`[Federal Register Volume 88, Number 240 (Friday, December 15, 2023)]
[Proposed Rules]
[Pages 87062-87153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26531]



[[Page 87061]]

Vol. 88

Friday,

No. 240

December 15, 2023

Part II





 Department of Energy





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10 CFR Parts 429 and 431





Energy Conservation Program: Energy Conservation Standards for Expanded 
Scope Electric Motors; Proposed Rule

  Federal Register / Vol. 88 , No. 240 / Friday, December 15, 2023 / 
Proposed Rules  

[[Page 87062]]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 431

[EERE-2020-BT-STD-0007]
RIN 1904-AF55


Energy Conservation Program: Energy Conservation Standards for 
Expanded Scope Electric Motors

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of proposed rulemaking and announcement of public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including electric 
motors. In this notice of proposed rulemaking (``NOPR''), DOE proposes 
new energy conservation standards for a subset of electric motors, 
expanded scope electric motors, expressed in terms of average full-load 
efficiency, and also announces a public meeting to receive comment on 
these proposed standards and associated analyses and results.

DATES: 
    Comments: DOE will accept comments, data, and information regarding 
this NOPR no later than February 13, 2024.
    Meeting: DOE will hold a public meeting on Wednesday, January 17, 
2024, from 10 a.m. to 4 p.m., in Washington, DC. This meeting will also 
be broadcast as a webinar.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the Department of Justice contact listed in 
the ADDRESSES section on or before January 16, 2024.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue SW, 
Washington, DC 20585. See section VII of this document, ``Public 
Participation,'' for further details, including procedures for 
attending the in-person meeting, webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants.
    Interested persons are encouraged to submit comments using the 
Federal eRulemaking Portal at www.regulations.gov under docket number 
EERE-2020-BT-STD-0007. Follow the instructions for submitting comments. 
Alternatively, interested persons may submit comments, identified by 
docket number EERE-2020-BT-STD-0007, by any of the following methods:
    Email: [email protected]. Include the docket number 
EERE-2020-BT-STD-0007 in the subject line of the message.
    Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 287-1445. If possible, please submit all items on a compact disc 
(``CD''), in which case it is not necessary to include printed copies.
    Hand Delivery/Courier: Appliance and Equipment Standards Program, 
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant 
Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445. 
If possible, please submit all items on a CD, in which case it is not 
necessary to include printed copies.
    No telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section VII of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at www.regulations.gov. All documents in the 
docket are listed in the www.regulations.gov index. However, not all 
documents listed in the index may be publicly available, such as 
information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2020-BT-STD-0007. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section VII of this document for information on how to submit comments 
through www.regulations.gov.
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standard. Interested 
persons may contact the Antitrust Division at 
[email protected] on or before the date specified in the DATES 
section. Please indicate in the ``Subject'' line of your email the 
title and Docket Number of this proposed rulemaking.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Email: 
[email protected].
    Ms. Kristin Koernig, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-3593. Email: 
[email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact the Appliance and Equipment Standards Program staff at (202) 
287-1445 or by email: [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for ESEMs
    3. Electric Motors Working Group Recommended Standard Levels
    C. Deviation From Process Rule
    1. Public Comment Period
    2. Framework Document
III. General Discussion
    A. Scope of Coverage and Equipment Classes
    1. General Scope of Coverage and Equipment Classes
    2. Structure of the Regulatory Text
    3. Air-Over Medium Electric Motors and Air-Over ESEMs
    B. Test Procedure
    C. Represented Values
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared To Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments

[[Page 87063]]

    A. Market and Technology Assessment
    1. Scope of Coverage
    2. Air-Over ESEMs
    3. Equipment Classes
    4. Technology Options
    5. Imported Embedded Motors
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Representative Units Analyzed
    b. Baseline Efficiency
    c. Higher Efficiency Levels
    2. Cost Analysis
    3. Technical Specifications
    4. Cost-Efficiency Results
    5. Scaling Methodology
    D. Markups Analysis
    E. Energy Use Analysis
    1. Consumer Sample
    2. Motor Input Power
    3. Annual Operating Hours
    4. Impact of Electric Motor Speed
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Equipment Lifetime
    7. Discount Rates
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Manufacturer Markup Scenarios
    3. Manufacturer Interviews
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for ESEM Standards
    2. Annualized Benefits and Costs of the Proposed Standards
    D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Review Under the Regulatory Flexibility Act
    1. Description of Reasons Why Action Is Being Considered
    2. Objectives of, and Legal Basis for, Rule
    3. Description and Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    5. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    6. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    The Energy Policy and Conservation Act, Public Law 94-163, as 
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency 
of a number of consumer products and certain industrial equipment. (42 
U.S.C. 6291-6317) Title III, Part C \2\ of EPCA established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes electric motors. Expanded scope electric 
motors (``ESEMs''), a subcategory of electric motors, are the subject 
of this rulemaking. This proposed rulemaking does not address small 
electric motors that are covered under title 10 of the Code of Federal 
Regulations (``CFR'') part 431 subpart X.
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in significant 
conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
    In accordance with these and other statutory provisions discussed 
in this document, DOE analyzed the benefits and burdens of four trial 
standard levels (``TSLs'') for ESEMs. The TSLs and their associated 
benefits and burdens are discussed in detail in sections V.A through 
V.C of this document. As discussed in section V.C of this document, DOE 
has tentatively determined that TSL 2 represents the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. The proposed standards, which are expressed in 
average full-load efficiency, are shown in Table I-1 through Table I-3 
and are equivalent to those recommended in a joint recommendation for 
energy conservation standards for ESEMs \3\ (``December 2022 Joint 
Recommendation'') from the Electric Motors Working Group, representing 
the motors industry, energy efficiency organizations and 
utilities.4 5
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    \3\ In the letter, this category is referred to as ``SNEM.'' See 
discussion on the change in terminology in sections III.A and III.B 
of this document.
    \4\ Full recommendation available at: www.regulations.gov/comment/EERE-2020-BT-STD-0007-0038.
    \5\ The members of the Electric Motors Working Group included 
American Council for an Energy-Efficient Economy, Appliance 
Standards Awareness Project, National Electrical Manufacturers 
Association, Natural Resources Defense Council, Northwest Energy 
Efficiency Alliance, Pacific Gas & Electric Company, San Diego Gas & 
Electric, and Southern California Edison.
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    Upon receipt of the December 2022 Joint Recommendation, DOE 
considered whether the statutory requirements of

[[Page 87064]]

42 U.S.C. 6295(p)(4) would be satisfied and thus warrant the issuance 
of a direct final rule by DOE. In particular, EPCA requires DOE to 
determine whether the recommended standard contained in a statement 
submitted jointly by interested parties is in accordance with 42 U.S.C. 
6295(o); i.e., whether the recommended standard would achieve the 
maximum improvement in energy efficiency that is technologically 
feasible and economically justified. (42 U.S.C. 6295(p)(4)(A)(i)) If 
the Secretary determines the recommended standard is in accordance with 
42 U.S.C. 6295(o), the Secretary may issue a final rule that 
establishes the recommended energy conservation standard. (Id.) If the 
Secretary determines that a direct final rule cannot be issued based on 
the statement, the Secretary must publish a notice of the 
determination, together with an explanation of the reasons for such 
determination. (42 U.S.C. 6295(p)(4)(A)(ii)) EPCA defines seven factors 
by which DOE must determine whether a proposed standard is economically 
justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) Having considered the 
December 2022 Joint Recommendation, DOE has tentatively determined that 
the recommended standard is in accordance with 42 U.S.C. 6295(o). 
However, because EPCA does not require DOE to issue a direct final rule 
under 42 U.S.C. 6295(p), DOE is interested in seeking public comment on 
the proposed, and recommended, standards level through this proposed 
rule to better understand the impacts of those standards.
    These proposed standards, if adopted, would apply to all ESEMs 
listed in Table I-1 through Table I-3 manufactured in, or imported 
into, the United States starting on January 1, 2029.

                                   Table I-1--Proposed Energy Conservation Standards for High and Medium-Torque ESEMs
                                              [Compliance Starting on January 1, 2029] [Recommended TSL 2]
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                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       59.5       59.5       57.5  ..........       59.5       59.5       57.5  .........
0.33...........................................................       64.0       64.0       62.0       50.5        64.0       64.0       62.0       50.5
0.5............................................................       68.0       69.2       68.0       52.5        68.0       67.4       68.0       52.5
0.75...........................................................       76.2       81.8       80.2       72.0        75.5       75.5       75.5       72.0
1..............................................................       80.4       82.6       81.1       74.0        77.0       80.0       77.0       74.0
1.5............................................................       81.5       83.8  .........  ..........       81.5       81.5       80.0  .........
2..............................................................       82.9       84.5  .........  ..........       82.5       82.5  .........  .........
3..............................................................       84.1  .........  .........  ..........       84.0  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                         Table I-2--Proposed Energy Conservation Standards for Low-Torque ESEMs
                                              [Compliance Starting on January 1, 2029] [Recommended TSL 2]
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                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       63.9       66.1       60.2       52.5        60.9       64.1       59.2       52.5
0.33...........................................................       66.9       69.7       65.0       56.6        63.9       67.7       64.0       56.6
0.5............................................................       68.8       70.1       66.8       57.1        65.8       68.1       65.8       57.1
0.75...........................................................       70.5       74.8       73.1       62.8        67.5       72.8       72.1       62.8
1..............................................................       74.3       77.1       77.3       65.7        71.3       75.1       76.3       65.7
1.5............................................................       79.9       82.1       80.5       72.2        76.9       80.1       79.5       72.2
2..............................................................       81.0       82.9       81.4       73.3        78.0       80.9       80.4       73.3
3..............................................................       82.4       84.0       82.5       74.9        79.4       82.0       81.5       74.9
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                                          Table I-3--Proposed Energy Conservation Standards for Polyphase ESEMs
                                              [Compliance Starting on January 1, 2029] [Recommended TSL 2]
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                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       65.6       69.5       67.5       62.0        66.0       68.0       66.0       62.0
0.33...........................................................       69.5       73.4       71.4       64.0        70.0       72.0       70.0       64.0
0.5............................................................       73.4       78.2       75.3       66.0        72.0       75.5       72.0       66.0
0.75...........................................................       76.8       81.1       81.7       70.0        75.5       77.0       74.0       70.0
1..............................................................       77.0       83.5       82.5       75.5        75.5       77.0       74.0       75.5
1.5............................................................       84.0       86.5       83.8       77.0        84.0       82.5       87.5       78.5
2..............................................................       85.5       86.5  .........       86.5        85.5       85.5       88.5       84.0
3..............................................................       85.5       86.9  .........       87.5        86.5       86.5       89.5       85.5
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[[Page 87065]]

A. Benefits and Costs to Consumers

    Table I-4 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of ESEMs, as measured by the average 
life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\6\ The average LCC savings are positive for all 
representative units, and the PBP is less than the average lifetime of 
ESEMs, which is estimated to be 7.1 years (see section IV.F of this 
document).
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    \6\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new standards (see section 
IV.F.9 of this document). The simple PBP, which is designed to 
compare specific efficiency levels, is measured relative to the 
baseline product (see section IV.C of this document).

               Table I-4--Impacts of Proposed Energy Conservation Standards on Consumers of ESEMs
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                                                                  Average LCC savings     Simple payback period
                      Representative unit                               (2022$)                  (years)
----------------------------------------------------------------------------------------------------------------
ESEM High/Med Torque, 4 poles, enclosed, 0.25 hp...............                     51                       1.1
ESEM High/Med Torque, 4 poles, enclosed, 1 hp..................                    138                       0.9
ESEM High/Med Torque, 4 poles, enclosed, 5 hp..................                    147                       0.7
ESEM Low Torque, 6 poles, enclosed, 0.25 hp....................                    100                       1.5
ESEM Low Torque, 6 poles, enclosed, 0.5 hp.....................                     26                       2.0
ESEM Polyphase, 4 poles, enclosed, 0.25 hp.....................                     83                       0.8
AO-ESEM High/Med Torque, 4 poles, enclosed, 0.25 hp............                    160                       0.8
AO-ESEM High/Med Torque, 4 poles, enclosed, 1 hp...............                    121                       0.7
AO-ESEM High/Med Torque, 4 poles, enclosed, 5 hp...............                     88                       1.3
AO-ESEM Low Torque, 6 poles, enclosed, 0.25 hp.................                     40                       1.8
AO-ESEM Low Torque, 6 poles, enclosed, 0.5 hp..................                     51                       1.2
AO-ESEM Polyphase, 4 poles, enclosed, 0.25 hp..................                    138                       1.1
----------------------------------------------------------------------------------------------------------------

    DOE's analysis of the impacts of the proposed standards on 
consumers is described in section IV.F of this document.

B. Impact on Manufacturers

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2024-2058). Using a real discount rate of 
9.1 percent, DOE estimates that the INPV for manufacturers of ESEMs in 
the case without new standards is $2,019 million in 2022$. Under the 
proposed standards, DOE estimates the change in INPV to range from -
13.1 percent to -6.5 percent, which is approximately -$264 million to -
$131 million. In order to bring equipment into compliance with new 
standards, it is estimated that industry will incur total conversion 
costs of $339 million.
    DOE's analysis of the impacts of the proposed standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

C. National Benefits and Costs 7
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    \7\ All monetary values in this document are expressed in 2022 
dollars.
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    DOE's analyses indicate that the proposed energy conservation 
standards for ESEMs would save a significant amount of energy. Relative 
to the case without new standards, the lifetime energy savings for 
ESEMs purchased in the 30-year period that begins in the anticipated 
year of compliance with the new standards (2029-2058) amount to 8.9 
quadrillion British thermal units (``Btu''), or quads.\8\ This 
represents a savings of 9 percent relative to the energy use of these 
products in the case without new standards (referred to as the ``no-
new-standards case'').
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    \8\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.1 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for ESEMs ranges from $38.3 billion 
(at a 7-percent discount rate) to $72.8 billion (at a 3-percent 
discount rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased equipment and 
installation costs for ESEMs purchased in 2029-2058.
    In addition, the proposed standards for ESEMs are projected to 
yield significant environmental benefits. DOE estimates that the 
proposed standards would result in cumulative emission reductions (over 
the same period as for energy savings) of 160.5 million metric tons 
(``Mt'') \9\ of carbon dioxide (``CO2''), 43.8 thousand tons 
of sulfur dioxide (``SO2''), 299.8 thousand tons of nitrogen 
oxides (``NOX''), 1,362.2 thousand tons of methane 
(``CH4''), 1.4 thousand tons of nitrous oxide 
(``N2O''), and 0.3 tons of mercury (``Hg'').\10\
---------------------------------------------------------------------------

    \9\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \10\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the Inflation Reduction Act. See section IV.K of this 
document for further discussion of AEO2023 assumptions that effect 
air pollutant emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost of CO2 (``SC-CO2''), the social cost of 
methane (``SC-CH4''), and the social cost of nitrous oxide 
(``SC-N2O''). Together these represent the social cost of 
GHG (``SC-GHG''). DOE used interim SC-GHG values (in terms of benefit 
per ton of GHG avoided) developed by an Interagency Working Group on 
the Social Cost of Greenhouse Gases (``IWG'').\11\ The derivation of 
these values is discussed in section IV.L of this document. For 
presentational purposes, the climate benefits associated with the 
average SC-GHG at a 3-percent discount rate are estimated to be $9.4 
billion. DOE does not have a single central SC-GHG point estimate and 
it emphasizes the importance and value of considering the benefits

[[Page 87066]]

calculated using all four sets of SC-GHG estimates.
---------------------------------------------------------------------------

    \11\ To monetize the benefits of reducing GHG emissions this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive Order 13990 published in February 
2021 by the IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions using benefit per ton estimates 
from the Environmental Protection Agency (``EPA''),\12\ as discussed in 
section IV.L of this document. DOE estimated the present value of the 
health benefits would be $7.9 billion using a 7-percent discount rate, 
and $18.3 billion using a 3-percent discount rate.\13\ DOE is currently 
only monetizing health benefits from changes in ambient fine 
particulate matter (``PM2.5'') concentrations from two 
precursors (SO2 and NOX), and from changes in 
ambient ozone from one precursor (for NOX), but will 
continue to assess the ability to monetize other effects such as health 
benefits from reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------

    \12\ U.S. EPA. Estimating the Benefit per Ton of Reducing 
Directly Emitted PM2.5, PM2.5 Precursors and 
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
    \13\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

    Table I-5 summarizes the monetized benefits and costs expected to 
result from the proposed standards for ESEMs. There are other important 
unquantified effects, including certain unquantified climate benefits, 
unquantified public health benefits from the reduction of toxic air 
pollutants and other emissions, unquantified energy security benefits, 
and distributional effects, among others.

  Table I-5--Summary of Monetized Benefits and Costs of Proposed Energy
                    Conservation Standards for ESEMs
                                 [TSL 2]
------------------------------------------------------------------------
                                                          Billion $2022
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................             54.7
Climate Benefits *.....................................              9.4
Health Benefits **.....................................             18.3
Total Benefits [dagger]................................             82.4
Consumer Incremental Equipment Costs [Dagger]..........              9.7
Net Benefits...........................................             72.8
Change in Producer Cashflow (INPV [dagger][dagger])....      (0.3)-(0.1)
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................             26.1
Climate Benefits * (3% discount rate)..................              9.4
Health Benefits **.....................................              7.9
Total Benefits [dagger]................................             43.5
Consumer Incremental Equipment Costs [Dagger]..........              5.1
Net Benefits...........................................             38.3
Change in Producer Cashflow (INPV [dagger][dagger])....      (0.3)-(0.1)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs
  shipped in 2029-2058. These results include consumer, climate, and
  health benefits which accrue after 2029 from the equipment shipped in
  2029-2058.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate) (see
  section IV.L of this document). Together these represent the global SC-
  GHG. For presentational purposes of this table, the climate benefits
  associated with the average SC-GHG at a 3 percent discount rate are
  shown; however, DOE emphasizes the importance and value of considering
  the benefits calculated using all four sets of SC-GHG estimates. To
  monetize the benefits of reducing GHG emissions, this analysis uses
  the interim estimates presented in the Technical Support Document:
  Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
  Under Executive Order 13990 published in February 2021 by the IWG
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
  health benefits that can be quantified and monetized. For presentation
  purposes, total and net benefits for both the 3-percent and 7-percent
  cases are presented using the average SC-GHG with 3-percent discount
  rate.
[Dagger] Costs include incremental equipment costs.
[dagger][dagger] Operating Cost Savings are calculated based on the life
  cycle costs analysis and national impact analysis as discussed in
  detail below. See sections IV.F and IV.H of this document. DOE's
  national impacts analysis includes all impacts (both costs and
  benefits) along the distribution chain beginning with the increased
  costs to the manufacturer to manufacture the equipment and ending with
  the increase in price experienced by the consumer. DOE also separately
  conducts a detailed analysis on the impacts on manufacturers (the
  MIA). See section IV.J of this document. In the detailed MIA, DOE
  models manufacturers' pricing decisions based on assumptions regarding
  investments, conversion costs, cashflow, and margins. The MIA produces
  a range of impacts, which is the rule's expected impact on the INPV.
  The change in INPV is the present value of all changes in industry
  cash flow, including changes in production costs, capital
  expenditures, and manufacturer profit margins. Change in INPV is
  calculated using the industry weighted average cost of capital value
  of 9.1 percent that is estimated in the MIA (see chapter 12 of the
  NOPR TSD for a complete description of the industry weighted average
  cost of capital). For ESEMs, those values are -$264 million and -$131
  million. DOE accounts for that range of likely impacts in analyzing
  whether a TSL is economically justified. See section IV.J of this
  document. DOE is presenting the range of impacts to the INPV under two
  markup scenarios: the Preservation of Gross Margin scenario, which is
  the manufacturer markup scenario used in the calculation of Consumer
  Operating Cost Savings in this table, and the Preservation of
  Operating Profit scenario, where DOE assumed manufacturers would not
  be able to increase per-unit operating profit in proportion to
  increases in manufacturer production costs. DOE includes the range of
  estimated INPV in the above table, drawing on the MIA explained
  further in section IV.J of this document, to provide additional
  context for assessing the estimated impacts of this rule to society,
  including potential changes in production and consumption, which is
  consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to
  include the INPV into the net benefit calculation for this proposed
  rule, the net benefits would range from $72.5 billion to $72.7 billion
  at 3-percent discount rate and would range from $38.0 billion to $38.2
  billion at 7-percent discount rate. Numbers in parentheses are
  negative numbers. DOE seeks comment on this approach.


[[Page 87067]]

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the value of climate and health benefits 
of emission reductions, all annualized.\14\
---------------------------------------------------------------------------

    \14\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2022, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2022. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of ESEMs shipped in 
2029-2058. The benefits associated with reduced emissions achieved as a 
result of the proposed standards are also calculated based on the 
lifetime of ESEMs shipped in 2029-2058. Total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social 
costs with 3-percent discount rate. Estimates of SC-GHG values are 
presented for all four discount rates in section V.B of this document.
    Table I-6 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $543 million per year in increased equipment 
costs, while the estimated annual benefits are $2,757 million in 
reduced equipment operating costs, $542 million in climate benefits, 
and $836 million in health benefits. In this case. The net benefit 
would amount to $3,592 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $556 million per year in 
increased equipment costs, while the estimated annual benefits are 
$3,140 million in reduced operating costs, $542 million in climate 
benefits, and $1,052 million in health benefits. In this case, the net 
benefit would amount to $4,179 million per year.

          Table I-6--Annualized Benefits and Costs of Proposed Energy Conservation Standards for ESEMs
                                                     [TSL 2]
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2022$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           3,140           2,962           3,341
Climate Benefits *..............................................             542             526             562
Health Benefits **..............................................           1,052           1,021           1,089
Total Benefits [dagger].........................................           4,734           4,509           4,992
Consumer Incremental Equipment Costs [Dagger]...................             556             598             529
Net Benefits....................................................           4,179           3,911           4,464
Change in Producer Cashflow (INPV [dagger][dagger]).............       (25)-(13)       (25)-(13)       (25)-(13)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           2,757           2,615           2,921
Climate Benefits * (3% discount rate)...........................             542             526             562
Health Benefits **..............................................             836             814             863
Total Benefits [dagger].........................................           4,135           3,955           4,346
Consumer Incremental Equipment Costs [Dagger]...................             543             578             520
Net Benefits....................................................           3,592           3,377           3,826
Change in Producer Cashflow (INPV [dagger][dagger]).............       (25)-(13)       (25)-(13)       (25)-(13)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029-2058. These results
  include consumer, climate, and health benefits which accrue after 2058 from the equipment shipped in 2029-
  2058. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from
  the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In
  addition, incremental equipment costs reflect a constant rate in the Primary Estimate, an increasing rate in
  the Low Net Benefits Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in sections IV.F and IV.4 of this document. Note that the Benefits
  and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3 percent discount rate are shown; however, DOE emphasizes the importance and value of considering the
  benefits calculated using all four sets of SC-GHG estimates. To monetize the benefits of reducing GHG
  emissions, this analysis uses the interim estimates presented in the Technical Support Document: Social Cost
  of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021
  by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate.
[Dagger] Costs include incremental equipment costs.

[[Page 87068]]

 
[dagger][dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
  impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
  the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price
  experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
  (the MIA). See section IV.J. of this document. In the detailed MIA, DOE models manufacturers' pricing
  decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA
  produces a range of impacts, which is the rule's expected impact on the INPV. The change in INPV is the
  present value of all changes in industry cash flow, including changes in production costs, capital
  expenditures, and manufacturer profit margins. The annualized change in INPV is calculated using the industry
  weighted average cost of capital value of 9.1 percent that is estimated in the MIA (see chapter 12 of the NOPR
  TSD for a complete description of the industry weighted average cost of capital). For ESEMs, those values are
  $25 million and -$13 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is
  economically justified. See section IV.J of this NOPR. DOE is presenting the range of impacts to the INPV
  under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup
  scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of
  Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit
  operating profit in proportion to increases in manufacturer production costs. DOE includes the range of
  estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J
  of this document to provide additional context for assessing the estimated impacts of this rule to society,
  including potential changes in production and consumption, which is consistent with OMB's Circular A-4 and
  E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed
  rule, the annualized net benefits would range from $4,154 million to $4,166 million at 3-percent discount rate
  and would range from $3,567 million to $3,579 million at 7-percent discount rate. Numbers in parentheses are
  negative numbers. DOE seeks comment on this approach.

    DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.G, IV.K, and IV.L of this document.

D. Conclusion

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. Specifically, with regards to 
technological feasibility, equipment achieving these standard levels 
are already commercially available for all equipment classes covered by 
this proposal. As for economic justification, DOE's analysis shows that 
the benefits of the proposed standard exceed, to a great extent, the 
burdens of the proposed standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for ESEMs is $543 million per year in increased 
equipment costs, while the estimated annual benefits are $2,757 million 
in reduced equipment operating costs, $542 million in climate benefits 
and $836 million in health benefits. The net benefit amounts to $3,592 
million per year.
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\15\ For 
example, some covered products and equipment have substantial energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

    \15\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As previously mentioned, the standards are projected to result in 
estimated national energy savings of 8.9 quad FFC, the equivalent of 
the primary annual energy use of 95.7 million homes. In addition, they 
are projected to reduce CO2 emissions by 160.5 Mt. Based on 
these findings, DOE has initially determined the energy savings from 
the proposed standard levels are ``significant'' within the meaning of 
42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for 
these tentative conclusions is contained in the remainder of this 
document and the accompanying technical support document (``TSD'').
    DOE also considered more-stringent energy efficiency levels as 
potential standards, and is still considering them in this proposed 
rulemaking. However, DOE has tentatively concluded that the potential 
burdens of the more-stringent energy efficiency levels would outweigh 
the projected benefits.
    Based on consideration of the public comments DOE receives in 
response to this document and related information collected and 
analyzed during the course of this proposed rulemaking effort, DOE may 
adopt energy efficiency levels presented in this document that are 
either higher or lower than the proposed standards, or some combination 
of level(s) that incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed rule, as well as some of the relevant 
historical background related to the establishment of standards for 
ESEMs.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, which sets forth a variety of provisions designed to improve 
the energy efficiency of certain types of industrial equipment, 
including electric motors. (42 U.S.C. 6311(1)(A)) ESEMs, the subject of 
this document, are a category of electric motors.
    The Energy Policy Act of 1992 (``EPACT 1992'') (Pub. L. 102-486 
(Oct. 24, 1992)) further amended EPCA by establishing energy 
conservation standards and test procedures for certain commercial and 
industrial electric motors that are manufactured alone or as a 
component of another piece of equipment. In December 2007, Congress 
enacted the Energy Independence and Security Act of 2007 (``EISA 
2007'') (Pub. L. 110-140 (Dec. 19, 2007). Section 313(b)(1) of EISA 
2007 updated the energy conservation standards for those electric 
motors already covered by EPCA and established energy conservation 
standards for a larger scope of motors not previously covered by 
standards. (42 U.S.C. 6313(b)(2)) EISA 2007 also revised certain 
statutory definitions related to electric motors. See EISA 2007, sec. 
313 (amending statutory definitions related to electric motors at 42 
U.S.C. 6311(13)).
    The energy conservation program under EPCA, consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from

[[Page 87069]]

manufacturers (42 U.S.C. 6316; U.S.C. 6296).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede state laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) DOE may, however, 
grant waivers of Federal preemption in limited instances for particular 
state laws or regulations, in accordance with the procedures and other 
provisions set forth under EPCA. (See 42 U.S.C. 6316(a) (applying the 
preemption waiver provisions of 42 U.S.C. 6297))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered equipment. (See 42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of 
covered equipment must use the Federal test procedures as the basis 
for: (1) certifying to DOE that their equipment complies with the 
applicable energy conservation standards adopted pursuant to EPCA (42 
U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making representations 
about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, 
DOE must use these test procedures to determine whether the equipment 
complies with relevant standards promulgated under EPCA. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(s)) The DOE test procedure for ESEMs appear at 
10 CFR part 431, subpart B, appendix B (``appendix B'').
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including ESEMs. Any new or 
amended standard for a covered product must be designed to achieve the 
maximum improvement in energy efficiency that the Secretary of Energy 
determines is technologically feasible and economically justified. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt 
any standard that would not result in the significant conservation of 
energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3))
    Moreover, DOE may not prescribe a standard (1) for certain 
equipment, including ESEMs, if no test procedure has been established 
for the equipment, or (2) if DOE determines by rule that the standard 
is not technologically feasible or economically justified. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed 
standard is economically justified, DOE must determine whether the 
benefits of the standard exceed its burdens. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(3)(A)-(B)) DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
greatest extent practicable, the following seven statutory factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the standard;
    (3) The total projected amount of energy (or as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
products likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') considers 
relevant.

(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product. 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) Also, the Secretary may not 
prescribe an amended or new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States in any 
covered product type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered product or equipment that 
has two or more subcategories. DOE must specify a different standard 
level for a type or class of product that has the same function or 
intended use, if DOE determines that products within such group: (A) 
consume a different kind of energy from that consumed by other covered 
products within such type (or class); or (B) have a capacity or other 
performance-related feature which other products within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)(1)) In determining 
whether a performance-related feature justifies a different standard 
for a group of equipment, DOE must consider such factors as the utility 
to the consumer of such a feature and other factors DOE deems 
appropriate. (Id.) Any rule prescribing such a standard must include an 
explanation of the basis on which such higher or lower level was 
established. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)(2))

B. Background

1. Current Standards
    DOE does not currently have energy conservation standards for ESEMs 
even though DOE has the authority to regulate electric motors broadly. 
DOE has adopted energy conservation standards for medium electric 
motors (``MEMs'') at 10 CFR 431.25 (see section III.A of this document 
for further description), as well as small electric motors (``SEMs'') 
at 10 CFR 431.446, which are separately regulated categories.
2. History of Standards Rulemaking for ESEMs
    On May 21, 2020, DOE issued an early assessment request for 
information (``RFI'') (``May 2020 Early Assessment Review RFI'') in 
which DOE stated that it was initiating an early assessment review to 
determine whether any new or amended standards would satisfy the 
relevant requirements of EPCA for a new or amended energy conservation 
standard for electric motors and sought information related to that 
effort. Specifically, DOE sought data and information that could enable 
the agency to determine whether DOE should propose a ``no new 
standard'' determination because a more stringent standard: (1) would 
not result in a significant savings of energy; (2) is not 
technologically feasible; (3) is not economically justified; or (4) any 
combination of the foregoing. 85 FR 30878, 30879.

[[Page 87070]]

    On March 2, 2022, DOE published a Preliminary Analysis for electric 
motors (``March 2022 Preliminary Analysis''). 87 FR 11650. In 
conjunction with the March 2022 Preliminary Analysis, DOE published the 
March 2022 Preliminary TSD, which presented the results of the in-depth 
technical analyses in the following areas: (1) engineering; (2) markups 
to determine equipment price; (3) energy use; (4) LCC and PBP; and (5) 
national impacts. The results presented included the current scope of 
electric motors regulated at 10 CFR 431.25, in addition to an expanded 
scope of motors, including electric motors above 500 horsepower, air-
over electric motors, and ESEMs.\16\ See chapter 2 of the March 2022 
Preliminary TSD. DOE requested comment on a number of topics regarding 
the analysis presented. However, DOE is only responding to comments 
pertaining to ESEMs and air-over expanded scope electric motors (``AO-
ESEMs'') in this NOPR, as DOE responded to the rest of the comments 
pertaining to medium electric motors and their air-over equivalents in 
the Electric Motors Direct Final Rule published on June 1, 2023 (``June 
2023 DFR'') that amended energy conservation standards for medium 
electric motors and their air-over equivalents. 88 FR 36066.
---------------------------------------------------------------------------

    \16\ In the March 2022 Preliminary Analysis, DOE used the term 
small, non-small electric motor, electric motors (``SNEMs'') to 
designate ESEMs.
---------------------------------------------------------------------------

    On April 5, 2022, DOE held a public webinar in which it presented 
the methods and analysis in the March 2022 Preliminary Analysis and 
solicited public comment. (``April 5, 2022, Public Meeting'').

                         Table II-1--March 2022 Preliminary Analysis Written Commenters
----------------------------------------------------------------------------------------------------------------
                                                    Reference in  this
                  Commenter(s)                             NOPR             Docket No.        Commenter type
----------------------------------------------------------------------------------------------------------------
American Council for an Energy-Efficient          Electric Motors                     38  Working Group.
 Economy, Appliance Standards Awareness Project,   Working Group.
 National Electrical Manufacturers Association,
 Natural Resources Defense Council, Northwest
 Energy Efficiency Alliance, Pacific Gas &
 Electric Company, San Diego Gas & Electric,
 Southern California Edison.
Appliance Standards Awareness Project, American   Joint Advocates.......              27  Efficiency Advocacy
 Council for an Energy-Efficient Economy,                                                  Organizations.
 Natural Resources Defense Council, New York
 State Energy Research and Development Authority.
Association of Home Appliance Manufacturers; Air- AHAM and AHRI.........              25  Trade Association.
 Conditioning, Heating, and Refrigeration
 Institute.
Air-Conditioning, Heating, and Refrigeration      AHRI..................              26  Trade Association.
 Institute.
Pacific Gas and Electric Company, San Diego Gas   CA IOUs...............              30  Utilities.
 and Electric, and Southern California Edison;
 collectively, the California Investor-Owned
 Utilities.
Electrical Apparatus Service Association, Inc...  EASA..................              21  Trade Association.
Hydraulics Institute............................  HI....................              31  Trade Association.
Lennox International............................  Lennox................              29  Manufacturer.
Northwest Energy Efficiency Alliance............  NEEA..................              33  Efficiency Advocacy
                                                                                           Organization.
National Electrical Manufacturers Association,    Joint Industry                      23  Trade Associations.
 Association of Home Appliance Manufacturers,      Stakeholders.
 the Air-Conditioning, Heating, and
 Refrigeration Institute, the Medical Imaging
 Technology Alliance, the Outdoor Power
 Equipment Institute, Home Ventilating
 Institute, and the Power Tool Institute.
National Electrical Manufacturers Association...  NEMA..................              22  Trade Association.
----------------------------------------------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\17\ 
To the extent that interested parties have provided written comments 
that are substantively consistent with any oral comments provided 
during the April 5, 2022, public meeting, DOE cites the written 
comments throughout this document.
---------------------------------------------------------------------------

    \17\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for electric motors. (Docket No. EERE-
2020-BT-STD-0007, which is maintained at www.regulations.gov). The 
references are arranged as follows: (commenter name, comment docket 
ID number, page of that document).
---------------------------------------------------------------------------

    By letter dated December 22, 2022, DOE received the December 2022 
Joint Recommendation from the Electric Motors Working Group. The 
December 2022 Joint Recommendation addressed energy conservation 
standards for high-torque, medium-torque, low-torque, and polyphase 
ESEMs that are 0.25-3 hp, and AO-ESEMs. The December 2022 Joint 
Recommendation recommended a compliance date for updated energy 
conservation standards for AO-ESEMs as well. (Electric Motors Working 
Group, No. 38 at p. 5)
3. Electric Motors Working Group Recommended Standard Levels
    This section summarizes the standard levels recommended in the 
December 2022 Joint Recommendation and the subsequent procedural steps 
taken by DOE. Further discussion on scope is provided in section III.A 
of this document. The Electric Motors Working Group stated that the 
recommended levels would minimize potential market disruptions by 
allowing smaller designs to remain on the market. Specifically the 
Electric Motors Working Group stated that the recommended levels for 
high and medium torque ESEM could allow smaller capacitor start 
induction run (``CSIR'') motors and currently unregulated split-phase 
motors, which are common in certain space-constrained products; for low 
torque ESEMs, the Electric Motors Working Group stated that 
manufacturers believe efficiency levels above the recommended levels 
could result in significant increases in the physical size, 
unavailability of product, and, in some cases, may be extremely 
difficult to achieve with current permanent split capacitor (``PSC'') 
technology; and for AO-ESEMs, the Electric Motors Working Group stated 
that the recommended levels represented the highest feasible 
efficiencies given the potential design constraints associated with 
their use in covered equipment. (Id. at pp. 3-5)
    Recommendation A: For high-torque and medium-torque ESEMs (i.e., 
CSIR, capacitor start capacitor run (``CSCR''), and split-phase 
motors), the Electric Motors Working Group recommended the following 
standard levels, expressed in average full-load efficiency:
    (1) Values for open and enclosed motors rated at 0.25, 0.33, and 
0.5 hp (all pole configurations) that are largely based on the levels 
in NEMA MG 1, Table 12-19, ``Premium Efficiency Levels for Capacitor-
Start/Induction-

[[Page 87071]]

Run Single-Phase Small Motors.'' The exceptions are the open and 
enclosed 0.5 hp 4-pole values, which have lower efficiency standards 
described in Table II-2. For cases where Table 12-19 lists two frame 
sizes (e.g., 48 and 56 frame) for a given hp rating, the recommended 
efficiency level reflects the smaller frame size (i.e., lower 
efficiency).
    (2) Values for open motors (2-, 4-, 6-pole) above 0.5 hp that are 
consistent with the current small electric motor standards for CSCR and 
CSIR motors found in 10 CFR part 431, subpart X (Sec.  431.446).
    (3) Values for 8-pole open motors above 0.5 hp and all enclosed 
motors above 0.5 hp that are based on the levels in NEMA MG 1, Table 
12-20, ``Premium Efficiency Levels for Capacitor-Start/Capacitor-Run 
Single-Phase Small Motors.'' For cases where Table 12-20 lists two 
frame sizes (e.g., 48 and 56 frame) for a given hp rating, the 
recommended efficiency level reflects the smaller frame size (i.e., 
lower efficiency).

                              Table II-2--Recommended Energy Conservation Standards for High-Torque and Medium-Torque ESEMs
                                                       [i.e., CSIR, CSCR, and split-phase motors]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       59.5       59.5       57.5  ..........       59.5       59.5       57.5  .........
0.33...........................................................       64.0       64.0       62.0       50.5        64.0       64.0       62.0       50.5
0.5............................................................       68.0       69.2       68.0       52.5        68.0       67.4       68.0       52.5
0.75...........................................................       76.2       81.8       80.2       72.0        75.5       75.5       75.5       72.0
1..............................................................       80.4       82.6       81.1       74.0        77.0       80.0       77.0       74.0
1.5............................................................       81.5       83.8  .........  ..........       81.5       81.5       80.0  .........
2..............................................................       82.9       84.5  .........  ..........       82.5       82.5  .........  .........
3..............................................................       84.1  .........  .........  ..........       84.0  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

(Id. at pp. 3, 6).
    Recommendation B: For low-torque ESEMs (i.e., shaded pole and PSC 
motors), the Electric motors Working Group recommended the following 
standard levels, expressed in terms of average full-load efficiency:
    (1) Values for open motors rated at 0.25 hp, 0.33 hp, and 1.5 hp 
and above that are based on DOE's new efficiency level (EL 3).\18\
---------------------------------------------------------------------------

    \18\ ``DOE's new efficiency level'' refers to preliminary 
efficiency levels that were developed during the private 
negotiations of the Electric Motors Working Group. See Table II-3 
for the final values chosen from those preliminary efficiency 
levels.
---------------------------------------------------------------------------

    (2) Values for open motors rated at 0.5, 0.75, and 1.0 hp that are 
based on DOE's new EL 2, with two exceptions: \19\
---------------------------------------------------------------------------

    \19\ See footnote 18.
---------------------------------------------------------------------------

    (a) The 6-pole, 1.0 hp value is the mid-point between EL 2 (75.3%) 
and EL 3 (79.2%)
    (b) The 2-pole, 0.5 hp value is the mid-point between EL 2 (66.4%) 
and EL 3 (71.1%)
    (3) Values for enclosed motors that are based on the equivalent 
open motor efficiency but are adjusted to account for the lack of 
additional cooling, which is a function of motor rpm (i.e., number of 
poles). The adjustment is 3% for 2-pole motors, 2% for 4-pole motors, 
1% for 6-pole motors, and 0% for 8-pole motors.

                                       Table II-3--Recommended Energy Conservation Standards for Low-Torque ESEMs
                                                           [i.e., shaded pole and PSC motors]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       63.9       66.1       60.2       52.5        60.9       64.1       59.2       52.5
0.33...........................................................       66.9       69.7       65.0       56.6        63.9       67.7       64.0       56.6
0.5............................................................       68.8       70.1       66.8       57.1        65.8       68.1       65.8       57.1
0.75...........................................................       70.5       74.8       73.1       62.8        67.5       72.8       72.1       62.8
1..............................................................       74.3       77.1       77.3       65.7        71.3       75.1       76.3       65.7
1.5............................................................       79.9       82.1       80.5       72.2        76.9       80.1       79.5       72.2
2..............................................................       81.0       82.9       81.4       73.3        78.0       80.9       80.4       73.3
3..............................................................       82.4       84.0       82.5       74.9        79.4       82.0       81.5       74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

(Id. at pp. 4, 6)
    Recommendation C: For polyphase ESEMs (i.e., three-phase ESEMs), 
the Electric Motors Working Group recommended the following standard 
levels, expressed in terms of average full-load efficiency:
    (1) Values for 2-pole, 4-pole, and 6-pole open motors that are 
consistent with the current small electric motor standards for 
polyphase motors found in 10 CFR part 431, subpart X (Sec.  431.446).
    (2) Values for 8-pole open and all enclosed motors from NEMA MG 1, 
Table 12-21, ``Premium Efficiency Levels for Three-Phase Induction 
Small Motors.'' For cases where Table 12-21 lists two frame sizes 
(e.g., 48 and 56 frame) for a given hp rating, the recommended 
efficiency level reflects the smaller frame size (i.e., lower 
efficiency).

[[Page 87072]]



                                        Table II-4--Recommended Energy Conservation Standards for Polyphase ESEMs
                                                                [i.e., Three-Phase ESEMs]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       65.6       69.5       67.5       62.0        66.0       68.0       66.0       62.0
0.33...........................................................       69.5       73.4       71.4       64.0        70.0       72.0       70.0       64.0
0.5............................................................       73.4       78.2       75.3       66.0        72.0       75.5       72.0       66.0
0.75...........................................................       76.8       81.1       81.7       70.0        75.5       77.0       74.0       70.0
1..............................................................       77.0       83.5       82.5       75.5        75.5       77.0       74.0       75.5
1.5............................................................       84.0       86.5       83.8       77.0        84.0       82.5       87.5       78.5
2..............................................................       85.5       86.5  .........       86.5        85.5       85.5       88.5       84.0
3..............................................................       85.5       86.9  .........       87.5        86.5       86.5       89.5       85.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

(Id.)
    Recommendation D: The Electric Motors Working Group recommended 
that if standards are warranted for AO-ESEMs, DOE set the standards at 
the same levels as those for comparable ESEMs used in non-air-over 
applications. (Id. at p. 5)
    Recommendation E: The Electric Motors Working Group recommended 
that DOE align the compliance date for AO-ESEMs with the compliance 
date for updated energy conservation standards for Commercial Unitary 
Air Conditioners/Heat Pumps (``CUAC/HPs'') currently under negotiation 
in DOE's Appliance Standards and Rulemaking Federal Advisory Committee 
(``ASRAC'') Working Group on CUAC/HPs. The Electric Motors Working 
Group stated this recommended compliance date would appropriately 
balance energy savings and the time needed for manufacturers of 
equipment with AO-ESEMs to re-design products. (Id.)
    DOE notes that the scope and standards proposed in this document 
are equivalent to those recommended by the Electric Motors Working 
Group. Regarding the compliance year for energy conservation standards 
for ESEMs, the Electric Motors Working Group recommended that DOE align 
the compliance date for AO-ESEMs with the compliance date for updated 
energy conservation standards for CUAC/HP, which were under negotiation 
in DOE's ASRAC Working Group on CUAC/HPs at the time. Since then, the 
CUAC/HP negotiations have concluded and include a recommended 
compliance year of 2029 (i.e., January 1, 2029).\20\ ESEMs are a type 
of electric motor, but not among the types of electric motor for which 
Congress established standards and a rulemaking schedule in 42 U.S.C. 
6313(b). As such, they are exempt from the requirements of 42 U.S.C. 
6313(b), including the compliance deadlines provided in that section. 
Because section 42 U.S.C. 6316(a) applies certain requirements of 42 
U.S.C. 6295(l)-(s) of EPCA to certain equipment, including electric 
motors, DOE considered whether the compliance deadlines of 42 U.S.C. 
6295(m)(4) applies to ESEMs. 42 U.S.C. 6295(m)(4)(A) defines compliance 
deadlines for specific products; however, electric motors and ESEMs are 
not listed, nor does 42 U.S.C. 6316 apply a cross reference on how to 
apply these paragraphs to electric motors or ESEMs. Accordingly, DOE 
has determined that these compliance deadlines do not apply to ESEMs. 
Additionally, DOE reviewed section 6295(m)(4)(B), which states that a 
manufacturer shall not be required to apply new standards to a product 
with respect to which other new standards have been required in the 
prior 6-year period. As no standards for ESEMs have not yet been 
established, this paragraph also does not apply to ESEMs. As such, DOE 
has determined that it has discretion to establish compliance deadlines 
for ESEMs. Therefore, DOE proposes a January 1, 2029, compliance date 
in accordance with the recommendation from the Electric Motors Working 
Group. DOE has tentatively determined that this compliance date would 
provide sufficient lead time to motor manufacturers based on the 
recommendation from the Electric Motors Working Group, which includes 
NEMA.
---------------------------------------------------------------------------

    \20\ See CUAC/HP ASRAC Working group term sheet at: 
www.regulations.gov/document/EERE-2022-BT-STD-0015-0087.
---------------------------------------------------------------------------

C. Deviation From Process Rule

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``Process Rule''), DOE notes that it is deviating from the 
provision in the Process Rule regarding the pre-NOPR and NOPR stages 
for an energy conservation standards rulemaking.
1. Public Comment Period
    Section 6(f)(2) of the Process Rule specifies that the length of 
the public comment period for a NOPR will be not less than 75 calendar 
days. For this NOPR, DOE has opted instead to provide a 60-day comment 
period, consistent with EPCA requirements. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(p). DOE is opting to deviate from the 75-day comment period 
because stakeholders have already been afforded multiple opportunities 
to provide comments on this proposed rulemaking. As noted previously, 
DOE requested comment on various issues pertaining to this standards 
rulemaking in the May 2020 Early Assessment Review RFI and provided 
stakeholders with a 30-day comment period. 85 FR 30878. Additionally, 
DOE provided a 60-day comment period for stakeholders to provide input 
on the analyses presented in the March 2022 Preliminary Analysis. 87 FR 
11650. The analytical assumptions and approaches used for the analyses 
conducted for this NOPR are similar to those used for the preliminary 
analysis. Furthermore, as discussed previously in this document, the 
standards proposed in this document are equivalent to those recommended 
by the Electric Motors Working Group for the electric motor types 
subject to this proposal. Therefore, DOE believes a 60-day comment 
period is appropriate and will provide interested parties with a 
meaningful opportunity to comment on the proposed rule.
2. Framework Document
    Section 6(a)(2) of the Process Rule states that if DOE determines 
it is appropriate to proceed with a rulemaking, the preliminary stages 
of a rulemaking to issue or amend an energy conservation standard that 
DOE will undertake will be a framework document and preliminary 
analysis, or

[[Page 87073]]

an advance notice of proposed rulemaking. While DOE published a 
preliminary analysis for this rulemaking (see 87 FR 11650), DOE did not 
publish a framework document in conjunction with the preliminary 
analysis. DOE notes, however, that chapter 2 of the March 2022 
Preliminary TSD that accompanied the March 2022 Preliminary Analysis--
entitled Analytical Framework, Comments from Interested Parties, and 
DOE Responses--describes the general analytical framework that DOE uses 
in evaluating and developing potential new energy conservation 
standards.\21\ As such, publication of a separate framework document 
would be largely redundant of chapter 2 of the March 2022 Preliminary 
TSD.
---------------------------------------------------------------------------

    \21\ The March 2022 Preliminary TSD is available at 
www.regulations.gov/document/EERE-2020-BT-STD-0007-0010.
---------------------------------------------------------------------------

III. General Discussion

    DOE developed this proposal after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests, including the December 2022 Joint 
Recommendation. The following discussion addresses issues raised by 
these commenters.

A. Scope of Coverage and Equipment Classes

1. General Scope of Coverage and Equipment Classes
    This document covers certain equipment meeting the definition of 
electric motors as defined in 10 CFR 431.12. Specifically, the 
definition for ``electric motor'' is ``a machine that converts 
electrical power into rotational mechanical power.'' 10 CFR 431.12. 
This NOPR addresses ESEMs, which are covered under 10 CFR part 431 
subpart B. This NOPR does not address small electric motors, which are 
covered under 10 CFR part 431 subpart X.\22\
---------------------------------------------------------------------------

    \22\ DOE uses the term ``expanded scope electric motor'' or 
``ESEM'' (formally known as ``small, non-small electric motor, 
electric motors'' or ``SNEMs''), to describe those small electric 
motors that are not included in the definition ``small electric 
motor'' under EPCA, but otherwise fall within the definition of 
``electric motor'' under EPCA. The term ``small electric motor'' 
means a NEMA general purpose alternating current single-speed 
induction motor, built in a two-digit frame number series in 
accordance with NEMA Standards Publication MG1-1987. (42 U.S.C. 
6311(13)(G)).
---------------------------------------------------------------------------

    Currently, DOE regulates MEMs falling into the NEMA Design A, NEMA 
Design B, NEMA Design C, and fire pump motor categories and those 
electric motors that meet the criteria specified at 10 CFR 431.25(g). 
10 CFR 431.25(h)-(j). Section 431.25(g) specifies that the relevant 
standards apply only to electric motors, including partial electric 
motors, that satisfy the following criteria:
    (1) Are single-speed, induction motors;
    (2) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
    (4) Operate on polyphase alternating current 60-hertz sinusoidal 
line power;
    (5) Are rated 600 volts or less;
    (6) Have a 2-, 4-, 6-, or 8-pole configuration;
    (7) Are built in a three-digit or four-digit NEMA frame size (or 
IEC metric equivalent), including those designs between two consecutive 
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA 
frame size (or IEC metric equivalent);
    (8) Produce at least one horsepower (0.746 kW) but not greater than 
500 horsepower (373 kW), and
    (9) Meet all of the performance requirements of one of the 
following motor types: A NEMA Design A, B, or C motor or an IEC Design 
N, NE, NEY, NY or H, HE, HEY, HYmotor.\23\
---------------------------------------------------------------------------

    \23\ DOE added the ``E'' and ``Y'' designations for IEC Design 
motors into 10 CFR 431.25(g) in the electric motors test procedure 
final rule. 87 FR 63588, 63596-636597, 63606 (Oct. 19, 2022).
---------------------------------------------------------------------------

    10 CFR 431.25(g).
    The definitions for ``NEMA Design A motors,'' ``NEMA Design B 
motors,'' ``NEMA Design C motors,'' ``fire pump electric motors,'' 
``IEC Design N motor,'' and ``IEC Design H motor,'' as well as ``E'' 
and ``Y'' designated IEC Design motors, are codified in 10 CFR 431.12. 
DOE has also currently exempted certain categories of motors from 
standards. The exemptions are as follows:
    (1) Air-over electric motors;
    (2) Component sets of an electric motor;
    (3) Liquid-cooled electric motors;
    (4) Submersible electric motors; and
    (5) Inverter-only electric motors.
    10 CFR 431.25(l).
    On October 19, 2022, DOE published the electric motors test 
procedure final rule (``October 2022 Final Rule''). 87 FR 63588. As 
part of the October 2022 Final Rule, DOE expanded the test procedure 
scope to additional categories of electric motors that currently do not 
have energy conservation standards. 87 FR 63588, 63593-63606. The 
expanded test procedure scope included the following:
    (1) Electric motors having a rated horsepower above 500 and up to 
750 hp that meets the criteria listed at Sec.  431.25(g), with the 
exception of criteria Sec.  431.25(g)(8) to air-over electric motors 
(``AO-MEMs''), and inverter-only electric motors;
    (2) Expanded Scope Electric Motors (``ESEM'', formally known as 
``small, non-small electric motor, electric motors'' or ``SNEMs''), 
that are not air-over electric motors, which:
    (a) Are not a small electric motor, as defined at Sec.  431.442 and 
is not a dedicated pool pump motors as defined at Sec.  431.483;
    (b) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (c) Operate on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that 
operates on polyphase or single-phase alternating current 60-hertz (Hz) 
sinusoidal line power;
    (d) Are rated for 600 volts or less;
    (e) Are a single-speed induction motor capable of operating without 
an inverter or is an inverter-only electric motor;
    (f) Produce a rated motor horsepower greater than or equal to 0.25 
horsepower (0.18 kW); and
    (g) Are built in the following frame sizes: any two-, or three-
digit NEMA frame size (or IEC equivalent) if the motor operates on 
single-phase power; any two-, or three-digit NEMA frame size (or IEC 
equivalent) if the motor operates on polyphase power, and has a rated 
motor horsepower less than 1 horsepower (0.75 kW); or a two-digit NEMA 
frame size (or IEC metric equivalent), if the motor operates on 
polyphase power, has a rated motor horsepower equal to or greater than 
1 horsepower (0.75 kW), and is not an enclosed 56 NEMA frame size (or 
IEC metric equivalent).
    (3) ESEMs that are air-over electric motors (``AO-ESEMs'') and 
inverter-only electric motors;
    (4) A synchronous electric motor, which:
    (a) Is not a dedicated pool pump motor as defined at Sec.  431.483 
or is not an air-over electric motor;
    (b) Is a synchronous electric motor;
    (c) Is rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (d) Operates on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or is used with an inverter that 
operates on polyphase or single-phase alternating current 60-hertz (Hz) 
sinusoidal line power;
    (e) Is rated 600 volts or less; and
    (f) Produces at least 0.25 hp (0.18 kW) but not greater than 750 hp 
(559 kW).
    (5) Synchronous electric motors that are inverter-only electric 
motors.
    See section 1.2, appendix B.
    In the October 2022 Final Rule, DOE noted that, for these motors 
newly included within the scope of the test procedure for which there 
was no established energy conservation standards, such as ESEMs and AO-

[[Page 87074]]

ESEMs, manufacturers would not be required to use the test procedure to 
certify these motors to DOE until such time as a standard is 
established. 87 FR 63588, 63591.\24\ Further, the October 2022 Final 
Rule continued to exclude the following categories of electric motors:
---------------------------------------------------------------------------

    \24\ However, manufacturers making voluntary representations 
respecting the energy consumption or cost of energy consumed by such 
motors are required to use the DOE test procedure for making such 
representations beginning 180 days following publication of the 
October 2022 Final Rule. Id. at 87 FR 63591.
---------------------------------------------------------------------------

    (1) Inverter-only electric motors that are air-over electric 
motors;
    (2) Component sets of an electric motor;
    (3) Liquid-cooled electric motors; and
    (4) Submersible electric motors.
    Due to the number of electric motor characteristics (e.g., 
horsepower rating, pole configuration, and enclosure), in the March 
2022 Preliminary Analysis, DOE used two constructs to help develop 
appropriate energy conservation standards for electric motors: 
``equipment class'' and ``equipment class groups.'' An equipment class 
represents a unique combination of motor characteristics for which DOE 
is establishing a specific energy conservation standard. This includes 
permutations of electric motor design topologies (i.e., CSIR/CSCR, 
split phase, shaded pole, PSC, or polyphase), standard horsepower 
ratings (i.e., standard ratings from 0.25 to 3 horsepower varying based 
on torque level and pole count), pole configurations (i.e., 2-, 4-, 6-, 
or 8-pole), and enclosure types (i.e., open or enclosed). An ECG is a 
collection of electric motors that share a common design trait. 
Equipment class groups include motors over a range of horsepower 
ratings, enclosure types, and pole configurations. Essentially, each 
equipment class group is a collection of a large number of equipment 
classes with the same design trait. As such, in the March 2022 
Preliminary Analysis, DOE presented equipment class groups based on 
electric motor topology, horsepower rating, pole configuration. and 
enclosure type. See sections 2.3.1 and 3.2.2 of the March 2022 
Preliminary TSD.
    In the March 2022 Preliminary Analysis, DOE analyzed the additional 
motors now included within the scope of the test procedure after the 
October 2022 Final Rule. See sections 2.2.1 and 2.2.3.2 of the March 
2022 Preliminary TSD. This analysis included MEMs from 1-500hp, AO-
MEMs, and ESEMs (including AO-ESEMs). This NOPR proposes new standards 
for only a portion of the scope analyzed in the March 2022 Preliminary 
Analysis and included within the scope of the test procedure after the 
October 2022 Final Rule. Specifically, in this NOPR, DOE is only 
proposing standards for ESEMs, including AO-ESEMs. As further described 
in section IV.A.3 of this document, DOE used multiple performance 
characteristics to establish the equipment classes used in this NOPR. 
Among these performance characteristics are locked-rotor torque and 
number of phases of the input power of a motor, used to create the 
following groups: high and medium torque single-phase ESEMs (i.e., 
CSIR/CSCR and split phase), low torque single phase ESEMs (i.e., shaded 
pole, PSC) and polyphase ESEMs that meet the criteria a) through g) as 
listed previously (See section 1.2, 10 CFR part 431, appendix B). These 
are typically used in residential as well as commercial and industrial 
applications.
    Further discussion on equipment classes and the basis used to 
establish them is provided in section IV.A.3 of this document.
2. Structure of the Regulatory Text
    In addition to proposing new requirements for ESEMs, in this NOPR, 
DOE proposes to move portions of the existing electric motor 
regulations that pertain to the energy conservation standards and their 
compliance dates (at 10 CFR 431.25) to improve clarity. In this NOPR, 
DOE proposes to revise 10 CFR 431.25 by retaining the existing electric 
motor energy conservation standards and their compliance dates, adding 
provisions pertaining to ESEMs, and reorganizing all provisions 
currently in 10 CFR 431.25 by compliance date (i.e., each section has a 
different compliance date) to improve clarity. See Table III-1 for 
details.

                                     Table III-1--Revisions to 10 CFR 431.25
----------------------------------------------------------------------------------------------------------------
                                          Content high-level        Proposed revised
           Current location                  description                location                  Impact
----------------------------------------------------------------------------------------------------------------
Sec.   431.25(a)-(f).................  Describes standards for  None...................  None--Removed as these
                                        certain electric                                  requirements are no
                                        motors manufactured on                            longer current.
                                        or after December 19,
                                        2010, but before June
                                        1, 2016.
Sec.   431.25(k), Sec.   431.25(q)...  Describes how to         Sec.   431.25(a).......  Avoids repeating
                                        establish the                                     identical provisions
                                        horsepower for                                    in each subsection.
                                        purposes of
                                        determining the
                                        required minimum
                                        nominal full-load
                                        efficiency of an
                                        electric motor.
Sec.   431.25(g).....................  Describes the criteria   Sec.   431.25(b)(1)(i).  Moves the ``inclusion''
                                        for inclusion for                                 criteria, so that the
                                        certain electric                                  proper scope is
                                        motors manufactured on                            presented fully
                                        or after June 1, 2016,                            upfront in each
                                        but before June 1,                                section.
                                        2027 subject to energy
                                        conservation standards.
Sec.   431.25(h).....................  Describes standards for  Sec.   431.25(b)(2)(i).  Makes each section
                                        certain NEMA Design A                             ``comprehensive'' by
                                        and B electric motors                             carrying over the
                                        (and IEC equivalent)                              existing standards for
                                        manufactured on or                                all electric motors
                                        after June 1, 2016,                               categories in each
                                        but before June 1,                                section.
                                        2027.
Sec.   431.25(i).....................  Describes standards for  Sec.                     Makes each section
                                        certain NEMA Design C    431.25(b)(2)(ii), Sec.   ``comprehensive'' by
                                        electric motors (and       431.25(c)(2)(iv),      carrying over the
                                        IEC equivalent)          Sec.                     existing standards for
                                        manufactured on or       431.25(d)(3)(iv).        all electric motors
                                        after June 1, 2016.                               categories in each
                                                                                          section.

[[Page 87075]]

 
Sec.   431.25(j).....................  Describes standards for  Sec.                     Makes each section
                                        certain fire pump        431.25(b)(2)(iii),       ``comprehensive'' by
                                        electric motors (and     Sec.                     carrying over the
                                        IEC equivalent)          431.25(c)(2)(v), Sec.    existing standards for
                                        manufactured on or        431.25(d)(3)(v).        all electric motors
                                        after June 1, 2016.                               categories in each
                                                                                          section.
Sec.   431.25(l).....................  Describes the criteria   Sec.   431.25(b)(1)(ii)  Moves the
                                        for exclusion for                                 ``exemptions'' to
                                        certain electric                                  directly after the
                                        motors manufactured on                            ``inclusion''
                                        or after June 1, 2016,                            criteria, so that the
                                        but before June 1,                                proper scope is
                                        2027 subject to energy                            presented fully
                                        conservation standards.                           upfront in each
                                                                                          section, prior to
                                                                                          presenting the sub-
                                                                                          group criteria and
                                                                                          standards.
Sec.   431.25(m).....................  Describes the criteria   Sec.   431.25(c)(1)(i).  Moves the ``inclusion''
                                        for inclusion for                                 criteria, so that the
                                        certain electric                                  proper scope is
                                        motors manufactured on                            presented fully
                                        or after June 1, 2027                             upfront in each
                                        subject to energy                                 section.
                                        conservation standards.
Sec.   431.25(n).....................  Describes standards for  Sec.   431.25(c)(2)(i),  Makes each section
                                        certain NEMA Design A    Sec.   431.25(d)(3)(i).  ``comprehensive'' by
                                        and B electric motors                             carrying over the
                                        (and IEC                                          existing standards for
                                        equivalent),but                                   all electric motors
                                        excluding fire pump                               categories in each
                                        electric motors and                               section.
                                        air-over electric
                                        motors manufactured on
                                        or after June 1, 2027.
Sec.   431.25(o).....................  Describes standards for  Sec.                     Makes each section
                                        certain air-over NEMA    431.25(c)(2)(ii), Sec.   ``comprehensive'' by
                                        Design A and B             431.25(d)(3)(ii).      carrying over the
                                        electric motors (and                              existing standards for
                                        IEC equivalent), built                            all electric motors
                                        in standard frame size                            categories in each
                                        manufactured on or                                section.
                                        after June 1, 2027.
Sec.   431.25(p).....................  Describes standards for  Sec.                     Makes each section
                                        certain air-over NEMA    431.25(c)(2)(iii),       ``comprehensive'' by
                                        Design A and B           Sec.                     carrying over the
                                        electric motors (and     431.25(d)(3)(iii).       existing standards for
                                        IEC equivalent), built                            all electric motors
                                        in specialized frame                              categories in each
                                        size manufactured on                              section.
                                        or after June 1, 2027.
Sec.   431.25(r).....................  Describes the criteria   Sec.   431.25(c)(1)(ii)  Moves the
                                        for exclusion for                                 ``exemptions'' to
                                        certain electric                                  directly after the
                                        motors manufactured on                            ``inclusion''
                                        or after June 1, 2027,                            criteria, so that the
                                        subject to energy                                 proper scope is
                                        conservation standards.                           presented fully
                                                                                          upfront in each
                                                                                          section, prior to
                                                                                          presenting the sub-
                                                                                          group criteria and
                                                                                          standards.
New section..........................  Describes the criteria   Sec.   431.25(d)(2)(i).  New section--Adds the
                                        for inclusion as ESEM.                            ESEM provisions
                                                                                          proposed in this NOPR.
New section..........................  Describes the criteria   Sec.   431.25(d)(2)(ii)  New section--Adds the
                                        for exclusion for                                 ESEM provisions
                                        certain ESEM electric                             proposed in this NOPR.
                                        motors manufactured on
                                        or after January 1,
                                        2029.
New section..........................  Describes standards for  Sec.   431.25(d)(3)(vi)  New section--Adds the
                                        certain high and                                  ESEM provisions
                                        medium torque ESEM                                proposed in this NOPR.
                                        manufactured on or
                                        after January 1, 2029.
New section..........................  Describes standards for  Sec.                     New section--Adds the
                                        certain low torque       431.25(d)(3)(vii).       ESEM provisions
                                        ESEMs manufactured on                             proposed in this NOPR.
                                        or after January 1,
                                        2029.
New section..........................  Describes standards for  Sec.                     New section--Adds the
                                        certain polyphase        431.25(d)(3)(viii).      ESEM provisions
                                        ESEMs manufactured on                             proposed in this NOPR.
                                        or after January 1,
                                        2029.
----------------------------------------------------------------------------------------------------------------

3. Air-Over Medium Electric Motors and Air-Over ESEMs
    The June 2023 DFR amended the existing energy conservation 
standards for electric motors by establishing higher standards for 
certain horsepower electric motors and expanding the scope of the 
energy conservation standards to include certain air-over electric 
motors and electric motors with horsepower greater than 500. DOE 
adopted standards that were consistent with a joint recommendation that 
was submitted to DOE on November 15, 2022 (the ``November 2022 Joint 
Recommendation''), after determining that the new and amended energy 
conservation standards for these products would result in significant 
conservation of energy and are technologically feasible and 
economically justified. 88 FR 36066, 36067-36069.
    In the June 2023 DFR, DOE described that DOE currently regulates 
MEMs falling into the NEMA Design A, NEMA Design B, NEMA Design C, and 
fire pump motor categories and those electric motors that meet the 
criteria specified at 10 CFR 431.25(g). See id. at 88 FR 36079-36080; 
10 CFR 431.25(h)-(j). Specifically, DOE noted the nine criteria used to 
describe currently regulated MEMs, including the criteria at 10 CFR 
431.25(g)(7), which specifies MEMs: ``Are built in a three-digit or 
four-digit NEMA frame size (or IEC metric equivalent), including those 
designs between two consecutive NEMA

[[Page 87076]]

frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame 
size (or IEC metric equivalent)''. 88 FR 36066, 36080.
    In the June 2023 DFR, to support the new energy conservations 
standards for air-over electric motors, DOE created new equipment 
classes: one for standard frame size air-over motors (``AO-MEM 
(Standard frame size)'')) and one for specialized frame size air-over 
electric motors (``AO-Polyphase (Specialized frame size)''). Id. at 88 
FR 36088. DOE also established a definition for ``specialized frame 
size,'' based on a table that specified the maximum NEMA frame diameter 
(or size) for a given motor horsepower, pole configuration, and 
enclosure combination. Id. This table was part of the November 2022 
Joint Recommendation. Id. In this table, the maximum frame diameter 
specified ranges from a 48 NEMA frame motor diameter up to a 210 NEMA 
frame diameter, therefore including intermediate sizes such as 56 NEMA 
frame size in enclosed and open enclosure configurations. Id.
    To clarify that AO-Polyphase (Specialized frame size) are not 
included in the scope of electric motors included as ESEMs, DOE 
proposes to add ``and do not have an air-over enclosure and a 
specialized frame size if the motor operates on polyphase power'' to 
the ESEM scope criteria in the proposed paragraph (d)(2)(i)(1) of 10 
CFR 431.25 in this NOPR. DOE notes that AO-MEM (Standard frame size) do 
not meet the frame criteria for ESEMs and are not included in the scope 
of ESEMs.
    In the June 2023 DFR, DOE further noted that the specialized frame 
size air-over electric motors equipment class included frame sizes 
beyond those described at 10 CFR 431.25(g)(7). Id. To better 
characterize this distinction in frame sizes, DOE stated that it was 
renaming ``Specialized Frame Size AO-MEMs'' (from the November 2022 
Joint Recommendation) to ``AO-Polyphase (Specialized frame size).'' Id. 
DOE added that only the naming convention was changed compared to the 
November 2022 Joint Recommendation; and the scope of motors being 
represented in that equipment class continued to stay the same as in 
the November 2022 Joint Recommendation. Id.
    The general scope description in 10 CFR 431.25(m) of the regulatory 
text published in the June 2023 DFR presents the nine criteria that 
determine what electric motors the standards in 10 CFR 431.25 apply to. 
Specifically, the criteria at 10 CFR 431.25(m)(7) specifies that the 
standards apply to electric motors that: ``Are built in a three-digit 
or four-digit NEMA frame size (or IEC metric equivalent), including 
those designs between two consecutive NEMA frame sizes (or IEC metric 
equivalent), or an enclosed 56 NEMA frame size (or IEC metric 
equivalent).''
    When describing the energy conversation standards adopted for 
specialized frame sizes air-over electric motors, DOE specified that 
the standards are applicable to ``air-over electric motor meeting the 
criteria in paragraph (m) of this section and [. . .] built in a 
specialized frame size'' in section 10 CFR 431.25(p) of the regulatory 
text published in the June 2023 DFR. 88 FR 36066, 36150.
    As published, the general scope description in 10 CFR 431.25(m)(7) 
of the regulatory text in the June 2023 DFR, and the scope description 
in section 10 CFR 431.25(p) may be interpreted as inconsistent with the 
scope of electric motors included in the AO-Polyphase (Specialized 
frame size) equipment class analyzed in the June 2023 DFR, and for 
which DOE intended to establish new standards in 10 CFR 431.25(p). 
Specifically, DOE identified that the criteria at 10 CFR 431.25 (m)(7), 
which is identical to the criteria currently at 10 CFR 431.25(g)(7), 
excludes specialized frame air-over motors built in two-digit NEMA 
frame sizes (other than enclosed 56 frame size motors). Therefore, 
while in the preamble, DOE explicitly stated that the specialized frame 
size air-over electric motors equipment class included frame sizes 
beyond those described at 10 CFR 431.25(g)(7), the regulatory text as 
written may be interpreted as limiting the covered frame sizes to those 
specifically described at 10 CFR 431.25(g)(7).
    Therefore, to clarify the intent of the preamble of the June 2023 
DFR when establishing standards for the AO-polyphase (Specialized frame 
size) equipment class, which was to include frame sizes beyond those 
described at 10 CFR 431.25(g)(7), DOE proposes to make the following 
clarification by adding ``or have an air-over enclosure and a 
specialized frame size'' to the criteria originally included under 10 
CFR 431.25 (m)(7) in the June 2023 DFR, to read as follows: ``Are built 
in a three-digit or four-digit NEMA frame size (or IEC metric 
equivalent), including those designs between two consecutive NEMA frame 
sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame size (or 
IEC metric equivalent), or have an air-over enclosure and a specialized 
frame size''. As previously discussed, DOE proposes to re-organize the 
regulatory text at 10 CFR 431.25 and therefore is adding this proposed 
clarification in the new paragraphs (c)(1)(i)(7) and (d)(1)(i)(7).

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered equipment must use these test procedures to 
certify to DOE that their equipment complies with energy conservation 
standards and to quantify the efficiency of their equipment. On October 
19, 2022, DOE published the October 2022 Final Rule. 87 FR 63588. As 
described previously in this document, the October 2022 Final Rule 
expanded the types of motors included within the scope of the test 
procedure, including the new class of ESEMs for which DOE is 
establishing energy conservation standards in this NOPR. DOE's test 
procedures for electric motors are currently prescribed at appendix B 
as ``small, non-small-electric-motor electric motor'' and measure the 
full-load efficiency of an electric motor. To harmonize terminology, in 
this NOPR, DOE is replacing any reference to small, non-small-electric-
motor electric motor (``SNEM'') in appendix B with the term ``expanded 
scope electric motor,'' or ``ESEM.''

C. Represented Values

    DOE's energy conservation standards for electric motors are 
currently prescribed at 10 CFR 431.25. DOE's current energy 
conservation standards for electric motors are expressed in terms of 
nominal full-load efficiency and manufacturers must certify the 
represented value of nominal full-load efficiency of each basic model. 
10 CFR 429.64. The provisions establishing how to determine the average 
full-load efficiency and the nominal full-load efficiency of a basic 
model are provided at 10 CFR 429.64.
    As discussed in section II.B.3 of this document, the ESEM standard 
levels recommended by the Electric Motors Working Group are expressed 
in average full-load efficiency and not in terms of nominal full-load 
efficiency. To align with the Electric Motors Working Group 
recommendations, DOE proposes to revise the provisions related to the 
determination of the represented values for ESEMs at 10 CFR 429.64 such 
that manufacturers of ESEMs would certify a represented value of 
average full-load efficiency instead of a represented value of nominal 
full-load efficiency. DOE also proposes edits to 10 CFR 429.70(j) to 
reflect the use of a represented value of average full-load efficiency 
instead of

[[Page 87077]]

a represented value of nominal full-load efficiency for ESEMs.
    DOE requests comments on the proposal to use a represented value of 
average full-load efficiency for ESEMs and proposed revisions to 10 CFR 
429.64 and 429.70(j).

D. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, DOE conducts a 
screening analysis based on information gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of this 
proposed rulemaking. As the first step in such an analysis, DOE 
develops a list of technology options for consideration in consultation 
with manufacturers, design engineers, and other interested parties. DOE 
then determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially-available products or in working prototypes to be 
technologically feasible. 10 CFR 431.4; sections 6(c)(3)(i) and 
7(b)(1), Process Rule.
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety, and (4) unique-pathway proprietary technologies. 10 
CFR 431.4; sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5), Process Rule. 
Section IV.B of this document discusses the results of the screening 
analysis for ESEMs, particularly the designs DOE considered, those it 
screened out, and those that are the basis for the standards considered 
in this rulemaking. For further details on the screening analysis for 
this proposed rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new or amended standard for a type or 
class of covered product, it must determine the maximum improvement in 
energy efficiency or maximum reduction in energy use that is 
technologically feasible for such product. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE 
determined the maximum technologically feasible (``max-tech'') 
improvements in energy efficiency for ESEMs, using the design 
parameters for the most efficient products available on the market or 
in working prototypes. The max-tech levels that DOE determined for this 
proposed rulemaking are described in section IV.C of this proposed rule 
and in chapter 5 of the NOPR TSD.

E. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from application of the 
TSL to ESEMs purchased in the 30-year period that begins in the year of 
compliance with the proposed standards (2029-2058).\25\ The savings are 
measured over the entire lifetime of ESEMs purchased in the previous 
30-year period. DOE quantified the energy savings attributable to each 
TSL as the difference in energy consumption between each standards case 
and the no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for a 
product would likely evolve in the absence of new energy conservation 
standards.
---------------------------------------------------------------------------

    \25\ Each TSL is composed of specific efficiency levels for each 
product class. The TSLs considered for this NOPR are described in 
section V.A of this document. DOE conducted a sensitivity analysis 
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet model 
to estimate national energy savings (``NES'') from potential new 
standards for ESEMs. The NIA spreadsheet model (described in section 
IV.H of this document) calculates energy savings in terms of site 
energy, which is the energy directly consumed by products at the 
locations where they are used. For electricity, DOE reports national 
energy savings in terms of primary energy savings, which is the savings 
in the energy that is used to generate and transmit the site 
electricity. DOE also calculates NES in terms of FFC energy savings. 
The FFC metric includes the energy consumed in extracting, processing, 
and transporting primary fuels (i.e., coal, natural gas, petroleum 
fuels), and thus presents a more complete picture of the impacts of 
energy conservation standards.\26\ DOE's approach is based on the 
calculation of an FFC multiplier for each of the energy types used by 
covered products or equipment. For more information on FFC energy 
savings, see section IV.H of this document.
---------------------------------------------------------------------------

    \26\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as 
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for a covered product, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given proposed rulemaking.\27\ 
For example, some covered products and equipment have most of their 
energy consumption occur during periods of peak energy demand. The 
impacts of these products on the energy infrastructure can be more 
pronounced than products with relatively constant demand. Accordingly, 
DOE evaluates the significance of energy savings on a case-by-case 
basis, taking into account the significance of cumulative FFC national 
energy savings, the cumulative FFC emissions reductions, and the need 
to confront the global climate crisis, among other factors.
---------------------------------------------------------------------------

    \27\ The numeric threshold for determining the significance of 
energy savings established in a final rule published on February 14, 
2020 (85 FR 8626, 8670) was subsequently eliminated in a final rule 
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

    As stated, the standard levels proposed in this NOPR are projected 
to result in national energy savings of 8.9 quad FFC, the equivalent of 
the primary annual energy use of 95.7 million homes. Based on the 
amount of FFC savings, the corresponding reduction in emissions, and 
need to confront the global climate crisis, DOE has tentatively 
determined the energy savings from the standard levels proposed in this 
NOPR are ``significant'' within the meaning of 42 U.S.C. 6316(a) and 42 
U.S.C. 6295(o)(3)(B).

F. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential new or amended standard 
on manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes

[[Page 87078]]

both a short-term assessment--based on the cost and capital 
requirements during the period between when a regulation is issued and 
when entities must comply with the regulation--and a long-term 
assessment over a 30-year period. The industry-wide impacts analyzed 
include (1) INPV, which values the industry on the basis of expected 
future cash flows, (2) cash flows by year, (3) changes in revenue and 
income, and (4) other measures of impact, as appropriate. Second, DOE 
analyzes and reports the impacts on different types of manufacturers, 
including impacts on small manufacturers. Third, DOE considers the 
impact of standards on domestic manufacturer employment and 
manufacturing capacity, as well as the potential for standards to 
result in plant closures and loss of capital investment. Finally, DOE 
takes into account cumulative impacts of various DOE regulations and 
other regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value of 
the consumer costs and benefits expected to result from particular 
standards. DOE also evaluates the impacts of potential standards on 
identifiable subgroups of consumers that may be affected 
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from a standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analysis.
    The LCC is the sum of the purchase price of equipment (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the equipment. The LCC analysis requires a variety of inputs, such as 
equipment prices, equipment energy consumption, energy prices, 
maintenance and repair costs, equipment lifetime, and discount rates 
appropriate for consumers. To account for uncertainty and variability 
in specific inputs, such as equipment lifetime and discount rate, DOE 
uses a distribution of values, with probabilities attached to each 
value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered equipment in the first year of compliance with new 
standards. The LCC savings for the considered efficiency levels are 
calculated relative to the case that reflects projected market trends 
in the absence of new standards. DOE's LCC and PBP analysis is 
discussed in further detail in section IV.F of this document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section IV.H of this document, 
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing product classes and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
proposed in this document would not reduce the utility or performance 
of the equipment under consideration in this proposed rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to 
determine the impact, if any, of any lessening of competition likely to 
result from a proposed standard and to transmit such determination to 
the Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy 
of this proposed rule to the Attorney General with a request that the 
Department of Justice (``DOJ'') provide its determination on this 
issue. DOE will publish and respond to the Attorney General's 
determination in the final rule. DOE invites comment from the public 
regarding the competitive impacts that are likely to result from this 
proposed rule. In addition, stakeholders may also provide comments 
separately to DOJ regarding these potential impacts. See the ADDRESSES 
section for information to send comments to DOJ.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards 
are likely to provide improvements to the security and reliability of 
the Nation's energy system. Reductions in the demand for electricity 
also may result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how standards may affect the Nation's needed power generation 
capacity, as discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The proposed standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (``GHGs'') associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions, as discussed in section 
IV.K of this document; the estimated emissions impacts are reported in 
section V.B.6 of this document. DOE also estimates the economic value 
of emissions reductions resulting from the considered TSLs, as 
discussed in section IV.L of this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be

[[Page 87079]]

relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the 
extent DOE identifies any relevant information regarding economic 
justification that does not fit into the other categories described 
previously, DOE could consider such information under ``other 
factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
consumer of the equipment that meets the standard is less than three 
times the value of the first year's energy savings resulting from the 
standard, as calculated under the applicable DOE test procedure. (42 
U.S.C. 6313(a); 42 U.S.C. 6295(o)(2)(B)(iii) DOE's LCC and PBP analyses 
generate values used to calculate the effects that new energy 
conservation standards would have on the PBP for consumers. These 
analyses include, but are not limited to, the 3-year PBP contemplated 
under the rebuttable-presumption test.
    In addition, DOE routinely conducts an economic analysis that 
considers the full range of impacts to consumers, manufacturers, the 
Nation, and the environment, as required under 42 U.S.C. 6313(a) and 42 
U.S.C. 6295(o)(2)(B). The results of this analysis serve as the basis 
for DOE's evaluation of the economic justification for a potential 
standard level (thereby supporting or rebutting the results of any 
preliminary determination of economic justification). The rebuttable 
presumption payback calculation is discussed in section V.B.1.c of this 
document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
proposed rulemaking with regard to ESEMs. Separate subsections address 
each component of DOE's analyses. In this NOPR, DOE is only addressing 
comments and analysis specific to the scope of motors provided in the 
December 2022 Joint Recommendation (i.e., ESEMs and AO-ESEMs). As such, 
any analysis and comments related to MEMs and AO-MEMs were addressed in 
the separate June 2023 DFR published on June 1, 2023. 88 FR 36066.
    DOE used several analytical tools to estimate the impact of the 
standards proposed in this document. The first tool is a spreadsheet 
that presents the calculations of the LCC savings and PBP of potential 
new energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this rulemaking: www.regulations.gov/docket/EERE-2020-BT-STD-0007. Additionally, DOE used output from the 
latest version of the Energy Information Administration's (``EIA's'') 
Annual Energy Outlook (``AEO''), a widely known energy projection for 
the United States, for the emissions and utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly-available 
information. The subjects addressed in the market and technology 
assessment for this proposed rulemaking include (1) a determination of 
the scope of the proposed rulemaking and equipment classes, (2) 
manufacturers and industry structure, (3) existing efficiency programs, 
(4) shipments information, (5) market and industry trends; and (6) 
technologies or design options that could improve the energy efficiency 
of ESEMs. The key findings of DOE's market assessment are summarized in 
the following sections. See chapter 3 of the NOPR TSD for further 
discussion of the market and technology assessment.
1. Scope of Coverage
    This document covers ESEMs, a category of electric motors. The term 
``electric motor'' is defined at 10 CFR 431.12. Specifically, the 
definition for ``electric motor'' is ``a machine that converts 
electrical power into rotational mechanical power.'' 10 CFR 431.12.
    In the March 2022 Preliminary Analysis, DOE presented analysis for 
the current scope of electric motors regulated at 10 CFR 431.25, in 
addition to certain expanded scope, including air-over electric motors, 
and ESEMs and AO-ESEMs. See chapter 2 of the March 2022 Preliminary 
TSD. Since then, DOE has published the October 2022 Final Rule, which 
established test procedures for expanded scope, as discussed in detail 
in section III.B of this NOPR. Additionally, DOE has also published the 
June 2023 DFR, which established energy conservations standards for 
MEMs and AO-MEMs.
    In response to the scope presented in the March 2022 Preliminary 
Analysis, DOE received a number of comments, which are discussed in the 
subsections below. In this NOPR, DOE is only addressing comments and 
analysis specific to the scope of motors proposed in this NOPR, which 
includes ESEMs and AO-ESEMs.
    NEEA supported the inclusion of ESEMs in the scope of the 
standards. NEEA noted that including ESEMs will allow comparison of 
performance and informed purchase decisions. (NEEA, No. 33 at p. 2)
    AHAM and AHRI strongly opposed DOE's plan to expand the existing 
scope of coverage of electric motors to include motors destined for 
particular applications in finished goods, and instead recommended that 
DOE should apply a finished-product approach to energy efficiency 
regulations. (AHAM and AHRI, No. 25 at pp. 7-9) Lennox added that it 
strongly objects to any expansion of coverage (including development of 
test procedures, energy conservation requirements, and/or certification 
requirements) for electric motors that would circumvent the statutory 
exemption that Congress provided for small electric motors that are 
components of EPCA-covered products/equipment. (Lennox, No. 29 at p. 3) 
AHAM and AHRI commented that they interpret the EPCA exemption for SEMs 
that are components of covered product and equipment as to also mean 
that small special and definite purpose motors, whether they are 
classified as small electric motors or as an ESEM, should not be 
subject to energy conservation standards. AHAM and AHRI stated that 
such motors are, by definition, destined for particular products, and 
when that product is a covered product/piece of equipment, that motor 
is destined for a product already subject to energy conservation 
standards and has defining features to identify it as such. (AHAM and 
AHRI, No. 25 at pp. 1,6)
    AHRI and AHAM further commented that regulating ESEMs could affect 
the following product categories: clothes washers (top and front load), 
clothes dryers, food waste disposers, refrigerators, room air 
conditioners, and stick vacuums. Apart from stick vacuums and food 
waste disposers, AHAM and AHRI noted that the products listed are 
already subject to energy conservation standards. AHAM and AHRI also 
commented that

[[Page 87080]]

regulating ESEM and AO motors could impact the following products: 
small, large, very large commercial package air conditioning and 
heating equipment, residential air conditioners and heat pumps, single 
package vertical air conditioners and heat pumps, commercial and 
residential furnaces, commercial and residential boilers, commercial 
and residential water heaters, air cooled condensing unit, central 
station air handling units, geothermal heat pumps, unit coolers, unit 
ventilators, and water source heat pumps. (AHAM and AHRI, No. 25 at pp. 
1-2)
    HI recommended that dedicated-purpose ESEMs should be regulated as 
part of their final product instead of as motors specifically. (HI, No. 
31 at p. 1)
    The Joint Industry Stakeholders commented that they strongly object 
to any expansion of coverage (including development of test procedures, 
energy conservation requirements, and/or certification requirements) 
for electric motors that would circumvent the statutory exemption that 
Congress provided for small electric motors that are components of 
EPCA-covered products/equipment. They stated that embedded motor 
testing, and ultimately energy conservation standards, would save 
minimal energy and would create needless testing, paperwork, and 
record-keeping requirements that would raise costs for consumers. 
(Joint Industry Stakeholders, No. 23 at pp. 3-4) The Joint Industry 
Stakeholders and AHAM and AHRI agreed with the previous determination 
in which DOE recognized that Congress intentionally excluded these 
motors from coverage by DOE regulation when such motors are used as 
components of products and equipment that are already subject to DOE 
regulation, and they noted that these are the motors that DOE now seeks 
to regulate as ESEMs and by expanding the scope of the test procedure 
to \1/4\ hp. The Joint Industry Stakeholders and AHAM and AHRI added 
that, despite the similarity between ESEMs and SEMs, DOE is proposing 
to subject ESEMs used as components in EPCA-covered equipment/products 
to duplicative energy conservation standards at both the motor level 
and the finished product/equipment stage and that DOE provides no 
rationale or explanation for doing so. (Joint Industry Stakeholders, 
No. 23 at pp. 3-4; AHAM and AHRI, No. 25 at pp. 7- 9) Further, the 
Joint Industry Stakeholders commented that ESEMs include special and 
definite purpose motors that have been built to meet the needs of 
original equipment manufacturer (``OEM'') products. The Joint Industry 
Stakeholders added that many of these OEM products are already 
regulated by DOE. (Joint Industry Stakeholders, No. 23 at p. 2)
    As discussed in the October 2022 Final Rule, EPCA, as amended 
through EISA 2007, provides DOE with the authority to regulate the 
expanded scope of motors addressed in this rule. 87 FR 63588, 63596. 
Before the enactment of EISA 2007, EPCA defined the term ``electric 
motor'' as any motor that is a general purpose T-frame, single-speed, 
foot-mounting, polyphase squirrel-cage induction motor of the NEMA, 
Design A and B, continuous rated, operating on 230/460 volts and 
constant 60 Hertz line power as defined in NEMA Standards Publication 
MG1-1987. (See 42 U.S.C. 6311(13)(A) (2006)) Section 313(a)(2) of EISA 
2007 removed that definition and the prior limits that narrowly defined 
what types of motors would be considered as electric motors. In its 
place, EISA 2007 inserted a new ``Electric motors'' heading, and 
created two new subtypes of electric motors: General purpose electric 
motor (subtype I) and general purpose electric motor (subtype II). (42 
U.S.C. 6311(13)(A)-(B) (2011)) In addition, section 313(b)(2) of EISA 
2007 established energy conservation standards for four types of 
electric motors: general purpose electric motors (subtype I) (i.e., 
subtype I motors) with a power rating of 1 to 200 horsepower; fire pump 
motors; general purpose electric motor (subtype II) (i.e., subtype II 
motors) with a power rating of 1 to 200 horsepower; and NEMA Design B, 
general purpose electric motors with a power rating of more than 200 
horsepower, but less than or equal to 500 horsepower. (42 U.S.C. 
6313(b)(2)) The term ``electric motor'' was left undefined. However, in 
a May 4, 2012 final rule amending the electric motors test procedure 
(the ``May 2012 TP Final Rule''), DOE adopted the broader definition of 
``electric motor,'' currently found in 10 CFR 431.12, because DOE noted 
that the absence of a definition may cause confusion about which 
electric motors are required to comply with mandatory test procedures 
and energy conservation standards, and the broader definition provided 
DOE with the flexibility to set energy conservation standards for other 
types of electric motors without having to continuously update the 
definition of ``electric motors''. 77 FR 26608, 26613.
    Some electric motors included in this proposed rule may be sold 
embedded into covered products and equipment or sold alone as 
replacements. DOE is proposing new energy conservation standards for 
ESEMs in this proposed rule that apply to the motor's efficiency 
regardless of whether the ESEM is being sold alone or embedded into a 
covered product or equipment. As discussed in section III.D of this 
document, DOE has determined that energy savings from the standard 
levels proposed in this NOPR are ``significant'' within the meaning of 
42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(3)(B)
    The provisions of EPCA make clear that DOE may regulate electric 
motors ``alone or as a component of another piece of equipment.'' (See 
42 U.S.C. 6313(b)(1) and (2) (providing that standards for electric 
motors be applied to electric motors manufactured ``alone or as a 
component of another piece of equipment'')) In contrast, Congress 
exempted SEM that are a component of a covered product or a covered 
equipment from the standards that DOE was required to establish under 
42 U.S.C. 6317(b). Congress did not, however, similarly restrict 
electric motors.
    Congress defined what equipment comprises a SEM--specifically, ``a 
NEMA general purpose alternating current single-speed induction motor, 
built in a two-digit frame number series in accordance with NEMA 
Standards Publication MG1-1987.'' \28\ (42 U.S.C. 6311(13)(G)) ESEMs, 
which are electric motors, are not SEMs because they do not satisfy the 
more specific statutory SEM definition. Unlike SEMs, the statute does 
not limit DOE's authority to regulate an electric motor with respect to 
whether ``electric motors'' are stand-alone equipment items or 
components of a covered product or covered equipment. Rather, Congress 
specifically provided that DOE could regulate electric motors that are 
components of other covered equipment in the standards established by 
DOE. (See 42 U.S.C. 6313(b)(1) (providing that standards for electric 
motors be applied to electric motors manufactured ``alone or as a 
component of another piece of equipment'')) Accordingly, DOE disagrees 
with commenters that the SEM component exemption should apply to ESEMs 
and, therefore, includes ESEMs installed as components in other DOE-
regulated products and equipment in these proposed energy conservation 
standards.
---------------------------------------------------------------------------

    \28\ DOE clarified, at industry's urging, that the definition 
also includes motors that are IEC metric equivalents to the 
specified NEMA motors prescribed by the statute. See 74 FR 32059, 
32061-32062 (July 7, 2009); 10 CFR 431.442.
---------------------------------------------------------------------------

    In addition, ESEMs are built in standard NEMA frame sizes and are 
not common in currently regulated consumer products including those 
listed by AHAM and AHRI (i.e., clothes washers (top and front load), 
clothes

[[Page 87081]]

dryers, food waste disposers, refrigerators, room air conditioners, and 
stick vacuums). Therefore, DOE believes the standards proposed in this 
NOPR would not impact manufacturers of consumer products. In commercial 
equipment, DOE identified the following equipment as potentially 
incorporating ESEMs: walk-in coolers and freezers,\29\ circulator 
pumps,\30\ air circulating fans,\31\ and commercial unitary air 
conditioning equipment.\32\ If the proposed energy conservation 
standards for these rules finalize as proposed, DOE has identified that 
these rules would all: (1) have a compliance year that is at or before 
the ESEM standard compliance year (2029) and/or (2) require a motor 
that is either outside of the scope of this rule (e.g., an 
electronically commutated motor (``ECM'')) or an ESEM with an 
efficiency above the proposed ESEM standards, and therefore not be 
impacted by the proposed ESEM rule (i.e., the ESEM rule would not 
trigger a redesign of these equipment).
---------------------------------------------------------------------------

    \29\ The walk-in coolers and walk-in freezers standards 
rulemaking docket number is: EERE-2015-BT-STD-0016.
    \30\ The circulator pumps energy conservation standard 
rulemaking docket number is: EERE-2016-BT-STD-0004.
    \31\ The commercial and industrial fans and blowers energy 
conservation standard rulemaking docket number is: EERE-2013-BT-STD-
0006. Air circulating fans are a subcategory of fans.
    \32\ The small, large, and very large air-cooled commercial 
package air conditioners and heat pumps energy conservation standard 
rulemaking docket number is: EERE-2013-BT-STD-0007.
---------------------------------------------------------------------------

    Furthermore, EPCA requires that any new or amended standard for 
covered equipment must be designed to achieve the maximum improvement 
in energy efficiency that the Secretary of Energy determines is 
technologically feasible and economically justified. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) In this 
NOPR, DOE performs the necessary analyses to determine what new 
standards would meet the aforementioned criteria. Further, DOE has 
determined that the proposed standards provide cost-effective standards 
that would result in the significant conservation of energy. Further 
discussion on the analytical results and DOE's justification is 
provided in section V of this document.
    NEEA commented that the term ``small, non-small electric motors'' 
is confusing and recommended using ``Other Small HP Motors (OSHM)'' or 
``Other Small Electric Motors (OSEM)'' as alternative options. (NEEA, 
No. 33 at p. 2) DOE has opted to use the term ``ESEM'' in this NOPR.
    The Joint Industry Stakeholders commented that the proposed 
definition for ESEMs used in the March 2022 Preliminary Analysis is 
vague. Specifically, the Joint Industry Stakeholders requested 
clarification regarding (1) the definition of full-rated load; (2) 
whether brushless permanent magnet motors were included; (3) whether 
some motors, which have motor assemblies that are connected to 60 Hz 
and which are rectified internally to DC power and require brush 
maintenance were included. (Joint Industry Stakeholders, No. 23 at pp. 
1-2) In response, DOE notes that the October 2022 Final Rule finalized 
a definition for ``rated load,'' which is currently provided in 10 CFR 
431.12 (87 FR 63588, 63623), and included specifications on what 
electric motors meet the definition of ESEM, which is currently 
provided in section 1 of appendix B (87 FR 63588, 63599). Specifically, 
10 CFR 431.12 currently relates rated load to full-load, full rated 
load, or rated full-load, and defines it as ``the rated output power of 
an electric motor.'' Further, section 1.1 of appendix B states that an 
ESEM means a motor that ``is a single-speed induction motor capable of 
operating without an inverter or is an inverter-only electric motor''; 
therefore, the ESEM scope does not include non-induction electric 
motors. However, DOE does separately include in scope ``synchronous 
electric motors,'' which entails an electric motor that is 
``synchronous'' and ``produces at least 0.25 hp but not greater than 
750 hp''. See Section 1.1, appendix B. However, DOE is not adopting 
standards for synchronous electric motors in this NOPR. Finally, the 
ESEM scope specifically states that an electric motor would meet the 
scope if it operates on polyphase or single-phase alternating current 
60-hertz (Hz) sinusoidal line power; or is used with an inverter that 
operates on polyphase or single-phase alternating current 60-hertz (Hz) 
sinusoidal line power. An ``inverter'' is defined as ``an electronic 
device that converts an input AC or DC power into a controlled output 
AC or DC voltage or current. An inverter may also be called a 
converter.'' 10 CFR 431.12.
    The Joint Industry Stakeholders recommended that DOE exclude 
refrigeration compressor motors from the scope of the ESEM rulemaking. 
The Joint Industry Stakeholders explained that such motors are 
hermetically sealed and are cooled by the refrigerant flowing within 
the appliance/equipment, and that there is no accurate way to measure 
the efficiency of just the motor and thus, it is not appropriate or 
feasible to include refrigeration compressor motors in the scope of 
this rulemaking. (Joint Industry Stakeholders, No. 23 at p. 9) DOE 
defines a liquid-cooled electric motor as a motor that is cooled by 
liquid circulated using a designated cooling apparatus such that the 
liquid or liquid-filled conductors come into direct contact with the 
parts of the motor but is not submerged in a liquid during operation. 
10 CFR 431.12. DOE reviewed refrigeration compressor motors and 
understands that they would be considered a liquid-cooled electric 
motor according to this definition because they require flowing 
refrigerant to adequately cool during operation. The designated cooling 
apparatus in this case is shared with the greater refrigeration system. 
Liquid-cooled electric motors are currently exempt from DOE's standards 
for electric motors, generally. See 10 CFR 431.25(l)(3). Accordingly, 
because the refrigeration compressor motor described by the commenters 
meets the definition of a ``liquid-cooled electric motor,'' it is 
exempt from the test procedure and energy conservation standards 
proposed by this NOPR. DOE also notes that many refrigeration 
compressor motors are not built in standard NEMA frame sizes, and this 
would also disqualify them from the scope of this NOPR. As such, DOE 
does not see a need to specifically exempt refrigeration compression 
motors from the scope of this NOPR, but may revisit the issue in the 
future, as necessary.
    Additionally, NEMA stated that there is no room for explosion proof 
motors to accommodate a run capacitor because of the added enclosure 
constraints associated with explosion proof motors. (NEMA, No. 22 at p. 
3) DOE agrees with NEMA that the enclosure constraints for explosion 
proof motors do not allow for the addition of a run capacitor. The new 
standard levels proposed by this NOPR will not require CSIR motors to 
incorporate an additional run capacitor and will not require CSIR 
motors to be replaced by CSCR motors. Therefore, DOE believes NEMA's 
concern is addressed.
    The CA IOUs recommended exploring stakeholder interest in convening 
an ASRAC Working Group to clearly define the scope of an ESEM 
regulation before moving forward with an energy conservation standard 
rulemaking. (CA IOUs, No. 30 at p. 2) In response, DOE notes that 
several members of industry and other stakeholders did convene on a 
negotiation, which ended in the December 2022 Joint Recommendation. The 
December 2022 Joint Recommendation limited its scope to high-torque and 
medium-torque ESEMs, low-torque ESEMs, and polyphase ESEMs.

[[Page 87082]]

    The Joint Industry Stakeholders also commented that ESEMs are the 
same as SEMs and that DOE's reliance on the SEM data as an analog to 
ESEM performance demonstrates that the products are the same. 
Additionally, the Joint Industry Stakeholders said that DOE did not 
provide sufficient data to support its analysis or to allow commenters 
to fully understand, interpret, or analyze the March 2022 Preliminary 
TSD and provide meaningful comment. The Joint Industry Stakeholders 
also stated that DOE's reliance on old data for what DOE claims is a 
different product and its drawing of conclusions without providing 
further detail fails to meet the requirements of the Administrative 
Procedure Act (``APA'') or the Data Quality Act. (Joint Industry 
Stakeholders, No. 23 at pp. 2-3) As noted previously, EPCA provides a 
very specific definition for SEMs that DOE regulates under 10 CFR part 
431 subpart X. ESEMs can be similar to SEMs in many aspects, but 
nevertheless fall outside of the EPCA-provided definition. Accordingly, 
ESEMs are treated differently for purposes of DOE's energy conservation 
standards. That DOE used SEMs data as an analog to ESEM performance to 
help construct the March 2022 Preliminary Analysis does not change the 
fact that they are treated differently under EPCA, or that, as electric 
motors, DOE may regulate ESEMs used as components in other covered 
equipment. Notably, in response to the comment from the Joint 
Stakeholders, DOE has made updates to the ESEMs analysis in this NOPR 
compared to what was presented in the March 2022 Preliminary Analysis; 
specifically, DOE has performed additional testing, teardowns, and 
modeling of electric motors that more closely align with the ESEM scope 
and updated the engineering analysis accordingly. In addition, DOE 
reviewed the latest motor catalog data to inform the updated analyses. 
Further discussion on this updated analysis is provided in section IV.C 
of this document. Therefore, DOE has met the APA's requirements as DOE 
has explained throughout this NOPR and in the NOPR TSD the details of 
the analysis conducted by DOE and the information DOE relied on in 
conducting that analysis. Further, DOE has complied with DOE's 
guidelines for implementing the Data Quality Act that ensure the 
quality, objectivity, utility, and integrity of the data presented in 
this document.\33\
---------------------------------------------------------------------------

    \33\ See the discussion of the Data Quality Act in section VI.J 
of this document; see also www.energy.gov/sites/prod/files/cioprod/documents/finalinfoqualityguidelines03072011.pdf.
---------------------------------------------------------------------------

2. Air-Over ESEMs
    In response to the March 2022 Preliminary Analysis, AHRI commented 
that air-over motors are explicitly exempted from regulation in 10 CFR 
431.25(l), and that DOE has not overcome the challenges to include 
these exempted products, procedurally or technically. AHRI added that 
the claimed similarities between SEMs and the newly proposed AO-ESEMs 
category warrant the same exemption for AO-ESEMs that Congress 
expressly provided for small electric motors, and AHRI referenced the 
requirement of EPCA, which says that energy conservation standards 
``shall not apply to any small electric motor which is a component of a 
covered product under section 6292(a) of this title or covered 
equipment under section 6311 of this title.'' (AHRI, No. 26 at pp. 1, 
2)
    With regards to the comment from AHRI, DOE is covering AO-ESEMs 
under its ``electric motors'' authority. (42 U.S.C. 6311(1)(A); 42 
U.S.C. 6313(b)) As discussed in section III.A of this document, the 
statute does not limit DOE's authority to regulate electric motors 
(that are not SEMs) with respect to whether they are stand-alone 
equipment items or as components of a covered product or covered 
equipment. See 42 U.S.C. 6313(b)(1) (providing that standards for 
electric motors be applied to electric motors manufactured ``alone or 
as a component of another piece of equipment'') AO-ESEMs do not fall 
within the SEMs definition under EPCA, and, therefore, DOE is 
regulating AO-ESEMs under its ``electric motors'' authority.
    DOE's previous determination in the December 2013 Final Rule to 
exclude air-over electric motors from scope was due to insufficient 
information available to DOE at the time to support establishment of a 
test method. 78 FR 75962, 75974-75975. Since that time, NEMA published 
a test standard for air-over motors in Section IV, ``Performance 
Standards Applying to All Machines,'' Part 34 ``Air-Over Motor 
Efficiency Test Method'' of NEMA MG 1-2016 (``NEMA Air-over Motor 
Efficiency Test Method''). The air-over method was originally published 
as part of the 2017 NEMA MG-1 Supplements and is also included in the 
latest version of NEMA MG 1-2016. Accordingly, in the October 2022 
Final Rule, DOE included air-over electric motors in the test procedure 
scope and established test procedures for such motors. 87 FR 63588, 
63597. In this NOPR, DOE has analyzed the scope of electric motors 
based on the finalized test procedures and proposes new energy 
conservation standards for AO-ESEMs that align with the December 2022 
Joint Recommendation.
3. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
may establish separate standards for a group of covered products (i.e., 
establish a separate equipment class) if DOE determines that separate 
standards are justified based on the type of energy used, or if DOE 
determines that a product's capacity or other performance-related 
feature justifies a different standard. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(q)(1)) In making a determination whether a performance-related 
feature justifies a different standard, DOE must consider such factors 
as the utility of the feature to the consumer and other factors DOE 
determines are appropriate. (Id.)
    In the March 2022 Preliminary Analysis, DOE considered potential 
equipment classes defined on the basis of motor horsepower rating, pole 
configuration (i.e., 2, 4, 6, or 8 poles), enclosure type (i.e., open 
or enclosed construction), locked-rotor torque level (i.e., high, 
medium, or low), type of input power (i.e., phase), and motor cooling 
approach (i.e., air-over or non-air-over). See chapter 2 of the March 
2022 Preliminary TSD.
    Regarding horsepower, DOE has previously established separate 
equipment classes for electric motors on the basis of horsepower 
rating. In an electric motors final rule that published on May 29, 2014 
(``May 2014 Electric Motors Final Rule''), DOE discussed that 
horsepower is a performance attribute of an electric motor that is 
directly related to the capacity of an electric motor to perform useful 
work, and that horsepower generally scales with efficiency. 79 FR 
30934, 30958. For example, a 50-horsepower electric motor would 
generally be considered more efficient than a 10-horsepower electric 
motor. Id. For these reasons, DOE has tentatively determined that 
horsepower represents a performance-related feature that justifies 
separate equipment classes for ESEMs.
    Regarding pole configuration, DOE has also previously established 
separate equipment classes for electric motors on the basis of pole 
configuration. In the May 2014 Electric Motors Final Rule, DOE 
discussed that the number of poles in an induction motor determines the 
synchronous speed (i.e., revolutions per minute) of that motor, and 
that there is an inverse relationship between the number of poles and a 
motor's speed. Id. at 79 FR 30958-30959. As the number

[[Page 87083]]

of poles increases from two to four to six to eight, the synchronous 
speed drops from 3,600 to 1,800 to 1,200 to 900 revolutions per minute, 
respectively. Id. The number of poles has a direct impact on the 
electric motor's performance and achievable efficiency because the 
number of poles affects the amount of available space inside an 
electric motor that can be used to accommodate efficiency improvements. 
Id. For example, eight pole motors have twice as many poles as four-
pole motors and, correspondingly, less space for efficiency 
improvements. Id. For these reasons, DOE has tentatively determined 
that pole configuration represents a performance-related feature that 
justifies separate equipment classes for ESEMs.
    Regarding enclosure type, DOE has also previously established 
separate equipment classes for electric motors on the basis of 
enclosure type. In the May 2014 Electric Motors Final Rule, DOE 
discussed that electric motors manufactured with open construction 
allow a free interchange of air between the electric motor's interior 
and exterior. Id. at 79 FR 30959. Whereas, electric motors with 
enclosed construction have no direct air interchange between the 
motor's interior and exterior (but are not necessarily air-tight) and 
may be equipped with an internal fan for cooling. Id. Whether an 
electric motor is open or enclosed affects its utility; open motors are 
generally not used in harsh operating environments, whereas totally 
enclosed electric motors often are. Id. The enclosure type also affects 
an electric motor's ability to dissipate heat, which directly affects 
efficiency. For these reasons, DOE has tentatively determined that the 
enclosure type represents a performance-related feature that justifies 
separate equipment classes ESEMs.
    Regarding locked-rotor torque level, DOE considered three 
classifications of locked-rotor torque in the March 2022 Preliminary 
Analysis: high, medium, and low. The high locked-rotor torque motor 
topologies included CSCR and CSIR motors; the medium locked-rotor 
torque topologies included split phase motors; and the low locked-rotor 
torque topologies included PSC and shaded pole motors. Locked-rotor 
torque refers to torque developed by an electric motor whose rotor is 
locked in place, i.e., not rotating. Locked-rotor torque characterizes 
a motor's ability to begin moving loads at rest, an attribute which is 
important to varying degree across applications. Certain applications, 
for example, some fans, may be relatively indifferent to locked-rotor 
torque; whereas for others, a minimum locked-rotor torque may be 
required to begin operation. DOE understands that high and medium 
locked-rotor torque motors are generally physically larger than low-
locked rotor torque motors and may not fit in many embedded 
applications that low locked-rotor torque motors are used in. 
Additionally, low locked-rotor torque motors may not provide sufficient 
starting torque (i.e., the motor would stall and the application would 
never start) to the many applications that have a high starting load 
(e.g., compressors and pumps). DOE also understands that high and 
medium locked-rotor torque motors generally operate inherently more 
efficiently than low locked-rotor torque motors. As such, DOE has 
tentatively determined that separate standards (i.e., separate 
equipment classes) are warranted for the high/medium locked-rotor 
torque topologies (i.e., CSCR, CSIR, and split phase) and low locked-
rotor torque topologies (i.e., PSC and shaded pole). In the March 2022 
Preliminary Analysis, DOE sought comment on whether any applications 
require a low locked-rotor torque and would not operate with a high 
locked-rotor torque motor, and whether locked-rotor torque is necessary 
to maintain as an equipment class factor if the highest-torque motor 
types (e.g., CSCR) can reach the highest available efficiency levels 
among the set of electric motors which are used as substitutes for 
similar applications. Section 2.3.1.2 of the March 2022 TSD.
    In response to the equipment classes presented in the March 2022 
Preliminary Analysis, NEMA agreed that locked-rotor torque (or 
alternatively, the motor technology) is necessary to maintain as an 
equipment class factor even if the high locked-rotor torque ESEMs can 
reach the highest efficiencies among the full range of ESEMs 
(regardless of locked-rotor torque categorization). They substantiated 
their recommendation by stating that certain high locked-rotor torque 
motors are often not interchangeable with lower locked-rotor torque 
motors in specific applications because of the larger physical size of 
the high locked-rotor torque motor due to the presence of additional 
capacitors. (NEMA, No. 22 at pp. 6-7) The December 2022 Joint 
Recommendation recommended equipment classes with locked-rotor torque 
as one of the differentiators among equipment classes, although in 
contrast to the March 2022 Preliminary Analysis, it merged the high and 
medium locked-rotor torque classes to form a single high locked-rotor 
torque class. DOE infers from this recommendation that the performance 
of split phase motors does not inherently differ substantially from the 
performance of CSCR and CSIR motors, such that a higher or lower energy 
conservation standard for split phase motors would not be warranted in 
relation to a standard established for CSCR and CSIR motors. As such, 
DOE has tentatively determined that separate equipment classes for 
ESEMs are warranted for two groupings of locked-rotor torque: high and 
medium locked-rotor torque (represented by the grouping of CSCR, CSIR, 
and split phase topologies) and low locked-rotor torque (represented by 
the grouping of PSC and shaded pole topologies).
    Regarding motor cooling approach, DOE discussed the differentiation 
between air-over and non-air-over motors in the March 2022 Preliminary 
Analysis. See section 2.3.1.2 of the March 2022 Preliminary TSD. DOE 
currently defines an air-over electric motor at 10 CFR 431.12 as an 
electric motor ``rated to operate in and be cooled by the airstream of 
a fan or blower that is not supplied with the motor and whose primary 
purpose is providing airflow to an application other than the motor 
driving it.'' As such, air-over motors are often designed without an 
internal fan, which allows for smaller packaging, reduced cost, and the 
potential for higher-efficiency performance because the motor is not 
driving an internal fan. DOE notes, however, the inability to self-cool 
may be a limitation in many applications where cooling airflow is 
unavailable or too variable to provide a reliable cooling source. For 
these reasons, DOE has tentatively determined that the cooling approach 
represents a performance-related feature that justifies separate 
equipment classes for AO-ESEMs.
    Based on the above considerations, DOE is proposing to establish 
equipment class groupings for ESEMs based on the following 
characteristics: horsepower rating, pole configuration (i.e., 2, 4, 6, 
or 8 poles), enclosure type (i.e., open or enclosed), locked-rotor 
torque level (i.e., high and medium locked-rotor torque, represented by 
the grouping of CSCR, CSIR, and split phase topologies; and low locked-
rotor torque, represented by the grouping of PSC and shaded pole 
topologies), type of input power (i.e., phase), and motor cooling 
approach (i.e., air-over or non-air-over). Table IV-1 presents the 
equipment class groups proposed in this NOPR. Within each equipment 
class group, DOE would establish individual equipment classes for each 
pole configuration, enclosure type, and horsepower range. The equipment 
class groups shown in Table IV-1 represent a total of 350 equipment 
classes.

[[Page 87084]]



                                                           Table IV-1--Equipment Class Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Horsepower         Pole
  Equipment class  groups (``ECG'')         Motor topology          rating       configuration           Enclosure              Cooling  requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................  CSCR, CSIR, Split Phase           .25-3      2, 4, 6, 8  Open......................  Non-Air-Over.
                                                                                                Enclosed..................
2....................................  PSC, Shaded Pole.......           .25-3      2, 4, 6, 8  Open......................  Non-Air-Over.
                                                                                                Enclosed..................
3....................................  Polyphase..............           .25-3      2, 4, 6, 8  Open......................  Non-Air-Over.
                                                                                                Enclosed..................
4....................................  CSCR, CSIR, Split Phase           .25-3      2, 4, 6, 8  Open......................  Air-Over
                                                                                                Enclosed..................
5....................................  PSC, Shaded Pole.......           .25-3      2, 4, 6, 8  Open......................  Air-Over
                                                                                                Enclosed..................
6....................................  Polyphase..............           .25-3      2, 4, 6, 8  Open......................  Air-Over
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE requests comment on the proposed equipment classes for this 
NOPR.
4. Technology Options
    In the March 2022 Preliminary Analysis market and technology 
assessment, DOE identified several technology options that were 
initially determined to improve the efficiency of ESEMs, as measured by 
the DOE test procedure. Table IV-2 presents the technology options 
considered in the March 2022 Preliminary Analysis.

    Table IV-2--March 2022 Preliminary Analysis Technology Options To
                        Increase Motor Efficiency
------------------------------------------------------------------------
         Type of loss to reduce                 Technology option
------------------------------------------------------------------------
Stator I2R Losses......................  Increase cross-sectional area
                                          of copper in stator slots.
                                         Decrease the length of coil
                                          extensions.
Rotor I2R Losses.......................  Increase cross-sectional area
                                          of end rings.
                                         Increase cross-sectional area
                                          of rotor conductor bars.
                                         Use a die-cast copper rotor
                                          cage.
Core Losses............................  Use electrical steel
                                          laminations with lower losses
                                          (watts/lb).
                                         Use thinner steel laminations.
                                         Increase stack length (i.e.,
                                          add electrical steel
                                          laminations).
Friction and Windage Losses............  Optimize bearing and
                                          lubrication selection.
                                         Improve cooling system design.
Stray-Load Losses......................  Reduce skew on rotor cage.
                                         Improve rotor bar insulation.
------------------------------------------------------------------------

    DOE maintains the same technology options from the March 2022 
Preliminary Analysis in this NOPR. DOE received a number of comments 
regarding technology options. As these options are applicable to 
electric motors, broadly, DOE responded to these comments in the June 
2023 DFR and refers to that discussion for purposes of technology 
options considered in this NOPR. See 88 FR 36066, 36089-36090.
5. Imported Embedded Motors
    In response to the March 2022 Preliminary Analysis, DOE received 
comments regarding compliance logistics and general issues regarding 
embedded motors being imported into the United States. NEMA commented 
that they estimate between 30 and 60 percent of ESEMs will be imported 
as a motor or embedded in a piece of equipment, and that the importers 
of these equipment are the responsible parties to comply. NEMA stated 
that if DOE ignores these importers, the rule will harm American 
equipment manufacturers incorporating ESEMs who compete with offshore 
suppliers and will not maintain a ``level playing field'' amongst motor 
manufacturers. NEMA added that they believe that adding the ESEM 
categories as defined in the March 2022 Preliminary TSD will have 
significant negative effects on U.S. suppliers and jobs, giving 
offshore equipment producers an unfair advantage over American 
producers. NEMA continued by saying that if DOE does not provide a 
funded and feasible border enforcement plan, the energy savings 
estimates for a regulation for ESEM will need to be adjusted by 
removing the savings of the offshore motors that escape regulation. 
(NEMA, No. 22 at pp. 18-19) DOE recognizes that importing embedded 
motors within larger pieces of equipment poses logistical challenges 
regarding the compliance of these embedded motors with the new energy 
conservation standards. However, DOE notes that imported motors that 
meet the scope criteria proposed in this NOPR will be subject to the 
energy conservation standards that are being promulgated regardless of 
whether the motor is imported on its own or embedded in a separate 
piece of equipment. DOE is committed to enforcing its regulations in a 
fair and equitable manner to ensure a level playing field is preserved 
for domestic manufacturers.

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in commercially viable, existing 
prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then

[[Page 87085]]

that technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the product to 
subgroups of consumers, or result in the unavailability of any covered 
product type with performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as products generally available in the United States at the time, 
it will not be considered further.
    (4) Safety of technologies. If it is determined that a technology 
would have significant adverse impacts on health or safety, it will not 
be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving a 
given efficiency level, it will not be considered further, due to the 
potential for monopolistic concerns.
    10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, 6(c)(3) and 
7(b).
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
    In the March 2022 Preliminary TSD, DOE screened out amorphous metal 
laminations and plastic bonded iron powder (``PBIP'') from the 
analysis. DOE requested further data on the feasibility of amorphous 
steel being used in electric motors at scale. See chapter 3 of the 
March 2022 Preliminary TSD. In response, DOE received comments 
regarding the technologies excluded from this engineering analysis, 
which DOE responded to in the June 2023 DFR as those comments are 
applicable to the broader suite of electric motors (including ESEMs). 
In the June 2023 DFR, DOE determined that it was not definitive that 
amorphous steel could meet all the screening criteria, and therefore, 
DOE continued to screen out amorphous metal in the June 2023 DFR on the 
basis of technological feasibility. 88 FR 36066, 36091. That reasoning 
continues to apply in the case of the ESEMs within the scope of this 
NOPR.
    Accordingly, consistent with the March 2022 Preliminary Analysis 
and the June 2023 DFR, DOE is continuing to screen out amorphous metal 
laminations and PBIP in this NOPR.
2. Remaining Technologies
    In the March 2022 Preliminary TSD, DOE did not screen out the 
following technology options: increasing cross-sectional area of copper 
in stator slots; decreasing the length of coil extensions; increasing 
cross-sectional area of end rings; increasing cross-sectional area of 
rotor conductor bars; using a die-cast copper rotor cage; using 
electrical steel laminations with lower losses (watts/lb); using 
thinner steel laminations; increasing stack length; optimizing bearing 
and lubrication selection; improving cooling system design; reducing 
skew on rotor cage; and improving rotor bar insulation. See chapter 3 
of the March 2022 Preliminary TSD. DOE received comments regarding the 
remaining technologies included in this engineering analysis, which 
were responded to in the June 2023 DFR as those comments are applicable 
to the broader suite of electric motors (including ESEMs). 88 FR 36066, 
36091-36092. DOE believes the responses to those comments in the June 
2023 DFR are applicable to this discussion regarding ESEMs. 
Accordingly, DOE has not screened out any of these technologies for its 
analysis in this NOPR.
    Otherwise, through a review of each technology, DOE concludes that 
all of the other identified technologies listed in this section met all 
five screening criteria to be examined further as design options in 
DOE's NOPR analysis. The design options screened-in are consistent with 
the design options from the March 2022 Preliminary Analysis. DOE 
determined that these technology options are technologically feasible 
because they are being used or have previously been used in 
commercially-available equipment or working prototypes. DOE also finds 
that all of the remaining technology options meet the other screening 
criteria (i.e., practicable to manufacture, install, and service and do 
not result in adverse impacts on consumer utility, product 
availability, health, or safety). For additional details, see chapter 4 
of the NOPR TSD.
    DOE requests comment on the remaining technology options considered 
in this NOPR.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of ESEMs. There are two 
elements to consider in the engineering analysis; the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
equipment, DOE considers technologies and design option combinations 
not eliminated by the screening analysis. For each equipment class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
product/equipment at efficiency levels above the baseline. The output 
of the engineering analysis is a set of cost-efficiency ``curves'' that 
are used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing equipment (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design option approach to ``gap fill'' levels (to bridge 
large gaps between other identified efficiency levels) and/or to 
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on 
the market).
    In this proposed rulemaking, DOE applied a combination of the 
efficiency-level approach and the design-option approach to establish 
efficiency levels to

[[Page 87086]]

analyze. The design-option approach was used to characterize efficiency 
levels that are not available on the market but appear to be market 
solutions for those higher efficiency levels if sufficient demand 
existed. For the efficiency levels available on the market, sufficient 
performance data was publicly available to characterize these levels.
a. Representative Units Analyzed
    Due to the large number of equipment classes, DOE did not directly 
analyze all equipment classes of electric motors considered in this 
NOPR. Instead, DOE selected representative units based on two factors: 
(1) the quantity of motor models available within an equipment class 
and (2) the ability to scale to other equipment classes.
    For this NOPR, DOE updated the horsepower output and pole 
configuration in response to feedback received on the March 2022 
Preliminary Analysis and on feedback received through manufacturer 
interviews. For more information on the manufacturer interviews, see 
section IV.J.2 of this document. Table IV-3 presents the representative 
units analyzed, and the covered horsepower ranges for each of the 
representative units.

                                    Table IV-3 Representative Units Analyzed
----------------------------------------------------------------------------------------------------------------
                                       Representative     Representative     Represented horsepower range  (all
                ECG                      unit  (RU)      unit horsepower           poles, all enclosures)
----------------------------------------------------------------------------------------------------------------
ESEM High Torque...................                  1               0.25  0.25 <= hp <= 0.50.
                                                     2                  1  0.5 < hp <= 3.
ESEM Low Torque....................                  3               0.25  0.25 hp.
                                                     4                0.5  0.25 < hp <= 3.
ESEM Polyphase.....................                  5               0.25  0.25 <= hp <= 3.
AO-ESEM High Torque................                  6               0.25  0.25 <= hp <= 0.50.
                                                     7                  1  0.5 < hp <= 3.
AO-ESEM Low Torque.................                  8               0.25  0.25 hp.
                                                     9                0.5  0.25 < hp <= 3
AO-ESEM Polyphase..................                 10               0.25  0.25 <= hp <= 3.
----------------------------------------------------------------------------------------------------------------

    In response to the March 2022 Preliminary Analysis, DOE received a 
comment from NEMA stating that DOE should conduct more testing of motor 
efficiency at higher efficiency levels rather than relying so heavily 
on scaled results. (NEMA, No. 22 at pp. 15, 24) DOE notes that 
teardowns of motors at higher efficiency levels were conducted for each 
ECG that was directly analyzed. This comment was also discussed in 
section IV.C.1 of the June 2023 DFR. See 88 FR 36066, 36093. DOE 
believes the responses to that comment in the June 2023 DFR are 
applicable to this discussion regarding ESEMs. Additionally, for more 
information on scaling as it pertains to ESEMs, see section IV.C.5 of 
this document.
    DOE requests comment on the representative units used in this NOPR.
b. Baseline Efficiency
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class and measures changes resulting from 
potential energy conservation standards against the baseline. The 
baseline model in each equipment class represents the characteristics 
of an equipment typical of that class (e.g., capacity, physical size). 
Generally, a baseline model is one that just meets current energy 
conservation standards, or, if no standards are in place, the baseline 
is typically the most common or least efficient unit on the market.
    In the March 2022 Preliminary Analysis, DOE generated a baseline 
efficiency level for ESEMs by creating a curve-fit of motor losses vs. 
hp based on the SEM energy conservation standards located at 10 CFR 
431.446, and shifting this curve-fit down to fit what was observed in 
catalog data for a given ESEM ECG. See chapter 5 of the March 2022 
Preliminary TSD. In response to the March 2022 Preliminary Analysis, 
DOE received comments on how the baseline efficiencies were established 
for ESEMs.
    The Joint Advocates commented that DOE tested five ESEMs with and 
without the fan using the proposed NOPR test procedure to determine the 
difference in efficiency between AO and non-AO motors. Removing the 
motor fan resulted in baseline efficiencies several percent higher for 
the AO-ESEMs. As such, the Joint Advocates recommend that DOE analyze 
appropriate baseline efficiency levels for AO motors. (Joint Advocates, 
No. 27 at p. 3)
    NEMA disagreed with how DOE created the baseline for ESEMs and 
suggested that the baseline be determined through testing and not rely 
on unverified performance models. (NEMA, No. 22 at p. 15) With regards 
to the comment from NEMA, DOE acknowledges that testing individual 
models is the most ideal way to gather performance data for electric 
motors. However, due to the very high volume of combinations of motor 
topologies, horsepower, frame sizes, pole counts, speeds, unique motor 
construction, and other parameters, DOE has recognized it to be 
unrealistic to test every possible motor available in the U.S. market. 
As such, DOE is modeling performance using a catalog of all electric 
motors (including ESEMs) available for sale in the U.S. market, which 
contains specific data for all relevant parameters of electric motor 
performance, including locked rotor torque, pole count, horsepower 
output, speed, nominal efficiency, current draw, as well as many 
others. DOE created the baseline using a similar combination of the 
catalog performance data and trends that DOE developed and modeled in 
the 2010 SEM standard rulemaking when DOE was similarly faced with a 
high volume of potential SEM model possibilities. Given the 
similarities between SEMs and ESEMs, DOE believes that a baseline 
created with a methodology parallel to the previous SEM rulemaking is a 
reasonable approach for creating energy conservation standards for 
ESEMs. Accordingly, in this NOPR, DOE used a mix of catalog data, 
current SEM standards, and test data to establish the baseline 
efficiencies. For ECGs 1-3, DOE began with the methodology that was 
used in March 2022 Preliminary Analysis to establish the baseline. For 
ECGs 1 and 3, DOE then shifted the baseline (i.e., increased the losses 
across all horsepowers by a flat multiplier to shift the entire curve 
uniformly) to

[[Page 87087]]

account for the least efficient ESEMs in each ECG at various horsepower 
ratings. For ECG 2, DOE used test data to determine the efficiency of 
shaded pole motors at the horsepower ratings where they are used and 
combined that with the shifted SEM standard to create a baseline. For 
more information, see chapter 5 of the NOPR TSD.
    DOE requests comment on the baseline efficiencies used in this 
NOPR.
c. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given equipment.
    In the March 2022 Preliminary Analysis, DOE established the higher 
efficiency levels by shifting the baseline efficiencies up a certain 
number of NEMA bands. In response to the March 2022 Preliminary 
Analysis, DOE received comments regarding the analysis used to 
determine efficiencies at higher levels, which were responded to in the 
June 2023 DFR. 88 FR 36066, 36096-36097. In that final rule, DOE 
determined that the approach used in the March 2022 Preliminary 
Analysis continued to be appropriate. Id. at 88 FR 36097. DOE believes 
the rationale from its responses in the June 2023 DFR is applicable to 
this NOPR. As such, for this NOPR, DOE considered several design 
options for higher efficiencies: improved electrical steel for the 
stator and rotor, using die-cast copper rotors, increasing stack 
length, and any other applicable design options remaining after the 
screening analysis when improving electric motor efficiency from the 
baseline level up to a max-tech level. As each of these design options 
are added, the manufacturer's cost generally increases and the electric 
motor's efficiency improves. DOE worked with a subject matter expert 
with design experience and motor performance simulation software to 
develop the highest efficiency levels technologically feasible for each 
representative unit analyzed, and used a combination of electric motor 
software design programs and subject matter expert input to develop 
these levels. The subject matter expert also checked his designs 
against tear-down data and calibrated his software using the relevant 
test results. DOE notes that for all efficiency levels of directly 
modeled representative units, the frame size was constrained to that of 
the baseline unit. DOE also notes that the full-load speed of the 
simulated motors did not stay the same throughout all efficiency 
levels. Depending on the materials used to meet a given efficiency 
level, the full-load speed of the motor may increase compared to a 
lower efficiency model, but for the representative units analyzed this 
was not always the case. Employing these design options, higher 
efficiency levels can be reached without resulting in any significant 
size increase and without changing the key electrical and mechanical 
characteristics of the motor. See chapter 5 of the NOPR TSD for more 
details on the full-load speeds of modeled units.
    DOE requests comment on the proposal to constrain the frame size of 
all efficiency levels to that of the baseline unit.
    For the max-tech efficiencies in the engineering analysis, DOE 
considered 35H210 silicon steel, which has the lowest theoretical 
maximum core loss of all steels considered in this engineering 
analysis, and the thinnest practical thickness for use in motor 
laminations. The max-tech designs also have the highest possible slot 
fill, maximizing the number of motor laminations that can fit inside 
the motor. Further details are provided in chapter 5 of the NOPR TSD.
    The max-tech for all equipment classes was created by using the 
curve shape of motor losses vs. horsepower for the SEM energy 
conservation standards and shifting that curve up to intersect with the 
representative unit efficiencies for a given ECG. For intermediate 
efficiency levels that were higher than an ECG's baseline but not the 
max-tech efficiency considered, DOE used a consistent approach across 
all ECGs. EL 1 was an average of the full-load efficiencies of the 
baseline, EL 2 contained the levels recommended in the December 2022 
Joint Recommendation, and EL 3 was an average of the full-load 
efficiencies of EL 2 and max-tech.
    Table IV-4 presents a summary of the description of the higher 
efficiency levels analyzed in this NOPR. For additional details on the 
efficiency levels, see chapter 5 of the NOPR TSD.

                                    Table IV-4--Higher Efficiencies Analyzed
----------------------------------------------------------------------------------------------------------------
              EL0                        EL1                 EL2                EL3                  EL4
----------------------------------------------------------------------------------------------------------------
Baseline.......................  Average of EL0 and  Joint Recommended   Average of EL2     Max-tech.
                                  EL2.                Levels.             and EL4.
----------------------------------------------------------------------------------------------------------------

2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
equipment, the availability and timeliness of purchasing the equipment 
on the market. The cost approaches are summarized as follows:
    [ballot] Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available equipment, component-by-component, 
to develop a detailed bill of materials for the product.
    [ballot] Catalog teardowns: In lieu of physically deconstructing an 
equipment, DOE identifies each component using parts diagrams 
(available from manufacturer websites or appliance repair websites, for 
example) to develop the bill of materials for the equipment.
    [ballot] Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g. large commercial boilers), DOE conducts price surveys 
using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the March 2022 Preliminary Analysis, DOE conducted the analysis 
using a combination of physical teardowns and software modeling. DOE 
contracted a professional motor laboratory to disassemble various 
electric motors and record what types of materials were present and how 
much of each material was present, recorded in a final bill of 
materials (``BOM''). To supplement the physical teardowns, software 
modeling by a subject matter expert was also used to generate BOMs for 
select efficiency levels of directly analyzed representative units. The 
resulting bill of materials provides the basis for the manufacturer 
production cost (``MPC'') estimates. See chapter 5 of the March 2022 
Preliminary TSD.

[[Page 87088]]

    In response to the March 2022 Preliminary Analysis, DOE received a 
number of comments pertaining to the cost analysis, which were 
responded to in the June 2023 DFR. 88 FR 36066, 36098-36099. In that 
final rule, DOE determined that the approach used in the March 2022 
Preliminary Analysis continued to be appropriate. Id. at 88 FR 36099. 
DOE believes the rationale from its responses in the June 2023 DFR is 
applicable to this NOPR. Accordingly, in this NOPR, DOE continues to 
use the approach from the March 2022 Preliminary Analysis by 
determining costs using a combination of physical teardowns and 
software modeling. In addition, as part of this NOPR, DOE supplemented 
other critical inputs to the MPC estimate, including material prices 
assumed, scrap costs, overhead costs, and conversion costs incurred by 
the manufacturer, using information provided by manufacturers under a 
nondisclosure agreement (``NDA'') through both manufacturer interviews 
and the Electric Motors Working Group. Through these nondisclosure 
agreements, DOE solicited and received feedback on inputs like recent 
electrical steel prices by grade, the cost of critical components of 
ESEMs like capacitors or conductors, motors at different efficiency 
levels, and rated motor output. See chapter 5 of the NOPR TSD for more 
detail on the scrap, overhead, and conversion costs, as well as 
material prices used.
    Finally, to account for manufacturers' non-production costs and 
profit margin, DOE applies a non-production cost multiplier (the 
manufacturer markup) to the MPC. The resulting manufacturer selling 
price (``MSP'') is the price at which the manufacturer distributes a 
unit into commerce. DOE developed an average manufacturer markup by 
examining the annual Securities and Exchange Commission (``SEC'') 10-K 
reports filed by publicly-traded manufacturers primarily engaged in 
ESEM manufacturing and whose combined product range includes ESEMs. DOE 
used a non-production markup of 37 percent for all ESEMs considered in 
this NOPR.
3. Technical Specifications
    DOE received comments in response to the March 2022 Preliminary 
Analysis regarding the technical design and performance specifications 
of ESEMs analyzed in this NOPR. The Joint Industry Stakeholders and 
AHAM and AHRI commented that more-efficient motors become heavier and 
larger and that DOE needs to account for the loss of consumer demanded 
utility in terms of portability or ease of lifting by one person. 
(Joint Industry Stakeholders, No. 23 at p. 6; AHAM and AHRI, No. 25 at 
p. 12) The Joint Industry Stakeholders commented that DOE must factor 
portability into its calculations and considerations for technological 
feasibility or risk violation of EPCA provision 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII) The Joint Industry Stakeholders provided 
results of the AHAM Home Comfort Survey showing that portability is 
important to PAC owners. The Joint Industry Stakeholders added that DOE 
should screen out technology options that increase weight and should 
not use it as a design option in its analysis of higher efficiency 
levels. The Joint Industry Stakeholders added that DOE must account for 
physical growth (i.e., girth) of appliances as a result of 
incorporation of larger ESEMs as a consumer-demanded utility with 
regards to portability, or fall short of EPCA 6295(o)(2)(B)(i)(I)-
(VII). (Joint Industry Stakeholders, No. 23 at pp. 6-8) AHAM and AHRI 
noted that space constraints in many appliances require that 
manufacturers use the smallest possible component that meets the 
required performance for the product. Additionally, they stated larger 
motors will also decrease the space available for additional features, 
thereby preventing finished product manufacturers from offering those 
features to consumers. (AHAM and AHRI, No. 25 at p. 12)
    In response to these comments, DOE notes that size increase of 
ESEMs analyzed as part of this NOPR is limited, and efficiency levels 
at or below the levels recommended in the December 2022 Joint 
Recommendation will not result in a significant weight increase 
relative to the present weight of ESEMs, specifically at the selected 
TSL 2 (i.e., recommended level). DOE revised the preliminary analysis 
to account for space-constrained and non-space constrained motor 
designs that actively limit the amount of additional active material 
that can fit into the ESEM, limiting the potential for size and weight 
increase as well. DOE's analysis assumes that higher ELs can be reached 
without significant increase in size. DOE made this assumption to 
analyze a representative unit that could be more widely adopted without 
significant redesign from end-users. However, as discussed in section 
II.B.3 of this document, the Electric Motor Working Group expressed 
that any efficiency requirements at or above EL 3, could result in 
market disruption and may not allow smaller size motors to remain on 
the market. DOE acknowledges that at or above EL 3, some manufacturers 
may choose to rely on design options that would significantly increase 
the physical size of ESEMs. This could result in a significant and 
widespread disruption to the OEM markets that used ESEMs as an embedded 
product, as those OEMs may have to make significant changes to their 
equipment that use ESEMs because those ESEMs could become larger in 
physical size.\34\
---------------------------------------------------------------------------

    \34\ DOE believes there will be several impacts of larger motors 
on downstream users and consumers of these motors, and the 
difficulty to accommodate a larger motor varies across applications. 
An increase in motor size may result in new motors that fit in their 
existing systems. DOE notes that this impact to OEMs and end users 
may be difficult to quantify because of range of applications these 
motors go into, and DOE expects the potential impacts of larger 
motors to vary by end use application.
---------------------------------------------------------------------------

    DOE requests comment on the assumption that higher ELs 
(particularly ELs 3 and 4) can be reached without significant increase 
in size.
    DOE requests comment on the potential for market disruption at 
higher ELs and if manufacturers could design motors at ELs 3 and 4 that 
do not increase in size, or if for the final rule, DOE should model 
motors larger than what is considered in this NOPR.
    The Joint Industry Stakeholders commented that if lower speed 
motors are no longer available, appliances may be forced to incorporate 
higher speed motors which may cause short-cycling in HVAC and 
refrigeration applications and result in negative impacts in other 
appliances. The Joint Industry Stakeholders provided the example of a 
vacuum cleaner where a higher speed motor could lead to increased 
suction and reduce the ability to move the vacuum. (Joint Industry 
Stakeholders, No. 23 at pp. 8-9)
    DOE notes that the ESEM performance models generated by the subject 
matter expert for the representative units did not always increase in 
speed as efficiency increased and that the energy conservation 
standards proposed by this NOPR apply to motors of varying operating 
speeds across multiple pole-configurations. As such, DOE does not 
expect the respective standard levels and equipment classes to result 
in the unavailability of motors with specific speed characteristics. 
DOE has also found that many vacuum cleaners currently on the market 
utilize suction \35\ motors and universal \36\ motors that have 
brushes, and are not

[[Page 87089]]

single-speed induction motors, thus are not within the scope of this 
NOPR.
---------------------------------------------------------------------------

    \35\ Suction motor design & operation are described at 
www.ristenbatt.com/xcart/Suction-Motor-Design-and-Operation.html--
(last accessed on 5/31/2023).
    \36\ A major application of Universal Motors is electric vacuum 
cleaners. ``Universal motor'' is defined at www.nidec.com/en/technology/motor/glossary/000/0565/ (last accessed on 5/31/2023).
---------------------------------------------------------------------------

    AHAM and AHRI commented that they expect electric motors, 
particularly fractional horsepower electric motors, would increase in 
price because larger/faster motors will require additional materials 
for the motor stack, windings, and other components. Moreover, AHAM and 
AHRI commented that efficiency requirements could push manufacturers to 
different, more expensive, motor topologies. AHAM and AHRI added that 
the certification, testing, and reporting requirements will also add 
cost. AHAM and AHRI provided an estimate that 6,015 basic models of 
equipment would have one or more motors under the scope of this 
proposed regulation. Applying a $304,000 per basic model cost estimate 
to redesign the equipment to accommodate a redesigned motor, AHAM and 
AHRI estimate the cost of this regulation for OEMs will exceed $1.83 
billion. (AHAM and AHRI, No. 25 at pp. 9-12)
    The Joint Industry Stakeholders and Lennox stated that if a new 
ESEM cannot be incorporated into an existing, previously-purchased 
appliance or OEM product, the consumer must source salvage/repaired 
component motors or purchase new products entirely. The Joint 
Stakeholders and Lennox commented that consumers will either face 
significant repair bills due to field modifications to incorporate new 
ESEM or lost use of devices due to inability to repair with a new ESEM. 
The Joint Industry Stakeholders and Lennox commented that DOE did not 
incorporate the impact of consumers being forced to prematurely 
purchase new equipment. The Joint Industry Stakeholders and Lennox 
added that DOE fails to account for these additional OEM equipment 
repair costs and for the fact that many consumers will be left without 
a repair option and forced to prematurely purchase new equipment or a 
new appliance and place additional burden on low-income consumers. 
(Joint Industry Stakeholders, No. 23 at pp. 5-6; Lennox, No. 29 at p. 
5) AHAM and AHRI commented that setting energy conservation standards 
on motors that are components of finished goods would result in 
unavailability of replacement motors and consumers would be forced to 
purchase a new appliance they cannot afford because the existing 
equipment can no longer be serviced. (AHAM and AHRI, No. 25 at p. 10)
    Lennox commented that DOE must thoroughly evaluate the loss of 
repairability for installed/owned HVACR systems that contain newly 
regulated ESEMs, which could force consumers to undertake unnecessary 
and costly premature replacement of HVACR systems. (Lennox, No. 29 at 
p. 5)
    As discussed previously in this section, DOE revised the 
engineering analysis from the March 2022 Preliminary Analysis, and, as 
such, the proposed standards in this NOPR result in no significant 
increases to the size of an affected ESEM, which means there is no loss 
in repairability for previously-purchased appliances because the form, 
fit, and function of the ESEMs are maintained at the proposed TSLs. In 
addition, the proposed levels would preserve key criteria that are used 
to identify suitable replacement motors,\37\ such as frame sizes, 
voltages, horsepower, pole configurations, enclosure constructions, and 
mountings, and DOE believes drop-in replacement motors would remain 
available and there would be no major market disruption, as highlighted 
by the Electric Motors Working Group. DOE further notes that OEM 
equipment can usually accommodate different models of motors and online 
cross-referencing tools \38\ exist to help consumers identify motors 
that can be used as drop-in replacements. However, as discussed in 
section II.B.3 of this document, the Electric Motor Working group 
expressed that any efficiency requirements at or above EL 3, could 
result in market disruption and may not allow smaller size motor to 
remain on the market. Although DOE's engineering analysis assumes that 
higher ELs can be reached without significant increase in size, DOE 
acknowledges that at or above EL 3 (i.e., above the proposed TSL), some 
manufacturers may choose to rely on design options that would 
significantly increase the physical size of ESEMs and there is 
uncertainty as to whether the size, fit and function would be 
maintained at these levels. At or above EL3, this could result in a 
significant and widespread disruption to the OEM markets that used 
ESEMs as an embedded product, as those OEMs may have to make 
significant changes to their equipment that use ESEMs because those 
ESEMs could become larger in physical size.
---------------------------------------------------------------------------

    \37\ See ``How to cross reference an OEM motor.'' Available at 
http://hvacknowitall.com/blog/how-to-cross-reference-an-oem-motor 
(last accessed September 28, 2023); Rheem and Ruud PROTECH 
``Selecting a Motor.'' Available at assets.unilogcorp.com/267/ITEM/DOC/PROTECH_51_100998_33_Catalog.pdf (last accessed September 28, 
2023).
    \38\ See www.emotorsdirect.ca/hvac.
---------------------------------------------------------------------------

    Regarding the additional OEM testing and certification costs, while 
DOE conducts a MIA to address the industry burden on the manufacturer 
of the considered covered equipment, DOE typically does not include the 
impacts to other manufacturers. The MIA for this rulemaking 
specifically examined the conversion costs that electric motor 
manufacturers (including OEMs that also manufacture electric motors) 
would incur due to the analyzed energy conservation standards for 
electric motors in comparison to the revenue and free cash electric 
motor manufacturers receive. The OEM testing and certification costs 
were not included in the MIA, and neither were the OEM revenues and 
free cash flows, as these costs and revenue are not specific to 
electric motor manufacturers. However, as noted by the Electric Motors 
Working Group, the proposed standards for ESEMs are not expected to 
cause broad market disruption. In addition, DOE fixed the frame size, 
which remained the same across efficiency levels. As such, the energy 
conservation standards proposed in this NOPR would preserve the frame 
sizes of electric motors on the market today. Further, as discussed in 
section IV.A.1 of this document, ESEMs are built in standard NEMA frame 
sizes and are not common in currently regulated consumer products 
including those listed by AHAM and AHRI (i.e., clothes washers (top and 
front load), clothes dryers, food waste disposers, refrigerators, room 
air conditioners, and stick vacuums). Therefore, DOE believes the 
standards as proposed would not impact manufacturers of consumer 
products. In commercial equipment, DOE identified the following 
equipment as potentially incorporating ESEMs: walk-in coolers and 
freezers, circulator pumps, air circulating fans, and commercial 
unitary air conditioning equipment. If the proposed energy conservation 
standards for these rules finalize as proposed, DOE identified that 
these rules would all: (1) have a compliance year that is at or before 
the ESEM standard compliance year (2029) and/or (2) require a motor 
that is either outside of the scope of this rule (e.g., an ECM) or an 
ESEM with an efficiency above the proposed ESEM standards, and 
therefore not be impacted by the proposed ESEM rule (i.e., the ESEM 
rule would not trigger a redesign of these equipment). Therefore, DOE 
has tentatively determined that OEMs would already have to redesign 
these equipment to comply with these energy conservation standards, and 
the ESEM rule would not trigger another redesign of these equipment 
because the end-use equipment regulation would require

[[Page 87090]]

higher efficiency ESEMs or out of scope electric motors. Consequently, 
although DOE did not include any OEM testing and certification costs in 
this NOPR, DOE does not estimate these impacts to be significant.
4. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of MSP (in dollars) versus 
full-load efficiency (in %), which form the basis for subsequent 
analysis. DOE developed ten curves representing the six equipment class 
groups. The methodology for developing the curves started with 
determining the full-load efficiency and MPCs for baseline motors. 
Above the baseline, DOE implemented various combinations of design 
options to achieve each efficiency level. Design options were 
implemented until all available technologies were employed (i.e., at a 
max-tech level). To account for manufacturers' non-production costs and 
profit margin, DOE applies a manufacturer markup to the MPC, resulting 
in the MSP. See the following tables for the final results and chapter 
5 of the NOPR TSD for additional detail on the engineering analysis.
[GRAPHIC] [TIFF OMITTED] TP15DE23.003

[GRAPHIC] [TIFF OMITTED] TP15DE23.004

5. Scaling Methodology
    Due to the large number of equipment classes, DOE was not able to 
perform a detailed engineering analysis on each one. Instead, DOE 
focused its analysis on the representative units and scaled the results 
to equipment classes not directly analyzed in the engineering analysis. 
In the March 2022 Preliminary Analysis, DOE used the current standards 
at 10 CFR 431.25 as a basis to scale the efficiency of the 
representative units to all other equipment classes. In order to scale 
for efficiency levels above baseline, the efficiencies for the 
representative units were shifted up or down by however many NEMA 
bands, because these bands are commonly used by industry when 
describing motor efficiency, that efficiency level was above current 
standards. DOE received a number of comments regarding scaling 
methodology, to which DOE responded to in the June 2023 DFR. 88 FR 
36066, 36099-36100. In that final rule, DOE determined that the 
approach used in the March 2022 Preliminary Analysis continued to be 
appropriate. Id. at 88 FR 36100. DOE believes the rationale from its 
responses in the June 2023 DFR is applicable to this NOPR.
    In this NOPR, to scale across horsepower, pole configuration, and 
enclosure, DOE again relied on industry-recognized levels of efficiency 
when possible, or shifted forms of these levels. For example: when an 
efficiency level for a representative unit was NEMA Premium, Table 12-
12 of NEMA MG 1-2016 was used to determine the efficiency of all the 
non-representative unit equipment classes. This method of scaling was 
also done for IE4 levels of efficiency, electric motor fire pump 
levels, and shifted versions of NEMA Premium (see section IV.C.1 of 
this document for a description of efficiency levels analyzed). DOE 
relied on industry-recognized levels because they sufficiently capture 
the effects of enclosure, pole configuration, frame size, and 
horsepower on motor efficiency.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., 
manufacturer markups, retailer markups, distributor markups, contractor 
markups) in the distribution chain and sales taxes to convert the MSP 
estimates derived in the engineering analysis to consumer

[[Page 87091]]

prices, which are then used in the LCC and PBP analysis and in the 
manufacturer impact analysis. At each step in the distribution channel, 
companies mark up the price of the equipment to cover business costs 
and profit margin.
    In the March 2022 Preliminary Analysis, DOE identified distribution 
channels for electric motors and their respective market shares (i.e., 
percentage of sales going through each channel). For ESEMs, the main 
parties in the distribution chain are OEMs, equipment or motor 
wholesalers, retailers, and contractors. See section 6.2 of the March 
2022 Preliminary TSD. DOE did not receive any comment on the 
distribution channels identified in response to the March 2022 
Preliminary Analysis. DOE retained these distribution channels for this 
NOPR.
    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
equipment with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental 
markup is typically less than the baseline markup and is designed to 
maintain similar per-unit operating profit before and after new or 
amended standards.\39\
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    \39\ Because the projected price of standards-compliant 
equipment is typically higher than the price of baseline equipment, 
using the same markup for the incremental cost and the baseline cost 
would result in higher per-unit operating profit. While such an 
outcome is possible, DOE maintains that in markets that are 
reasonably competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    In the March 2022 Preliminary Analysis, DOE relied on economic data 
from the U.S. Census Bureau and on 2020 RS Means Electrical Cost Data 
to estimate average baseline and incremental markups. Specifically, DOE 
estimated the OEM markups for electric motors based on financial data 
of different sets of OEMs that use respective electric motors from the 
latest 2019 Annual Survey of Manufactures.\40\ The relevant sets of 
OEMs identified were listed in Table 6.4.2 of the March 2022 
Preliminary TSD, using six-digit code level North American Industry 
Classification System (``NAICS''). Further, DOE collected information 
regarding sales taxes from the Sales Tax Clearinghouse.\41\
---------------------------------------------------------------------------

    \40\ U. S. Census Bureau. 2019 Annual Survey of Manufactures 
(ASM): Statistics for Industry Groups and Industries. 
www.census.gov/programs-surveys/asm.html (last accessed March 23, 
2021).
    \41\ Sales Tax Clearinghouse Inc. State Sales Tax Rates Along 
with Combined Average City and County Rates. July 2021. thestc.com/STrates.stm (last accessed July 1, 2021).
---------------------------------------------------------------------------

    In response to the March 2022 Preliminary Analysis, NEMA agreed 
that 95 percent of ESEMs reach the market through the OEM equipment 
channel. NEMA further commented that Table 6.4.2 of the March 2022 
Preliminary TSD should be replaced by Table IV.3 of the Import Data 
Declaration Proposed Rule.\42\ (NEMA, No. 22 at p. 18) Table IV.3 of 
the Import Data Declaration Proposed Rule provides a list of five-digit 
code level NAICS.\43\ DOE reviewed the corresponding six-digit code 
level NAICS and identified the following additional OEM as relevant in 
the context of OEMs incorporating ESEMs in their equipment: 333991 
``Power-driven handtool manufacturing;'' 333999 ``All other 
miscellaneous general Purpose machinery manufacturing;'' 335210 ``Small 
electrical appliance manufacturing;'' and 335220 ``Major appliance 
manufacturing''. Other NAICS codes were either already included in the 
March 2022 Preliminary Analysis or did not correspond to OEMs 
incorporating ESEMs in their equipment.
---------------------------------------------------------------------------

    \42\ NEMA also provided the following link: www.regulations.gov/document/EERE-2015-BT-CE-0019-0001.
    \43\ Each five-digit code level NAICS includes several six-digit 
code level NAICS.
---------------------------------------------------------------------------

    For this NOPR, DOE revised the OEM baseline and incremental markups 
calculation to account for these additional NAICS codes. In addition, 
DOE relied on updated data from the economic data from the U.S. Census 
Bureau, 2023 RS Means Electrical Cost Data, and the updated data from 
the Sales Tax Clearinghouse.
    Chapter 6 of the NOPR TSD provides details on DOE's development of 
markups for ESEMs.
    DOE requests data and information to characterize the distribution 
channels for ESEMs and associated market shares.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of ESEMs at different efficiencies for a 
representative sample of residential, commercial, and industrial 
consumers, and to assess the energy savings potential of increased ESEM 
efficiency. The energy use analysis estimates the range of energy use 
of ESEMs in the field (i.e., as they are actually used by consumers). 
For each consumer in the sample, the energy use is calculated by 
multiplying the annual average motor input power by the annual 
operating hours. The energy use analysis provides the basis for other 
analyses DOE performed, particularly assessments of the energy savings 
and the savings in consumer operating costs that could result from 
adoption of new standards.
1. Consumer Sample
    DOE created a consumer sample to represent consumers of electric 
motors in the commercial, industrial, and residential sectors. DOE used 
the sample to determine electric motor annual energy consumption as 
well as to conduct the LCC and PBP analyses. Each consumer in the 
sample was assigned a sector, an application, and a region. The sector 
and application determine the usage profile of the electric motor and 
the economic characteristics of the motor owner vary by sector and 
region. In addition, residential consumers were assigned household 
income groups. In the March 2022 Preliminary Analysis, DOE primarily 
relied on data from the 2018 Commercial Building Energy Consumption 
Survey (``CBECS''),\44\ the 2018 Manufacturing Energy Consumption 
Survey (``MECS''),\45\ the 2015 Residential Energy Consumption Survey 
(``RECS''), a previous DOE Technical Support Document (``January 2021 
Final Determination Technical Support Document'') related to small 
electric motors,\46\ and a DOE-AMO report ``U.S. Industrial and 
Commercial Motor System Market Assessment Report Volume 1: 
Characteristics of the Installed Base'' (``MSMA'' or ``DOE-AMO 
report'').\47\ See chapter 7 of the March 2022 Preliminary TSD.
---------------------------------------------------------------------------

    \44\ U.S. Department of Energy-Energy Information 
Administration, ``2018 Commercial Buildings Energy Consumption 
Survey (CBECS),'' 2018 CBECS Survey Data, 2018, https://www.eia.gov/consumption/commercial/data/2018/index.php?view=methodology.
    \45\ 2018 Manufacturing Energy Consumption Survey,'' https://www.eia.gov/consumption/manufacturing/data/2018/pdf/Table11_1.pdf.
    \46\ Technical Support Document: Energy Efficiency Program for 
Consumer Products and Commercial and Industrial Equipment: Small 
Electric Motors Final Determination (Prepared for the Department of 
Energy by Staff Members of Navigant Consulting, Inc and Lawrence 
Berkeley National Laboratory, January 2021),'' www.regulations.gov/document/EERE-2019-BT-STD-0008-0035.
    \47\ Prakash Rao et al., ``U.S. Industrial and Commercial Motor 
System Market Assessment Report Volume 1: Characteristics of the 
Installed Base,'' January 12, 2021, doi.org/10.2172/1760267.
---------------------------------------------------------------------------

    Specifically, in the March 2022 Preliminary Analysis, for ESEMs, 
DOE used information from the Small Electric Motors January 2021 Final 
Determination Technical Support Document to develop sector specific 
distributions. Since the publication of the March 2022 Preliminary 
Analysis, DOE updated the consumer sample to

[[Page 87092]]

reflect the latest version of RECS (i.e., 2020 RECS).\48\ DOE also 
revised the distribution of ESEMs by sector to reflect that the 
majority of single-phase motors are used in the residential and 
commercial sectors \49\ and incorporate the industrial and commercial 
sector distributions as published in the June 2023 DFR.
---------------------------------------------------------------------------

    \48\ ``2020 Residential Energy Consumption Survey Data,'', 
https://www.eia.gov/consumption/residential/data/2020/https://www.eia.gov/consumption/residential/data/2020/ (last accessed July 
5, 2023).
    \49\ Goetzler, William, Sutherland, Timothy, and Reis, Callie. 
Energy Savings Potential and Opportunities for High-Efficiency 
Electric Motors in Residential and Commercial Equipment. United 
States: N. p., 2013. Web. doi:10.2172/1220812. Available at: 
osti.gov/biblio/1220812 (last accessed April 18, 2023).
---------------------------------------------------------------------------

    In response to DOE's requests for feedback regarding consumer 
sample in the March 2022 Preliminary Analysis, NEMA referred DOE to the 
MSMA report (NEMA, No. 22 at p. 19) As previously described, DOE relied 
on information from the MSMA report to inform its consumer sample. DOE 
did not receive any additional comments related to the consumer sample 
developed in the March 2022 Preliminary Analysis and, in this NOPR, DOE 
continued to rely on the MSMA report to characterize motor use in the 
commercial and industrial sectors.
    DOE requests data and information to characterize the distribution 
of ESEMs by sector (commercial, industrial, and residential sectors) as 
well as the distribution of ESEMs by application in each sector.
2. Motor Input Power
    In the March 2022 Preliminary Analysis, DOE calculated the motor 
input power as the sum of (1) the electric motor's rated horsepower 
multiplied by its operating load (i.e., the motor output power), and 
(2) the losses at the operating load (i.e., part-load losses). DOE 
estimated distributions of motor average annual operating load by 
application and sector based on information from the MSMA report. DOE 
determined the part-load losses using outputs from the engineering 
analysis (full-load efficiency at each efficiency level) and published 
part-load efficiency information from 2016 and 2020 catalog data from 
several manufacturers to model motor part-load losses as a function of 
the motor's operating load. See section 7.2.2 of the March 2022 
Preliminary TSD.
    In response to DOE's requests for feedback regarding distributions 
of average annual operating load by application and sector in the March 
2022 Preliminary Analysis, NEMA referred DOE to the MSMA report. (NEMA, 
No. 22 at p. 19) As previously described, DOE relied on information 
from the MSMA report to characterize average annual operating loads. 
DOE did not receive any additional comments related to the 
distributions of operating loads developed in the March 2022 
Preliminary Analysis and retained the same approach for this NOPR.
    DOE did not receive any comments on its approach to determine part-
load losses and retained the same methodology for this NOPR. However, 
DOE updated its analysis to account for more recent part-load 
efficiency information from 2022 manufacturer catalogs.
    DOE seeks data and additional information to characterize ESEM 
operating loads.
3. Annual Operating Hours
    In the March 2022 Preliminary Analysis, DOE used information from 
the MSMA report to establish distributions of motor annual hours of 
operation by application for the commercial and industrial sectors. See 
section 7.2.5 of the March 2022 Preliminary TSD. The MSMA report 
provided average, mean, median, minimum, maximum, and quartile 
boundaries for annual operating hours across industrial and commercial 
sectors by application and showed no significant difference in average 
annual hours of operation between horsepower ranges. DOE used this 
information to develop application-specific statistical distributions 
of annual operating hours in the commercial and industrial sectors.
    For electric motors used in the agricultural sector (which were not 
included in the MSMA report), DOE derived statistical distributions of 
annual operating hours of irrigation pumps by region using data from 
the 2013 Census of Agriculture Farm and Ranch Irrigation Survey.
    For ESEMs used in the residential sector (which is a sector that 
was not studied in the MSMA report), DOE did not receive any comments 
specific to the residential sector. DOE retained the approach used in 
the March 2022 Preliminary Analysis and relied on the distributions of 
operating hours by application as presented in chapter 7 of the January 
2021 Final Determination Technical Support Document pertaining to SEMs.
    In response to DOE's requests for feedback regarding distributions 
of average annual operating hours by application and sector in the 
March 2022 Preliminary Analysis, NEMA referred DOE to the MSMA report. 
(NEMA, No. 22 at p. 20) As previously described, DOE relied on 
information from the MSMA report to inform its distributions of annual 
operating hours in the commercial and industrial sectors. For other 
sectors not included in the MSMA report, DOE relied on additional data 
sources as previously described. DOE did not receive any additional 
comments related to the distributions of operating hours developed in 
the March 2022 Preliminary Analysis and retained the same approach for 
this NOPR.
    DOE requests comment on the distribution of average annual 
operating hours by application and sector used to characterize the 
variability in energy use for ESEMs.
4. Impact of Electric Motor Speed
    Any increase in operating speeds as the efficiency of the motor is 
increased could affect the energy saving benefits of more efficient 
motors in certain variable torque applications (i.e., fans, pumps, and 
compressors) due to the cubic relation between speed and power 
requirements (i.e., ``affinity law''). In the March 2022 Preliminary 
Analysis, DOE accounted for any changes in the motor's rated speed with 
an increase in efficiency levels, for those electric motors that are 
currently regulated under 10 CFR 431.25 and for AO-MEMs and for which 
the engineering analysis provided speed information by EL. Based on 
information from a European motor study,\50\ DOE assumed that 20 
percent of consumers with fan, pump, and air compressor applications 
would be negatively impacted by higher operating speeds. For other 
electric motor categories that it analyzed in the March 2022 
Preliminary Analysis, including ESEMs, DOE did not characterize the 
motor speed by ELs as part of the engineering analysis and DOE did not 
include this impact in the analysis. See section 7.2.2.1 of the March 
2022 Preliminary TSD.
---------------------------------------------------------------------------

    \50\ ``EuP-LOT-30-Task-7-Jun-2014.Pdf,'' Available at www.eup-
network.de/fileadmin/user_upload/EuP-LOT-30-Task-7-Jun-2014.pdf 
(last accessed April 26, 2021). The European motor study estimated, 
as a ``worst case scenario,'' that up to 40 percent of consumers 
purchasing motors for replacement applications may not see any 
decrease or increase in energy use due to this impact and did not 
incorporate any change in energy use with increased speed. In 
addition, the European motor study also predicts that any energy use 
impact will be reduced over time because new motor driven equipment 
would be designed to take account of this change in speed. 
Therefore, the study did not incorporate this effect in the analysis 
(i.e., 0 percent of negatively impacted consumers). In the absence 
of additional data to estimate the percentage of consumers that may 
be negatively impacted in the compliance year, DOE relied on the 
mid-point value of 20 percent.

---------------------------------------------------------------------------

[[Page 87093]]

    In response to the March 2022 Preliminary Analysis, the Joint 
Advocates requested clarifications regarding how DOE accounted for the 
impact of the increase motor speed on the energy use, as well as how 
motor slip was incorporated into the energy use analysis. (Joint 
Advocates, No. 27 at pp. 4-5) \51\
---------------------------------------------------------------------------

    \51\ The motor slip is the difference between the motor's 
synchronous speed and actual speed which is lower than the 
synchronous speed). At higher ELs, the speed of a given motor may 
increase and the motor slip may decrease.
---------------------------------------------------------------------------

    DOE described the method and assumptions used to calculate the 
impact of higher speed on energy use in section 7.2.2.1 of the March 
2022 Preliminary TSD. In this NOPR, DOE provided additional details on 
the methodology and equations used as part of Appendix 7A in the NOPR 
TSD.
    NEMA commented that nearly 100 percent of fans, pumps and 
compressors using ESEMs would be negatively impacted by an increase in 
speed. In addition, NEMA commented that it would take up to two years 
for OEMs to redesign and recertify an equipment with a motor that has 
higher speed and provided an example calculation to illustrate the 
impacts of higher speed operation. (NEMA, No. 22 at pp. 20-21, 49)
    The Joint Industry Stakeholders commented that DOE should consider 
the full impact of higher speed motors by considering new products as 
well as replacement. The Joint Industry Stakeholders added that DOE 
only incorporated the effect of increased speeds in currently regulated 
motors and air-over motors and that this effect should also be 
accounted for in ESEMs. The Joint Industry Stakeholders commented that 
if lower speed motors are no longer available, appliances may be forced 
to incorporate higher speed motors, which may cause short-cycling in 
HVAC and refrigeration applications and result in negative impacts in 
other appliances. (Joint Industry Stakeholders, No. 23 at pp. 8-9)
    In this NOPR, DOE included the effect of increased speeds in the 
energy use calculation for all equipment classes. DOE reviewed 
information related to pump, fans, and compressor applications driven 
by electric motors \52\ and notes that in the commercial land 
industrial sectors: (1) 7 to 20 percent of motors used in these 
applications are paired with VFDs, which allow the user to adjust the 
speed of the motor; \53\ (2) approximately half of fans operate with 
belts, which also allow the user to adjust the speed of the driven fan; 
\54\ (3) some applications would benefit from increase in speeds as the 
work would be completed at a higher load in less operating hours (e.g., 
pump filling water tank faster at increased speed); and (4) not all 
fans, pumps and compressors are variable torque loads to which the 
affinity laws applies. Therefore, less than 100 percent of motor in 
these applications would experience an increase in energy use as a 
result of an increase in speed. In addition, as described in the 
European motor study, the increase in speed would primarily impact 
replacement motors installed in applications that previously operated 
with a lower speed motor. For these reasons, DOE has determined that 
assuming that 100 percent of fans, pumps and compressors using ESEM 
would be negatively impacted by an increase in speed would not be 
representative. DOE continues to rely on a 20 percent assumption used 
in the March 2022 Preliminary Analysis, based on the European motor 
study. In addition, DOE incorporated a sensitivity analysis allowing 
the user to consider this effect for three additional scenarios 
described in appendix 7-A of the NOPR TSD (i.e., 0 percent, 50 percent 
and 100 percent).
---------------------------------------------------------------------------

    \52\ DOE did not have data specific to pumps driven by ESEMs and 
relied on pump, fans, and compressor applications driven by the 
broader category of electric motors.
    \53\ See Figure 64 and Figure 71 of the MSMA report.
    \54\ See 2016 Fan Notice of Data Availability, 81 FR 75742 (Nov. 
1, 2016); LCC spreadsheet, ``LCC sample'' worksheet, ``Belt vs. 
direct driven fan distribution'' available at www.regulations.gov/document/EERE-2013-BT-STD-0006-0190.
---------------------------------------------------------------------------

    Chapter 7 of the NOPR TSD provides details on DOE's energy use 
analysis for ESEMs.
    DOE seeks data and additional information to support the analysis 
of projected energy use impacts related to any increases in motor 
nominal speed.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
ESEMs. The effect of new energy conservation standards on individual 
consumers usually involves a reduction in operating cost and an 
increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
    [ballot] The LCC is the total consumer expense of an equipment over 
the life of that equipment, consisting of total installed cost 
(manufacturer selling price, distribution chain markups, sales tax, and 
installation costs) plus operating costs (expenses for energy use, 
maintenance, and repair). To compute the operating costs, DOE discounts 
future operating costs to the time of purchase and sums them over the 
lifetime of the equipment.
    [ballot] The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of ESEMs in the absence of new energy 
conservation standards. In contrast, the PBP for a given efficiency 
level is measured relative to the baseline equipment.
    For each considered efficiency level in each equipment class, DOE 
calculated the LCC and PBP for a nationally representative set of 
consumers. As stated previously, DOE developed consumer samples from 
various data sources (see section IV.E.1 of this document). For each 
sample consumer, DOE determined the energy consumption for the ESEM and 
the appropriate energy price. By developing a representative sample of 
consumers, the analysis captured the variability in energy consumption 
and energy prices associated with the use of ESEMs.
    Inputs to the calculation of total installed cost include the cost 
of the equipment--which includes MPCs, manufacturer markups, retailer 
and distributor markups, and sales taxes--and installation costs. 
Inputs to the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, equipment lifetimes, and discount rates. DOE created 
distributions of values for equipment lifetime, discount rates, and 
sales taxes, with probabilities attached to each value, to account for 
their uncertainty and variability.
    The computer model DOE uses to calculate the LCC relies on a Monte 
Carlo simulation to incorporate uncertainty and variability into the 
analysis. The Monte Carlo simulations randomly sample input values from 
the probability distributions and ESEM consumer samples. The model 
calculated the LCC for equipment at each efficiency level for 10,000 
consumers per simulation run. The analytical results include a 
distribution of 10,000 data points showing the range of LCC savings for 
a given efficiency

[[Page 87094]]

level relative to the no-new-standards case efficiency distribution. In 
performing an iteration of the Monte Carlo simulation for a given 
consumer, equipment efficiency is chosen based on its probability. If 
the chosen equipment efficiency is greater than or equal to the 
efficiency of the standard level under consideration, the LCC 
calculation reveals that a consumer is not impacted by the standard 
level. By accounting for consumers who already purchase more-efficient 
equipment, DOE avoids overstating the potential benefits from 
increasing equipment efficiency. DOE calculated the LCC and PBP for 
consumers of ESEMs as if each were to purchase a new equipment in the 
first year of required compliance with new standards. DOE used 2029 as 
the first year of compliance with any new standards for ESEMs as 
discussed in section II.B.3 of this document.
    Table IV-7 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the NOPR TSD and its appendices.

Table IV-7--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
              Inputs                            Source/method
------------------------------------------------------------------------
Equipment Cost....................  Derived by multiplying MPCs by
                                     manufacturer and retailer markups
                                     and sales tax, as appropriate. Used
                                     a constant price trend to project
                                     equipment costs based on historical
                                     data.
Installation Costs................  Assumed no change with efficiency
                                     level other than shipping costs.
Annual Energy Use.................  Motor input power multiplied by
                                     annual operating hours per year.
                                    Variability: Primarily based on the
                                     MSMA report, 2018 CBECS, 2018 MECS,
                                     and 2020 RECS.
Energy Prices.....................  Electricity: Based on EEI Typical
                                     Bills and Average Rates Reports
                                     data for 2022.
                                    Variability: Regional energy prices
                                     determined for four census regions.
Energy Price Trends...............  Based on AEO2023 price projections.
Repair and Maintenance Costs......  Assumed ESEMs are not repaired.
                                    Assumed no change in maintenance
                                     costs with efficiency level.
Equipment Lifetime................  Average: 7.1 years (6.8 to 9.3 years
                                     depending on the equipment class
                                     group and horsepower considered).
Discount Rates....................  Residential: Approach involves
                                     identifying all possible debt or
                                     asset classes that might be used to
                                     purchase the considered appliances,
                                     or might be affected indirectly.
                                     Primary data source was the Federal
                                     Reserve Board's Survey of Consumer
                                     Finances.
                                    Non-residential: Calculated as the
                                     weighted average cost of capital
                                     for entities purchasing electric
                                     motors. Primary data source was
                                     Damodaran Online.
Compliance Date...................  2029.
------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources
  mentioned in this table are provided in the sections following the
  table or in chapter 8 of the NOPR TSD.

    In response to the March 2022 Preliminary Analysis, the Joint 
Industry Stakeholders commented that double-regulation has no 
corresponding consumer benefits in the form of reduced power 
consumption given the appliance regulations being unchanged and the 
fact that a more efficient motor does not necessarily translate to a 
more efficient product when incorporated into a finished good. The 
Joint Industry Stakeholders commented that to potentially increase the 
cost of an OEM product, without a corresponding energy savings, would 
mean a net loss for consumers and negative national impacts. The Joint 
Industry Stakeholders noted that the DOE used operating hours for the 
following categories of equipment: air compressors, refrigeration 
compressors, fans and blowers, pumps material handling, material 
processing, other, and agricultural pumps. Of these, the Joint Industry 
Stakeholders noted that electric motors used in air compressors, 
refrigeration compressors, fans and blowers, pumps and agricultural 
pumps are already regulated to some extent and that DOE made no 
apparent effort to account for this and deduct a significant portion of 
those estimated hours. (Joint Industry Stakeholders, No. 23 at p. 5) 
AHAM and AHRI commented that expanding coverage to special and definite 
purpose motors would force manufacturers to incorporate more expensive 
motors and increase the cost of appliances and equipment, while not 
necessarily improving the energy performance of the finished product 
(whether it be a covered product/equipment or not). (AHAM and AHRI, No. 
25 at p. 9) Lennox commented that DOE must accurately assess, and avoid 
double-counting, energy savings when assessing potential efficiency 
improvements from motors used in already-regulated HVAC equipment. 
Lennox commented that it is unclear in the LCC and PBP analysis if DOE 
accounted for double regulation and eliminated energy savings already 
achieved from system-level HVACR regulation. (Lennox, No. 29 at p. 4) 
HI commented that there is a potential for duplicate accounting of 
energy savings when regulating motors in general. HI stated that, in 
addition to the ESEMs, there is a potential for other motor product 
efficiencies to be counted twice such as the use of inverter-only 
products in pumps when the DOE calculates savings in their evaluations 
(one for inverter only motors, and another for pumps using those 
motors). (HI, No. 31 at p. 1)
    As highlighted in a previous DOE report, motor energy savings 
potential and opportunities for higher efficiency electric motors in 
commercial and residential equipment would result in overall energy 
savings.\55\ In addition, some manufacturers advertise electric motors 
as resulting in energy savings in HVAC equipment.\56\ All other 
characteristics of the equipment and motor being held constant, 
increasing the efficiency of the motor component will increase the 
efficiency of the overall equipment.\57\ Therefore, DOE disagrees with 
the Joint Industry Stakeholders that an increase in motor efficiency 
would not result in a more

[[Page 87095]]

efficient equipment when incorporated into a given equipment. In 
addition, DOE's analysis ensures the LCC and NIA analysis do not result 
in double-counting of energy savings by accounting for consumers who 
already purchase more-efficient products and calculating LCC and energy 
savings relative to a no-new standards case efficiency distribution. 
See section IV.F.8 of this document. Finally, any future analysis in 
support of energy conservation standards for equipment incorporating 
motors would also account for equipment that already incorporate more-
efficient electric motors and would not result in any double counting 
of energy savings resulting from motor efficiency improvements.
---------------------------------------------------------------------------

    \55\ U.S. DOE Building technology Office, Energy Savings 
Potential and Opportunities for High-Efficiency Electric Motors in 
residential and Commercial Equipment, December 2013. Available at: 
www.energy.gov/eere/buildings/downloads/motor-energy-savings-potential-report.
    \56\ See, for example, Nidec and ABB: http://acim.nidec.com/motors/usmotors/industry-applications/hvac;bit.ly/3wEIQyu.
    \57\ As discussed in section IV.E.4 of this document, DOE 
acknowledges that in some cases higher efficiency motors may operate 
at higher speeds which could offset some of the expected energy 
savings.
---------------------------------------------------------------------------

1. Equipment Cost
    To calculate consumer equipment costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups described previously (along with sales taxes). DOE used 
different markups for baseline equipment and higher-efficiency 
equipment, because DOE applies an incremental markup to the increase in 
MSP associated with higher-efficiency equipment.
    To project an equipment price trend for electric motors, DOE 
obtained historical Producer Price Index (``PPI'') data for integral 
horsepower motors and generators manufacturing spanning the time period 
1969-2022 and for fractional horsepower motors and generators 
manufacturing between 1967-2022 from the Bureau of Labor Statistics 
(``BLS'').\58\ The PPI data reflect nominal prices, adjusted for 
electric motor quality changes. An inflation-adjusted (deflated) price 
index for integral and fractional horsepower motors and generators 
manufacturing was calculated by dividing the PPI series by the implicit 
price deflator for Gross Domestic Product. The deflated price index for 
integral horsepower motors was found to align with the copper, steel 
and aluminum deflated price indices. DOE believes that the extent to 
how these trends will continue in the future is very uncertain. In 
addition, the deflated price index for fractional horsepower motors was 
mostly flat during the entire period from 1967 to 2022. Therefore, DOE 
relied on a constant price assumption as the default price factor index 
to project future electric motor prices.
---------------------------------------------------------------------------

    \58\ Series ID PCU3353123353123 and PCU3353123353121 for 
integral and fractional horsepower motors and generators 
manufacturing, respectively; www.bls.gov/ppi/.
---------------------------------------------------------------------------

    DOE did not receive any comments on price trends in response to the 
March 2022 Preliminary Analysis and retained the same approach in this 
NOPR.
    DOE requests data and information regarding the most appropriate 
price trend to use to project ESEM prices.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. Electric motor 
installation cost data from 2023 RS Means Electrical Cost Data show a 
variation in installation costs according to the motor horsepower (for 
three-phase electric motors), but not according to efficiency. DOE 
found no evidence that installation costs would be impacted with 
increased efficiency levels. Therefore, in the March 2022 Preliminary 
Analysis, DOE did not incorporate changes in installation costs for 
motors that are more efficient than baseline equipment. DOE assumed 
there is no variation in installation costs between a baseline 
efficiency motor and a higher efficiency motor except in terms of 
shipping costs. These shipping costs were based on weight data from the 
engineering analysis for the representative units. See section 8.2.4 of 
the March 2022 Preliminary Analysis.
    In response to the March 2022 Preliminary Analysis, EASA commented 
that if a motor is replaced with a physically larger frame, the 
replacement would have higher installation costs because of the added 
complexity of modifying the mounting setup to accommodate the larger 
motor, and in some case would be impossible. (EASA, No. 21 at pp. 2-3)
    As noted in section IV.C.1.c of this document, DOE fixed the frame 
size, which remains the same across efficiency levels in the analysis. 
Therefore, DOE did not account for any changes in installation costs 
due to changes in frame sizes and, in this NOPR, DOE retained the 
approach used in the March 2022 Preliminary Analysis and assumed there 
is no variation in installation costs between a baseline efficiency 
motor and a higher efficiency motor except in terms of shipping costs.
    DOE requests comment on whether any of the efficiency levels 
considered in this NOPR might lead to an increase in installation 
costs, and if so, DOE seeks supporting data regarding the magnitude of 
the increased cost per unit for each relevant efficiency level and the 
reasons for those differences.
3. Annual Energy Consumption
    For each sampled consumer, DOE determined the energy consumption 
for an electric motor at different efficiency levels using the approach 
described previously in section IV.E of this document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the equipment 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2022 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kilowatt-hour costs to the customer as charged by 
investor-owned utilities. For the residential sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2018).\59\ For the non-residential sectors, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2019).\60\
---------------------------------------------------------------------------

    \59\ Coughlin, K. and B. Beraki.2018. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. Lawrence 
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169. 
https://ees.lbl.gov/publications/residential-electricity-prices-review.
    \60\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis. For 
electric motors, DOE relied on variability by region and sector. See 
chapter 8 of the NOPR TSD for more details.
    To estimate energy prices in future years, DOE multiplied the 2022 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the Reference case in AEO2023, 
which has an end year of 2050.\61\ To estimate price trends after 2050, 
the 2050 prices were held constant.
---------------------------------------------------------------------------

    \61\ Energy Information Administration. Annual Energy Outlook 
2023. Available at www.eia.gov/outlooks/aeo/ (last accessed May 1, 
2023).

---------------------------------------------------------------------------

[[Page 87096]]

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing equipment 
components that have failed in an equipment; maintenance costs are 
associated with maintaining the operation of the equipment.
    In the March 2022 Preliminary Analysis, for the maintenance costs, 
DOE did not find data indicating a variation in maintenance costs 
between baseline efficiency and higher efficiency motors. The cost of 
replacing bearings, which is the most common maintenance practice, is 
constant across efficiency levels. Therefore, DOE did not include 
maintenance costs in the LCC analysis. See Section 8.3.3 of the March 
2022 Preliminary Analysis.
    DOE did not receive any comments related to maintenance costs and 
retained the same approach in this NOPR.
    DOE considers a motor repair as including rewinding and 
reconditioning. See section 8.3.3 of the March 2022 Preliminary 
Analysis TSD. In the March 2022 Preliminary Analysis, DOE only included 
repair costs for units with a horsepower greater than 20 horsepower and 
did not consider any repair for the ESEM representative units. See 
section 8.3.3 of the March 2022 Preliminary Analysis.
    In response to the March 2022 Preliminary Analysis, EASA commented 
that the definition of repair must be clear for the purposes of 
estimating the number of repairs and should be provided in a separate 
``Definitions'' section. (EASA, No. 21 at p. 5) As noted previously, 
DOE considers a motor repair as including rewinding and reconditioning 
and describes the term in chapter 8 of the NOPR TSD (this was also 
described in chapter 8 of the March 2022 Preliminary Analysis). Other 
non-rewinding related practices, such as bearing replacement, were 
considered as part of the maintenance costs.
    DOE did not receive any comments supporting inclusion of repair 
costs for ESEMs and, in this NOPR, continued to exclude repair costs 
for ESEMs in line with the approach used in the March 2022 Preliminary 
Analysis.
    DOE requests comment on whether any of the efficiency levels 
considered in this NOPR might lead to an increase in maintenance and 
repair costs, and if so, DOE seeks supporting data regarding the 
magnitude of the increased cost per unit for each relevant efficiency 
level and the reasons for those differences.
6. Equipment Lifetime
    In the March 2022 Preliminary Analysis, DOE established separate 
average mechanical lifetime estimates for single phase and polyphase 
ESEMs and AO-ESEMs. DOE then developed Weibull distributions of 
mechanical lifetimes (in hours). The lifetime in years for a sampled 
electric motor is calculated by dividing the sampled mechanical 
lifetime by the sampled annual operating hours of the electric motor. 
In addition, DOE considered that ESEMs and AO-ESEMs are typically 
embedded in a piece of equipment (i.e., an application). For such 
applications, DOE developed Weibull distributions of application 
lifetimes expressed in years and compared the sampled motor mechanical 
lifetime (in years) with the sampled application lifetime. DOE assumed 
that the electric motor would be retired at the earlier of the two 
ages. See section 8.3.4 of the March 2022 Preliminary Analysis.
    In response to the March 2022 Preliminary Analysis, EASA commented 
that the definition of lifetime must be clear and should be provided in 
a separate ``Definitions'' section. (EASA, No. 21 at p. 5) In response, 
DOE notes that it considers a motor lifetime as the age at which an 
equipment is retired from service and describes the term in chapter 8 
of the NOPR TSD (this was also described in chapter 8 of the March 2022 
Preliminary Analysis).
    DOE did not receive any comments regarding ESEMs and AO-ESEMs 
lifetimes and continued to apply the same approach in this NOPR as in 
the March 2022 Preliminary Analysis.
    DOE requests comment on the equipment lifetimes (both in years and 
in mechanical hours) used for each representative unit considered in 
the LCC and PBP analyses.
7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to consumers to estimate the present value of future operating cost 
savings. DOE estimated a distribution of sector-specific discount rates 
for ESEMs based on the opportunity cost of consumer funds.
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\62\ The LCC analysis estimates net present value over the 
lifetime of the equipment, so the appropriate discount rate will 
reflect the general opportunity cost of consumer funds, taking this 
time scale into account. Given the long-time horizon modeled in the 
LCC, the application of a marginal interest rate associated with an 
initial source of funds is inaccurate. Regardless of the method of 
purchase, consumers are expected to continue to rebalance their debt 
and asset holdings over the LCC analysis period, based on the 
restrictions consumers face in their debt payment requirements and the 
relative size of the interest rates available on debts and assets. DOE 
estimates the aggregate impact of this rebalancing using the historical 
distribution of debts and assets.
---------------------------------------------------------------------------

    \62\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's triennial Survey of Consumer Finances 
\63\ (``SCF'') starting in 1995 and ending in 2019. Using the SCF and 
other sources, DOE developed a distribution of rates for each type of 
debt and asset by income group to represent the rates that may apply in 
the year in which the new standards would take effect. DOE assigned 
each sample household a specific discount rate drawn from one of the 
distributions. The average rate across all types of household debt and 
equity and income groups, weighted by the shares of each type, is 3.7 
percent.
---------------------------------------------------------------------------

    \63\ Federal Reserve Board. Survey of Consumer Finances (SCF) 
for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.
---------------------------------------------------------------------------

    To establish non-residential discount rates, DOE estimated the 
weighted-average cost of capital using data from Damodaran Online.\64\ 
The weighted-average cost of capital is commonly used 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 their cost of capital is the weighted average 
of the cost to the firm of equity and debt financing. DOE estimated the 
cost of equity using the capital asset pricing

[[Page 87097]]

model, which assumes that the cost of equity for a particular company 
is proportional to the systematic risk faced by that company. The 
average commercial and industrial discount rates are 6.8 percent and 
7.3 percent, respectively.
---------------------------------------------------------------------------

    \64\ Damodaran, A. Data Page: Historical Returns on Stocks, 
Bonds and Bills--United States. 2021. pages.stern.nyu.edu/~adamodar/ 
(last accessed April 26, 2022).
---------------------------------------------------------------------------

    See chapter 8 of the NOPR TSD for further details on the 
development of consumer discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy 
conservation standards).
    In the March 2022 Preliminary Analysis, DOE relied on model counts 
by efficiency from the 2016 and 2020 Manufacturer Catalog Data to 
estimate the energy efficiency distribution of electric motors for 2027 
and assumed no changes in electric motor efficiency over time. For some 
AO-ESEM representative units, DOE did not have enough models with 
efficiency information and used the efficiency distributions of the 
corresponding non-AO equipment class instead. In the March 2022 
Preliminary Analysis, DOE used a Monte Carlo simulation to draw from 
the efficiency distributions and randomly assign an efficiency to the 
electric motor purchased by each sample household in the no-new-
standards case. The resulting percent shares within the sample match 
the market shares in the efficiency distributions. See chapter 8 of the 
March 2022 Preliminary TSD.
    In response to the March 2022 Preliminary Analysis, NEMA disagreed 
with the DOE estimates for ESEM and AO-ESEM efficiency distributions 
and commented that these distributions were modeled/estimated, rather 
than gathered properly and accurately through testing and other means. 
NEMA commented that DOE should not develop estimates and interpolations 
and instead finalize test procedures. NEMA added that energy efficiency 
information does not exist because Federal test procedures for some of 
these motors have not been established. (NEMA, No. 22 at p. 23)
    As noted previously, due to the very high volume of combinations of 
motor topologies, horsepower, frame sizes, pole counts, speeds, unique 
motor construction, and other parameters, DOE has recognized it to be 
unrealistic to test every possible motor available in the U.S. market. 
In the absence of such data, DOE relied on model counts by efficiency 
from manufacturer Catalog Data and updated the data to reflect 2022 
catalog offerings (using the 2022 Motor Database). In addition, the 
electric motors test procedure finalized in the October 2022 Final Rule 
relies on industry test methods published in 2016.\65\ 87 FR 63588. For 
ESEMs, DOE believes manufacturers have used, and currently use, these 
industry test methods to evaluate the efficiency of electric motors as 
reported in their catalogs.
---------------------------------------------------------------------------

    \65\ NEMA Standards Publication MG 1-2016, ``Motors and 
Generators: Air-Over Motor Efficiency Test Method Section IV Part 
34'', www.nema.org/docs/default-source/standards-document-library/part-34-addition-to-mg1-2016-watermarkd91d7834-cf4f-4a87-b86f-bef96b7dad54.pdf?sfvrsn=cbf1386d_3.
---------------------------------------------------------------------------

    As previously noted, in the March 2022 Preliminary Analysis, DOE 
assumed no changes in electric motor efficiency over time. DOE did not 
receive any comment on this assumption and retained the same approach 
in this NOPR: to estimate the energy efficiency distribution of 
electric motors for 2029, DOE assumed no changes in electric motor 
efficiency over time. The estimated market shares for the no-new-
standards case for electric motors are shown in Table IV-8 by equipment 
class group and horsepower range.

                Table IV-8--No-New Standards Case Efficiency Distributions in the Compliance Year
----------------------------------------------------------------------------------------------------------------
      Equipment class group        Horsepower range     EL0 (%)     EL1 (%)     EL2 (%)     EL3 (%)     EL4 (%)
----------------------------------------------------------------------------------------------------------------
ESEM High/Med Torque............  0.25 <= hp <= 0.50        24.1        43.1        16.2        16.0         0.7
                                  0.5 < hp <= 3.....        37.5        49.1        11.9         1.4         0.1
ESEM Low Torque.................  0.25 hp...........         4.2        16.0        79.9         0.0         0.0
                                  0.25 < hp <= 3....        41.5        22.0        26.8         9.8         0.0
ESEM Polyphase..................  0.25 <= hp <= 3...         9.6        23.1        53.3        13.4         0.5
AO-ESEM High/Med Torque.........  0.25 <= hp <= 0.50        26.7        33.3        20.0         6.7        13.3
                                  0.5 < hp <= 3.....        32.4        38.2        17.6        11.8         0.0
AO-ESEM Low Torque..............  0.25 hp...........         1.8        21.8        58.2        18.2         0.0
                                  0.25 < hp <= 3....         9.8        26.1        55.4         8.7         0.0
AO-ESEM Polyphase...............  0.25 <= hp <= 3...        37.7        26.0        33.8         2.6         0.0
----------------------------------------------------------------------------------------------------------------
* May not sum to 100% due to rounding.

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the ESEM purchased 
by each sample household in the no-new-standards case. The resulting 
percent shares within the sample match the market shares in the 
efficiency distributions.
    The existence of market failures in the commercial and industrial 
sectors is well supported by the economics literature and by a number 
of case studies as discussed in the remainder of this section. DOE did 
not receive any comments specific to the random assignment of no-new-
standards case efficiencies (sampled from the developed efficiency 
distribution) in the LCC model and continued to rely on the same 
approach to reflect market failures in the ESEM market, as noted in the 
following examples. First, a recognized problem in commercial settings 
is the principal-agent problem, where the building owner (or building 
developer) selects the equipment and the tenant (or subsequent building 
owner) pays for energy costs.66 67 In the case of ESEMs, for 
many companies, the energy bills are paid for the company as a whole 
and

[[Page 87098]]

not allocated to individual departments. This practice provides 
maintenance and engineering staff little incentives to pursue energy 
saving investments because the savings in energy bills provide little 
benefits to the decision-making maintenance and engineering staff. 
(Nadel et al.) \68\ Second, the nature of the organizational structure 
and design can influence priorities for capital budgeting, resulting in 
choices that do not necessarily maximize profitability.\69\ In the case 
of ESEMs, within manufacturing as a whole, motor system energy costs 
constitute less than 1 percent of total operating costs and energy 
efficiency has a low level of priority among capital investment and 
operating objectives. (Xenergy,\70\ Nadel et al.) Third, there are 
asymmetric information and other potential market failures in financial 
markets in general, which can affect decisions by firms with regard to 
their choice among alternative investment options, with energy 
efficiency being one such option.\71\ In the case of electric motors, 
Xenergy identified the lack of information concerning the nature of 
motor system efficiency measures--their benefits, costs, and 
implementation procedures--as a principal barrier to their adoption. In 
addition, Almeida \72\ reports that the attitude of electric motor end-
user is characterized by bounded rationality where they adopt ``rule of 
thumb'' routines because of the complexity of market structure which 
makes it difficult for motors end-users to get all the information they 
need to make an optimum decision concerning allocation of resources. 
The rule of thumb is to buy the same type and brand as the failed motor 
from the nearest retailer. Almeida adds that the same problem of 
bounded rationality exists when end-users purchase electric motors 
incorporated in larger equipment. In general, end-users are only 
concerned about the overall performance of a machine, and energy 
efficiency is rarely a key factor in this performance. Motor selection 
is therefore often left to the OEM, which are not responsible for 
energy costs and prioritize price and reliability.
---------------------------------------------------------------------------

    \66\ Vernon, D., and Meier, A. (2012). ``Identification and 
quantification of principal-agent problems affecting energy 
efficiency investments and use decisions in the trucking industry,'' 
Energy Policy, 49, 266-273.
    \67\ Blum, H. and Sathaye, J. (2010). ``Quantitative Analysis of 
the Principal-Agent Problem in Commercial Buildings in the U.S.: 
Focus on Central Space Heating and Cooling,'' Lawrence Berkeley 
National Laboratory, LBNL-3557E. (Available at: escholarship.org/uc/item/6p1525mg) (Last accessed January 20, 2022).
    \68\ Nadel, S., R.N. Elliott, M. Shepard, S. Greenberg, G. Katz 
& A.T. de Almedia. 2002. Energy-Efficient Motor Systems: A Handbook 
on Technology, Program and Policy Opportunities. Washington, DC: 
American Council for an Energy-Efficient Economy. Second Edition.
    \69\ DeCanio, S.J. (1994). ``Agency and control problems in US 
corporations: the case of energy-efficient investment projects,'' 
Journal of the Economics of Business, 1(1), 105-124.
    Stole, L.A., and Zwiebel, J. (1996). ``Organizational design and 
technology choice under intrafirm bargaining,'' The American 
Economic Review, 195-222.
    \70\ Xenergy, Inc. (1998). United States Industrial Electric 
Motor Systems Market Opportunity Assessment. (Available at: 
www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf) (Last 
accessed January 20, 2022).
    \71\ Fazzari, S.M., Hubbard, R.G., Petersen, B.C., Blinder, 
A.S., and Poterba, J.M. (1988). ``Financing constraints and 
corporate investment,'' Brookings Papers on Economic Activity, 
1988(1), 141-206.
    Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall, R.E., and 
Caballero, R.J. (1994). ``A reconsideration of investment behavior 
using tax reforms as natural experiments,'' Brookings Papers on 
Economic Activity, 1994(2), 1-74.
    DeCanio, S.J., and Watkins, W.E. (1998). ``Investment in energy 
efficiency: do the characteristics of firms matter?'' Review of 
Economics and Statistics, 80(1), 95-107.
    Hubbard R.G. and Kashyap A. (1992). ``Internal Net Worth and the 
Investment Process: An Application to U.S. Agriculture,'' Journal of 
Political Economy, 100, 506-534.
    \72\ de Almeida, E.L.F. (1998). ``Energy efficiency and the 
limits of market forces: The example of the electric motor market in 
France'', Energy Policy, 26(8), 643-653.
---------------------------------------------------------------------------

    See chapter 8 of the NOPR TSD for further information on the 
derivation of the efficiency distributions.
    DOE seeks information and data to help establish efficiency 
distribution in the no-new standards case for ESEMs. DOE requests data 
and information on any trends in the electric motor market that could 
be used to forecast expected trends in market share by efficiency 
levels for each equipment class.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more-
efficient equipment, compared to baseline equipment, through energy 
cost savings. Payback periods that exceed the life of the equipment 
mean that the increased total installed cost is not recovered in 
reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the equipment and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing an equipment complying 
with an energy conservation standard level will be less than three 
times the value of the first year's energy savings resulting from the 
standard, as calculated under the applicable test procedure. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency 
level, DOE determined the value of the first year's energy savings by 
calculating the energy savings in accordance with the applicable DOE 
test procedure, and multiplying those savings by the average energy 
price projection for the year in which compliance with the new 
standards would be required.

G. Shipments Analysis

    DOE uses projections of annual equipment shipments to calculate the 
national impacts of potential new energy conservation standards on 
energy use, NPV, and future manufacturer cash flows.\73\ The shipments 
model takes an accounting approach, tracking market shares of each 
equipment class and the vintage of units in the stock. Stock accounting 
uses equipment shipments as inputs to estimate the age distribution of 
in-service product stocks for all years. The age distribution of in-
service product stocks is a key input to calculations of both the NES 
and NPV, because operating costs for any year depend on the age 
distribution of the stock.
---------------------------------------------------------------------------

    \73\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    First, in the March 2022 Preliminary Analysis, DOE estimated 
shipments in the base year (2020). DOE estimated the total shipments of 
ESEMs in 2020 to be 28.6 million units (including 7.9 million units of 
AO ESEMs). DOE developed a distribution of shipments by equipment class 
group and horsepower range based on model counts from the 2020 and 
2016/2020 Manufacturer Catalog Data. See chapter 9 of the March 2022 
Preliminary Analysis TSD.
    DOE did not receive any comments related to the base year shipments 
estimates for ESEMs and retained the values estimated in the 
preliminary analysis in this NOPR, however, DOE only included motors up 
to 3hp, which were in the recommended scope of the December 2022 Joint 
Recommendation. For ESEMs (including AO ESEMs), DOE revised the 
distribution of shipments by horsepower range based on model counts 
from the 2022 Manufacturer Catalog Data.
    In the March 2022 Preliminary Analysis, DOE projected shipments for 
ESEMs in the no-new standards case under the assumption that long-term 
growth of electric motor shipments will be driven the following sector-
specific market drivers from AEO2021: commercial building floor space, 
housing numbers, and value of manufacturing activity for the 
commercial, residential, and industrial sector, respectively. In 
addition, DOE kept the distribution of shipments by

[[Page 87099]]

equipment class group and horsepower range constant across the analysis 
period.
    In response to the March 2022 Preliminary Analysis, NEMA commented 
that legacy induction motors are being replaced by PDS (or power drive 
systems) consisting of a motor and controls/drives as a means to 
dramatically reduce power and integrate motor driven systems into 
sophisticated control schemes that continuously monitor processes 
managing flow, pressure, etc., to reduce operating costs and emissions. 
(NEMA, No. 22 at p. 23) In the case of ESEMs, DOE agrees with NEMA that 
some ESEMs could be replaced by non-induction motors such as ECMs. 
However, DOE does not have sufficient data to quantify the magnitude of 
such substitution, which could result in lower ESEM shipments. Instead, 
DOE established two additional shipments sensitivity scenario to 
account for the impacts of lower/higher ESEMs shipments estimates.
    DOE did not receive any other comments specific to ESEM shipments 
projections and retained the same methodology as in the March 2022 
Preliminary Analysis in this NOPR and revised the projections based on 
AEO2023.
    DOE requests comment and additional data on its 2020 shipments 
estimates for ESEMs. DOE seeks comment on the methodology used to 
project future shipments of ESEMs. DOE seeks information on other data 
sources that can be used to estimate future shipments.

H. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new standards at specific efficiency levels.\74\ (``Consumer'' in this 
context refers to consumers of the equipment being regulated.) DOE 
calculates the NES and NPV for the potential standard levels considered 
based on projections of annual equipment shipments, along with the 
annual energy consumption and total installed cost data from the energy 
use and LCC analyses. For the present analysis, DOE projected the 
energy savings, operating cost savings, product costs, and NPV of 
consumer benefits over the lifetime of ESEMs sold from 2029 through 
2058.
---------------------------------------------------------------------------

    \74\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new standards by comparing a case 
without such standards with standards-case projections. The no-new-
standards case characterizes energy use and consumer costs for each 
equipment class in the absence of new energy conservation standards. 
For this projection, DOE considers any historical trends in efficiency 
and various forces that are likely to affect the mix of efficiencies 
over time. DOE compares the no-new-standards case with projections 
characterizing the market for each equipment class if DOE adopted new 
standards at specific energy efficiency levels (i.e., the TSLs or 
standards cases) for that class. For the standards cases, DOE considers 
how a given standard would likely affect the market shares of equipment 
with efficiencies greater than the standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each TSL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV-9 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

    Table IV-9--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
              Inputs                               Method
------------------------------------------------------------------------
Shipments.........................  Annual shipments from shipments
                                     model.
Compliance Date of Standard.......  2029.
Efficiency Trends.................  No-new-standards case: constant
                                     trend.
                                    Standards cases: constant trend.
Annual Energy Consumption per Unit  Annual weighted-average values are a
                                     function of energy use at each TSL.
Total Installed Cost per Unit.....  Annual weighted-average values are a
                                     function of cost at each TSL.
                                    Incorporates projection of future
                                     product prices based on historical
                                     data. (constant trend).
Annual Energy Cost per Unit.......  Annual weighted-average values as a
                                     function of the annual energy
                                     consumption per unit and energy
                                     prices.
Repair and Maintenance Cost per     Maintenance costs: No change with
 Unit.                               efficiency level.
                                    Repair costs: No repair.
Energy Price Trends...............  AEO2023 projections (to 2050) and
                                     held constant thereafter.
Energy Site-to-Primary and FFC      A time-series conversion factor
 Conversion.                         based on AEO2023.
Discount Rate.....................  Three and seven percent.
Present Year......................  2024.
------------------------------------------------------------------------

1. Equipment Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.8 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered equipment classes for the year of anticipated compliance 
with a new standard. To project the trend in efficiency absent new 
standards for ESEMs and AO-ESEMs over the entire shipments projection 
period, DOE applied a constant trend, similar to what was done in the 
March 2022 Preliminary Analysis. The approach is further described in 
chapter 10 of the NOPR TSD.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2029). In this scenario, the market 
shares of equipment in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of products above the standard would remain 
unchanged.

[[Page 87100]]

    To develop standards case efficiency trends after 2029, DOE assumed 
no change over the forecast period.
    DOE did not receive any comments on the projected efficiency trends 
in response to the March 2022 Preliminary Analysis and retained the 
same approach in this NOPR.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered products between each 
potential standards case (``TSL'') and the case with no new energy 
conservation standards. DOE calculated the national energy consumption 
by multiplying the number of units (stock) of each equipment (by 
vintage or age) by the unit energy consumption (also by vintage). DOE 
calculated annual NES based on the difference in national energy 
consumption for the no-new-standards case and for each higher 
efficiency standard case. DOE estimated energy consumption and savings 
based on site energy and converted the electricity consumption and 
savings to primary energy (i.e., the energy consumed by power plants to 
generate site electricity) using annual conversion factors derived from 
AEO2023. Cumulative energy savings are the sum of the NES for each year 
over the timeframe of the analysis.
    Use of higher-efficiency equipment is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the equipment due to the increase in efficiency. In the March 2022 
Preliminary Analysis, DOE requested comment and data regarding the 
potential increase in utilization of electric motors due to any 
increase in efficiency. See section 2.10.1 of the March 2022 
Preliminary TSD. DOE did not find any data on the rebound effect 
specific to electric motors \75\ and did not receive any comments 
supporting the inclusion of a rebound effect for ESEMs and AO-ESEMs. 
Therefore, DOE did not apply a rebound effect for ESEMs and AO-ESEMs.
---------------------------------------------------------------------------

    \75\ See, e.g., 86 FR 36111 for further discussion regarding 
DOE's explanation and findings regarding rebound effect for electric 
motors, broadly.
---------------------------------------------------------------------------

    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \76\ 
that EIA uses to prepare its Annual Energy Outlook. The FFC factors 
incorporate losses in production and delivery in the case of natural 
gas (including fugitive emissions) and additional energy used to 
produce and deliver the various fuels used by power plants. The 
approach used for deriving FFC measures of energy use and emissions is 
described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------

    \76\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed 5/1/
2023).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance costs), 
and (3) a discount factor to calculate the present value of costs and 
savings. DOE calculates net savings each year as the difference between 
the no-new-standards case and each standards case in terms of total 
savings in operating costs versus total increases in installed costs. 
DOE calculates operating cost savings over the lifetime of each 
equipment shipped during the projection period.
    As discussed in section IV.F.1 of this document, DOE developed 
constant ESEM price trends based on historical PPI data. DOE applied 
the same trends to project prices for each equipment class at each 
considered efficiency level. DOE's projection of equipment prices is 
described in appendix 10C of the NOPR TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different equipment price 
projections on the consumer NPV for the considered TSLs for ESEMs. In 
addition to the default price trend, DOE considered two equipment price 
sensitivity cases: (1) a high price decline case and (2) a low price 
decline case based on historical PPI data. The derivation of these 
price trends and the results of these sensitivity cases are described 
in appendix 10C of the NOPR TSD.
    The energy cost savings are calculated using the estimated energy 
savings in each year and the projected price of the appropriate form of 
energy. To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the projection of annual national-
average residential energy price changes in the Reference case from 
AEO2023, which has an end year of 2050. To estimate price trends after 
2050, the 2050 value was used for all years. As part of the NIA, DOE 
also analyzed scenarios that used inputs from variants of the AEO2023 
Reference case that have lower and higher economic growth. Those cases 
have lower and higher energy price trends compared to the Reference 
case. NIA results based on these cases are presented in appendix 10C of 
the NOPR TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\77\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \77\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
georgewbush-whitehouse.archives.gov/omb/memoranda/m03-21.html (last 
accessed May 1, 2023).
---------------------------------------------------------------------------

    DOE requests comment and data regarding the potential increase in 
utilization of electric motors due to any increase in efficiency 
(``rebound effect'').

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new energy conservation 
standards on consumers, DOE evaluates the impact on identifiable 
subgroups of consumers that may be disproportionately affected by a new 
national standard. The purpose of a subgroup analysis is to determine 
the extent of any such

[[Page 87101]]

disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels. For this NOPR, DOE analyzed 
the impacts of the considered standard levels on three subgroups: (1) 
low-income households (for ESEMs used in the residential sector); (2) 
senior-only households (for ESEMs used in the residential sector); and 
(3) small-businesses. The analysis used subsets of the RECS 2020 sample 
composed of households that meet the criteria for the low-income and 
senior-only household subgroups. For small-businesses subgroup, DOE 
used the same sample of consumers but with subgroup-specific inputs. 
DOE determined the impact on the electric motors subgroups using the 
same LCC model, which is used for all consumers, but with subgroup-
specific inputs as applicable.
    In response to the March 2022 Preliminary Analysis, AHAM and AHRI 
commented that a forced redesign of motors used in finished goods will 
force changes by the OEM. AHAM and AHRI commented that this would be 
particularly damaging for small appliances and floor care products, 
which use special purpose motors and are sensitive to even small 
increases in component part costs. AHAM and AHRI commented that the 
increased cost could make some appliances and equipment too costly for 
low-income consumers to purchase and delay purchases of more efficient 
appliances and equipment for middle-income consumers. (AHAM and AHRI, 
No. 25 at pp. 9-10) In response to these comments, DOE performed a 
subgroup analysis for low-income consumers showing these consumers 
would not be disproportionately impacted. See section V.B.1.b of this 
document.
    Chapter 11 in the NOPR TSD describes the consumer subgroup 
analysis.
    DOE requests comment and data on the overall methodology used for 
the consumer subgroup analysis. DOE requests comment on whether 
additional consumer subgroups may be disproportionately affected by a 
new standard and warrant additional analysis in the final rule.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new 
energy conservation standards on manufacturers of ESEMs and to estimate 
the potential impacts of such standards on employment and manufacturing 
capacity. The MIA has both quantitative and qualitative aspects and 
includes analyses of projected industry cash flows, the INPV, 
investments in research and development (``R&D'') and manufacturing 
capital, and domestic manufacturing employment. Additionally, the MIA 
seeks to determine how new energy conservation standards might affect 
manufacturing employment, capacity, and competition, as well as how 
standards contribute to overall regulatory burden. Finally, the MIA 
serves to identify any disproportionate impacts on manufacturer 
subgroups, including small business manufacturers.
    The quantitative part of the MIA primarily relies on the GRIM, an 
industry cash flow model with inputs specific to this proposed 
rulemaking. The key GRIM inputs include data on the industry cost 
structure, unit production costs, equipment shipments, manufacturer 
markups, and investments in R&D and manufacturing capital required to 
produce compliant products. The key GRIM outputs are the INPV, which is 
the sum of industry annual cash flows over the analysis period, 
discounted using the industry-weighted average cost of capital, and the 
impact to domestic manufacturing employment. The model uses standard 
accounting principles to estimate the impacts of energy conservation 
standards on a given industry by comparing changes in INPV and domestic 
manufacturing employment between a no-new-standards case and the 
various standards cases (i.e., TSLs). To capture the uncertainty 
relating to manufacturer pricing strategies following new standards, 
the GRIM estimates a range of possible impacts under different 
manufacturer markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the NOPR TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the ESEMs manufacturing 
industry based on the market and technology assessment, preliminary 
manufacturer interviews, and publicly-available information. This 
included a top-down analysis of ESEM manufacturers that DOE used to 
derive preliminary financial inputs for the GRIM (e.g., revenues; 
materials, labor, overhead, and depreciation expenses; selling, 
general, and administrative expenses (``SG&A''); and R&D expenses). DOE 
also used public sources of information to further calibrate its 
initial characterization of the ESEM manufacturing industry, including 
company filings of form 10-K from the SEC, corporate annual 
reports,\78\ the U.S. Census Bureau's Economic Census,\79\ and reports 
from D&B Hoovers.\80\
---------------------------------------------------------------------------

    \78\ See www.sec.gov/edgar.
    \79\ See www.census.gov/programs-surveys/asm/data/tables.html.
    \80\ See app.avention.com.
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of new energy conservation 
standards. The GRIM uses several factors to determine a series of 
annual cash flows starting with the announcement of the standard and 
extending over a 30-year period following the compliance date of the 
standard. These factors include annual expected revenues, costs of 
sales, SG&A and R&D expenses, taxes, and capital expenditures. In 
general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of ESEMs in order to develop other key GRIM 
inputs, including product and capital conversion costs, and to gather 
additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital assets, 
industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.J.3 of this document for a 
description of the key issues raised by manufacturers during the 
interviews. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by new standards 
or that may not be accurately represented by the average cost 
assumptions used to develop the industry cash flow analysis. Such 
manufacturer subgroups may include

[[Page 87102]]

small business manufacturers, low-volume manufacturers, niche players, 
and/or manufacturers exhibiting a cost structure that largely differs 
from the industry average. DOE identified one subgroup for a separate 
impact analysis: small business manufacturers. The small business 
subgroup is discussed in section VI.B, ``Review under the Regulatory 
Flexibility Act'', of this document and in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
standards that result in a higher or lower industry value. The GRIM 
uses a standard, annual discounted cash-flow analysis that incorporates 
manufacturer costs, markups, shipments, and industry financial 
information as inputs. The GRIM models changes in costs, distribution 
of shipments, investments, and manufacturer margins that could result 
from new energy conservation standard. The GRIM spreadsheet uses the 
inputs to arrive at a series of annual cash flows, beginning in 2024 
(the base year of the analysis) and continuing to 2058. DOE calculated 
INPVs by summing the stream of annual discounted cash flows during this 
period. For manufacturers of ESEMs, DOE initially estimated a real 
discount rate of 9.1 percent, which was the real discount rate used in 
the previous medium electric motors final rule that published on May 
29, 2014 (``May 2014 Electric Motors Final Rule''). 79 FR 30934, 30938. 
DOE then asked for feedback on this value during manufacturer 
interviews. Manufacturers agreed this was still an appropriate value to 
use. Therefore, DOE used a real discount rate of 9.1 percent for the 
analysis in this NOPR.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of new energy 
conservation standards on manufacturers. As discussed previously, DOE 
developed critical GRIM inputs using a number of sources, including 
publicly available data, results of the engineering analysis, and 
information gathered from industry stakeholders during the course of 
manufacturer interviews and subsequent working group meetings. The GRIM 
results are presented in section V.B.2 of this document. Additional 
details about the GRIM, the discount rate, and other financial 
parameters can be found in chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry.
    DOE conducted the engineering analysis using a combination of 
physical teardowns and software modeling. DOE contracted a professional 
motor laboratory to disassemble various ESEMs and record what types of 
materials were present and how much of each material was present, 
recorded in a final BOM. To supplement the physical teardowns, software 
modeling by a subject matter expert was also used to generate BOMs for 
select efficiency levels of directly analyzed representative units.
    For a complete description of the MPCs, see chapter 5 of the NOPR 
TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency mix over time 
can significantly affect manufacturer finances. For this analysis, the 
GRIM uses the NIA's annual shipment projections derived from the 
shipments analysis from 2024 (the base year) to 2058 (the end year of 
the analysis period). See chapter 9 of the NOPR TSD for additional 
details.
c. Product and Capital Conversion Costs
    New energy conservation standards could cause manufacturers to 
incur conversion costs to bring their production facilities and 
equipment designs into compliance. DOE evaluated the level of 
conversion-related expenditures that would be needed to comply with 
each considered efficiency level in each equipment class. For the MIA, 
DOE classified these conversion costs into two major groups: (1) 
product conversion costs; and (2) capital conversion costs. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make equipment 
designs comply with new energy conservation standards. Capital 
conversion costs are investments in property, plant, and equipment 
necessary to adapt or change existing production facilities such that 
new compliant equipment designs can be fabricated and assembled.
    DOE calculated the product and capital conversion costs using a 
bottom-up approach based on feedback from manufacturers during 
manufacturer interviews. During manufacturer interviews, DOE asked 
manufacturers questions regarding the estimated equipment and capital 
conversion costs needed to produce ESEMs within an equipment class at 
each specific EL. DOE used the feedback provided by manufacturers to 
estimate the approximate amount of engineering time, testing costs, and 
capital equipment that would need to be purchased in order to redesign 
a single frame size for each EL. Some of the types of capital 
conversion costs manufacturers identified were the purchase of 
lamination die sets, winding machines, frame casts, and assembly 
equipment as well as other retooling costs. The two main types of 
product conversion costs manufacturers shared with DOE during 
interviews were the number of engineer hours necessary to re-engineer 
frames to meet higher efficiency standards and the testing costs, 
including thermal protection testing, to comply with higher efficiency 
standards.
    DOE then took average values (i.e., costs or number of hours) based 
on the range of responses given by manufacturers to calculate both the 
equipment and capital conversion cost necessary for a manufacturer to 
increase the efficiency of one frame size to a specific EL. DOE 
multiplied the conversion costs associated with manufacturing a single 
frame size at each EL by the number of frames each interviewed 
manufacturer produces. DOE finally scaled this number based on the 
market share of the manufacturers DOE interviewed to arrive at an 
industry-wide bottom-up product and capital conversion cost estimate 
for each representative unit at each EL.
    In response to the March 2022 Preliminary Analysis, the Joint 
Industry Stakeholders and Lennox commented that there may be instances 
where substitution of a newer, larger, heavier, faster ESEM is 
feasible, but that it was not reasonable to assume this is always the 
case. The Joint Industry Stakeholders and Lennox added that OEM 
companies would be forced to expend significant resources seeking 
retrofit and repair options for recently purchased end-use OEM goods to 
account for unnecessary motor subcomponent changes. (Joint Industry 
Stakeholders, No. 23 at pp. 5-6; Lennox, No. 29 at p. 5) The Joint 
Industry

[[Page 87103]]

Stakeholders added that this could particularly impact small 
businesses. (Joint Industry Stakeholders, No. 23 at p. 5-6) The Joint 
Stakeholder also commented that while OEM manufacturers would likely 
redesign product, and incur a cost to do so, to avoid issues resulting 
from new motors, there may not be suitable replacement motors, which 
are immediately available due to DOE's proposed certification 
requirements, limiting approvals to a few third-party labs. The Joint 
Stakeholder added that these costs need to be accounted for in DOE's 
analysis. (Id. at p. 8)
    In this NOPR, as noted in section IV.C.1 of this document, DOE 
assumes higher efficiency levels can be reached without resulting in 
any significant size increase and without changing the key electrical 
and mechanical characteristics of the motor. Therefore, DOE disagrees 
with the Joint Stakeholders and Lennox that the higher efficiency 
levels would force OEMs to redesign their equipment and result in 
redesign and re-tooling costs.
    As previously discussed, DOE revised the March 2022 Preliminary 
Analysis to account for space-constrained and non-space constrained 
motor designs, which will continue to provide repair options to 
consumers. As stated in the December 2022 Joint Recommendation, motor 
manufacturers believe that efficiency levels higher than EL 2 could 
result in significant increases in the physical size of certain motors. 
(Electric Motors Working Group, No. 38 at p. 4) As part of the 
engineering analysis, DOE models representative units that are able to 
meet the efficiency requirements of EL 2 and below that would not 
result in a significantly increase in the physical size of the ESEMs. 
For ELs higher than EL 2 (i.e., EL 3 and EL 4), DOE recognizes that 
ESEMs may significantly increase in physical size in order to meet 
those higher efficiency requirements. DOE also recognizes that this may 
result in a significant disruption to the OEM markets that used ESEMs 
as an embedded product. In addition, as discussed in section IV.C.3 of 
this document, DOE accounted for the impacts of any potential changes 
in speeds at higher efficiency levels.
    In response to the March 2022 Preliminary Analysis, NEMA stated 
that many ESEMs have agency listings for thermal protection and any 
redesign of the motor will require retesting with the respective 
agencies. NEMA commented additionally that the time needed to complete 
this testing should be considered when setting the compliance date of 
any ESEM energy conservation standards, and that the cost associated 
with this agency testing must be accounted for in the cost analysis. 
(NEMA, No. 22 at pp. 3, 17) As previously stated in this section, DOE 
accounted for additional thermal protection testing in addition to the 
costs associated with redesigning each ESEM model as part of the 
product conversion costs. These product conversion costs, in addition 
to the capital conversion costs, are included when calculating the 
potential change in manufacturer INPV.
    NEMA also commented that DOE must capture the OEM impacts in terms 
of costs of redesigning and retooling. NEMA noted that these costs will 
have a very wide variation: some will involve a few hours' worth of 
work while others could require several hundred hours plus material and 
recertification to regulating bodies and safety testers. NEMA commented 
further that single phase (and some small three phase) motors with 
agency certified overload protection will need several years to be 
recertified. In addition, NEMA noted that DOE should capture the 
installation cost impacts on end-users trying to repair appliances with 
larger, heavier, or faster replacement motors built to meet new 
standards. (NEMA, No. 22 at p. 21)
    In response to these comments and as noted in section IV.F of this 
document, DOE determined that the installation costs for ESEMs would 
not change at higher efficiency levels compared to the baseline as DOE 
is maintaining the frame size of ESEMs constant across all efficiency 
levels analyzed. DOE is further limiting the stack length to be no 
greater than 20 percent longer than the baseline unit for that 
representative unit. In addition, as noted in section IV.C.3 of this 
document, the speed of the ESEMs across efficiency levels did not 
always increase with increasing efficiency and DOE accounted for speed 
variations in its energy use analysis (see section IV.E.4 of this 
document for more details).
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with new standards. The conversion cost 
figures used in the GRIM can be found in section V.B.2 of this 
document. For additional information on the estimated capital and 
product conversion costs, see chapter 12 of the NOPR TSD.
d. Manufacturer Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied non-production cost markups to the 
MPCs estimated in the engineering analysis for each equipment class and 
efficiency level. Modifying these markups in the standards case yields 
different sets of impacts on manufacturers. For the MIA, DOE modeled 
two standards-case markup scenarios to represent uncertainty regarding 
the potential impacts on prices and profitability for manufacturers 
following the implementation of new energy conservation standards: (1) 
a preservation of gross margin scenario; and (2) a preservation of 
operating profit scenario. These scenarios lead to different markup 
values that, when applied to the MPCs, result in varying revenue and 
cash flow impacts.
    Under the preservation of gross margin scenario, DOE applied a 
single uniform ``gross margin percentage'' across all efficiency 
levels, which assumes that manufacturers would be able to maintain the 
same amount of profit as a percentage of revenues at all efficiency 
levels within an equipment class. DOE initially estimated a 
manufacturer markup of 1.37 for all ESEMs covered by this rulemaking in 
the no-new-standards case, which was the manufacturer markup for medium 
electric motors under 5 hp used in the May 2014 Electric Motors Final 
Rule. 79 FR 30934, 30938. DOE then asked for feedback on this 
manufacturer markup during manufacturer interviews. Manufacturers 
agreed this was an appropriate manufacturer markup to use for ESEMs 
covered by this rulemaking. Therefore, DOE used this same manufacturer 
markup of 1.37 for all equipment classes and ELs at each TSL (i.e., the 
standards cases) in the preservation of gross margin scenario. This 
manufacturer markup scenario represents the upper-bound of manufacturer 
INPV and is the manufacturer markup scenario used to calculate the 
economic impacts on consumers.
    Under the preservation of operating profit scenario, DOE modeled a 
situation in which manufacturers are not able to increase per-unit 
operating profit in proportion to increases in MPCs. Under this 
scenario, as MPCs increase, manufacturers reduce their manufacturer 
margins to maintain a cost competitive offering in the market. However, 
in this scenario manufacturers maintain their total operating profit in 
absolute dollars in the standards case, despite higher product costs 
and investment. Therefore, gross margin (as a percentage) shrinks in 
the standards cases for this manufacturer markup

[[Page 87104]]

scenario. This manufacturer markup scenario represents the lower-bound 
to industry profitability under new energy conservation standards.
    A comparison of industry financial impacts under the two markup 
scenarios is presented in section V.B.2.a of this document.
3. Manufacturer Interviews
    DOE conducted additional interviews with manufacturers following 
the publication of the March 2022 Preliminary TSD in preparation for 
this analysis. In interviews, DOE asked manufacturers to describe their 
major concerns regarding this rulemaking. The following section 
highlights manufacturer concerns that helped inform the projected 
potential impacts of new standards on the industry. Manufacturer 
interviews are conducted under NDAs, so DOE does not document these 
discussions in the same way that it does public comments in the comment 
summaries and DOE's responses throughout the rest of this document.
    During these interviews, most manufacturers stated that they were 
concerned that if energy conservation standards were set at the higher 
ELs, ESEM manufacturers may have to increase the size and footprint of 
potentially non-compliant ESEM models to meet these higher ELs. While 
ESEM manufacturers stated it is possible for them to meet higher ELs by 
increasing the size or footprint of their ESEMs, many of the ESEMs that 
they manufacture are embedded or incorporated in another product or 
equipment. They further stated that several of these products or 
equipment with embedded ESEMs are not able to accommodate a larger 
ESEMs into these space-constrained products or equipment.
    As previously discussed, DOE revised the engineering analysis for 
this NOPR based on comments from the December 2022 Joint 
Recommendation, to assume that ESEMs at EL 2 or below would not result 
in a significant increase in physical size. (See Electric Motors 
Working Group, No. 38 at p. 4) For ELs higher than EL 2 (i.e., EL 3 and 
EL 4), DOE recognizes that ESEMs may significantly increase in physical 
size in order to meet those higher efficiency requirements. DOE also 
recognizes that this may result in a significant disruption to the OEM 
market that used ESEMs as an embedded product.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions in emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions intended to 
represent the marginal impacts of the change in electricity consumption 
associated with new standards. The methodology is based on results 
published for the AEO, including a set of side cases that implement a 
variety of efficiency-related policies. The methodology is described in 
appendix 13A in the NOPR TSD. The analysis presented in this notice 
uses projections from AEO2023. Power sector emissions of CH4 
and N2O from fuel combustion are estimated using Emission 
Factors for Greenhouse Gas Inventories published by the EPA.\81\
---------------------------------------------------------------------------

    \81\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12, 
2021).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the NOPR TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the emissions control programs discussed in the following 
paragraphs the emissions control programs discussed in the following 
paragraphs, and the Inflation Reduction Act.\82\
---------------------------------------------------------------------------

    \82\ For further information, see the Assumptions to AEO2023 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed May 1, 2023).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.) 
SO2 emissions from numerous States in the eastern half of 
the United States are also limited under the Cross-State Air Pollution 
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these 
states to reduce certain emissions, including annual SO2 
emissions, and went into effect as of January 1, 2015.\83\ The AEO 
incorporates implementation of CSAPR, including the update to the CSAPR 
ozone season program emission budgets and target dates issued in 2016. 
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among 
EGUs and is enforced through the use of tradable emissions allowances. 
Under existing EPA regulations, for states subject to SO2 
emissions limits under CSAPR, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \83\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (``PM2.5'') pollution, in order 
to address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants.\84\ 77 FR 9304 (Feb. 16, 2012). The final rule 
establishes power plant emission standards for mercury, acid gases, and 
non-mercury metallic toxic pollutants. Because of the emissions 
reductions under the MATS, it is unlikely that excess SO2 
emissions allowances resulting from the lower electricity demand would 
be needed or used to

[[Page 87105]]

permit offsetting increases in SO2 emissions by another 
regulated EGU. Therefore, energy conservation standards that decrease 
electricity generation will generally reduce SO2 emissions. 
DOE estimated SO2 emissions reduction using emissions 
factors based on AEO2023.
---------------------------------------------------------------------------

    \84\ In order to continue operating, coal power plants must have 
either flue gas desulfurization or dry sorbent injection systems 
installed. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions.
---------------------------------------------------------------------------

    CSAPR also established limits on NOX emissions for 
numerous states in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those states covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such case, NOX 
emissions would remain near the limit even if electricity generation 
goes down. Depending on the configuration of the power sector in the 
different regions and the need for allowances, however, NOX 
emissions might not remain at the limit in the case of lower 
electricity demand. That would mean that standards might reduce 
NOX emissions in covered states. Despite this possibility, 
DOE has chosen to be conservative in its analysis and has maintained 
the assumption that standards will not reduce NOX emissions 
in states covered by CSAPR. Standards would be expected to reduce 
NOX emissions in the states not covered by CSAPR. DOE used 
AEO2023 data to derive NOX emissions factors for the group 
of states not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this NOPR, for the purpose of 
complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2, CH4, N2O, NOX, and 
SO2 that are expected to result from each of the TSLs 
considered. In order to make this calculation analogous to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of equipment shipped in 
the projection period for each TSL. This section summarizes the basis 
for the values used for monetizing the emissions benefits and presents 
the values considered in this NOPR.
    To monetize the benefits of reducing GHG emissions, this analysis 
uses the interim estimates presented in the Technical Support Document: 
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates 
Under Executive Order 13990 published in February 2021 by the IWG.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., SC-CO2). These 
estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as recommended by applicable Executive orders, and DOE would 
reach the same conclusion presented in this NOPR in the absence of the 
social cost of greenhouse gases. That is, the social costs of 
greenhouse gases, whether measured using the February 2021 interim 
estimates presented by the Interagency Working Group on the Social Cost 
of Greenhouse Gases or by another means, did not affect this NOPR by 
DOE.
    DOE estimated the global social benefits of CO2, 
CH4, and N2O reductions using SC-GHG values that 
were based on the interim values presented in the Technical Support 
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim 
Estimates under Executive Order 13990, published in February 2021 by 
the IWG. (``February 2021 SC-GHG TSD'') The SC-GHGs is the monetary 
value of the net harm to society associated with a marginal increase in 
emissions in a given year, or the benefit of avoiding that increase. In 
principle, SC-GHGs includes the value of all climate change impacts, 
including (but not limited to) changes in net agricultural 
productivity, human health effects, property damage from increased 
flood risk and natural disasters, disruption of energy systems, risk of 
conflict, environmental migration, and the value of ecosystem services. 
The SC-GHGs therefore, reflect the societal value of reducing emissions 
of the gas in question by one metric ton. The SC-GHGs is the 
theoretically appropriate value to use in conducting benefit-cost 
analyses of policies that affect CO2, N2O and 
CH4 emissions. As a member of the IWG involved in the 
development of the February 2021 SC-GHG TSD, DOE agrees that the 
interim SC-GHG estimates represent the most appropriate estimate of the 
SC-GHG until revised estimates have been developed reflecting the 
latest, peer-reviewed science.
    The SC-GHGs estimates presented here were developed over many 
years, using transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, the IWG, that included the DOE and other 
executive branch agencies and offices was established to ensure that 
agencies were using the best available science and to promote 
consistency in the social cost of carbon (``SC-CO2'') values 
used across agencies. The IWG published SC-CO2 estimates in 
2010 that were developed from an ensemble of three widely cited 
integrated assessment models (``IAMs'') that estimate global climate 
damages using highly aggregated representations of climate processes 
and the global economy combined into a single modeling framework. The 
three IAMs were run using a common set of input assumptions in each 
model for future population, economic, and CO2 emissions 
growth, as well as equilibrium climate sensitivity--a measure of the 
globally averaged temperature response to increased atmospheric 
CO2 concentrations. These estimates were updated in 2013 
based on new versions of each IAM. In August 2016 the IWG published 
estimates of the social cost of methane (``SC-CH4'') and 
nitrous oxide (``SC-N2O'') using methodologies that are 
consistent with the methodology underlying the SC-CO2 
estimates. The modeling approach that extends the IWG SC-CO2 
methodology to non-CO2 GHGs has undergone multiple stages of 
peer review. The SC-CH4 and SC-N2O estimates were 
developed by Marten et al.\85\ and underwent a standard double-blind 
peer review process prior to journal publication. In 2015, as part of 
the response to public comments received to a 2013 solicitation for 
comments on the SC-CO2 estimates, the IWG announced a 
National Academies of Sciences, Engineering, and Medicine review of the 
SC-CO2 estimates to offer

[[Page 87106]]

advice on how to approach future updates to ensure that the estimates 
continue to reflect the best available science and methodologies. In 
January 2017, the National Academies released their final report, 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide, and recommended specific criteria for future updates to 
the SC-CO2 estimates, a modeling framework to satisfy the 
specified criteria, and both near-term updates and longer-term research 
needs pertaining to various components of the estimation process.\86\ 
Shortly thereafter, in March 2017, President Trump issued Executive 
Order 13783, which disbanded the IWG, withdrew the previous TSDs, and 
directed agencies to ensure SC-CO2 estimates used in 
regulatory analyses are consistent with the guidance contained in OMB's 
Circular A-4, ``including with respect to the consideration of domestic 
versus international impacts and the consideration of appropriate 
discount rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses 
following E.O. 13783 used SC-GHG estimates that attempted to focus on 
the U.S.-specific share of climate change damages as estimated by the 
models and were calculated using two discount rates recommended by 
Circular A-4, 3 percent and 7 percent. All other methodological 
decisions and model versions used in SC-GHG calculations remained the 
same as those used by the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \85\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, 
and A. Wolverton. Incremental CH4 and N2O 
mitigation benefits consistent with the US Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
    \86\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC. 
http://nap.nationalacademies.org/catalog/24651/valuing-climate-damages-updating-estimation-of-the-social-cost-of.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations of in the National Academies 2017 report. The IWG was 
tasked with first reviewing the SC-GHG estimates currently used in 
Federal analyses and publishing interim estimates within 30 days of the 
E.O. that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller 
update of the SC-GHG estimates that takes into consideration the advice 
in the National Academies 2017 report and other recent scientific 
literature. The February 2021 SC-GHG TSD provides a complete discussion 
of the IWG's initial review conducted under E.O. 13990. In particular, 
the IWG found that the SC-GHG estimates used under E.O. 13783 fail to 
reflect the full impact of GHG emissions in multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad, supply chains, U.S. military 
assets and interests abroad, and tourism, and spillover pathways such 
as economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of 
damages. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this NOPR, DOE centers attention on a global measure of 
SC-GHG. This approach is the same as that taken in DOE regulatory 
analyses from 2012 through 2016. A robust estimate of climate damages 
that accrue only to U.S. citizens and residents does not currently 
exist in the literature. As explained in the February SC-GHG 2021 TSD, 
existing estimates are both incomplete and an underestimate of total 
damages that accrue to the citizens and residents of the U.S. because 
they do not fully capture the regional interactions and spillovers 
discussed above, nor do they include all of the important physical, 
ecological, and economic impacts of climate change recognized in the 
climate change literature. As noted in the February 2021 SC-GHG TSD, 
the IWG will continue to review developments in the literature, 
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full 
range of carbon impacts. As a member of the IWG, DOE will continue to 
follow developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies and the economic literature, the IWG continued to conclude 
that the consumption rate of interest is the theoretically appropriate 
discount rate in an intergenerational context,\87\ and recommended that 
discount rate uncertainty and relevant aspects of intergenerational 
ethical considerations be accounted for in selecting future discount 
rates.
---------------------------------------------------------------------------

    \87\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 
2022); Interagency Working Group on Social Cost of Carbon. Technical 
Update of the Social Cost of Carbon for Regulatory Impact Analysis 
Under Executive Order 12866. 2013. www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact 
(last accessed April 15, 2022); Interagency Working Group on Social 
Cost of Greenhouse Gases, United States Government. Technical 
Support Document: Technical Update on the Social Cost of Carbon for 
Regulatory Impact Analysis-Under Executive Order 12866. August 2016. 
www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last accessed January 18, 2022); 
Interagency Working Group on Social Cost of Greenhouse Gases, United 
States Government. Addendum to Technical Support Document on Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866: Application of the Methodology to Estimate the Social Cost of 
Methane and the Social Cost of Nitrous Oxide. August 2016. 
www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed January 18, 2022).
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes

[[Page 87107]]

that while OMB Circular A-4, as published in 2003, recommends using 3% 
and 7% discount rates as ``default'' values, Circular A-4 also reminds 
agencies that ``different regulations may call for different emphases 
in the analysis, depending on the nature and complexity of the 
regulatory issues and the sensitivity of the benefit and cost estimates 
to the key assumptions.'' On discounting, Circular A-4 recognizes that 
``special ethical considerations arise when comparing benefits and 
costs across generations,'' and Circular A-4 acknowledges that analyses 
may appropriately ``discount future costs and consumption benefits . . 
. at a lower rate than for intragenerational analysis.'' In the 2015 
Response to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE concludes that a 7% discount rate 
is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented in this analysis.
    To calculate the present and annualized values of climate benefits, 
DOE uses the same discount rate as the rate used to discount the value 
of damages from future GHG emissions, for internal consistency. That 
approach to discounting follows the same approach that the February 
2021 TSD recommends ``to ensure internal consistency--i.e., future 
damages from climate change using the SC-GHG at 2.5 percent should be 
discounted to the base year of the analysis using the same 2.5 percent 
rate.'' DOE has also consulted the National Academies' 2017 
recommendations on how SC-GHG estimates can ``be combined in RIAs with 
other cost and benefits estimates that may use different discount 
rates.'' The National Academies reviewed several options, including 
``presenting all discount rate combinations of other costs and benefits 
with [SC-GHG] estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue 
to follow developments in the literature pertaining to this issue. 
While the IWG works to assess how best to incorporate the latest, peer 
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent estimates developed by the 
IWG prior to the group being disbanded in 2017. The estimates rely on 
the same models and harmonized inputs and are calculated using a range 
of discount rates. As explained in the February 2021 SC-GHG TSD, the 
IWG has recommended that agencies revert to the same set of four values 
drawn from the SC-GHG distributions based on three discount rates as 
were used in regulatory analyses between 2010 and 2016 and were subject 
to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3 percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications that was developed using a 
transparent process, peer-reviewed methodologies, and the science 
available at the time of that process. Those estimates were subject to 
public comment in the context of dozens of proposed rulemakings as well 
as in a dedicated public comment period in 2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent, near 2 percent or 
lower.\88\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions''--i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages--lags behind the most recent research. For example, 
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their 
incomplete treatment of adaptation and technological change, the 
incomplete way in which inter-regional and intersectoral linkages are 
modeled, uncertainty in the extrapolation of damages to high 
temperatures, and inadequate representation of the relationship between 
the discount rate and uncertainty in economic growth over long time 
horizons. Likewise, the socioeconomic and emissions scenarios used as 
inputs to the models do not reflect new information from the last 
decade of scenario generation or the full range of projections. The 
modeling limitations do not all work in the same direction in terms of 
their influence on the SC-CO2 estimates. However, as 
discussed in the February 2021 TSD, the IWG has recommended that, taken 
together, the limitations suggest that the interim SC-GHG estimates 
used in this NOPR likely underestimate the damages from GHG emissions. 
DOE concurs with this assessment.
---------------------------------------------------------------------------

    \88\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at: 
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this NOPR are discussed in the 
following sections, and the results of DOE's analyses estimating the 
benefits of the reductions in emissions of these GHGs are presented in 
section V.B.6 of this document.
    In response to the March 2022 Preliminary Analysis, NEMA disagreed 
with DOE's approach for estimating monetary benefits associated with 
emissions reductions. NEMA commented that this topic is too convoluted 
and subjective to be included in a rulemaking analysis for electric 
motor standards. NEMA added that DOE does not adequately examine or 
account for the significant impacts from ever-increasing investment in 
and use of renewable energy sources and associated decrease in 
emissions. (NEMA, No. 22 at p. 25)
    DOE acknowledges that increasing use of renewable electricity 
sources will reduce CO2 emissions and likely other emissions 
from the power sector faster than could have been expected when AEO2023 
was prepared. Nevertheless, DOE has used AEO2023 for the purposes of 
quantifying emissions as DOE believes it continues to be the most 
appropriate projection at this time for such purposes. And to comply 
with the requirements of Executive Order 12866, DOE considered the 
estimated monetary benefits from the reduced emissions of 
CO2, CH4, N2O, NOX, and 
SO2 that are

[[Page 87108]]

expected to result from each of the TSLs considered. It is important to 
note that even a significant reduction in the emissions benefits 
projected in this NOPR would not change DOE's decision about which 
standard levels to propose based on the December 2022 Joint 
Recommendation and DOE's analysis.
a. Social Cost of Carbon
    The SC-CO2 values used for this NOPR were based on the 
values developed for the IWG's February 2021 TSD, which are shown in 
Table IV-10 in five-year increments from 2020 to 2050. The set of 
annual values that DOE used, which was adapted from estimates published 
by EPA,\89\ is presented in Appendix 14A of the NOPR TSD. These 
estimates are based on methods, assumptions, and parameters identical 
to the estimates published by the IWG (which were based on EPA 
modeling) and include values for 2051 to 2070.
---------------------------------------------------------------------------

    \89\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023).

                    Table IV-10--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                          Discount rate and statistic
                                                             ---------------------------------------------------
                            Year                                  5%         3%        2.5%         3% 95th
                                                               Average    Average    Average       percentile
----------------------------------------------------------------------------------------------------------------
2020........................................................         14         51         76                152
2025........................................................         17         56         83                169
2030........................................................         19         62         89                187
2035........................................................         22         67         96                206
2040........................................................         25         73        103                225
2045........................................................         28         79        110                242
2050........................................................         32         85        116                260
----------------------------------------------------------------------------------------------------------------

    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. DOE adjusted the values to 2022$ using the implicit price 
deflator for gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. To calculate a present value of the stream of 
monetary values, DOE discounted the values in each of the four cases 
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
NOPR were based on the values developed for the February 2021 TSD. 
Table IV-11 shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in Appendix 14-A of the NOPR TSD. To capture the 
uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG. 
DOE derived values after 2050 using the approach described above for 
the SC-CO2.

                                  Table IV-11--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                 [2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        SC-CH4                                              SC-N2O
                                                --------------------------------------------------------------------------------------------------------
                                                             Discount rate and statistic                          Discount rate and statistic
                      Year                      --------------------------------------------------------------------------------------------------------
                                                     5%         3%        2.5%                            5%         3%        2.5%         3% 95th
                                                  Average    Average    Average   3% 95th percentile   Average    Average    Average       percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020...........................................        670      1,500      2,000              3,900       5,800     18,000     27,000             48,000
2025...........................................        800      1,700      2,200              4,500       6,800     21,000     30,000             54,000
2030...........................................        940      2,000      2,500              5,200       7,800     23,000     33,000             60,000
2035...........................................      1,100      2,200      2,800              6,000       9,000     25,000     36,000             67,000
2040...........................................      1,300      2,500      3,100              6,700      10,000     28,000     39,000             74,000
2045...........................................      1,500      2,800      3,500              7,500      12,000     30,000     42,000             81,000
2050...........................................      1,700      3,100      3,800              8,200      13,000     33,000     45,000             88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE 
adjusted the values to 2022$ using the implicit price deflator for GDP 
from the Bureau of Economic Analysis. To calculate a present value of 
the stream of monetary values, DOE discounted the values in each of the 
cases using the specific discount rate that had been used to obtain the 
SC-CH4 and SC-N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For this NOPR, DOE estimated the monetized value of NOX 
and SO2 emissions reductions from electricity generation 
using the latest benefit-per-ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\90\ DOE used EPA's values 
for PM2.5-related benefits associated with NOX 
and SO2 and for ozone-related benefits associated with 
NOX for 2025, 2030, and 2040, calculated with

[[Page 87109]]

discount rates of 3 percent and 7 percent. DOE used linear 
interpolation to define values for the years not given in the 2025 to 
2040 period; for years beyond 2040, the values are held constant. DOE 
combined the EPA regional benefit-per-ton estimates with regional 
information on electricity consumption and emissions from AEO2023 to 
define weighted-average national values for NOX and 
SO2 (see appendix 14B of the NOPR TSD).
---------------------------------------------------------------------------

    \90\ U.S. Environmental Protection Agency. Estimating the 
Benefit per Ton of Reducing Directly-Emitted PM2.5, 
PM2.5 Precursors and Ozone Precursors from 21 Sectors. 
www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.
    DOE requests comment on how to address the climate benefits and 
non-monetized effects of the proposal.

M. Utility Impact Analysis

    In the March 2022 Preliminary Analysis, DOE described the approach 
for conducting the utility impact analysis. See chapter 15 of the March 
2022 Preliminary TSD. In response, NEMA commented that the proposed 
approach for assessing utility impacts appears to be sufficient. (NEMA, 
No. 22 at p. 25) In this NOPR, DOE continues to follow the same 
approach.
    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2023. NEMS produces the AEO Reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption and emissions in the 
AEO2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
NOPR TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new 
energy conservation standards.

N. Employment Impact Analysis

    In the March 2022 Preliminary Analysis, DOE described the approach 
for conducting the employment impact analysis. See chapter 16 of the 
March 2022 Preliminary TSD. In response, NEMA commented that the 
proposed approach for assessing national employment impacts appears to 
be sufficient. (NEMA, No. 22 at p. 25) In this NOPR, DOE continues to 
follow the same approach.
    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts from new 
energy conservation standards include both direct and indirect impacts. 
Direct employment impacts are any changes in the number of employees of 
manufacturers of the products subject to standards, their suppliers, 
and related service firms. The MIA addresses those impacts. Indirect 
employment impacts are changes in national employment that occur due to 
the shift in expenditures and capital investment caused by the purchase 
and operation of more-efficient appliances. Indirect employment impacts 
from standards consist of the net jobs created or eliminated in the 
national economy, other than in the manufacturing sector being 
regulated, caused by (1) reduced spending by consumers on energy, (2) 
reduced spending on new energy supply by the utility industry, (3) 
increased consumer spending on the products to which the new standards 
apply and other goods and services, and (4) the effects of those three 
factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's BLS. BLS 
regularly publishes its estimates of the number of jobs per million 
dollars of economic activity in different sectors of the economy, as 
well as the jobs created elsewhere in the economy by this same economic 
activity. Data from BLS indicate that expenditures in the utility 
sector generally create fewer jobs (both directly and indirectly) than 
expenditures in other sectors of the economy.\91\ There are many 
reasons for these differences, including wage differences and the fact 
that the utility sector is more capital-intensive and less labor-
intensive than other sectors. Energy conservation standards have the 
effect of reducing consumer utility bills. Because reduced consumer 
expenditures for energy likely lead to increased expenditures in other 
sectors of the economy, the general effect of efficiency standards is 
to shift economic activity from a less labor-intensive sector (i.e., 
the utility sector) to more labor-intensive sectors (e.g., the retail 
and service sectors). Thus, the BLS data suggest that net national 
employment may increase due to shifts in economic activity resulting 
from energy conservation standards.
---------------------------------------------------------------------------

    \91\ See U.S. Department of Commerce--Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (RIMS II). 1997. U.S. Government 
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed July 1, 2021).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this NOPR using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\92\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer- based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \92\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may over-estimate actual job impacts over the long 
run for this proposed rule. Therefore, DOE used ImSET only to generate 
results for near-term timeframes (2034), where these uncertainties are 
reduced. For more details on the employment impact analysis, see 
chapter 16 of the NOPR TSD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for ESEMs. 
It addresses the TSLs examined by DOE, the projected impacts of each of 
these levels if adopted as energy conservation standards for ESEMs, and 
the standards levels that DOE is proposing to adopt in this NOPR. 
Additional details regarding DOE's analyses are contained in the NOPR 
TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential new standards for 
products

[[Page 87110]]

and equipment by grouping individual efficiency levels for each class 
into TSLs. Use of TSLs allows DOE to identify and consider manufacturer 
cost interactions between the equipment classes, to the extent that 
there are such interactions, and price elasticity of consumer 
purchasing decisions that may change when different standard levels are 
set.
    In the analysis conducted for this NOPR, DOE analyzed the benefits 
and burdens of four TSLs for ESEMs. DOE developed TSLs that combine 
efficiency levels for each analyzed equipment class. DOE presents the 
results for the TSLs in this document, while the results for all 
efficiency levels that DOE analyzed are in the NOPR TSD.\93\
---------------------------------------------------------------------------

    \93\ Results by efficiency level are presented in chapters 8, 
10, and 12 of the NOPR TSD.
---------------------------------------------------------------------------

    Table V-1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential new energy conservation standards 
for ESEMs. TSL 4 represents the maximum technologically feasible 
(``max-tech'') energy efficiency for all equipment classes. TSL 3 is 
equivalent to EL 3 for all equipment classes. TSL 2 is equivalent to EL 
2 for all equipment classes and corresponds to the Electric Motors 
Working Group recommended levels. TSL 1 is equivalent to EL 1 for all 
equipment classes.

                                                       Table V-1--Trial Standard Levels for ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          TSL1                    TSL2                   TSL3                 TSL4
                                                                 ---------------------------------------------------------------------------------------
      Equipment class group               Horsepower range         Average of EL0 and                             Average of EL2 and
                                                                           EL2             Recommended levels             EL4               Max-tech
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM High/Med Torque.............  0.25 <= hp <= 0.50...........  EL1.................  EL2....................  EL3.................  EL4.
                                   0.5 < hp <= 3................  EL1.................  EL2....................  EL3.................  EL4.
ESEM Low Torque..................  0.25 hp......................  EL1.................  EL2....................  EL3.................  EL4.
                                   0.25 < hp....................  EL1.................  EL2....................  EL3.................  EL4.
ESEM Polyphase...................  0.25 <= hp...................  EL1.................  EL2....................  EL3.................  EL4.
AO-ESEM High/Med Torque..........  0.25 <= hp <= 0.50...........  EL1.................  EL2....................  EL3.................  EL4.
                                   0.5 < hp <= 3................  EL1.................  EL2....................  EL3.................  EL4.
AO-ESEM Low Torque...............  0.25 hp......................  EL1.................  EL2....................  EL3.................  EL4.
                                   0.25 < hp....................  EL1.................  EL2....................  EL3.................  EL4.
AO-ESEM Polyphase................  0.25 <= hp...................  EL1.................  EL2....................  EL3.................  EL4.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE constructed the TSLs for this NOPR to include ELs 
representative of ELs with similar characteristics (i.e., using similar 
efficiencies). Specifically, DOE aligned the efficiency levels for air-
over and non-air-over ESEMs because of the similarities in the 
manufacturing processes between air-over and non-air-over ESEMs. In 
some cases, an AO-ESEM could be manufactured on the same line as a non-
air-over ESEM by omitting the steps of manufacturing associated with 
the fan of a motor. DOE notes this alignment is in line with Electric 
Motors Working Group's recommendation in the December 2022 Joint 
Recommendation. While representative ELs were included in the TSLs, DOE 
considered all efficiency levels as part of its analysis.\94\
---------------------------------------------------------------------------

    \94\ Efficiency levels that were analyzed for this NOPR are 
discussed in section IV.C.4 of this document. Results by efficiency 
level are presented in chapters 8, 10, and 12 of the NOPR TSD.
---------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on ESEM consumers by looking at 
the effects that potential ESEM standards at each TSL would have on the 
LCC and PBP. DOE also examined the impacts of potential standards on 
selected consumer subgroups. These analyses are discussed in the 
following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency equipment affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., equipment price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses equipment lifetime and a discount rate. Chapter 8 of the NOPR TSD 
provides detailed information on the LCC and PBP analyses.
    Table V-2 through Table V-21 show the LCC and PBP results for the 
TSLs considered for each equipment class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
product. In the second table, the impacts are measured relative to the 
efficiency distribution in the no-new-standards case in the compliance 
year (see section IV.F.8 of this document). Because some consumers 
purchase equipment with higher efficiency in the no-new-standards case, 
the average savings are less than the difference between the average 
LCC of the baseline equipment and the average LCC at each TSL. The 
savings refer only to consumers who are affected by a standard at a 
given TSL. Those who already purchase an equipment with efficiency at 
or above a given TSL are not affected. Consumers for whom the LCC 
increases at a given TSL experience a net cost.

[[Page 87111]]



                                        Table V-2--Average LCC and PBP Results for ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          186           98          509          696  ...........          7.7
1.........................................  1.............................          192           86          447          639          0.5          7.7
2.........................................  2.............................          211           76          397          607          1.1          7.7
3.........................................  3.............................          296           68          354          649          3.7          7.7
4.........................................  4.............................          434           62          322          755          6.9          7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


     Table V-3--Average LCC Savings Relative to the No-New-Standards Case for ESEM--High/Med Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           2.0                        56
2.......................................               2                          16.7                        51
3.......................................               3                          51.2                        -1
4.......................................               4                          85.9                      -107
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                         Table V-4--Average LCC and PBP Results for ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          351          243        1,272        1,624  ...........          7.5
1.........................................  1.............................          368          218        1,142        1,510          0.7          7.5
2.........................................  2.............................          395          196        1,028        1,423          0.9          7.5
3.........................................  3.............................          534          189          989        1,522          3.4          7.5
4.........................................  4.............................          733          183          955        1,688          6.3          7.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V-5--Average LCC Savings Relative to the No-New-Standards Case for ESEM--High/Med Torque, 1 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           3.5                       116
2.......................................               2                          11.7                       138
3.......................................               3                          53.5                        21
4.......................................               4                          82.5                      -145
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                          Table V-6--Average LCC and PBP Results for ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          153          216          956        1,108  ...........          6.8
1.........................................  1.............................          174          163          718          892          0.4          6.8
2.........................................  2.............................          213          131          576          789          0.7          6.8

[[Page 87112]]

 
3.........................................  3.............................          277          118          518          795          1.3          6.8
4.........................................  4.............................          366          107          470          836          2.0          6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


       Table V-7--Average LCC Savings Relative to the No-New-Standards Case for ESEM--Low Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           0.2                       213
2.......................................               2                           2.9                       147
3.......................................               3                          52.0                        24
4.......................................               4                          67.7                       -17
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                           Table V-8--Average LCC and PBP Results for ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          223          237        1,074        1,297  ...........          6.9
1.........................................  1.............................          269          218          987        1,256          2.4          6.9
2.........................................  2.............................          276          201          908        1,184          1.5          6.9
3.........................................  3.............................          372          178          805        1,177          2.5          6.9
4.........................................  4.............................          455          159          719        1,174          3.0          6.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


        Table V-9--Average LCC Savings Relative to the No-New-Standards Case for ESEM--Low Torque, 0.5 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                          10.8                        41
2.......................................               2                           7.8                       100
3.......................................               3                          30.4                        78
4.......................................               4                          40.1                        73
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                       Table V-10--Average LCC and PBP Results for ESEM--Polyphase Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          199           68          432          631  ...........          9.3
1.........................................  1.............................          206           62          394          600          1.2          9.3
2.........................................  2.............................          222           57          362          584          2.0          9.3
3.........................................  3.............................          277           51          325          602          4.6          9.3
4.........................................  4.............................          405           47          297          702          9.7          9.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


[[Page 87113]]


       Table V-11--Average LCC Savings Relative to the No-New-Standards Case for ESEM--Polyphase, 0.25 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           1.0                        32
2.......................................               2                           7.2                        26
3.......................................               3                          58.6                        -8
4.......................................               4                          95.0                      -107
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                      Table V-12--Average LCC and PBP Results for AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          174          158          695          869  ...........          6.8
1.........................................  1.............................          180          139          611          791          0.3          6.8
2.........................................  2.............................          200          123          543          743          0.8          6.8
3.........................................  3.............................          282          110          485          767          2.3          6.8
4.........................................  4.............................          419          101          444          863          4.3          6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


   Table V-13--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--High/Med Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           1.3                        76
2.......................................               2                           7.8                        83
3.......................................               3                          36.0                        37
4.......................................               4                          64.6                       -61
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                       Table V-14--Average LCC and PBP Results for AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          338          312        1,492        1,830  ...........          7.0
1.........................................  1.............................          355          283        1,352        1,707          0.6          7.0
2.........................................  2.............................          382          255        1,219        1,601          0.8          7.0
3.........................................  3.............................          520          246        1,173        1,693          2.7          7.0
4.........................................  4.............................          716          238        1,138        1,854          5.1          7.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


    Table V-15--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--High/Med Torque, 1 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           2.0                       122
2.......................................               2                           5.9                       160
3.......................................               3                          44.4                        37

[[Page 87114]]

 
4.......................................               4                          81.9                      -128
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                        Table V-16--Average LCC and PBP Results for AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          141          218          962        1,103  ...........          6.8
1.........................................  1.............................          163          164          722          885          0.4          6.8
2.........................................  2.............................          202          132          579          781          0.7          6.8
3.........................................  3.............................          264          119          521          785          1.2          6.8
4.........................................  4.............................          352          108          472          824          1.9          6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


     Table V-17--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--Low Torque, 0.25 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022$)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           0.1                       217
2.......................................               2                           3.7                       121
3.......................................               3                          39.1                        32
4.......................................               4                          67.9                       -13
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                         Table V-18--Average LCC and PBP Results for AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          213          257        1,144        1,357  ...........          6.8
1.........................................  1.............................          257          237        1,053        1,310          2.2          6.8
2.........................................  2.............................          265          218          969        1,234          1.3          6.8
3.........................................  3.............................          358          194          860        1,218          2.3          6.8
4.........................................  4.............................          441          174          770        1,211          2.7          6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V-19--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--Low Torque, 0.5 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022$)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           2.1                        48
2.......................................               2                           2.9                        88
3.......................................               3                          34.4                        50
4.......................................               4                          42.2                        52
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


[[Page 87115]]


                                         Table V-20--Average LCC and PBP Results for AO-ESEM--Polyphase, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                                                            First                                  Simple      Average
                    TSL                            Efficiency level          Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Baseline......................          189           81          488          678  ...........          8.9
1.........................................  1.............................          197           74          446          643          1.1          8.9
2.........................................  2.............................          212           68          411          623          1.8          8.9
3.........................................  3.............................          267           61          369          636          3.9          8.9
4.........................................  4.............................          394           56          340          734          8.3          8.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V-21--Average LCC Savings Relative to the No-New-Standards Case for AO-ESEM--Polyphase, 0.25 hp
----------------------------------------------------------------------------------------------------------------
                                                                          Life-cycle cost savings
                                            Efficiency   -------------------------------------------------------
                   TSL                         level        Percent of consumers that     Average LCC savings *
                                                               experience net cost               (2022$)
----------------------------------------------------------------------------------------------------------------
1.......................................               1                           2.7                        35
2.......................................               2                           9.7                        40
3.......................................               3                          48.6                        13
4.......................................               4                          87.8                       -85
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on low-income households (for representative units with 
consumers in the residential sector \95\), senior-only households (for 
representative units with consumers in the residential sector), and 
small businesses. Table V-22 to Table V-24 compare the average LCC 
savings and PBP at each efficiency level for the consumer subgroups 
with similar metrics for the entire consumer sample for all equipment 
classes. In most cases, the average LCC savings and PBP for low-income 
households, senior-only household, and small-businesses at the 
considered efficiency levels are not substantially different from the 
average for all. Chapter 11 of the NOPR TSD presents the complete LCC 
and PBP results for the subgroups.
---------------------------------------------------------------------------

    \95\ All representative units except for the ESEM Polyphase and 
AO-ESEM Polyphase, 0.5 hp are used in the residential sector.

                            Table V-22--Comparison of LCC Savings and PBP for Low-Income Household Subgroup and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Average LCC savings     Simple payback      Consumers with net    Consumers with net
                                                                        * (2021$)              (years)             benefit (%)            cost (%)
                               TSL                               ---------------------------------------------------------------------------------------
                                                                     Low-                  Low-                  Low-                  Low-
                                                                    income      All       income      All       income      All       income      All
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         56         56        0.5        0.5       22.3       22.5        1.7        2.0
2...............................................................         53         51        1.4        1.5       52.1       51.0       14.3       16.7
3...............................................................          7         -1        4.9        5.3       36.1       32.4       45.9       51.2
4...............................................................        -90       -107        9.2       10.0       19.7       13.6       77.9       85.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        116        116        0.7        0.7       33.9       34.0        3.4        3.5
2...............................................................        138        138        1.0        1.1       74.4       74.2       11.1       11.7
3...............................................................         24         21        4.6        4.7       46.0       44.9       51.9       53.5
4...............................................................       -138       -145        8.6        8.7       18.9       17.4       80.5       82.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        210        213        0.4        0.4        3.9        4.0        0.2        0.2
2...............................................................        148        147        0.9        1.0       17.5       17.5        2.6        3.0
3...............................................................         29         24        3.1        3.3       50.2       48.0       48.1       52.0
4...............................................................         -6        -17        4.6        5.0       35.7       32.3       62.6       67.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 87116]]

 
                                                                ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         43         41        2.3        2.4       32.0       31.7       10.0       10.8
2...............................................................        101        100        1.2        1.3       56.2       56.2        7.1        7.8
3...............................................................         84         78        2.7        2.8       61.1       60.1       28.3       30.4
4...............................................................         82         73        3.2        3.3       61.0       59.9       37.7       40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         77         76        0.3        0.3       25.1       25.5        1.2        1.3
2...............................................................         84         83        0.9        1.0       51.1       51.5        7.0        7.8
3...............................................................         44         37        3.0        3.2       44.6       43.0       32.8       36.0
4...............................................................        -46        -61        5.7        6.1       25.7       21.8       59.1       64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        122        122        0.6        0.6       30.5       30.6        2.0        2.0
2...............................................................        160        160        0.9        0.9       65.3       65.5        5.8        5.9
3...............................................................         39         37        3.9        3.9       44.3       44.0       43.8       44.4
4...............................................................       -124       -128        7.6        7.7       18.8       18.1       80.9       81.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        220        217        0.4        0.4        1.6        1.7        0.1        0.1
2...............................................................        124        121        1.0        1.1       20.4       20.5        3.3        3.7
3...............................................................         36         32        2.9        3.1       45.0       43.2       36.1       39.1
4...............................................................         -3        -13        4.6        4.9       35.7       32.1       62.7       67.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         51         48        2.1        2.2        7.1        7.0        2.0        2.2
2...............................................................         90         88        0.8        0.8       31.9       32.0        2.5        2.9
3...............................................................         56         50        2.8        3.0       58.0       56.7       31.5       34.4
4...............................................................         64         52        3.2        3.4       59.3       57.8       38.8       42.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


                           Table V-23--Comparison of LCC Savings and PBP for Senior-Only Household Subgroup and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Average LCC savings     Simple payback      Consumers with net    Consumers with net
                                                                        * (2021$)              (years)             benefit (%)            cost (%)
                               TSL                               ---------------------------------------------------------------------------------------
                                                                   Senior-               Senior-               Senior-               Senior-
                                                                     only       All        only       All        only       All        only       All
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         56         56        0.5        0.5       22.4       22.5        2.1        2.0
2...............................................................         51         51        1.5        1.5       51.0       51.0       16.7       16.7
3...............................................................         -1         -1        5.3        5.3       32.4       32.4       51.3       51.2
4...............................................................       -107       -107       10.0       10.0       13.6       13.6       85.9       85.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                ESEM--High/Med Torque hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        116        116        0.7        0.7       34.0       34.0        3.5        3.5
2...............................................................        138        138        1.1        1.1       74.1       74.2       11.7       11.7
3...............................................................         21         21        4.7        4.7       44.8       44.9       53.6       53.5
4...............................................................       -145       -145        8.7        8.7       17.4       17.4       82.5       82.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        212        213        0.4        0.4        4.0        4.0        0.2        0.2
2...............................................................        146        147        1.0        1.0       17.5       17.5        3.0        3.0
3...............................................................         24         24        3.3        3.3       48.0       48.0       52.0       52.0
4...............................................................        -17        -17        5.0        5.0       32.1       32.3       67.9       67.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 87117]]

 
                                                                ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         41         41        2.4        2.4       31.6       31.7       10.8       10.8
2...............................................................         99        100        1.3        1.3       56.2       56.2        7.8        7.8
3...............................................................         78         78        2.8        2.8       60.0       60.1       30.5       30.4
4...............................................................         72         73        3.3        3.3       59.8       59.9       40.2       40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         76         76        0.3        0.3       25.5       25.5        1.3        1.3
2...............................................................         83         83        1.0        1.0       51.4       51.5        7.9        7.8
3...............................................................         37         37        3.2        3.2       42.9       43.0       36.1       36.0
4...............................................................        -62        -61        6.1        6.1       21.7       21.8       64.7       64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        122        122        0.6        0.6       30.6       30.6        2.0        2.0
2...............................................................        160        160        0.9        0.9       65.5       65.5        5.9        5.9
3...............................................................         37         37        3.9        3.9       44.0       44.0       44.4       44.4
4...............................................................       -128       -128        7.7        7.7       18.1       18.1       81.9       81.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        216        217        0.4        0.4        1.7        1.7        0.1        0.1
2...............................................................        121        121        1.1        1.1       20.5       20.5        3.7        3.7
3...............................................................         31         32        3.1        3.1       43.2       43.2       39.2       39.1
4...............................................................        -14        -13        4.9        4.9       32.1       32.1       67.9       67.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         47         48        2.2        2.2        7.0        7.0        2.1        2.2
2...............................................................         88         88        0.8        0.8       32.0       32.0        2.9        2.9
3...............................................................         50         50        3.0        3.0       56.7       56.7       34.5       34.4
4...............................................................         52         52        3.4        3.4       57.8       57.8       42.2       42.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                   Table V-24--Comparison of LCC Savings and PBP for Small Business and All Consumers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Average LCC  savings     Simple payback      Consumers with  net   Consumers with  net
                                                                       *  (2021$)              (years)            benefit  (%)            cost  (%)
                               TSL                               ---------------------------------------------------------------------------------------
                                                                    Small                 Small                 Small                 Small
                                                                   business     All      business     All      business     All      business     All
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         58         56        0.5        0.5       22.5       22.5        2.0        2.0
2...............................................................         54         51        1.4        1.5       51.2       51.0       16.5       16.7
3...............................................................          3         -1        4.9        5.3       33.8       32.4       49.9       51.2
4...............................................................       -102       -107        9.3       10.0       15.2       13.6       84.3       85.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        121        116        0.6        0.7       34.0       34.0        3.4        3.5
2...............................................................        145        138        1.0        1.1       74.4       74.2       11.5       11.7
3...............................................................         28         21        4.3        4.7       46.0       44.9       52.4       53.5
4...............................................................       -136       -145        8.1        8.7       19.1       17.4       80.8       82.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        220        213        0.4        0.4        4.0        4.0        0.2        0.2
2...............................................................        153        147        1.0        1.0       17.6       17.5        2.9        3.0
3...............................................................         27         24        3.2        3.3       50.6       48.0       49.4       52.0
4...............................................................        -12        -17        4.7        5.0       34.6       32.3       65.4       67.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 87118]]

 
                                                                ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         44         41        2.3        2.4       32.0       31.7       10.5       10.8
2...............................................................        105        100        1.2        1.3       56.4       56.2        7.6        7.8
3...............................................................         85         78        2.6        2.8       61.1       60.1       29.4       30.4
4...............................................................         82         73        3.1        3.3       61.7       59.9       38.3       40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 ESEM--Polyphase, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         33         32        1.0        1.1        9.3        9.2        1.0        1.0
2...............................................................         28         26        2.4        2.6       26.4       26.3        7.1        7.2
3...............................................................         -7         -8        6.8        7.4       29.1       27.8       57.3       58.6
4...............................................................       -105       -107       14.3       15.6        5.2        4.5       94.3       95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            AO-ESEM--High/Med Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         79         76        0.3        0.3       25.5       25.5        1.3        1.3
2...............................................................         86         83        0.9        1.0       51.6       51.5        7.7        7.8
3...............................................................         42         37        3.0        3.2       44.4       43.0       34.6       36.0
4...............................................................        -56        -61        5.7        6.1       23.4       21.8       62.9       64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             AO-ESEM--High/Med Torque, 1 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        128        122        0.5        0.6       30.6       30.6        2.0        2.0
2...............................................................        168        160        0.8        0.9       65.6       65.5        5.8        5.9
3...............................................................         46         37        3.6        3.9       45.0       44.0       43.4       44.4
4...............................................................       -119       -128        7.1        7.7       20.2       18.1       79.8       81.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              AO-ESEM--Low Torque, 0.25 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................        225        217        0.4        0.4        1.7        1.7        0.1        0.1
2...............................................................        127        121        1.0        1.1       20.6       20.5        3.7        3.7
3...............................................................         35         32        2.9        3.1       45.1       43.2       37.3       39.1
4...............................................................         -9        -13        4.6        4.9       34.3       32.1       65.7       67.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               AO-ESEM--Low Torque, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         51         48        2.1        2.2        7.1        7.0        2.1        2.2
2...............................................................         92         88        0.8        0.8       32.1       32.0        2.8        2.9
3...............................................................         55         50        2.8        3.0       58.1       56.7       33.1       34.4
4...............................................................         60         52        3.3        3.4       59.7       57.8       40.3       42.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               AO-ESEM--Polyphase, 0.5 hp
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................................         37         35        1.0        1.1       33.8       33.7        2.6        2.7
2...............................................................         42         40        1.9        2.0       53.4       53.3        9.6        9.7
3...............................................................         16         13        4.7        5.1       50.1       48.8       47.3       48.6
4...............................................................        -81        -85        9.9       10.8       13.9       12.2       86.1       87.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Rebuttable Presumption Payback
    As discussed in section IV.F.9 of this document, EPCA establishes a 
rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for a product 
that meets the standard is less than three times the value of the 
first-year energy savings resulting from the standard. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) In calculating a rebuttable 
presumption payback period for each of the considered TSLs, DOE used 
discrete values, and, as required by EPCA, based the energy use 
calculation on the DOE test procedures for ESEMs. In contrast, the PBPs 
presented in section V.B.1.a of this document were calculated using 
distributions that reflect the range of energy use in the field.
    Table V-25 presents the rebuttable-presumption payback periods for 
the considered TSLs for ESEMs. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels 
considered for this proposed rule are economically justified through a 
more detailed analysis of the economic impacts of those levels, 
pursuant to 42 U.S.C. 6313(a) and 42 U.S.C. 6295(o)(2)(B)(i), that 
considers the full range of impacts to the consumer, manufacturer, 
Nation, and environment. The results of that analysis serve as the 
basis for DOE to definitively evaluate the economic justification for a 
potential standard level, thereby supporting or rebutting the results 
of any preliminary determination of economic justification.

[[Page 87119]]



                               Table V-25--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
                                                                      Payback period  (years)
                 Equipment class                 ---------------------------------------------------------------
                                                       TSL1            TSL2            TSL3            TSL4
----------------------------------------------------------------------------------------------------------------
ESEM--High and Medium Torque, 0.25 hp...........             0.4             1.0             3.1             5.8
ESEM--High and Medium Torque, 1 hp..............             0.6             0.8             2.9             5.4
ESEM--Low Torque, 0.25 hp.......................             0.4             0.7             1.2             1.8
ESEM--Low Torque, 0.5 hp........................             2.2             1.3             2.3             2.7
ESEM--Polyphase, 0.25 hp........................             1.0             1.7             3.9             8.3
AO-ESEM--High and Medium Torque, 0.25 hp........             0.3             0.6             1.9             3.7
AO-ESEM--High and Medium Torque, 1 hp...........             0.5             0.7             2.4             4.4
AO-ESEM--Low Torque, 0.25 hp....................             0.4             0.6             1.1             1.7
AO-ESEM--Low Torque, 0.5 hp.....................             2.0             1.2             2.1             2.5
AO-ESEM--Polyphase, 0.25 hp.....................             0.9             1.5             3.4             7.1
----------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new energy 
conservation standards on manufacturers of ESEM. The following section 
describes the expected impacts on manufacturers at each considered TSL. 
Chapter 12 of the NOPR TSD explains the analysis in further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from new standards. 
The following tables summarize the estimated financial impacts 
(represented by changes in INPV) of potential new energy conservation 
standards on manufacturers of ESEMs, as well as the conversion costs 
that DOE estimates manufacturers of ESEMs would incur at each TSL.
    To evaluate the range of cash flow impacts on the ESEM industry, 
DOE modeled two manufacturer markup scenarios that correspond to the 
range of possible market responses to new standards. Each manufacturer 
markup scenario results in a unique set of cash flows and corresponding 
INPVs at each TSL.
    In the following discussion, the INPV results refer to the 
difference in industry value between the no-new-standards case and the 
standards cases that result from the sum of discounted cash flows from 
the base year (2024) through the end of the analysis period (2058). The 
results also discuss the difference in cash flows between the no-new 
standards case and the standards cases in the year before the estimated 
compliance date for new energy conservation standards. This figure 
represents the size of the required conversion costs relative to the 
cash flow generated by the ESEM industry in the absence of new energy 
conservation standards.
    To assess the upper (less severe) end of the range of potential 
impacts on ESEM manufacturers, DOE modeled a preservation of gross 
margin scenario. This scenario assumes that, in the standards cases, 
ESEM manufacturers will be able to pass along all the higher MPCs 
required for more efficient equipment to their customers. Specifically, 
the industry will be able to maintain its average no-new-standards case 
gross margin (as a percentage of revenue) despite the higher MPCs in 
the standards cases. In general, the larger the MPC increases, the less 
likely manufacturers are to achieve the cash flow from operations 
calculated in this scenario because it is less likely that 
manufacturers will be able to fully pass on these larger production 
cost increases.
    To assess the lower (more severe) end of the range of potential 
impacts on the ESEM manufacturers, DOE modeled a preservation of 
operating profit scenario. This scenario represents the lower end of 
the range of impacts on manufacturers because no additional operating 
profit is earned on the higher MPCs, eroding profit margins as a 
percentage of total revenue.

      Table V-26--Industry Net Present Value for ESEM Manufacturers--Preservation of Gross Margin Scenario
----------------------------------------------------------------------------------------------------------------
                                                            No-new-             Trial standard level *
                                          Units            standards -------------------------------------------
                                                             case         1          2          3          4
----------------------------------------------------------------------------------------------------------------
INPV..........................  2022$ millions..........       2,019      1,883      1,888      1,820      1,710
Change in INPV................  2022$ millions..........  ..........      (136)      (131)      (199)      (309)
                                %.......................  ..........      (6.7)      (6.5)      (9.9)     (15.3)
----------------------------------------------------------------------------------------------------------------
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.


    Table V-27--Industry Net Present Value for ESEM Manufacturers--Preservation of Operating Profit Scenario
----------------------------------------------------------------------------------------------------------------
                                                            No-new-             Trial standard level *
                                          Units            standards -------------------------------------------
                                                             case         1          2          3          4
----------------------------------------------------------------------------------------------------------------
INPV..........................  2022$ millions..........       2,019      1,818      1,755      1,035         73
Change in INPV................  2022$ millions..........  ..........      (201)      (264)      (984)    (1,946)
                                %.......................  ..........      (9.9)     (13.1)     (48.7)     (96.4)
----------------------------------------------------------------------------------------------------------------
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.


[[Page 87120]]


                              Table V-28--Cash Flow Analysis for ESEM Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                            No-new-             Trial standard level *
                                          Units            standards -------------------------------------------
                                                             case         1          2          3          4
----------------------------------------------------------------------------------------------------------------
Free Cash Flow (2028).........  2022$ millions..........         154         45         17      (313)      (764)
Change in Free Cash Flow        2022$ millions..........  ..........      (110)      (137)      (468)      (919)
 (2028).
                                %.......................  ..........       (71)       (89)      (303)      (595)
Product Conversion Costs......  2022$ millions..........  ..........        125        141        326        572
Capital Conversion Costs......  2022$ millions..........  ..........        149        198        792      1,584
                                                         -------------------------------------------------------
    Total Conversion Costs....  2022$ millions..........  ..........        274        339      1,118      2,156
----------------------------------------------------------------------------------------------------------------
* Numbers may not sum exactly due to rounding. Numbers in parentheses are negative numbers.

    TSL 4 sets the efficiency level at EL 4 for all ESEM equipment 
classes. At TSL 4, DOE estimates the impacts to INPV will range from a 
decrease of $1,946 million to a decrease of $309 million, which 
represents decreases to INPV by approximately 96.4 percent and 15.3 
percent, respectively. At TSL 4, industry free cash flow (operating 
cash flow minus capital expenditures) is estimated to decrease to -$764 
million, or a drop of 595 percent, compared to the no-new-standards 
case value of $154 million in 2028, the year leading up to the 
compliance date of new energy conservation standards. The significantly 
negative free cash flow in the years leading up to the compliance date 
implies that most, if not all, ESEM manufacturers will need to borrow 
funds in order to make the investments necessary to comply with 
standards at TSL 4. This has the potential to significantly alter the 
market dynamics as some smaller ESEM manufacturers may not be able to 
secure this funding and could exit the market as a result of standards 
set at TSL 4.
    In the absence of new energy conservation standards, DOE estimates 
that less than 1 percent of ESEM (High/Med Torque), no ESEM (Low 
Torque), less than 1 percent of ESEM (Polyphase), 6 percent of AO-ESEM 
(High/Med Torque), no AO-ESEM (Low Torque), and no AO-ESEM (Polyphase) 
shipments will meet the ELs required at TSL 4 in 2029, the compliance 
year of new standards. Therefore, DOE estimates that manufacturers will 
have to redesign models representing over 99 percent of all ESEM 
shipments by the compliance date. It is unclear if most ESEM 
manufacturers would have the engineering capacity to complete the 
necessary redesigns within the 4-year compliance period. If 
manufacturers require more than 4 years to redesign their non-compliant 
ESEM models, they will likely prioritize redesigns based on sales 
volume, which could result in customers not being able to obtain 
compliant ESEMs covering the entire range of horsepower and motor 
configurations that they require.
    Almost all ESEMs covered by this rulemaking will need to be 
redesigned at TSL 4. Therefore, DOE estimates that manufacturers will 
have to make significant investments in their manufacturing production 
equipment and the engineering resources dedicated to redesigning ESEM 
models. DOE estimates that manufacturers will incur approximately $572 
million in product conversion costs and approximately $1,584 million in 
capital conversion costs. Product conversion costs include the 
engineering time to redesign almost all ESEM models and to re-test 
these newly redesigned models to meet the standards set at TSL 4. 
Capital conversion costs include the purchase of almost all new 
lamination die sets, winding machines, frame casts, and assembly 
equipment as well as other retooling costs to accommodate almost all 
ESEM models covered by this proposed rulemaking that will need to be 
redesigned.
    At TSL 4, under the preservation of gross margin scenario, the 
shipment weighted average MPC significantly increases by approximately 
117.7 percent relative to the no-new-standards case MPC. While this 
price increase results in additional revenue for manufacturers, the 
$2,156 million in total conversion costs estimated at TSL 4 outweighs 
this increase in manufacturer revenue and results in moderately 
negative INPV impacts at TSL 4 under the preservation of gross margin 
scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. The significant increase in the shipment 
weighted average MPC results in a lower average manufacturer margin. 
This lower average manufacturer margin and the significant $2,156 
million in total conversion costs result in significantly negative INPV 
impacts at TSL 4 under the preservation of operating profit scenario.
    TSL 3 sets the efficiency level at EL 3 for all ESEM equipment 
classes. At TSL 3, DOE estimates the impacts to INPV will range from a 
decrease of $984 million to a decrease of $199 million, which 
represents decreases to INPV by approximately 48.7 percent and 9.9 
percent, respectively. At TSL 3, industry free cash flow is estimated 
to decrease to -$313 million, or a drop of 303 percent, compared to the 
no-new-standards case value of $154 million in 2028, the year leading 
up to the compliance date of new energy conservation standards. The 
negative free cash flow in the years leading up to the compliance date 
implies that most, if not all, ESEM manufacturers will need to borrow 
funds in order to make the investments necessary to comply with 
standards. This has the potential to significantly alter the market 
dynamics as some smaller ESEM manufacturers may not be able to secure 
this funding and could exit the market as a result of standards set at 
TSL 3.
    In the absence of new energy conservation standards, DOE estimates 
that 8 percent of ESEM (High/Med Torque), 8 percent of ESEM (Low 
Torque), 14 percent of ESEM (Polyphase), 15 percent of AO-ESEM (High/
Med Torque), 11 percent of AOESEM (Low Torque), and 3 percent of AO-
ESEM (Polyphase) shipments will meet or exceed the ELs requires at TSL 
3 in 2029, the compliance year of new standards. Therefore, DOE 
estimates that manufacturers will have to redesign models representing 
approximately 91 percent of all ESEM shipments by the compliance date. 
It is unclear if most ESEM manufacturers would have the engineering 
capacity to complete the necessary redesigns within the 4-year 
compliance period. If manufacturers require more than 4 years to 
redesign their non-compliant ESEM models, they will likely prioritize 
redesigns based on sales volume, which could result in customers not 
being able

[[Page 87121]]

to obtain compliant ESEMs covering the entire range of horsepower and 
motor configurations that they require.
    The majority of ESEMs covered by this rulemaking will need to be 
redesigned at TSL 3. Therefore, DOE estimates that manufacturers will 
have to make significant investments in their manufacturing production 
equipment and the engineering resources dedicated to redesigning ESEM 
models. DOE estimates that manufacturers will incur approximately $326 
million in product conversion costs and approximately $792 million in 
capital conversion costs. Product conversion costs include the 
engineering time to redesign approximately 91 percent of all ESEM 
models and to re-test these newly redesigned models to meet the 
standards set at TSL 3. Capital conversion costs include the purchase 
of almost all new lamination die sets, winding machines, frame casts, 
and assembly equipment as well as other retooling costs for 
approximately 91 percent of all ESEM models covered by this proposed 
rulemaking.
    At TSL 3, under the preservation of gross margin scenario, the 
shipment weighted average MPC significantly increases by approximately 
56.4 percent relative to the no-new-standards case MPC. While this 
price increase results in additional revenue for manufacturers, the 
$1,118 million in total conversion costs estimated at TSL 3 outweighs 
this increase in manufacturer revenue and results in moderately 
negative INPV impacts at TSL 3 under the preservation of gross margin 
scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. The significant increase in the shipment 
weighted average MPC results in a lower average manufacturer margin. 
This lower average manufacturer margin and the significant $1,118 
million in total conversion costs result in significantly negative INPV 
impacts at TSL 3 under the preservation of operating profit scenario.
    TSL 2 sets the efficiency level at EL 2 for all ESEM equipment 
classes, which is the recommended level from the December 2022 Joint 
Recommendation. At TSL 2, DOE estimates the impacts to INPV will range 
from a decrease of $264 million to a decrease of $131 million, which 
represents decreases to INPV by approximately 13.1 percent and 6.5 
percent, respectively. At TSL 2, industry free cash flow is estimated 
to decrease to $17 million, or a drop of 89 percent, compared to the 
no-new-standards case value of $154 million in 2028, the year leading 
up to the compliance date of new energy conservation standards.
    In the absence of new energy conservation standards, DOE estimates 
that 22 percent of ESEM (High/Med Torque), 45 percent of ESEM (Low 
Torque), 67 percent of ESEM (Polyphase), 34 percent of AO-ESEM (High/
Med Torque), 67 percent of AO-ESEM (Low Torque), and 36 percent of AO-
ESEM (Polyphase) shipments will meet or exceed the ELs requires at TSL 
2 in 2029, the compliance year of new standards. Therefore, DOE 
estimates that manufacturers will have to redesign models representing 
approximately 55 percent of all ESEM shipments by the compliance date.
    DOE estimates that manufacturers will incur approximately $141 
million in product conversion costs and approximately $198 million in 
capital conversion costs. Product conversion costs primarily include 
engineering time to redesign non-compliance ESEM models and to re-test 
these newly redesigned models to meet the standards set at TSL 2. 
Capital conversion costs include the purchase of lamination die sets, 
winding machines, frame casts, and assembly equipment as well as other 
retooling costs for all non-compliant ESEM models covered by this 
proposed rulemaking.
    At TSL 2, under the preservation of gross margin scenario, the 
shipment weighted average MPC increases by approximately 9.6 percent 
relative to the no-new-standards case MPC. While this price increase 
results in additional revenue for manufacturers, the $339 million in 
total conversion costs estimated at TSL 2 outweighs this increase in 
manufacturer revenue and results in moderately negative INPV impacts at 
TSL 2 under the preservation of gross margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. The increase in the shipment weighted average 
MPC results in a slightly lower average manufacturer margin. This lower 
average manufacturer margin and the $339 million in total conversion 
costs result in moderately negative INPV impacts at TSL 2 under the 
preservation of operating profit scenario.
    TSL 1 sets the efficiency level at EL 1 for all ESEM equipment 
classes. At TSL 1, DOE estimates the impacts to INPV will range from a 
decrease of $201 million to a decrease of $136 million, which 
represents decreases to INPV by approximately 9.9 percent and 6.7 
percent, respectively. At TSL 1, industry free cash flow is estimated 
to decrease to $45 million, or a drop of 71 percent, compared to the 
no-new-standards case value of $154 million in 2028, the year leading 
up to the compliance date of new energy conservation standards.
    In the absence of new energy conservation standards, DOE estimates 
that 68 percent of ESEM (High/Med Torque), 66 percent of ESEM (Low 
Torque), 90 percent of ESEM (Polyphase), 70 percent of AO-ESEM (High/
Med Torque), 92 percent of AO-ESEM (Low Torque), and 62 percent of AO-
ESEM (Polyphase) shipments will meet or exceed the ELs requires at TSL 
1 in 2029, the compliance year of new standards. Therefore, DOE 
estimates that manufacturers will have to redesign models representing 
approximately 26 percent of all ESEM shipments by the compliance date.
    DOE estimates that manufacturers will incur approximately $125 
million in product conversion costs and approximately $149 million in 
capital conversion costs. Product conversion costs primarily include 
engineering time to redesign non-compliance ESEM models and to re-test 
these newly redesigned models to meet the standards set at TSL 1. 
Capital conversion costs include the purchase of lamination die sets, 
winding machines, frame casts, and assembly equipment, as well as other 
retooling costs for all non-compliant ESEM models covered by this 
proposed rulemaking.
    At TSL 1, under the preservation of gross margin scenario, the 
shipment weighted average MPC increases slightly by approximately 4.7 
percent relative to the no-new-standards case MPC. While this price 
increase results in additional revenue for manufacturers, the $274 
million in total conversion costs estimated at TSL 1 outweighs this 
increase in manufacturer revenue and results in moderately negative 
INPV impacts at TSL 1 under the preservation of gross margin scenario.
    Under the preservation of operating profit scenario, manufacturers 
earn the same nominal operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments. The increase in the shipment weighted average 
MPC results in a slightly lower average manufacturer margin. This lower 
average manufacturer margin and the $274 million in total conversion 
costs result in moderately negative INPV impacts at TSL 1 under the 
preservation of operating profit scenario.

[[Page 87122]]

b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of new energy 
conservation standards on direct employment in the ESEM industry, DOE 
used the GRIM to estimate the domestic labor expenditures and number of 
direct employees in the no-new-standards case and in each of the 
standards cases during the analysis period.
    DOE used statistical data from the U.S. Census Bureau's 2021 Annual 
Survey of Manufacturers (``ASM''), the results of the engineering 
analysis, and interviews with manufacturers to determine the inputs 
necessary to calculate industry-wide labor expenditures and domestic 
employment levels. Labor expenditures involved with the manufacturing 
of ESEMs are a function of the labor intensity of the product, the 
sales volume, and an assumption that wages remain fixed in real terms 
over time.
    In the GRIM, DOE used the labor content of each piece of equipment 
and the MPCs to estimate the annual labor expenditures of the industry. 
DOE used Census data and interviews with manufacturers to estimate the 
portion of the total labor expenditures attributable to domestic labor.
    The production worker estimates in this employment section cover 
only workers up to the line-supervisor level who are directly involved 
in fabricating and assembling ESEMs within a motor facility. Workers 
performing services that are closely associated with production 
operations, such as material handling with a forklift, are also 
included as production labor. DOE's estimates account for only 
production workers who manufacture the specific equipment covered by 
this proposed rulemaking.
    The employment impacts shown in Table V-29 represent the potential 
production employment impacts resulting from new energy conservation 
standards. The upper bound of the results estimates the maximum change 
in the number of production workers that could occur after compliance 
with new energy conservation standards when assuming that manufacturers 
continue to produce the same scope of covered equipment in the same 
production facilities. It also assumes that domestic production does 
not shift to lower-labor-cost countries. Because there is a real risk 
of manufacturers evaluating sourcing decisions in response to new 
energy conservation standards, the lower bound of the employment 
results includes the estimated total number of U.S. production workers 
in the industry who could lose their jobs if some existing ESEM 
production was moved outside of the U.S. While the results present a 
range of employment impacts following 2029, this section also includes 
qualitative discussions of the likelihood of negative employment 
impacts at the various TSLs. Finally, the employment impacts shown are 
independent of the indirect employment impacts from the broader U.S. 
economy, which are documented in chapter 16 of the NOPR TSD.
    Based on 2021 ASM data and interviews with manufacturers, DOE 
estimates approximately 15 percent of ESEMs covered by this proposed 
rulemaking sold in the U.S. are manufactured domestically. Using this 
assumption, DOE estimates that in the absence of new energy 
conservation standards, there would be approximately 784 domestic 
production workers involved in manufacturing all ESEMs covered by this 
rulemaking in 2029. Table V-29 shows the range of potential impacts of 
new energy conservation standards on U.S. production workers involved 
in the production of ESEMs covered by this rulemaking.

                       Table V-29--Potential Change in the Number of Domestic ESEM Workers
----------------------------------------------------------------------------------------------------------------
                                                                       Trail standard level
                                      No-new-    ---------------------------------------------------------------
                                  standards case         1               2               3               4
----------------------------------------------------------------------------------------------------------------
Domestic Production Workers in               784             821             859           1,226           1,706
 2029...........................
Domestic Non-Production Workers              449             470             492             702             977
 in 2029........................
Total Domestic Employment in               1,233           1,291           1,351           1,928           2,683
 2029...........................
Potential Changes in Total        ..............         58-(37)        118-(75)       695-(442)     1,450-(784)
 Domestic Employment in 2029 *..
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential impacts. Numbers in parentheses indicate negative values.

    At the upper end of the range, all examined TSLs show an increase 
in the number of domestic production workers for ESEMs. The upper end 
of the range represents a scenario where manufacturers increase 
production hiring due to the increase in the labor associated with 
adding the required components and additional labor (e.g., hand 
winding, etc.) to make more efficient ESEMs. However, as previously 
stated, this assumes that in addition to hiring more production 
employees, all existing domestic production would remain in the United 
States and not shift to lower labor-cost countries.
    At the lower end of the range, all examined TSLs show a decrease in 
domestic production employment. The lower end of the domestic 
employment range assumes that some, or all, ESEM domestic production 
employment may shift to lower labor-cost countries in response to 
energy conservation standards. DOE estimates that approximately 85 
percent of all ESEMs sold in the U.S. are manufactured abroad. At max-
tech, TSL 4, DOE conservatively estimates that the remaining 15 percent 
of domestic production could shift to foreign production locations. DOE 
estimated this lower bound potential change in domestic employment 
based on the percent change in the MPC at each TSL.\96\
---------------------------------------------------------------------------

    \96\ Except for TSL 4, which has an MPC increase of higher than 
100 percent. Therefore, DOE assumes all domestic employment moves 
abroad at this TSL.
---------------------------------------------------------------------------

c. Impacts on Manufacturing Capacity
    The December 2022 Joint Recommendation stated that standards set at 
EL 2 for the ESEM High/Med Torque equipment class would minimize 
potential market disruptions by allowing CSIR and split-phase 
topologies to remain on the market, but only at smaller (0.25-0.5 hp) 
horsepower ratings. (Electric Motors Working Group, No. 38 at p. 3) The 
December 2022 Joint Recommendation also stated that standards set at EL 
2 for the ESEM Low Torque equipment class would not create widespread 
market disruptions and that standards set at higher ELs could result in 
significant increases in the physical size, unavailability of product, 
and in some cases, may be extremely difficult to

[[Page 87123]]

achieve with current PSC technology. (Id.)
    Many ESEM manufacturers do not offer any ESEM models that would 
meet max-tech levels or one EL below max-tech (i.e., TSL 4 and TSL 3, 
respectively). Based on the shipments analysis used in the NIA, DOE 
estimates that less than one percent and 9 percent of all ESEM 
shipments will meet max-tech and one EL below max-tech, respectively, 
in the no-new-standards case in 2029, the compliance year of new 
standards. Therefore, at TSL 4 and TSL 3, DOE estimates that 
manufacturers will have to redesign models representing over 99 percent 
and 91 percent, respectively, of all ESEM shipments by the compliance 
date. It is unclear if any ESEM manufacturers would have the 
engineering capacity to complete the necessary redesigns within the 4-
year compliance period. If manufacturers require more than 4 years to 
redesign their non-compliant ESEM models, they will likely prioritize 
redesigns based on sales volume, which could result in customers not 
being able to obtain compliant ESEMs covering the entire range of 
horsepower and motor configurations that they require.
    Lastly, during manufacturer interviews, most manufacturers stated 
they would not be able to provide a full portfolio of any ESEM 
equipment class for any standards that would be met using copper 
rotors. In DOE's engineering analysis, all representative units, except 
the ESEM--Low Torque, 0.5 hp and AO-ESEM--Low Torque, 0.5 hp 
representative units, are modeled to use copper rotors at the max-tech 
efficiency design (i.e., EL 4). No other lower ELs are modeled to use 
die-cast copper rotors. Most manufacturers stated that they do not 
currently have the machinery, technology, or engineering resources to 
produce copper rotors in-house. Some manufacturers claim that the few 
manufacturers that do have the capability of producing copper rotors 
are not able to produce these motors in volumes sufficient to fulfill 
all shipments of that equipment class and would not be able to ramp up 
those production volumes over the four-year compliance period. For 
manufacturers to either completely redesign their motor production 
lines or significantly expand their very limited copper rotor 
production line would require a massive retooling and engineering 
effort, which could take more than a decade to complete. Most 
manufacturers stated they would have to outsource copper rotor 
production because they would not be able to modify their facilities 
and production processes to produce copper rotors in-house within a 
four-year time period. Most manufacturers agreed that outsourcing rotor 
die casting would constrain capacity by creating a bottleneck in rotor 
production, as there are very few companies that produce copper rotors.
    Manufacturers also pointed out that there is substantial 
uncertainty surrounding the global availability and price of copper, 
which has the potential to constrain capacity. Several manufacturers 
expressed concern that the combination of all of these factors would 
make it impossible to support existing customers while redesigning 
equipment lines and retooling.
    DOE estimates there is a strong likelihood of manufacturer capacity 
constraints in the near term for any standards that would likely 
require the use of copper rotors for any equipment classes both due to 
the uncertainty of the global supply of copper and due to the quantity 
of machinery that would need to be purchased and the engineering 
resources that would be required to produce copper rotors. Therefore, 
there could be significant market disruption for any standards set at 
EL 4 for any equipment class, except for the ESEM--Low Torque, 0.25-3 
hp and the AO-ESEM--Low Torque, 0.25-3 hp equipment classes.
d. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop an industry cash-flow 
estimate may not be adequate for assessing differential impacts among 
manufacturer subgroups. Small manufacturers, niche equipment 
manufacturers, and manufacturers exhibiting cost structures 
substantially different from the industry average could be affected 
disproportionately. DOE discusses the impacts on small businesses in 
section VI.B of this document and did not identify any other adversely 
impacted ESEM-related manufacturer subgroups for this proposed 
rulemaking based on the results of the industry characterization.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
equipment lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency. DOE requests information regarding the impact of 
cumulative regulatory burden on manufacturers of ESEMs associated with 
multiple DOE standards or product-specific regulatory actions of other 
Federal agencies.
    DOE evaluates product-specific regulations that will take effect 
approximately 3 years before or after the 2029 compliance date of any 
new energy conservation standards for ESEMs. This information is 
presented in Table V.30.

Table V.30--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
                                               ESEM Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                  Number of                         Industry         Industry
   Federal energy conservation      Number of   manufacturers       Approx.        conversion       conversion
             standard                mfrs *     affected from   standards year       costs        costs/product
                                                 this rule **                      (millions)    revenue *** (%)
----------------------------------------------------------------------------------------------------------------
Dedicated-Purpose Pool Pump                 5                5     2026 & 2028    $56.2 (2022$)              5.1
 Motors 88 FR 66966 (Sep. 28,
 2023)...........................
Distribution Transformer 88 FR             27                6            2027     $343 (2021$)              2.7
 1722 (Jan. 11, 2023) [dagger]...

[[Page 87124]]

 
Electric Motors 88 FR 36066 (Jun.          74               74            2027     $468 (2021$)              2.6
 1, 2023)........................
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule
  contributing to cumulative regulatory burden.
** This column presents the number of manufacturers producing ESEMs that are also listed as manufacturers in the
  listed energy conservation standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion
  period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant
  products/equipment. The revenue used for this calculation is the revenue from just the covered product/
  equipment associated with each row. The conversion period is the time frame over which conversion costs are
  made and lasts from the publication year of the final rule to the compliance year of the energy conservation
  standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking.
[dagger] Indicates a proposed rulemaking. Final values may change upon the publication of a final rule.

    In response to the March 2022 Preliminary Analysis, the Joint 
Stakeholders commented that regulating motors that are components 
significantly increases the burden on manufacturers if all products 
using special and definite purpose motors were suddenly forced to 
certify compliance with standards for component parts, including the 
testing, paperwork, and record-keeping requirements that accompany 
certification. (Joint Stakeholders, No. 23 at p. 5) As stated in 
section II.A and section IV.A.1 of this document, EPCA, as amended 
through EISA 2007, provides DOE with the authority to regulate the 
expanded scope of motors addressed in this rule, whether those electric 
motors are manufactured alone or as a component of another piece of 
equipment. DOE believes this ESEM proposed rulemaking would not impact 
manufacturers of consumer products. For commercial equipment, DOE 
identified the following equipment as potentially incorporating ESEMs: 
walk-in coolers and freezers, circulator pumps, air circulating fans, 
and commercial unitary air conditioning equipment. If the proposed 
energy conservation standards for these rules finalize as proposed, DOE 
identified that these rules would all: (1) have a compliance year that 
is at or before the ESEM standard compliance year (2029) and/or (2) 
require a motor that is either outside of the scope of ESEM (e.g., an 
ECM) or an ESEM with an efficiency above the proposed ESEM standards, 
and therefore would not be impacted by this ESEM proposed rulemaking 
(i.e., the ESEM rule would not trigger a redesign of these equipment).
3. National Impact Analysis
    This section presents DOE's estimates of the national energy 
savings and the NPV of consumer benefits that would result from each of 
the TSLs considered as potential new standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential new 
standards for ESEMs, DOE compared their energy consumption under the 
no-new-standards case to their anticipated energy consumption under 
each TSL. The savings are measured over the entire lifetime of products 
purchased in the 30-year period that begins in the year of anticipated 
compliance with new standards (2029-2058). Table V-31 presents DOE's 
projections of the national energy savings for each TSL considered for 
ESEMs. The savings were calculated using the approach described in 
section IV.H.2 of this document.

                 Table V-31--Cumulative National Energy Savings for ESEMs; 30 Years of Shipments
                                                   [2029-2058]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                              (Quads)
----------------------------------------------------------------------------------------------------------------
Primary energy..................................             3.0             8.7            16.5            23.6
FFC energy......................................             3.1             8.9            17.0            24.2
----------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \97\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this NOPR, DOE 
undertook a sensitivity analysis using 9 years, rather than 30 years, 
of equipment shipments. The choice of a 9-year period is a proxy for 
the timeline in EPCA for the review of certain energy conservation 
standards and potential revision of and compliance with such revised 
standards.\98\ The review

[[Page 87125]]

timeframe established in EPCA is generally not synchronized with the 
equipment lifetime, equipment manufacturing cycles, or other factors 
specific to ESEMs. Thus, such results are presented for informational 
purposes only and are not indicative of any change in DOE's analytical 
methodology. The NES sensitivity analysis results based on a 9-year 
analytical period are presented in Table V-32. The impacts are counted 
over the lifetime of ESEMs purchased in 2029-2037.
---------------------------------------------------------------------------

    \97\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. http://obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed 
May 1, 2023).
    \98\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(m)) While adding a 6-year review to the 3-
year compliance period adds up to 9 years, DOE notes that it may 
undertake reviews at any time within the 6-year period and that the 
3-year compliance date may yield to the 6-year backstop. A 9-year 
analysis period may not be appropriate given the variability that 
occurs in the timing of standards reviews and the fact that for some 
products, the compliance period is 5 years rather than 3 years.

                 Table V-32--Cumulative National Energy Savings for ESEMs; 9 Years of Shipments
                                                   [2029-2037]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                              (Quads)
----------------------------------------------------------------------------------------------------------------
Primary energy..................................             0.8             2.4             4.5             6.4
FFC energy......................................             0.8             2.4             4.6             6.6
----------------------------------------------------------------------------------------------------------------

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for ESEMs. In 
accordance with OMB's guidelines on regulatory analysis,\99\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V-33 shows the consumer NPV results with impacts counted 
over the lifetime of equipment purchased in 2029-2058.
---------------------------------------------------------------------------

    \99\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed 
July 1, 2021).

         Table V-33--Cumulative Net Present Value of Consumer Benefits for ESEMs; 30 Years of Shipments
                                                   [2029-2058]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                          (billion 2022$)
----------------------------------------------------------------------------------------------------------------
3 percent.......................................            14.0            45.0            50.4            36.8
7 percent.......................................             6.4            21.0            21.0            11.2
----------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V-34. The impacts are counted over the 
lifetime of equipment purchased in 2029-2037. As mentioned previously, 
such results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology or decision 
criteria.

          Table V-34--Cumulative Net Present Value of Consumer Benefits for ESEMs; 9 Years of Shipments
                                                   [2029-2037]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                          (billion 2022$)
----------------------------------------------------------------------------------------------------------------
3 percent.......................................             5.1            16.3            18.1            12.9
7 percent.......................................             3.2            10.3            10.1             5.2
----------------------------------------------------------------------------------------------------------------

    The previous results reflect the use of a default trend to estimate 
the change in price for ESEMs over the analysis period (see section 
IV.F.1 of this document). DOE also conducted a sensitivity analysis 
that considered one scenario with a price decline and one scenario with 
a price increase compared to the reference case. The results of these 
alternative cases are presented in appendix 10C of the NOPR TSD. In the 
decreasing price case, the NPV of consumer benefits is higher than in 
the default case. In the increasing price case, the NPV of consumer 
benefits is lower than in the default case.
c. Indirect Impacts on Employment
    DOE estimates that new energy conservation standards for ESEMs will 
reduce energy expenditures for consumers of those equipment, with the 
resulting net savings being redirected to other forms of economic 
activity. These expected shifts in spending and economic activity could 
affect the demand for labor. As described in section IV.N of this 
document, DOE used an input/output model of the U.S. economy to 
estimate indirect

[[Page 87126]]

employment impacts of the TSLs that DOE considered. There are 
uncertainties involved in projecting employment impacts, especially 
changes in the later years of the analysis. Therefore, DOE generated 
results for near-term timeframes (2029-2034), where these uncertainties 
are reduced.
    The results suggest that the proposed standards are likely to have 
a negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the NOPR TSD presents detailed results 
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As discussed in section IV.C.1.c of this document, DOE has 
tentatively concluded that the standards proposed in this NOPR would 
not lessen the utility or performance of the ESEMs under consideration 
in this proposed rulemaking. Manufacturers of these products currently 
offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new or amended standards. As discussed in section III.F.1.e 
of this document, the Attorney General determines the impact, if any, 
of any lessening of competition likely to result from a proposed 
standard, and transmits such determination in writing to the Secretary, 
together with an analysis of the nature and extent of such impact. To 
assist the Attorney General in making this determination, DOE has 
provided DOJ with copies of this NOPR and the accompanying NOPR TSD for 
review. DOE will consider DOJ's comments on the proposed rule in 
determining whether to proceed to a final rule. DOE will publish and 
respond to DOJ's comments in that document. DOE invites comment from 
the public regarding the competitive impacts that are likely to result 
from this proposed rule. In addition, stakeholders may also provide 
comments separately to DOJ regarding these potential impacts. See the 
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the NOPR TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this proposed rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for ESEMs is expected to yield environmental benefits in the 
form of reduced emissions of certain air pollutants and greenhouse 
gases. Table V-35 provides DOE's estimate of cumulative emissions 
reductions expected to result from the TSLs considered in this NOPR. 
The emissions were calculated using the multipliers discussed in 
section IV.L of this document. DOE reports annual emissions reductions 
for each TSL in chapter 13 of the NOPR TSD.

                    Table V-35--Cumulative Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                                             ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
                                         Electric Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................................         50.0        145.6        277.6        397.2
CH4 (thousand tons).........................................          3.4         10.0         19.2         27.5
N2O (thousand tons).........................................          0.5          1.4          2.6          3.8
SO2 (thousand tons).........................................         23.3         67.8        129.6        185.6
NOX (thousand tons).........................................         14.7         42.9         82.6        118.6
Hg (tons)...................................................          0.1          0.3          0.6          0.8
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................................          5.1         14.9         28.4         40.6
CH4 (thousand tons).........................................        464.2      1,352.2      2,574.8      3,682.0
N2O (thousand tons).........................................          0.0          0.1          0.1          0.2
SO2 (thousand tons).........................................         79.6        232.0        441.7        631.7
NOX (thousand tons).........................................          0.3          0.9          1.7          2.5
Hg (tons)...................................................          0.0          0.0          0.0          0.0
----------------------------------------------------------------------------------------------------------------
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................................         55.1        160.5        306.0        437.8
CH4 (thousand tons).........................................        467.6      1,362.2      2,593.9      3,709.4
N2O (thousand tons).........................................          0.5          1.4          2.8          4.0
SO2 (thousand tons).........................................        102.9        299.8        571.3        817.3
NOX (thousand tons).........................................         15.0         43.8         84.3        121.1
Hg (tons)...................................................          0.1          0.3          0.6          0.8
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this rulemaking, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for ESEMs. Section 
IV.L of this document discusses the SC-CO2 values that DOE 
used. Table V-36 presents the value of CO2 emissions 
reduction at

[[Page 87127]]

each TSL for each of the SC-CO2 cases. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.

               Table V-36--Present Value of CO2 Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
                                                                               SC-CO2 case
                                                       ---------------------------------------------------------
                                                                      Discount rate and statistics
                          TSL                          ---------------------------------------------------------
                                                                                      2.5%          3% 95th
                                                         5% Average   3% Average    Average        percentile
----------------------------------------------------------------------------------------------------------------
                                                                             (billion 2022$)
----------------------------------------------------------------------------------------------------------------
1.....................................................         0.61         2.55         3.95               7.76
2.....................................................         1.79         7.43        11.52              22.59
3.....................................................         3.42        14.18        21.97              43.10
4.....................................................         4.89        20.29        31.43              61.67
----------------------------------------------------------------------------------------------------------------

    As discussed in section IV.L.2 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for ESEMs. Table V-37 presents the value of the CH4 
emissions reduction at each TSL, and Table V-38 presents the value of 
the N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.

             Table V-37--Present Value of Methane Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
                                                                               SC-CH4 case
                                                       ---------------------------------------------------------
                                                                      Discount rate and statistics
                          TSL                          ---------------------------------------------------------
                                                                                      2.5%          3% 95th
                                                         5% Average   3% Average    Average        percentile
----------------------------------------------------------------------------------------------------------------
                                                                             (billion 2022$)
----------------------------------------------------------------------------------------------------------------
1.....................................................         0.24         0.68         0.94               1.80
2.....................................................         0.69         1.99         2.75               5.26
3.....................................................         1.32         3.79         5.24              10.01
4.....................................................         1.88         5.42         7.49              14.32
----------------------------------------------------------------------------------------------------------------


          Table V-38--Present Value of Nitrous Oxide Emissions Reduction for ESEMs Shipped in 2029-2058
----------------------------------------------------------------------------------------------------------------
                                                                               SC-N2O case
                                                       ---------------------------------------------------------
                                                                      Discount rate and statistics
                          TSL                          ---------------------------------------------------------
                                                                                      2.5%          3% 95th
                                                         5% Average   3% Average    Average        percentile
----------------------------------------------------------------------------------------------------------------
                                                                             (billion 2022$)
----------------------------------------------------------------------------------------------------------------
1.....................................................        0.002        0.008        0.012              0.022
2.....................................................        0.006        0.024        0.036              0.063
3.....................................................        0.012        0.045        0.070              0.121
4.....................................................        0.017        0.065        0.100              0.173
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
global and U.S. economy continues to evolve rapidly. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO2 and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes that the proposed standards would be economically justified 
even without inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the health benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for ESEMs. The dollar-
per-ton values that DOE used are discussed in section IV.L of this 
document. Table V-39 presents the present value for NOX 
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V-40 presents similar results for 
SO2 emissions reductions. The results in these tables 
reflect application of EPA's low dollar-per-ton values, which DOE used 
to be conservative. The time-series of annual values is presented for 
the proposed TSL in chapter 14 of the NOPR TSD.

[[Page 87128]]



 Table V-39--Present Value of NOX Emissions Reduction for ESEMs Shipped
                              in 2029-2058
------------------------------------------------------------------------
               TSL                 7% Discount rate    3% Discount rate
------------------------------------------------------------------------
                                              (million 2022$)
------------------------------------------------------------------------
1...............................             2,249.3             5,221.7
2...............................             6,551.5            15,211.6
3...............................            12,497.5            29,002.1
4...............................            17,883.3            41,492.7
------------------------------------------------------------------------


 Table V-40--Present Value of SO2 Emissions Reduction for ESEMs Shipped
                              in 2029-2058
------------------------------------------------------------------------
               TSL                 3% Discount rate    7% Discount rate
------------------------------------------------------------------------
                                              (million 2022$)
------------------------------------------------------------------------
1...............................               467.5             1,065.7
2...............................             1,362.5             3,106.6
3...............................             2,624.4             5,981.4
4...............................             3,767.9             8,586.2
------------------------------------------------------------------------

    Not all the public health and environmental benefits from the 
reduction of greenhouse gases, NOX, and SO2 are 
captured in the values above, and additional unquantified benefits from 
the reductions of those pollutants as well as from the reduction of 
direct PM and other co-pollutants may be significant. DOE has not 
included monetary benefits of the reduction of Hg emissions because the 
amount of reduction is very small.
7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) No other factors were considered in this 
analysis.
8. Summary of Economic Impacts
    Table V-41 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced GHG 
and NOX and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this proposed 
rulemaking. The consumer benefits are domestic U.S. monetary savings 
that occur as a result of purchasing the covered ESEMs and are measured 
for the lifetime of products shipped in 2029-2058. The climate benefits 
associated with reduced GHG emissions resulting from the proposed 
standards are global benefits and are also calculated based on the 
lifetime of ESEMs shipped in 2029-2058.

          Table V-41--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
----------------------------------------------------------------------------------------------------------------
                              Category                                  TSL 1      TSL 2      TSL 3      TSL 4
----------------------------------------------------------------------------------------------------------------
                   Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..............................................       21.2       65.8       90.1       93.7
3% Average SC-GHG case..............................................       23.6       72.8      103.4      112.7
2.5% Average SC-GHG case............................................       25.2       77.6      112.6      125.9
3% 95th percentile SC-GHG case......................................       29.9       91.2      138.6      163.1
----------------------------------------------------------------------------------------------------------------
                   Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..............................................       10.0       31.4       40.8       39.7
3% Average SC-GHG case..............................................       12.4       38.3       54.1       58.7
2.5% Average SC-GHG case............................................       14.1       43.2       63.4       71.9
3% 95th percentile SC-GHG case......................................       18.7       56.8       89.3      109.1
----------------------------------------------------------------------------------------------------------------

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered equipment 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(A)) In determining whether a standard is economically 
justified, the Secretary must determine whether the benefits of the 
standard exceed its burdens by, to the greatest extent practicable, 
considering the seven statutory factors discussed previously. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard 
must also result in significant conservation of energy. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(3)(B))
    For this NOPR, DOE considered the impacts of new standards for 
ESEMs at each TSL, beginning with the maximum technologically feasible 
level, to determine whether that level was economically justified. 
Where the max-tech level was not justified, DOE then considered the 
next most efficient level and undertook the same evaluation until it 
reached the highest efficiency level that is both technologically 
feasible and economically justified and saves a significant amount of 
energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary

[[Page 87129]]

of the results of DOE's quantitative analysis for each TSL. In addition 
to the quantitative results presented in the tables, DOE also considers 
other burdens and benefits that affect economic justification. These 
include the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
1. Benefits and Burdens of TSLs Considered for ESEM Standards
    Table V-42 and Table V-43 summarize the quantitative impacts 
estimated for each TSL for ESEMs. The national impacts are measured 
over the lifetime of ESEMs purchased in the 30-year period that begins 
in the anticipated year of compliance with new standards (2029-2058). 
The energy savings, emissions reductions, and value of emissions 
reductions refer to full-fuel-cycle results. The efficiency levels 
contained in each TSL are described in section V.A of this document.

   Table V-42--Summary of Analytical Results for ESEMs TSLs: National
                                 Impacts
------------------------------------------------------------------------
          Category              TSL 1      TSL 2      TSL 3      TSL 4
------------------------------------------------------------------------
                 Cumulative FFC National Energy Savings
------------------------------------------------------------------------
Quads.......................        3.1        8.9       17.0       24.2
------------------------------------------------------------------------
                   Cumulative FFC Emissions Reduction
------------------------------------------------------------------------
CO2 (million metric tons)...       55.1      160.5      306.0      437.8
CH4 (thousand tons).........      467.6    1,362.2    2,593.9    3,709.4
N2O (thousand tons).........        0.5        1.4        2.8        4.0
SO2 (thousand tons).........      102.9      299.8      571.3      817.3
NOX (thousand tons).........       15.0       43.8       84.3      121.1
Hg (tons)...................        0.1        0.3        0.6        0.8
------------------------------------------------------------------------
  Present Value of Benefits and Costs (3% discount rate, billion 2022$)
------------------------------------------------------------------------
Consumer Operating Cost            18.7       54.7      107.0      154.5
 Savings....................
Climate Benefits *..........        3.2        9.4       18.0       25.8
Health Benefits **..........        6.3       18.3       35.0       50.1
Total Benefits [dagger].....       28.3       82.4      160.0      230.3
Consumer Incremental                4.7        9.7       56.7      117.7
 Equipment Costs [Dagger]...
Consumer Net Benefits.......       14.0       45.0       50.4       36.8
Total Net Benefits..........       23.6       72.8      103.4      112.7
------------------------------------------------------------------------
  Present Value of Benefits and Costs (7% discount rate, billion 2022$)
------------------------------------------------------------------------
Consumer Operating Cost            8.94      26.10      51.09      73.76
 Savings....................
Climate Benefits *..........       3.24       9.45      18.01      25.77
Health Benefits **..........       2.72       7.91      15.12      21.65
Total Benefits [dagger].....      14.89      43.46      84.23     121.18
Consumer Incremental               2.49       5.14      30.12      62.52
 Equipment Costs [Dagger]...
Consumer Net Benefits.......       6.45      20.95      20.98      11.24
Total Net Benefits..........      12.41      38.31      54.11      58.66
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs
  shipped in 2029-2058. These results include consumer, climate, and
  health benefits which accrue after 2058 from the products shipped in
  2029-2058.
* Climate benefits are calculated using four different estimates of the
  SC-CO2, SC-CH4 and SC-N2O. Together, these represent the global SC-
  GHG. For presentational purposes of this table, the climate benefits
  associated with the average SC-GHG at a 3 percent discount rate are
  shown; however, DOE emphasizes the importance and value of considering
  the benefits calculated using all four sets of SC-GHG estimates. To
  monetize the benefits of reducing GHG emissions, this analysis uses
  the interim estimates presented in the Technical Support Document:
  Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
  Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. The health benefits are presented at real discount rates of
  3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health
  benefits. For presentation purposes, total and net benefits for both
  the 3-percent and 7-percent cases are presented using the average SC-
  GHG with 3-percent discount rate.
[Dagger] Costs include incremental equipment costs.


                               Table V-43--Summary of Analytical Results for ESEMs TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Category                           TSL 1                        TSL 2                        TSL 3                        TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-    1,883 to 1,818..............  1,888 to 1,755.............  1,820 to 1,035.............  1,710 to 73.
 new-standards case INPV = 2,019).
Industry NPV (% change)............  (6.7) to (9.9)..............  (6.5) to (13.1)............  (9.9) to (48.7)............  (15.3) to (96.4).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Medium Torque, 0.25 hp..  55.6........................  51.3.......................  (0.8)......................  (106.5).
ESEM--High/Medium Torque, 1 hp.....  116.1.......................  137.7......................  20.8.......................  (145.2).

[[Page 87130]]

 
ESEM--Low Torque, 0.25 hp..........  212.8.......................  146.8......................  24.1.......................  (16.7).
ESEM--Low Torque, 0.5 hp...........  41.2........................  99.6.......................  77.8.......................  72.5.
ESEM--Polyphase, 0.25 hp...........  31.9........................  26.2.......................  (8.3)......................  (107.3).
AO-ESEM--High/Medium Torque, 0.25    76.3........................  82.9.......................  37.4.......................  (61.4).
 hp.
AO-ESEM--High/Medium Torque, 1 hp..  121.9.......................  160.3......................  37.1.......................  (128.2).
AO-ESEM--Low Torque, 0.25 hp.......  217.2.......................  121.3......................  31.6.......................  (13.4)..
AO-ESEM--Low Torque, 0.5 hp........  47.6........................  88.4.......................  50.0.......................  52.4.
AO-ESEM--Polyphase, 0.25 hp........  35.1........................  39.9.......................  12.7.......................  (85.0).
Shipment-Weighted Average *........  82.8........................  101.8......................  43.6.......................  (9.6).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Medium Torque, 0.25 hp..  0.5.........................  1.5........................  5.3........................  10.0.
ESEM--High/Medium Torque, 1 hp.....  0.7.........................  1.1........................  4.7........................  8.7.
ESEM--Low Torque, 0.25 hp..........  0.4.........................  1.0........................  3.3........................  5.0.
ESEM--Low Torque, 0.5 hp...........  2.4.........................  1.3........................  2.8........................  3.3.
ESEM--Polyphase, 0.25 hp...........  1.1.........................  2.6........................  7.4........................  15.6.
AO-ESEM--High/Medium Torque, 0.25    0.3.........................  1.0........................  3.2........................  6.1.
 hp.
AO-ESEM--High/Medium Torque, 1 hp..  0.6.........................  0.9........................  3.9........................  7.7.
AO-ESEM--Low Torque, 0.25 hp.......  0.4.........................  1.1........................  3.1........................  4.9.
AO-ESEM--Low Torque, 0.5 hp........  2.2.........................  0.8........................  3.0........................  3.4.
AO-ESEM--Polyphase, 0.25 hp........  1.1.........................  2.0........................  5.1........................  10.8.
Shipment-Weighted Average *........  1.5.........................  1.2........................  3.6........................  5.7.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESEM--High/Medium Torque, 0.25 hp..  2%..........................  17%........................  51%........................  86%.
ESEM--High/Medium Torque, 1 hp.....  3%..........................  12%........................  54%........................  82%.
ESEM--Low Torque, 0.25 hp..........  0%..........................  3%.........................  52%........................  68%.
ESEM--Low Torque, 0.5 hp...........  11%.........................  8%.........................  30%........................  40%.
ESEM--Polyphase, 0.25 hp...........  1%..........................  7%.........................  59%........................  95%.
AO-ESEM--High/Medium Torque, 0.25    1%..........................  8%.........................  36%........................  65%.
 hp.
AO-ESEM--High/Medium Torque, 1 hp..  2%..........................  6%.........................  44%........................  82%.
AO-ESEM--Low Torque, 0.25 hp.......  0%..........................  4%.........................  39%........................  68%.
AO-ESEM--Low Torque, 0.5 hp........  2%..........................  3%.........................  34%........................  42%
AO-ESEM--Polyphase, 0.25 hp........  3%..........................  10%........................  49%........................  88%.
Shipment-Weighted Average *........  5%..........................  8%.........................  41%........................  59%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each equipment class in total projected shipments in 2022.

    DOE first considered TSL 4, which represents the max-tech 
efficiency levels. TSL 4 would save an estimated 24.2 quads of energy, 
an amount DOE considers significant. Under TSL 4, the NPV of consumer 
benefit would be $11.24 billion using a discount rate of 7 percent and 
$36.8 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 437.8 Mt of 
CO2, 817.3 thousand tons of SO2, 121.1 thousand 
tons of NOX, 0.8 tons of Hg, 3,709.4 thousand tons of 
CH4, and 4.0 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $25.8 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $21.7 billion using a 7-percent discount rate and $50.1 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $58.7 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $112.7 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 4, the average LCC impact for non-air over ESEMs is a 
savings of -$107 and -$145 for high/medium torque ESEMs (0.25 and 1 hp, 
respectively); -$17 and $73 for low torque ESEMs (0.25 and 0.5 hp, 
respectively); and -$107 for Polyphase ESEMs. At TSL 4, the average LCC 
impact for AO-ESEMs is a savings of -$61 and -$128 for high/medium 
torque AO-ESEMs (0.25 and 1 hp, respectively); -$13 and $52 for low 
torque AO-ESEMs (0.25 and 0.5 hp, respectively); and -$85 for Polyphase 
AO-ESEMs. Overall, the shipments-weighted average LCC impact is a 
savings of -$10. The simple payback period for non-air-over ESEMs is 
6.9 and 6.3 years for high/medium torque ESEMs (0.25 and 1 hp, 
respectively); 2.0 and 3.0 years for low torque ESEMs (0.25 and 0.5 hp, 
respectively); and 9.7 years for polyphase ESEMs. The simple payback 
period for AO-ESEMs is 4.3 and 5.1 years for high/medium torque AO-
ESEMs (0.25 and 1 hp, respectively); 1.9 and 2.7 years for low torque 
AO-ESEMs (0.25 and 0.5 hp, respectively); and 8.3 years for polyphase 
AO-ESEMs. Overall, the shipments-weighted average PBP is 4.0 years. The 
fraction of consumers experiencing a net LCC cost for non-air-over 
ESEMs is 85.9 and 82.5 percent for high/medium torque ESEMs (0.25 and 1 
hp, respectively); 67.7 and 40.1 percent

[[Page 87131]]

for low torque ESEMs (0.25 and 0.5 hp, respectively); and 95.0 percent 
for polyphase ESEMs. The fraction of consumers experiencing a net LCC 
cost for AO-ESEMs is 64.6 and 81.9 percent for high/medium torque AO-
ESEMs (0.25 and 1 hp, respectively); 67.9 and 42.2 percent for low 
torque AO-ESEMs (0.25 and 0.5 hp, respectively); and 87.8 percent for 
polyphase AO-ESEMs. Overall, the shipments-weighted average fraction of 
consumers experiencing a net LCC cost is 59.3 percent.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$1,946 million to a decrease of $309 million, which corresponds to 
decreases of 96.4 percent and 15.3 percent, respectively. DOE estimates 
that industry must invest $2,156 million to redesign almost all ESEM 
models and to purchase new lamination die sets, winding machines, frame 
casts, and assembly equipment as well as other retooling costs to 
manufacturer compliant ESEM models at TSL 4. An investment of $2,156 
million in conversion costs represents over 3.3 times the sum of the 
annual free cash flows over the years between the expected publication 
of the final rule and the compliance year (i.e., the time period that 
these conversion costs would be incurred) and represents over 100 
percent of the entire no-new-standards case INPV over the 30-year 
analysis period.\100\
---------------------------------------------------------------------------

    \100\ The sum of annual free cash flows is estimated to be $636 
million for 2025-2028 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $2,019 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be 
$154 million in 2028, the year before the compliance date. At TSL 4, 
the estimated free cash flow is -$764 million in 2028. This represents 
a decrease in free cash flow of 595 percent, or a decrease of $919 
million, in 2028. A negative free cash flow implies that most, if not 
all, manufacturers will need to borrow substantial funds to be able to 
make investments necessary to comply with energy conservation standards 
at TSL 4. The extremely large drop in free cash flows could cause some 
ESEM manufacturers to exit the ESEM market entirely, even though 
recovery may be possible over the 30-year analysis period. At TSL 4, 
models representing less than 1 percent of all ESEM shipments are 
estimated to meet the efficiency requirements at this TSL in the no-
new-standards case by 2029, the compliance year. Therefore, models 
representing over 99 percent of all ESEM shipments will need be 
remodeled in the 4-year compliance period.
    Manufacturers are unlikely to have the engineering capacity to 
conduct this massive redesign effort in 4 years. Instead, they will 
likely prioritize redesigns based on sales volume, which could leave 
market gaps in equipment offered by manufacturers and even the entire 
ESEMs industry. The resulting market gaps in equipment offerings could 
result in sub-optimal selection of ESEMs for some applications. Lastly, 
although DOE's analysis assumes that TSL 4 can be reached without 
significant increase in size, as discussed in sections IV.C.3 and 
IV.J.2.c of this NOPR and in the December 2022 Joint Recommendation, 
the Electric Motor Working group expressed that in order to meet the 
efficiency requirements at TSL 4, some manufacturers may choose to rely 
on design options that could significantly increase the physical size 
of ESEMs. This could result in a significant and widespread disruption 
to the OEM markets that used ESEMs as an embedded product, as those 
OEMs may have to make significant changes to their equipment that use 
ESEMs because those ESEMs could become larger in physical size.
    DOE requests comment on if manufacturers would have the engineering 
capacity to conduct design efforts to be able to offer a full portfolio 
of complaint ESEM at TSL 4. If not, please provide any data or 
information on the potential impacts that could arise due to these 
market gaps in equipment offerings.
    Under 42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(2)(B)(i), DOE 
determines whether a standard is economically justified after 
considering seven factors. Based on these factors, the Secretary 
tentatively concludes that at TSL 4 for ESEMs, the benefits of energy 
savings, positive NPV of consumer benefits, emission reductions, and 
the estimated monetary value of the emissions reductions would be 
outweighed by the economic burden on many consumers and the impacts on 
manufacturers, including the extremely large conversion costs 
(representing over 3.3 times the sum of the annual free cash flows 
during the time period that these conversion costs will be incurred and 
over 100 percent of the entire no-new-standards case INPV), 
profitability impacts that could result in a large reduction in INPV 
(up to a decrease of 96.4 percent), the large negative free cash flows 
in the years leading up to the compliance date (annual free cash flow 
is estimated to be -$764 million in the year before the compliance 
date), the lack of manufacturers currently offering equipment meeting 
the efficiency levels required at TSL 4 (models representing over 99 
percent of shipments will need to be redesigned to meet this TSL), and 
the likelihood of the significant disruption in the ESEM market. Due to 
the limited amount of engineering resources each manufacturer has, it 
is unclear if most manufacturers will be able to redesign models 
representing on average 99 percent of their ESEM shipments covered by 
this rulemaking in the 4-year compliance period. Consequently, the 
Secretary has tentatively concluded that TSL 4 is not economically 
justified.
    DOE then considered TSL 3, which represents efficiency level 3 for 
all equipment class groups. TSL 3 would save an estimated 17 quads of 
energy, an amount DOE considers significant. Under TSL 3, the NPV of 
consumer benefit would be $11.2 billion using a discount rate of 7 
percent and $36.8 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 306.0 Mt of 
CO2, 571.3 thousand tons of SO2, 84.3 thousand 
tons of NOX, 0.6 tons of Hg, 2,593.9 thousand tons of 
CH4, and 2.8 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 3 is $18.0 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 3 is $15.1 billion using a 7-percent discount rate and $35.0 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 3 is $54.1 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 3 is $103.4 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 3, the average LCC impact for non-air over ESEMs is a 
savings of -$1 and $21 for high/medium torque ESEMs (0.25 and 1 hp, 
respectively); $24 and $78 for low torque ESEMs (0.25 and 0.5 hp, 
respectively); and -$8 for Polyphase ESEMs. At TSL 3, the average LCC 
impact for AO-ESEMs is a savings of $37 and $37 for high/medium torque 
AO-ESEMs (0.25 and 1 hp, respectively); $32 and $50 for low

[[Page 87132]]

torque AO ESEMs (0.25 and 0.5 hp, respectively); and $13 for Polyphase 
AO-ESEMs. Overall, the shipments-weighted average LCC impact is a 
savings of $44. The simple payback period for non-air-over ESEMs is 3.7 
and 3.4 years for high/medium torque ESEMs (0.25 and 1 hp, 
respectively); 1.3 and 2.5 years for low torque ESEMs (0.25 and 0.5 hp, 
respectively); and 4.6 years for polyphase ESEMs. The simple payback 
period for AO-ESEMs is 2.3 and 2.7 years for high/medium torque AO-
ESEMs (0.25 and 1 hp, respectively); 1.2 and 2.3 years for low torque 
AO-ESEMs (0.25 and 0.5 hp, respectively); and 3.9 years for polyphase 
AO-ESEMs. Overall, the shipments-weighted average PBP is 2.6 years. The 
fraction of consumers experiencing a net LCC cost, for non-air-over 
ESEMs is 51.2 and 53.5 percent for high/medium torque ESEMs (0.25 and 1 
hp, respectively); 52.0 and 30.4 percent for low torque ESEMs (0.25 and 
0.5 hp, respectively); and 58.6 percent for polyphase ESEMs. The 
fraction of consumers experiencing a net LCC cost, for AO-ESEMs is 36.0 
and 44.4 percent for high/medium torque AO-ESEMs (0.25 and 1 hp, 
respectively); 39.1 and 34.4 percent for low torque AO-ESEMs (0.25 and 
0.5 hp, respectively); and 48.6 percent for polyphase AO-ESEMs. 
Overall, the shipments-weighted average fraction of consumers 
experiencing a net LCC cost is 40.6 percent.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$1,035 million to a decrease of $199 million, which corresponds to 
decreases of 48.7 percent and 9.9 percent, respectively. DOE estimates 
that industry must invest $1,118 million to redesign the majority of 
ESEM models and to purchase new lamination die sets, winding machines, 
frame casts, and assembly equipment as well as other retooling costs to 
manufacturer compliant ESEM models at TSL 3. An investment of $1,118 
million in conversion costs represents over 1.7 times the sum of the 
annual free cash flows over the years between the expected publication 
of the final rule and the compliance year (i.e., the time period that 
these conversion costs would be incurred) and represents over 55 
percent of the entire no-new-standards case INPV over the 30-year 
analysis period.\101\
---------------------------------------------------------------------------

    \101\ The sum of annual free cash flows is estimated to be $636 
million for 2025-2028 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $2,019 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be 
$154 million in 2028, the year before the compliance date. At TSL 3, 
the estimated free cash flow is -$313 million in 2028. This represents 
a decrease in free cash flow of 303 percent, or a decrease of $468 
million, in 2028. A negative free cash flow implies that most, if not 
all, manufacturers will need to borrow substantial funds to be able to 
make investments necessary to comply with energy conservation standards 
at TSL 3. The extremely large drop in free cash flows could cause some 
ESEM manufacturers to exit the ESEM market entirely, even though 
recovery may be possible over the 30-year analysis period. At TSL 3, 
models representing approximately 9 percent of all ESEM shipments are 
estimated to meet the efficiency requirements at this TSL in the no-
new-standards case by 2029, the compliance year. Therefore, models 
representing approximately 91 percent of all ESEM shipments will need 
be remodeled in the 4-year compliance period.
    Manufacturers are unlikely to have the engineering capacity to 
conduct this massive redesign effort in 4 years. Instead, they will 
likely prioritize redesigns based on sales volume, which could leave 
market gaps in equipment offered by manufacturers and even the entire 
ESEMs industry. The resulting market gaps in equipment offerings could 
result in sub-optimal selection of ESEMs for some applications. Lastly, 
although DOE's analysis assumes that TSL 3 can be reached without 
significant increase in size, as discussed in sections IV.C.3 and 
IV.J.2.c of this NOPR and in the December 2022 Joint Recommendation, 
the Electric Motor Working group expressed that in order to meet the 
efficiency requirements at TSL 3, some manufacturers may choose to rely 
on design options that would significantly increase the physical size 
of ESEMs. This could result in a significant and widespread disruption 
to the OEM markets that used ESEMs as an embedded product, as those 
OEMs may have to make significant changes to their equipment that use 
ESEMs since those ESEMs could become larger in physical size.
    DOE requests comment on if manufacturers would have the engineering 
capacity to conduct design efforts to be able to offer a full portfolio 
of compliant ESEMs at TSL 3. If not, please provide any data or 
information on the potential impacts that could arise due to these 
market gaps in equipment offerings.
    Under 42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(2)(B)(i), DOE 
determines whether a standard is economically justified after 
considering seven factors. Based on these factors, the Secretary 
tentatively concludes that at TSL 3 for ESEMs, the benefits of energy 
savings, the economic benefit on many consumers, positive NPV of 
consumer benefits, emission reductions, and the estimated monetary 
value of the emissions reductions would be outweighed by the impacts on 
manufacturers, including the extremely large conversion costs 
(representing over 1.7 times the sum of the annual free cash flows 
during the time period that these conversion costs will be incurred and 
over 55 percent of the entire no-new-standards case INPV), 
profitability impacts that could result in a large reduction in INPV 
(up to a decrease of 48.7 percent), the large negative free cash flows 
in the years leading up to the compliance date (annual free cash flow 
is estimated to be -$313 million in the year before the compliance 
date), the lack of manufacturers currently offering equipment meeting 
the efficiency levels required at this TSL (models representing 
approximately 91 percent of shipments will need to be redesigned to 
meet this TSL), and the likelihood of the significant disruption in the 
ESEM market. Due to the limited amount of engineering resources each 
manufacturer has, it is unclear if most manufacturers will be able to 
redesign models representing on average 91 percent of their ESEM 
shipments covered by this rulemaking in the 4-year compliance period. 
Consequently, the Secretary has tentatively concluded that TSL 3 is not 
economically justified.
    DOE then considered TSL 2, the standards level recommended in the 
December 2022 Joint Recommendation, which represents EL 2 for all 
equipment class groups. TSL 2 would save an estimated 8.9 quads of 
energy, an amount DOE considers significant. Under TSL 2, the NPV of 
consumer benefit would be $21.0 billion using a discount rate of 7 
percent and $45.0 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 2 are 160.5 Mt of 
CO2, 299.8 thousand tons of SO2, 43.8 thousand 
tons of NOX, 0.3 tons of Hg, 1,362.2 thousand tons of 
CH4, and 1.4 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 2 is $9.4 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 2 is $7.9 billion using a 7-percent discount rate and $18.3 billion 
using a 3-percent discount rate.

[[Page 87133]]

    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 2 is $38.3 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 2 is $72.8 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 2, the average LCC impact for non-air over ESEMs is a 
savings of $51 and $138 for high/medium torque ESEMs (0.25 and 1 hp, 
respectively); $147 and $100 for low torque ESEMs (0.25 and 0.5 hp, 
respectively); and $26 for Polyphase ESEMs. At TSL 2, the average LCC 
impact for AO-ESEMs is a savings of $83 and $160 for high/medium torque 
AO-ESEMs (0.25 and 1 hp, respectively); $121 and $88 for low torque AO-
ESEMs (0.25 and 0.5 hp, respectively); and $40 for Polyphase AO-ESEMs. 
Overall, the shipments-weighted average LCC impact is a savings of 
$102. The simple payback period for non-air-over ESEMs is 1.1 and 0.9 
years for high/medium torque ESEMs (0.25 and 1 hp, respectively); 0.7 
and 1.5 years for low torque ESEMs (0.25 and 0.5 hp, respectively); and 
2.0 years for polyphase ESEMs. The simple payback period for AO-ESEMs 
is 0.8 and 0.8 years for high/medium torque AO-ESEMs (0.25 and 1 hp, 
respectively); 0.7 and 1.3 years for low torque AO-ESEMs (0.25 and 0.5 
hp, respectively); and 1.8 years for polyphase AO-ESEMs. Overall, the 
shipments-weighted average PBP is 1.2 years. The fraction of consumers 
experiencing a net LCC cost, for non-air-over ESEMs is 16.7 and 11.7 
percent for high/medium torque ESEMs (0.25 and 1 hp, respectively); 3.0 
and 7.8 percent for low torque ESEMs (0.25 and 0.5 hp, respectively); 
and 7.2 percent for polyphase ESEMs. The fraction of consumers 
experiencing a net LCC cost for AO-ESEMs is 7.8 and 5.9 percent for 
high/medium torque AO-ESEMs (0.25 and 1 hp, respectively); 3.7 and 2.9 
percent for low torque AO-ESEMs (0.25 and 0.5 hp, respectively); and 
9.7 percent for polyphase AO-ESEMs. Overall, the shipments-weighted 
average fraction of consumers experiencing a net LCC cost is 7.8 
percent.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$264 million to a decrease of $131 million, which corresponds to 
decreases of 13.1 percent and 6.5 percent, respectively. DOE estimates 
that industry must invest $339 million to comply with standards set at 
TSL 2. An investment of $339 million in conversion costs represents 
approximately 53 percent of the sum of the annual free cash flows over 
the years between the expected publication date of the final rule and 
the standards year (i.e., the time period that these conversion costs 
would be incurred) and represents approximately 17 percent of the 
entire no-new-standards case INPV over the 30-year analysis 
period.\102\
---------------------------------------------------------------------------

    \102\ The sum of annual free cash flows is estimated to be $636 
million for 2025-2028 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $2,019 million.
---------------------------------------------------------------------------

    Under 42 U.S.C. 6316(a) and 42 U.S.C. 6295(o)(2)(B)(i), DOE 
determines whether a standard is economically justified after 
considering seven factors. After considering the seven factors and 
weighing the benefits and burdens, the Secretary has tentatively 
concluded that standards set at TSL 2, the recommended TSL from the 
Electric Motors Working Group, for ESEMs would be economically 
justified. At this TSL, the average LCC savings for all equipment 
classes is positive. An estimated 7.8 percent of ESEM consumers 
experience a net cost. The FFC national energy savings are significant 
and the NPV of consumer benefits is positive using both a 3-percent and 
7-percent discount rate. Notably, the benefits to consumers vastly 
outweigh the cost to manufacturers. At TSL 2, the NPV of consumer 
benefits, even measured at the more conservative discount rate of 7 
percent is over 79 times higher than the maximum estimated 
manufacturers' loss in INPV. The proposed standard levels at TSL 2 are 
economically justified even without weighing the estimated monetary 
value of emissions reductions. When those emissions reductions are 
included--representing $9.4 billion in climate benefits (associated 
with the average SC-GHG at a 3-percent discount rate), and $18.3 
billion (using a 3-percent discount rate) or $7.9 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes 
stronger still.
    Accordingly, the Secretary has tentatively concluded that TSL 2, 
the TSL recommended by the Electric Motors Working Group, would offer 
the maximum improvement in efficiency that is technologically feasible 
and economically justified and would result in the significant 
conservation of energy. In addition, as discussed in section V.A of 
this document, DOE is establishing the TSLs by equipment class groups 
and aligning the AO-ESEM levels with the non-AO-ESEMs. Although results 
are presented here in terms of TSLs, DOE analyzes and evaluates all 
possible ELs for each equipment class in its analysis. For all 
equipment classes, TSL 2 is comprised of EL 2, and represents two 
levels below max-tech. The max tech efficiency levels (TSL 4) result in 
negative LCC savings for most equipment classes and a large percentage 
of consumers that experience a net LCC cost for most equipment classes, 
in addition to significant manufacturer impacts. The ELs one level 
below max tech (TSL 3) result in negative LCC savings for some 
equipment classes and a large percentage of consumers that experience a 
net LCC cost for most equipment classes. Additionally, the impact to 
manufacturers is significantly reduced at TSL 2. While manufacturers 
will have to invest $339 million to comply with standards at TSL 2, 
annual free cash flows remain positive for all years leading up to the 
modeled compliance date. DOE also estimates that most ESEM 
manufacturers will have the engineering capacity to complete these 
redesigns in a 4-year compliance period. Lastly, as discussed in the 
December 2022 Joint Recommendation,\103\ TSL 2 would not result in 
ESEMs significantly increasing in physical size and therefore would not 
result in a significant and widespread disruption to the OEM markets 
that used ESEMs as an embedded product.
---------------------------------------------------------------------------

    \103\ See EERE-2020-BT-STD-0007-0038 at p. 4.
---------------------------------------------------------------------------

    The ELs two levels below max-tech (TSL 2), which represents the 
proposed standard levels as recommended by the Electric Motors Working 
Group, result in positive LCC savings for all equipment classes, 
significantly reduce the number of consumers experiencing a net cost, 
and reduce the decrease in INPV and conversion costs to the point where 
DOE has tentatively concluded they are economically justified, as 
discussed for TSL 2 in the preceding paragraphs.
    As presented in section V.A in this document, DOE developed TSLs 
that aligned the efficiency levels for air-over and non-air-over ESEMs 
because of the similarities in the manufacturing processes between air-
over and non-air-over ESEMs. In some cases, an air-over ESEM could be 
manufactured on the same line as a non-air-over ESEM by omitting the 
steps of manufacturing associated with the fan of a motor.
    While DOE did not explicitly analyze a TSL that would require TSL 3 
efficiency levels for AO-ESEMs and

[[Page 87134]]

TSL 2 efficiency levels for non-air over ESEMs, DOE may consider this 
alternative combination for any potential final rule. In that case, DOE 
seeks feedback on the potential consequences of adopting a more-
efficient level of AO-ESEMs as compared to non-air over ESEMs. DOE 
seeks information about whether there would be any decrease in the 
shipments of AO-ESEMs (and a decrease in the potential benefits from a 
more efficient proposed standard at TSL 3 efficiency levels for AO-
ESEMs) by shifting the market to predominantly non-air over ESEMs. In 
such a scenario, the savings associated with this TSL option may never 
be realized. In addition, while DOE did not consider a TSL that would 
require TSL 2 for all equipment classes except TSL3 efficiency levels 
for low torque ESEMs (both air-over and non-air-over) due to the 
uncertainties as to whether the size, fit and function would be 
maintained and potential significant and widespread disruption to the 
OEM markets, DOE seeks information related to potential size increase 
and impact on OEM markets at TSL 3 and above.
    DOE seeks comment on these alternative proposed standard levels. 
DOE requests comment on the unintended market consequences and the 
changes industry would make as a result of standards that require the 
use of different motor technologies for non-air over and AO-ESEMs. In 
addition, if DOE were to consider a TSL that would require TSL 2 for 
all equipment classes except TSL3 efficiency levels for low torque 
ESEMs, DOE seeks information related to potential ESEM size increase 
and impact on OEM markets at TSL 3 and above.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to EPCA. 86 FR 70892, 70908 (Dec. 
12, 2021). Although DOE has not conducted a comparative analysis to 
select the proposed new energy conservation standards, DOE notes that 
as compared to TSL 3 and TSL 4, TSL 2 has higher average LCC savings 
for consumers, significantly smaller percentages of consumers 
experiencing a net cost, a lower maximum decrease in INPV, lower 
manufacturer conversion costs, and a significant decrease in the 
likelihood of a major disruption to the both the ESEM market and the 
OEM markets that use ESEMs as an embedded product in their equipment, 
as DOE does not anticipate gaps in ESEM equipment offerings or a 
significant increase in the physical size of ESEMs at TSL 2.
    Although DOE considered proposing new standard levels for ESEMs by 
grouping the efficiency levels for each equipment class into TSLs, DOE 
evaluates all analyzed efficiency levels in its analysis. For all 
equipment classes, TSL 2 represents the maximum energy savings that 
does not result in significant negative economic impacts to ESEM 
manufacturers. At TSL 2, conversion costs are estimated to be $339 
million, significantly less than at TSL 3 ($1,118 million) or at TSL 4 
($2,156 million). At TSL 2, conversion costs represent a significantly 
smaller size of the sum of ESEM manufacturers' annual free cash flows 
for 2025 to 2028 (53 percent), than at TSL 3 (176 percent) or at TSL 4 
(339 percent) and a significantly smaller portion of ESEM 
manufacturers' no-new-standards case INPV (17 percent), than at TSL 3 
(55 percent) or at TSL 4 (107 percent). At TSL 2, ESEM manufacturers 
will have to redesign a significantly smaller portion of their ESEM 
models to meet the ELs set at TSL 2 (models representing 55 percent of 
all ESEM shipments), than at TSL 3 (91 percent) or at TSL 4 (99 
percent). Lastly, ESEM manufacturers' free cash flow remains positive 
at TSL 2 for all years leading up to the compliance date. Whereas at 
TSL 3 annual free cash flow is estimated to be -$313 million and at TSL 
4 annual free cash flow is estimated to be -$764 million in 2028, the 
year before the compliance year. Additionally, the ELs at the proposed 
TSL result in average positive LCC savings for all equipment class 
groups and significantly reduce the number of consumers experiencing a 
net cost to the point where DOE has tentatively concluded they are 
economically justified, as discussed for TSL 2 in the preceding 
paragraphs.
    Therefore, based on the previous considerations, DOE proposes to 
adopt the energy conservation standards for ESEMs at TSL 2, which was 
the recommended TSL by the Electric Motors Working Group. The proposed 
energy conservation standards for ESEMs, which are expressed as average 
full-load efficiency, are shown in Table V-44 through Table V-46.

                                   Table V-44--Proposed Energy Conservation Standards for High and Medium-Torque ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       59.5       59.5       57.5  ..........       59.5       59.5       57.5  .........
0.33...........................................................       64.0       64.0       62.0       50.5        64.0       64.0       62.0       50.5
0.5............................................................       68.0       69.2       68.0       52.5        68.0       67.4       68.0       52.5
0.75...........................................................       76.2       81.8       80.2       72.0        75.5       75.5       75.5       72.0
1..............................................................       80.4       82.6       81.1       74.0        77.0       80.0       77.0       74.0
1.5............................................................       81.5       83.8  .........  ..........       81.5       81.5       80.0  .........
2..............................................................       82.9       84.5  .........  ..........       82.5       82.5  .........  .........
3..............................................................       84.1  .........  .........  ..........       84.0  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 87135]]


                                         Table V-45--Proposed Energy Conservation Standards for Low-Torque ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       63.9       66.1       60.2       52.5        60.9       64.1       59.2       52.5
0.33...........................................................       66.9       69.7       65.0       56.6        63.9       67.7       64.0       56.6
0.5............................................................       68.8       70.1       66.8       57.1        65.8       68.1       65.8       57.1
0.75...........................................................       70.5       74.8       73.1       62.8        67.5       72.8       72.1       62.8
1..............................................................       74.3       77.1       77.3       65.7        71.3       75.1       76.3       65.7
1.5............................................................       79.9       82.1       80.5       72.2        76.9       80.1       79.5       72.2
2..............................................................       81.0       82.9       81.4       73.3        78.0       80.9       80.4       73.3
3..............................................................       82.4       84.0       82.5       74.9        79.4       82.0       81.5       74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                         Table V-46--Proposed Energy Conservation Standards for Polyphase ESEMs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Average full load efficiency
                                                                ----------------------------------------------------------------------------------------
                               hp                                                    Open                                      Enclosed
                                                                ----------------------------------------------------------------------------------------
                                                                   2-pole     4-pole     6-pole     8-pole      2-pole     4-pole     6-pole     8-pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.25...........................................................       65.6       69.5       67.5       62.0        66.0       68.0       66.0       62.0
0.33...........................................................       69.5       73.4       71.4       64.0        70.0       72.0       70.0       64.0
0.5............................................................       73.4       78.2       75.3       66.0        72.0       75.5       72.0       66.0
0.75...........................................................       76.8       81.1       81.7       70.0        75.5       77.0       74.0       70.0
1..............................................................       77.0       83.5       82.5       75.5        75.5       77.0       74.0       75.5
1.5............................................................       84.0       86.5       83.8       77.0        84.0       82.5       87.5       78.5
2..............................................................       85.5       86.5  .........       86.5        85.5       85.5       88.5       84.0
3..............................................................       85.5       86.9  .........       87.5        86.5       86.5       89.5       85.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Annualized Benefits and Costs of the Proposed Standards
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022$) of the 
benefits from operating equipment that meet the proposed standards 
(consisting primarily of operating cost savings from using less energy, 
minus increases in equipment purchase costs, and (2) the annualized 
monetary value of the climate and health benefits from emission 
reductions.
    Table V-47 shows the annualized values for ESEMs under TSL 2, 
expressed in 2022$. The results under the primary estimate are as 
follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for ESEMs is $543 million per year in increased 
equipment costs, while the estimated annual benefits are $2,757 million 
in reduced product operating costs, $542 million in climate benefits, 
and $836 million in health benefits. In this case, the net benefit 
amounts to $3,592 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards for ESEMs is $556 million per 
year in increased equipment costs, while the estimated annual benefits 
are $3,140 million in reduced operating costs, $542 million in climate 
benefits, and $1,052 million in health benefits. In this case, the net 
benefit amounts to $4,179 million per year.

               Table V-47--Annualized Monetized Benefits and Costs of Proposed Standards for ESEMs
                                                [Proposed TSL 2]
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2022$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           3,140           2,962           3,341
Climate Benefits *..............................................             542             526             562
Health Benefits **..............................................           1,052           1,021           1,089
Total Benefits [dagger].........................................           4,734           4,509           4,992
Consumer Incremental Equipment Costs [Dagger]...................             556             598             529
Net Benefits....................................................           4,179           3,911           4,464
Change in Producer Cashflow (INPV [dagger][dagger]).............       (25)-(13)       (25)-(13)       (25)-(13)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           2,757           2,615           2,921

[[Page 87136]]

 
Climate Benefits * (3% discount rate)...........................             542             526             562
Health Benefits **..............................................             836             814             863
Total Benefits [dagger].........................................           4,135           3,955           4,346
Consumer Incremental Equipment Costs [Dagger]...................             543             578             520
Net Benefits....................................................           3,592           3,377           3,826
Change in Producer Cashflow (INPV [dagger][dagger]).............       (25)-(13)       (25)-(13)       (25)-(13)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with ESEMs shipped in 2029-2058. These results
  include consumer, climate, and health benefits which accrue after 2058 from the equipment shipped in 2029-
  2058. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from
  the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In
  addition, incremental equipment costs reflect a constant rate in the Primary Estimate, an increasing rate in
  the Low Net Benefits Estimate, and a declining rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the
  Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  notice). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at
  a 3 percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs.
[dagger][dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
  impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
  the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price
  experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
  (the MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers' pricing decisions
  based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range
  of impacts, which is the rule's expected impact on the INPV. The change in INPV is the present value of all
  changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer
  profit margins. The annualized change in INPV is calculated using the industry weighted average cost of
  capital value of 9.1 percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete
  description of the industry weighted average cost of capital). For ESEMs, those values are -$25 million and -
  $13 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically
  justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two
  markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in
  the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit
  Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
  proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
  change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document, to
  provide additional context for assessing the estimated impacts of this rule to society, including potential
  changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were
  to include the INPV into the annualized net benefit calculation for this NOPR, the annualized net benefits
  would range from $4,154 million to $4,166 million at 3-percent discount rate and would range from $3,567
  million to $3,579 million at 7-percent discount rate. Numbers in parentheses are negative numbers.

D. Reporting, Certification, and Sampling Plan

    Manufacturers, including importers, must use equipment-specific 
certification templates to certify compliance to DOE. For currently 
regulated electric motors, the certification template is specified at 
10 CFR 429.36. DOE is not proposing new product-specific certification 
reporting requirements for ESEMs. However, as discussed in section 
III.C of this document, DOE proposes to amend the determinations of 
represented values for ESEMs.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and 
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879 
(April 11, 2023), requires agencies, to the extent permitted by law, to 
(1) propose or adopt a regulation only upon a reasoned determination 
that its benefits justify its costs (recognizing that some benefits and 
costs are difficult to quantify); (2) tailor regulations to impose the 
least burden on society, consistent with obtaining regulatory 
objectives, taking into account, among other things, and to the extent 
practicable, the costs of cumulative regulations; (3) select, in 
choosing among alternative regulatory approaches, those approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety, and other advantages; distributive impacts; 
and equity); (4) to the extent feasible, specify performance 
objectives, rather than specifying the behavior or manner of compliance 
that regulated entities must adopt; and (5) identify and assess 
available alternatives to direct regulation, including providing 
economic incentives to encourage the desired behavior, such as user 
fees or marketable permits, or providing information upon which choices 
can be made by the public. DOE emphasizes as well that E.O. 13563 
requires agencies to use the best available techniques to quantify 
anticipated present and future benefits and costs as accurately as 
possible. In its guidance, the Office of Information and Regulatory 
Affairs (``OIRA'') in the Office of Management and Budget (``OMB'') has 
emphasized

[[Page 87137]]

that such techniques may include identifying changing future compliance 
costs that might result from technological innovation or anticipated 
behavioral changes. For the reasons stated in the preamble, this 
proposed regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 
12866, DOE has provided to OIRA an assessment, including the underlying 
analysis, of benefits and costs anticipated from the proposed 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation why the planned regulatory action is preferable to the 
identified potential alternatives. These assessments are summarized in 
this preamble and further detail can be found in the technical support 
document for this proposed rulemaking.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
for any rule that by law must be proposed for public comment, unless 
the agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by E.O. 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's website (www.energy.gov/gc/office-general-counsel). DOE has 
prepared the following IRFA for the equipment that are the subject of 
this proposed rulemaking.
    For manufacturers of ESEMs, the Small Business Administration 
(``SBA'') has set a size threshold, which defines those entities 
classified as ``small businesses'' for the purposes of the statute. DOE 
used the SBA's small business size standards to determine whether any 
small entities would be subject to the requirements of the rule. (See 
13 CFR part 121.) The size standards are listed by North American 
Industry Classification System (``NAICS'') code and industry 
description and are available at www.sba.gov/document/support-table-size-standards. Manufacturing of ESEMs is classified under NAICS 
335312, ``Motor and Generator Manufacturing.'' The SBA sets a threshold 
of 1,250 employees or fewer for an entity to be considered as a small 
business for this category.
1. Description of Reasons Why Action Is Being Considered
    DOE previously established energy conservation standards for some 
types of electric motors at 10 CFR 431.25. These previous rulemakings 
did not establish energy conservation standards for ESEMs when 
establishing or amending energy conservation standards for other 
electric motors. In the March 2022 Preliminary Analysis, DOE analyzed 
potential efficiency levels for ESEMs. See 87 FR 11650 (March 2, 2022). 
On December 22, 2022, DOE received a joint recommendation for energy 
conservation standards for ESEMs. These standard levels were submitted 
jointly to DOE, by groups representing manufacturers, energy and 
environmental advocates, and consumer groups (the Electric Motors 
Working Group). The December 2022 Joint Recommendation recommends 
specific energy conservation standards for ESEMs.
2. Objectives of, and Legal Basis for, Rule
    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve the energy efficiency of certain types 
of industrial equipment, including ESEMs, a category of electric 
motors, the subject of this notice. (42 U.S.C. 6311(1)(A)).
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including electric motors. Any 
new or amended standard for covered equipment must be designed to 
achieve the maximum improvement in energy efficiency that the Secretary 
of Energy determines is technologically feasible and economically 
justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 
6295(o)(3)(B))
3. Description and Estimated Number of Small Entities Regulated
    To estimate the number of companies that could be small business 
manufacturers of ESEMs covered by this rulemaking, DOE conducted a 
market survey using publicly available information. DOE's research 
involved DOE's publicly available Compliance Certification Database 
(``CCD''), industry trade association membership directories (including 
NEMA), and information from previous rulemakings. DOE also asked 
stakeholders and industry representatives if they were aware of any 
other small manufacturers during manufacturer interviews and DOE 
working groups. DOE used information from these sources to create a 
list of companies that potentially manufacture ESEMs covered by this 
proposed rulemaking. As necessary, DOE contacted companies to determine 
whether they met the SBA's definition of a small business manufacturer. 
DOE screened out companies that do not offer equipment covered by this 
proposed rulemaking, do not meet the definition of a ``small 
business,'' or are foreign owned and operated.
    DOE initially identified approximately 74 unique potential 
manufacturers of ESEMs sold in the U.S that are covered by this 
proposed rulemaking. DOE screened out companies that had more than 
1,250 employees or companies that were completely foreign-owned and 
operated. Of the 74 manufacturers that potentially manufacture ESEMs 
covered by this proposed rulemaking, DOE identified 3 companies that 
meet SBA's definition of a small business.
4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    In this NOPR, DOE is proposing new energy conservation standards 
for ESEMs. The primary value added by these 3 small businesses is 
creating ESEMs that serve an application specific purpose that the OEMs 
require. This includes combining an ESEM with specific mechanic 
couplings, weatherproofing, or controls to suit the OEM's needs. Most 
small businesses manufacture motor housing and couplings but do not 
manufacture the rotors and stators used in the ESEMs they sell. While 
these small businesses may have to create new ESEM housings and/or 
couplings if the ESEM characteristics change in response to the 
proposed energy conservation

[[Page 87138]]

standards, DOE was not able to identify any small businesses that own 
their own lamination dies sets and winding machines that are used to 
manufacture rotors and stators for ESEMs.
    The 3 small businesses identified do not manufacture the rotors and 
stators of their ESEMs and instead purchase these components from other 
manufacturers. Thus, they would not need to purchase the machinery 
necessary to manufacture these components (i.e., would not need to 
purchase costly lamination dies sets and winding machines) nor would 
they need to spend R&D efforts to develop ESEM designs to meet energy 
conservation standards. Instead, these small manufacturers may have to 
create new moldings for ESEM housings (if the ESEM characteristics 
change in response to the proposed energy conservation standards).
    DOE estimated conversion costs associated with redesigning an 
equipment line for ESEM housings. DOE estimates this will cost 
approximately $50,000 in molding equipment per ESEM housing; $37,330 in 
engineering design effort per ESEM housing; \104\ and $10,000 in 
testing costs per ESEM housing. Based on these estimates, each ESEM 
housing that will need to be redesigned would cost a small business 
approximately $97,330.
---------------------------------------------------------------------------

    \104\ DOE estimated that it would take approximately three 
months of engineering time to redesign each ESEM housing. Based on 
data from BLS, the mean hourly wage of an electrical engineer is 
$54.83 (www.bls.gov/oes/current/oes172071.htm) and wages comprise 
70.5 percent of an employee's total compensation (www.bls.gov/news.release/archives/ecec_06162023.pdf).
    $54.83 (hourly wage) / 0.705 (wage as a percentage of total 
compensation) = $77.77 (fully burdened hourly labor rate).
    $77.77 x 8 (hours in a workday) x 20 (working days in a month) x 
3 (months) = $37,330
---------------------------------------------------------------------------

    DOE displays in Table VI-1 the estimated average conversion costs 
per small business compared to the annual revenue for each small 
business. DOE used D&B Hoovers \105\ to estimate the annual revenue for 
each small business. Manufacturers will have 4 years between the 
expected publication of the final rule and the date of compliance with 
the proposed energy conservation standards. Therefore, DOE presents the 
estimated conversion costs and testing costs as a percent of the 
estimated 4 years of annual revenue for each small business.
---------------------------------------------------------------------------

    \105\ app.avention.com.

                Table VI-1--Estimated Conversion Costs and Annual Revenue for Each Small Business
----------------------------------------------------------------------------------------------------------------
                                         Number of ESEM                                             Conversion
                                          housing that      Total      Estimated    4 Years of   costs as a % of
              Manufacturer                 need to be     conversion     annual       annual        4 years of
                                           redesigned       costs       revenue       revenue     annual revenue
----------------------------------------------------------------------------------------------------------------
Small Business 1.......................              27   $2,627,910   $6,270,000   $25,080,000             10.5
Small Business 2.......................              19    1,849,270    10,120,00    40,480,000              4.6
Small Business 3.......................              24    2,335,920   28,210,000   112,840,000              2.1
                                        ------------------------------------------------------------------------
    Average Small Business.............              23    2,271,033   14,866,667    59,466,667              3.8
----------------------------------------------------------------------------------------------------------------

5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    As described in section IV.A. of this document, DOE believes the 
standards proposed in this NOPR would not impact manufacturers of 
consumer products. In commercial equipment, DOE identified the 
following equipment as potentially incorporating ESEMs: walk-in coolers 
and freezers, circulator pumps, air circulating fans, and commercial 
unitary air conditioning equipment. If the proposed energy conservation 
standards for these rules finalize as proposed, DOE has identified that 
these rules would all: (1) have a compliance year that is at or before 
the ESEM standard compliance year (2029) and/or (2) require a motor 
that is either outside of the scope of this rule (e.g., an ECM) or an 
ESEM with an efficiency above the proposed ESEM standards, and 
therefore not be impacted by the proposed ESEM rule (i.e., the ESEM 
rule would not trigger a redesign of these equipment).
6. Significant Alternatives to the Rule
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's proposal to adopt standards 
represented by TSL 2. In reviewing alternatives to the proposed rule, 
DOE examined energy conservation standards set at lower efficiency 
levels. While TSL 1 would reduce the impacts on small business 
manufacturers, it would come at the expense of a reduction in energy 
savings and consumer NPV. TSL 1 achieves 65 percent lower energy 
savings and 69 percent lower consumer NPV compared to the energy 
savings at TSL 2.
    Based on the presented discussion, proposing standards at TSL 2 
balances the benefits of the energy savings at TSL 2 with the potential 
burdens placed on ESEM manufacturers, including small business 
manufacturers. Accordingly, DOE does not propose one of the other TSLs 
considered in the analysis, or the other policy alternatives examined 
as part of the regulatory impact analysis and included in chapter 17 of 
the NOPR TSD.
    Additional compliance flexibilities may be available through other 
means. Manufacturers subject to DOE's energy efficiency standards may 
apply to DOE's Office of Hearings and Appeals for exception relief 
under certain circumstances. Manufacturers should refer to 10 CFR part 
1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Manufacturers of expanded scope electric motors must test their 
equipment according to the DOE test procedures for ESEMs, including any 
amendments adopted for those test procedures, and use the results of 
the test procedure and applicable sampling plan if they choose to make 
representations of the energy efficiency or energy use of ESEMs. DOE 
has established regulations for recordkeeping requirements for all 
covered consumer products and commercial equipment, including ESEMs. 
(See generally 10 CFR part 429). The collection-of-information 
requirement for the testing and recordkeeping is subject to review and 
approval by OMB under the Paperwork Reduction Act (``PRA''). This 
requirement has been approved by OMB under OMB control number 1910-1400 
and is in the process of being renewed. Public reporting burden is 
estimated to average 35 hours per response,

[[Page 87139]]

including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. DOE does not currently have 
certification or labeling requirements for ESEMs and is not proposing 
to establish either of those as part of this proposed rule. Thus, DOE 
expects the recordkeeping requirements associated with testing and 
maintaining test data would be less than the average estimate per 
response for this paperwork package.
    Currently, DOE is seeking comment on DOE's renewal of its paperwork 
reduction approval under OMB control number 1910-1400. See 88 FR 65994 
(Sept. 26, 2023).
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for rulemakings that establish energy 
conservation standards for consumer products or industrial equipment. 
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this 
proposed rulemaking qualifies for categorical exclusion B5.1 because it 
is a rulemaking that establishes energy conservation standards for 
consumer products or industrial equipment, none of the exceptions 
identified in categorical exclusion B5.1(b) apply, no extraordinary 
circumstances exist that require further environmental analysis, and it 
otherwise meets the requirements for application of a categorical 
exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review 
before issuing the final rule.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt state law or that have federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the states and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by state and local officials in the development of regulatory 
policies that have federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this proposed rule and has 
tentatively determined that it would not have a substantial direct 
effect on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. EPCA governs 
and prescribes Federal preemption of state regulations as to energy 
conservation for the equipment that are the subject of this proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (See 42 U.S.C. 
6316(a) and (b); 42 U.S.C. 6297) Therefore, no further action is 
required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation: 
(1) clearly specifies the preemptive effect, if any, (2) clearly 
specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this proposed rule meets the 
relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on state, local, and Tribal governments and the 
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C. 
1531). For a proposed regulatory action likely to result in a rule that 
may cause the expenditure by state, local, and Tribal governments, in 
the aggregate, or by the private sector of $100 million or more in any 
one year (adjusted annually for inflation), section 202 of UMRA 
requires a Federal agency to publish a written statement that estimates 
the resulting costs, benefits, and other effects on the national 
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal 
agency to develop an effective process to permit timely input by 
elected officers of state, local, and Tribal governments on a proposed 
``significant intergovernmental mandate,'' and requires an agency plan 
for giving notice and opportunity for timely input to potentially 
affected small governments before establishing any requirements that 
might significantly or uniquely affect them. On March 18, 1997, DOE 
published a statement of policy on its process for intergovernmental 
consultation under UMRA. 62 FR 12820. DOE's policy statement is also 
available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    Although this proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more in any one year by the private sector. Such expenditures may 
include: (1) investment in research and development and in capital 
expenditures by ESEM manufacturers in the years between the final rule 
and the compliance date for the new standards and (2) incremental 
additional expenditures by consumers to purchase higher-efficiency 
ESEMs, starting at the compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and

[[Page 87140]]

Executive Order 12866. The SUPPLEMENTARY INFORMATION section of this 
NOPR and the TSD for this proposed rule respond to those requirements.
    Under section 205 of UMRA, DOE is obligated to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the proposed rule unless DOE publishes 
an explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6316(a) 
and 42 U.S.C. 6295(o), this proposed rule would establish new energy 
conservation standards for that are designed to achieve the maximum 
improvement in energy efficiency that DOE has determined to be both 
technologically feasible and economically justified. A full discussion 
of the alternatives considered by DOE is presented in chapter 17 of the 
TSD for this proposed rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This proposed rule would not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15, 
1988), DOE has determined that this proposed rule would not result in 
any takings that might require compensation under the Fifth Amendment 
to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this NOPR under the OMB and DOE guidelines and has concluded 
that it is consistent with applicable policies in those guidelines.

K. Review Under Executive Order 13211

    E.O. 13211, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22, 
2001), requires Federal agencies to prepare and submit to OIRA at OMB, 
a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule, and that (1) is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that this proposed regulatory action, 
which proposes new energy conservation standards for ESEMs, is not a 
significant energy action because the proposed standards are not likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy, nor has it been designated as such by the Administrator 
at OIRA. Accordingly, DOE has not prepared a Statement of Energy 
Effects on this proposed rule.

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a report describing that peer 
review.\106\ Generation of this report involved a rigorous, formal, and 
documented evaluation using objective criteria and qualified and 
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the 
productivity and management effectiveness of programs and/or projects. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged with the National Academy of 
Sciences to review DOE's analytical methodologies to ascertain whether 
modifications are needed to improve DOE's analyses. DOE is in the 
process of evaluating the resulting report.\107\
---------------------------------------------------------------------------

    \106\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed October 10, 2023).
    \107\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

VII. Public Participation

A. Attendance at the Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this document. If 
you plan to attend the public meeting, please notify the Appliance and 
Equipment Standards staff at (202) 287-1445 or 
[email protected].
    Please note that foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures which require advance 
notice prior to attendance at the public meeting. If a foreign national 
wishes to participate in the public meeting, please inform DOE of this 
fact as soon as possible by contacting Ms. Regina Washington at

[[Page 87141]]

(202) 586-1214 or by email ([email protected]) so that the 
necessary procedures can be completed.
    DOE requires visitors to have laptops and other devices, such as 
tablets, checked upon entry into the Forrestal Building. Any person 
wishing to bring these devices into the building will be required to 
obtain a property pass. Visitors should avoid bringing these devices, 
or allow an extra 45 minutes to check in. Please report to the 
visitor's desk to have devices checked before proceeding through 
security.
    Due to the REAL ID Act implemented by the Department of Homeland 
Security (``DHS''), there have been recent changes regarding ID 
requirements for individuals wishing to enter Federal buildings from 
specific states and U.S. territories. DHS maintains an updated website 
identifying the state and territory driver's licenses that currently 
are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcement-brief. A driver's licenses from a state or territory 
identified as not compliant by DHS will not be accepted for building 
entry and one of the alternate forms of ID listed below will be 
required. Acceptable alternate forms of Photo-ID include U.S. Passport 
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card 
issued by states and territories as identified on the DHS website 
(Enhanced licenses issued by these states and territories are clearly 
marked Enhanced or Enhanced Driver's License); a military ID or other 
Federal Government-issued Photo-ID card.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's website at www.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/50. Participants are 
responsible for ensuring their systems are compatible with the webinar 
software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this document. The request and advance copy of statements must be 
received at least one week before the public meeting and are to be 
emailed. Please include a telephone number to enable DOE staff to make 
follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C. 
6306) A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. There shall not be discussion of proprietary 
information, costs or prices, market share, or other commercial matters 
regulated by U.S. anti-trust laws. After the public meeting, interested 
parties may submit further comments on the proceedings, as well as on 
any aspect of the proposed rulemaking, until the end of the comment 
period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present a general overview of the topics addressed in 
this rulemaking, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this proposed rulemaking. Each participant will be 
allowed to make a general statement (within time limits determined by 
DOE), before the discussion of specific topics. DOE will allow, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly. Participants should 
be prepared to answer questions by DOE and by other participants 
concerning these issues. DOE representatives may also ask questions of 
participants concerning other matters relevant to this proposed 
rulemaking. The official conducting the public meeting will accept 
additional comments or questions from those attending, as time permits. 
The presiding official will announce any further procedural rules or 
modification of the previous procedures that may be needed for the 
proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this document and will be accessible on the DOE website. In 
addition, any person may buy a copy of the transcript from the 
transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed

[[Page 87142]]

simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If 
you do not want your personal contact information to be publicly 
viewable, do not include it in your comment or any accompanying 
documents. Instead, provide your contact information in a cover letter. 
Include your first and last names, email address, telephone number, and 
optional mailing address. The cover letter will not be publicly 
viewable as long as it does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (``faxes'') will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: one copy of the document marked 
``confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    (1) DOE requests comments on the proposal to use a represented 
value of average full-load efficiency for ESEMs and proposed revisions 
to 10 CFR 429.64 and 429.70(j).
    (2) DOE requests comment on the proposed equipment classes for this 
NOPR.
    (3) DOE requests comment on the remaining technology options 
considered in this NOPR.
    (4) DOE requests comment on the representative units used in this 
NOPR.
    (5) DOE requests comment on the baseline efficiencies used in this 
NOPR.
    (6) DOE requests comment on the proposal to constrain the frame 
size of all efficiency levels to that of the baseline unit.
    (7) DOE requests comment on the assumption that higher ELs 
(particularly ELs 3 and 4) can be reached without significant increase 
in size.
    (8) DOE requests comment on the potential for market disruption at 
higher ELs and if manufacturers could design motors at ELs 3 and 4 that 
do not increase in size, or if for the final rule, DOE should model 
motors larger than what is considered in this NOPR.
    (9) DOE requests data and information to characterize the 
distribution channels for ESEMs and associated market shares.
    (10) DOE requests data and information to characterize the 
distribution of ESEMs by sector (commercial, industrial, and 
residential sectors) as well as the distribution of ESEMs by 
application in each sector.
    (11) DOE seeks data and additional information to characterize ESEM 
operating loads.
    (12) DOE requests comment on the distribution of average annual 
operating hours by application and sector used to characterize the 
variability in energy use for ESEMs
    (13) DOE seeks data and additional information to support the 
analysis of projected energy use impacts related to any increases in 
motor nominal speed.
    (14) DOE requests data and information regarding the most 
appropriate price trend to use to project ESEM prices.
    (15) DOE requests comment on whether any of the efficiency levels 
considered in this NOPR might lead to an increase in installation 
costs, and if so, DOE seeks supporting data regarding the magnitude of 
the increased cost per unit for each relevant efficiency level and the 
reasons for those differences.
    (16) DOE requests comment on whether any of the efficiency levels 
considered in this NOPR might lead to an increase in maintenance and 
repair costs, and if so, DOE seeks supporting data regarding the 
magnitude of the increased cost per unit for each relevant efficiency 
level and the reasons for those differences.
    (17) DOE requests comment on the equipment lifetimes (both in years 
and in mechanical hours) used for each representative unit considered 
in the LCC and PBP analyses
    (18) DOE seeks information and data to help establish efficiency 
distribution in the no-new standards case for ESEMs. DOE requests data 
and information on any trends in the electric motor market that could 
be used to forecast expected trends in market share by efficiency 
levels for each equipment class.
    (19) DOE requests comment and additional data on its 2020 shipments 
estimates for ESEMs. DOE seeks comment on the methodology used to 
project future shipments of ESEMs. DOE seeks information on other data 
sources that can be used to estimate future shipments.
    (20) DOE requests comment and data regarding the potential increase 
in utilization of electric motors due to any increase in efficiency 
(``rebound effect'').
    (21) DOE requests comment and data on the overall methodology used 
for the consumer subgroup analysis. DOE requests comment on whether 
additional consumer subgroups may be disproportionately affected by a 
new standard and warrant additional analysis in the final rule.
    (22) DOE requests comment on how to address the climate benefits 
and non-monetized effects of the proposal.
    (23) DOE requests comment on if manufacturers would have the 
engineering capacity to conduct design efforts to be able to offer a 
full portfolio of complaint ESEM at TSL 4. If not, please provide any 
data or information on the potential impacts that could arise due to 
these market gaps in equipment offerings.
    (24) DOE requests comment on if manufacturers would have the 
engineering capacity to conduct design efforts to be able to offer a 
full portfolio of compliant ESEMs at TSL 3. If not, please provide any 
data or information

[[Page 87143]]

on the potential impacts that could arise due to these market gaps in 
equipment offerings.
    (25) DOE seeks comment on these alternative proposed standard 
levels. DOE requests comment on the unintended market consequences and 
the changes industry would make as a result of standards that require 
the use of different motor technologies for non-air over and AO-ESEMs. 
In addition, if DOE were to consider a TSL that would require TSL 2 for 
all equipment classes except TSL3 efficiency levels for low torque 
ESEMs, DOE seeks information related to potential ESEM size increase 
and impact on OEM markets at TSL 3 and above.
    Additionally, DOE welcomes comments on other issues relevant to the 
conduct of this proposed rulemaking that may not specifically be 
identified in this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and announcement of public meeting.

List of Subjects

10 CFR Part 429

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Reporting and 
recordkeeping requirements.

10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation test procedures, and Reporting and 
recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on November 
21, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary 
for Energy Efficiency and Renewable Energy, pursuant to delegated 
authority from the Secretary of Energy. That document with the original 
signature and date is maintained by DOE. For administrative purposes 
only, and in compliance with requirements of the Office of the Federal 
Register, the undersigned DOE Federal Register Liaison Officer has been 
authorized to sign and submit the document in electronic format for 
publication, as an official document of the Department of Energy. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

    Signed in Washington, DC, on November 29, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE is proposing to 
amend parts 429 and 431 of chapter II, subchapter D, of title 10 of the 
Code of Federal Regulations, as set forth below:

PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER 
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 429 continues to read as follows:

    Authority: 2 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
2. Amend Sec.  429.64 by:
0
a. Revising paragraphs (a)(3) and (d)(2);
0
b. Revising paragraphs (e) introductory text and (e)(1)(iii);
0
c. Redesignating paragraph (e)(1)(iv) as paragraph (e)(1)(v);
0
d. Adding paragraph (e)(1)(iv); and
0
e. Revising paragraphs (e)(2) introductory text and (e)(2)(ii).
    The revisions and addition read as follows:


Sec.  429.64  Electric motors.

    (a) * * *
    (3) On or after April 17, 2023, manufacturers of electric motors 
that are subject to the test procedures in appendix B of subpart B of 
part 431 but are not subject to the energy conservation standards in 
subpart B of part 431 of this subchapter, must, if they chose to 
voluntarily make representations of energy efficiency, follow the 
provisions in paragraph (e) of this section.
* * * * *
    (d) * * *
    (2) Testing was conducted using a laboratory other than an 
accredited laboratory that meets the requirements of paragraph (f) of 
this section, or the represented value of the electric motor basic 
model was determined through the application of an AEDM pursuant to the 
requirements of Sec.  429.70(j), and a third-party certification 
organization that is nationally recognized in the United States under 
Sec.  429.73 has certified the represented value of the electric motor 
basic model through issuance of a certificate of conformity for the 
basic model.
    (e) Determination of represented value. Manufacturers of electric 
motors that are subject to energy conservation standards in subpart B 
of part 431 of this subchapter, and for which minimum values of nominal 
full-load efficiency are prescribed, must determine the represented 
value of nominal full-load efficiency (inclusive of the inverter for 
inverter-only electric motors) for each basic model of electric motor 
either by testing in conjunction with the applicable sampling 
provisions or by applying an AEDM as set forth in this section and in 
Sec.  429.70(j). Manufacturers of electric motors that are subject to 
energy conservation standards in subpart B of part 431 of this 
subchapter, and for which minimum values of average full-load 
efficiency are prescribed, must determine the represented value of 
average full-load efficiency (inclusive of the inverter for inverter-
only electric motors) for each basic model of electric motor either by 
testing in conjunction with the applicable sampling provisions or by 
applying an AEDM as set forth in this section and in Sec.  429.70(j).
    (1) * * *
    (iii) Nominal Full-load Efficiency. Manufacturers of electric 
motors that are subject to energy conservation standards in subpart B 
of part 431 of this subchapter, and for which minimum values of nominal 
full-load efficiency are prescribed, must determine the nominal full-
load efficiency by selecting an efficiency from the ``Nominal Full-load 
Efficiency'' table in appendix B that is no greater than the average 
full-load efficiency of the basic model as calculated in paragraph 
(e)(1)(ii) of this section.
    (iv) Represented value. For electric motors subject to energy 
conservation standards in subpart B of part 431 of this subchapter and 
for which minimum values of nominal full-load efficiency are prescribed 
the represented value is the nominal full-load efficiency of a basic 
model of electric motor and is to be used in marketing materials and 
all public representations, as the certified value of efficiency, and 
on the nameplate. (See Sec.  431.31(a) of this subchapter.) For 
electric motors subject to energy conservation standards in subpart B 
of part 431 of this subchapter and for which minimum values of average 
full-load efficiency are prescribed the represented value is the 
average full-load efficiency of a basic model of electric motor and is 
to be used in marketing materials and all public representations, as 
the certified value of efficiency, and on the nameplate. (See Sec.  
431.31(a) of this subchapter.)
* * * * *
    (2) Alternative efficiency determination methods. In lieu of

[[Page 87144]]

testing, the represented value of a basic model of electric motor must 
be determined through the application of an AEDM pursuant to the 
requirements of Sec.  429.70(j) and the provisions of this section, 
where:
* * * * *
    (ii) For electric motors subject to energy conservation standards 
in subpart B of part 431 of this subchapter and for which minimum 
values of nominal full-load efficiency are prescribed the represented 
value is the nominal full-load efficiency of a basic model of electric 
motor and is to be used in marketing materials and all public 
representations, as the certified value of efficiency, and on the 
nameplate. (See Sec.  431.31(a) of this subchapter) Determine the 
nominal full-load efficiency by selecting a value from the ``Nominal 
Full-Load Efficiency'' table in appendix B to subpart B of this part, 
that is no greater than the simulated full-load efficiency predicted by 
the AEDM for the basic model. For electric motors subject to energy 
conservation standards in subpart B of part 431 of this subchapter and 
for which minimum values of average full-load efficiency are prescribed 
the represented value is the average full-load efficiency of a basic 
model of electric motor and is to be used in marketing materials and 
all public representations, as the certified value of efficiency, and 
on the nameplate. (See Sec.  431.31(a) of this subchapter.)
* * * * *
0
3. Amend Sec.  429.70 by revising paragraph (j)(2)(i)(D) to read as 
follows:


Sec.  429.70  Alternative methods for determining energy efficiency and 
energy use.

* * * * *
    (j) * * *
    (2) * * *
    (i) * * *
    (D) Each basic model must have the lowest represented value of 
nominal full-load efficiency or represented value of average full-load 
efficiency, as applicable, among the basic models within the same 
equipment class.
* * * * *

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
4. The authority citation for part 431 continues to read as follows:

    Authority: 42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
5. Amend Sec.  431.12 by adding in alphabetical order definitions for 
``Capacitor start capacitor run motor'', ``Capacitor start induction 
run motor'', ``Permanent split capacitor motor'', ``Polyphase motor'', 
``Shaded pole motor'', and ``Split-phase motor'' to read as follows:


Sec.  431.12  Definitions.

* * * * *
    Capacitor start capacitor run motor means a single-phase induction 
electric motor equipped with a start capacitor to provide the starting 
torque, as well as a run capacitor to maintain a running torque while 
the motor is loaded.
    Capacitor start induction run motor means a single-phase induction 
electric motor equipped with a start capacitor to provide the starting 
torque, which is capable of operating without a run capacitor.
* * * * *
    Permanent split capacitor motor means a single-phase induction 
electric motor that has a capacitor permanently connected in series 
with the starting winding of the motor and is permanently connected in 
the circuit both at starting and running conditions of the motor.
* * * * *
    Polyphase motor means an electric motor that has a stator 
containing multiple distinct windings per motor pole, driven by 
corresponding time-shifted sine waves.
* * * * *
    Shaded pole motor means a self-starting single-phase induction 
electric motor with a copper ring shading one of the poles.
* * * * *
    Split-phase motor means a single-phase induction electric motor 
that possesses two windings: a main/running winding, and a starting/
auxiliary winding.
* * * * *
0
6. Revise Sec.  431.25 to read as follows:


Sec.  431.25  Energy conservation standards and effective dates.

    (a) For purposes of determining the required minimum nominal full-
load efficiency or minimum average full-load efficiency of an electric 
motor that has a horsepower or kilowatt rating between two horsepower 
or two kilowatt ratings listed in any table of energy conservation 
standards in paragraphs (b) through (d) of this section, each such 
electric motor shall be deemed to have a listed horsepower or kilowatt 
rating, determined as follows:
    (1) A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    (2) A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
or
    (3) A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = (\1/0.746\) horsepower. The 
conversion should be calculated to three significant decimal places, 
and the resulting horsepower shall be rounded in accordance with 
paragraph (a)(1) or (a)(2) of this section, whichever applies.
    (b) This section applies to electric motors manufactured (alone or 
as a component of another piece of equipment) on or after June 1, 2016, 
but before June 1, 2027, that satisfy the criteria in paragraph 
(b)(1)(i) of this section, with the exclusion listed in paragraph 
(b)(1)(ii) of this section.
    (1) Scope. (i) The standards in paragraph (b)(2) of this section 
apply only to electric motors, including partial electric motors, that 
satisfy the following criteria:
    (A) Are single-speed, induction motors;
    (B) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (C) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
    (D) Operate on polyphase alternating current 60-hertz sinusoidal 
line power;
    (E) Are rated 600 volts or less;
    (F) Have a 2-, 4-, 6-, or 8-pole configuration,
    (G) Are built in a three-digit or four-digit NEMA frame size (or 
IEC metric equivalent), including those designs between two consecutive 
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA 
frame size (or IEC metric equivalent),
    (H) Produce at least one horsepower (0.746 kW) but not greater than 
500 horsepower (373 kW); and
    (I) Meet all of the performance requirements of one of the 
following motor types: A NEMA Design A, B, or C motor or an IEC Design 
N, NE, NEY, NY or H, HE, HEY, HY motor.
    (ii) The standards in paragraph (b)(2) of this section do not apply 
to the following electric motors exempted by the Secretary, or any 
additional electric motors that the Secretary may exempt:
    (A) Air-over electric motors;
    (B) Component sets of an electric motor;
    (C) Liquid-cooled electric motors;
    (D) Submersible electric motors; and
    (E) Inverter-only electric motors.
    (2) Standards. (i) Each NEMA Design A motor, NEMA Design B motor, 
and IEC Design N (including NE, NEY, or NY variants) motor that is an 
electric motor meeting the criteria in paragraph (b)(1) of this section 
and with a power

[[Page 87145]]

rating from 1 horsepower through 500 horsepower, but excluding fire 
pump electric motors, shall have a nominal full-load efficiency of not 
less than the following:

  Table 1 to Paragraph (b)(2)(i)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire
                                                             Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       77.0       77.0       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5...........................................................       85.5       85.5       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2...........................................................       86.5       85.5       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7...........................................................       88.5       86.5       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.........................................................       89.5       88.5       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5..........................................................       90.2       89.5       91.7       91.7       91.0       91.7       89.5       90.2
15/11...........................................................       91.0       90.2       92.4       93.0       91.7       91.7       89.5       90.2
20/15...........................................................       91.0       91.0       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.........................................................       91.7       91.7       93.6       93.6       93.0       93.0       90.2       91.0
30/22...........................................................       91.7       91.7       93.6       94.1       93.0       93.6       91.7       91.7
40/30...........................................................       92.4       92.4       94.1       94.1       94.1       94.1       91.7       91.7
50/37...........................................................       93.0       93.0       94.5       94.5       94.1       94.1       92.4       92.4
60/45...........................................................       93.6       93.6       95.0       95.0       94.5       94.5       92.4       93.0
75/55...........................................................       93.6       93.6       95.4       95.0       94.5       94.5       93.6       94.1
100/75..........................................................       94.1       93.6       95.4       95.4       95.0       95.0       93.6       94.1
125/90..........................................................       95.0       94.1       95.4       95.4       95.0       95.0       94.1       94.1
150/110.........................................................       95.0       94.1       95.8       95.8       95.8       95.4       94.1       94.1
200/150.........................................................       95.4       95.0       96.2       95.8       95.8       95.4       94.5       94.1
250/186.........................................................       95.8       95.0       96.2       95.8       95.8       95.8       95.0       95.0
300/224.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
350/261.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
400/298.........................................................       95.8       95.8       96.2       95.8  .........  .........  .........  .........
450/336.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
500/373.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) Each NEMA Design C motor and IEC Design H (including HE, HEY, 
or HY variants) electric motor meeting the criteria in paragraph (b)(1) 
of this section and with a power rating from 1 horsepower through 200 
horsepower, shall have a nominal full-load efficiency that is not less 
than the following:

Table 2 to Paragraph (b)(2)(ii)--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H, HE, HEY or HY
                                                 Motors at 60 Hz
----------------------------------------------------------------------------------------------------------------
                                                                Nominal full-load efficiency (%)
                                               -----------------------------------------------------------------
 Motor horsepower/standard kilowatt equivalent         4 Pole                6 Pole                8 Pole
                                               -----------------------------------------------------------------
                                                 Enclosed     Open     Enclosed     Open     Enclosed     Open
----------------------------------------------------------------------------------------------------------------
1/.75.........................................       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.......................................       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5.........................................       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2.........................................       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7.........................................       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.......................................       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5........................................       91.7       91.7       91.0       91.7       89.5       90.2
15/11.........................................       92.4       93.0       91.7       91.7       89.5       90.2
20/15.........................................       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.......................................       93.6       93.6       93.0       93.0       90.2       91.0
30/22.........................................       93.6       94.1       93.0       93.6       91.7       91.7
40/30.........................................       94.1       94.1       94.1       94.1       91.7       91.7
50/37.........................................       94.5       94.5       94.1       94.1       92.4       92.4
60/45.........................................       95.0       95.0       94.5       94.5       92.4       93.0
75/55.........................................       95.4       95.0       94.5       94.5       93.6       94.1
100/75........................................       95.4       95.4       95.0       95.0       93.6       94.1
125/90........................................       95.4       95.4       95.0       95.0       94.1       94.1
150/110.......................................       95.8       95.8       95.8       95.4       94.1       94.1
200/150.......................................       96.2       95.8       95.8       95.4       94.5       94.1
----------------------------------------------------------------------------------------------------------------


[[Page 87146]]

    (iii) Each fire pump electric motor meeting the criteria in 
paragraph (b)(1) of this section and with a power rating of 1 
horsepower through 500 horsepower, shall have a nominal full-load 
efficiency that is not less than the following:

                         Table 3 to Paragraph (b)(2)(iii)--Nominal Full-Load Efficiencies of Fire Pump Electric Motors at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       75.5  .........       82.5       82.5       80.0       80.0       74.0       74.0
1.5/1.1.........................................................       82.5       82.5       84.0       84.0       85.5       84.0       77.0       75.5
2/1.5...........................................................       84.0       84.0       84.0       84.0       86.5       85.5       82.5       85.5
3/2.2...........................................................       85.5       84.0       87.5       86.5       87.5       86.5       84.0       86.5
5/3.7...........................................................       87.5       85.5       87.5       87.5       87.5       87.5       85.5       87.5
7.5/5.5.........................................................       88.5       87.5       89.5       88.5       89.5       88.5       85.5       88.5
10/7.5..........................................................       89.5       88.5       89.5       89.5       89.5       90.2       88.5       89.5
15/11...........................................................       90.2       89.5       91.0       91.0       90.2       90.2       88.5       89.5
20/15...........................................................       90.2       90.2       91.0       91.0       90.2       91.0       89.5       90.2
25/18.5.........................................................       91.0       91.0       92.4       91.7       91.7       91.7       89.5       90.2
30/22...........................................................       91.0       91.0       92.4       92.4       91.7       92.4       91.0       91.0
40/30...........................................................       91.7       91.7       93.0       93.0       93.0       93.0       91.0       91.0
50/37...........................................................       92.4       92.4       93.0       93.0       93.0       93.0       91.7       91.7
60/45...........................................................       93.0       93.0       93.6       93.6       93.6       93.6       91.7       92.4
75/55...........................................................       93.0       93.0       94.1       94.1       93.6       93.6       93.0       93.6
100/75..........................................................       93.6       93.0       94.5       94.1       94.1       94.1       93.0       93.6
125/90..........................................................       94.5       93.6       94.5       94.5       94.1       94.1       93.6       93.6
150/110.........................................................       94.5       93.6       95.0       95.0       95.0       94.5       93.6       93.6
200/150.........................................................       95.0       94.5       95.0       95.0       95.0       94.5       94.1       93.6
250/186.........................................................       95.4       94.5       95.0       95.4       95.0       95.4       94.5       94.5
300/224.........................................................       95.4       95.0       95.4       95.4       95.0       95.4  .........  .........
350/261.........................................................       95.4       95.0       95.4       95.4       95.0       95.4  .........  .........
400/298.........................................................       95.4       95.4       95.4       95.4  .........  .........  .........  .........
450/336.........................................................       95.4       95.8       95.4       95.8  .........  .........  .........  .........
500/373.........................................................       95.4       95.8       95.8       95.8  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (c) This section applies to electric motors manufactured (alone or 
as a component of another piece of equipment) on or after June 1, 2027, 
but before January 1, 2029, that satisfy the criteria in paragraph 
(c)(1)(i) of this section, with the exclusion listed in paragraph 
(c)(1)(ii) of this section.
    (1) Scope. (i) The standards in paragraph (c)(2) of this section 
apply only to electric motors, including partial electric motors, that 
satisfy the following criteria:
    (A) Are single-speed, induction motors;
    (B) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (C) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
    (D) Operate on polyphase alternating current 60-hertz sinusoidal 
line power;
    (E) Are rated 600 volts or less;
    (F) Have a 2-, 4-, 6-, or 8-pole configuration,
    (G) Are built in a three-digit or four-digit NEMA frame size (or 
IEC metric equivalent), including those designs between two consecutive 
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA 
frame size (or IEC metric equivalent), or have an air-over enclosure 
and a specialized frame size,
    (H) Produce at least one horsepower (0.746 kW) but not greater than 
750 horsepower (559 kW); and
    (I) Meet all of the performance requirements of one of the 
following motor types: A NEMA Design A, B, or C motor or an IEC Design 
N, NE, NEY, NY or H, HE, HEY, HY motor.
    (ii) The standards in paragraph (c)(2) of this section do not apply 
to the following electric motors exempted by the Secretary, or any 
additional electric motors that the Secretary may exempt:
    (A) Component sets of an electric motor;
    (B) Liquid-cooled electric motors;
    (C) Submersible electric motors; and
    (D) Inverter-only electric motors.
    (2) Standards. (i) Each NEMA Design A motor, NEMA Design B motor, 
and IEC Design N (including NE, NEY, or NY variants) motor that is an 
electric motor meeting the criteria in paragraph (c)(1) of this section 
but excluding fire pump electric motors and air-over electric motors, 
and with a power rating from 1 horsepower through 750 horsepower, shall 
have a nominal full-load efficiency of not less than the following:

  Table 4 to Paragraph (c)(2)(i)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding Fire
                                               Pump Electric Motors and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       77.0       77.0       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       86.5       86.5       87.5       86.5       78.5       77.0

[[Page 87147]]

 
2/1.5...........................................................       85.5       85.5       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2...........................................................       86.5       85.5       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7...........................................................       88.5       86.5       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.........................................................       89.5       88.5       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5..........................................................       90.2       89.5       91.7       91.7       91.0       91.7       89.5       90.2
15/11...........................................................       91.0       90.2       92.4       93.0       91.7       91.7       89.5       90.2
20/15...........................................................       91.0       91.0       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.........................................................       91.7       91.7       93.6       93.6       93.0       93.0       90.2       91.0
30/22...........................................................       91.7       91.7       93.6       94.1       93.0       93.6       91.7       91.7
40/30...........................................................       92.4       92.4       94.1       94.1       94.1       94.1       91.7       91.7
50/37...........................................................       93.0       93.0       94.5       94.5       94.1       94.1       92.4       92.4
60/45...........................................................       93.6       93.6       95.0       95.0       94.5       94.5       92.4       93.0
75/55...........................................................       93.6       93.6       95.4       95.0       94.5       94.5       93.6       94.1
100/75..........................................................       95.0       94.5       96.2       96.2       95.8       95.8       94.5       95.0
125/90..........................................................       95.4       94.5       96.2       96.2       95.8       95.8       95.0       95.0
150/110.........................................................       95.4       94.5       96.2       96.2       96.2       95.8       95.0       95.0
200/150.........................................................       95.8       95.4       96.5       96.2       96.2       95.8       95.4       95.0
250/186.........................................................       96.2       95.4       96.5       96.2       96.2       96.2       95.4       95.4
300/224.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
350/261.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
400/298.........................................................       95.8       95.8       96.2       95.8  .........  .........  .........  .........
450/336.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
500/373.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
550/410.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
600/447.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
650/485.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
700/522.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
750/559.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) Each NEMA Design A motor, NEMA Design B motor, and IEC Design 
N (including NE, NEY, or NY variants) motor that is an air-over 
electric motor meeting the criteria in paragraph (c)(1) of this 
section, but excluding fire pump electric motors, and with a power 
rating from 1 horsepower through 250 horsepower, built in a standard 
frame size, shall have a nominal full-load efficiency of not less than 
the following:

Table 5 to Paragraph (c)(2)(ii)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size Air-
                                           Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       77.0       77.0       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5...........................................................       85.5       85.5       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2...........................................................       86.5       85.5       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7...........................................................       88.5       86.5       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.........................................................       89.5       88.5       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5..........................................................       90.2       89.5       91.7       91.7       91.0       91.7       89.5       90.2
15/11...........................................................       91.0       90.2       92.4       93.0       91.7       91.7       89.5       90.2
20/15...........................................................       91.0       91.0       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.........................................................       91.7       91.7       93.6       93.6       93.0       93.0       90.2       91.0
30/22...........................................................       91.7       91.7       93.6       94.1       93.0       93.6       91.7       91.7
40/30...........................................................       92.4       92.4       94.1       94.1       94.1       94.1       91.7       91.7
50/37...........................................................       93.0       93.0       94.5       94.5       94.1       94.1       92.4       92.4
60/45...........................................................       93.6       93.6       95.0       95.0       94.5       94.5       92.4       93.0
75/55...........................................................       93.6       93.6       95.4       95.0       94.5       94.5       93.6       94.1
100/75..........................................................       95.0       94.5       96.2       96.2       95.8       95.8       94.5       95.0
125/90..........................................................       95.4       94.5       96.2       96.2       95.8       95.8       95.0       95.0
150/110.........................................................       95.4       94.5       96.2       96.2       96.2       95.8       95.0       95.0
200/150.........................................................       95.8       95.4       96.5       96.2       96.2       95.8       95.4       95.0

[[Page 87148]]

 
250/186.........................................................       96.2       95.4       96.5       96.2       96.2       96.2       95.4       95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (iii) Each NEMA Design A motor, NEMA Design B motor, and IEC Design 
N (including NE, NEY, or NY variants) motor that is an air-over 
electric motor meeting the criteria in paragraph (c)(1) of this 
section, but excluding fire pump electric motors, and with a power 
rating from 1 horsepower through 20 horsepower, built in a specialized 
frame size, shall have a nominal full-load efficiency of not less than 
the following:

 Table 6 to Paragraph (c)(2)(iii)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame Size
                                         Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       74.0  .........       82.5       82.5       80.0       80.0       74.0       74.0
1.5/1.1.........................................................       82.5       82.5       84.0       84.0       85.5       84.0       77.0       75.5
2/1.5...........................................................       84.0       84.0       84.0       84.0       86.5       85.5       82.5       85.5
3/2.2...........................................................       85.5       84.0       87.5       86.5       87.5       86.5       84.0       86.5
5/3.7...........................................................       87.5       85.5       87.5       87.5       87.5       87.5       85.5       87.5
7.5/5.5.........................................................       88.5       87.5       89.5       88.5       89.5       88.5       85.5       88.5
10/7.5..........................................................       89.5       88.5       89.5       89.5       89.5       90.2  .........  .........
15/11...........................................................       90.2       89.5       91.0       91.0  .........  .........  .........  .........
20/15...........................................................       90.2       90.2       91.0       91.0  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (iv) Each NEMA Design C motor and IEC Design H (including HE, HEY, 
or HY variants) electric motor meeting the criteria in paragraph (c)(1) 
of this section but excluding air-over electric motors and with a power 
rating from 1 horsepower through 200 horsepower, shall have a nominal 
full-load efficiency that is not less than the following:

Table 7 to Paragraph (c)(2)(iv)--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H, HE, HEY or HY
                              Motors (Excluding Air-Over Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
                                                                Nominal full-load efficiency (%)
                                               -----------------------------------------------------------------
 Motor horsepower/standard kilowatt equivalent         4 Pole                6 Pole                8 Pole
                                               -----------------------------------------------------------------
                                                 Enclosed     Open     Enclosed     Open     Enclosed     Open
----------------------------------------------------------------------------------------------------------------
1/.75.........................................       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.......................................       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5.........................................       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2.........................................       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7.........................................       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.......................................       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5........................................       91.7       91.7       91.0       91.7       89.5       90.2
15/11.........................................       92.4       93.0       91.7       91.7       89.5       90.2
20/15.........................................       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.......................................       93.6       93.6       93.0       93.0       90.2       91.0
30/22.........................................       93.6       94.1       93.0       93.6       91.7       91.7
40/30.........................................       94.1       94.1       94.1       94.1       91.7       91.7
50/37.........................................       94.5       94.5       94.1       94.1       92.4       92.4
60/45.........................................       95.0       95.0       94.5       94.5       92.4       93.0
75/55.........................................       95.4       95.0       94.5       94.5       93.6       94.1
100/75........................................       95.4       95.4       95.0       95.0       93.6       94.1
125/90........................................       95.4       95.4       95.0       95.0       94.1       94.1
150/110.......................................       95.8       95.8       95.8       95.4       94.1       94.1
200/150.......................................       96.2       95.8       95.8       95.4       94.5       94.1
----------------------------------------------------------------------------------------------------------------


[[Page 87149]]

    (v) Each fire pump electric motor meeting the criteria in paragraph 
(c)(1) of this section, but excluding air-over electric motors, and 
with a power rating of 1 horsepower through 500 horsepower, shall have 
a nominal full-load efficiency that is not less than the following:

        Table 8 to Paragraph (c)(2)(v)--Nominal Full-Load Efficiencies of Fire Pump Electric Motors (Excluding Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       75.5  .........       82.5       82.5       80.0       80.0       74.0       74.0
1.5/1.1.........................................................       82.5       82.5       84.0       84.0       85.5       84.0       77.0       75.5
2/1.5...........................................................       84.0       84.0       84.0       84.0       86.5       85.5       82.5       85.5
3/2.2...........................................................       85.5       84.0       87.5       86.5       87.5       86.5       84.0       86.5
5/3.7...........................................................       87.5       85.5       87.5       87.5       87.5       87.5       85.5       87.5
7.5/5.5.........................................................       88.5       87.5       89.5       88.5       89.5       88.5       85.5       88.5
10/7.5..........................................................       89.5       88.5       89.5       89.5       89.5       90.2       88.5       89.5
15/11...........................................................       90.2       89.5       91.0       91.0       90.2       90.2       88.5       89.5
20/15...........................................................       90.2       90.2       91.0       91.0       90.2       91.0       89.5       90.2
25/18.5.........................................................       91.0       91.0       92.4       91.7       91.7       91.7       89.5       90.2
30/22...........................................................       91.0       91.0       92.4       92.4       91.7       92.4       91.0       91.0
40/30...........................................................       91.7       91.7       93.0       93.0       93.0       93.0       91.0       91.0
50/37...........................................................       92.4       92.4       93.0       93.0       93.0       93.0       91.7       91.7
60/45...........................................................       93.0       93.0       93.6       93.6       93.6       93.6       91.7       92.4
75/55...........................................................       93.0       93.0       94.1       94.1       93.6       93.6       93.0       93.6
100/75..........................................................       93.6       93.0       94.5       94.1       94.1       94.1       93.0       93.6
125/90..........................................................       94.5       93.6       94.5       94.5       94.1       94.1       93.6       93.6
150/110.........................................................       94.5       93.6       95.0       95.0       95.0       94.5       93.6       93.6
200/150.........................................................       95.0       94.5       95.0       95.0       95.0       94.5       94.1       93.6
250/186.........................................................       95.4       94.5       95.0       95.4       95.0       95.4       94.5       94.5
300/224.........................................................       95.4       95.0       95.4       95.4       95.0       95.4  .........  .........
350/261.........................................................       95.4       95.0       95.4       95.4       95.0       95.4  .........  .........
400/298.........................................................       95.4       95.4       95.4       95.4  .........  .........  .........  .........
450/336.........................................................       95.4       95.8       95.4       95.8  .........  .........  .........  .........
500/373.........................................................       95.4       95.8       95.8       95.8  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (d) This section applies to electric motors manufactured (alone or 
as a component of another piece of equipment) on or after January 1, 
2029.
    (1) The standards in paragraph (d)(1)(ii) of this section apply 
only to electric motors that satisfy the criteria in paragraph 
(d)(1)(i)(A) of this section and with the exclusion listed in paragraph 
(d)(1)(i)(B) of this section.
    (i) Scope. (A) The standards in paragraph (d)(1)(ii) of this 
section apply only to electric motors, including partial electric 
motors, that satisfy the following criteria:
    (1) Are single-speed, induction motors;
    (2) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
    (4) Operate on polyphase alternating current 60-hertz sinusoidal 
line power;
    (5) Are rated 600 volts or less;
    (6) Have a 2-, 4-, 6-, or 8-pole configuration,
    (7) Are built in a three-digit or four-digit NEMA frame size (or 
IEC metric equivalent), including those designs between two consecutive 
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA 
frame size (or IEC metric equivalent), or have an air-over enclosure 
and a specialized frame size,
    (8) Produce at least one horsepower (0.746 kW) but not greater than 
750 horsepower (559 kW); and
    (9) Meet all of the performance requirements of one of the 
following motor types: A NEMA Design A, B, or C motor or an IEC Design 
N, NE, NEY, NY or H, HE, HEY, HY motor.
    (B) The standards in paragraph (d)(1)(ii) of this section do not 
apply to the following electric motors exempted by the Secretary, or 
any additional electric motors that the Secretary may exempt:
    (1) Component sets of an electric motor;
    (2) Liquid-cooled electric motors;
    (3) Submersible electric motors; and
    (4) Inverter-only electric motors.
    (ii) Standards. (A) Each NEMA Design A motor, NEMA Design B motor, 
and IEC Design N (including NE, NEY, or NY variants) motor that is an 
electric motor meeting the criteria in paragraph (d)(1)(i) of this 
section but excluding fire pump electric motors and air-over electric 
motors, and with a power rating from 1 horsepower through 750 
horsepower, shall have a nominal full-load efficiency of not less than 
the following:

[[Page 87150]]



  Table 9 to Paragraph (d)(1)(ii)(A)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Motors (Excluding
                                            Fire Pump Electric Motors and Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       77.0       77.0       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5...........................................................       85.5       85.5       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2...........................................................       86.5       85.5       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7...........................................................       88.5       86.5       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.........................................................       89.5       88.5       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5..........................................................       90.2       89.5       91.7       91.7       91.0       91.7       89.5       90.2
15/11...........................................................       91.0       90.2       92.4       93.0       91.7       91.7       89.5       90.2
20/15...........................................................       91.0       91.0       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.........................................................       91.7       91.7       93.6       93.6       93.0       93.0       90.2       91.0
30/22...........................................................       91.7       91.7       93.6       94.1       93.0       93.6       91.7       91.7
40/30...........................................................       92.4       92.4       94.1       94.1       94.1       94.1       91.7       91.7
50/37...........................................................       93.0       93.0       94.5       94.5       94.1       94.1       92.4       92.4
60/45...........................................................       93.6       93.6       95.0       95.0       94.5       94.5       92.4       93.0
75/55...........................................................       93.6       93.6       95.4       95.0       94.5       94.5       93.6       94.1
100/75..........................................................       95.0       94.5       96.2       96.2       95.8       95.8       94.5       95.0
125/90..........................................................       95.4       94.5       96.2       96.2       95.8       95.8       95.0       95.0
150/110.........................................................       95.4       94.5       96.2       96.2       96.2       95.8       95.0       95.0
200/150.........................................................       95.8       95.4       96.5       96.2       96.2       95.8       95.4       95.0
250/186.........................................................       96.2       95.4       96.5       96.2       96.2       96.2       95.4       95.4
300/224.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
350/261.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
400/298.........................................................       95.8       95.8       96.2       95.8  .........  .........  .........  .........
450/336.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
500/373.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
550/410.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
600/447.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
650/485.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
700/522.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
750/559.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (B) Each NEMA Design A motor, NEMA Design B motor, and IEC Design N 
(including NE, NEY, or NY variants) motor that is an air-over electric 
motor meeting the criteria in paragraph (d)(1)(i) of this section, but 
excluding fire pump electric motors, and with a power rating from 1 
horsepower through 250 horsepower, built in a standard frame size, 
shall have a nominal full-load efficiency of not less than the 
following:

 Table 10 to Paragraph (d)(1)(ii)(B)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Standard Frame Size
                                         Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       77.0       77.0       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5...........................................................       85.5       85.5       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2...........................................................       86.5       85.5       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7...........................................................       88.5       86.5       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.........................................................       89.5       88.5       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5..........................................................       90.2       89.5       91.7       91.7       91.0       91.7       89.5       90.2
15/11...........................................................       91.0       90.2       92.4       93.0       91.7       91.7       89.5       90.2
20/15...........................................................       91.0       91.0       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.........................................................       91.7       91.7       93.6       93.6       93.0       93.0       90.2       91.0
30/22...........................................................       91.7       91.7       93.6       94.1       93.0       93.6       91.7       91.7
40/30...........................................................       92.4       92.4       94.1       94.1       94.1       94.1       91.7       91.7
50/37...........................................................       93.0       93.0       94.5       94.5       94.1       94.1       92.4       92.4
60/45...........................................................       93.6       93.6       95.0       95.0       94.5       94.5       92.4       93.0
75/55...........................................................       93.6       93.6       95.4       95.0       94.5       94.5       93.6       94.1
100/75..........................................................       95.0       94.5       96.2       96.2       95.8       95.8       94.5       95.0
125/90..........................................................       95.4       94.5       96.2       96.2       95.8       95.8       95.0       95.0

[[Page 87151]]

 
150/110.........................................................       95.4       94.5       96.2       96.2       96.2       95.8       95.0       95.0
200/150.........................................................       95.8       95.4       96.5       96.2       96.2       95.8       95.4       95.0
250/186.........................................................       96.2       95.4       96.5       96.2       96.2       96.2       95.4       95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (C) Each NEMA Design A motor, NEMA Design B motor, and IEC Design N 
(including NE, NEY, or NY variants) motor that is an air-over electric 
motor meeting the criteria in paragraph (d)(1)(i) of this section, but 
excluding fire pump electric motors, and with a power rating from 1 
horsepower through 20 horsepower, built in a specialized frame size, 
shall have a nominal full-load efficiency of not less than the 
following:

  Table 11 to Paragraph (d)(1)(ii)(C)--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N, NE, NEY or NY Specialized Frame
                                      Size Air-Over Electric Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       74.0  .........       82.5       82.5       80.0       80.0       74.0       74.0
1.5/1.1.........................................................       82.5       82.5       84.0       84.0       85.5       84.0       77.0       75.5
2/1.5...........................................................       84.0       84.0       84.0       84.0       86.5       85.5       82.5       85.5
3/2.2...........................................................       85.5       84.0       87.5       86.5       87.5       86.5       84.0       86.5
5/3.7...........................................................       87.5       85.5       87.5       87.5       87.5       87.5       85.5       87.5
7.5/5.5.........................................................       88.5       87.5       89.5       88.5       89.5       88.5       85.5       88.5
10/7.5..........................................................       89.5       88.5       89.5       89.5       89.5       90.2  .........  .........
15/11...........................................................       90.2       89.5       91.0       91.0  .........  .........  .........  .........
20/15...........................................................       90.2       90.2       91.0       91.0  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (D) Each NEMA Design C motor and IEC Design H (including HE, HEY, 
or HY variants) electric motor meeting the criteria in paragraph 
(d)(1)(i) of this section but excluding air-over electric motors and 
with a power rating from 1 horsepower through 200 horsepower, shall 
have a nominal full-load efficiency that is not less than the 
following:

 Table 12 to Paragraph (d)(1)(ii)(D)--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H, HE, HEY
                           or HY Motors (Excluding Air-Over Electric Motors) at 60 Hz
----------------------------------------------------------------------------------------------------------------
                                                                Nominal full-load efficiency (%)
                                               -----------------------------------------------------------------
 Motor horsepower/standard kilowatt equivalent         4 Pole                6 Pole                8 Pole
                                               -----------------------------------------------------------------
                                                 Enclosed     Open     Enclosed     Open     Enclosed     Open
----------------------------------------------------------------------------------------------------------------
1/.75.........................................       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.......................................       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5.........................................       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2.........................................       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7.........................................       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.......................................       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5........................................       91.7       91.7       91.0       91.7       89.5       90.2
15/11.........................................       92.4       93.0       91.7       91.7       89.5       90.2
20/15.........................................       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.......................................       93.6       93.6       93.0       93.0       90.2       91.0
30/22.........................................       93.6       94.1       93.0       93.6       91.7       91.7
40/30.........................................       94.1       94.1       94.1       94.1       91.7       91.7
50/37.........................................       94.5       94.5       94.1       94.1       92.4       92.4
60/45.........................................       95.0       95.0       94.5       94.5       92.4       93.0
75/55.........................................       95.4       95.0       94.5       94.5       93.6       94.1
100/75........................................       95.4       95.4       95.0       95.0       93.6       94.1
125/90........................................       95.4       95.4       95.0       95.0       94.1       94.1
150/110.......................................       95.8       95.8       95.8       95.4       94.1       94.1
200/150.......................................       96.2       95.8       95.8       95.4       94.5       94.1
----------------------------------------------------------------------------------------------------------------


[[Page 87152]]

    (E) Each fire pump electric motor meeting the criteria in paragraph 
(d)(1)(i) of this section, but excluding air-over electric motors, and 
with a power rating of 1 horsepower through 500 horsepower, shall have 
a nominal full-load efficiency that is not less than the following:

     Table 13 to Paragraph (d)(1)(ii)(E)--Nominal Full-Load Efficiencies of Fire Pump Electric Motors (Excluding Air-Over Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       75.5  .........       82.5       82.5       80.0       80.0       74.0       74.0
1.5/1.1.........................................................       82.5       82.5       84.0       84.0       85.5       84.0       77.0       75.5
2/1.5...........................................................       84.0       84.0       84.0       84.0       86.5       85.5       82.5       85.5
3/2.2...........................................................       85.5       84.0       87.5       86.5       87.5       86.5       84.0       86.5
5/3.7...........................................................       87.5       85.5       87.5       87.5       87.5       87.5       85.5       87.5
7.5/5.5.........................................................       88.5       87.5       89.5       88.5       89.5       88.5       85.5       88.5
10/7.5..........................................................       89.5       88.5       89.5       89.5       89.5       90.2       88.5       89.5
15/11...........................................................       90.2       89.5       91.0       91.0       90.2       90.2       88.5       89.5
20/15...........................................................       90.2       90.2       91.0       91.0       90.2       91.0       89.5       90.2
25/18.5.........................................................       91.0       91.0       92.4       91.7       91.7       91.7       89.5       90.2
30/22...........................................................       91.0       91.0       92.4       92.4       91.7       92.4       91.0       91.0
40/30...........................................................       91.7       91.7       93.0       93.0       93.0       93.0       91.0       91.0
50/37...........................................................       92.4       92.4       93.0       93.0       93.0       93.0       91.7       91.7
60/45...........................................................       93.0       93.0       93.6       93.6       93.6       93.6       91.7       92.4
75/55...........................................................       93.0       93.0       94.1       94.1       93.6       93.6       93.0       93.6
100/75..........................................................       93.6       93.0       94.5       94.1       94.1       94.1       93.0       93.6
125/90..........................................................       94.5       93.6       94.5       94.5       94.1       94.1       93.6       93.6
150/110.........................................................       94.5       93.6       95.0       95.0       95.0       94.5       93.6       93.6
200/150.........................................................       95.0       94.5       95.0       95.0       95.0       94.5       94.1       93.6
250/186.........................................................       95.4       94.5       95.0       95.4       95.0       95.4       94.5       94.5
300/224.........................................................       95.4       95.0       95.4       95.4       95.0       95.4  .........  .........
350/261.........................................................       95.4       95.0       95.4       95.4       95.0       95.4  .........  .........
400/298.........................................................       95.4       95.4       95.4       95.4  .........  .........  .........  .........
450/336.........................................................       95.4       95.8       95.4       95.8  .........  .........  .........  .........
500/373.........................................................       95.4       95.8       95.8       95.8  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (2) The standards in paragraph (d)(2)(ii) of this section apply 
only to electric motors that satisfy the criteria in paragraph 
(d)(2)(i)(A) of this section and with the exclusion listed in paragraph 
(d)(2)(i)(B) of this section
    (i) Scope. (A) The standards in paragraph (d)(2)(ii) of this 
section apply only to electric motors, including partial electric 
motors, that satisfy the following criteria:
    (1) Are not small electric motors, as defined at Sec.  431.442 and 
are not a dedicated pool pump motors as defined at Sec.  431.483; and 
do not have an air-over enclosure and a specialized frame size if the 
motor operates on polyphase power;
    (2) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (3) Operate on polyphase or single-phase alternating current 60-
hertz (Hz) sinusoidal line power; or are used with an inverter that 
operates on polyphase or single-phase alternating current 60-hertz (Hz) 
sinusoidal line power;
    (4) Are rated for 600 volts or less;
    (5) Are single-speed induction motors capable of operating without 
an inverter or are inverter-only electric motors;
    (6) Produce a rated motor horsepower greater than or equal to 0.25 
horsepower (0.18 kW); and
    (7) Are built in the following frame sizes: any two-, or three-
digit NEMA frame size (or IEC equivalent) if the motor operates on 
single-phase power; any two-, or three-digit NEMA frame size (or IEC 
equivalent) if the motor operates on polyphase power, and has a rated 
motor horsepower less than 1 horsepower (0.75 kW); or a two-digit NEMA 
frame size (or IEC metric equivalent), if the motor operates on 
polyphase power, has a rated motor horsepower equal to or greater than 
1 horsepower (0.75 kW), and is not an enclosed 56 NEMA frame size (or 
IEC metric equivalent).
    (B) The standards in paragraph (d)(2)(ii) of this section do not 
apply to the following electric motors exempted by the Secretary, or 
any additional electric motors that the Secretary may exempt:
    (1) Component sets of an electric motor;
    (2) Liquid-cooled electric motors;
    (3) Submersible electric motors; and
    (4) Inverter-only electric motors.
    (ii) Standards. (A) Each high-torque and medium-torque electric 
motor (i.e., capacitor-start-induction-run (``CSIR''), capacitor-start-
capacitor-run (``CSCR''), and split-phase motor) meeting the criteria 
in paragraph (d)(2)(i) of this section and with a power rating of 
greater than or equal to 0.25 horsepower and less than or equal to 3 
horsepower, shall have an average full-load efficiency that is not less 
than the following:

[[Page 87153]]



 Table 14 to Paragraph (d)(2)(ii)(A)--Average Full-Load Efficiencies of High and Medium-Torque Electric Motor (CSIR, CSCR, and Split-Phase Motors) at 60
                                                                           Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Average full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
.25/.19.........................................................       59.5       59.5       59.5       59.5       57.5       57.5  .........  .........
.33/.25.........................................................       64.0       64.0       64.0       64.0       62.0       62.0       50.5       50.5
.5/.37..........................................................       68.0       68.0       67.4       69.2       68.0       68.0       52.5       52.5
.75/.56.........................................................       75.5       76.2       75.5       81.8       75.5       80.2       72.0       72.0
1/.75...........................................................       77.0       80.4       80.0       82.6       77.0       81.1       74.0       74.0
1.5/1.1.........................................................       81.5       81.5       81.5       83.8       80.0  .........  .........  .........
2/1.5...........................................................       82.5       82.9       82.5       84.5  .........  .........  .........  .........
3/2.2...........................................................       84.0       84.1  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (B) Each low-torque electric motor (i.e., shaded pole and permanent 
split capacitor motor) meeting the criteria in paragraph (d)(2)(i) of 
this section and with a power rating of greater than or equal to 0.25 
horsepower and less than or equal to 3 horsepower, shall have an 
average full-load efficiency of not less than the following:

 Table 15 to Paragraph (d)(2)(ii)(B)--Average Full-Load Efficiencies of Low-Torque Electric Motor (Shaded Pole and Permanent Split Capacitor Motors) at
                                                                          60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Average full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
.25/.19.........................................................       60.9       63.9       64.1       66.1       59.2       60.2       52.5       52.5
.33/.25.........................................................       63.9       66.9       67.7       69.7       64.0       65.0       56.6       56.6
.5/.37..........................................................       65.8       68.8       68.1       70.1       65.8       66.8       57.1       57.1
.75/.56.........................................................       67.5       70.5       72.8       74.8       72.1       73.1       62.8       62.8
1/.75...........................................................       71.3       74.3       75.1       77.1       76.3       77.3       65.7       65.7
1.5/1.1.........................................................       76.9       79.9       80.1       82.1       79.5       80.5       72.2       72.2
2/1.5...........................................................       78.0       81.0       80.9       82.9       80.4       81.4       73.3       73.3
3/2.2...........................................................       79.4       82.4       82.0       84.0       81.5       82.5       74.9       74.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (C) Each polyphase electric motor meeting the criteria in paragraph 
(d)(2)(i) of this section and with a power rating of greater than or 
equal to 0.25 horsepower and less than or equal to 3 horsepower, shall 
have an average full-load efficiency of not less than the following:

                        Table 16 to Paragraph (d)(2)(ii)(C)--Average Full-Load Efficiencies of Polyphase Electric Motor at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Average full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
.25/.19.........................................................       66.0       65.6       68.0       69.5       66.0       67.5       62.0       62.0
.33/.25.........................................................       70.0       69.5       72.0       73.4       70.0       71.4       64.0       64.0
.5/.37..........................................................       72.0       73.4       75.5       78.2       72.0       75.3       66.0       66.0
.75/.56.........................................................       75.5       76.8       77.0       81.1       74.0       81.7       70.0       70.0
1/.75...........................................................       75.5       77.0       77.0       83.5       74.0       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       82.5       86.5       87.5       83.8       78.5       77.0
2/1.5...........................................................       85.5       85.5       85.5       86.5       88.5  .........       84.0       86.5
3/2.2...........................................................       86.5       85.5       86.5       86.9       89.5  .........       85.5       87.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix B to Subpart B of Part 431 [Amended]

0
7. Appendix B to subpart B of part 431 is amended by:
0
a. In sections 1 and 1.2., removing the words ``Small, non-small-
electric-motor electric motor'' wherever it appears, and adding in its 
place the words ``Expanded scope electric motor''.
0
b. In section 1.2, removing the term ``SNEM'' wherever it appears, and 
adding in its place ``ESEM''.
0
c. In sections 2.3, 2.3.1, and 2.3.3, removing the term ``SNEMs'' 
wherever it appears, and adding in its place ``ESEMs''.

[FR Doc. 2023-26531 Filed 12-14-23; 8:45 am]
BILLING CODE 6450-01-P`