Vol. 80 Thursday, 

No. 63 April 2, 2015 

Part II 

Department of Energy 

10 CFR Parts 429 and 431 

Energy Conservation Program: Energy Conservation Standards for Pumps; 

Proposed Rules 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17826 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Parts 429 and 431 

[Docket Number EERE–2011–BT–STD– 

0031] 

RIN 1904–AC54 

Energy Conservation Program: Energy 

Conservation Standards for Pumps 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notice of proposed rulemaking 

(NOPR) and public meeting. 

SUMMARY: The Energy Policy and 

Conservation Act of 1975 (EPCA), as 

amended, sets forth a variety of 

provisions designed to improve energy 

efficiency. Part C of Title III, which for 

editorial reasons was re-designated as 

Part A–1 upon incorporation into the 

U.S. Code, establishes the ‘‘Energy 

Conservation Program for Certain 

Industrial Equipment.’’ The covered 

equipment includes pumps. In this 

document, DOE proposes to establish 

new energy conservation standards for 

pumps and announces a public meeting 

to receive comment on these proposed 

standards and associated analyses and 

results. 

DATES:

Meeting: DOE will hold a public 

meeting on Wednesday, April 29, 2015, 

from 2 p.m. to 5 p.m., in Washington, 

DC. The meeting will also be broadcast 

as a webinar. See section VIII Public 

Participation for webinar registration 

information, participant instructions, 

and information about the capabilities 

available to webinar participants. 

Comments: DOE will accept 

comments, data, and information 

regarding this notice of proposed 

rulemaking (NOPR) before and after the 

public meeting, but no later than June 

1, 2015. See section VIII Public 

Participation for details. 

ADDRESSES: The public meeting will be 

held at the U.S. Department of Energy, 

Forrestal Building, Room 8E–089, 1000 

Independence Avenue SW., 

Washington, DC 20585. To attend, 

please notify Ms. Brenda Edwards at 

(202) 586–2945. Persons can attend the 

public meeting via webinar. For more 

information, refer to the Public 

Participation section near the end of this 

NOPR. 

Any comments submitted must 

identify the NOPR for Energy 

Conservation Standards for pumps, and 

provide docket number EE–2011–BT– 

STD–0031 and/or regulatory 

information number (RIN) number 

1904–AC54. Comments may be 

submitted using any of the following 

methods: 

1. Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions for submitting comments. 

2. Email: Pumps2011STD0031@

ee.doe.gov . Include the docket number 

and/or RIN in the subject line of the 

message. 

3. Mail: Ms. Brenda Edwards, U.S. 

Department of Energy, Building 

Technologies Program, Mailstop EE–2J, 

1000 Independence Avenue SW., 

Washington, DC, 20585–0121. If 

possible, please submit all items on a 

CD. It is not necessary to include 

printed copies. 

4. Hand Delivery/Courier: Ms. Brenda 

Edwards, U.S. Department of Energy, 

Building Technologies Program, 950 

L’Enfant Plaza SW., Suite 600, 

Washington, DC, 20024. Telephone: 

(202) 586–2945. If possible, please 

submit all items on a CD, in which case 

it is not necessary to include printed 

copies. 

Written comments regarding the 

burden-hour estimates or other aspects 

of the collection-of-information 

requirements contained in this proposed 

rule may be submitted to Office of 

Energy Efficiency and Renewable 

Energy through the methods listed 

above and by email to Chad_S_

Whiteman@omb.eop.gov. 

For detailed instructions on 

submitting comments and additional 

information on the rulemaking process, 

see section VIII of this document (Public 

Participation). 

Docket: The docket, which includes 

Federal Register notices, public meeting 

attendee lists and transcripts, 

comments, and other supporting 

documents/materials, is available for 

review at regulations.gov. All 

documents in the docket are listed in 

the regulations.gov index. However, 

some documents listed in the index, 

such as those containing information 

that is exempt from public disclosure, 

may not be publicly available. 

A link to the docket Web page can be 

found at: www.regulations.gov/

#!docketDetail;D=EERE-2011-BT-STD0031. This Web page will contain a link 

to the docket for this NOPR on the 

regulations.gov site. The regulations.gov 

Web page will contain simple 

instructions on how to access all 

documents, including public comments, 

in the docket. See section VIII for 

further information on how to submit 

comments through 

www.regulations.gov. 

For further information on how to 

submit a comment, review other public 

comments and the docket, or participate 

in the public meeting, contact Ms. 

Brenda Edwards at (202) 586–2945 or by 

email: Brenda.Edwards@ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: John 

Cymbalsky, U.S. Department of Energy, 

Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, EE–5B, 1000 

Independence Avenue SW., 

Washington, DC, 20585–0121. 

Telephone: (202) 287–1692. Email: 

pumps@ee.doe.gov. 

Elizabeth Kohl, U.S. Department of 

Energy, Office of the General Counsel, 

GC–33, 1000 Independence Avenue 

SW., Washington, DC, 20585–0121. 

Telephone: (202) 586–9507. Email: 

Elizabeth.Kohl@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Proposed Rule 

A. Benefits and Costs to Consumers 

B. Impact on Manufacturers 

C. National Benefits 

II. Introduction 

A. Authority 

B. Background 

C. Relevant Industry Sectors 

III. General Discussion 

A. Rulemaking Approach 

1. Harmonization 

2. Regulatory Options 

B. Definition of Covered Equipment 

C. Scope of the Energy Conservation 

Standards in This Rulemaking 

D. Test Procedure and Metric 

1. PER Rating of a Minimally Compliant 

Pump 

E. Compliance Date 

F. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

G. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

H. Economic Justification 

1. Specific Criteria 

a. Economic Impact on Manufacturers and 

Consumers 

b. Savings in Operating Costs Compared To 

Increase in Price 

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 

Comments 

A. Market and Technology Assessment 

1. Equipment Classes 

2. Scope of Analysis and Data Availability 

a. Radially Split, Multi-Stage, Vertical, InLine, Diffuser Casing (RSV) 

b. Vertical Turbine Submersible 

(VTS).1800 

3. Technology Assessment 

a. General Discussion of Technology 

Options 

b. Additional Technology Options 

c. Applicability of Technology Options To 

Reduced Diameter Impellers 


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d. Elimination of Technology Options Due 

to Low Energy Savings Potential 

B. Screening Analysis 

1. Screened Out Technologies 

2. Remaining Technologies 

C. Engineering Analysis 

1. Representative Equipment for Analysis 

a. Representative Configuration Selection 

b. Baseline Configuration 

2. Design Options 

3. Available Energy Efficiency 

Improvements 

4. Efficiency Levels Analyzed 

a. Maximum Technologically Feasible 

Levels 

5. Manufacturers Production Cost 

Assessment Methodology 

a. Changes in MPC Associated With 

Hydraulic Redesign 

b. Manufacturer Production Cost (MPC) 

Model 

6. Product and Capital Conversion Costs 

7. Manufacturer Markup Analysis 

a. Industry-Average Markups 

b. Individual Manufacturer Markup 

Structures 

c. Industry-Wide Markup Structure 

8. MSP-Efficiency Relationship 

D. Markups Analysis 

E. Energy Use Analysis 

1. Duty Point 

2. Pump Sizing 

3. Operating Hours 

4. Load Profiles 

5. Equipment Losses 

F. Life-Cycle Cost and Payback Period 

Analysis 

1. Approach 

2. Life-Cycle Cost Inputs 

a. Equipment Prices 

b. Installation Costs 

c. Annual Energy Use 

d. Electricity Prices 

e. Maintenance Costs 

f. Repair Costs 

g. Equipment Lifetime 

h. Discount Rates 

3. Payback Period 

4. Rebuttable-Presumption Payback Period 

G. Shipments Analysis 

H. National Impact Analysis 

1. Approach 

a. National Energy Savings 

b. Net Present Value 

2. Base-Case and Standards-Case 

Distribution of Efficiencies 

I. Consumer Subgroup Analysis 

J. Manufacturer Impact Analysis 

1. Overview 

2. GRIM Analysis 

a. GRIM Key Inputs 

b. GRIM Scenarios 

3. Manufacturer Interviews 

a. Alignment With European Union Energy 

Efficiency Standards 

b. Pattern Production and Engineering 

Constraints 

c. Conversion Requirements 

d. Exclusion of Specific Pump Types 

K. Emissions Analysis 

L. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

1. Social Cost of Carbon 

a. Monetizing Carbon Dioxide Emissions 

2. Valuation of Other Emissions 

Reductions 

M. Utility Impact Analysis 

N. Employment Impact Analysis 

V. Analytical Results 

A. Trial Standard Levels 

1. Trial Standard Level Formulation 

Process and Criteria 

2. Trial Standard Level Equations 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

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. Impacts on Direct 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 

Equipment 

5. Impact of Any Lessening of Competition 

6. Need of the Nation To Conserve Energy 

7. Other Factors 

C. Proposed Standards 

1. Benefits and Burdens of Trial Standard 

Levels Considered for Pumps 

2. Summary of Benefits and Costs 

(Annualized) of the Proposed Standards 

VI. Labeling and Certification Requirements 

A. Labeling 

B. Certification Requirements 

1. Certification Report Requirements 

2. Definition of Manufacturer 

C. Enforcement Provisions 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866 

and 13563 

B. Review Under the Regulatory Flexibility 

Act 

1. ‘Description and Estimated Number of 

Small Entities Regulated 

2. Description and Estimate of Compliance 

Requirements 

3. Duplication, Overlap, and Conflict With 

Other Rules and Regulations 

4. 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. Review Under the Information Quality 

Bulletin for Peer Review 

VIII. 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 

IX. Approval of the Office of the Secretary 

I. Summary of the Proposed Rule 

The proposed standards for pumps 

(collectively, ‘‘pumps’’) set forth in 

today’s rule reflect the consensus of a 

stakeholder negotiation. A working 

group was established under the 

Appliance Standards and Rulemaking 

Federal Advisory Committee (ASRAC) 

in accordance with the Federal 

Advisory Committee Act (FACA) and 

the Negotiated Rulemaking Act (NRA). 

(5 U.S.C. App. 2; 5 U.S.C. 561–570, Pub. 

L. 104–320.) The purpose of the working 

group was to discuss and, if possible, 

reach consensus on proposed standards 

for pump energy efficiency. On June 19, 

2014, the working group successfully 

reached consensus on proposed energy 

conservation standards for specific 

rotodynamic, clean water pumps used 

in a variety of commercial, industrial, 

agricultural, and municipal 

applications. See section II.B for further 

discussion of the working group, section 

II.C for the industry sectors covered, and 

section III.C for a description of the 

relevant pumps. 

DOE’s proposed standards, which are 

consistent with the working group 

recommendations, are shown in Table 

I.1 and consist of pump energy index 

(PEI) values. Under the proposed 

standards, a pump model would be 

compliant if its PEI rating is less than or 

equal to the proposed standard. PEI is 

defined as the pump efficiency rating 

(PER) for a given pump model (at full 

impeller diameter), divided by a 

calculated minimally compliant PER for 

the given pump model. PER is defined 

as a weighted average of the electric 

input power supplied to the pump over 

a specified load profile, represented in 

units of horsepower (hp). 

The minimally compliant PER is 

unique to each pump model and is a 

function of specific speed (a 

dimensionless index describing the 

geometry of the pump) and each pump 

model’s flow at best efficiency point 

(BEP), as well as a specified C-value. A 

C-value is the translational component 

of a three-dimensional polynomial 

equation that describes the attainable 

hydraulic efficiency of pumps as a 

function of flow at BEP, specific speed, 

and C-value. Thus, when a C-value is 

used to define an efficiency level, that 

efficiency level can be considered 

equally attainable across the full scope 

of flow and specific speed encompassed 

by this proposed rule. 

A certain percentage of pumps 

currently on the market will not meet 

each efficiency level. That percentage 

can be referred to as the efficiency 

percentile. For example, if 10% of the 


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17828 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

1Council of the European Union. 2012. 

Commission Regulation (EU) No 547/2012 of 25 

June 2012 implementing Directive 2009/125/EC of 

the European Parliament and of the Council with 

regard to ecodesign requirements for water pumps. 

Official Journal of the European Union. L 165, 26 

June 2012, pp. 28–36. 

2Market research, limited confidential 

manufacturer data, and direct input from the CIP 

working group indicate that RSV models sold in the 

United States market are global platforms with 

hydraulic designs equivalent to those in the 

European market. 3The average LCC savings are measured relative 

to the base-case efficiency distribution, which 

depicts the market in the compliance year (see 

section IV.H.2). The simple PBP, which is designed 

to compare specific pump efficiency levels, is 

measured relative to the baseline model (see section 

IV.C.1.b). 

4 DOE also calculates a distribution of LCC 

savings; the percentage of consumers that would 

have negative LCC savings (net cost) under the 

proposed standards is shown in section V.B.1.a. 

pumps on the market do not meet a 

specified efficiency level, that efficiency 

level represents the lower 10th 

percentile of efficiency. The efficiency 

percentile is an effective descriptor of 

the impact of a selected efficiency level 

(selected C-value) on the current market. 

The C-values proposed by DOE in 

Table I.1 correspond to the lower 25th 

percentile of efficiency for End Suction 

Close-Coupled (ESCC), End Suction 

Frame Mounted/Own Bearings (ESFM), 

In-line (IL), and Vertical Turbine 

Submersible (VTS) equipment classes. 

The C-values for the radially split, 

multi-stage, vertical, in-line, diffuser 

casing (RSV) equipment class were 

targeted to harmonize with the 

standards recently enacted in the 

European Union,1 as models in the RSV 

equipment class are known to be global 

platforms with no differentiation 

between products sold into the United 

States and European Union markets.2

Section III.D describes the PEI metric in 

further detail. 

These proposed standards, if adopted, 

would apply to all equipment listed in 

Table I.1 and manufactured in, or 

imported into, the United States on or 

after the date four years after the 

publication of any final rule for this 

rulemaking. 

TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR PUMPS

Equipment class * 

Proposed 

standard level ** 

(PEI) 

Efficiency 

percentile 

Proposed 

C-values 

ESCC.1800.CL .......................................................................................................... 1.00 25 128.47 

ESCC.3600.CL .......................................................................................................... 1.00 25 130.42 

ESCC.1800.VL ........................................................................................................... 1.00 25 128.47 

ESCC.3600.VL ........................................................................................................... 1.00 25 130.42 

ESFM.1800.CL .......................................................................................................... 1.00 25 128.85 

ESFM.3600.CL .......................................................................................................... 1.00 25 130.99 

ESFM.1800.VL ........................................................................................................... 1.00 25 128.85 

ESFM.3600.VL ........................................................................................................... 1.00 25 130.99 

IL.1800.CL ................................................................................................................. 1.00 25 129.30 

IL.3600.CL ................................................................................................................. 1.00 25 133.84 

IL.1800.VL .................................................................................................................. 1.00 25 129.30 

IL.3600.VL .................................................................................................................. 1.00 25 133.84 

RSV.1800.CL ............................................................................................................. 1.00 † 0 129.63 

RSV.3600.CL ............................................................................................................. 1.00 † 0 133.20 

RSV.1800.VL ............................................................................................................. 1.00 † 0 129.63 

RSV.3600.VL ............................................................................................................. 1.00 † 0 133.20 

VTS.1800.CL ............................................................................................................. 1.00 25 134.13 

VTS.3600.CL ............................................................................................................. 1.00 25 134.13 

VTS.1800.VL .............................................................................................................. 1.00 25 134.13 

VTS.3600.VL .............................................................................................................. 1.00 25 134.13 

* Equipment class designations consist of a combination (in sequential order separated by periods) of: (1) An equipment family (ESCC = end 

suction close-coupled, ESFM = end suction frame mounted, IL = inline, RSV = radially split, multi-stage, vertical, in-line, diffuser casing, VTS = 

vertical turbine submersible); (2) a nominal design speed (1800 = 1800 revolutions per minute (rpm), 3600 = 3600 rpm); and (3) an operating 

mode (CL = constant load, VL = variable load). For example, ‘‘ESCC.1800.CL’’ refers to the ‘‘end suction close-coupled, 1,800 rpm, constant 

load’’ equipment class. See discussion in chapter 5 of the NOPR technical support document (TSD) for a more detailed explanation of the equipment class terminology. 

** A pump model is compliant if its PEI rating is less than or equal to the proposed standard. 

† The standard level for RSV was set at a level that harmonized with the current European Union energy conservation standard level. See discussion in section IV.A.2.a for more detail regarding matters related to harmonization. 

A. Benefits and Costs to Consumers 

Table I.2 presents DOE’s evaluation of 

the economic impacts of the proposed 

standards on consumers of pumps, as 

measured by the average life-cycle cost 

(LCC) savings and the simple payback 

period (PBP).3 The average LCC savings 

are positive for all equipment classes for 

which consumers would be impacted by 

the proposed standards 4 and the PBP is 

less than the average lifetime of pumps, 

which is estimated to range between 11 

and 23 years depending on equipment 

class, with an average of 15 years (see 

section IV.F.2.g). 

TABLE I.2—IMPACTS OF PROPOSED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF PUMPS

Equipment class 

Average LCC 

savings 

(2013$) 

Simple payback 

period 

(years) 

ESCC.1800 .................................................................................................................................................. $164 2.2 

ESCC.3600 .................................................................................................................................................. 92 1.0 

ESFM.1800 .................................................................................................................................................. 173 2.8 

ESFM.3600 .................................................................................................................................................. 547 0.8 


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5 DOE estimated draft financial metrics, including 

the industry discount rate, based on data from 

Securities and Exchange Commission (SEC) filings. 

DOE presented the draft financial metrics to 

manufacturers in MIA interviews and adjusted 

those values based on feedback from industry. The 

complete set of financial metrics and more detail 

about the methodology can be found in section 

12.4.3 of TSD chapter 12. 

6All monetary values in this section are 

expressed in 2013 dollars and are discounted to 

2015. 

7 In this case, the compliance date of any final 

standards is estimated to be very late 2019, so the 

analysis period begins in 2020. 

8A quad is equal to 1015 British thermal units 

(Btu). 

9A 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 Annual Energy Outlook 2014 (AEO 2014) 

Reference case, which generally represents current 

legislation and environmental regulations for which 

implementing regulations were available as of 

October 31, 2013. 

11Technical Update of the Social Cost of Carbon 

for Regulatory Impact Analysis Under Executive 

Order 12866. Interagency Working Group on Social 

Cost of Carbon, United States Government. May 

2013; revised November 2013. http://

www.whitehouse.gov/sites/default/files/omb/assets/

inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf. 

12 DOE is currently investigating valuation of 

avoided Hg and SO2 emissions. 

TABLE I.2—IMPACTS OF PROPOSED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF PUMPS—Continued 

Equipment class 

Average LCC 

savings 

(2013$) 

Simple payback 

period 

(years) 

IL.1800 ......................................................................................................................................................... 149 2.8 

IL.3600 ......................................................................................................................................................... 139 1.9 

RSV.1800 ..................................................................................................................................................... N/A N/A 

RSV.3600 ..................................................................................................................................................... N/A N/A 

VTS.1800 ..................................................................................................................................................... N/A N/A 

VTS.3600 ..................................................................................................................................................... 7.2 4.2 

Notes: DOE relied on available data for bare pumps with no information on configuration. Therefore, DOE conducted analysis at the level of 

equipment type and nominal design speed only. DOE is proposing identical standards for both CL and VL equipment classes. Economic results 

are not presented for RSV classes because the proposed standard is at the baseline. For the VTS.1800 class, which has a small market share, 

DOE [did not conduct a separate analysis for this class and is instead proposing to adopt the same levels as for the VTS.3600 class. 

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 of the 

manufacturer impacts analysis through 

the end of the analysis period (2015 to 

2049). Using a real discount rate of 11.8 

percent,5 DOE estimates that INPV for 

manufacturers of pumps is $121.4 

million in 2013$ for the base case. 

Under the proposed standards, DOE 

expects that INPV will change by ¥32.5 

percent to 6.9 percent. Industry 

conversion costs total $78.4 million. 

C. National Benefits 6

DOE’s analyses indicate that the 

proposed standards would save a 

significant amount of energy. The 

lifetime savings for pumps purchased in 

the 30-year period that begins in the 

first full year of compliance 7 with new 

standards (2020–2049) amount to 0.28 

quadrillion Btu (quads).8 This is a 

savings of one percent relative to the 

energy use of this equipment in the base 

case without new standards. 

The cumulative net present value 

(NPV) of total consumer costs and 

savings of the proposed standards for 

pumps ranges from $0.41 billion (at a 7- 

percent discount rate) to $1.11 billion 

(at a 3-percent discount rate). This NPV 

expresses the estimated total value of 

future operating-cost savings minus the 

estimated increased equipment costs for 

equipment purchased in 2020–2049. 

In addition, the proposed standards 

would have significant environmental 

benefits. The energy savings would 

result in cumulative emission 

reductions of 16 million metric tons 

(Mt) 9 of carbon dioxide (CO2), 77 

thousand tons of methane (CH4), 13 

thousand tons of sulfur dioxide (SO2), 

25 thousand tons of nitrogen oxides 

(NOX), 0.23 thousand tons of nitrous 

oxide (N2O), and 0.04 tons of mercury 

(Hg).10 The cumulative reduction in CO2

emissions through 2030 amounts to 2.5 

Mt, which is equivalent to the emissions 

associated with the annual electricity 

use of 0.36 million homes. 

The value of the CO2 reductions is 

calculated using a range of values per 

metric ton of CO2 (otherwise known as 

the Social Cost of Carbon, or SCC) 

developed by a recent Federal 

interagency process.11 The derivation of 

the SCC values is discussed in section 

IV.L. Using discount rates appropriate 

for each set of SCC values, DOE 

estimates the present monetary value of 

the CO2 emissions reduction is between 

$0.11 billion and $1.6 billion. DOE also 

estimates the present monetary value of 

the NOX emissions reduction, is $13 

million at a 7-percent discount rate and 

$30 million at a 3-percent discount 

rate.12

Table 1.3 summarizes the national 

economic costs and benefits expected to 

result from the proposed standards for 

pumps. 

TABLE I.3—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION

STANDARDS FOR PUMPS * 

Category Present value 

(billion 2013$) 

Discount rate 

(%) 

Benefits 

Operating Cost Savings ............................................................................................................................... 0.6 7 

1.4 3 

CO2 Reduction Monetized Value ($12.0/t case) ** ...................................................................................... 0.1 5 

CO2 Reduction Monetized Value ($40.5/t case) ** ...................................................................................... 0.5 3 

CO2 Reduction Monetized Value ($62.4/t case) ** ...................................................................................... 0.8 2.5 

CO2 Reduction Monetized Value ($119/t case) ** ....................................................................................... 1.6 3 


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13To convert the time-series of costs and benefits 

into annualized values, DOE calculated a present 

value in 2014, the year used for discounting the 

NPV of total customer 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., 2020 or 2030), and then 

discounted the present value from each year to 

2015. The calculation uses discount rates of 3 and 

7 percent for all costs and benefits except for the 

value of CO2 reductions, for which DOE used casespecific discount rates, as shown in Table I.3. 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. 

TABLE I.3—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION

STANDARDS FOR PUMPS *—Continued 

Category Present value 

(billion 2013$) 

Discount rate 

(%) 

NOX Reduction Monetized Value (at $2,684/ton) ** .................................................................................... 0.01 

0.03 

7 

3 

Total Benefits † ..................................................................................................................................... 1.1 

1.9 

7 

3 

Costs 

Incremental Installed Costs ......................................................................................................................... 0.2 

0.3 

7 

3 

Total Net Benefits 

Including Emissions Reduction Monetized Value † ..................................................................................... 0.9 

1.6 

7 

3 

* This table presents the costs and benefits associated with pumps shipped in 2020–2049. These results include benefits to consumers accruing after 2049 from equipment purchased in 2020–2049. The results account for the incremental variable and fixed costs incurred by manufacturers from the standard, some of which may be incurred in preparation for the rule. 

** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the updated SCC values. The 

first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor. 

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate ($40.5/

t case). 

The benefits and costs of today’s 

proposed standards, for equipment sold 

in 2020–2049, can also be expressed in 

terms of annualized values. The 

annualized monetary values are the sum 

of (1) the annualized national economic 

value of the benefits from consumer 

operation of equipment that meets the 

new or amended standards (consisting 

primarily of operating cost savings from 

using less energy, minus increases in 

equipment purchase and installation 

costs, which is another way of 

representing consumer NPV), and (2) 

the annualized monetary value of the 

benefits of emission reductions, 

including CO2 emission reductions.13

Although combining the values of 

operating savings and CO2 emission 

reductions provides a useful 

perspective, two issues should be 

considered. First, the national operating 

savings are domestic U.S. consumer 

monetary savings that occur as a result 

of market transactions, whereas the 

value of CO2 reductions is based on a 

global value. Second, the assessments of 

operating cost savings and CO2 savings 

are performed with different methods 

that use different time frames for 

analysis. The national operating cost 

savings is measured for the lifetime of 

pumps shipped in 2020–2049. The SCC 

values, on the other hand, reflect the 

present value of some future climaterelated impacts resulting from the 

emission of one ton of carbon dioxide in 

each year. These impacts continue well 

beyond 2100. 

Estimates of annualized benefits and 

costs of the proposed standards are 

shown in Table I.4. The results under 

the primary estimate are as follows. 

Using a 7-percent discount rate for 

benefits and costs other than CO2

reduction, for which DOE used a 3- 

percent discount rate along with the 

average SCC series that has a value of 

$40.5/t in 2015, the cost of the standards 

proposed in today’s rule is $16.9 million 

per year in increased equipment costs, 

while the benefits are $60 million per 

year in reduced equipment operating 

costs, $29 million in CO2 reductions, 

and $1.3 million in reduced NOX

emissions. In this case, the net benefit 

amounts to $73 million per year. Using 

a 3-percent discount rate for all benefits 

and costs and the average SCC series 

that has a value of $40.5/t in 2015, the 

cost of the standards proposed in 

today’s rule is $17.5 million per year in 

increased equipment costs, while the 

benefits are $81 million per year in 

reduced operating costs, $29 million in 

CO2 reductions, and $1.7 million in 

reduced NOX emissions. In this case, the 

net benefit amounts to $94 million per 

year. 

TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR PUMPS

Discount rate 

Million 2013$/year 

Primary 

estimate * 

Low net benefits 

estimate * 

High net benefits 

estimate * 

Benefits 

Operating Cost Savings ........................................................ 7% ............................. 60 ....................... 54 ....................... 67. 

3% ............................. 81 ....................... 72 ....................... 93. 

CO2 Reduction Monetized Value ($12.0/t case) * ................. 5% ............................. 8 ......................... 8 ......................... 9. 


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14All references to EPCA in this document refer 

to the statute as amended through the American 

Energy Manufacturing Technical Corrections Act of 

2012, Public Law 112–210 (Dec. 18, 2012). 

TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR PUMPS— 

Continued 

Discount rate 

Million 2013$/year 

Primary 

estimate * 

Low net benefits 

estimate * 

High net benefits 

estimate * 

CO2 Reduction Monetized Value ($40.5/t case) * ................. 3% ............................. 29 ....................... 27 ....................... 31. 

CO2 Reduction Monetized Value ($62.4/t case) * ................. 2.5% .......................... 42 ....................... 39 ....................... 46. 

CO2 Reduction Monetized Value ($119/t case) * .................. 3% ............................. 89 ....................... 83 ....................... 97. 

NOX Reduction Monetized Value (at $2,684/ton) ** .............. 7% .............................

3% .............................

1.3 ......................

1.7 ......................

1.3 ......................

1.6 ......................

1.4. 

1.9. 

Total Benefits † ...................................................................... 7% plus CO2 range ... 69 to 150 ............ 63 to 138 ............ 78 to 166. 

7% ............................. 90 ....................... 82 ....................... 100. 

3% plus CO2 range ... 91 to 172 ............ 81 to 156 ............ 104 to 192. 

3% ............................. 112 ..................... 100 ..................... 126. 

Costs 

Consumer Incremental Equipment Costs ............................. 7% .............................

3% .............................

16.9 ....................

17.5 ....................

18.6 ....................

19.5 ....................

17.2. 

17.7. 

Net Benefits 

Total † .................................................................................... 7% plus CO2 range ... 53 to 133 ............ 44 to 119 ............ 61 to 148. 

7% ............................. 73 ....................... 63 ....................... 83. 

3% plus CO2 range ... 74 to 155 ............ 62 to 136 ............ 86 to 174. 

3% ............................. 94 ....................... 80 ....................... 108. 

* This table presents the annualized costs and benefits associated with pumps shipped in 2020–2049. These results include benefits to consumers which accrue after 2049 from the products purchased in 2020–2049. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High 

Benefits Estimates utilize projections of energy prices from the AEO 2014 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect a constant rate in the Primary Estimate, an increase rate in the Low Benefits Estimate, and a decline 

rate in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.2.a. 

** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the updated SCC values. The 

first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor. 

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate 

($40.5/t case). In the rows labeled ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the 

labeled discount rate, and those values are added to the full range of CO2 values. 

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. DOE further 

notes that equipment achieving these 

standard levels is already commercially 

available for all equipment classes 

covered by today’s proposal. Based on 

the analyses described above, DOE has 

tentatively concluded that the benefits 

of the proposed standards to the nation 

(energy savings, positive NPV of 

consumer benefits, consumer LCC 

savings, and emission reductions) 

would outweigh the burdens (loss of 

INPV for manufacturers and LCC 

increases for some consumers). 

DOE also considered higher and lower 

energy efficiency levels as trial standard 

levels, and is still considering them in 

this rulemaking. However, DOE has 

tentatively concluded that the potential 

burdens of these energy efficiency levels 

would outweigh the projected benefits. 

Based on consideration of the public 

comments DOE receives in response to 

this notice and related information 

collected and analyzed during the 

course of this rulemaking, DOE may 

adopt energy efficiency levels presented 

in this notice 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 today’s proposal, as well as 

some of the relevant historical 

background related to the establishment 

of standards for pumps. 

A. Authority 

Title III of the Energy Policy and 

Conservation Act of 1975 ‘‘EPCA’’), 

Public Law 94–163, codified at 42 

U.S.C. 6291 et seq., sets forth a variety 

of provisions designed to improve 

energy efficiency. Part C of Title III, 

which for editorial reasons was redesignated as Part A–1 upon 

incorporation into the U.S. Code (42 

U.S.C. 6311–6317, as codified), 

establishes the ‘‘Energy Conservation 

Program for Certain Industrial 

Equipment.’’ The covered equipment 

includes pumps, the subject of today’s 

notice. (42 U.S.C. 6311(1)(A).) 14 There 

are currently no energy conservation 

standards for pumps. 

Pursuant to EPCA, any new or 

amended energy conservation standard 

must be designed to achieve the 

maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified. (42 

U.S.C. 6295(o)(2)(A) and 6316(a).) 

Furthermore, the new or amended 

standard must result in a significant 

conservation of energy. (42 U.S.C. 

6295(o)(3)(B) and 6316(a).) 

DOE’s energy conservation program 

for covered equipment consists 

essentially of four parts: (1) Testing; (2) 

labeling; (3) the establishment of 

Federal energy conservation standards; 

and (4) certification and enforcement 

procedures. Subject to certain criteria 

and conditions, DOE is required to 

develop test procedures to measure the 

energy efficiency, energy use, or 


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estimated annual operating cost of each 

covered product. (42 U.S.C. 6314.) 

Manufacturers of covered equipment 

must use the prescribed DOE test 

procedure as the basis for certifying to 

DOE that their equipment comply with 

the applicable energy conservation 

standards adopted under EPCA and 

when making representations to the 

public regarding the energy use or 

efficiency of those products. (42 U.S.C. 

6314(d).) Similarly, DOE must use these 

test procedures to determine whether 

the products comply with standards 

adopted pursuant to EPCA. Id. DOE has 

proposed a test procedure for pumps 

through a separate rulemaking. Any 

final test procedures would appear at 

title 10 of the Code of Federal 

Regulations (CFR) part 431. 

When setting standards for the 

equipment addressed by today’s notice, 

EPCA prescribes specific statutory 

criteria for DOE to consider. See 

generally 42 U.S.C. 6313(a)(6)(A)–(C), 

6295(o), and 6316(a). As indicated 

previously, any new or amended 

standard for covered equipment must be 

designed to achieve the maximum 

improvement in energy efficiency that is 

technologically feasible and 

economically justified. Furthermore, 

DOE may not adopt any standard that 

would not result in the significant 

conservation of energy. Moreover, DOE 

may not prescribe a standard: (1) For 

certain equipment, including pumps, if 

no test procedure has been established 

for the equipment, or (2) if DOE 

determines by rule that the proposed 

standard is not technologically feasible 

or economically justified. 42 U.S.C. 

6295(o); 6316(a). In considering whether 

a proposed standard is economically 

justified, DOE must determine whether 

the benefits of the standard exceed its 

burdens. DOE must make this 

determination after receiving comments 

on the proposed standard, and by 

considering, to the greatest extent 

practicable, the following seven factors: 

1. The economic impact of the 

standard on manufacturers and 

consumers of the equipment subject to 

the standard; 

2. The savings in operating costs 

throughout the estimated average life of 

the covered equipment 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 imposition 

of the standard; 

3. The total projected amount of 

energy, or as applicable, water, savings 

likely to result directly from the 

imposition of the standard; 

4. Any lessening of the utility or the 

performance of the covered equipment 

likely to result from the imposition of 

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 imposition of 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. 6295(o)(2)(B)(i)(I) through 

(VII) and 6316(a).) 

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 of 

any covered product- or equipment-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. 

6295(o)(4) and 6316(a).) 

There is a rebuttable presumption that 

a standard is economically justified if 

the Secretary finds that the additional 

cost to the consumer of purchasing 

equipment 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. 

6295(o)(2)(B)(iii) and 6316(a).) 

Additionally, EPCA specifies 

requirements when promulgating a 

standard for a type or class of covered 

equipment that has two or more 

subcategories. DOE must specify a 

different standard level than that which 

applies generally to such type or class 

of equipment for any group of covered 

equipment that have the same function 

or intended use if DOE determines that 

equipment within such group (A) 

consume a different kind of energy from 

that consumed by other covered 

equipment within such type (or class); 

or (B) have a capacity or other 

performance-related feature which other 

equipment within such type (or class) 

do not have and such feature justifies a 

higher or lower standard. (42 U.S.C. 

6295(q)(1) and 6316(a).) 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 

the feature and other factors DOE deems 

appropriate. 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. 

6295(q)(2) and 6316(a).) 

Federal energy conservation 

requirements generally supersede State 

laws or regulations concerning energy 

conservation testing, labeling, and 

standards. (42 U.S.C. 6297(a) through (c) 

and 6316(a).) DOE may, however, grant 

waivers of Federal preemption for 

particular State laws or regulations, in 

accordance with the procedures and 

other provisions set forth under 42 

U.S.C. 6297(d). 

B. Background 

DOE does not currently have a test 

procedure or energy conservation 

standards for pumps. In considering 

whether to establish standards for 

pumps, DOE issued a Request for 

Information (RFI) on June 13, 2011. (76 

FR 34192.) DOE received several 

comments in response to the RFI. In 

December 2011, DOE received a letter 

from the Appliance Standards 

Awareness Project (ASAP) and the 

Hydraulic Institute indicating that 

efficiency advocates (including ASAP, 

American Council for an EnergyEfficient Economy, Natural Resources 

Defense Council, and Northwest Energy 

Efficiency Alliance) and pump 

manufacturers (as represented by the 

Hydraulic Institute) had initiated 

discussions regarding potential energy 

conservation standards for pumps. 

(EERE–2011–BT–STD–0031–0011.) In 

subsequent letters in March and April 

2012, and in a meeting with DOE in 

May 2012, the stakeholders reported on 

a tentative path forward on energy 

conservation standards for water 

pumps, inclusive of the motor and 

controls, and certification and labeling. 

(EERE–2011–BT–STD–0031–0010 and 

–0012.) 

On February 1, 2013, DOE published 

a notice in the Federal Register that 

announced the availability of the 

‘‘Commercial and Industrial Pumps 

Energy Conservation Standard 

Framework Document,’’ solicited 

comment on the document, and invited 

all stakeholders to a public meeting to 

discuss the document. (78 FR 7304.) 

The Framework Document described 

the procedural and analytical 

approaches that DOE anticipated using 

to evaluate energy conservation 

standards for pumps, addressed 

stakeholder comments related to the 

RFI, and identified and solicited 

comment on various issues to be 

resolved in the rulemaking. (EERE– 

2011–BT–STD–0031–0013.) 

DOE held the framework public 

meeting on February 20, 2013 and 

received many comments that helped 

identify and resolve issues pertaining to 

pumps relevant to this rulemaking. 


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These comments are discussed in 

subsequent sections of this notice. 

As noted previously, DOE established 

a working group to negotiate proposed 

energy conservation standards for 

pumps. Specifically, on July 23, 2013, 

DOE issued a notice of intent to 

establish a commercial and industrial 

pumps working group (‘‘CIP Working 

Group’’). (78 FR 44036.) The working 

group was established under the 

Appliance Standards and Rulemaking 

Federal Advisory Committee (ASRAC) 

in accordance with the Federal 

Advisory Committee Act (FACA) and 

the Negotiated Rulemaking Act (NRA). 

(5 U.S.C. App. 2; 5 U.S.C. 561–570, Pub. 

L. 104–320.) The purpose of the working 

group was to discuss and, if possible, 

reach consensus on proposed standard 

levels for the energy efficiency of 

pumps. The working group was to 

consist of representatives of parties 

having a defined stake in the outcome 

of the proposed standards, and the 

group would consult as appropriate 

with a range of experts on technical 

issues. 

DOE received 19 nominations for 

membership. Ultimately, the working 

group consisted of 16 members, 

including 1 member from the ASRAC 

and 1 DOE representative. (See Table 

II.1) The working group met in-person 

during 7 sets of meetings held December 

18–19, 2013 and January 30–31, March 

4–5, March 26–27, April 29–30, May 

28–29, and June 17–19, 2014. 

TABLE II.1—ASRAC PUMP WORKING

GROUP MEMBERS AND AFFILIATIONS

Member Affiliation 

Lucas Adin ................ U.S. Department of 

Energy. 

Tom Eckman ............. Northwest Power and 

Conservation 

Council (ASRAC 

Member). 

Robert Barbour ......... TACO, Inc. 

Charles Cappelino .... ITT Industrial Process. 

Greg Case ................. Pump Design, Development and 

Diagnostics. 

Gary Fernstrom ......... Pacific Gas & Electric 

Company, San 

Diego Gas & Electric Company, 

Southern California 

Edison, and Southern California Gas 

Company. 

Mark Handzel ............ Xylem Corporation. 

Albert Huber .............. Patterson Pump 

Company. 

Joanna Mauer ........... Appliance Standards 

Awareness Project. 

Doug Potts ................ American Water. 

TABLE II.1—ASRAC PUMP WORKING

GROUP MEMBERS AND AFFILIATIONS—Continued 

Member Affiliation 

Charles Powers ......... Flowserve Corporation, Industrial 

Pumps. 

Howard Richardson .. Regal Beloit. 

Steve Rosenstock ..... Edison Electric Institute. 

Louis Starr ................. Northwest Energy Efficiency Alliance. 

Greg Towsley ............ Grundfos USA. 

Meg Waltner .............. Natural Resources 

Defense Council. 

To facilitate the negotiations, DOE 

provided analytical support and 

supplied the group with a variety of 

analyses and presentations, all of which 

are available in the docket 

(www.regulations.gov/

#!docketDetail;D=EERE-2013-BT-NOC0039). These analyses and 

presentations, developed with direct 

input from the working group members, 

include preliminary versions of many of 

the analyses discussed in today’s NOPR, 

including a market and technology 

assessment; screening analysis; 

engineering analysis; energy use 

analysis; markups analysis; life cycle 

cost and payback period analysis; 

shipments analysis; national impact 

analysis; and manufacturer impact 

analysis. 

On June 19, 2014, the working group 

reached consensus on proposed energy 

conservation standards for specific 

types of pumps. The working group 

assembled their recommendations into a 

term sheet (See EERE–2013–BT–NOC– 

0039–0092) that was presented to, and 

approved by the ASRAC on July 7, 2014. 

DOE considered the approved term 

sheet, along with other comments 

received during the rulemaking process, 

in developing proposed energy 

conservation standards. 

C. Relevant Industry Sectors 

The energy conservation standards 

proposed in this NOPR will primarily 

affect the pump and pumping 

equipment manufacturing industry. The 

North American Industry Classification 

System (NAICS) classifies this industry 

under code 333911. DOE identified 86 

manufacturers of pumps covered under 

this proposed rule, with 56 of those 

being domestic manufacturers. The 

leading U.S. industry association for the 

pumps covered under this proposed 

rule is the Hydraulic Institute (HI). 

III. General Discussion 

In developing this NOPR, DOE 

reviewed the recommendations in the 

term sheet produced by the CIP Working 

Group, as well as the 13 comments it 

received in response to the February 

2013 Framework Document. 

Commenters included: Engineered 

Software, Inc.; Richard Shaw; Grundfos 

Pumps Corporation; the Hydraulic 

Institute (HI); Pacific Gas and Electric 

Company, San Diego Gas and Electric, 

Southern California Gas Company, and 

Southern California Edison (the 

preceding four commenters hereafter 

referred to collectively as the CA IOUs); 

National Fire Protection Association 

(NFPA); Air-Conditioning, Heating, and 

Refrigeration Institute (AHRI); Colombia 

Engineering; Earthjustice; Edison 

Electric Institute (EEI); The Appliance 

Standards Awareness Project (ASAP), 

Alliance to Save Energy (ASE), 

American Council for an Energy 

Efficient Economy (ACEEE), 

Earthjustice, and Natural Resources 

Defense Council (NRDC) (the preceding 

five commenters hereafter referred to 

collectively as the Advocates); and the 

Northwest Energy Efficiency Alliance 

and the Northwest Power and 

Conservation Council (hereafter referred 

to as NEEA/NPCC). DOE addressed all 

relevant stakeholder comments and 

requests throughout this NOPR. DOE 

notes that comments addressed in this 

NOPR reflect the views of the 

stakeholders at the close of the 

framework comment period in May 

2013. DOE recognizes that the working 

group’s ASRAC-approved term sheet 

may represent views that have 

progressed since the time of the 

framework comments. As such, when 

addressing comments, DOE has noted 

where stakeholder views have changed. 

A. Rulemaking Approach 

1. Harmonization 

In response to the Framework 

Document, HI and Grundfos 

recommended that DOE harmonize its 

efforts with the approach followed by 

the European Union (EU). (HI, No. 25 at 

p. 2; Grundfos, No. 24 at p. 2.) HI noted 

that harmonizing with the EU provides 

a logical and consistent path forward for 

U.S. manufacturers who have 

international operations and who export 

equipment from the U.S. to markets 

worldwide. Id. Grundfos also suggested 

that DOE should harmonize with the EU 

on specific issues, including: (1) 

nomenclature and definitions, (2) test 

procedures, and (3) use of the Minimum 

Efficiency Index (MEI), including the 

applicable equation and constants. 

Grundfos also suggested limiting this 

initial rulemaking to address 1 potential 

standards for clean water pumps (as 

opposed to expanding the scope to 


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15For the purposes of this rulemaking, ‘‘VSD’’ 

will be used when discussing speed control of 

pumps in general. Variable frequency drive (VFD) will be used when specifically discussing 

continuous control of AC induction motors. 

include other pump types). Id. DOE 

notes that throughout the course of 

negotiations, the CIP Working Group 

members, including HI and Grundfos, 

made recommendations that in many 

cases did not completely harmonize 

with the EU approach. The level of 

harmonization reflected in this NOPR 

and the associated test procedure NOPR 

directly results from these working 

group recommendations. This is 

discussed with more specificity in the 

applicable sections of the preamble. 

2. Regulatory Options 

In the Framework Document, DOE 

considered the following options for 

regulation: 

1. Defining and establishing standards 

for the pump exclusive of the motor 

(i.e., the bare pump), except possibly for 

submersible pumps. This option follows 

the current EU approach for clean water 

pumps. 

2. Defining and establishing standards 

for the pump inclusive of the motor and 

controls, if the pump is sold with them. 

Using this approach, each pump 

equipment class would be sub-divided 

into two categories: (1) Without 

variable-speed drive (VSD) (pump is 

sold with or without a motor), and (2) 

with VSD (VSD included only if the 

pump is sold with a motor).15

3. Defining and establishing standards 

for the pump inclusive of the motor, if 

the pump is sold with a motor, and 

considering the VSD as a design option 

to improve the efficiency of pumps sold 

with motors. Each pump equipment 

class could be divided into two further 

categories: (1) without motor (or VSD), 

and (2) with motor (with or without 

VSD). (EERE–2011–BT–0031–0013) 

DOE also discussed the metrics it was 

considering for each option, shown in 

Table III.1. 

TABLE III.1—TENTATIVE METRICS FOR PUMP REGULATORY OPTIONS AS PROPOSED IN FRAMEWORK DOCUMENT

Regulatory option Equipment class set Metric 

1. Bare Pumps ................................................... N/A ................................................................... Pump efficiency at three points. 

2. Pumps inclusive of motor and VSD .............. Pumps Without VSD (with or without motor) ...

Pumps With VSD .............................................

Pump efficiency at three points. 

Overall efficiency at three points. 

3. Pumps inclusive of motor, with VSD as a design option for all pumps sold with motors.Pumps Without Motor ......................................

Pumps With Motor (with or without VSD) ........

Pump efficiency at three points. 

Potentially based on motor/VSD input power 

at multiple load points.* 

* DOE stated that it may also consider the use of pump efficiency as an additional labeling requirement. 

In response, commenters 

recommended various approaches for 

dealing with pumps inclusive of the 

motor and/or controls: 

• The Advocates, NEEA/NPCC, and 

the CA IOUs recommended a modified 

regulatory option 3, in which pumps 

sold with motors below a certain 

horsepower (hp) limit might be required 

to be sold with VSDs. (Advocates, No. 

32 at pp. 5–6; NEEA/NPVCC, No. 33 at 

p. 2; CA IOUs, No. 26 at p. 3.) The CA 

IOUs did not see the value in having an 

equipment class just for 

pump+motor+VSD (as in regulatory 

option 2). (CA IOUs, No. 26 at p. 3.) 

• HI and Grundfos both supported an 

approach where the pump would be 

regulated inclusive of the motor and 

controls, which would, in their view, be 

likely to achieve significantly greater 

savings than an approach based only on 

the bare pump. (Grundfos, No. 24 at p. 

1; HI, No. 25 at p. 2.) HI believes that 

a large majority of systems can benefit 

from VSDs. (HI, No. 25 at p. 28.) HI and 

Grundfos agreed that system feedback 

control is necessary in this approach. 

(Grundfos, No. 24 at p. 9; HI, No. 25 at 

p. 27.) Specifically, HI and Grundfos 

proposed a two-prong approach: that all 

pumps be required to meet the MEI 

(Minimum Efficiency Index, based on 

the metric of pump efficiency), while 

pumps sold with motors and VSDs 

would also have another electric input 

power-based metric as a label or 

standard. (HI, No. 25 at p. 2; Grundfos, 

No. 24 at p.10.) The HI and Grundfos 

(European) approaches are similar but 

not identical. 

• EEI stated that analyzing energy 

(and setting standards) on the basis of 

pumps including their motors is the 

preferred approach, although EEI was 

not opposed to establishing pump 

standards based on ‘pump only’ 

performance characteristics. EEI did not 

support establishing standards based on 

pump performance with a VSD 

controller, as pumps are used in a 

variety of applications and not all are a 

good fit with VSDs. EEI also noted that 

it was unaware of any other DOE 

rulemaking where an optional, external 

component has been proposed as part of 

the test procedure or standard. (EEI, No. 

31 at p. 3.) 

• AHRI noted that unless DOE 

develops coverage of all possible 

combinations of pumps inclusive of the 

motor and controls, a regulatory regime 

may inadvertently cover only 10 percent 

of the possible combinations that are in 

use. (AHRI, No. 28 at pp.1–2.) 

The CIP Working Group ultimately 

recommended an alternative regulatory 

option that considers pumps inclusive 

of motors and controls, but applies 

essentially the same metric to all 

pumps, regardless of how they are sold. 

(EERE–2013–BT–NOC–0039–0092; 

Recommendations Nos. 1, 9, and 11.) 

DOE’s proposal is consistent with the 

recommendation of the working group. 

The details of the proposed regulatory 

structure are discussed in the remainder 

of this NOPR. 

DOE recognizes that some pumps, 

particularly in the agricultural sector, 

may be sold and operated with nonelectric drivers, such as engines, steam 

turbines, or generators. The CIP 

Working Group recommended that 

pumps sold with non-electric drivers be 

rated as a bare pump, excluding the 

energy performance of the non-electric 

driver. (Docket No. EERE–2013–BT– 

NOC–0039, No. 92, Recommendation #3 

at p. 2) DOE believes that there is 

insufficient technical merit or potential 

for additional energy savings to justify 

the additional burden associated with 

rating and certifying pumps sold with 

non-electric drivers inclusive of those 

drivers. This is described in more detail 

in the test procedure NOPR. 

B. Definition of Covered Equipment 

Although pumps are listed as covered 

equipment under 42 U.S.C. 6311(1)(A), 

the term ‘‘pump’’ is not defined in 

EPCA. In the test procedure NOPR, DOE 

proposed a definition for ‘‘pump’’ 

clarify what would constitute the 


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Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17835 

16The CIP Working Group recommendation 

specified pumps designed for nominal 3600 or 1800 

revolutions per minute (rpm) driver speed. 

However, it was intended that this would include 

pumps driven by non-induction motors as well. 

DOE believes that its clarification accomplishes the 

same intent while excluding niche pumps sold with 

non-induction motors that may not be able to be 

tested according to the proposed test procedure. 

The test procedure NOPR contains additional 

details. 

17The CIP Working Group made this 

recommendation because a given pump may be 

distributed to a particular customer with its 

impeller trimmed, and impeller trim has a direct 

impact on a pump’s performance characteristics. 

For any pump sold with a trimmed impeller, it was 

recommended that the certification rating for that 

pump model with a full diameter impeller would 

apply. This approach would limit the overall 

burden when measuring the energy efficiency of a 

given pump. In addition, a rating at full impeller 

diameter will typically be the most consumptive 

rating for the pump. 

covered equipment. The definition 

reflects the consensus reached by the 

CIP Working Group in its negotiations: 

‘‘Pump’’ means equipment designed to 

moves liquids (which may include 

entrained gases, free solids, and totally 

dissolved solids) by physical or 

mechanical action and includes a bare 

pump and, if included by the 

manufacturer at the time of sale, 

mechanical equipment, driver and 

controls. In the test procedure NOPR, 

DOE also proposed definitions for ‘‘bare 

pump,’’ ‘‘mechanical equipment,’’ 

‘‘driver,’’ and ‘‘controls,’’ as 

recommended by the CIP Working 

Group. 

C. Scope of the Energy Conservation 

Standards in this Rulemaking 

DOE is considering applying a 

bifurcated approach that would set out 

the scope of the types of pumps that 

would be subject to the test procedure 

and energy conservation standards, 

along with potential energy 

conservation standards that would 

apply to these pumps. The pumps for 

which DOE is proposing to set energy 

conservation standards for in this 

rulemaking are consistent with the CIP 

Working Group’s recommendations as 

well as the proposals in the test 

procedure NOPR, and consist of the 

following categories: 

• End suction close coupled, 

• End suction frame mounted/own 

bearings, 

• In-line, 

• Radially split, multi-stage, vertical, 

in-line, diffuser casing, and 

• Vertical turbine submersible. 

DOE proposed definitions for these 

pumps in the test procedure NOPR. 

For the equipment categories 

included in this rulemaking, DOE 

proposes to consider energy 

conservation standards only for clean 

water pumps. In the test procedure, 

DOE proposed to define ‘‘clean water 

pump’’ as a pump that is designed for 

use in pumping water with a maximum 

non-absorbent free solid content of 0.25 

kilograms per cubic meter, and with a 

maximum dissolved solid content of 50 

kilograms per cubic meter, provided 

that the total gas content of the water 

does not exceed the saturation volume, 

and disregarding any additives 

necessary to prevent the water from 

freezing at a minimum of ¥10 °C. 

In the test procedure NOPR, DOE also 

proposed to define several kinds of 

pumps that are clean water pumps, as 

defined, but would not be subject to the 

proposed test procedure, in accordance 

with CIP Working Group 

recommendations. DOE proposes that 

these pumps would also not be subject 

to the proposed energy conservation 

standards: 

(a) Fire pumps; 

(b) Self-priming pumps; 

(c) Prime-assist pumps; 

(d) Sealless pumps; 

(e) Pumps designed to be used in a 

nuclear facility subject to 10 CFR part 

50—Domestic Licensing of Production 

and Utilization Facilities; and 

(f) A pump meeting the design and 

construction requirements set forth in 

Military Specification MIL–P–17639F, 

‘‘Pumps, Centrifugal, Miscellaneous 

Service, Naval Shipboard Use’’ (as 

amended). 

The test procedure NOPR included 

further definitions for ‘‘fire pump,’’ 

‘‘self-priming pump,’’ ‘‘prime-assist 

pump,’’ and ‘‘sealless pump.’’ 

For pumps meeting the definition of 

a clean water pump, with certain 

exceptions as noted above, DOE 

proposes to set energy conservation 

standards only for pumps with the 

following characteristics, which are 

identical to those for which DOE 

proposed the test procedure apply and 

are in accordance with CIP Working 

Group recommendations: 

• 1–200 hp (shaft power at BEP at full 

impeller diameter for the number of 

stages required for testing to the 

standard); 

• 25 gallons/minute and greater (at 

BEP at full impeller diameter); 

• 459 feet of head maximum (at BEP 

at full impeller diameter); 

• Design temperature range from ¥10 

to 120 degrees C; 

• Pumps designed to operate with 

either: (1) a 2- or 4-pole induction 

motor, or (2) a non-induction motor 

with a speed of rotation operating range 

that includes speeds of rotation between 

2,880 and 4,320 revolutions per minute 

and/or 1,440 and 2,160 revolutions per 

minute; 16 and 

• 6 inch or smaller bowl diameter 

(VTS/HI VS0). 

DOE also proposed in the test 

procedure that all pump models must be 

rated and certified in a full impeller 

configuration, as recommended by the 

CIP Working Group. (See EERE–2013– 

BT–NOC–0039–0092, Recommendation 

No. 7.) 17 DOE proposed a definition for 

full impeller in its test procedure NOPR. 

D. Test Procedure and Metric 

DOE is currently conducting a 

rulemaking to establish a uniform test 

procedure for determining the energy 

efficiency of pumps, as well as sampling 

plans for the purposes of demonstrating 

compliance with any energy 

conservation standards for this 

equipment that DOE adopts. In the test 

procedure NOPR, DOE proposed to 

prescribe test methods for measuring the 

efficiency of pumps, inclusive of motors 

and/or controls, by measuring the 

produced hydraulic power and 

measuring or calculating the shaft 

power and/or electric input power to 

the motor or controls. Consistent with 

the recommendations of the CIP 

Working Group, DOE proposed that 

these methods be based on Hydraulic 

Institute (HI) Standard 40.6–2014, 

‘‘Hydraulic Institute Standard for 

Method for Rotodynamic Pump 

Efficiency Testing,’’ hereinafter referred 

to as ‘‘HI 40.6–2014.’’ (See EERE–2013– 

BT–NOC–0039–0092, Recommendation 

No. 10.) DOE proposed additions to HI 

40.6–2014 to account for the energy 

performance of motors and/or controls, 

which is not addressed in the scope of 

HI 40.6–2014. 

The test procedure NOPR proposes 

that the energy conservation standards 

for pumps be expressed in terms of a 

constant load PEI (PEICL) for pumps 

sold without continuous or noncontinuous controls (i.e., either bare 

pumps or pumps sold inclusive of 

motors but not continuous or noncontinuous controls) or a variable load 

PEI (PEIVL) for pumps sold with 

continuous or non-continuous controls. 

The PEICL or PEIVL, as applicable, 

describes the weighted average 

performance of the rated pump, 

inclusive of any motor and/or controls, 

at specific load points, normalized with 

respect to the performance of a 

‘‘minimally compliant pump’’ (as 

defined in section III.D.1) without 

controls. The metrics are defined as 

follows: 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17836 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

18The equation to define the minimally 

compliant pump in the EU is of the same form, but 

employs different coefficients to reflect the fact that 

the flow will be reported in m3/hr at 50 Hz and the 

specific speed will also be reported in metric units. 

Specific speed is a dimensionless quantity, but has 

a different magnitude when calculated using metric 

versus English units. 

Where: 

• PERCL is the equally-weighted average 

electric input power to the pump 

measured (or calculated) at the driver 

input over a specified load profile, as 

tested in accordance with the DOE test 

procedure. This metric applies only to 

pumps in a fixed speed equipment class. 

For bare pumps, the test procedure 

would specify the default motor loss 

values to use in the calculations of driver 

input. 

• PERVL is the equally-weighted average 

electric input power to the pump 

measured (or calculated) at the controller 

input over a specified load profile as 

tested in accordance with the DOE test 

procedure. This metric applies only to 

pumps in a variable speed equipment 

class. 

• PERSTD is the PER rating of a minimally 

compliant pump (as defined in section 

III.D.1). It can be described as the 

allowable weighted average electric 

input power to the specific pump, as 

calculated in the test procedure. This 

metric applies to all equipment classes. 

A value of PEI greater than 1.00 

would indicate that the pump is less 

efficient than DOE’s energy 

conservation standard and does not 

comply, while a value less than 1.00 

would indicate that the pump is more 

efficient than the standard requires. 

1. PER Rating of a Minimally Compliant 

Pump 

DOE is considering using a 

standardized, minimally compliant bare 

pump, inclusive of a minimally 

compliant motor, as a reference pump 

for each combination of flow at BEP and 

specific speed. The minimally 

compliant pump would be defined as a 

function of certain physical properties 

of the bare pump, such as flow at BEP 

and specific speed (Ns), as used in the 

EU MEI approach. In the MEI approach, 

a single polynomial equation defines a 

three-dimensional surface over which 

minimum efficiency varies across a 

range of both flow and Ns. The EU uses 

the same equation for all equipment 

classes, changing only one value—the Cvalue—to raise or lower the surface 

along a vertical axis to cut off a certain 

percentage of pumps, but without 

adjusting any variables that would 

change the shape of the efficiency 

surface. HI and Grundfos supported the 

EU MEI approach, which eliminates the 

least efficient pumps by type category. 

(HI, No. 25 at p. 2; Grundfos, No. 24 at 

p. 14.) HI added that Ns versus flow rate 

is the most practical approach to use 

when predicting efficiency for a 

particular class of pump types. (HI, No. 

25 at p. 37.) 

Grundfos recommended use of the EU 

equation as well as the same C-values 

used in the EU, which would result in 

exact harmonization. (Grundfos, No. 24 

at p. 14.) However, HI recommended 

DOE use the EU equation but with an 

updated C-value. HI added that 

although a better data fit could be 

obtained by changing other coefficients, 

such complexity is not warranted. (HI, 

No. 25 at pp. 4–5, 32, 40.) 

After reviewing stakeholder 

comments, as well as discussions of the 

CIP Working Group, DOE is proposing 

to base its PER rating using the EU’s 

equation, but modifying the C-values as 

suggested by HI to better reflect the U.S. 

market. Specifically, DOE proposes to 

use the same equation used by the EU 

to develop its standard (i.e., to 

determine the shape of the efficiency 

surface), translated to 60 Hz electrical 

input power and English units 18 as 

shown in equation 2, to determine the 

efficiency of a minimally compliant 

pump: 

Where: 

Q = flow at BEP in gallons per minute at 60 

Hz, 

Ns = specific speed at 60 Hz, and 

C = an intercept that is set for the surface 

based on the speed of rotation and 

equipment category of the pump model. 

The C-value is the translational 

component of the three-dimensional 

polynomial equation. Adjusting the Cvalue increases or decreases the pump 

efficiency of a minimally compliant 

pump. 

The calculated efficiency of the 

minimally compliant pump is reflective 

of the pump efficiency at BEP. This 

value is adjusted to determine the 

minimally compliant pump efficiency at 

75 percent and 110 percent of BEP flow 

using the scaling values implemented in 

the EU regulations for clean water 

pumps. Namely, the efficiency at 75 

percent of BEP flow is assumed to be 

94.7 percent of that at 100 percent of 

BEP flow and the pump efficiency at 

110 percent of BEP flow is assumed to 

be 98.5 percent of that at 100 percent of 

BEP flow, as shown in equation 3: 


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Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17837 

19 DOE also presents a sensitivity analysis that 

considers impacts for products shipped in a nineyear period. 

Where: 

wi = weighting at each rating point (equal 

weighting—0.3333); 

PHydro,i = the pump power output at rating 

point i of the tested pump; 

hpump,STD = the minimally compliant pump 

efficiency, as determined in accordance 

with equation 52; 

Li = the motor losses at each load point i, as 

determined in accordance with the 

procedure specified in the DOE test 

procedure; and 

i = 75%, 100%, and 110% of BEP flow, as 

determined in accordance with the DOE 

test procedure. 

Equation 3 also demonstrates how a 

ratio of the minimally compliant pump 

efficiency and the hydraulic output 

power for the rated pump is used to 

determine the input power to a 

minimally compliant pump at each load 

point. Note that the pump hydraulic 

output power for the minimally 

compliant pump is the same as that for 

the particular pump being evaluated. 

The calculated shaft input power for the 

minimally compliant pump at each load 

point would then be combined with a 

minimally compliant motor for that 

default motor construction and 

horsepower and the default part-load 

loss curve, described in the proposed 

DOE test procedure, to determine the 

input power to the motor at each load 

point. Under this proposal, the 

applicable minimum motor efficiency is 

determined as a function of construction 

(i.e., open or enclosed), number of 

poles, and horsepower as specified by 

DOE’s existing energy conservation 

standards for electric motors at 10 CFR 

431.25. PERSTD is then determined as 

the weighted average input power to the 

motor at each load point, as shown in 

equation 3. 

DOE selected several C-values to 

establish the efficiency levels analyzed 

in this proposal. Each C-value and 

efficiency level accounts for pump 

efficiency at all load points as well as 

motor losses, and does so equivalently 

across the full scope of flow and specific 

speed encompassed by this proposed 

rule. See section IV.C.4 for a complete 

examination of the efficiency levels 

analyzed in this rulemaking. 

E. Compliance Date 

Consistent with the recommendations 

of the CIP Working Group, see EERE– 

2013–BT–NOC–0039–0092, p. 4, 

Recommendation No. 9, DOE proposes 

to require that its standards would 

apply to equipment manufactured 

beginning on the date four years after 

the publication date of the final rule. 

DOE estimates that any final rule would 

publish in late 2015, resulting in a 

compliance date for the standards in 

late 2019. In its analysis, DOE used an 

analysis period of 2020 through 2049. 

F. Technological Feasibility 

1. General 

EPCA requires that any new or 

amended energy conservation standard 

that DOE prescribes be designed to 

achieve the maximum improvement in 

energy efficiency that DOE determines 

is technologically feasible. (42 U.S.C. 

6295(o)(2)(A) and 6316(a).) 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 the 

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. 

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; and (3) adverse impacts on 

health or safety. (10 CFR part 430, 

subpart C, appendix A, section 

4(a)(4)(ii) through (iv).) Section IV.B of 

this NOPR discusses the results of the 

screening analysis for pumps, 

particularly the designs DOE 

considered, those it screened out, and 

those that are the basis for the trial 

standard levels (TSLs) in this proposed 

rulemaking. For further details on the 

screening analysis for this 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 equipment, 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. 6295(p)(1) and 

6316(a).) Accordingly, in the 

engineering analysis, DOE determined 

the maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for pumps, using the design 

options that passed the screening 

analysis. 

G. Energy Savings 

1. Determination of Savings 

EPCA provides that any new or 

amended energy conservation standard 

that DOE prescribes shall be designed to 

achieve the maximum improvement in 

energy efficiency that DOE determines 

is economically justified. (42 U.S.C. 

6295(o)(2)(A) and (B) and 6316(a).) In 

addition, in determining whether such 

standard is technologically feasible and 

economically justified, DOE may not 

prescribe standards for certain types or 

classes of pumps if such standards 

would not result in significant energy 

savings. (42 U.S.C. 6295(o)(3)(B) and 

6316(a).) 

For each TSL, DOE projected energy 

savings from the pumps that are the 

subject of this rulemaking purchased in 

the 30-year period that begins in the 

first full year of compliance with new 

standards (2020–2049).19 The savings 

are measured over the entire lifetime of 

pumps purchased in the 30-year 

analysis period. DOE quantified the 

energy savings attributable to each TSL 

as the difference in energy consumption 

between each standards case and the 

base case. The base case represents a 

projection of energy consumption that 

currently exists in the marketplace in 

the absence of mandatory efficiency 

standards, and it considers market 

forces and policies that affect demand 

for more efficient products. To estimate 

the base case, DOE used data provided 


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by the CIP Working Group, as discussed 

in section IV.H.2. 

DOE used its national impact analysis 

(NIA) spreadsheet model to estimate 

energy savings from potential new 

standards for the equipment that is the 

subject of this rulemaking. The NIA 

spreadsheet model (described in section 

IV.H of this notice) calculates energy 

savings in 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. To calculate 

this primary energy savings, DOE 

derives annual conversion factors from 

the model used to prepare the Energy 

Information Administration’s (EIA) most 

recent Annual Energy Outlook (AEO). 

DOE also estimates full-fuel-cycle 

(FFC) energy savings, as discussed in 

DOE’s statement of policy and notice of 

policy amendment. 76 FR 51282 

(August 18, 2011), as amended at 77 FR 

49701 (August 17, 2012). 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 efficiency standards. DOE’s 

approach is based on the calculation of 

an FFC multiplier for each of the energy 

types used by covered equipment. For 

more information on FFC energy 

savings, see section IV.H.1.a. 

2. Significance of Savings 

As noted above, EPCA prohibits DOE 

from adopting a standard for a covered 

product unless such standard would 

result in ‘‘significant’’ energy savings. 

(42 U.S.C. 6295(o)(3)(B) and 6316(a).) 

Although the term ‘‘significant’’ is not 

defined in the Act, the U.S. Court of 

Appeals for the District of Columbia 

Circuit, in Natural Resources Defense 

Council v. Herrington, 768 F.2d 1355, 

1373 (D.C. Cir. 1985), opined that 

Congress intended ‘‘significant’’ energy 

savings in the context of EPCA to be 

savings that were not ‘‘genuinely 

trivial.’’ The energy savings for today’s 

proposed standards (presented in 

section V.B.3.a) are nontrivial and, 

therefore, DOE considers them 

‘‘significant’’ within the meaning of 

section 325 of EPCA. 

H. Economic Justification 

1. Specific Criteria 

EPCA provides seven factors to be 

evaluated in determining whether a 

potential energy conservation standard 

is economically justified. (42 U.S.C. 

6295(o)(2)(B)(i) and 6316(a).) The 

following sections discuss how DOE has 

addressed each of those seven factors in 

this rulemaking. 

a. Economic Impact on Manufacturers 

and Consumers 

In determining the impacts of a 

potential new or amended standard on 

manufacturers, DOE conducts a 

manufacturer impact analysis (MIA), as 

discussed in section IV.J. DOE first uses 

an annual cash-flow approach to 

determine the quantitative impacts. This 

step includes 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 industrywide impacts analyzed include industry 

net present value (INPV), which values 

the industry on the basis of expected 

future cash flows; cash flows by year; 

changes in revenue and income; and 

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 payback period (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 economic impacts 

applicable to a particular rulemaking. 

DOE also evaluates the LCC impacts of 

potential standards on identifiable 

subgroups of consumers that may be 

affected disproportionately by a national 

standard. 

b. Savings in Operating Costs Compared 

to Increase in Price 

EPCA requires DOE to consider the 

savings in operating costs throughout 

the estimated average life of the covered 

equipment that are likely to result from 

the standard. (42 U.S.C. 

6295(o)(2)(B)(i)(II) and 6316(a).) DOE 

conducts this comparison in its LCC and 

PBP analysis. 

The LCC is the sum of the purchase 

price of a piece 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 consumer 

discount rates. 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. For its analysis, DOE 

assumes that consumers will purchase 

the covered equipment in the first year 

of compliance with new standards. 

The LCC savings for the efficiency 

levels considered in today’s NOPR are 

calculated relative to a base case that 

reflects projected market trends in the 

absence of new standards. DOE 

identifies the percentage of consumers 

estimated to receive LCC savings or 

experience an LCC increase, in addition 

to the average LCC savings associated 

with a particular standard level. DOE’s 

LCC and PBP analysis is discussed in 

further detail in section IV.F. 

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. 6295(o)(2)(B)(i)(III) 

and 6316(a).) As discussed in section 

IV.H, DOE uses the NIA spreadsheet to 

project national energy savings. 

d. Lessening of Utility or Performance of 

Products 

In establishing classes of equipment, 

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. 6295(o)(2)(B)(i)(IV) and 

6316(a).) Based on data available to 

DOE, the standards proposed in today’s 

notice would not reduce the utility or 

performance of the products under 

consideration in this 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. 

6295(o)(2)(B)(i)(V) and 6316(a).) It also 

directs the Attorney General to 

determine the impact, if any, of any 


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Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17839 

20Such a rating would include the hydraulic 

efficiency of the bare pump as well as the efficiency 

Continued 

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. 

6295(o)(2) (B)(ii) and 6316(a).) 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 respond to the Attorney General’s 

determination in the final rule. 

f. Need for National Energy 

Conservation 

DOE also considers the need for 

national energy conservation in 

determining whether a new or amended 

standard is economically justified. (42 

U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a).) 

The energy savings from new or 

amended 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. 

New or amended standards also are 

likely to result in environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases associated with energy 

production. DOE reports the emissions 

impacts from the proposed standards, 

and from each TSL it considered, in 

section V.B.6 of this notice. DOE also 

reports estimates of the economic value 

of emissions reductions resulting from 

the considered TSLs, as discussed in 

section IV.L. 

g. Other Factors 

EPCA allows the Secretary of Energy, 

in determining whether a standard is 

economically justified, to consider any 

other factors that the Secretary deems to 

be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII) and 6316(a).) In 

developing the proposed standard, DOE 

has also considered the term sheet of 

recommendations voted on by the CIP 

Working Group and approved by the 

ASRAC. (See EERE–2013–BT–NOC– 

0039–0092.) DOE has weighed the value 

of such negotiation in establishing the 

standards proposed in today’s rule. DOE 

has encouraged the negotiation of 

proposed standard levels, in accordance 

with the FACA and the NRA, as a means 

for interested parties, representing 

diverse points of view, to analyze and 

recommend energy conservation 

standards to DOE. Such negotiations 

may often expedite the rulemaking 

process. In addition, standard levels 

recommended through a negotiation 

may increase the likelihood for 

regulatory compliance, while decreasing 

the risk of litigation. 

2. Rebuttable Presumption 

EPCA creates a rebuttable 

presumption that an energy 

conservation standard is economically 

justified if the additional cost to the 

consumer of a product 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. 

6295(o)(2)(B)(iii) and 6316(a).) DOE’s 

LCC and PBP analyses generate values 

used to calculate the effects that 

proposed energy conservation standards 

would have on the payback period for 

consumers. These analyses include, but 

are not limited to, the three-year 

payback period 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. 

6295(o)(2)(B)(i) and 6316(a). 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 

proposed rule. 

IV. Methodology and Discussion of 

Comments 

DOE used four analytical tools to 

estimate the impact of today’s proposed 

standards. The first tool is a spreadsheet 

that calculates LCC and PBP of potential 

new energy conservation standards. The 

second tool is a spreadsheet that 

provides shipments forecasts calculates 

national energy savings and net present 

value resulting from potential energy 

conservation standards. DOE uses the 

third spreadsheet tool, the Government 

Regulatory Impact Model (GRIM), to 

assess manufacturer impacts. 

Additionally, DOE used output from the 

latest version of EIA’s National Energy 

Modeling System (NEMS) for the 

emissions and utility impact analyses. 

NEMS is a public domain, multi-sector, 

partial equilibrium model of the U.S. 

energy sector. EIA uses NEMS to 

prepare its Annual Energy Outlook 

(AEO), a widely known energy forecast 

for the United States. 

A. Market and Technology Assessment 

When beginning an energy 

conservation standards rulemaking, 

DOE develops information that provides 

an overall picture of the market for the 

equipment concerned, including the 

purpose of the equipment, the industry 

structure, and market characteristics. 

This activity includes both quantitative 

and qualitative assessments based 

primarily on publicly available 

information (e.g., manufacturer 

specification sheets, industry 

publications) and data submitted by 

manufacturers, trade associations, and 

other stakeholders. The subjects 

addressed in the market and technology 

assessment for this rulemaking include: 

(1) Quantities and types of equipment 

sold and offered for sale; (2) retail 

market trends; (3) equipment covered by 

the rulemaking; (4) equipment classes; 

(5) manufacturers; (6) regulatory 

requirements and non-regulatory 

programs (such as rebate programs and 

tax credits); and (7) technologies that 

could improve the energy efficiency of 

the equipment under examination. DOE 

researched manufacturers of pumps and 

made a particular effort to identify and 

characterize small business 

manufacturers in this sector. See 

chapter 3 of the NOPR TSD for further 

discussion of the market and technology 

assessment. 

1. Equipment Classes 

When evaluating and establishing 

energy conservation standards, DOE 

divides covered equipment into 

equipment classes by the type of energy 

used or by capacity or other 

performance-related features that would 

justify a different standard from that 

which would apply to other equipment 

classes. DOE proposes dividing pumps 

into equipment classes based on the 

following three factors: 

1. Basic pump equipment type, 

2. Configuration, and 

3. Nominal design speed. 

DOE notes that some clean water 

pumps are sold for use with engines or 

turbines rather than electric motors, and 

as such, would use a different fuel type 

(i.e., fossil fuels rather than electricity). 

However, because of the small market 

share of clean water pumps using these 

fuel types, in the test procedure NOPR, 

DOE proposed that any pump sold with, 

or for use with, a driver other than an 

electric motor would be rated as a bare 

pump.20 Therefore, DOE did not 


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of a minimally-compliant electric motor, as 

described in section III.D.1. 

21 In the Framework Document, DOE explored 

identifying specific equipment types that would 

always be used in a variable load application. In 

response, HI and Grundfos reported that 

application, rather than pump type or equipment 

class, controls whether the pump can be used in a 

variable load application. (Grundfos, No. 24 at p. 

21; HI, No. 25 at p. 37).) The proposal is based on 

the assumption that a pump sold with speed 

controls is intended for a variable load application. 

22Council of the European Union. 2012. 

Commission Regulation (EU) No 547/2012 of 25 

June 2012 implementing Directive 2009/125/EC of 

the European Parliament and of the Council with 

regard to ecodesign requirements for water pumps. 

Official Journal of the European Union. L 165, 26 

June 2012, pp. 28–36. 

disaggregate equipment classes by fuel 

type. 

As discussed in section III.C, the five 

pump equipment types considered in 

this rulemaking, each of which DOE 

proposes would form the basis for an 

individual equipment class, include: 

• End suction close coupled (ESCC); 

• End suction frame mounted/own 

bearings (ESFM); 

• In-line (IL); 

• Radially split, multi-stage, vertical, 

in-line, diffuser casing (RSV); and 

• Vertical turbine submersible (VTS). 

A pump’s configuration is defined by 

the equipment with which it is sold. 

Pumps sold inclusive of motors and 

continuous or non-continuous controls 

(as defined in the test procedure NOPR), 

capable of operation at multiple driver 

shaft speeds are defined as variable load 

(VL); pumps sold as bare pumps or with 

motors without such controls, capable 

only of operation at a fixed shaft speed, 

are defined as constant load (CL).21

In the Framework Document, DOE 

requested comment on the use of pump 

design speed as a feature that 

distinguishes equipment classes as well 

as the burden associated with testing 

under multiple speeds. HI reported that 

often a manufacturer will need to make 

modifications to pumps that will be run 

at higher speed to allow for greater 

bearing loads. These may include 

changing the bearing frame size or 

modifying the axial thrust balancing 

device, which will impact pump 

efficiency. These potential 

modifications will vary by equipment 

class. (HI, No. 25 at p. 37–38.) Grundfos 

also added that speed is considered 

during the design of the pump, 

specifically as it relates to the design of 

the shaft and bearings. (Grundfos, No.24 

at p. 23.) HI noted that pumps designed 

for different speeds are normally tested 

over the range of speeds for which the 

pumps will be offered for sale. A pump 

manufacturer offering the same pump at 

different speeds will have to account for 

any speed-related effects on efficiency 

and determine if the pump is compliant 

with the required MEI level at all 

offered speeds. (HI, No.25 at p. 38.) Both 

HI and Grundfos recommended 

harmonizing equipment classes with the 

EU, which regulates pumps designed for 

two- and four-pole nominal driver 

speeds separately, but at 60 Hz 

frequency. (Grundfos, No. 24 at p. 22; 

HI, No. 25 at p. 38.) 

The CIP Working Group also 

recommended separate energy 

efficiency standards for equipment 

types at the nominal speeds for two- and 

four-pole motors. (See EERE–2013–BT– 

NOC–0039–0092, p. 4, Recommendation 

No. 9.) In its analysis, DOE found that 

across the market, pumps at each 

nominal speed demonstrate distinctly 

different performance. To account for 

this variability, DOE proposes that for 

both constant load and variable load 

pumps, the equipment classes should 

also be differentiated on the basis of 

nominal design speed. Within the scope 

of this proposed rule, pumps may be 

defined as being designed for either 

3,600 or 1,800 rpm nominal driver 

speeds. Pumps defined as having a 

3,600 rpm nominal driver speed are 

designed to operate with a 2-pole 

induction motor or with a noninduction motor with a speed of rotation 

operating range that includes speeds of 

rotation between 2,880 and 4,320 rpm. 

Pumps defined as having an 1,800 rpm 

nominal driver speed are designed to 

operate with a 4-pole induction motor 

or with a non-induction motor with a 

speed of rotation operating range that 

includes speeds of rotation between 

1,440 and 2,160 rpm. Throughout this 

document, a 3,600 rpm nominal speed 

is abbreviated as 3600, and a 1,800 rpm 

nominal speed is abbreviated as 1800. 

Taking into account the basic pump 

equipment type, nominal design speed, 

and configuration, DOE proposes the 

following twenty equipment classes for 

the types of pumps to be addressed by 

this rulemaking: 

• ESCC.1800.CL; 

• ESCC.3600.CL; 

• ESCC.1800.VL; 

• ESCC.3600.VL; 

• ESFM.1800.CL; 

• ESFM.3600.CL; 

• ESFM.1800.VL; 

• ESFM.3600.VL; 

• IL.1800.CL; 

• IL.3600.CL; 

• IL.1800.VL; 

• IL.3600.VL; 

• RSV.1800.CL; 

• RSV.3600.CL; 

• RSV.1800.VL; 

• RSV.3600.VL; 

• VTS.1800.CL; 

• VTS.3600.CL; 

• VTS.1800.VL; and 

• VTS.3600.VL. 

Chapter 3 of the NOPR TSD provides 

further detail on the definition of 

equipment classes. 

As noted in section III.D, as proposed 

in the test procedure NOPR, CL 

equipment classes would be rated with 

the PEICL metric, and VL equipment 

classes would be rated with the PEIVL

metric. For today’s NOPR, however, 

DOE relied on available data for bare 

pumps. Therefore, DOE’s analysis is 

based on equipment type and nominal 

design speed only—reported results do 

not use a ‘‘.CL’’ or ‘‘.VL’’ designation. 

DOE is proposing identical standards for 

both CL and VL equipment classes. 

2. Scope of Analysis and Data 

Availability 

DOE collected data to conduct all 

NOPR analyses for the following 

equipment classes directly: 

• ESCC.1800; 

• ESCC.3600; 

• ESFM.1800; 

• ESFM.3600; 

• IL.1800; 

• IL.3600; and 

• VTS.3600. 

The following subsections summarize 

DOE’s approach for the remaining 

equipment classes: 

• RSV.1800; 

• RSV.3600; and 

• VTS.1800. 

a. Radially Split, Multi-Stage, Vertical, 

In-Line, Diffuser Casing (RSV) 

DOE used available information to 

identify baseline and the maximum 

technologically feasible (‘‘max-tech’’) 

efficiency levels for this class. 

Specifically DOE’s contractors used 

market research and confidential 

manufacturer information to establish a 

database of RSV models. The DOE 

contractor database represented models 

offered for sale in the United States by 

three major manufacturers of RSV 

pumps. DOE reviewed the efficiency 

data for these RSV pumps and found no 

models to be less efficient than the 

European Union’s MEI 40 standard 

level, which took effect on January 1, 

2015 22. Details of this analysis are 

presented in Chapter 5 of the TSD. This 

analysis, in conjunction with 

confidential discussions with 

manufacturers led DOE to conclude that 

RSV models sold in the United States 

market are global platforms with 

hydraulic designs equivalent to those in 

the European market. As such, DOE 

presented this conclusion to the CIP 

Working Group for consideration, where 

it was supported and reaffirmed on 

numerous occasions (See, e.g. EERE– 


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23Note that this NOPR and the European Union 

regulation use different metrics to represent 

efficiency. DOE used available data to establish 

harmonized baseline and max-tech efficiency levels 

using the DOE metric. 

24Council of the European Union. 2012. 

Commission Regulation (EU) No 547/2012 of 25 

June 2012 implementing Directive 2009/125/EC of 

the European Parliament and of the Council with 

regard to ecodesign requirements for water pumps. 

Official Journal of the European Union. L 165, 26 

June 2012, pp. 28–36. 

2013–BT–NOC–0039–0109 at pp. 91–97, 

EERE–2013–BT–NOC–0039–0105 at pp. 

293–300, EERE–2013–BT–NOC–0039– 

0106 at pp. 38–40, 62–67, 88–95; EERE– 

2013–BT–NOC–0039–0108 at pp. 119.) 

As a result of the conclusion that RSV 

models sold in the United States market 

are global platforms with hydraulic 

designs equivalent to those in the 

European market, DOE proposes to set 

the baseline and max-tech levels equal 

to those established in Europe. 

Specifically, the baseline would be the 

European minimum efficiency 

standard,23 and the max-tech level 

would be the European level referred to 

as ‘‘the indicative benchmark for the 

best available technology.’’ 24

Although DOE was able to establish a 

baseline and max-tech level using 

aspects of what has already been 

adopted for the European market, DOE 

was unable to develop a cost-efficiency 

relationship or additional efficiency 

levels for RSV, due to lack of available 

cost data for this equipment. As a result, 

DOE has proposed a standard level for 

RSV that is equivalent to the baseline, 

consistent with the recommendation of 

the CIP Working Group. (See EERE– 

2013–BT–NOC–0039–0092, p. 4, 

Recommendation No. 9.) Based on the 

data available and recommendation of 

the CIP Working Group, DOE concludes 

that this standard level is representative 

of the typical minimum efficiency 

configuration sold in this equipment 

class, and no significant impact is 

expected for either the consumers or 

manufacturers. 

Chapter 5 of the NOPR TSD provides 

complete details on RSV data 

availability and the development of the 

baseline efficiency level. 

DOE seeks comment on its 

assumption that all RSV models sold in 

the United States are based on a global 

platform. This is identified as Issue 1 in 

section VIII.E, ‘‘Issues on Which DOE 

Seeks Comment.’’ 

b. Vertical Turbine Submersible 

(VTS).1800 

Market research, confidential 

manufacturer data, and direct input 

from the CIP Working Group indicate 

that the 4-pole electric motor-driven 

submersible vertical turbine (VTS.1800) 

is a very uncommon pump 

configuration in the marketplace. 

Existing models are hydraulically 

identical to the 2-pole-based model, 

with the only differences being in the 

type of motor used. This means that 

every 4-pole-based model is constructed 

from a bare pump that was originally 

designed for use with a 2-pole motor. 

Total shipments for this equipment 

class are estimated to be less than 1 

percent of the VTS.3600 equipment 

class. On the recommendation of the 

CIP Working Group (See EERE–2013– 

BT–NOC–0039–0105 at pp. 300–308; 

EERE–2013–BT–NOC–0039–0106 at pp. 

38–40, 62–67, 88–95), DOE proposes 

efficiency levels for VTS.1800 equal to 

that of the VTS.3600 equipment class. 

Chapter 5 of NOPR TSD provides 

complete details on the development of 

the VTS.1800 efficiency levels. 

DOE seeks comment on whether any 

pump models would meet the proposed 

standard at a nominal speed of 3600 but 

fail at a nominal speed of 1800 if the 

same C-values were used for each 

equipment class. This issue is identified 

as Issue 2 in section VIII.E, ‘‘Issues on 

Which DOE Seeks Comment.’’ 

3. Technology Assessment 

In the Framework Document, DOE 

listed the following technologies that 

can improve pump efficiency: 

• Improved hydraulic design; 

• Improved surface finish on wetted 

components; 

• Reduced running clearances; 

• Reduced mechanical friction in 

seals; 

• Reduction of other volumetric 

losses; 

• Addition of a variable speed drive 

(VSD); 

• Improvement of VSD efficiency; 

and 

• Reduced VSD standby and off mode 

power usage. 

Chapter 3 of the NOPR TSD details 

each of these technology options. DOE 

solicited and received numerous 

stakeholder comments regarding these 

options in the Framework Document. 

The following sections summarize the 

stakeholder comments. 

a. General Discussion of Technology 

Options 

In the Framework Document, DOE 

requested comment on the applicability 

of the technology options presented and 

the accuracy of the potential efficiency 

gains listed. HI agreed that the 

presented technology options are 

applicable to the types of pumps being 

discussed, but it emphasized that DOE’s 

estimates of potential efficiency gains 

are representative of the differences 

between the very worst and very best in 

class pump designs. HI also stated that 

the estimated efficiency gains listed by 

DOE in the Framework document are 

likely to be larger than the gains that 

would be realized for pumps that would 

be subject to an efficiency standard. (HI, 

Framework Public Meeting Transcript at 

pp. 297–298; HI, No. 25 at p. 9; HI, No. 

25 at p. 39.) 

Grundfos also commented on the 

applicability of the technology options. 

They suggested that certain design 

options are interrelated, noting that 

optimizing components such as the 

impeller (i.e., the primary rotating 

component of a centrifugal pump) and 

volute (i.e., the primary static 

component of a centrifugal pump) can 

reduce volumetric losses and improve 

efficiency. (Grundfos, No. 24 at p. 25.) 

Grundfos suggested that using 

combinations of options, such as 

hydraulic redesign, reduced running 

clearance, and reduced volumetric 

losses, may all be incorporated into the 

design of the pump to optimize the 

desired characteristics. (Id.) 

DOE has incorporated both of these 

suggestions into its market and 

technology, screening, and engineering 

analyses. 

b. Additional Technology Options 

The CA IOUs recommended that DOE 

evaluate technology options that 

facilitate maintenance or improve 

average performance over a pump’s 

lifetime. These include wear rings, 

flange taps, and compression sleeves. 

(CA IOUs, No. 26 at pp. 3, 4.) DOE 

evaluated all available technology 

options related to pump performance 

and efficiency, as defined by the 

proposed PEI metric and test procedure. 

While the technology options proposed 

by the CA IOUs may improve 

maintainability and average 

performance over a pump’s lifetime, 

they were not found to have a 

significant impact on pump efficiency 

(as defined by the test procedure) as 

stand-alone technology options and, 

thus, were not considered in the 

analysis. 

c. Applicability of Technology Options 

to Reduced Diameter Impellers 

In the Framework Document, DOE 

also solicited comments on how the 

technology options might impact pumps 

with reduced diameter impellers. In 

response, HI observed that pursuing 

efficiency improvements specific to 

only trimmed impellers would prove 

costly and result in only minor 

efficiency gains. (HI, No. 25 at p. 39.) 

Grundfos noted that modifications in 

the pump design to achieve improved 


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performance are not specific to the 

impeller trim, but to the design of all 

components as a whole. (Grundfos, No. 

24 at p. 26.) 

DOE is proposing to set energy 

conservation standards for pump 

efficiency based on the pump’s full 

impeller diameter characteristics, which 

would require testing the pump at its 

full impeller diameter. As such, DOE’s 

analyses of technology options have 

been made with respect to the full 

diameter model. In proposing to set 

standards only on the full diameter, 

DOE considered that improvements 

made to the full diameter pumps will 

also improve the efficiency for all 

trimmed or reduced diameter variants. 

d. Elimination of Technology Options 

Due to Low Energy Savings Potential. 

DOE eliminated some technologies 

that were determined to provide little or 

no potential for efficiency improvement 

for one of the following additional 

reasons: (a) The technology does not 

significantly improve efficiency; (b) the 

technology is not applicable to the 

equipment being considered for 

coverage or does not significantly 

improve efficiency across the entire 

scope of each equipment class; and (c) 

efficiency improvements from the 

technology degrade quickly. 

DOE found that most of the 

technology options identified in the 

Framework Document have limited 

potential to improve the efficiency of 

pumps. In addition, DOE found that 

several of the options also do not pass 

the screening criteria listed in section 

III.B. DOE discusses the elimination of 

all of these technologies in section III.B. 

B. Screening Analysis 

DOE generally uses four screening 

factors to determine which technology 

options are suitable for further 

consideration in a standards 

rulemaking. If a technology option fails 

to meet any one of the factors, it is 

removed from consideration. The factors 

for screening design options include: 

(1) Technological feasibility. 

Technologies incorporated in 

commercial products or in working 

prototypes will be considered 

technologically feasible. 

(2) Practicability to manufacture, 

install and service. If mass production 

of a technology in commercial products 

and reliable installation and servicing of 

the technology could be achieved on the 

scale necessary to serve the relevant 

market at the time of the effective date 

of the standard, then that technology 

will be considered practicable to 

manufacture, install and service. 

(3) Adverse impacts on product utility 

or product availability. 

(4) Adverse impacts on health or 

safety. 10 CFR part 430, subpart C, 

appendix A, sections (4)(a)(4) and (5)(b). 

1. Screened Out Technologies 

Improved Surface Finish on Wetted 

Components 

Grundfos suggested that smoothing 

the surface finish of pump components 

is a time consuming manual activity 

that should not be considered to be a 

practical manufacturing process. 

(Grundfos, No. 24 at pp. 25–26.) 

Additionally, HI responded to DOE’s 

initial estimates of available efficiency 

improvement by noting that its 

experience has shown that smoothing 

and surface finish have very little effect 

at higher specific speeds and for the 

range of pumps that are commonly in 

service. (HI, No. 25 at p. 39.) HI, 

Grundfos, and ACEEE all suggested that 

gains in efficiency from improved 

surface finish and smoothing are nonpersistent, with the surface finish 

quickly being degraded in most 

applications. (HI, No.25 at pp. 9, 39; 

Grundfos, No. 24 at p. 25; ACEEE, 

Framework Public Meeting Transcript at 

p. 299.) Based on these comments, the 

agreement of the CIP Working Group 

(EERE–2013–BT–NOC–0039–0109 at 

pp. 91–97 pp. 46–50), and the 

information obtained from manufacturer 

interviews, DOE observed that, at this 

time, manual smoothing poses a number 

of significant drawbacks—(1) the 

process is manually-intensive, which 

makes it impractical to implement in a 

production environment, (2) the 

efficiency improvements from this 

process degrade over a short period of 

time, and (3) the relative magnitude of 

efficiency improvements are small (e.g., 

approximately 20:1 for a baseline pump 

with a specific speed of 2,500 RPMs) 

when compared to other options, such 

as hydraulic redesign. Consequently, 

after considering these limitations and 

the relative benefits that might be 

possible from including this particular 

option, DOE concluded that manual 

smoothing operations would not be 

likely to significantly improve the 

energy efficiency across the entire scope 

of each equipment class DOE is 

currently examining. Consequently, 

DOE screened this technology option 

out. Chapters 3 and 4 of NOPR TSD 

provide further details on the 

justification for screening out this 

technology. 

In addition to smoothing operations, 

DOE also evaluated two additional 

methods for improving surface finish; 

(1) surface coating or plating, and (2) 

improved casting techniques. In 

addition to being unable to significantly 

improve efficiency across the entire 

scope of each equipment class, surface 

coatings and platings were also screened 

out due to reliability and durability 

concerns, and improved casting 

techniques were screened out because 

the efficiency improvements from the 

technology degrade quickly. Chapters 3 

and 4 of NOPR TSD provide further 

details on these methods for surface 

finish improvement, and justification 

for screening out. 

Reduced Running Clearances 

Grundfos stated that reducing running 

clearances is a method used by most 

manufacturers in the design of the 

individual components with the use of 

wear rings. (Grundfos, No. 24 at p.25.) 

HI suggested that the reduction in 

running clearances may improve 

efficiency in some applications, 

depending on specific speed, but it 

noted that reduced running clearances 

may also lead to mechanical reliability 

problems leading to the added expense 

of larger (stiffer) shafts, larger bearings, 

and advanced or more costly wear ring 

materials. (HI, No. 25 at p. 39.) HI and 

ACEEE also suggest that the efficiency 

improvements from tightened running 

clearances degrade quickly. (HI, 

Framework Public Meeting Transcript at 

p. 329; ACEEE, Framework Public 

Meeting Transcript at p. 299.) 

Manufacturer interview responses 

indicate that clearances are currently set 

as tight as possible, given the limitations 

of current wear ring materials, 

machining tolerances, and pump 

assembly practices. To tighten clearance 

any further without causing operational 

contact between rotating and static 

components would require larger 

(stiffer) shafts, and larger (stiffer) 

bearings. Without these stiffer 

components, operational contact will 

lead to accelerated pump wear and 

loosened clearances. Loosened 

clearances cause the initial efficiency 

improvements to quickly degrade. 

Alternatively, the use of larger 

components to improve the stiffness to 

appropriate levels results in increased 

mechanical losses. These losses negate 

the potential improvements gained from 

reduced clearances. Consequently, DOE 

proposes to eliminate this technology 

option because of the reliability 

concerns highlighted by HI and the 

concerns of quickly degrading efficiency 

improvements highlighted by HI and 

ACEEE. For additional details on the 

screening of reduced running 

clearances, see chapter 4 of the NOPR 

TSD. 


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25Static head is the component of total dynamic 

head that results from the fluid being lifted a certain 

height above the pump. Unlike dynamic head, static 

head requirements stay constant across the system 

curve, even at zero flow. 

Reduced Mechanical Friction in Seals 

DOE evaluated mechanical seal 

technologies that offered reduced 

friction when compared to commonly 

used alternatives. DOE concluded from 

this evaluation that the reduction in 

friction resulting from improved 

mechanical seals would be too small to 

significantly improve efficiency across 

the entire scope of each equipment 

class. For additional details, see 

chapters 3 and 4 of the NOPR TSD. 

Reduction of Other Volumetric Losses 

The most common causes of 

volumetric losses (other than previously 

discussed technology options) are thrust 

balance holes. (Thrust balance holes are 

holes located in the face of an impeller 

that act to balance the axial loads on the 

impeller shaft and thus reduce wear on 

rub surfaces and bearings). DOE found 

that removal of thrust balance holes 

from existing impellers will reduce 

pump reliability. DOE notes that 

manufacturers may be able to decrease 

volumetric losses by reducing the 

number and/or diameter of thrust 

balance holes as a part of a full 

hydraulic redesign. For additional 

details, see chapters 3 and 4 of the 

NOPR TSD. 

Addition of a Variable Speed Drive 

(VSD) 

Grundfos suggested that variable 

speed drives are a proven method to 

optimize pump operation and reduce 

energy consumption. (Grundfos, No. 24 

at p. 25.) DOE agrees that variable speed 

drives are a proven method to optimize 

pump operation, but only for certain 

pump applications for which standards 

are being considered. DOE’s analysis 

has shown that there are many 

applications for these types of pumps 

that will not benefit from a VSD. For 

common applications, such as systems 

that have unvarying flow and head 

requirements (constant load), on/off 

operation, or high percentages of static 

head,25 VFDs may not save energy and 

may even increase energy consumption 

when factoring in the efficiency of the 

VFD unit. EEI reported that technologies 

that reduce power factor below 85 

percent should be screened out because 

of deleterious impacts on the electric 

grid but that most VSDs will not reduce 

power factors to levels that would create 

extra costs for consumers. (EEI, No. 31 

at p. 4.) 

Because there are many application 

types and load profiles that would not 

benefit from a VSD, and many 

applications for which energy use 

would increase with a VSD, DOE has 

eliminated the use of VSDs from the list 

of technology options. For additional 

details, see chapters 3 and 4 of the 

NOPR TSD. 

Improvement of VSD Efficiency 

Grundfos stated that proper selection, 

operation and integration of a VSD with 

a pump and motor are more important 

than improving the efficiency of the 

VSD alone. (Grundfos, No. 24 at p. 25.) 

Because DOE has eliminated the use of 

VSDs as a technology option, 

improvement of VSD efficiency will also 

not be considered as technology option. 

For additional details, see chapters 3 

and 4 of the NOPR TSD. 

Reduced VSD Standby and Off Mode 

Power Usage 

Grundfos stated that reducing VSD 

standby and off mode power usage has 

a minor impact on energy efficiency, but 

can add to the efficiency of the control 

strategy. (Grundfos, No. 24 at p. 25.) 

Available information supports 

Grundfos’ characterization of the 

relative benefits of improved VSD 

efficiency and reduced standby and off 

mode power usage. Although improving 

VSD efficiency and standby/off mode 

power may help improve overall pump 

efficiency, DOE has concluded that not 

all pumps for which DOE is considering 

standards in this rule would benefit 

from the use of a VSD. In addition, VSD 

standby and off model power usage 

would not impact the PEI rating of 

equipment as tested under the DOE test 

procedure. As such, DOE is not 

considering improved VSD efficiency 

and reduced standby and off mode 

power usage as design options in the 

engineering analysis. For additional 

details, see chapter 4 of the NOPR TSD. 

2. Remaining Technologies 

DOE found that only improved 

hydraulic design met all four screening 

criteria to be examined further in DOE’s 

analysis. HI commented that hydraulic 

redesign will be the most prominent 

method used to improve efficiency 

because many of the easy to implement 

efficiency gains, such as tighter 

clearances, have already been explored 

by manufacturers. (HI, Framework 

Public Meeting Transcript at p. 328.) 

The results of DOE’s screening analysis 

support HI’s comment. 

Improved hydraulic design is 

technologically feasible, as there is 

equipment on the market that has 

utilized this technology option. DOE 

also finds that improved hydraulic 

design meets the other screening criteria 

(i.e., practicable to manufacture, install, 

and service and no adverse impacts on 

consumer utility, product availability, 

health, or safety). As such, DOE 

considered hydraulic redesign as a 

design option in the engineering 

analysis. For additional details, see 

chapter 4 of the NOPR TSD. 

C. Engineering Analysis 

The engineering analysis determines 

the manufacturing costs of achieving 

increased efficiency or decreased energy 

consumption. DOE historically has used 

the following three methodologies to 

generate the manufacturing costs 

needed for its engineering analyses: (1) 

The design-option approach, which 

provides the incremental costs of adding 

to a baseline model design options that 

will improve its efficiency; (2) the 

efficiency-level approach, which 

provides the relative costs of achieving 

increases in energy efficiency levels, 

without regard to the particular design 

options used to achieve such increases; 

and (3) the cost-assessment (or reverse 

engineering) approach, which provides 

‘‘bottom-up’’ manufacturing cost 

assessments for achieving various levels 

of increased efficiency, based on 

detailed data as to costs for parts and 

material, labor, shipping/packaging, and 

investment for models that operate at 

particular efficiency levels. 

DOE conducted the engineering 

analyses for this rulemaking using a 

design-option approach. The decision to 

use this approach was made due to 

several factors, including the wide 

variety of equipment analyzed, the lack 

of numerous levels of equipment 

efficiency currently available in the 

market, and the limited design options 

available for the equipment. More 

specifically, for the hydraulic redesign 

option, DOE used industry research to 

determine changes in manufacturing 

costs and energy efficiency. DOE 

directly analyzed costs for the 

equipment classes listed in section 

IV.A.2. Consistent with HI’s 

recommendation (HI, Framework Public 

Meeting Transcript at p. 329) and 

available data, DOE concluded that it 

was infeasible to determine the upfront 

costs (engineering time, tooling, new 

patterns, qualification, etc.) associated 

with hydraulic redesign via reverse 

engineering. 

The following sections briefly discuss 

the methodology used in the 

engineering analysis. Complete details 

of the engineering analysis are available 

in chapter 5 of the NOPR TSD. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17844 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

1. Representative Equipment for 

Analysis 

a. Representative Configuration 

Selection 

For the engineering analysis, DOE 

directly analyzed the cost-efficiency 

relationship for all equipment classes 

specified in in section IV.A.1, over the 

full range of sizes, for all pumps falling 

within the proposed scope. Within the 

engineering analysis, ‘‘size’’ is defined 

by a pump’s flow at BEP and specific 

speed. Analyzing over the full size range 

allowed DOE to use representative 

configurations for each equipment class, 

rather than an approach that analyzes a 

representative unit from each class. A 

representative unit has a defined size 

and defined features, while a 

representative configuration defines 

only the features of the pump, allowing 

the cost-efficiency analysis to consider a 

large range of data points that occur 

over the full range of sizes. This method 

addresses the concerns of both EEI and 

HI that the equipment classes 

considered by DOE encompass too 

much variation to effectively be 

characterized by one representative 

unit. (EEI, Framework Public Meeting 

Transcript at pp. 275–276; HI, 

Framework Public Meeting Transcript at 

p. 286.) 

In selecting representative 

configurations, DOE researched the 

offerings of major manufacturers to 

select configurations generally 

representative of the typical offerings 

produced within each equipment class. 

Configurations and features were based 

on high-shipment-volume designs 

prevalent in the market. The key 

features that define each representative 

configuration include impeller material, 

impeller production method, volute/

casing material, volute/casing 

production method, and seal type. 

For the ESCC, ESFM, and IL 

equipment classes, the representative 

configuration was defined as a pump 

fitted with a cast bronze impeller; castiron volute; and mechanical seal. For 

the RSV and VTS equipment classes, the 

representative configuration was 

defined as a pump fitted with sheet 

metal-based fabricated stainless-steel 

impeller(s), and sheet metal-based 

fabricated stainless-steel casing and 

internal static components. Chapter 5 of 

the TSD provides further detail on 

representative configurations. 

b. Baseline Configuration 

The baseline configuration defines the 

lowest efficiency equipment in each 

analyzed equipment class. This 

configuration represents equipment that 

utilizes the lowest efficiency 

technologies present in the market. 

Because DOE directly analyzed the costefficiency relationship over the full 

range of sizes, DOE defined a baseline 

configuration applicable across all sizes, 

rather than a more specific baseline 

model. This baseline configuration 

ultimately defines the energy 

consumption and associated cost for the 

lowest efficiency equipment analyzed in 

each class. 

DOE established baseline 

configurations by reviewing available 

manufacturer performance and sales 

data for equipment manufactured at the 

time of the analysis. Chapter 5 of the 

NOPR TSD sets forth the process that 

DOE used to select the baseline 

configuration for each equipment class 

and discusses the baseline in greater 

detail. 

2. Design Options 

After conducting the screening 

analysis and removing from 

consideration technologies that did not 

warrant inclusion on technical grounds, 

DOE considered hydraulic redesign as a 

design option in the NOPR engineering 

analysis. 

3. Available Energy Efficiency 

Improvements 

For each equipment class, DOE 

assessed the available energy efficiency 

improvements resulting from a 

hydraulic redesign. This assessment was 

informed by manufacturer performance 

and cost data, confidential manufacturer 

interview responses, general industry 

research, and stakeholder input 

gathered at the CIP Working Group 

public meetings. DOE concluded that a 

hydraulic redesign is capable of 

improving the efficiency of a pump up 

to and including the max-tech level 

(discussed in section IV.C.4.a). The 

efficiency gains that a manufacturer 

realizes from a hydraulic redesign are 

expected to be commensurate with the 

level of effort and capital a 

manufacturer invests in redesign. 

Section IV.C.7 discusses the 

relationship between efficiency gains 

and conversion cost in more detail. 

4. Efficiency Levels Analyzed 

In assessing the cost associated with 

hydraulic redesign, and carrying 

through to all downstream analyses, 

DOE analyzed several efficiency levels. 

Each level consists of a specific C-value, 

as shown in Table IV.1. (See section 

III.D.1 for more information about Cvalues and the related equations.) 

TABLE IV.1—EFFICIENCY LEVELS ANALYZED WITH CORRESPONDING C-VALUES

Equipment class 

EL0 EL1 EL 2 EL 3 EL 4 EL 5 

Baseline 10th Efficiency 

percentile 

25th Efficiency 

percentile 

40th Efficiency 

percentile 

55th Efficiency 

percentile 

70th Efficiency 

percentile/max 

tech 

ESCC.1800 .............................................. 134.43 131.63 128.47 126.67 125.07 123.71 

ESCC.3600 .............................................. 135.94 134.60 130.42 128.92 127.35 125.29 

ESFM.1800 .............................................. 134.99 132.95 128.85 127.04 125.12 123.71 

ESFM.3600 .............................................. 136.59 134.98 130.99 129.26 127.77 126.07 

IL.1800 ..................................................... 135.92 133.95 129.30 127.30 126.00 124.45 

IL.3600 ..................................................... 141.01 138.86 133.84 131.04 129.38 127.35 

RSV.1800 * ............................................... 129.63 N/A N/A N/A N/A 124.73 

RSV.3600 * ............................................... 133.20 N/A N/A N/A N/A 129.10 

VTS.1800 ................................................. 137.62 135.93 134.13 130.83 128.92 127.29 

VTS.3600 ................................................. 137.62 135.93 134.13 130.83 128.92 127.29 

* For RSV equipment, DOE established only baseline and max-tech efficiency levels due to limited data availability. 


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26See EERE–2013–BT–NOC–0039–0072, pp.103– 

105. 

27Refer to the following transcripts in which the 

conclusion of no change in MPC with improved 

efficiency is presented to the working group and 

discussed: EERE–2013–BT–NOC–0039–0072, pp. 

114–130 and pp. 270–273; EERE–2013–BT–NOC– 

0039–0109, p.264). 

a. Maximum Technologically Feasible 

Levels 

Efficiency level five (EL5), as shown 

in Table IV.1, represents the maximum 

technologically feasible (‘‘max-tech’’) 

efficiency level for the ESCC, ESFM, IL, 

and VTS equipment classes. EL1 

represents max-tech for the RSV 

equipment classes. To set the max-tech 

level for the applicable equipment 

classes, DOE performed an analysis to 

determine the maximum improvement 

in energy efficiency that is 

technologically feasible for each 

equipment class. 

DOE considers technologies to be 

technologically feasible if they are 

incorporated in any currently available 

equipment or working prototypes. A 

max-tech level results from the 

combination of design options predicted 

to result in the highest efficiency level 

possible for an equipment class. 

In the case of pumps, DOE 

determined, based on available 

information and consistent with the 

conclusions of the CIP Working Group, 

that pumps are a mature technology, 

with all available design options already 

existing in the marketplace.26 Therefore, 

DOE assumed in its analysis that the 

max-tech efficiency level coincides with 

the maximum available efficiency 

already offered in the marketplace. As a 

result, DOE performed a market-based 

analysis to determine max-tech/maxavailable levels. The analysis resulted in 

the 70th efficiency percentile being 

consider max-tech for each equipment 

class. A preliminary version of this 

analysis was provided to the CIP 

Working Group during the April 29–30, 

2014 meetings. (EERE–2013–BT–NOC– 

0039–0051, pp. 17–32) This analysis 

proposed the 70th efficiency percentile 

as the max-tech level and solicited 

feedback on alternative opinions. 

Ultimately no alternative feedback on 

max-tech was received, and the CIP 

Working Group implicitly agreed with 

DOE’s proposal, and incorporated the 

70th efficiency percentile as the highest 

TSL level evaluated. Chapter 5 of NOPR 

TSD provides complete details on DOE’s 

market-based max-tech analysis and 

results. 

DOE’s market-based approach directly 

addresses Grundfos’ concerns (in 

response to the Framework Document) 

that it is difficult to accurately predict 

maximum efficiency levels using 

theoretical models. (Grundfos, No. 24 at 

p. 28). 

In response to the CA IOUs concerns 

that manufacturers might not be 

currently making the most efficient 

pumps possible in all segments of the 

market. See CA IOUs, Framework Public 

Meeting Transcript at p. 331, DOE notes 

that the maximum available efficiency 

level was determined using a regression 

analysis across pumps of all sizes 

within each equipment class. As such, 

a broadly applicable max-tech/maxavailable level was developed, which 

does not provide any advantage or 

disadvantage to current low efficiency 

sub-segments of the market. 

5. Manufacturers Production Cost 

Assessment Methodology 

a. Changes in MPC Associated With 

Hydraulic Redesign 

DOE performed an analysis for each 

equipment class to determine the 

change in manufacturer production cost 

(MPC), if any, associated with a 

hydraulic redesign. For this analysis, 

DOE reviewed the manufacturer selling 

price (MSP), component cost, 

performance, and efficiency data 

supplied by both individual 

manufacturers and HI. DOE, with the 

support of the majority of the CIP 

Working Group, concluded that for all 

equipment classes, a hydraulic redesign 

is not expected to increase the MPC of 

the representative pump configuration 

used for analysis.27 Specifically, a 

hydraulic redesign is not expected to 

increase production or purchase cost of 

a pump’s two primary components; the 

impeller and the volute. 

DOE acknowledges that actual 

changes in MPC experienced by 

individual manufacturers will vary, and 

that in some cases redesigns may 

actually increase or decrease the cost of 

the impeller and/or volute. However, 

available information indicates that the 

flat MPC-versus-efficiency relationship 

best represents the aggregated pump 

industry as a whole. Chapter 5 of the 

NOPR TSD provides complete details on 

DOE’s MPC-efficiency analysis and 

results. 

b. Manufacturer Production Cost (MPC) 

Model 

For each equipment class, DOE 

developed a scalable cost model to 

estimate MPC across all pump sizes. 

Given a pump’s specific speed and BEP 

flow, the cost model outputs an 

estimated MPC. Because hydraulic 

redesign is not expected to result in an 

increase in MPC, the model is 

efficiency-independent and predicts the 

same MPC for all pumps of the identical 

BEP flow, specific speed, and 

equipment class, regardless of 

efficiency. 

The DOE MPC model was developed 

using data supplied by both HI and 

individual manufacturers. This data set 

includes information on the MSP, 

manufacturer markup, shipments 

volumes, model performance and 

efficiency, and various other 

parameters. Chapter 5 of the NOPR TSD 

provides additional detail on the 

development of the MPC model. 

6. Product and Capital Conversion Costs 

DOE expects that hydraulic redesigns 

will result in significant conversion 

costs for manufacturers as they attempt 

to bring their pumps into compliance 

with the proposed standard. 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 product designs comply with a 

new or amended energy conservation 

standard. Capital conversion costs are 

investments in property, plant, and 

equipment necessary to adapt or change 

existing production facilities such that 

new product designs can be fabricated 

and assembled. 

To evaluate the magnitude of the 

product and capital conversion costs the 

pump industry would incur to comply 

with new energy conservation 

standards, DOE used a bottom-up 

approach. For this approach, DOE first 

determined the industry-average cost, 

per model, to redesign pumps of varying 

sizes to meet each of the proposed 

efficiency levels. DOE then modeled the 

distribution of unique pump models 

that would require redesign at each 

efficiency level. For each efficiency 

level, DOE multiplied each unique 

failing model by its associated cost to 

redesign and summed the total to reach 

an estimate of the total product and 

capital conversion cost for the industry. 

Data supplied to DOE by HI was used 

as the basis for the industry-average 

cost, per model, to redesign a failing 

pump model. HI, through an 

independent third party, surveyed 15 

manufacturers regarding the product 

and conversion costs associated with 

redesigning one-, 50-, and 200-hp 

pumps from the 10th to the 40th 

percentile of market efficiency. 

Specifically, HI’s survey contained cost 

categories for the following: Redesign; 

prototype and initial test; patterns and 

tooling; testing; working capital; and 

marketing. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
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28AEA Energy & Environment. 2008, Appendix 6: 

Lot 11—‘Circulators in buildings,’ Report to 

European Commission. 

DOE validated the HI survey data 

with independent analysis and 

comparable independently collected 

manufacturer interview data. In 

addition, data from the EU pumps 

regulation preparatory study 28 was used 

to augment the HI survey data and scale 

costs to various efficiency levels above 

and below the 40th percentile. 

During the framework meeting, CA 

IOUs recommended that DOE use 

mature market estimates to determine 

costs associated with efficiency 

improvements rather than an approach 

based on the current market. (CA IOUs, 

Framework Public Meeting Transcript, 

No. 19, at pp. 324, 345.) In previous 

rules, the CA IOUs commented that the 

cost to improve efficiency has been 

overestimated. DOE recognizes the 

concerns of the CA IOUs and notes that 

hydraulic redesigns are a mature 

technology option and as such, the 

redesign costs used in the NOPR 

analysis represent the mature market 

cost of the technology option. 

DOE used a pump model database, 

developed by its contractors, containing 

various performance parameters, to 

model the distribution of unique pump 

models that would require redesign at 

each efficiency level. The DOE 

contractor database is comprised of a 

combination of data supplied by HI and 

data collected independently from 

manufacturers by the DOE. For the 

ESCC, ESFM, IL, and VT equipment 

classes, the database is of suitable size 

to be representative of the industry as a 

whole. Table IV.2 presents the resulting 

product and capital conversion costs for 

each equipment class, at each efficiency 

level. Complete details on the 

calculation of industry aggregate 

product and capital conversion costs are 

found in chapter 5 of the NOPR TSD. 

TABLE IV.2—TOTAL CONVERSION COST AT EACH EFFICIENCY LEVEL

All values in millions of dollars EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

ESCC/ESFM * ............................ $0 $12.4 $49.4 $110.6 $210.4 $344.7. 

IL ................................................ 0 5.1 20.0 45.3 88.2 144.0. 

VTS ............................................ 0 2.5 9.3 19.2 37.8 61.3. 

RSV ............................................ 0 N/A N/A N/A N/A Data Not Available. 

* Due to commonality in design and components, DOE calculated the conversion costs for ESCC and ESFM in aggregate. These values were 

later disaggregated, as appropriate, in downstream analyses. 

7. Manufacturer Markup Analysis 

To account for manufacturers’ nonproduction costs and profit margin, DOE 

applies a non-production cost multiplier 

(the manufacturer markup) to the full 

MPC. The resulting MSP is the price at 

which the manufacturer can recover all 

production and non-production costs 

and earn a profit. To meet the new 

energy conservation standards proposed 

in this rule, DOE expects that 

manufacturers will hydraulically 

redesign their product lines, which may 

result in new and increased capital and 

equipment conversion costs. Depending 

on the competitive environment for this 

equipment, some or all of the increased 

conversion costs may be passed from 

manufacturers to retailers and 

eventually to consumers in the form of 

higher purchase prices. The MSP should 

be high enough to recover the full cost 

of the equipment (i.e., full production 

and non-production costs) and overhead 

(including amortized product and 

capital conversion costs), and still yield 

a profit. The manufacturer markup has 

an important bearing on profitability. A 

high markup under a standards scenario 

suggests manufacturers can readily pass 

along more of the increased capital and 

equipment conversion costs to 

consumers. A low markup suggests that 

manufacturers will not be able to 

recover as much of the necessary 

investment in plant and equipment. 

DOE developed initial estimates of the 

base case manufacturer markups based 

on corporate annual reports, Securities 

and Exchange Commission (SEC) 10–K 

filings, confidential manufacturer data, 

and comments made publicly during the 

CIP Working Group negotiations. 

To support the downstream analyses, 

DOE investigated industry markups in 

detail, characterizing industry-average 

markups, individual manufacturer 

markup structures, and the industrywide markup structure. 

a. Industry-Average Markups 

Industry-average manufacturer 

markups were developed by weighting 

individual manufacturer markup 

estimates on a market share basis, as 

manufacturers with larger market shares 

more significantly affect the market 

average. 

b. Individual Manufacturer Markup 

Structures 

Using data and information gathered 

during the manufacturer interviews, 

DOE concluded that within an 

equipment class, each manufacturer 

maintains a flat markup. This means 

that each manufacturer targets a single 

markup value for models offered in an 

equipment class, regardless of size, 

efficiency, or other design features. 

Tiered product offerings and markups 

do not exist at the individual 

manufacturer level. 

c. Industry-Wide Markup Structure 

DOE also used the markup data 

gathered during the manufacturer 

interviews to assess the industry-wide 

markup structure. Although tiered 

product offerings and markups do not 

exist at the individual manufacturer 

level, DOE concluded that when 

analyzed as whole, the industry exhibits 

a relationship between manufacturer 

markup and efficiency. DOE’s analysis 

showed that on the industry-wide scale, 

the lowest efficiency models tend to 

garner lower markups than higher 

efficiency models, up to about the 25th 

percentile of efficiency. Beyond the 25th 

percentile, the relationship flattens out, 

and no correlation is seen between 

markup and efficiency. The data suggest 

that this relationship is a result of 

certain manufacturers positioning 

themselves with more or less efficient 

product portfolios and charging 

markups commensurate with their 

position in the marketplace. They also 

indicate (consistent with the views of 

the CIP Working Group) that the market 

does not value efficiency beyond the 

lower 25th percentile. (EERE–2013–BT– 

NOC–0039–0072, pp. 269–278; EERE– 

2013–BT–NOC–0039–0054, pp. 67–69.) 

In both private interviews and public 

working group comments, 

manufacturers held the view that 

efficiency is not currently the primary 

selling point or cost driver for the 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17847 

29Refer to the following transcript in which the 

conclusion that the markup structure of the IL 

equipment class is representative of the ESCC, 

ESFM, and VTS equipment classes is presented to 

the working group and no negative feedback is 

received: EERE–2013–BT–NOC–0039–0072, pp. 

292–295. 

30The cost recovery pricing scenario is the most 

conservative case (ie,i.e., resulting in the fewest 

benefits) for consumers and the most positive case 

for manufacturers (ie,i.e., resulting in the fewest 

negative impacts). In the MIA, DOE analyses this 

scenario and the flat pricing scenario, which results 

in the most positive case for consumer and the most 

conservative case for manufacturers. 

31U.S. Census Bureau (2007). Economic Census 

Manufacturing Industry Series (NAICS 33 Series) 

http://www.census.gov/manufacturing/asm. 

32U.S. Census Bureau (2012). Annual Wholesale 

Trade Survey, Hardware, and Plumbing and 

Heating Equipment and Supplies Merchant 

Wholesalers (NAICS 4237). http://www.census.gov/ 

wholesale/index.html. 

33RS Means (2013), Electrical Cost Data, 36th 

Annual Edition (Available at: http://

www.rsmeans.com). 

34Sales Tax Clearinghouse, Inc. (last accessed on 

January 10, 2014), State sales tax rates along with 

combined average city and county rates, http://

thestc.com/STrates.stm. 

majority of pumps within the scope of 

the proposed rule. Rather, other factors, 

such as reliability, may influence price 

significantly and are known to be more 

influential in the purchaser’s decision 

making process. (EERE–2013–BT–NOC– 

0039–0072, pp. 269–278.) 

DOE notes that the development of 

the markup-efficiency relationship was 

based on data from the IL equipment 

class. DOE, with support of the CIP 

Working Group, concludes that the 

markup structure of the IL equipment 

class is representative of the ESCC, 

ESFM, and VTS equipment classes.29

DOE applied the IL markup-efficiency 

relationship to these equipment classes, 

for use in the analyses presented in this 

NOPR. Chapter 5 of the NOPR TSD 

provides complete details the markupefficiency relationship analysis and 

results. 

8. MSP-Efficiency Relationship 

Ultimately, the goal of the engineering 

analysis is to develop an MSP-Efficiency 

relationship that can be used in 

downstream rulemaking analyses such 

as the Life Cycle Cost (LCC) analysis, 

the Payback Period (PBP) analysis, and 

the Manufacturer Impact Analysis 

(MIA). 

For the downstream analyses, DOE 

evaluated the base case MSP-Efficiency 

relationship as well as two separate 

MSP-Efficiency relationship scenarios to 

represent the uncertainty regarding the 

potential impacts on prices and 

profitability for manufacturers following 

the implementation of new energy 

conservation standards. The two 

scenarios are: (1) Flat pricing, and (2) 

cost recovery pricing. These scenarios 

result in varying revenue and cash flow 

impacts and were chosen to represent 

the lower and upper bounds of potential 

revenues for manufacturers. 

The base pricing scenario represents a 

snapshot of the pump market, as it 

stands prior to this rulemaking. The 

base pricing scenario was developed by 

applying the markup-efficiency 

relationship presented in section 

IV.C.7.c to the MPC model presented in 

section IV.C.5.a. Both the markup and 

MPC model are based on data supplied 

by individual manufacturers. From 

these data, DOE created a scalable 

model that can determine MSP as a 

function of efficiency, specific speed, 

and flow at BEP. 

Under the flat pricing standards case 

scenario, DOE maintains the same 

pricing as in the base case, which 

resulted in no price changes at a given 

efficiency level for the manufacturer’s 

first consumer. Because this pricing 

scenario assumes that manufacturers 

would not increase their pricing as a 

result of standards, even as they incur 

conversion costs, this scenario is 

considered a lower bound for revenues. 

In the cost recovery pricing scenario, 

manufacturer pricing is set so that 

manufacturers recover their conversion 

costs over the analysis period. This cost 

recovery is enabled by an increase in 

mark-up, which results in higher sales 

prices for pumps even as MPCs stay the 

same. The cost recovery calculation 

assumes manufacturers raise prices on 

models where a redesign is necessitated 

by the standard. The additional revenue 

due to the increase in markup results in 

manufacturers recovering 100 percent of 

their conversion costs over the 30-year 

analysis period, taking into account the 

time-value of money. The final MSPefficiency relationship for this scenario 

is created by applying the markupefficiency relationship to the MPC cost 

model presented in section IV.C.5.b., 

resulting in a scalable model that can 

determine MSP as a function of 

efficiency, specific speed, and flow at 

BEP. In the LCC and NIA analysis, DOE 

evaluated only the cost recovery pricing 

scenario, as it would be the most 

conservative case for consumers, 

resulting in the fewest benefits.30

D. Markups Analysis 

DOE uses markups (e.g., manufacturer 

markups, distributor markups, 

contractor markups) and sales taxes to 

convert the MSP estimates from the 

engineering analysis to consumer prices, 

which are then used in the LCC and PBP 

analysis and in the manufacturer impact 

analysis. The markups are multipliers 

that represent increases above the MSP. 

DOE develops baseline and incremental 

markups based on the equipment 

markups at each step in the distribution 

chain. The incremental markup relates 

the change in the manufacturer sales 

price of higher-efficiency models (the 

incremental cost increase) to the change 

in the consumer price. 

Before developing markups, DOE 

defines key market participants and 

identifies distribution channels. In the 

Framework Document, DOE presented 

initial information regarding the 

distribution channels for pumps. DOE 

revised these channels and their 

assigned market share in response to 

manufacturer interviews and 

discussions in the CIP Working Group. 

(See, e.g., EERE–2013–BT–NOC–0039– 

0072, pp. 327–330.) Based on this 

information, DOE proposes to use the 

following main distribution channels 

that describe how pumps pass from the 

manufacturer to end-users: (1) 

Manufacturer to distributor to contractor 

to end-users (70 percent of sales); (2) 

manufacturer to distributor to end-users 

(17 percent of sales); (3) manufacturer to 

original equipment manufacturer to 

end-users (8 percent of sales); (4) 

manufacturer to end-users (2 percent of 

sales); and (5) manufacturer to 

contractor to end-users (1 percent of 

sales). Other distribution channels exist 

but are estimated to account for a minor 

share of pump sales (combined 2 

percent). 

To develop markups for the parties 

involved in the distribution of the 

equipment, DOE utilized several 

sources, including: (1) The U.S. Census 

Bureau 2007 Economic Census 

Manufacturing Industry Series (NAICS 

33 Series) 31 to develop original 

equipment manufacturer markups; (2) 

the U.S. Census Bureau 2012 Annual 

Wholesale Trade Survey, Hardware, and 

Plumbing and Heating Equipment and 

Supplies Merchant Wholesalers 32 to 

develop distributor markups; and (3) 

2013 RS Means Electrical Cost Data 33 to 

develop mechanical contractor 

markups. 

In addition to the markups, DOE 

derived State and local taxes from data 

provided by the Sales Tax 

Clearinghouse.34 These data represent 

weighted-average taxes that include 

county and city rates. DOE derived 

shipment-weighted-average tax values 

for each region considered in the 

analysis. 

In the Framework Document, DOE 

also considered accounting for shipping 

costs in its markups analysis. In 

response to the Framework Document, 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
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35ASHRAE was formerly known as the American 

Society of Heating, Refrigerating and AirConditioning Engineers. 

36Refer to the following transcripts in which 

operating hours are presented to the working group 

and no negative feedback is received: EERE–2013– 

BT–NOC–0039–0072, pp. 353–355; EERE–2013– 

BT–NOC–0039–XXXX0109, pp. 128–140139–152. 

Grundfos noted that transportation and 

shipping costs from freight companies 

and package delivery companies are 

based on size, weight and transit time 

requirements. (Grundfos, No. 24 at p. 

31.) DOE’s understanding is that pump 

size and weight do not change with 

efficiency level; therefore, DOE did not 

account for shipping costs in this 

analysis. 

Chapter 6 of the NOPR TSD provides 

further detail on the estimation of 

markups. 

Because the identified market 

channels are complex and their 

characterization required a number of 

assumptions, DOE seeks input on its 

analysis of market channels for the 

above equipment classes, particularly 

related to whether the channels include 

all necessary intermediate steps, and the 

estimated market share of each channel. 

DOE identified this as Issue 3 under 

‘‘Issues on Which DOE Seeks Comment’’ 

in section VIII.E of this NOPR. 

E. Energy Use Analysis 

DOE analyzed the energy use of 

pumps to estimate the savings in energy 

costs that consumers would realize from 

more energy-efficient pump equipment. 

Annual energy use depends on a 

number of factors that depend on the 

utilization of the pump, particularly 

duty point (i.e., flow, head, and power 

required for a given application), pump 

sizing, annual hours of operation, load 

profiles, and equipment losses. The 

annual energy use is calculated as a 

weighted sum of input power 

multiplied by the annual operating 

hours across all load points. 

1. Duty Point 

DOE researched information on duty 

points for the commercial, industrial, 

and agricultural sectors from a variety of 

sources. DOE identified statistical 

samples only for the agricultural sector. 

Therefore, DOE used manufacturer 

shipment data to estimate the 

distribution of pumps in use by duty 

point. To account for the wide range of 

pump duty points in the field, DOE 

placed pump models in bins with 

varying power capacities using the 

shipment data provided by individual 

manufacturers. DOE grouped all pump 

models into nine power bins on a logscale between 1 and 200 hp. Then, for 

each equipment class, DOE grouped the 

pump models into nine flow bins on a 

log-scale between minimum flow at BEP 

and maximum flow at BEP. Based on 

the power and flow binning process, 

DOE defined a representative unit for 

each of the combined power and flow 

bins. Within each bin, DOE defined the 

pump performance data (power and 

flow at BEP, pump curve and efficiency 

curve) as the shipment-weighted 

averages over all units in the bin. DOE 

used these data to calculate the annual 

energy use for each of the equipment 

classes. 

2. Pump Sizing 

In the Framework Document, DOE 

requested information on pump sizing. 

Grundfos noted that the general 

selection guidelines and other resources 

are available from HI and specific 

professional or trade associations such 

as ASHRAE.35 (Grundfos, No. 24 at p. 

32.) DOE reviewed relevant guidelines 

and resources and introduced a variable 

called the BEP offset to capture 

variations in pump sizing practices in 

the field. The BEP offset is essentially 

the relative distance between the 

consumer’s duty point and the pump’s 

BEP. Pumps are often sized to operate 

within 75 percent to 110 percent of their 

BEP flow. Therefore, for this analysis, 

the BEP offset is assumed to be 

uniformly distributed between ¥0.25 

(i.e., 25% less than BEP flow) and 0.1 

(10% more than BEP flow). 

3. Operating Hours 

DOE estimated average annual 

operating hours by application based on 

inputs from a market expert and 

feedback from the CIP Working Group.36

DOE developed statistical distributions 

to use in its energy use analysis. 

DOE requests information and data on 

average annual operating hours for the 

pump types and applications in the 

scope of this rulemaking. This is 

identified as Issue 4 in section VIII.E, 

‘‘Issues on Which DOE Seeks 

Comment.’’ 

4. Load Profiles 

Information on typical load profiles 

for pumps is not available in the public 

domain. DOE requested information on 

load profiles in the Framework 

Document. Grundfos responded that 

available public data related to the use 

of pumps is very limited and provided 

a reference that may be considered for 

heating, cooling, and hot water load 

profiles: California’s 2013 Title 24 

Nonresidential Alternative Calculation 

Method (ACM) Reference Manual, 

Appendix 5.4B. (Grundfos, No. 24 at p. 

32.) Grundfos also noted that general 

selection guidelines and other resources 

are available from HI and suggested that 

DOE review EU Commission Regulation 

No 547/2012 and the work being 

considered under the Ecodesign 

Preparatory Study (ENER Lot 29). 

(Grundfos, No. 24 at p. 34.) HI 

mentioned that application-specific 

duty profiles could lead to confusion for 

pumps with motors and/or controls 

serving multiple applications and 

suggested that a single duty profile, 

consisting of equally weighted time 

intervals at 100 percent, 75 percent, 50 

percent, and 25 percent of the BEP flow, 

be used to evaluate pump efficiency. 

(HI, No. 25 at p. 43.) 

DOE reviewed the resources suggested 

by Grundfos, as well as other 

information on pump load profiles, such 

as building simulation files. DOE 

concluded, however, that these load 

profiles were not sufficiently 

representative of the variability 

expected in the field for commercial 

applications. In addition, DOE did not 

identify any similar information for 

other sectors, including the industrial, 

agricultural, and municipal sectors. 

However, DOE believed it would be 

appropriate to analyze more than one 

duty profile. Considering the range of all 

applications of the pump equipment 

classes for which DOE is considering 

standards, DOE developed four load 

profiles, characterized by different 

weights at 50 percent, 75 percent, 100 

percent, and 110 percent of the flow at 

the duty point. These load profiles 

represent different types of loading 

conditions in the field: Flat load at BEP, 

flat/over-sized load weighted evenly at 

50 percent and 75 percent BEP, variable 

load over-sized, and variable load 

under-sized. During the CIP Working 

Group negotiations, DOE initially 

proposed that each of these load profiles 

would be weighted equally in the 

consumer sample. However, a 

stakeholder commented that pumps 

generally operated on the pump curve to 

the left of the BEP (i.e., pumps generally 

require less flow than that provided at 

BEP) as opposed to beyond the BEP. 

(Charles Cappellino, ITT, EERE–2013– 

BT–NOC–0039–0072, p. 356.) This 

indicates that pumps are generally 

oversized rather than undersized. 

Therefore, DOE estimated that only 10 

percent of consumers would use pumps 

with the variable load/undersized load 

profile; the remaining load profiles were 

estimated to apply to 30 percent of 

consumers each. DOE notes that 

changes in weighting across the load 

profiles have very little impact on 

energy use results. 

DOE requests information and data on 

typical load profiles for the pump types 

and applications in the scope of this 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17849 

37See http://www1.eere.energy.gov/buildings/

appliance_standards/rulemaking.aspx/ruleid/14. 

rulemaking. This is identified as Issue 5 

in section VIII.E, ‘‘Issues on Which DOE 

Seeks Comment.’’ 

To describe a pump’s power 

requirements at points on the load 

profile away from the BEP, DOE used 

the shipment-weighted average pump 

curves, modeled as second-order 

polynomial functions, for each of the 

representative units. 

5. Equipment Losses 

Using the duty point, load profile, and 

operational hours, DOE calculated the 

energy use required for the end-use (or 

the energy which that is converted to 

useful hydraulic horsepower). However, 

the total energy use by pumps also 

depends on pump losses, motor losses, 

and control losses. 

Pump losses account for the 

differences between pump shaft 

horsepower and hydraulic horsepower 

due to friction and other factors. DOE 

takes this into account using the 

efficiency information available in the 

manufacturer shipment data for each 

pump. To describe pump efficiency at 

points away from the BEP, DOE 

calculated shipment-weighted average 

efficiency curves for each representative 

unit, modeled as second-order 

polynomial functions. 

In the Framework Document, DOE 

requested information on motor losses 

Grundfos noted that existing motor 

efficiency standards based on prior 

requirements set by the Energy Policy 

Act of 1992 (Pub. L. 102–486, Oct. 24 

1992) and the Energy Independence and 

Security Act of 2007 (Pub. L. 110–140, 

Dec. 19, 2007) can be utilized as 

minimum efficiency levels. (Grundfos, 

No. 24 at p. 34) DOE used existing 

minimum motor efficiency standards in 

calculating annual energy use. 

In the Framework Document, DOE 

also requested information on variable 

frequency drive (VFD) efficiency. VFDs 

are the most common type of VSD used 

in the pump market; they automatically 

control the speed of a pump by 

adjusting frequency in response to 

system feedback. In this way, pumps 

can deliver the appropriate amount of 

flow required by the system with less 

head and power compared to reducing 

flow at full speed by closing a throttling 

valve. Grundfos noted that the 

efficiencies of a VFD vary by 

manufacturer and suggested that a 

sampling of these efficiencies can be 

obtained from the members of the 

Adjustable Speed Drive Systems group 

of the Industrial Automation section of 

the National Electrical Manufacturers 

Association (NEMA). (Grundfos, No. 24 

at p. 34.) DOE has reviewed all available 

VFD efficiency information in 

developing the test procedure NOPR. 

However, DOE estimates that very few 

pump users operate their pumps with 

VFDs. (See section IV.H.1.a, the lifecycle cost analysis is not meant to 

represent national impacts, DOE’s 

energy use analysis assumes that all 

users with variable loads throttled their 

pumps and therefore did not include 

VFD efficiency. This assumption allows 

for the analysis of impacts to the largest 

group of customers in the market (i.e., 

those that throttle their pumps). 

However, DOE considered use of 

VFDs—in the life-cycle cost customer 

subgroup and national impact analyses. 

(See section IV.I and IV.H.1.a, 

respectively.) 

As noted previously, DOE proposed 

in the test procedure NOPR that pumps 

sold with non-electric drivers be rated 

as bare pumps. Any hydraulic 

improvements made to the bare pump to 

comply with any applicable energy 

conservation standards would also 

result in energy savings if the pump is 

used with a non-electric driver. 

However, DOE estimated, based on 

information from consultants and the 

CIP Working Group, that only 1–2% of 

pumps in scope are driven by nonelectric drivers. Therefore DOE 

accounted for the energy use of all 

pumps as electricity use and chose not 

to account for fuel use in its analysis. 

DOE requests comment on the percent 

of pumps in scope operated by each fuel 

type other than electricity (e.g., diesel, 

gasoline, liquid propane gas, or natural 

gas) and the efficiency or losses of each 

type of non-electric driver, including 

transmission losses if any, that would 

allow DOE to estimate the fuel use and 

savings of pumps sold with non-electric 

drivers. This is identified as Issue 6 in 

section VIII.E, ‘‘Issues on Which DOE 

Seeks Comment.’’ 

F. Life-Cycle Cost and Payback Period 

Analysis 

DOE conducted the life-cycle cost 

(LCC) and payback period (PBP) 

analysis to estimate the economic 

impacts of potential standards on 

individual consumers of pump 

equipment. The LCC calculation 

considers total installed cost (equipment 

cost, sales taxes, distribution chain 

markups, and installation cost), 

operating expenses (energy, repair, and 

maintenance costs), equipment lifetime, 

and discount rate. DOE calculated the 

LCC for all consumers as if each would 

purchase a pump in the year the 

standard takes effect. DOE presumes 

that the purchase year for all pump 

equipment for purposes of the LCC 

calculation is 2020, the first full year 

following the expected compliance date 

of late 2019. To compute LCCs, DOE 

discounted future operating costs to the 

time of purchase and summed them 

over the lifetime of the equipment. 

DOE analyzed the effect of changes in 

installed costs and operating expenses 

by calculating the PBP of potential 

standards relative to baseline efficiency 

levels. The PBP estimates the amount of 

time it would take the consumer to 

recover the incremental increase in the 

purchase price of more-efficient 

equipment through lower operating 

costs. In other words, the PBP is the 

change in purchase price divided by the 

change in annual operating cost that 

results from the energy conservation 

standard. DOE expresses this period in 

years. Similar to the LCC, the PBP is 

based on the total installed cost and 

operating expenses. However, unlike the 

LCC, DOE only considers the first year’s 

operating expenses in the PBP 

calculation. Because the PBP does not 

account for changes in operating 

expense over time or the time value of 

money, it is also referred to as a simple 

PBP. 

DOE’s LCC and PBP analyses are 

presented in the form of a spreadsheet 

model, available on DOE’s Web site for 

pumps.37 DOE accounts for variability 

in energy use and prices, discount rates 

by doing individual LCC calculations 

for a large sample of pumps (10,000 for 

each equipment class) that are assigned 

different installation conditions. 

Installation conditions include 

consumer attributes such as sector and 

application, and usage attributes such as 

duty point and annual hours of 

operation. Each pump installation in the 

sample is equally weighted. The simple 

average over the sample is used to 

generate national LCC savings by 

efficiency level. The results of DOE’s 

LCC and PBP analysis are summarized 

in section V.B.1.a and described in 

detail in chapter 8 of the NOPR TSD. 

1. Approach 

DOE conducted the LCC analysis by 

developing a large sample of 10,000 

pump installations, which represent the 

general population of pumps that would 

be affected by proposed energy 

conservation standards. Separate LCC 

analyses are conducted for each 

equipment class. Conceptually, the LCC 

distinguishes between the pump 

installation and the pump itself. The 

pump installation is characterized by a 

combination of consumer attributes 

(sector, application, electricity price, 

discount rate) and usage attributes (duty 

point, BEP offset, load profile, annual 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17850 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

hours of operation, mechanical lifetime) 

that do not change among the 

considered efficiency levels. The pump 

itself is the regulated equipment, so its 

efficiency and selling price change in 

the analysis. 

In the base case, which represents the 

market in the absence of new energy 

efficiency standards, DOE assigns a 

specific representative pump to each 

pump installation. These pumps are 

chosen from the set of representative 

units described in the energy use 

analysis. The relative weighting of 

different representative units in the LCC 

sample is determined based on 2012 

shipments data supplied by the 

manufacturers. 

The base case also includes an 

estimate of the distribution of 

equipment efficiencies. DOE developed 

a base-case distribution of efficiency 

levels for pumps using the shipments 

data mentioned above. DOE assumed 

that this distribution would remain 

constant over time and applied the 2012 

distribution in 2020. Out of this 

distribution, DOE assigns a pump 

efficiency based on the relative 

weighting of different efficiencies. 

Chapter 8 of the NOPR TSD contains 

details regarding the base case efficiency 

distribution. 

At each efficiency level, the pump 

assigned in the base case has a PEI 

rating that either would or would not 

meet a standard set at that efficiency 

level. If the pump would meet the 

standard at a given efficiency level, the 

installation is left unchanged. For that 

installation, the LCC at the given TSL is 

the same as the LCC in the base case and 

the standard does not impact that user. 

If the pump would not meet the 

standard at a given efficiency level, the 

base case pump is replaced with a 

compliant unit (i.e., a redesigned pump) 

having a higher selling price and higher 

efficiency, and the LCC is recalculated. 

The LCC savings at that efficiency level 

are defined as the difference between 

the LCC in the base case and the LCC 

for the more efficient pump. The LCC is 

calculated for each pump installation at 

each efficiency level. 

In the engineering analysis, DOE 

determines the total conversion costs 

required to bring the entire population 

of pump models up to a given efficiency 

level. DOE uses these conversion costs 

to calculate the selling price of a 

redesigned pump within each of the 

combined power and flow bins that 

define a representative unit. DOE 

assumes that all consumers whose base 

case pump would not meet the standard 

at a given efficiency level will purchase 

the new redesigned pump at the new 

selling price, and that manufacturers 

recover the total conversion costs at 

each efficiency level. DOE allocates 

conversion costs to each representative 

unit based on the proportion of total 

revenues generated by that unit in the 

base case. 

DOE calculates the selling price in 

two stages. In the first stage, for each 

equipment class and efficiency level, 

DOE calculates the total revenue 

generated from all failing units, adds the 

total conversion costs to the revenues 

from failing units to generate the new 

revenue requirement, and defines a 

markup as the ratio of the new revenue 

requirement to the base case revenue 

from failing units. This approach 

ensures that (1) the conversion costs are 

recovered from the sale of redesigned 

units and (2) the conversion costs are 

distributed across the different 

representative units in proportion to the 

amount of revenue each representative 

unit generates in the base case. 

In the second stage, DOE calculates a 

new selling price for each redesigned 

representative unit, i.e., for each of the 

combined power and flow bins. In the 

base case, each bin contains a set of 

pumps with varying efficiencies and 

varying prices. However, all pumps that 

fail at an efficiency level are given the 

same new price. Hence, the markup 

defined in stage one of the calculation 

cannot be applied directly to the selling 

price of a failing unit. Instead, DOE 

calculates revenues associates with all 

failing units in the bin, and applies the 

markup to this total to get the new 

revenue requirement for that bin. Then 

DOE defines the new selling price as the 

new revenue requirement divided by 

the number of failing units in the bin. 

In general, the economic inputs to the 

LCC, (e.g., discount rate and electricity 

price) depend on the sector, while the 

usage criteria (e.g., hours of operation) 

may depend on the application. For the 

pumps analysis, DOE considered four 

sectors: Industrial, commercial 

buildings, agricultural and municipal 

water utilities. DOE assigns electricity 

prices and discount rates based on the 

sector. DOE considered several 

applications, based on a review of 

available data, and determined that 

there is some correlation between 

application and operating hours. DOE 

did not find any information relating 

either the BEP offset (a pump sizing 

factor) or load profile to either sector or 

application, so DOE assigned these 

values randomly. 

As noted above, DOE determines the 

distribution of representative units in 

the pump installation sample from the 

shipments data. Each representative 

unit can be thought of as a pump that 

operates at a representative duty point. 

To assign the consumer attributes 

(sector, application etc.) to duty points, 

DOE reviewed several data sources to 

incorporate correlations between sector, 

application, equipment class and the 

distribution of duty points into the 

analysis. Specifically, DOE used a 

database of various industrial 

applications collected from several case 

studies and field studies, and a database 

on pump tests provided by the Pacific 

Gas & Electric Company, to construct 

the distribution of pumps by sector, 

application and speed as a function of 

power bin and equipment class. DOE 

used these distributions to determine 

the relative weighting of different 

sectors and applications in the LCC 

sample for each equipment class. 

2. Life-Cycle Cost Inputs 

For each efficiency level DOE 

analyzed, the LCC analysis required 

input data for the total installed cost of 

the equipment, its operating cost, and 

the discount rate. Table IV.3 

summarizes the inputs and key 

assumptions DOE used to calculate the 

consumer economic impacts of all 

energy efficiency levels analyzed in this 

rulemaking. A more detailed discussion 

of the inputs follows. 

TABLE IV.3—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LCC AND PBP ANALYSES

Inputs Description 

Affecting Installed Costs 

Equipment Price ........................................ Equipment price derived by multiplying manufacturer sales price or MSP (calculated in the engineering analysis) by distribution channel markups, as needed, plus sales tax from the markups analysis. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17851 

38U.S. Energy Information Administration. 

Annual Energy Outlook 2014 (2014) DOE/EIA– 

0383(2014). (Last Accessed August 8, 2014) 

(Available at: http://www.eia.gov/forecasts/aeo/). 

39See for example, Docket No. EERE–2013–BT– 

NOC–0039–0073, p. 153. 

40Series ID PCU333911333911; http://

www.bls.gov/ppi/. 

TABLE IV.3—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LCC AND PBP ANALYSES—Continued 

Inputs Description 

Installation Cost ........................................ Installation cost assumed to not change with efficiency level, and therefore is not included in this 

analysis. 

Affecting Operating Costs 

Annual Energy Use ................................... Annual unit energy consumption for each class of equipment at each efficiency level estimated by 

sector and application using simulation models. 

Electricity Prices ........................................ DOE developed average electricity prices and projections of future electricity prices based on Annual 

Energy Outlook 2014 (AEO 2014).38

Maintenance Cost ..................................... Maintenance cost assumed to not change with efficiency level, and therefore is not included in this 

analysis. 

Repair Cost ............................................... Repair cost assumed to not change with efficiency level, and therefore is not included in this analysis. 

Affecting Present Value of Annual Operating Cost Savings 

Equipment Lifetime ................................... Pump equipment lifetimes estimated to range between 4 and 40 years, with an average lifespan of 

15 years across all equipment classes, based on estimates from market experts and input from 

the CIP Working Group.39

Discount Rate ........................................... Mean real discount rates for all sectors that purchase pumps range from 3.4 percent for municipal 

sector to 5.9 percent for industrial sector. 

Analysis Start Year ................................... Start year for LCC is 2020, which is the first full year following the estimated compliance date of late 

2019. 

Analyzed Efficiency Levels 

Analyzed Efficiency Levels ....................... DOE analyzed the baseline efficiency levels and five higher efficiency levels for each equipment 

class. See the engineering analysis for additional details on selections of efficiency levels and 

cost. 

DOE analyzed the baseline efficiency 

levels (reflecting the lowest efficiency 

levels currently on the market) and five 

higher efficiency levels for each 

equipment class analyzed. Chapter 5 of 

the NOPR TSDprovides additional 

details on the selection of efficiency 

levels and cost. 

a. Equipment Prices 

The price of pump equipment reflects 

the application of distribution channel 

markups and sales tax to the 

manufacturer sales price (MSP), which 

is the cost established in the engineering 

analysis. For each equipment class, DOE 

generated MSPs for the baseline 

equipment and five higher equipment 

efficiencies in the engineering analysis. 

As described in section IV.D, DOE 

determined distribution channel costs 

and markups for pump equipment. 

The markup is the percentage increase 

in price as the pump equipment passes 

through distribution channels. As 

explained in section IV.D, DOE assumed 

that pumps are delivered by the 

manufacturer through one of five 

distribution channels. The overall 

markups used in LCC analyses are 

weighted averages of all of the relevant 

distribution channel markups. 

To project an equipment price trend 

for the NOPR, DOE derived an inflationadjusted index of the Producer Price 

Index for pumps and pumping 

equipment over the period 1984–2013.40

These data show a general price index 

increase from 1987 through 2009. Since 

2009, there has been no clear trend in 

the price index. Given the relatively 

slow global economic activity in 2009 

through 2013, the extent to which the 

future trend can be predicted based on 

the last two decades is uncertain and 

the observed data do not provide a firm 

basis for projecting future cost trends for 

pump equipment. Therefore, DOE used 

a constant price assumption as the 

default trend to project future pump 

prices in 2020. Thus, prices projected 

for the LCC and PBP analysis are equal 

to the 2012 values for each efficiency 

level in each equipment class. 

Appendix 8A of the NOPR TSD 

describes the historical data that were 

considered. 

DOE requests comments on the most 

appropriate trend to use for real 

(inflation-adjusted) pump prices. This is 

identified as Issue 7 in section VIII.E, 

‘‘Issues on Which DOE Seeks 

Comment.’’ 

b. Installation Costs 

In the Framework Document, DOE 

requested information on whether 

installation costs would be expected to 

change with efficiency. Grundfos 

responded that this was not expected to 

occur for new installations, but noted 

that for existing installations, there may 

be additional costs to replace existing 

equipment with higher efficiency 

equipment for piping, electrical 

modifications, base and foundations, 

and code requirements for equipment 

rooms. (Grundfos, No. 24 at p. 34.) In 

the CIP Working Group, Grundfos and 

ITT Corporation also noted that the 

assumption of targeting identical flange 

or feet dimensions during redesign is 

reasonable, but that, as one drives to 

higher efficiency one may have to 

stretch the pump (i.e., change the 

dimensions from the base design) and 

change configurations. (See EERE– 

2013–BT–NOC–0039–0109, pp.240– 

242), Grundfos stated that at some point 

within the range of efficiency levels 

under consideration, whether at PER 40 

or 70 or some other point, the 

installation cost might change. In the 

absence of data to indicate at what 

efficiency level DOE may need to 

consider an increase in installation 

costs, DOE has not estimated 

installation costs for this analysis. DOE 

requests comment on whether any of the 

efficiency levels considered in this 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17852 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

41Power factor is the ratio of real power flowing 

to the load to the apparent power in the circuit. 

Reactive power is power that is not transferred to 

the load but is required for electric motors to start. 

42 Damodaran financial data used for determining 

cost of capital are available at: http://

pages.stern.nyu.edu/∼adamodar/ for commercial 

businesses (Last accessed February 12, 2014). 

NOPR might lead to an increase in 

installation costs and, if so, data 

regarding the magnitude of the 

increased cost for each relevant 

efficiency level. This is identified as 

Issue 8 in section VIII.E, ‘‘Issues on 

Which DOE Seeks Comment.’’ 

c. Annual Energy Use 

DOE estimated the annual electricity 

consumed by each class of pump 

equipment, by efficiency level, based on 

the energy use analysis described in 

section IV.E and in chapter 7 of the 

NOPR TSD. 

d. Electricity Prices 

Electricity prices are used to convert 

changes in the electric consumption 

from higher-efficiency equipment into 

energy cost savings. DOE used average 

national commercial and industrial 

electricity prices from the AEO 2014 

reference case. DOE applied the 

commercial price to pump installations 

in the commercial sector and the 

industrial price to installations in the 

industrial, agricultural, and municipal 

sectors. To establish prices beyond 2040 

(the last year in the AEO 2014 

projection, DOE extrapolated the trend 

in prices from 2030 to 2040 for both the 

commercial and industrial sectors. 

In response to the Framework 

Document and during the CIP Working 

Group meetings, EEI and the CA IOUs 

discussed consideration of reactive 

power prices in the analyses. 

Specifically, the CA IOUs recommended 

that DOE consider costs and value of 

power factor and reactive power.41 (CA 

IOUs, No. 26 at p. 4, EERE–2013–BT– 

NOC–0039–0072, p. 341.) On the other 

hand, EEI stated that it may not be 

necessary to consider reactive power 

prices because most pumps, motors, and 

VSDs will not reduce power factors to 

levels that would create extra costs for 

consumers. (EEI, No. 31 at p. 4.) DOE is 

not considering motors or VSDs as 

technology options and concludes that 

any changes in pump efficiency would 

have very small impacts on power 

factor. As a result, DOE did not include 

reactive power prices in its analyses. 

e. Maintenance Costs 

During the CIP Working Group 

meetings, DOE indicated that its 

analysis assumed that maintenance 

costs would not change with efficiency 

level. (EERE–2013–BT–NOC–0039– 

0073, p. 135.) DOE did not receive any 

negative comments on this assumption, 

so DOE has not estimated a maintenance 

cost for this analysis. 

f. Repair Costs 

DOE received information in response 

to the Framework Document (Grundfos, 

No. 24 at p. 35) and from the CIP 

Working Group that repair costs are not 

expected to change with efficiency 

level. Therefore, DOE has not estimated 

a repair cost for this analysis. 

g. Equipment Lifetime 

DOE defines ‘‘equipment lifetime’’ as 

the age when a given commercial or 

industrial pump is retired from service. 

DOE consulted with market experts to 

establish typical equipment lifetimes, 

which included estimates of minimum 

and maximum lifetime. Consequently, 

DOE developed distributions of 

lifetimes that vary by equipment class. 

The average across all equipment 

classes is 15 years. DOE also used a 

distribution of mechanical lifetime in 

hours to allow a negative correlation 

between annual operating hours and 

lifetime in years—pumps with more 

annual operating hours tend to have 

shorter lifetimes. In addition, based on 

discussions in the CIP Working Group 

meetings (see, e.g., Docket No. EERE– 

2013–BT–NOC–0039–0073, p. 153), 

DOE introduced lifetime variation by 

pump speed—pumps running faster 

tend to have a shorter lifetime. Chapter 

8 of the NOPR TSD contains a detailed 

discussion of equipment lifetimes. 

h. Discount Rates 

The discount rate is the rate at which 

future expenditures are discounted to 

estimate their present value. The 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 the cost of capital is the 

weighted-average cost to the firm of 

equity and debt financing. For all but 

the municipal sector, DOE uses the 

capital asset pricing model to calculate 

the equity capital component, and 

financial data sources, primarily the 

Damodaran Online Web site,42 to 

calculate the cost of debt financing. DOE 

derived the discount rates by estimating 

the cost of capital of companies that 

purchase pumping equipment. 

For the municipal sector, DOE 

calculated the real average interest rate 

on state and local bonds over the period 

of 1983–2012 by adjusting the Federal 

Reserve Board nominal rates to account 

for inflation. This 30-year average is 

assumed to be representative of the cost 

of capital relevant to municipal end 

users over the analysis period. 

More details regarding DOE’s 

estimates of consumer discount rates are 

provided in chapter 8 of the NOPR TSD. 

3. Payback Period 

The PBP measures the amount of time 

it takes the commercial consumer to 

recover the assumed higher purchase 

expense of more-efficient equipment 

through lower operating costs. Similar 

to the LCC, the PBP is based on the total 

installed cost and the operating 

expenses for each application and 

sector, weighted by the probability of 

shipments to each market. Because the 

simple PBP does not take into account 

changes in operating expense over time 

or the time value of money, DOE 

considered only the first year’s 

operating expenses to calculate the PBP, 

unlike the LCC, which is calculated over 

the lifetime of the equipment. Chapter 8 

of the NOPR TSD provides additional 

details about the PBP calculation. 

4. Rebuttable-Presumption Payback 

Period 

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 (and, as 

applicable, water) savings during the 

first year that the consumer will receive 

as a result of the standard, as calculated 

under the test procedure in place for 

that standard. (42 U.S.C. 

6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a).) 

For each considered efficiency level, 

DOE determines the value of the first 

year’s energy savings by calculating the 

quantity of those savings in accordance 

with the applicable DOE test procedure, 

and multiplying that amount by the 

average energy price forecast for the 

year in which compliance with the 

amended standards would be required. 

G. Shipments Analysis 

In its shipments analysis, DOE 

developed shipment projections for 

pumps and, in turn, calculated 

equipment stock over the course of the 

analysis period. DOE used the 

shipments projection and the equipment 

stock to determine the NES. The 

shipments portion of the spreadsheet 

model projects pump shipments from 

2020 through 2049. 

In the Framework Document, DOE 

considered using the shipment data 

available from the U.S. Census Bureau. 


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43 DOE’s Web page on pumps can be found at: 

http://www1.eere.energy.gov/buildings/appliance_

standards/rulemaking.aspx/ruleid/14. 

In response, Grundfos and HI expressed 

concern that the Census descriptions 

did not match HI nomenclature. 

(Grundfos, No. 24 at p. 20; HI, No. 25 

at p. 36.) HI further added that they did 

not find the Census data to be reliable 

(Id.) During the course of the CIP 

Working Group meetings, HI provided 

DOE with shipment estimates collected 

directly from its members (EERE–2013– 

BT–NOC–0039–0068). 

To develop the shipments model, 

DOE started with the 2012 shipment 

estimates by equipment type from HI. 

For the initial year, DOE distributed 

total shipments into the four sectors 

using estimates from the LCC, as 

discussed in section IV.F.1. To project 

shipments of pumps, DOE relied 

primarily on AEO 2014 forecasts of 

various indicators for each sector: (1) 

Commercial floor space; (2) value of 

manufacturing shipments; (3) value of 

agriculture, mining, and construction 

shipments; and (4) population (for the 

municipal sector). 

DOE used the 2012 total industry 

shipments by equipment class estimated 

by HI to distribute total shipments in 

each year into the five equipment types. 

DOE then used 2012 shipment data 

collected directly from manufacturers to 

distribute shipments into the further 

disaggregated equipment classes 

accounting for nominal speeds. The 

distribution of sectors changes over time 

as a result of each sector’s differing 

forecast in AEO, while the distribution 

of equipment classes remains constant 

over time. 

DOE estimated that standards would 

have a negligible impact on pump 

shipments. Under most pricing 

scenarios, it is likely that following a 

standard, a consumer would be able to 

buy a more efficient pump for the same 

price as the less efficient pump they 

would have purchased before or without 

a standard. Therefore, rather than 

foregoing a pump purchase under a 

standards case, a consumer might 

simply switch brands or pumps to 

purchase a cheaper one that did not 

have to be redesigned. As a result, DOE 

used the same shipments projections in 

the standards case as in the base case. 

Chapter 9 of the TSD contains more 

details. DOE seeks comment on whether 

new standards would be likely to affect 

shipments. This is identified as Issue 9 

under ‘‘Issues on Which DOE Seeks 

Comment’’ in section VIII.E of this 

NOPR. 

H. National Impact Analysis 

The national impact analysis (NIA) 

evaluates the effects of energy 

conservation standards from a national 

perspective. This analysis assesses the 

net present value (NPV) (future amounts 

discounted to the present) and the 

national energy savings (NES) of total 

commercial consumer costs and savings 

expected to result from new standards at 

specific efficiency levels. 

The NES refers to cumulative energy 

savings for the lifetime of pumps 

shipped from 2020 through 2049. DOE 

calculated energy savings in each year 

relative to a base case, defined by the 

current market. DOE calculated net 

monetary savings in each year relative 

to the base case as the difference 

between total operating cost savings and 

increases in total installed cost. DOE 

accounted for operating cost savings 

until the year when the equipment 

installed in 2049 should be retired. 

Cumulative savings are the sum of the 

annual NPV over the specified period. 

1. Approach 

The NES and NPV are a function of 

the total number of units in use and 

their efficiencies. Both the NES and 

NPV depend on annual shipments and 

equipment lifetime. Both calculations 

start by using the shipments estimate 

and the quantity of units in service 

derived from the shipments model. 

DOE used a spreadsheet tool, 

available on DOE’s Web site for 

pumps,43 to calculate the energy savings 

and the national monetary costs and 

savings from potential standards. 

Interested parties can review DOE’s 

analyses by changing various input 

quantities within the spreadsheet. 

Unlike the LCC analysis, the NES 

spreadsheet does not use distributions 

for inputs or outputs, but relies on 

national average equipment costs and 

energy costs developed from the LCC 

analysis. DOE projected the energy 

savings, energy cost savings, equipment 

costs, and NPV of benefits for 

equipment sold in each pump class 

from 2020 through 2049. 

a. National Energy Savings 

DOE calculated the NES based on the 

difference between the per-unit energy 

use under a standards-case scenario and 

the per-unit energy use in the base case. 

The average energy per unit used by the 

pumps in service gradually decreases in 

the standards case relative to the base 

case because more-efficient pumps are 

expected to gradually replace lessefficient ones. 

Unit energy consumption values for 

each equipment class are taken from the 

LCC spreadsheet for each efficiency 

level and weighted based on market 

efficiency distributions. To estimate the 

total energy savings for each efficiency 

level, DOE first calculated the delta unit 

energy consumption (i.e., the difference 

between the energy directly consumed 

by a unit of equipment in operation in 

the base case and the standards case) for 

each class of pumps for each year of the 

analysis period. The analysis period 

begins with the first full year following 

the estimated compliance date of any 

new energy conservation standards (i.e., 

2020). Second, DOE determined the 

annual site energy savings by 

multiplying the stock of each equipment 

class by vintage (i.e., year of shipment) 

by the delta unit energy consumption 

for each vintage (from step one). Third, 

DOE converted the annual site 

electricity savings into the annual 

amount of energy saved at the source of 

electricity generation (primary energy) 

using a time series of conversion factors 

derived from the AEO 2014 version of 

EIA’s National Energy Modeling System 

(NEMS). Finally, DOE summed the 

annual primary energy savings for the 

lifetime of units shipped over a 30-year 

period to calculate the total NES. DOE 

performed these calculations for each 

efficiency level considered for pumps in 

this rulemaking. 

DOE has historically presented NES 

in terms of primary energy savings. On 

August 18, 2011, DOE published a final 

statement of policy in the Federal 

Register announcing its intention to use 

full-fuel-cycle (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. 

After evaluating the approaches 

discussed in the August 18, 2011 notice, 

DOE published a statement of amended 

policy in the Federal Register in which 

DOE explained its determination that 

NEMS is the most appropriate tool for 

its FFC analysis and its intention to use 

NEMS for that purpose. 77 FR 49701 

(August 17, 2012). Therefore, DOE used 

the NEMS model to conduct the FFC 

analysis. The approach used for this 

NOPR, and the FFC multipliers that 

were applied, are described in appendix 

10B of the NOPR TSD. 

To properly account for national 

impacts, DOE adjusted the energy use 

and energy costs developed from the 

LCC spreadsheet. Specifically, in the 

LCC, DOE does not account for pumps 

sold with trimmed impellers or pumps 

used with VSDs, both of which may 

reduce the energy savings resulting from 

pump efficiency improvements. 

In response to the Framework 

Document, HI mentioned that the 

penetration of VSDs is increasing in the 


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44United States Industrial Electric Motor Systems 

Market Opportunities Assessment. Tech. 

Washington DC: U.S. Department of Energy’s (DOE) 

Office of Energy Efficiency and Renewable Energy 

(EERE), 1998. Print. 

45Almeida, A., Chretien, B., Falkner, H., Reichert, 

J., West, M., Nielsen, S., and Both, D. VSDs for 

Electric Motor Systems. Tech. N.p.: European 

Commission Directorate-General for Transport and 

Energy, SAVE II Programme 2000, n.d. Print. 

46See for example: 

Energy Tips—Motor. Tech. Washington DC: U.S. 

Department of Energy’s (DOE) Office of Energy 

Efficiency and Renewable Energy (EERE), 2008, 

Motor Tip Sheet #11,Print, p. 1. 

Variable Frequency Drives. Tech. Northwest 

Energy Efficiency Alliance, 2000, Report #00–054, 

Print, Exhibit 2.1. 

47See for example: Variable speed drives: 

Introducing energy saving opportunities for 

business. London: Carbon Trust, 2011. 

market place and recommended that 

DOE explore the issue (HI, No. 25 at p. 

43). DOE reviewed studies on VSD 

penetration and used an initial 

penetration of 3.2 percent in 1998 44

with a 5 percent annual increase.45 For 

more information on VSD penetration, 

see chapter 9 of the NOPR TSD. 

Although these studies are not specific 

to VFDs, DOE assumed all VSD use was 

attributable to VFD use, as VFDs are the 

most common type of VSD in the pumps 

market.46 Based on DOE’s analysis of 

VFD users in the consumer subgroup 

analysis (see section IV.I), DOE assumed 

VFDs would reduce energy use by 39 

percent on average, which also reduces 

the potential energy savings from higher 

efficiency. However, DOE assumed 

based on the difficulties with VFD 

installation and operation,47 that the full 

amount of potential savings would not 

be realized for all consumers. DOE is 

currently assuming an ‘‘effectiveness 

rate’’ of 75 percent; in other words DOE 

is assuming that consumers will achieve 

on average only 75 percent of the 39 

percent estimated savings (i.e., 29 

percent savings) because of improper 

installation, operation inconsistent with 

intended use, or other equipment 

problems. 

In the CIP Working Group meetings, 

one stakeholder stated that half of 

pumps sold by manufacturers are 

trimmed (i.e., have impellers trimmed to 

meet customer needs) (Louis Starr, 

EERE–2013–BT–NOC–0039–0072, p. 

345), while another stated that the vast 

majority of pumps sold by 

manufacturers are trimmed (Al Huber, 

EERE–2013–BT–NOC–0039–0009, p. 

168). DOE also consulted a market 

expert who agreed that a majority of 

pumps are trimmed, and that the 

average trim is between 10 to 20 

percent. In the NIA, DOE assumed that 

for all equipment classes except VTS, 50 

percent of pumps not sold with VFDs 

are sold with impellers trimmed to 85 

percent of full impeller. According to 

the pump affinity laws, which are a set 

of relationships that can be used to 

predict the performance of a pump 

when its speed or impeller diameter is 

changed, such an impeller trim uses 61 

percent of the power of full trim. 

Accordingly, DOE reduced the energy 

use for those consumers by 39 percent. 

For the VTS equipment class, DOE 

assumed that pumps were not sold with 

trimmed impellers. A large percentage 

of these pumps are pressed stainless and 

will never be trimmed; the remainder of 

these pumps will be significantly less 

likely to be trimmed than other pump 

types because variability in the number 

of stages would be used in place of 

trimming the impellers. 

DOE used the penetration rate and 

power reduction values for VFDs and 

trimmed impellers, as well as the 

effectiveness rate for VFDs, to create an 

energy use adjustment factor time series 

in the NES spreadsheet. DOE seeks 

comment on the components of this 

adjustment. This matter is identified as 

Issue 10 under ‘‘Issues on Which DOE 

Seeks Comment’’ in section VIII.E of 

this NOPR. 

DOE considered whether a rebound 

effect applies to pumps. A rebound 

effect occurs when an increase in 

equipment efficiency leads to increased 

demand for its service. For example, 

when a consumer realizes that a moreefficient pump used for cooling will 

lower the electricity bill, that person 

may opt for increased comfort in the 

building by using the equipment more, 

thereby negating a portion of the energy 

savings. In commercial buildings, 

however, the person owning the 

equipment (i.e., the building owner) is 

usually not the person operating the 

equipment (i.e., the renter). Because the 

operator usually does not own the 

equipment, that person will not have 

the operating cost information necessary 

to influence their operation of the 

equipment. Therefore, DOE believes that 

a rebound effect is unlikely to occur in 

commercial buildings. In the industrial 

and agricultural sectors, DOE believes 

that pumps are likely to be operated 

whenever needed for the required 

process or irrigation demand, so a 

rebound effect is also unlikely to occur 

in the industrial and agricultural 

sectors. DOE seeks comment on whether 

a rebound effect should be included in 

the determination of annual energy 

savings. If a rebound effect should be 

included, DOE seeks data to assist in 

calculating the rebound effect. This 

matter is identified as Issue 11 under 

‘‘Issues on Which DOE Seeks Comment’’ 

in section VIII.E of this NOPR. 

DOE also considered whether there 

would be any spill-over effects related 

to an energy conservation standard for 

clean water pumps. Specifically, in the 

Framework Document, DOE requested 

information on whether design changes 

to clean water pumps would also be 

reflected in the design of pumps used in 

other processes and applications, thus 

saving additional energy not accounted 

for in the analysis of clean water pumps 

only. In response, Grundfos expected 

that design changes to clean water 

pumps would spill over, while HI 

believed that spillover was possible for 

a small number of design changes by 

pump manufacturers with modular 

designs. Grundfos and HI noted, 

however, that designs in alternate 

applications are very dependent on 

requirements for safety and reliability. 

(Grundfos, No. 24 at p. 4; HI No. 25 at 

p. 14.) Because DOE did not obtain any 

data indicating how much spillover 

might occur, DOE has not accounted for 

spillover effects in the NOPR analysis. 

b. Net Present Value 

To estimate the NPV, DOE calculated 

the net impact as the difference between 

total operating cost savings and 

increases in total installed costs. DOE 

calculated the NPV of each considered 

standard level over the life of the 

equipment using the following three 

steps. 

First, DOE determined the difference 

between the equipment costs under the 

standard-level case and the base case to 

obtain the net equipment cost increase 

resulting from the higher standard level. 

As noted in section IV.F.2.a, DOE used 

a constant price assumption as the 

default price forecast. In addition, DOE 

considered two alternative price trends 

to investigate the sensitivity of the 

results to different assumptions 

regarding equipment price trends. One 

of these used an exponential fit on the 

deflated Producer Price Index (PPI) for 

pump and puming equipment 

manufacturing, and the other is based 

on the ‘‘deflator—industrial equipment’’ 

forecast for AEO 2014. The derivation of 

these price trends is described in 

appendix 10B of the NOPR TSD. 

Second, DOE determined the 

difference between the base-case 

operating costs and the standard-level 

operating costs to obtain the net 

operating cost savings from each higher 

efficiency level. 

Third, DOE determined the difference 

between the net operating cost savings 

and the net equipment cost increase to 

obtain the net savings (or expense) for 

each year. DOE then discounted the 

annual net savings (or expenses) to 2015 

and summed the discounted values to 


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48OMB Circular A–4, section E (Sept. 17, 2003) 

(Available at: www.whitehouse.gov/omb/circulars_

a004_a-4.) 

49 In this analysis, DOE is not counting energy 

savings of switching from throttling a pump to 

using a VFD, as this is not a design option. DOE 

is simply analyzing the life-cycle costs of customers 

that use VFDs with their pumps. 

50Filings & Forms, Securities and Exchange 

Commission (2013) (Available at: http://

www.sec.gov/edgar.shtml) (Last accessed July 2013). 

51U.S. Census Bureau, Annual Survey of 

Manufacturers: General Statistics: Statistics for 

Industry Groups and Industries (2010) (Available at: 

<http://www.census.gov/manufacturing/asm/

index.html>) (Last accessed July, 2013). 

52Hoovers | Company Information | Industry 

Information | Lists, D&B (2013) (Available at: 

http://www.hoovers.com/) (Last accessed July 2013). 

provide the NPV for a standard at each 

efficiency level. 

In accordance with the Office of 

Management and Budget’s (OMB’s) 

guidelines on regulatory analysis,48

DOE calculated NPV using both a 7- 

percent and a 3-percent real discount 

rate. The 7-percent rate is an estimate of 

the average before-tax rate of return on 

private capital in the U.S. economy. 

DOE used this discount rate to 

approximate the opportunity cost of 

capital in the private sector, because 

recent OMB analysis has found the 

average rate of return on capital to be 

near this rate. DOE used the 3-percent 

rate to capture the potential effects of 

standards on private consumption (e.g., 

through higher prices for equipment and 

reduced purchases of energy). This rate 

represents the rate at which society 

discounts future consumption flows to 

their present value. This rate can be 

approximated by the real rate of return 

on long-term government debt (i.e., 

yield on United States Treasury notes 

minus annual rate of change in the 

Consumer Price Index), which has 

averaged about 3 percent on a pre-tax 

basis for the past 30 years. 

2. Base-Case and Standards-Case 

Distribution of Efficiencies 

As described in section IV.F.1, DOE 

developed a base-case distribution of 

efficiency levels for pumps using 

performance data provided by 

manufacturers. Because the available 

evidence suggests that there is no trend 

toward greater interest in higher pump 

efficiency, DOE assumed that the base 

case distribution would remain constant 

over time. The base-case efficiency 

distributions for each equipment class 

are presented in chapter 10 of the NOPR 

TSD. Furthermore, DOE has no reason 

to believe that implementation of 

standards would lead to an increased 

demand for more efficient equipment 

than the minimum available, and 

therefore does not use an efficiency 

trend in the standards-case scenarios. 

For each efficiency level analyzed, 

DOE used a ‘‘roll-up’’ scenario to 

establish the market shares by efficiency 

level for the year that compliance would 

be required with new standards (i.e., 

2020). DOE concludes that equipment 

efficiencies in the base case that were 

above the standard level under 

consideration would not be affected. 

Information from certain manufacturers 

indicates that for pumps not meeting a 

potential standard at some of the lower 

efficiency levels, redesign would likely 

target an efficiency level higher than the 

minimum given the level of investment 

required for a redesign, and the 

relatively more modest change in 

investment to design a given pump to a 

higher level once redesign is already 

taking place. However, DOE has no data 

that clearly indicate what percentage of 

failing pumps would likely be 

redesigned to a level higher than the 

minimum, or how high that level would 

be. In the absence of such data, DOE 

does not assume that manufacturers 

would design to a level higher than 

required, to avoid overestimating the 

energy savings that would result from 

the rule. 

In response to the Framework 

Document, EEI commented that the 

federal regulations on motor efficiency 

and the requirements in the most recent 

building codes should be considered in 

the energy efficiency base case in the 

analyses. (EEI, No. 31 at p. 2.) DOE 

notes that its analysis incorporates the 

federal motor efficiency standards in its 

analysis but does not consider the use 

of motors more efficient than those 

standards. DOE also reviewed the 

relevant building codes and found that 

they do not place any requirements on 

pump efficiency. 

I. Consumer Subgroup Analysis 

In the Framework Document, DOE 

requested input on any consumer 

subgroups that should be analyzed 

separately. Grundfos suggested that 

consumer subgroups should include 

commercial buildings, water utilities, 

and irrigation. (Grundfos, No. 24 at p. 

36.) While DOE is not analyzing these 

different groups as part of its consumer 

subgroup analysis, it has considered 

these groups as part of the LCC analysis. 

For the consumer subgroup analysis, 

DOE estimated the impacts of the TSLs 

on the subgroup of consumers who 

operate their pumps with VFDs.49 DOE 

analyzed this subgroup because the 

lower power typically drawn by 

operating pumps at reduced speed may 

reduce the energy and operating cost 

savings to the consumer that would 

result from improved efficiency of the 

pump itself. DOE estimated the average 

LCC savings and simple PBP for the 

subgroup compared with the results 

from the full sample of pump 

consumers, which did not account for 

VFD use. 

J. Manufacturer Impact Analysis 

1. Overview 

DOE performed a manufacturer 

impact analysis (MIA) to estimate the 

financial impact of energy conservation 

standards on manufacturers of pumps 

and to calculate the potential impact of 

such standards on direct employment 

and manufacturing capacity. 

The MIA has both quantitative and 

qualitative aspects. The quantitative 

portion of the MIA primarily relies on 

the Government Regulatory Impact 

Model (GRIM), an industry cash-flow 

model customized for this rulemaking. 

The key GRIM inputs are data on the 

industry cost structure, equipment 

costs, shipments, markups, and 

conversion expenditures. The key 

output is the industry net present value 

(INPV). Different sets of assumptions 

will produce different results. The 

qualitative portion of the MIA addresses 

factors such as equipment 

characteristics, as well as industry and 

market trends. Chapter 12 of the NOPR 

TSD describes the complete MIA. 

DOE conducted the MIA for this 

rulemaking in three phases. In Phase 1 

of the MIA, DOE prepared a profile of 

the pumps industry that includes a topdown cost analysis of manufacturers 

that DOE used to derive preliminary 

financial inputs for the GRIM (e.g., 

sales, general, and administration 

(SG&A) expenses; research and 

development (R&D) expenses; and tax 

rates). DOE used public sources of 

information, including the Securities 

and Exchange Commission (SEC) 10–K 

filings 50; corporate annual reports; the 

U.S. Census Bureau’s Annual Survey of 

Manufacturers 51; and Hoovers reports.52

In phase 2 of the MIA, DOE prepared 

an industry cash-flow analysis to 

quantify the potential impacts of an 

energy conservation standard. In 

general, new or amended energy 

conservation standards can affect 

manufacturer cash flow in three distinct 

ways: (1) Create a need for increased 

investment; (2) raise production costs 

per unit; and (3) alter revenue due to 

higher per-unit prices and possible 

changes in sales volumes. 

In phase 3 of the MIA, DOE 

conducted detailed interviews with a 

representative cross-section of 


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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.I.3 for 

a description of the key issues 

manufacturers raised during the 

interviews. 

Additionally, in phase 3, DOE 

evaluates subgroups of manufacturers 

that may be disproportionately 

impacted by standards or that may not 

be accurately represented by the average 

cost assumptions used to develop the 

industry cash-flow analysis. For 

example, small manufacturers, niche 

players, or manufacturers exhibiting a 

cost structure that largely differs from 

the industry average could be more 

negatively affected. For today’s NOPR, 

DOE analyzed small manufacturers as a 

subgroup. 

The Small Business Administration 

(SBA) defines a small business under 

North American Industry Classification 

System (NAICS) code 333911, ‘‘Pump 

and Pumping Equipment 

Manufacturing,’’ as one having no more 

than 500 employees. During its research, 

DOE identified 25 domestic companies 

that manufacture equipment covered by 

this rulemaking and qualify as small 

businesses under the SBA definition. 

Consistent with the requirements of the 

Regulatory Flexibility Act, DOE’s 

analysis of the small business subgroup 

is discussed in section VII.B of this 

NOPR and chapter 12 of the NOPR TSD. 

2. GRIM Analysis 

As discussed previously, DOE uses 

the GRIM to quantify the changes in 

cash flow that result in a higher or lower 

industry value due to energy 

conservation standards. The GRIM 

analysis uses a discounted cash-flow 

methodology that incorporates 

manufacturer costs, markups, 

shipments, and industry financial 

information as inputs. The GRIM 

models changes in MPCs, distributions 

of shipments, investments, and 

manufacturer margins that could result 

from new energy conservation 

standards. The GRIM spreadsheet uses 

the inputs to arrive at a series of annual 

cash flows, beginning in 2015 (the base 

year of the analysis) and continuing to 

2049. DOE calculated INPVs by 

summing the stream of annual 

discounted cash flows during this 

period. DOE applied a discount rate of 

11.8 percent, derived from industry 

financials and then modified according 

to feedback received during 

manufacturer interviews. 

In the GRIM, DOE calculates cash 

flows using standard accounting 

principles and compares changes in 

INPV between the base case and each 

TSL (the standards case). The difference 

in INPV between the base case and a 

standards case represents the financial 

impact of the energy conservation 

standard on manufacturers. Additional 

details about the GRIM, the discount 

rate, and other financial parameters can 

be found in chapter 12 of the NOPR 

TSD. 

a. GRIM Key Inputs 

Manufacturer Production Costs 

Manufacturer production costs 

(MPCs) are the cost to the manufacturer 

to produce a covered pump. The cost 

includes raw materials and purchased 

components, production labor, factory 

overhead, and production equipment 

depreciation. The changes, if any, in the 

MPC of the analyzed products can affect 

revenues, gross margins, and cash flow 

of the industry. In the MIA, DOE used 

the MPCs for each efficiency level 

calculated in the engineering analysis, 

as described in section IV.C.5 and 

further detailed in chapter 5 of the 

NOPR TSD. In addition, DOE used 

information from manufacturer 

interviews to disaggregate the MPCs into 

material, labor, and overhead costs. 

Shipments Forecast 

The GRIM estimates manufacturer 

revenues based on total unit shipment 

forecasts and the distribution of 

shipments by equipment class. For the 

base-case analysis, the GRIM uses the 

NIA base-case shipments forecasts from 

2015 (the base year for the MIA 

analysis) to 2049 (the last year of the 

analysis period). In the shipments 

analysis, DOE estimates the distribution 

of efficiencies in the base case for all 

equipment classes. See section IV.G for 

additional details. 

For the standards-case shipment 

forecast, the GRIM uses the NIA 

standards-case shipment forecasts. The 

NIA assumes that equipment 

efficiencies in the base case that do not 

meet the energy conservation standard 

in the standards case ‘‘roll up’’ to meet 

the standard after the compliance date. 

See section IV.G for additional details. 

Product and Capital Conversion Costs 

Energy conservation standards can 

cause manufacturers to incur conversion 

costs to make necessary changes to their 

production facilities and bring product 

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 

purpose of 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, and 

marketing, focused on making product 

designs comply with the energy 

conservation standard. Capital 

conversion costs are investments in 

property, plant, and equipment to adapt 

or change existing production facilities 

so that compliant equipment designs 

can be fabricated and assembled. 

To evaluate the magnitude of the 

product and capital conversion costs the 

pump industry would incur to comply 

with new energy conservation 

standards, DOE used a bottom-up 

approach. For this approach, DOE first 

determined the industry-average cost, 

per model, to redesign pumps of varying 

sizes to meet each of the proposed 

efficiency levels. DOE then modeled the 

distribution of unique pump models 

that would require redesign at each 

efficiency level. For each efficiency 

level, DOE multiplied each unique 

failing model by its associated cost to 

redesign it to comply with the 

applicable efficiency level and summed 

the total to reach an estimate of the total 

product and capital conversion cost for 

the industry. A more detailed 

description of this methodology can be 

found in engineering section IV.C.6. 

In general, DOE assumes that all 

conversion-related investments occur 

between the year of publication of the 

final rule and the year by which 

manufacturers must comply with the 

standard. The investment figures used 

in the GRIM can be found in section 

V.B.2 of today’s notice. For additional 

information on the estimated product 

conversion and capital conversion costs, 

see chapter 12 of the NOPR TSD. 

b. GRIM Scenarios 

Markup Scenarios 

As discussed above, MSPs include 

direct manufacturing production costs 

(i.e., labor, material, and overhead 

estimated in DOE’s MPCs), all nonproduction costs (i.e., SG&A, R&D, and 

interest), and profit. To account for 

manufacturers’ non-production costs 

and profit margin, DOE applies a nonproduction cost multiplier (the 

manufacturer markup) to the full MPC. 

The resulting MSP is the price at which 

the manufacturer can recover all 

production and non-production costs 

and earn a profit. Modifying these 

markups in the standards case yields 

different sets of impacts on 

manufacturers. 

To meet new energy conservation 

standards, manufacturers must often 

invest in design changes that result in 


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Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17857 

changes to equipment design and 

production lines, which can result in 

changes to MPC and changes to working 

capital, as well as change to capital 

expenditures. Depending on the 

competitive pressures, some or all of the 

increased costs may be passed from 

manufacturers to the manufacturers’ 

first consumer (typically a distributor) 

and eventually to consumers in the form 

of higher purchase prices. The MSP 

should be high enough to recover the 

full cost of the produced equipment 

(i.e., full production and nonproduction costs) and yield a profit. The 

manufacturer markup impacts 

profitability. A high markup under a 

standards scenario suggests 

manufacturers can readily pass along 

increases in variable costs and some of 

the capital and product conversion costs 

(the one-time expenditures) to 

consumers. A low markup suggests that 

manufacturers will not be able to 

recover as much of the necessary 

investment in plant and equipment. 

DOE developed initial estimates of the 

base case average manufacturer markup 

through an examination of corporate 

annual reports and Securities and 

Exchange Commission (SEC) 10–K 

reports. Furthermore, DOE refined the 

estimates of manufacturer markup by 

equipment class based on feedback 

received from manufacturers and 

information received from HI. 

For the MIA, DOE modeled two 

standards case markup scenarios to 

represent the uncertainty regarding the 

potential impacts on prices and 

profitability for manufacturers following 

the implementation of new energy 

conservation standards: (1) A flat 

markup scenario; and (2) a cost recovery 

markup scenario. These scenarios lead 

to different markup values that, when 

applied to the MPCs, result in varying 

revenue and cash flow impacts. DOE 

used these values to represent the lower 

and upper bounds of potential markups 

for manufacturers. 

Under the flat markup scenario, DOE 

maintains the same markup in the base 

case and standards case. This results in 

no price changes at a given efficiency 

level for the manufacturer’s first 

consumer. Based on the MSP, 

component cost, performance, and 

efficiency data supplied by both 

individual manufacturers and HI, DOE 

concluded the non-production cost 

markup (which includes SG&A 

expenses, R&D expenses, interest, and 

profit) to vary by efficiency level. DOE 

calculated the flat markups as follows: 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

ESCC ....................................................... 1.37 1.38 1.39 1.39 1.39 1.39 

ESFM ....................................................... 1.33 1.37 1.38 1.39 1.39 1.39 

IL .............................................................. 1.43 1.46 1.47 1.47 1.47 1.47 

VTS .......................................................... 1.37 1.37 1.40 1.40 1.40 1.40 

Because this markup scenario 

assumes that manufacturers would not 

increase their pricing for a given 

efficiency level as a result of a standard 

even as they incur conversion costs, this 

markup scenario is considered a lower 

bound. 

In the cost recovery markup scenario, 

manufacturer markups are set so that 

manufacturers recover their conversion 

costs, which are investments necessary 

to comply with the new energy 

conservation standard, over the analysis 

period. That cost recovery is enabled by 

an increase in mark-up, which results in 

higher manufacturer sales prices for 

pumps even as manufacturer product 

costs stay the same. The cost recovery 

calculation assumes manufacturers raise 

prices only on models where a redesign 

is necessitated by the standard. The 

additional revenue due to the increase 

in markup results in manufacturers 

recovering 100% of their conversion 

costs over the 30-year analysis period, 

taking into account the time-value of 

money. DOE calculated the cost 

recovery markups are calculated as 

follows: 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

ESCC ....................................................... 1.37 1.57 1.68 1.74 1.92 2.13 

ESFM ....................................................... 1.33 1.45 1.51 1.54 1.61 1.70 

IL .............................................................. 1.43 1.53 1.62 1.73 1.88 2.02 

VTS .......................................................... 1.37 1.49 1.47 1.54 1.65 1.77 

Because this markup scenario models 

the maximum level to which 

manufacturers would increase their 

pricing as a result of the given standard, 

this markup scenario is considered an 

upper bound to markups. 

Depending on the equipment class 

and the standard level being analyzed, 

the cost-recovery markup results in a 

simple payback period of 7 to 8 years for 

the industry. This means the total 

additional revenues due to a higher 

markup equal the industry conversion 

cost within seven to eight years, not 

taking into account the time value of 

money. The simple payback period 

varies at each TSL due to differences in 

the number of models requiring 

redesign, the total conversion costs, and 

the number of unit over which costs can 

be recouped. The simple payback 

timeframes are as follows: 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Years ........................................................ 0 8 7 7 7 7 

The payback period is greatest at TSL 

1 due to the relatively high numbers of 

models that require redesign as 

compared to the number of units sold at 

that level. 

3. Manufacturer Interviews 

As part of the MIA, DOE discussed 

potential impacts of standards with ten 

pump manufacturers. The interviewed 

manufacturers account for 

approximately 40 percent of the 

domestic pump market. In interviews, 

DOE asked manufacturers to describe 

their major concerns about this 

rulemaking. This section (IV.J.3) 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17858 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

53The EU sets efficiency standards based on 

desired percentages of the market to cut off, which 

it refers to as minimum efficiency indexes, or MEIs. 

A MEI of 0.4, for example, indicates an efficiency 

standard designed to eliminate the least efficient 40 

percent of products from the market. 

54See: http://www.epa.gov/climateleadership/

inventory/ghg-emissions.html. 

55 1 IPCC, 2013: Climate Change 2013: The 

Physical Science Basis. Contribution of Working 

Group I to the Fifth Assessment Report of the 

Intergovernmental Panel on Climate Change 

[Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, 

S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex 

and P.M. Midgley (eds.)]. Cambridge University 

Press, Cambridge, United Kingdom and New York, 

NY, USA, Chapter 8. 

highlights manufacturers’ interview 

statements that helped shaped DOE’s 

understanding of the potential impacts 

of an energy conservation standard on 

the industry. 

a. Alignment With European Union 

Energy Efficiency Standards 

Multiple manufacturers emphasized 

the importance of harmonizing U.S. 

energy conservation standards with 

existing EU standards for clean water 

pumps. Manufacturers stated that 

harmonized standards would promote 

regulatory consistency and would 

enable them to better coordinate 

product redesigns and reduce 

conversion costs. If U.S. and EU 

standards are not harmonized, some 

manufacturers noted they would have to 

carry a greater number of product lines 

to service separate markets or to comply 

with efficiency standards in both 

domestic and European markets. 

Manufacturers also indicated that 

harmonized standards could help to 

improve U.S. manufacturers’ access to 

foreign markets and would help to avoid 

a situation where lower domestic 

standards enable EU-compliant 

manufacturers to market their pumps to 

U.S. consumers as more efficient than 

pumps manufactured domestically. 

Manufacturers noted that expansion 

beyond the EU Directive parameters will 

add complexity and cost to the tasks of 

the manufacturers and create a 

significant financial burden for 

manufacturers to comply with the 

standards, particularly with respect to 

double-suction pumps and vertical 

turbines beyond 6-inch bowl 

assemblies. See Section III.A.1. 

In contrast, one manufacturer stated 

that aligning U.S. standards with EU 

standards would give European 

manufacturers an advantage because 

they would have products that could 

immediately comply with the U.S. 

standard, while U.S. manufacturers 

would have conversion costs to achieve 

the new efficiency level. 

b. Pattern Production and Engineering 

Constraints 

Many manufacturers raised concerns 

regarding potential tooling bottlenecks. 

In general, much of the industry relies 

on the same resources for patterns used 

to produce the impeller and bowl. 

Manufacturers were concerned there 

would not be enough pattern production 

capacity available if the entire industry 

attempted to redesign products within 

the same three to five year timeframe. 

Furthermore, manufacturers expressed 

concern surrounding insufficient 

availability of engineering resources 

(mainly design engineers) required to 

redesign a high volume of pump lines 

during a short time period. 

Manufacturers stated that limited pump 

design expertise in the industry could 

create time delays in complying with 

new standards. 

c. Conversion Requirements 

Manufacturers raised concerns over 

potentially significant barriers to 

achieving compliance with new 

standards, particularly at higher 

efficiency levels. If U.S. standards 

exceeded levels comparable to an EU 

minimum efficiency index (MEI) 53 of 

0.4, several manufacturers indicated 

they would have to develop entirely 

new product platforms at significant 

cost. At an MEI of 0.7, many indicated 

they would close manufacturing 

facilities rather than upgrade them to 

comply with any efficiency standards. 

Additionally, manufacturers suggested 

that conversion requirements would 

likely accelerate trends toward industry 

consolidation, as smaller manufacturers 

elect to exit the market rather than 

invest in product redesigns. 

d. Exclusion of Specific Pump Types 

Manufacturers expressed concern 

over which pumps would be included 

in the rulemaking; two of these 

manufacturers raised concerns 

specifically with the prospect of 

regulating circulator pumps (i.e., small 

pumps that circulate liquid in water 

heating or hydronic space conditioning 

systems in buildings). Manufacturers 

stated that compared to the European 

market, the U.S. market for circulator 

pumps is very small and would not 

present a large opportunity to save 

energy. Manufacturers also stated that 

the investment required by U.S. 

circulator pump manufacturers will be 

too high relative to the return on 

investment. They also mentioned that in 

most situations, due to the higher cost 

of high-efficiency equipment and the 

relatively low cost of energy in the U.S., 

consumers would not see a return on 

investment for a long period of time. 

K. Emissions Analysis 

In the emissions analysis, DOE 

estimated the reduction in power sector 

emissions of CO2, NOX, SO2, Hg, CH4, 

and N2O from new energy conservation 

standards for the considered pump 

equipment. In addition, DOE estimated 

emissions impacts in production 

activities (extracting, processing, and 

transporting fuels) that provide the 

energy inputs to power plants. These are 

referred to as ‘‘upstream’’ emissions. 

Together, these emissions account for 

the full-fuel-cycle (FFC). In accordance 

with DOE’s FFC Statement of Policy (76 

FR 51281, August 18, 2011, as amended 

at 77 FR 49701, Aug. 17, 2012), this FFC 

analysis includes impacts on emissions 

of methane (CH4) and nitrous oxide 

(N2O), both of which are recognized as 

greenhouse gases. 

DOE primarily conducted the 

emissions analysis using emissions 

factors for CO2 and most of the other 

gases derived from data in AEO 2014. 

Combustion emissions of CH4 and N2O 

were estimated using emissions 

intensity factors published by the 

Environmental Protection Agency (EPA) 

through its GHG Emissions Factors 

Hub.54 DOE developed separate 

emissions factors for power sector 

emissions and upstream emissions. The 

method that DOE used to derive 

emissions factors is described in chapter 

13 of the NOPR TSD. 

For CH4 and N2O, DOE calculated 

emissions reduction in tons and also in 

terms of units of carbon dioxide 

equivalent (CO2eq). Gases are converted 

to CO2eq by multiplying the physical 

units by the gas’s global warming 

potential (GWP) over a 100-year time 

horizon. Based on the Fifth Assessment 

Report of the Intergovernmental Panel 

on Climate Change,55 DOE used GWP 

values of 28 for CH4 and 265 for N2O. 

EIA prepares the Annual Energy 

Outlook using NEMS. Each annual 

version of NEMS incorporates the 

projected impacts of existing air quality 

regulations on emissions. AEO 2014 

generally represents current legislation 

and environmental regulations, 

including recent Government actions, 

for which implementing regulations 

were available as of October 31, 2013. 

SO2 emissions from affected electric 

generating units (EGUs) are subject to 

nationwide and regional emissions capand-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). SO2 emissions from 28 

eastern States and DC were also limited 

under the Clean Air Interstate Rule 

(CAIR; 70 FR 25162, May 12, 2005), 


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56See EME Homer City Generation, LP v. EPA, 

696 F.3d 7, 38 (D.C. Cir. 2012). 

57On April 29, 2014, the U.S. Supreme Court 

reversed the judgment of the D.C. Circuit and 

remanded the case for further proceedings 

consistent with the Supreme Court’s opinion. The 

Supreme Court held in part that EPA’s methodology 

for quantifying emissions that must be eliminated 

in certain States due to their impacts in other 

downwind States was based on a permissible, 

workable, and equitable interpretation of the Clean 

Air Act provision that provides statutory authority 

for CSAPR. See EPA v. EME Homer City Generation, 

No 12–1182, slip op. at 32 (U.S. April 29, 2014). 

Because DOE is using emissions factors based on 

AEO 2014 for today’s NOPR, the analysis assumes 

that CAIR, not CSAPR, is the regulation in force. 

The difference between CAIR and CSAPR is not 

relevant for the purpose of DOE’s analysis of SO2

emissions. 

58CSAPR also applies to NOX and it would 

supersede the regulation of NOX under CAIR. As 

stated previously, the current analysis assumes that 

CAIR, not CSAPR, is the regulation in force. The 

difference between CAIR and CSAPR with regard to 

DOE’s analysis of NOX emissions is slight. 

which created an allowance-based 

trading program that operates along 

with the Title IV program. CAIR was 

remanded to the U.S. Environmental 

Protection Agency (EPA) by the U.S. 

Court of Appeals for the District of 

Columbia Circuit, but it remained in 

effect. See North Carolina v. EPA, 550 

F.3d 1176 (D.C. Cir. 2008); North 

Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008). In 2011, EPA issued a 

replacement for CAIR, the Cross-State 

Air Pollution Rule (CSAPR). 76 FR 

48208, August 8, 2011. On August 21, 

2012, the D.C. Circuit issued a decision 

to vacate CSAPR.56 The court ordered 

EPA to continue administering CAIR. 

The emissions factors used for today’s 

NOPR, which are based on AEO 2014, 

assume that CAIR remains a binding 

regulation through 2040.57

The attainment of emissions caps is 

typically flexible among EGUs and is 

enforced through the use of emissions 

allowances and tradable permits. Under 

existing EPA regulations, 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 

any regulated EGU. In past rulemakings, 

DOE recognized that there was 

uncertainty about the effects of 

efficiency standards on SO2 emissions 

covered by the existing cap-and-trade 

system, but it concluded that negligible 

reductions in power sector SO2

emissions would occur as a result of 

standards. 

Beginning around 2016, however, SO2

emissions will fall as a result of the 

Mercury and Air Toxics Standards 

(MATS) for power plants. 77 FR 9304, 

Feb. 16, 2012. In the final MATS rule, 

EPA established a standard for hydrogen 

chloride as a surrogate for acid gas 

hazardous air pollutants (HAP), and also 

established a standard for SO2 (a nonHAP acid gas) as an alternative 

equivalent surrogate standard for acid 

gas HAP. The same controls are used to 

reduce HAP and non-HAP acid gas; 

thus, SO2 emissions will be reduced as 

a result of the control technologies 

installed on coal-fired power plants to 

comply with the MATS requirements 

for acid gas. AEO 2014 assumes that, in 

order to continue operating, coal plants 

must have either flue gas 

desulfurization or dry sorbent injection 

systems installed by 2016. Both 

technologies, which are used to reduce 

acid gas emissions, also reduce SO2

emissions. Under the MATS, emissions 

will be far below the cap that would be 

established by CAIR, so it is unlikely 

that excess SO2 emissions allowances 

resulting from the lower electricity 

demand would be needed or used to 

permit offsetting increases in SO2

emissions by any regulated EGU. 

Therefore, DOE believes that energy 

efficiency standards will reduce SO2

emissions in 2016 and beyond. 

CAIR established a cap on NOX

emissions in 28 eastern States and the 

District of Columbia.58 Energy 

conservation standards are expected to 

have little effect on NOX emissions in 

those States covered by CAIR because 

excess NOX emissions allowances 

resulting from the lower electricity 

demand could be used to permit 

offsetting increases in NOX emissions. 

However, standards would be expected 

to reduce NOX emissions in the States 

not affected by the caps, so DOE 

estimated NOX emissions reductions 

from the standards considered in 

today’s NOPR for these States. 

The MATS limit mercury emissions 

from power plants, but they do not 

include emissions caps, and as such, 

DOE’s energy conservation standards 

would likely reduce Hg emissions. DOE 

estimated mercury emissions reduction 

using emissions factors based on AEO 

2014, which incorporates MATS. 

In response to the Framework 

Document, EEI noted that EPA projects 

significant reductions in particulate 

emissions from electric generating units 

as a result of MATS compliance. (EEI, 

No.31 at p. 4.) EEI also believed that 

DOE should incorporate the most recent 

AEO and EPA’s most recent analyses in 

the emissions analysis. Power sector 

emissions of criteria air pollutants have 

dropped dramatically. (EEI, No. 31 at p. 

4.) As discussed above, the AEO 2014 

projections that serve as a reference case 

for measuring the impacts of potential 

standards account for the MATS and 

other emissions rules for which 

implementing regulations were 

available as of October 31, 2013. 

L. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

As part of the development of this 

NOPR, DOE considered the estimated 

monetary benefits from the reduced 

emissions of CO2 and NOX that are 

expected to result from each of the 

considered efficiency levels. To make 

this calculation similar 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 

forecast period for each efficiency level. 

This section summarizes the basis for 

the monetary values used for CO2 and 

NOX emissions and presents the values 

considered in this rulemaking. 

For this NOPR, DOE is relying on a set 

of values for the social cost of carbon 

(SCC) that was developed by an 

interagency process. A summary of the 

basis for those values is provided in the 

following subsection, and a more 

detailed description of the 

methodologies used is provided as an 

appendix to chapter 14 of the NOPR 

TSD. 

1. Social Cost of Carbon 

The SCC is an estimate of the 

monetized damages associated with an 

incremental increase in carbon 

emissions in a given year. It is intended 

to include (but is not limited to) changes 

in net agricultural productivity, human 

health, property damages from 

increased flood risk, and the value of 

ecosystem services. Estimates of the 

SCC are provided in dollars per metric 

ton of carbon dioxide. A domestic SCC 

value is meant to reflect the value of 

damages in the United States resulting 

from a unit change in carbon dioxide 

emissions, while a global SCC value is 

meant to reflect the value of damages 

worldwide. 

Under section 1(b)(6) of Executive 

Order 12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735, Oct. 4, 1993, 

agencies must, to the extent permitted 

by law, assess both the costs and the 

benefits of the intended regulation and, 

recognizing that some costs and benefits 

are difficult to quantify, propose or 

adopt a regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs. The 

purpose of the SCC estimates presented 

here is to allow agencies to incorporate 

the monetized social benefits of 

reducing CO2 emissions into costbenefit analyses of regulatory actions. 

The estimates are presented with an 

acknowledgement of the many 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17860 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

59Social Cost of Carbon for Regulatory Impact 

Analysis Under Executive Order 12866, Interagency 

Working Group on Social Cost of Carbon, United 

States Government (February 2010) (Available at: 

http://www.whitehouse.gov/sites/default/files/omb/

inforeg/for-agencies/Social-Cost-of-Carbon-forRIA.pdf). 

uncertainties involved and with a clear 

understanding that they should be 

updated over time to reflect increasing 

knowledge of the science and 

economics of climate impacts. 

As part of the interagency process that 

developed the SCC estimates, technical 

experts from numerous agencies met on 

a regular basis to consider public 

comments, explore the technical 

literature in relevant fields, and discuss 

key model inputs and assumptions. The 

main objective of this process was to 

develop a range of SCC values using a 

defensible set of input assumptions 

grounded in the existing scientific and 

economic literatures. In this way, key 

uncertainties and model differences 

transparently and consistently inform 

the range of SCC estimates used in the 

rulemaking process. 

a. Monetizing Carbon Dioxide Emissions 

When attempting to assess the 

incremental economic impacts of carbon 

dioxide emissions, the analyst faces a 

number of challenges. A recent report 

from the National Research Council 

points out that any assessment will 

suffer from uncertainty, speculation, 

and lack of information about: (1) 

Future emissions of greenhouse gases; 

(2) the effects of past and future 

emissions on the climate system; (3) the 

impact of changes in climate on the 

physical and biological environment; 

and (4) the translation of these 

environmental impacts into economic 

damages. As a result, any effort to 

quantify and monetize the harms 

associated with climate change will 

raise questions of science, economics, 

and ethics and should be viewed as 

provisional. 

Despite the limits of both 

quantification and monetization, SCC 

estimates can be useful in estimating the 

social benefits of reducing carbon 

dioxide emissions. The agency can 

estimate the benefits from reduced 

emissions in any future year by 

multiplying the change in emissions in 

that year by the SCC value appropriate 

for that year. The net present value of 

the benefits can then be calculated by 

multiplying the future benefits by an 

appropriate discount factor and 

summing across all affected years. 

It is important to emphasize that the 

interagency process is committed to 

updating these estimates as the science 

and economic understanding of climate 

change and its impacts on society 

improves over time. In the meantime, 

the interagency group will continue to 

explore the issues raised by this analysis 

and consider public comments as part of 

the ongoing interagency process. 

e. Development of Social Cost of Carbon 

Values 

In 2009, an interagency process was 

initiated to offer a preliminary 

assessment of how best to quantify the 

benefits from reducing carbon dioxide 

emissions. To ensure consistency in 

how benefits are evaluated across 

agencies, the Administration sought to 

develop a transparent and defensible 

method, specifically designed for the 

rulemaking process, to quantify avoided 

climate change damages from reduced 

CO2 emissions. The interagency group 

did not undertake any original analysis. 

Instead, it combined SCC estimates from 

the existing literature to use as interim 

values until a more comprehensive 

analysis could be conducted. The 

outcome of the preliminary assessment 

by the interagency group was a set of 

five interim values: Global SCC 

estimates for 2007 (in 2006$) of $55, 

$33, $19, $10, and $5 per metric ton of 

CO2. These interim values represented 

the first sustained interagency effort 

within the U.S. government to develop 

an SCC for use in regulatory analysis. 

The results of this preliminary effort 

were presented in several proposed and 

final rules. 

f. Current Approach and Key 

Assumptions 

After the release of the interim values, 

the interagency group reconvened on a 

regular basis to generate improved SCC 

estimates. Specifically, the group 

considered public comments and 

further explored the technical literature 

in relevant fields. The interagency group 

relied on three integrated assessment 

models commonly used to estimate the 

SCC: The FUND, DICE, and PAGE 

models. These models are frequently 

cited in the peer-reviewed literature and 

were used in the last assessment of the 

Intergovernmental Panel on Climate 

Change. Each model was given equal 

weight in the SCC values that were 

developed. 

Each model takes a slightly different 

approach to model how changes in 

emissions result in changes in economic 

damages. A key objective of the 

interagency process was to enable a 

consistent exploration of the three 

models while respecting the different 

approaches to quantifying damages 

taken by the key modelers in the field. 

An extensive review of the literature 

was conducted to select three sets of 

input parameters for these models: 

climate sensitivity, socio-economic and 

emissions trajectories, and discount 

rates. A probability distribution for 

climate sensitivity was specified as an 

input into all three models. In addition, 

the interagency group used a range of 

scenarios for the socio-economic 

parameters and a range of values for the 

discount rate. All other model features 

were left unchanged, relying on the 

model developers’ best estimates and 

judgments. 

The interagency group selected four 

sets of SCC values for use in regulatory 

analyses. Three sets of values are based 

on the average SCC from three 

integrated assessment models, at 

discount rates of 2.5 percent, 3 percent, 

and 5 percent. The fourth set, which 

represents the 95th-percentile SCC 

estimate across all three models at a 3- 

percent discount rate, is included to 

represent higher-than-expected impacts 

from climate change further out in the 

tails of the SCC distribution. The values 

grow in real terms over time. 

Additionally, the interagency group 

determined that a range of values from 

7 percent to 23 percent should be used 

to adjust the global SCC to calculate 

domestic effects, although preference is 

given to consideration of the global 

benefits of reducing CO2 emissions. 

Table IV.4 presents the values in the 

2010 interagency group report,59 which 

is reproduced in appendix 14A of the 

NOPR TSD. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17861 

60Technical Update of the Social Cost of Carbon 

for Regulatory Impact Analysis Under Executive 

Order 12866, Interagency Working Group on Social 

Cost of Carbon, United States Government (May 

2013; revised November 2013) (Available at: http:// 

www.whitehouse.gov/sites/default/files/omb/assets/

inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf). 

TABLE IV.4—ANNUAL SCC VALUES FROM 2010 INTERAGENCY REPORT, 2010–2050 

[in 2007 dollars per metric ton CO2] 

Year 

Discount rate 

(%) 

5 3 2.5 3 

Average Average Average 95th Percentile 

2010 ................................................................................................................. 4.7 21.4 35.1 64.9 

2015 ................................................................................................................. 5.7 23.8 38.4 72.8 

2020 ................................................................................................................. 6.8 26.3 41.7 80.7 

2025 ................................................................................................................. 8.2 29.6 45.9 90.4 

2030 ................................................................................................................. 9.7 32.8 50.0 100.0 

2035 ................................................................................................................. 11.2 36.0 54.2 109.7 

2040 ................................................................................................................. 12.7 39.2 58.4 119.3 

2045 ................................................................................................................. 14.2 42.1 61.7 127.8 

2050 ................................................................................................................. 15.7 44.9 65.0 136.2 

The SCC values used for today’s 

notice were generated using the most 

recent versions of the three integrated 

assessment models that have been 

published in the peer-reviewed 

literature.60 (See appendix 14B of the 

NOPR TSD for further information.) 

Table IV.5 shows the updated sets of 

SCC estimates in five year increments 

from 2010 to 2050. Appendix 14B of the 

NOPR TSD provides the full set of SCC 

estimates. The central value that 

emerges is the average SCC across 

models at the 3 percent discount rate. 

However, for purposes of capturing the 

uncertainties involved in regulatory 

impact analysis, the interagency group 

emphasizes the importance of including 

all four sets of SCC values. 

TABLE IV.5—ANNUAL SCC VALUES FROM 2013 INTERAGENCY UPDATE, 2010–2050 

[in 2007 dollars per metric ton CO2] 

Year 

Discount rate 

(%) 

5 3 2.5 3 

Average Average Average 95th Percentile 

2010 ................................................................................................................. 11 32 51 89 

2015 ................................................................................................................. 11 37 57 109 

2020 ................................................................................................................. 12 43 64 128 

2025 ................................................................................................................. 14 47 69 143 

2030 ................................................................................................................. 16 52 75 159 

2035 ................................................................................................................. 19 56 80 175 

2040 ................................................................................................................. 21 61 86 191 

2045 ................................................................................................................. 24 66 92 206 

2050 ................................................................................................................. 26 71 97 220 

It is important to recognize that a 

number of key uncertainties remain, and 

that current SCC estimates should be 

treated as provisional and revisable 

since they will evolve with improved 

scientific and economic understanding. 

The interagency group also recognizes 

that the existing models are imperfect 

and incomplete. The National Research 

Council report mentioned above points 

out that there is tension between the 

goal of producing quantified estimates 

of the economic damages from an 

incremental ton of carbon and the limits 

of existing efforts to model these effects. 

There are a number of analytical 

challenges that are being addressed by 

the research community, including 

research programs housed in many of 

the Federal agencies participating in the 

interagency process to estimate the SCC. 

The interagency group intends to 

periodically review and reconsider 

those estimates to reflect increasing 

knowledge of the science and 

economics of climate impacts, as well as 

improvements in modeling. 

In summary, in considering the 

potential global benefits resulting from 

reduced CO2 emissions, DOE used the 

values from the 2013 interagency report, 

adjusted to 2013$ using the Gross 

Domestic Product price deflator. For 

each of the four cases specified, the 

values used for emissions in 2015 were 

$12.0, $40.5, $62.4, and $119 per metric 

ton avoided (values expressed in 

2013$). DOE derived values after 2050 

using the relevant growth rates for the 

2040–2050 period in the interagency 

update. 

DOE multiplied the CO2 emissions 

reduction estimated for each year by the 

SCC value for that year in each of the 

four cases. 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 

SCC values in each case. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
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61U.S. Office of Management and Budget, Office 

of Information and Regulatory Affairs, 2006 Report 

to Congress on the Costs and Benefits of Federal 

Regulations and Unfunded Mandates on State, 

Local, and Tribal Entities, Washington, DC. 

Available at: www.whitehouse.gov/sites/default/

files/omb/assets/omb/inforeg/2006_cb/2006_cb_

final_report.pdf. 

62See Bureau of Economic Analysis, ‘‘Regional 

Multipliers: A User Handbook for the Regional 

Input-Output Modeling System (RIMS II),’’ U.S. 

Department of Commerce (1992). 

63M. J. Scott, O. V. Livingston, P. J. Balducci, J. 

M. Roop, and R. W. Schultz, ImSET 3.1: Impact of 

Sector Energy Technologies, PNNL–18412, Pacific 

Northwest National Laboratory (2009) (Available at: 

www.pnl.gov/main/publications/external/

technical_reports/PNNL-18412.pdf). 

2. Valuation of Other Emissions 

Reductions 

As noted above, DOE has taken into 

account how new energy conservation 

standards would reduce NOX emissions 

in those 22 States not affected by 

emissions caps. DOE estimated the 

monetized value of NOX emissions 

reductions resulting from each of the 

TSLs considered for today’s NOPR 

based on estimates found in the relevant 

scientific literature. Estimates of 

monetary value for reducing NOX from 

stationary sources range from $476 to 

$4,893 per ton (2013$).61 DOE 

calculated monetary benefits using a 

medium value for NOX emissions of 

$2,684 per short ton (in 2013$), and real 

discount rates of 3 percent and 7 

percent. 

DOE is evaluating appropriate 

monetization of avoided SO2 and Hg 

emissions in energy conservation 

standards rulemakings. It has not 

included such monetization in the 

current analysis. 

M. Utility Impact Analysis 

The utility impact analysis estimates 

several effects on the power generation 

industry that would result from the 

adoption of new or amended energy 

conservation standards. In the utility 

impact analysis, DOE analyzes the 

changes in installed electrical capacity 

and generation that would result for 

each trial standard level. The analysis is 

based on published output from NEMS, 

which is a public domain, multisectored, partial equilibrium model of 

the U.S. energy sector. Each year, NEMS 

is updated to produce the AEO 

reference case as well as a number of 

side cases that estimate the economywide impacts of changes to energy 

supply and demand. DOE uses those 

published side cases that incorporate 

efficiency-related policies to estimate 

the marginal impacts of reduced energy 

demand on the utility sector. The output 

of this analysis is a set of timedependent 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 

new or amended energy conservation 

standards. Chapter 15 of the NOPR TSD 

describes the utility impact analysis in 

further detail. 

N. Employment Impact Analysis 

Employment impacts include direct 

and indirect impacts. Direct 

employment impacts are any changes in 

the number of employees of 

manufacturers of the equipment subject 

to standards; 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 equipment. Indirect 

employment impacts from standards 

consist of the jobs created or eliminated 

in the national economy due to: (1) 

Reduced spending by end users on 

energy; (2) reduced spending on new 

energy supply by the utility industry; (3) 

increased consumer spending on the 

purchase of new products; 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 Bureau of 

Labor Statistics (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.62 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, based on the 

BLS data, net national employment may 

increase because of shifts in economic 

activity resulting from new energy 

conservation standards for pumps. 

For the standard levels considered in 

this NOPR, DOE estimated indirect 

national employment impacts using an 

input/output model of the U.S. economy 

called Impact of Sector Energy 

Technologies version 3.1.1 (ImSET).63

ImSET is a special-purpose version of 

the ‘‘U.S. Benchmark National InputOutput’’ (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 the 

187 sectors. ImSET’s national economic 

I–O structure is based on a 2002 U.S. 

benchmark table, specially aggregated to 

the 187 sectors most relevant to 

industrial, commercial, and residential 

building energy use. DOE notes that 

ImSET is not a general equilibrium 

forecasting model, and understands 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 the NOPR, DOE 

used ImSET only to estimate short-term 

(through 2024) employment impacts. 

For more details on the employment 

impact analysis, see chapter 16 of the 

NOPR TSD. 

V. Analytical Results 

A. Trial Standard Levels 

1. Trial Standard Level Formulation 

Process and Criteria 

DOE developed six efficiency levels, 

including a baseline level, for each 

equipment class analyzed in the LCC, 

NIA, and MIA. TSL 5 was selected at the 

max-tech level for these equipment 

classes, and also represented the highest 

energy savings, NPV, and net benefit to 

the nation scenario. TSL 1, TSL 2, TSL 

3, and TSL 4 were selected to provide 

intermediate efficiency levels between 

the baseline efficiency level and TSL 5 

and allow for an evaluation of 

manufacturer impact at each level. As 

discussed in section IV.A.2.a, for the 

RSV equipment classes, DOE proposed 

to set the baseline and max-tech levels 

equal to those established in Europe, but 

was unable to develop intermediate 

efficiency levels or TSLs due to lack of 

available cost data for this equipment. 

As a result, the baseline efficiency level 


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has been specified for all TSLs 1 

through 4, with the max-tech level being 

specified for TSL 5. Table V.1 shows the 

mapping between TSLs and efficiency 

levels for all equipment classes. 

TABLE V.1—MAPPING BETWEEN TSLS AND EFFICIENCY LEVELS

Equipment Class Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

ESCC.1800 ...................................................................... EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

ESCC.3600 ...................................................................... EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

ESFM.1800 ...................................................................... EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

ESFM.3600 ...................................................................... EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

IL.1800 ............................................................................. EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

IL.3600 ............................................................................. EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

RSV.1800 * ....................................................................... EL 0 EL 0 EL 0 EL 0 EL 0 EL 5 

RSV.3600 * ....................................................................... EL 0 EL 0 EL 0 EL 0 EL 0 EL 5 

VTS.1800 * ....................................................................... EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

VTS.3600 ......................................................................... EL 0 EL 1 EL 2 EL 3 EL 4 EL 5 

* Equipment classes not analyzed due to lack of available data (in the case of RSV) or lack of market share (in the case of VTS.1800). 

2. Trial Standard Level Equations 

Because the chosen efficiency metric, 

PEI, is a normalized metric targeted to 

create a standard level of 1.00, DOE has 

expressed its efficiency levels in terms 

of C-values. Each C-value represents a 

normalized efficiency for all size 

pumps, across the entire equipment 

class. (See section III.D.1 for more 

information about C-values and the 

related equations.) Table V.2 shows the 

appropriate C-values for each 

equipment class, at each TSL. 

TABLE V.2—C-VALUES AT EACH TSL 

Equipment class Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

ESCC.1800 ...................................................................... 134.43 131.63 128.47 126.67 125.07 123.71 

ESCC.3600 ...................................................................... 135.94 134.60 130.42 128.92 127.35 125.29 

ESFM.1800 ...................................................................... 134.99 132.95 128.85 127.04 125.12 123.71 

ESFM.3600 ...................................................................... 136.59 134.98 130.99 129.26 127.77 126.07 

IL.1800 ............................................................................. 135.92 133.95 129.30 127.30 126.00 124.45 

IL.3600 ............................................................................. 141.01 138.86 133.84 131.04 129.38 127.35 

RSV.1800 * ....................................................................... 129.63 129.63 129.63 129.63 129.63 129.63 

RSV.3600 * ....................................................................... 133.20 133.20 133.20 133.20 133.20 133.20 

VTS.1800 * ....................................................................... 137.62 135.93 134.13 130.83 128.92 127.29 

VTS.3600 ......................................................................... 137.62 135.93 134.13 130.83 128.92 127.29 

* Equipment classes not analyzed due to lack of available data (in the case of RSV) or lack of market share (in the case of VTS.1800). 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Consumers 

DOE analyzed the economic impacts 

on pump consumers by looking at the 

effects potential standards would have 

on the LCC and PBP, when compared to 

the base case described in section 

IV.F.1. DOE also examined the impacts 

of potential standards on consumer 

subgroups. These analyses are discussed 

below. 

a. Life-Cycle Cost and Payback Period 

In general, higher-efficiency 

equipment would affect consumers in 

two ways: (1) Purchase price would 

increase over the price of less efficient 

equipment currently in the market, and 

(2) annual operating costs would 

decrease as a result of increased energy 

savings. 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 savings, 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.3 through Table V.16 show 

the LCC and PBP results for all 

efficiency levels considered for all 

analyzed equipment classes. The 

average costs at each TSL are calculated 

considering the full sample of 

consumers that have levels of efficiency 

in the base case equal to or above the 

given TSL (who are not affected by a 

standard at that TSL), as well as 

consumers who had non-compliant 

pumps in the base case and purchase 

more expensive and efficient redesigned 

pumps in the standards case. The 

simple payback and LCC savings are 

measured relative to the base-case 

efficiency distribution in the 

compliance year (see section IV.F.1 for 

a description of the base case). 


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TABLE V.3—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR ESCC.1800 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $1,639 $2,271 $17,546 $19,185 ........................ 13 

1 ............................ 1 ............................ 1,672 2,261 17,470 19,142 3.3 13 

2 ............................ 2 ............................ 1,704 2,240 17,317 19,021 2.2 13 

3 ............................ 3 ............................ 1,768 2,222 17,177 18,945 2.6 13 

4 ............................ 4 ............................ 1,863 2,198 16,997 18,861 3.1 13 

5 ............................ 5 ............................ 2,026 2,172 16,796 18,822 3.9 13 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 

TABLE V.4—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR ESCC.1800 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net Cost (2013$) 

1 ..................................................................................................................... 1 12 $43 

2 ..................................................................................................................... 2 11 164 

3 ..................................................................................................................... 3 23 240 

4 ..................................................................................................................... 4 30 324 

5 ..................................................................................................................... 5 42 362 

* The calculation includes consumers with zero LCC savings (no impact). 

TABLE V.5—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR ESCC.3600 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $1,092 $1,592 $9,823 $10,915 ........................ 11 

1 ............................ 1 ............................ 1,098 1,588 9,800 10,898 1.4 11 

2 ............................ 2 ............................ 1,111 1,574 9,713 10,823 1.0 11 

3 ............................ 3 ............................ 1,141 1,565 9,653 10,794 1.8 11 

4 ............................ 4 ............................ 1,170 1,551 9,566 10,736 1.9 11 

5 ............................ 5 ............................ 1,215 1,528 9,422 10,638 1.9 11 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 

TABLE V.6—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR ESCC.3600 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net cost (2013$) 

1 ................................................................................................................. 1 0 .7 $17 

2 ................................................................................................................. 2 1 .8 92 

3 ................................................................................................................. 3 14 122 

4 ................................................................................................................. 4 14 180 

5 ................................................................................................................. 5 12 278 

* The calculation includes consumers with zero LCC savings (no impact). 

TABLE V.7—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR ESFM.1800 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $1,891 $3,424 $40,983 $42,874 ........................ 23 

1 ............................ 1 ............................ 1,893 3,423 40,973 42,866 2.4 23 

2 ............................ 2 ............................ 1,943 3,406 40,759 42,701 2.8 23 


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TABLE V.7—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR ESFM.1800—Continued 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

3 ............................ 3 ............................ 2,004 3,384 40,498 42,502 2.8 23 

4 ............................ 4 ............................ 2,151 3,342 39,988 42,139 3.1 23 

5 ............................ 5 ............................ 2,314 3,301 39,498 41,812 3.4 23 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 

TABLE V.8—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR ESFM.1800 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net cost (2013$) 

1 ................................................................................................................. 1 0 .26 $8 .0 

2 ................................................................................................................. 2 6 .5 173 

3 ................................................................................................................. 3 15 372 

4 ................................................................................................................. 4 24 735 

5 ................................................................................................................. 5 26 1,062 

* The calculation includes consumers with zero LCC savings (no impact). 

TABLE V.9—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR ESFM 3600 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $1,349 $5,278 $51,268 $52,616 ........................ 20 

1 ............................ 1 ............................ 1,357 5,271 51,201 52,558 1.2 20 

2 ............................ 2 ............................ 1,396 5,218 50,674 52,070 0.8 20 

3 ............................ 3 ............................ 1,441 5,171 50,214 51,655 0.9 20 

4 ............................ 4 ............................ 1,529 5,117 49,676 51,205 1.1 20 

5 ............................ 5 ............................ 1,648 5,036 48,890 50,538 1.2 20 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 

TABLE V.10—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR ESFM.3600 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net cost (2013$) 

1 ................................................................................................................... 1 0 .29 $58 

2 ................................................................................................................... 2 1 .9 547 

3 ................................................................................................................... 3 4 .7 961 

4 ................................................................................................................... 4 7 .0 1,411 

5 ................................................................................................................... 5 8 .4 2,078 

* The calculation includes consumers with zero LCC savings (no impact). 

TABLE V.11—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR IL.1800 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $2,128 $1,891 $16,760 $18,888 ........................ 16 

1 ............................ 1 ............................ 2,145 1,884 16,692 18,837 2.3 16 

2 ............................ 2 ............................ 2,194 1,868 16,545 18,739 2.8 16 

3 ............................ 3 ............................ 2,281 1,852 16,407 18,688 3.9 16 

4 ............................ 4 ............................ 2,432 1,835 16,254 18,686 5.4 16 


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TABLE V.11—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR IL.1800—Continued 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

5 ............................ 5 ............................ 2,614 1,811 16,040 18,654 6.1 16 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 

TABLE V.12—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR IL.1800 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net cost (2013$) 

1 ................................................................................................................... 1 1 .8 $51 

2 ................................................................................................................... 2 6 .9 149 

3 ................................................................................................................... 3 15 200 

4 ................................................................................................................... 4 25 202 

5 ................................................................................................................... 5 36 234 

* The calculation includes consumers with zero LCC savings (no impact). 

TABLE V.13—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR IL.3600 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $1,473 $2,046 $14,211 $15,684 ........................ 13 

1 ............................ 1 ............................ 1,484 2,038 14,155 15,639 1.4 13 

2 ............................ 2 ............................ 1,525 2,019 14,020 15,545 1.9 13 

3 ............................ 3 ............................ 1,578 1,997 13,865 15,443 2.1 13 

4 ............................ 4 ............................ 1,650 1,980 13,747 15,397 2.7 13 

5 ............................ 5 ............................ 1,797 1,946 13,510 15,307 3.2 13 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 

TABLE V.14—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR IL.3600 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net cost (2013$) 

1 ................................................................................................................... 1 2 .0 $46 

2 ................................................................................................................... 2 13 139 

3 ................................................................................................................... 3 11 241 

4 ................................................................................................................... 4 14 288 

5 ................................................................................................................... 5 20 377 

* The calculation includes consumers with zero LCC savings (no impact). 

TABLE V.15—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VTS.3600 

TSL Efficiency level 

Average costs 

(2013$) Simple 

payback 

(years) 

Average 

lifetime 

Installed (years) 

cost 

First year’s 

operating cost 

Lifetime 

operating cost LCC 

Base Case ............ $692 $1,025 $5,857 $6,549 ........................ 11 

1 ............................ 1 ............................ 697 1,025 5,855 6,551 11 11 

2 ............................ 2 ............................ 711 1,021 5,830 6,542 4.2 11 

3 ............................ 3 ............................ 732 1,002 5,726 6,458 1.7 11 

4 ............................ 4 ............................ 772 989 5,654 6,426 2.2 11 

5 ............................ 5 ............................ 821 977 5,584 6,405 2.7 11 

Note: The results for each TSL are calculated considering all consumers. The PBP is measured relative to the base case. 


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64 In this analysis, DOE does not count energy 

savings of switching from throttling a pump to 

using a VFD, as this is not a design option. Instead, DOE analyzes the life-cycle costs of consumers who 

use VFDs with their pumps. 

TABLE V.16—LCC SAVINGS RELATIVE TO THE BASE CASE EFFICIENCY DISTRIBUTION FOR VTS.3600 

TSL Efficiency level 

Life-cycle cost savings 

% of consumers that 

experience Average savings * 

Net Cost (2013$) 

1 ................................................................................................................. 1 1 .4 $(2 .4) 

2 ................................................................................................................. 2 21 7 .2 

3 ................................................................................................................. 3 4 .4 91 

4 ................................................................................................................. 4 8 .5 123 

5 ................................................................................................................. 5 13 144 

* The calculation includes consumers with zero LCC savings (no impact). 

b. Consumer Subgroup Analysis 

As shown in Table V.17 through 

Table V.23, the results of the life-cycle 

cost subgroup analysis indicate that for 

all equipment classes analyzed, the VFD 

subgroup fared slightly worse than the 

average consumer, with the VFD 

subgroup being expected to have lower 

LCC savings and longer payback periods 

than average. This occurs mainly 

because with power reduction through 

use of a VFD, consumers use and save 

less energy from pump efficiency 

improvements than do consumers who 

do not use VFDs and so would benefit 

less from the energy savings.64 Chapter 

11 of the NOPR TSD provides more 

detailed discussion on the LCC 

subgroup analysis and results. 

TABLE V.17—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, ESCC.1800 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ........................................................................................... 1 $12 $43 5.6 3.3 

2 ........................................................................................... 2 71 164 3.6 2.2 

3 ........................................................................................... 3 91 240 4.4 2.6 

4 ........................................................................................... 4 104 324 5.2 3.1 

5 ........................................................................................... 5 63 362 6.5 3.9 

* Parentheses indicate negative values. 

TABLE V.18—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, ESCC.3600 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ......................................................................................... 1 $8 .7 $17 2.3 1.4 

2 ......................................................................................... 2 51 92 1.6 1.0 

3 ......................................................................................... 3 57 122 2.8 1.8 

4 ......................................................................................... 4 83 180 3.0 1.9 

5 ......................................................................................... 5 127 278 3.0 1.9 

* Parentheses indicate negative values. 

TABLE V.19—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, ESFM.1800 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ....................................................................................... 1 $4 .3 $8 .0 3.9 2.4 

2 ....................................................................................... 2 85 173 4.6 2.8 

3 ....................................................................................... 3 186 372 4.6 2.8 

4 ....................................................................................... 4 355 735 5.1 3.1 

5 ....................................................................................... 5 494 1,062 5.6 3.4 

* Parentheses indicate negative values. 


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TABLE V.20—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, ESFM.3600 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ........................................................................................... 1 $33 $58 2.0 1.2 

2 ........................................................................................... 2 319 547 1.3 0.8 

3 ........................................................................................... 3 558 961 1.4 0.9 

4 ........................................................................................... 4 802 1,411 1.8 1.1 

5 ........................................................................................... 5 1,168 2,078 2.0 1.2 

* Parentheses indicate negative values. 

TABLE V.21—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, IL.1800 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ......................................................................................... 1 $26 $51 3.6 2.3 

2 ......................................................................................... 2 67 149 4.5 2.8 

3 ......................................................................................... 3 64 200 6.4 3.9 

4 ......................................................................................... 4 6.3 202 8.8 5.4 

5 ......................................................................................... 5 ($46 ) 234 9.9 6.1 

* Parentheses indicate negative values. 

TABLE V.22—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, IL.3600 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ........................................................................................... 1 $25 $46 2.2 1.4 

2 ........................................................................................... 2 67 139 3.1 1.9 

3 ........................................................................................... 3 111 241 3.5 2.1 

4 ........................................................................................... 4 113 288 4.3 2.7 

5 ........................................................................................... 5 112 377 5.2 3.2 

* Parentheses indicate negative values. 

TABLE V.23—COMPARISON OF IMPACTS FOR VFD USERS WITH NON-VFD USERS, VTS.3600 

TSL 

Energy 

efficiency 

level 

LCC savings 

(2013$ *) 

Simple payback period 

(years) 

VFD-users Non-VFD 

users VFD-users Non-VFD users 

1 ............................................................................................... 1 $(3.5 ) $(2.4 ) 18 11 

2 ............................................................................................... 2 (2.6 ) 7.2 6 .6 4 .2 

3 ............................................................................................... 3 44 91 2 .7 1 .7 

4 ............................................................................................... 4 50 123 3 .5 2 .2 

5 ............................................................................................... 5 46 144 4 .2 2 .7 

* Parentheses indicate negative values. 

c. Rebuttable Presumption Payback 

As discussed in section III.H.2, EPCA 

provides a rebuttable presumption that, 

in essence, 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. However, DOE routinely 

conducts a full economic analysis that 

considers the full range of impacts, 

including those to the consumer, 

manufacturer, nation, and environment, 

as required under 42 U.S.C. 

6295(o)(2)(B)(i) and 6316(a). The results 

of this analysis serve as the basis for 

DOE to evaluate the economic 

justification for a potential standard 

level, thereby supporting or rebutting 

the results of any preliminary 

determination of economic justification. 

For comparison with the more detailed 

analytical results, DOE calculated a 

rebuttable presumption payback period 

for each TSL. Table V.24 shows the 

rebuttable presumption payback periods 

for the pump equipment classes. 


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TABLE V.24—REBUTTABLE PRESUMPTION PAYBACK PERIODS FOR PUMP EQUIPMENT CLASSES

Equipment class 

Rebuttable presumption payback 

(years) 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

ESCC.1800 ........................................................................ 3 .4 2.2 2.6 3.1 3.9 

ESCC.3600 ........................................................................ 1 .4 1.0 1.7 1.8 1.9 

ESFM.1800 ........................................................................ 2 .4 2.8 2.8 3.1 3.4 

ESFM.3600 ........................................................................ 1 .2 0.8 0.9 1.1 1.2 

IL.1800 ............................................................................... 2 .3 2.8 3.9 5.4 6.0 

IL.3600 ............................................................................... 1 .3 1.9 2.1 2.7 3.2 

VTS.3600 ........................................................................... 11 4.2 1.8 2.3 2.7 

2. Economic Impacts on Manufacturers 

As noted above, DOE performed an 

MIA to estimate the impact of energy 

conservation standards on 

manufacturers of pumps. The following 

section summarizes 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 

Table V.25 and Table V.26 depict the 

financial impacts (represented by 

changes in INPV) of energy standards on 

manufacturers of pumps, as well as the 

conversion costs that DOE expects 

manufacturers would incur for all 

equipment classes at each TSL. To 

evaluate the range of cash flow impacts 

on the CIP industry, DOE modeled two 

different mark-up scenarios using 

different assumptions that correspond to 

the range of anticipated market 

responses to energy conservation 

standards: (1) the flat markup scenario; 

and (2) the cost recovery markup 

scenario. Each of these scenarios is 

discussed immediately below. 

Under the flat markup scenario, DOE 

maintains the same markup in the base 

case and standards case. This results in 

no price change at a given efficiency 

level for the manufacturer’s first 

consumer. Because this markup 

scenario assumes that manufacturers 

would not increase their pricing as a 

result of a standard even as they incur 

conversion costs, this markup scenario 

is the most negative and results in the 

most negative impacts on INPV. 

In the cost recovery markup scenario, 

manufacturer markups are set so that 

manufacturers recover their conversion 

costs over the analysis period. That cost 

recovery is enabled by an increase in 

mark-up, which results in higher sales 

prices for pumps even as manufacturer 

product costs stay the same. The cost 

recovery calculation assumes 

manufacturers raise prices on models 

where a redesign is necessitates by the 

standard. This cost recovery scenario 

results in more positive results than the 

flat markup scenario. 

The set of results below shows 

potential INPV impacts for pump 

manufacturers; Table V.25 reflects the 

lower bound of impacts (i.e., the flat 

markup scenario), and Table V.26 

represents the upper bound (the cost 

recovery markup scenario). 

Each of the modeled scenarios results 

in a unique set of cash flows and 

corresponding industry values at each 

TSL. In the following discussion, the 

INPV results refer to the difference in 

industry value between the base case 

and each standards case that results 

from the sum of discounted cash flows 

from the base year 2014 through 2048, 

the end of the analysis period. 

To provide perspective on the shortrun cash flow impact, DOE includes in 

the discussion of the results below a 

comparison of free cash flow between 

the base case and the standards case at 

each TSL in the year before new 

standards would take effect. This figure 

provides an understanding of the 

magnitude of the required conversion 

costs relative to the cash flow generated 

by the industry in the base case. 

TABLE V.25—MANUFACTURER IMPACT ANALYSIS FOR PUMPS—FLAT MARKUP SCENARIO * 

* Units Base case 

Trial standard level 

1 2 3 4 5 

INPV ....................... $M ............... 121.4 111 .6 81 .9 22.4 (85 .0) (228 .4) 

Change in INPV ..... $M ............... ........................ (9 .8) (39 .5) (99) (206 .3) (349 .8) 

% ................. ........................ (8 .0) (32 .5) (81.6) (170 .0) (288 .2) 

Total Conversion 

Costs.

$M ............... ........................ 19 .9 78 .4 174.3 335 .0 547 .7 

Free Cash Flow 

(2018).

$M ............... 12.2 5 .6 (16 .1) (58.7) (130 .1) (224 .4) 

Free Cash Flow 

(2018).

% Change ... ........................ (54 .3) (232 .5) (582.0) (1167 .5) (1942 .4) 

* Values in parentheses are negative values. 

TABLE V.26—MANUFACTURER IMPACT ANALYSIS FOR PUMPS—COST RECOVERY MARKUP SCENARIO * 

* Units Base case 

Trial standard level 

1 2 3 4 5 

INPV ....................... $M ............... 121.4 121 .8 129 .7 125.4 114 .1 94 .1 

Change in INPV ..... $M ............... ........................ 0 .4 8 .3 4.0 (7 .2) (27 .3) 

% ................. ........................ 0 .3 6 .9 3.3 (6 .0) (22 .5) 


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TABLE V.26—MANUFACTURER IMPACT ANALYSIS FOR PUMPS—COST RECOVERY MARKUP SCENARIO *—Continued 

% Units Base case 

Trial standard level 

1 2 3 4 5 

Total Conversion 

Costs.

$M ............... ........................ 19 .9 78 .4 174.3 335 .0 547 .7 

Free Cash Flow 

(2018).

$M ............... 12.2 5 .6 (16 .1) (58.7) (130 .1) (224 .4) 

Free Cash Flow 

(2018).

% Change ... ........................ (54 .3) (232 .5) (582.0) (1167 .5) (1942 .4) 

* Values in parentheses are negative values. 

TSL 1 represents EL 1 for all 

equipment classes. At TSL 1, DOE 

estimates impacts on INPV for pump 

manufacturers to range from ¥8.0 

percent to 0.3 percent, or a change in 

INPV of ¥$9.8 million to $0.4 million. 

At this potential standard level, 

industry free cash flow is estimated to 

decrease by approximately 54.3 percent 

to $5.6 million, compared to the basecase value of $12.2 million in the year 

before the compliance date (2019). The 

industry would need to either drop 

product lines or engage in redesign of 

approximately 10% of their models. 

DOE estimates that manufacturers 

would incur conversion costs totaling 

$19.9 million, driven by hydraulic 

redesigns. 

TSL 2 represents EL 2 across all 

equipment classes. At TSL 2, DOE 

estimates impacts on INPV for pump 

manufacturers to range from ¥32.5 

percent to 6.9 percent, or a change in 

INPV of ¥$39.5 million to $8.3 million. 

At this potential standard level, 

industry free cash flow is estimated to 

decrease by approximately 232.5 

percent to ¥$16.1 million, compared to 

the base-case value of $12.2 million in 

the year before the compliance date 

(2019). Conversion costs for an 

estimated 25% of model offerings, 

would be approximately $78.4 million 

for the industry. At TSL 2, the 

industry’s annual free cash flow is 

estimated to drop below zero in 2018 

and 2019, the years where conversion 

investments are the greatest. The 

negative free cash flow indicates that at 

least some manufacturers in the 

industry would need to access cash 

reserves or borrow money from capital 

markets to cover conversion costs. 

TSL 3 represents EL 3 for all 

equipment classes. At TSL 3, DOE 

estimates impacts on INPV for pump 

manufacturers to range from ¥81.6 

percent to 3.3 percent, or a change in 

INPV of ¥$99 million to $4 million. At 

TSL 3, industry conversion costs for an 

estimated 40% of model offerings would 

be approximately $174.3 million. As 

conversion costs increase, free cash flow 

continues to drop in the years before the 

standard year. This increases the 

likelihood that manufacturers will need 

to seek outside capital to support their 

conversion efforts. Furthermore, as more 

models require redesign, technical 

resources for hydraulic redesign could 

become an industry-wide constraint. 

Participants in the CIP Working Group 

noted that the industry as a whole relies 

on a limited pool of hydraulic redesign 

engineers and consultants. These 

specialists can support only a limited 

number of redesigns per year. Industry 

representatives stated that TSL 3 could 

be an upper bound to the number of 

redesigns possible in the four years 

between announcement and effective 

year of the final rule. 

TSL 4 represents EL4 across all 

equipment classes. At TSL 4, DOE 

estimates impacts on INPV for pump 

manufacturers to range from ¥170 

percent to ¥6 percent, or a change in 

INPV of ¥$206.3 million to ¥$7.2 

million. At this potential standard level, 

industry free cash flow is estimated to 

decrease by approximately 1167.5 

percent relative to the base-case value of 

$12.2 million in the year before the 

compliance date (2019). The total 

industry conversion costs for an 

estimated 55% of model offerings would 

be approximately $335 million. The 

1167.5% drop in free cash flow in 2019 

indicates that the conversion costs are a 

very large investment relative to typical 

industry operations. As noted above, at 

TSL 2 and TSL 3, manufacturers may 

need to access cash reserves or outside 

capital to finance conversion efforts. 

Additionally, the industry may not be 

able to convert all necessary models 

before the compliance date of the 

standard. 

TSL 5 represents max-tech across all 

equipment classes. At TSL 5, DOE 

estimates impacts on INPV for pump 

manufacturers to range from ¥288.2 

percent to ¥22.5 percent, or a change in 

INPV of ¥$349.8 million to ¥$27.3 

million. At this potential standard level, 

industry free cash flow is estimated to 

decrease by approximately 1942.4 

percent relative to the base-case value of 

$12.2 million in the year before the 

compliance date (2019). At max-tech, 

DOE estimates total industry conversion 

costs for an estimated 70% of model 

offerings, would be approximately 

$547.7 million. The negative impacts 

related to cash availability, need for 

outside capital, and technical resources 

constraints at TSLs 2, 3, and 4 would 

increase at TSL 5. 

DOE requests comment on the capital 

conversion costs and product 

conversion costs estimated for each 

TSL. This matter is identified as Issue 

12 under ‘‘Issues on Which DOE Seeks 

Comment’’ in section VIII.E of this 

NOPR. 

In section VI, DOE proposes labeling 

requirements recommended by the CIP 

Working Group. DOE recognizes that 

such requirements may result in costs to 

manufacturers. Costs of updating 

marketing materials for redesigned 

pumps in each standards case were 

included in the conversion costs for the 

industry and are accounted for in the 

industry cash-flow analysis results and 

industry valuation figures presented in 

this section. However, DOE notes that 

costs of updating marketing materials 

for pumps that do not have to be 

redesigned to meet the standard are not 

considered in the industry valuation 

figures because these costs would be 

incurred by manufacturers in order to 

make representations of energy use (PEI) 

according to the proposed test 

procedure, as well as to include labeling 

requirements, regardless of whether 

DOE set an energy conservation 

standard or what TSL DOE selected. 

These costs are discussed in section VI. 

b. Impacts on Direct Employment 

To quantitatively assess the impacts 

of energy conservation standards on 

direct employment in the pumps 

industry, DOE used the GRIM to 

estimate the domestic labor 

expenditures and number of employees 

in the base case and at each TSL from 

2015 through 2049. DOE used statistical 

data from the U.S. Census Bureau’s 2011 

Annual Survey of Manufacturers 


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65 ‘‘Annual Survey of Manufactures (ASM),’’ U.S. 

Census Bureau (2011) (Available at: http://

www.census.gov/manufacturing/asm/). 

(ASM),65 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 

related to manufacturing of the product 

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. The total labor 

expenditures in each year are calculated 

by multiplying the MPCs by the labor 

percentage of MPCs. Based on feedback 

from manufacturers, DOE believes that 

99% of the covered pumps are produced 

in the U.S. Therefore, 99% of the total 

labor expenditures contribute to 

domestic production employment. 

The total domestic labor expenditures 

in the GRIM were then converted to 

domestic production employment levels 

by dividing production labor 

expenditures by the annual payment per 

production worker (production worker 

hours multiplied by the labor rate found 

in the U.S. Census Bureau’s 2011 ASM). 

The estimates of production workers in 

this section cover workers, including 

line-supervisors directly involved in 

fabricating and assembling a product 

within the manufacturing facility. 

Workers performing services that are 

closely associated with production 

operations, such as materials handling 

tasks using forklifts, are also included as 

production labor. DOE’s estimates only 

account for production workers who 

manufacture the specific products 

covered by this rulemaking. DOE 

estimates that in the absence of energy 

conservation standards, there would be 

415 domestic production workers for 

covered pumps. 

In the standards case, DOE estimates 

an upper and lower bound to the 

potential changes in employment that 

result from the standard. Table V.27 

shows the range of the impacts of 

potential energy conservation standards 

on U.S. production workers of pumps. 

TABLE V.27—POTENTIAL CHANGES IN THE TOTAL NUMBER OF PUMP PRODUCTION WORKERS IN 2020 * 

Trial standard level 

Base case 1 2 3 4 5 

Potential Changes 

in Domestic Production Workers 

in 2020 (relative 

to a base case 

employment of 

415).

.................... (41) to 0 ................ (104) to 0 .............. (166) to 0 .............. (228) to 0 .............. (290) to 0. 

* Parentheses indicate negative values. 

Based on the engineering analysis, 

MPCs and labor expenditures do not 

vary with efficiency and increasing 

TSLs. Additionally, the shipments 

analysis models consistent shipments at 

all TSLs. As a result, the GRIM predicts 

no change in employment in the 

standards case. DOE considers this to be 

the upper bound for change in 

employment. For a lower bound, DOE 

assumes a loss of employment that is 

directly proportional to the portion of 

pumps being eliminated from the 

market. Additional detail can be found 

in chapter 12 of the TSD. 

DOE notes that the direct employment 

impacts discussed here are independent 

of the indirect employment impacts to 

the broader U.S. economy, which are 

documented in chapter 15 of the NOPR 

TSD. 

DOE requests comment on the 

potential impacts on manufacturer 

employment and the specific drivers of 

any expected change in production line 

employment. This matter is identified as 

Issue 13 under ‘‘Issues on Which DOE 

Seeks Comment’’ in section VIII.E of 

this NOPR. 

c. Impacts on Manufacturing Capacity 

Based on the engineering analysis, 

DOE concludes that higher efficiency 

pumps require similar production 

facilities, tooling, and labor as baseline 

efficiency pumps. Based on the 

engineering analysis and interviews 

with manufacturers, a new energy 

conservation standard is unlikely to 

create production capacity constraints. 

However, industry representatives, in 

interviews and in the CIP Working 

Group meetings, expressed concern 

about the industry’s ability to complete 

the necessary number of hydraulic 

redesigns required to comply with a 

new standard. (EERE–2013–BT–NOC– 

0039–0109, pp. 280–283) In the 

industry, not all companies have the inhouse capacity to redesign pumps. 

Many companies rely on outside 

consultants for a portion or all of their 

hydraulic design projects. 

Manufacturers were concerned that a 

new standard would create more 

demand for hydraulic design technical 

resources than are available in the 

industry. 

The number of pumps that require 

redesign is directly tied to the proposed 

standard level. The level proposed 

today is based on a level that the CIP 

Working Group considered feasible for 

the industry. DOE requests comments 

on the potential for production line 

capacity constraints and on the 

potential for technical resource 

constraints due to the proposed 

standard. 

DOE requests comments and data on 

capacity constraints at each TSL— 

including production capacity 

constraints, engineering resource 

constraints, and testing capacity 

constraints. In particular, DOE requests 

comment on whether the proposed 

compliance date allows for a sufficient 

conversion period to make the 

equipment design and facility updates 

necessary to meet a new standard. This 

matter is identified as Issue 14 under 

‘‘Issues on Which DOE Seeks Comment’’ 

in section VIII.E of this NOPR. 

d. Impacts on Subgroups of 

Manufacturers 

Small manufacturers, niche 

equipment manufacturers, and 

manufacturers exhibiting a cost 

structure substantially different from the 

industry average could be affected 

disproportionately. Using average cost 

assumptions developed for an industry 

cash-flow estimate is inadequate to 


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17872 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

assess differential impacts among 

manufacturer subgroups. 

For the CIP industry, DOE identified 

and evaluated the impact of energy 

conservation standards on one 

subgroup—small manufacturers. The 

SBA defines a ‘‘small business’’ as 

having 500 employees or less for NAICS 

333911, ‘‘Pump and Pumping 

Equipment Manufacturing.’’ Based on 

this definition, DOE identified 39 

manufacturers in the CIP industry that 

qualify as small businesses. For a 

discussion of the impacts on the small 

manufacturer subgroup, see the 

regulatory flexibility analysis in section 

VI.B of this notice and chapter 12 of the 

NOPR TSD. 

e. Cumulative Regulatory Burden 

While any one regulation may not 

impose a significant burden on 

manufacturers, the combined effects of 

recent 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 product 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. 

For the cumulative regulatory burden 

analysis, DOE looks at product-specific 

Federal regulations that could affect 

pumps manufacturers and with which 

compliance is required approximately 

three years before or after the 2020 

compliance date of standard proposed 

in this notice. The Department was not 

able to identify any additional 

regulatory burdens that met these 

criteria. 

DOE requests comments the 

cumulative regulatory burden on 

manufacturers. Specifically, DOE seeks 

input on any product-specific Federal 

regulations with which compliance is 

required within three years of the 

proposed compliance date for any final 

pumps standards, as well as on 

recommendations on how DOE may be 

able to align varying regulations to 

mitigate cumulative burden. This matter 

is identified as Issue 15 under ‘‘Issues 

on Which DOE Seeks Comment’’ in 

section VIII.E of this NOPR. 

3. National Impact Analysis 

a. Significance of Energy Savings 

For each TSL, DOE projected energy 

savings for pumps purchased in the 30- 

year period that begins in the year of 

compliance with new standards (2020– 

2049). The savings are measured over 

the entire lifetime of equipment 

purchased in the 30-year period. DOE 

quantified the energy savings 

attributable to each TSL as the 

difference in energy consumption 

between each standards case and the 

base case described in section IV.H.2. 

Table V.28 presents the estimated 

primary energy savings for each 

considered TSL, and Table V.29 

presents the estimated FFC energy 

savings. The approach is further 

described in section IV.H.1. 

TABLE V.28—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR PUMP TRIAL STANDARD LEVELS FOR UNITS SOLD

IN 2020–2049 

Equipment class 

Trial standard level 

(quads) 

1 2 3 4 5 

ESCC.1800 .......................................................................... 0.016 0.05 0.08 0.12 0.16 

ESCC.3600 .......................................................................... 0.016 0.07 0.11 0.17 0.26 

ESFM.1800 .......................................................................... 0.003 0.05 0.11 0.23 0.35 

ESFM.3600 .......................................................................... 0.002 0.02 0.03 0.05 0.07 

IL.1800 ................................................................................. 0.015 0.05 0.08 0.11 0.16 

IL.3600 ................................................................................. 0.003 0.01 0.02 0.02 0.03 

VTS.3600 ............................................................................. 0.002 0.02 0.11 0.17 0.22 

Total—All Classes ........................................................ 0.056 0.27 0.54 0.87 1.26 

Note: Components may not sum to total due to rounding. 

TABLE V.29—CUMULATIVE NATIONAL FULL-FUEL-CYCLE ENERGY SAVINGS FOR PUMP TRIAL STANDARD LEVELS FOR

UNITS SOLD IN 2020–2049 

Equipment class 

Trial standard level 

(quads) 

1 2 3 4 5 

ESCC.1800 .......................................................................... 0.017 0.05 0.08 0.12 0.17 

ESCC.3600 .......................................................................... 0.017 0.08 0.12 0.18 0.28 

ESFM.1800 .......................................................................... 0.003 0.06 0.12 0.25 0.37 

ESFM.3600 .......................................................................... 0.002 0.02 0.03 0.05 0.07 

IL.1800 ................................................................................. 0.016 0.05 0.08 0.12 0.17 

IL.3600 ................................................................................. 0.003 0.01 0.02 0.02 0.03 

VTS.3600 ............................................................................. 0.002 0.02 0.11 0.17 0.24 

Total—All Classes ........................................................ 0.059 0.28 0.56 0.91 1.32 

Note: Components may not sum to total due to rounding. 


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66U.S. Office of Management and Budget, 

‘‘Circular A–4: Regulatory Analysis’’ (Sept. 17, 

2003) (Available at: http://www.whitehouse.gov/

omb/circulars_a004_a-4/). 

67EPCA requires DOE to review its standards at 

least once every six years, and requires, for certain 

products, a three-year period after any new 

standard is promulgated before compliance is 

required, except that in no case may any new 

standards be required within six years of the 

compliance date of the previous standards. (42 

U.S.C. 6295(m) and 6313(a)(6)(C)) While adding a 

six-year review to the three-year compliance period 

adds up to nine years, DOE notes that it may 

undertake reviews at any time within the six-year 

period and that the three-year compliance date may 

yield to the six-year backstop. A nine-year analysis 

period may not be appropriate given the variability 

that occurs in the timing of standards reviews and 

the fact that for some consumer products, the 

compliance period is five years rather than three 

years. 

68OMB Circular A–4, section E (Sept. 17, 2003) 

(Available at: http://www.whitehouse.gov/omb/

circulars_a004_a-4). 

Circular A–4 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.66

Circular A–4 also directs agencies to 

consider the variability of key elements 

underlying the estimates of benefits and 

costs. For this rulemaking, DOE 

undertook a sensitivity analysis using 

nine rather than 30 years of equipment 

shipments. The choice of a nine-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.67 The review 

timeframe established in EPCA is 

generally not synchronized with the 

equipment lifetime, product 

manufacturing cycles, or other factors 

specific to pumps. Thus, such results 

are presented for informational 

purposes only and are not indicative of 

any change in DOE’s analytical 

methodology. The NES results based on 

a nine-year analytical period are 

presented in Table V.30. The impacts 

are counted over the lifetime of 

equipment purchased in 2020–2028. 

TABLE V.30—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR PUMP TRIAL STANDARD LEVELS FOR UNITS SOLD

IN 2020–2028 

Equipment class 

Trial standard level 

(quads) 

1 2 3 4 5 

ESCC.1800 .......................................................................... 0.004 0.013 0.020 0.03 0.04 

ESCC.3600 .......................................................................... 0.004 0.019 0.029 0.04 0.07 

ESFM.1800 .......................................................................... 0.001 0.014 0.030 0.06 0.09 

ESFM.3600 .......................................................................... 0.001 0.004 0.008 0.01 0.02 

IL.1800 ................................................................................. 0.004 0.012 0.020 0.03 0.04 

IL.3600 ................................................................................. 0.001 0.002 0.004 0.01 0.01 

VTS.3600 ............................................................................. 0.001 0.006 0.028 0.04 0.06 

Total—All Classes ........................................................ 0.015 0.071 0.141 0.23 0.33 

Note: Components may not sum to total due to rounding. 

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 pumps. In 

accordance with OMB’s guidelines on 

regulatory analysis,68 DOE calculated 

NPV using both a seven-percent and a 

three-percent real discount rate. Table 

V.31 shows the consumer NPV results 

for each TSL considered for pumps. In 

each case, the impacts cover the lifetime 

of equipment purchased in 2020–2049. 

TABLE V.31—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFIT FOR PUMP TRIAL STANDARD LEVELS FOR UNITS

SOLD IN 2020–2049 

Equipment class Discount rate 

(%) 

Trial standard level 

(billion 2013$ *) 

1 2 3 4 5 

ESCC.1800 ............................................ 3 0.052 0.20 0.29 0.40 0.47 

7 0.018 0.07 0.11 0.14 0.15 

ESCC.3600 ............................................ 3 0.069 0.34 0.46 0.68 1.06 

7 0.028 0.14 0.18 0.26 0.41 

ESFM.1800 ............................................ 3 0.010 0.20 0.44 0.88 1.28 

7 0.003 0.06 0.14 0.27 0.39 

ESFM.3600 ............................................ 3 0.009 0.08 0.14 0.20 0.30 

7 0.003 0.03 0.05 0.07 0.11 

IL.1800 ................................................... 3 0.063 0.18 0.25 0.28 0.34 

7 0.022 0.06 0.08 0.07 0.07 

IL.3600 ................................................... 3 0.011 0.04 0.06 0.08 0.11 

7 0.004 0.01 0.02 0.03 0.04 

VTS.3600 ............................................... 3 (0.001 ) 0.07 0.49 0.71 0.90 

7 (0.002 ) 0.02 0.20 0.28 0.35 

Total—All Classes .......................... 3 0.213 1.11 2.13 3.23 4.47 

7 0.077 0.41 0.77 1.13 1.51 

* Numbers in parentheses indicate negative NPV. 

Note: Components may not sum to total due to rounding. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
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The NPV results based on the 

aforementioned nine-year analytical 

period are presented in Table V.32. The 

impacts are counted over the lifetime of 

equipment purchased in 2020–2028. As 

mentioned previously, this information 

is presented for informational purposes 

only and is not indicative of any change 

in DOE’s analytical methodology or 

decision criteria. 

TABLE V.32—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFIT FOR PUMP TRIAL STANDARD LEVELS FOR UNITS

SOLD IN 2020–2028 

Equipment class Discount rate 

(%) 

Trial standard level 

(billion 2013$ *) 

1 2 3 4 5 

ESCC.1800 ............................................ 3 0.017 0.06 0.10 0.13 0.15 

7 0.008 0.03 0.05 0.06 0.07 

ESCC.3600 ............................................ 3 0.023 0.11 0.15 0.22 0.35 

7 0.013 0.06 0.08 0.12 0.18 

ESFM.1800 ............................................ 3 0.003 0.07 0.14 0.29 0.42 

7 0.002 0.03 0.06 0.12 0.18 

ESFM.3600 ............................................ 3 0.003 0.03 0.05 0.07 0.10 

7 0.001 0.01 0.02 0.03 0.05 

IL.1800 ................................................... 3 0.021 0.06 0.08 0.09 0.10 

7 0.010 0.03 0.03 0.03 0.03 

IL.3600 ................................................... 3 0.004 0.01 0.02 0.03 0.04 

7 0.002 0.01 0.01 0.01 0.02 

VTS.3600 ............................................... 3 (0.001 ) 0.02 0.16 0.23 0.30 

7 (0.001 ) 0.01 0.09 0.13 0.16 

Total—All Classes .......................... 3 0.070 0.36 0.70 1.06 1.45 

7 0.035 0.18 0.35 0.51 0.68 

* Numbers in parentheses indicate negative NPV. 

Note: Components may not sum to total due to rounding. 

The results presented in this section 

reflect an assumption of no change in 

pump prices over the forecast period. In 

addition, DOE conducted sensitivity 

analyses using alternative price trends: 

One in which prices decline over time, 

and one in which prices increase. These 

price trends, and the associated NPV 

results, are described in appendix 10B 

of the NOPR TSD. 

c. Indirect Impacts on Employment 

DOE expects energy conservation 

standards for pumps to reduce energy 

costs for equipment owners, with the 

resulting net savings being redirected to 

other forms of economic activity. Those 

shifts in spending and economic activity 

could affect the demand for labor. As 

described in section IV.N, DOE used an 

input/output model of the U.S. economy 

to estimate indirect employment 

impacts of the TSLs that DOE 

considered in this rulemaking. DOE 

understands that there are uncertainties 

involved in projecting employment 

impacts, especially changes in the later 

years of the analysis. Therefore, DOE 

generated results for near-term time 

frames (2020–2024), where these 

uncertainties are reduced. 

The results suggest that these 

proposed standards would be likely to 

have negligible impact on the net 

demand for labor in the economy. The 

projected 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 more detailed results 

about anticipated indirect employment 

impacts. 

4. Impact on Utility or Performance of 

Equipment 

Any technology option expected to 

lessen the utility or performance of 

pumps was removed from consideration 

in the screening analysis. As a result, 

DOE considered only one design option 

in this NOPR, hydraulic redesign. This 

design option does not involve geometry 

changes affecting installation of the 

pump (i.e., the flanges that connect it to 

external piping)—hence, there is no 

utility difference that might affect use of 

the more-efficient pumps for 

replacement applications. Further, the 

design option would not reduce the 

acceptable performance envelope of the 

pump (e.g., the combinations of 

pressure and flow for which the pump 

can be operated, restrictions to less 

corrosive environments, restrictions on 

acceptable operating temperature range). 

The hydraulic redesign would affect 

only the required power input, making 

no change to pump utility or 

performance. 

DOE seeks comment on the impacts, 

if any, there would be on the level of 

utility and available features currently 

offered by manufacturers with respect to 

the pumps that would be regulated 

under this proposal. This matter is 

identified as Issue 16 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

VIII.E of this NOPR. 

5. Impact of Any Lessening of 

Competition 

DOE has also considered any 

lessening of competition that is likely to 

result from new standards. 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. (42 U.S.C. 6313(a)(6)(B)(ii)(V) 

and 6316(a).) 

To assist the Attorney General in 

making such a determination, DOE will 

provide DOJ with copies of this notice 

and the TSD for review. DOE will 

consider DOJ’s comments on the 

proposed rule in preparing the final 

rule, and DOE will publish and respond 

to DOJ’s comments in that document. 

6. Need of the Nation To Conserve 

Energy 

An improvement in the energy 

efficiency of the equipment subject to 

this rule is likely to improve the 

security of the nation’s energy system by 

reducing the overall demand for energy. 

Reduced electricity demand may also 

improve the reliability of the electricity 

system. Reductions in national electric 

generating capacity estimated for each 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17875 

considered TSL are reported in chapter 

15 of the NOPR TSD. 

Energy savings from new standards 

for the pump equipment classes covered 

in today’s NOPR could also produce 

environmental benefits in the form of 

reduced emissions of air pollutants and 

greenhouse gases associated with 

electricity production. Table V.33 

provides DOE’s estimate of cumulative 

emissions reductions projected to result 

from the TSLs considered in this 

rulemaking. The table includes both 

power sector emissions and upstream 

emissions. The upstream emissions 

were calculated using the multipliers 

discussed in section IV.K. DOE reports 

annual CO2, NOX, and Hg emissions 

reductions for each TSL in chapter 13 of 

the NOPR TSD. As discussed in section 

IV.L, DOE did not include NOX

emissions reduction from power plants 

in States subject to CAIR, because an 

energy conservation standard would not 

affect the overall level of NOX emissions 

in those States due to the emissions 

caps mandated by CSAPR. 

TABLE V.33—CUMULATIVE EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR PUMPS

TSL 

1 2 3 4 5 

Power Sector Emissions 

CO2 (million metric tons) ...................................................... 3.2 15 31 50 72 

SO2 (thousand tons) ............................................................ 2.6 13 25 40 58 

NOX (thousand tons) ........................................................... 2.5 12 23 38 55 

Hg (tons) .............................................................................. 0.008 0.039 0.077 0.124 0.180 

CH4 (thousand tons) ............................................................ 0.32 1.54 3.07 4.95 7.20 

N2O (thousand tons) ............................................................ 0.05 0.22 0.44 0.71 1.03 

Upstream Emissions 

CO2 (million metric tons) ...................................................... 0.19 0.91 1.81 2.93 4.26 

SO2 (thousand tons) ............................................................ 0.03 0.16 0.32 0.51 0.74 

NOX (thousand tons) ........................................................... 2.7 13 26 42 61 

Hg (tons) .............................................................................. 0.0001 0.0004 0.0007 0.0011 0.0016 

CH4 (thousand tons) ............................................................ 16 76 151 244 354 

N2O (thousand tons) ............................................................ 0.002 0.008 0.016 0.025 0.036 

Total Emissions 

CO2 (million metric tons) ...................................................... 3.4 16 33 53 77 

SO2 (thousand tons) ............................................................ 2.7 13 25 41 59 

NOX (thousand tons) ........................................................... 5.2 25 49 80 116 

Hg (tons) .............................................................................. 0.01 0.04 0.08 0.13 0.18 

CH4 (thousand tons) ............................................................ 16 77 154 248 362 

N2O (thousand tons) ............................................................ 0.05 0.23 0.45 0.73 1.07 

As part of the analysis for this NOPR, 

DOE estimated monetary benefits likely 

to result from the reduced emissions of 

CO2 and NOX estimated for each of the 

TSLs considered for pumps. As 

discussed in section IV.L, for CO2, DOE 

used values for the SCC developed by 

an interagency process. The interagency 

group selected four sets of SCC values 

for use in regulatory analyses. Three sets 

are based on the average SCC from three 

integrated assessment models, at 

discount rates of 2.5 percent, 3 percent, 

and 5 percent. The fourth set, which 

represents the 95th-percentile SCC 

estimate across all three models at a 3- 

percent discount rate, is included to 

represent higher-than-expected impacts 

from temperature change further out in 

the tails of the SCC distribution. The 

four SCC values for CO2 emissions 

reductions in 2015, expressed in 2013$, 

are $12.0/ton, $40.5/ton, $62.4/ton, and 

$119/ton. The values for later years are 

higher due to increasing emissionsrelated costs as the magnitude of 

projected climate change increases. 

Table V.34 presents the global value 

of CO2 emissions reductions at each 

TSL. DOE calculated domestic values as 

a range from 7 percent to 23 percent of 

the global values, and these results are 

presented in chapter 14 of the NOPR 

TSD. See Section IV. L. for further 

details. 

TABLE V.34—GLOBAL PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR PUMPS

TSL 

SCC Scenario * 

(million 2013$) 

5% Discount rate, 

average 

3% Discount rate, 

average 

2.5% Discount rate, 

average 

3% Discount rate, 

95th percentile 

Power Sector Emissions 

1 ............................................................................... 21 100 160 310 

2 ............................................................................... 100 474 757 1468 

3 ............................................................................... 199 944 1506 2921 

4 ............................................................................... 319 1517 2421 4695 

5 ............................................................................... 463 2205 3521 6826 


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17876 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

TABLE V.34—GLOBAL PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR PUMPS— 

Continued 

TSL 

SCC Scenario * 

(million 2013$) 

5% Discount rate, 

average 

3% Discount rate, 

average 

2.5% Discount rate, 

average 

3% Discount rate, 

95th percentile 

Upstream Emissions 

1 ............................................................................... 1.2 5.8 9.3 18 

2 ............................................................................... 5.8 28 44 86 

3 ............................................................................... 11 55 88 170 

4 ............................................................................... 18 88 141 274 

5 ............................................................................... 27 129 206 398 

Total Emissions 

1 ............................................................................... 22 106 169 329 

2 ............................................................................... 106 502 801 1554 

3 ............................................................................... 210 999 1594 3092 

4 ............................................................................... 337 1605 2563 4969 

5 ............................................................................... 490 2334 3726 7224 

* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.0, $40.5, $62.4 and $119 per metric ton (2013$). 

DOE is well aware that scientific and 

economic knowledge about the 

contribution of CO2 and other 

greenhouse gas (GHG) emissions to 

changes in the future global climate and 

the potential resulting damages to the 

world economy continues to evolve 

rapidly. Thus, any value placed in this 

rulemaking on reducing CO2 emissions 

is subject to change. DOE, together with 

other Federal agencies, will continue to 

review various 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. 

However, consistent with DOE’s legal 

obligations, and taking into account the 

uncertainty involved with this 

particular issue, DOE has included in 

this NOPR the most recent values and 

analyses resulting from the interagency 

review process. 

DOE also estimated a range for the 

cumulative monetary value of the 

economic benefits associated with NOX

emissions reductions anticipated to 

result from new standards for the pump 

equipment that is the subject of this 

NOPR. The dollar-per-ton values that 

DOE used are discussed in section IV.L. 

Table V.35 presents the present value of 

cumulative NOX emissions reductions 

for each TSL calculated using the 

average dollar-per-ton values and sevenpercent and three-percent discount 

rates. 

TABLE V.35—PRESENT VALUE OF

NOX EMISSIONS REDUCTION FOR

POTENTIAL STANDARDS FOR PUMPS

TSL 

Million 2013$ 

3% Discount 

rate 

7% Discount 

rate 

Power Sector Emissions 

1 ............ 3 .1 1 .4 

2 ............ 15 6 .4 

3 ............ 29 13 

4 ............ 47 20 

5 ............ 68 29 

Upstream Emissions 

1 ............ 3 .3 1 .4 

2 ............ 16 6 .4 

3 ............ 31 13 

4 ............ 50 20 

5 ............ 72 30 

Total Emissions 

1 ............ 6 .5 2 .8 

TABLE V.35—PRESENT VALUE OF

NOX EMISSIONS REDUCTION FOR

POTENTIAL STANDARDS FOR

PUMPS—Continued 

TSL 

Million 2013$ 

3% Discount 

rate 

7% Discount 

rate 

2 ............ 30 13 

3 ............ 60 25 

4 ............ 97 41 

5 ............ 141 59 

The NPV of the monetized benefits 

associated with emissions reductions 

can be viewed as a complement to the 

NPV of the consumer savings calculated 

for each TSL considered in this 

rulemaking. Table V.36 presents the 

NPV values that result from adding the 

estimates of the potential economic 

benefits resulting from reduced CO2 and 

NOX emissions in each of four valuation 

scenarios to the NPV of consumer 

savings calculated for each TSL 

considered in this rulemaking, at both a 

seven-percent and a three-percent 

discount rate. The CO2 values used in 

the columns of each table correspond to 

the four scenarios for the valuation of 

CO2 emission reductions discussed 

above. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17877 

TABLE V.36—PUMP TSLS: NET PRESENT VALUE OF CONSUMER SAVINGS COMBINED WITH NET PRESENT VALUE OF

MONETIZED BENEFITS FROM CO2 AND NOX EMISSIONS REDUCTIONS

TSL 

Consumer NPV at 7% discount rate added with: 

(billion 2013$) 

SCC Value of $12.0/metric ton 

CO2* and medium value for 

NOX** 

SCC Value of $40.5/metric ton 

CO2* and medium value for 

NOX** 

SCC Value of $62.4/metric ton 

CO2* and medium value for 

NOX** 

SCC Value of $119/metric ton 

CO2* and medium value for 

NOX** 

1 ............. 0.2 0.3 0.4 0.5 

2 ............. 1.2 1.6 1.9 2.7 

3 ............. 2.4 3.2 3.8 5.3 

4 ............. 3.7 4.9 5.9 8.3 

5 ............. 5.1 6.9 8.3 12 

Consumer NPV at 7% discount rate added with: 

(billion 2013$) 

1 ............. 0.1 0.2 0.2 0.4 

2 ............. 0.5 0.9 1.2 2.0 

3 ............. 1.0 1.8 2.4 3.9 

4 ............. 1.5 2.8 3.7 6.1 

5 ............. 2.1 3.9 5.3 8.8 

Note: Parentheses indicate negative values. 

* These label values represent the global SCC in 2015, in 2013$. The present values have been calculated with scenario-consistent discount 

rates. 

** Medium Value corresponds to $2,684 per ton of NOX emissions. 

Although adding the value of 

consumer savings to the values of 

emission reductions provides a valuable 

perspective, two issues should be 

considered. First, the national operating 

cost savings are domestic U.S. consumer 

monetary savings that occur as a result 

of market transactions, while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and the SCC are 

performed with different methods that 

use quite different time frames for 

analysis. The national operating cost 

savings is measured for the lifetime of 

equipment shipped in 2020–2049. The 

SCC values, on the other hand, reflect 

the present value of future climaterelated impacts resulting from the 

emission of one metric ton of CO2 in 

each year. These impacts continue well 

beyond 2100. 

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. 

6295(o)(2)(B)(i)(VI) and 6316(a).) In 

developing the proposed standard, DOE 

considered the term sheet of 

recommendations voted on by the CIP 

Working Group and approved by the 

ASRAC. (See EERE–2013–BT–NOC– 

0039–0092.) DOE has weighed the value 

of such negotiation in establishing the 

standards proposed in today’s rule. DOE 

has encouraged the negotiation of 

proposed standard levels, in accordance 

with the FACA and the NRA, as a means 

for interested parties, representing 

diverse points of view, to analyze and 

recommend energy conservation 

standards to DOE. Such negotiations 

may often expedite the rulemaking 

process. In addition, standard levels 

recommended through a negotiation 

may increase the likelihood for 

regulatory compliance, while decreasing 

the risk of litigation. 

C. Proposed Standards 

When considering standards, the new 

or amended energy conservation 

standard that DOE adopts for any type 

(or class) of covered equipment shall 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. 

6295(o)(2)(A) and 6316(a).) In 

determining whether a standard is 

economically justified, the Secretary 

must determine whether the benefits of 

the standard exceed its burdens, 

considering, to the greatest extent 

practicable, the seven statutory factors 

discussed previously. (42 U.S.C. 

6295(o)(2)(B)(i) and 6316(a).) The new 

or amended standard must also ‘‘result 

in significant conservation of energy.’’ 

(42 U.S.C. 6295(o)(3)(B) and 6316(a).) 

For today’s NOPR, DOE considered 

the impacts of new standards for pumps 

at each TSL, beginning with the 

maximum technologically feasible level, 

to determine whether that level was 

economically justified. Where the maxtech 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 in understanding 

the benefits and/or burdens of each TSL, 

tables in this section summarize the 

quantitative analytical results for each 

TSL, based on the assumptions and 

methodology discussed herein. The 

efficiency levels contained in each TSL 

are described in section V.A. 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. 

Section V.B.1.b presents the estimated 

impacts of each TSL for these 

subgroups. DOE discusses the impacts 

on direct employment in pump 

manufacturing in section V.B.2.b, and 

the indirect employment impacts in 

section V.B.3.c. 

1. Benefits and Burdens of Trial 

Standard Levels Considered for Pumps 

Table V.37, Table V.38, and Table 

V.39 summarize the quantitative 

impacts estimated for each TSL for 

pumps. The national impacts are 

measured over the lifetime of pumps 

purchased in the 30-year period that 

begins in the year of compliance with 

new standards (2020–2049). The energy 

savings, emissions reductions, and 

value of emissions reductions refer to 

full-fuel-cycle results. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17878 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

TABLE V.37—SUMMARY OF ANALYTICAL RESULTS FOR PUMPS: NATIONAL IMPACTS

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

National FFC Energy 

Savings (quads).

0.059 ......................... 0.28 ........................... 0.56 ........................... 0.91 ........................... 1.32. 

NPV of Consumer Benefits 

(2013$ billion) 

3% discount rate ...... 0.213 ......................... 1.11 ........................... 2.13 ........................... 3.23 ........................... 4.47. 

7% discount rate ...... 0.077 ......................... 0.41 ........................... 0.77 ........................... 1.13 ........................... 1.51. 

Cumulative FFC Emissions Reduction 

CO2 (million metric 

tons).

3.4 ............................. 16 .............................. 33 .............................. 53 .............................. 77. 

SO2 (thousand tons) 2.7 ............................. 13 .............................. 25 .............................. 41 .............................. 59. 

NOX (thousand tons) 5.2 ............................. 25 .............................. 49 .............................. 80 .............................. 116. 

Hg (tons) .................. 0.01 ........................... 0.04 ........................... 0.08 ........................... 0.13 ........................... 0.18. 

CH4 (thousand tons) 16 .............................. 77 .............................. 154 ............................ 248 ............................ 362. 

N2O (thousand tons) 0.05 ........................... 0.23 ........................... 0.45 ........................... 0.73 ........................... 1.07. 

Value of Emissions Reduction 

CO2 (2013$ million)* 22 to 329 ................... 106 to 1554 ............... 210 to 3092 ............... 337 to 4969 ............... 490 to 7224. 

NOX—3% discount 

rate (2013$ million).

6.5 ............................. 30 .............................. 60 .............................. 97 .............................. 141. 

NOX—7% discount 

rate (2013$ million).

2.8 ............................. 13 .............................. 25 .............................. 41 .............................. 59. 

* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions. 

Note: Parentheses indicate negative values. 

TABLE V.38—NPV OF CONSUMER BENEFITS BY EQUIPMENT CLASS

Equipment class Discount rate 

(%) 

Trial standard level 

(billion 2013$ *) 

1 2 3 4 5 

ESCC.1800 ............................................ 3 0.052 0.20 0.29 0.40 0.47 

7 0.018 0.07 0.11 0.14 0.15 

ESCC.3600 ............................................ 3 0.069 0.34 0.46 0.68 1.06 

7 0.028 0.14 0.18 0.26 0.41 

ESFM.1800 ............................................ 3 0.010 0.20 0.44 0.88 1.28 

7 0.003 0.06 0.14 0.27 0.39 

ESFM.3600 ............................................ 3 0.009 0.08 0.14 0.20 0.30 

7 0.003 0.03 0.05 0.07 0.11 

IL.1800 ................................................... 3 0.063 0.18 0.25 0.28 0.34 

7 0.022 0.06 0.08 0.07 0.07 

IL.3600 ................................................... 3 0.011 0.04 0.06 0.08 0.11 

7 0.004 0.01 0.02 0.03 0.04 

VTS.3600 ............................................... 3 (0.001 ) 0.07 0.49 0.71 0.90 

7 (0.002 ) 0.02 0.20 0.28 0.35 

Total—All Classes .......................... 3 0.213 1.11 2.13 3.23 4.47 

7 0.077 0.41 0.77 1.13 1.51 

* Numbers in parentheses indicate negative NPV. 

Note: Components may not sum to total due to rounding. 

TABLE V.39—SUMMARY OF ANALYTICAL RESULTS FOR PUMPS: MANUFACTURER AND CONSUMER IMPACTS

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Manufacturer Impacts 

Industry NPV relative 

to a base case 

value of 121.4 

(2013$ millions).

111.6 to 121.8 ........... 81.9 to 129.7 ............. 22.4 to 125.3 ............. (85.0) to 114.1 ........... (228.4) to 94.1. 

Industry NPV (% 

change).

(8.0) to 0.3 ................. (32.5) to 6.9 ............... (81.6) to 3.3 ............... (170.0) to (6.0) .......... (288.2) to (22.5). 

Consumer Mean LCC Savings (2013$) 

ESCC.1800 .............. $43 ............................ $164 .......................... $240 .......................... $324 .......................... $362. 


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Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17879 

TABLE V.39—SUMMARY OF ANALYTICAL RESULTS FOR PUMPS: MANUFACTURER AND CONSUMER IMPACTS—Continued 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

ESCC.3600 .............. $17 ............................ $92 ............................ $122 .......................... $180 .......................... $278. 

ESFM.1800 .............. $8.0 ........................... $173 .......................... $372 .......................... $735 .......................... $1,062. 

ESFM.3600 .............. $58 ............................ $547 .......................... $961 .......................... $1,411 ....................... $2,078. 

IL.1800 ..................... $51 ............................ $149 .......................... $200 .......................... $202 .......................... $234. 

IL.3600 ..................... $46 ............................ $139 .......................... $241 .......................... $288 .......................... $377. 

VTS.3600 ................. ($2.4) ......................... $7.2 ........................... $91 ............................ $123 .......................... $144. 

Consumer Simple PBP (years) 

ESCC.1800 .............. 3.3 ............................. 2.2 ............................. 2.6 ............................. 3.1 ............................. 3.9. 

ESCC.3600 .............. 1.4 ............................. 1.0 ............................. 1.8 ............................. 1.9 ............................. 1.9. 

ESFM.1800 .............. 2.4 ............................. 2.8 ............................. 2.8 ............................. 3.1 ............................. 3.4. 

ESFM.3600 .............. 1.2 ............................. 0.8 ............................. 0.9 ............................. 1.1 ............................. 1.2. 

IL.1800 ..................... 2.3 ............................. 2.8 ............................. 3.9 ............................. 5.4 ............................. 6.1. 

IL.3600 ..................... 1.4 ............................. 1.9 ............................. 2.1 ............................. 2.7 ............................. 3.2. 

VTS.3600 ................. 11 .............................. 4.2 ............................. 1.7 ............................. 2.2 ............................. 2.7. 

Percent Consumers with Net Cost (%) 

ESCC.1800 .............. 12 .............................. 11 .............................. 23 .............................. 30 .............................. 42. 

ESCC.3600 .............. 0.7 ............................. 1.8 ............................. 14 .............................. 14 .............................. 12. 

ESFM.1800 .............. 0.26 ........................... 6.5 ............................. 15 .............................. 24 .............................. 26. 

ESFM.3600 .............. 0.29 ........................... 1.9 ............................. 4.7 ............................. 7.0 ............................. 8.4. 

IL.1800 ..................... 1.8 ............................. 6.9 ............................. 15 .............................. 25 .............................. 36. 

IL.3600 ..................... 2.0 ............................. 13 .............................. 11 .............................. 14 .............................. 20. 

VTS.3600 ................. 1.4 ............................. 21 .............................. 4.4 ............................. 8.5 ............................. 13 

Note: Parentheses indicate negative values. 

First, DOE considered TSL 5, which 

would save an estimated total of 1.32 

quads of energy, an amount DOE 

considers significant. TSL 5 has an 

estimated NPV of consumer benefit of 

$1.51 billion using a 7-percent discount 

rate, and $4.47 billion using a 3-percent 

discount rate. The cumulative emissions 

reductions at TSL 5 are 77 million 

metric tons of CO2, 116 thousand tons 

of NOX, and 0.18 tons of Hg. The 

estimated monetary value of the CO2

emissions reductions at TSL 5 ranges 

from $490 million to $7,224 million. At 

TSL 5, the average LCC savings ranges 

from $144 to $2,078 depending on 

equipment class. The fraction of 

consumers with negative LCC benefits 

range from 8.4 percent to 42 percent 

depending on equipment class. At TSL 

5, the projected change in INPV ranges 

from a decrease of $349.8 million to a 

decrease of $27.3 million. At TSL 5, 

DOE recognizes the risk of negative 

impacts if manufacturers’ expectations 

concerning reduced profit margins are 

realized. If the lower bound of the range 

of impacts is reached TSL 5 could result 

in a net loss of up to 288.2 percent in 

INPV for manufacturers. 

Accordingly, the Secretary tentatively 

concludes that, at TSL 5 for pumps, the 

benefits of energy savings, national net 

present value of consumer benefit, LCC 

savings, emission reductions, and the 

estimated monetary value of the CO2

emissions reductions would be 

outweighed by the fraction of 

consumers with negative LCC benefits 

and the significant burden on the 

industry. Consequently, DOE has 

concluded that TSL 5 is not 

economically justified. 

Next, DOE considered TSL 4, which 

would save an estimated total of 0.91 

quads of energy, an amount DOE 

considers significant. TSL 4 has an 

estimated NPV of consumer benefit of 

$1.13 billion using a 7-percent discount 

rate, and $3.23 billion using a 3-percent 

discount rate. The cumulative emissions 

reductions at TSL 4 are 53 million 

metric tons of CO2, 80 thousand tons of 

NOX, and 0.13 tons of Hg. The estimated 

monetary value of the CO2 emissions 

reductions at TSL 4 ranges from $337 

million to $4,969 million. At TSL 4, the 

average LCC savings ranges from $123 to 

$1,411 depending on equipment class. 

The fraction of consumers with negative 

LCC benefits range from 7.0 percent to 

30 percent depending on equipment 

class. At TSL 4, the projected change in 

INPV ranges from a decrease of $206.3 

million to a decrease of $7.2 million. At 

TSL 4, DOE recognizes the risk of 

negative impacts if manufacturers’ 

expectations concerning reduced profit 

margins are realized. If the lower bound 

of the range of impacts is reached TSL 

4 could result in a net loss of up to 170 

percent in INPV for manufacturers. 

Accordingly, the Secretary tentatively 

concludes that at TSL 4 for pumps, the 

benefits of energy savings, national net 

present value of consumer benefit, LCC 

savings, emission reductions, and the 

estimated monetary value of the CO2

emissions reductions would be 

outweighed by the fraction of 

consumers with negative LCC benefits 

and the significant burden on the 

industry. Consequently, DOE has 

concluded that TSL 4 is not 

economically justified. 

Next, DOE considered TSL 3, which 

would save an estimated total of 0.56 

quads of energy, an amount DOE 

considers significant. TSL 3 has an 

estimated NPV of consumer benefit of 

$0.77 billion using a 7-percent discount 

rate, and $2.13 billion using a 3-percent 

discount rate. The cumulative emissions 

reductions at TSL 3 are 33 million 

metric tons of CO2, 49 thousand tons of 

NOX, and 0.08 tons of Hg. The estimated 

monetary value of the CO2 emissions 

reductions at TSL 3 ranges from $210 

million to $3,092 million. At TSL 3, the 

average LCC savings are range from $91 

to $961 depending on equipment class. 

The fraction of consumers with negative 

LCC benefits ranged from 4.4 percent to 

23 percent depending on equipment 

class. At TSL 3, the projected change in 

INPV ranges from a decrease of $99 

million to an increase of $4 million. If 

the lower bound of the range of impacts 

is reached, TSL 3 could result in a net 

loss of up to 81.6 percent in INPV for 

manufacturers. 

Accordingly, the Secretary tentatively 

concludes that at TSL 3 for pumps, the 

benefits of energy savings, national net 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17880 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

69For the annualization methodology, see 

footnote 13. 

present value of consumer benefit, LCC 

savings, emission reductions, and the 

estimated monetary value of the CO2

emissions reductions would be 

outweighed by the fraction of 

consumers with negative LCC benefits 

and the significant burden on the 

industry. Consequently, DOE has 

concluded that TSL 3 is not 

economically justified. 

Next, DOE considered TSL 2, which 

would save an estimated total of 0.28 

quads of energy, an amount DOE 

considers significant. TSL 2 has an 

estimated NPV of consumer benefit of 

$0.41 billion using a 7-percent discount 

rate, and $1.11 billion using a 3-percent 

discount rate. The cumulative emissions 

reductions at TSL 2 are 16 million 

metric tons of CO2, 25 thousand tons of 

NOX, and 0.04 tons of Hg. The estimated 

monetary value of the CO2 emissions 

reductions at TSL 3 ranges from $106 

million to $1,554 million. At TSL 2, the 

average LCC savings range from $7.2 to 

$547 depending on equipment class. 

The fraction of consumers with negative 

LCC benefits range from 1.8 percent to 

21 percent depending on equipment 

class. At TSL 2, the projected change in 

INPV ranges from a decrease of $39.5 

million to an increase of $8.3 million. If 

the lower bound of the range of impacts 

is reached, TSL 2 could result in a net 

loss of up to 32.5 percent in INPV for 

manufacturers. 

After considering the analysis and 

weighing the benefits and the burdens, 

DOE has tentatively concluded that at 

TSL 2 for pumps, the benefits of energy 

savings, positive NPV of consumer 

benefit, positive average consumer LCC 

savings, emission reductions, and the 

estimated monetary value of the 

emissions reductions would outweigh 

the fraction of consumers with negative 

LCC benefits and the potential reduction 

in INPV for manufacturers. 

In addition, the proposed standards 

are consistent with the 

recommendations voted on by the CIP 

Working Group and approved by the 

ASRAC. (See EERE–2013–BT–NOC– 

0039–0092.) DOE has encouraged the 

negotiation of proposed standard levels, 

in accordance with the FACA and the 

NRA, as a means for interested parties, 

representing diverse points of view, to 

analyze and recommend energy 

conservation standards to DOE. Such 

negotiations may often expedite the 

rulemaking process. In addition, 

standard levels recommended through a 

negotiation may increase the likelihood 

for regulatory compliance, while 

decreasing the risk of litigation. 

The Secretary of Energy has 

tentatively concluded that TSL 2 would 

save a significant amount of energy and 

is technologically feasible and 

economically justified. For the above 

reasons, DOE today proposes to adopt 

the energy conservation standards for 

pumps at TSL 2. Table V.40 presents the 

proposed energy conservation standards 

for pumps. 

TABLE V.40—PROPOSED ENERGY

CONSERVATION STANDARDS FOR

PUMPS

Equipment class 

Proposed 

standard 

level * 

Proposed 

C-value 

ESCC.1800.CL ......... 1.00 128.47 

ESCC.3600.CL ......... 1.00 130.42 

ESCC.1800.VL ......... 1.00 128.47 

ESCC.3600.VL ......... 1.00 130.42 

ESFM.1800.CL ......... 1.00 128.85 

ESFM.3600.CL ......... 1.00 130.99 

ESFM.1800.VL ......... 1.00 128.85 

ESFM.3600.VL ......... 1.00 130.99 

IL.1800.CL ................ 1.00 129.30 

IL.3600.CL ................ 1.00 133.84 

IL.1800.VL ................ 1.00 129.30 

IL.3600.VL ................ 1.00 133.84 

RSV.1800.CL ............ 1.00 129.63 

RSV.3600.CL ............ 1.00 133.20 

RSV.1800.VL ............ 1.00 129.63 

RSV.3600.VL ............ 1.00 133.20 

VTS.1800.CL ............ 1.00 134.13 

VTS.3600.CL ............ 1.00 134.13 

VTS.1800.VL ............ 1.00 134.13 

VTS.3600.VL ............ 1.00 134.13 

* A pump model is compliant if its PEI rating 

is less than or equal to the proposed standard. 

2. Summary of Benefits and Costs 

(Annualized) of the Proposed Standards 

The benefits and costs of today’s 

proposed standards can also be 

expressed in terms of annualized values. 

The annualized monetary values are the 

sum of: (1) The annualized national 

economic value, expressed in 2013$, of 

the benefits from operating equipment 

that meets the proposed standards 

(consisting primarily of operating cost 

savings from using less energy, minus 

increases in equipment purchase costs, 

which is another way of representing 

consumer NPV), and (2) the monetary 

value of the benefits of emission 

reductions, including CO2 emission 

reductions.69 The value of the CO2

reductions (i.e., SCC), is calculated 

using a range of values per metric ton 

of CO2 developed by a recent 

interagency process. See section IV.L. 

Although combining the values of 

operating savings and CO2 reductions 

provides a useful perspective, two 

issues should be considered. First, the 

national operating savings are domestic 

U.S. consumer monetary savings that 

occur as a result of market transactions, 

while the value of CO2 reductions is 

based on a global value. Second, the 

assessments of operating cost savings 

and SCC are performed with different 

methods that use different time frames 

for analysis. The national operating cost 

savings is measured for the lifetime of 

equipment shipped in 2020–2049. The 

SCC values, on the other hand, reflect 

the present value of future climaterelated impacts resulting from the 

emission of one metric ton of CO2 in 

each year. These impacts continue well 

beyond 2100. 

Table V.41 shows the annualized 

values for the proposed standards for 

pumps. The results under the primary 

estimate are as follows. Using a 7- 

percent discount rate for benefits and 

costs other than CO2 reduction, for 

which DOE used a 3-percent discount 

rate along with the average SCC series 

that has a value of $40.5/t in 2015, the 

cost of the standards proposed in this 

document is $16.9 million per year in 

increased equipment costs, while the 

benefits are $60 million per year in 

reduced equipment operating costs, $29 

million in CO2 reductions, and $1.3 

million in reduced NOX emissions. In 

this case, the net benefit amounts to $73 

million per year. Using a 3-percent 

discount rate for all benefits and costs 

and the average SCC series that has a 

value of $40.5/t in 2015, the cost of the 

standards proposed in this document is 

$17.5 million per year in increased 

equipment costs, while the benefits are 

$81 million per year in reduced 

operating costs, $29 million in CO2

reductions, and $1.7 million in reduced 

NOX emissions. In this case, the net 

benefit amounts to $94 million per year. 


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TABLE V.41—ANNUALIZED BENEFITS AND COSTS OF PROPOSED STANDARDS (TSL 2) FOR PUMPS

Discount rate 

Million 2013$/year 

Primary 

estimate * 

Low net benefits 

estimate * 

High net benefits 

estimate * 

Benefits 

Operating Cost Savings .................................................... 7 .....................................

3 .....................................

60 .......................

81 .......................

54 .......................

72 .......................

67 

93 

CO2 Reduction Monetized Value ($12.0/t case) ** ........... 5 ..................................... 8 ......................... 8 ......................... 9 

CO2 Reduction Monetized Value ($40.5/t case) ** ........... 3 ..................................... 29 ....................... 27 ....................... 31 

CO2 Reduction Monetized Value ($62.4/t case) ** ........... 2.5 .................................. 42 ....................... 39 ....................... 46 

CO2 Reduction Monetized Value $119/t case) ** ............. 3 ..................................... 89 ....................... 83 ....................... 97 

NOX Reduction at $2,684/ton ** ........................................ 7 .....................................

7 plus CO2 range ...........

1.3 ......................

1.3 ......................

1.3 ......................

1.6 ......................

1.4 

1.9 

Total Benefits † ................................................................. 7 plus CO2 range ........... 69 to 150 ............ 63 to 138 ............ 78 to 166 

7 ..................................... 90 ....................... 82 ....................... 100 

3 plus CO2 range ........... 91 to 172 ............ 81 to 156 ............ 104 to 192 

3 ..................................... 112 ..................... 100 ..................... 126 

Costs 

Incremental Equipment Costs ........................................... 7 .....................................

3 .....................................

16.9 ....................

17.5 ....................

18.6 ....................

19.5 ....................

17.2 

17.7 

Net Benefits/Costs 

Total† ................................................................................ 7 plus CO2 range ........... 53 to 133 ............ 44 to 119 ............ 61 to 148 

7 ..................................... 73 ....................... 63 ....................... 83 

3 plus CO2 range ........... 74 to 155 ............ 62 to 136 ............ 86 to 174 

3 ..................................... 94 ....................... 80 ....................... 108 

* This table presents the annualized costs and benefits associated with pumps shipped in 2020–2049. These results include benefits to consumers which accrue after 2049 from the products purchased in 2020–2049. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High 

Benefits Estimates utilize projections of energy prices from the AEO 2014 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect a constant rate in the Primary Estimate, an increase rate in the Low Benefits Estimate, and a decline 

rate in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.2.a. 

** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the updated SCC values. The 

first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor. 

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate 

($40.5/t case). In the rows labeled ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the 

labeled discount rate, and those values are added to the full range of CO2 values. 

VI. Labeling and Certification 

Requirements 

A. Labeling 

In the Framework Document, DOE 

noted that EPCA includes provisions for 

labeling (42 U.S.C. 6315). EPCA 

authorizes DOE to establish labeling 

requirements only if certain criteria are 

met. Specifically, DOE must determine 

that: (1) Labeling in accordance with 

section 6315 is technologically and 

economically feasible with respect to 

any particular equipment class; (2) 

significant energy savings will likely 

result from such labeling; and (3) 

labeling in accordance with section 

6315 is likely to assist consumers in 

making purchasing decisions. (42 U.S.C. 

6315(h)). 

If these criteria are met, EPCA 

specifies certain aspects of equipment 

labeling that DOE must consider in any 

rulemaking establishing labeling 

requirements for covered equipment. At 

a minimum, such labels must include 

the energy efficiency of the affected 

equipment, as tested under the 

prescribed DOE test procedure. The 

labeling provisions may also consider 

the addition of other requirements, 

including: Directions for the display of 

the label; a requirement to display on 

the label additional information related 

to energy efficiency or energy 

consumption, which may include 

instructions for maintenance and repair 

of the covered equipment, as necessary 

to provide adequate information to 

purchasers; and requirements that 

printed matter displayed or distributed 

with the equipment at the point of sale 

also include the information required to 

be placed on the label. (42 U.S.C. 

6315(b) and 42 U.S.C. 6315(c)). 

In response to the Framework 

document, HI and Grundfos supported 

labeling that would include the rated 

efficiency value of the pump. (HI, No. 

25 at p. 11; Grundfos, No. 24 at p. 19). 

Grundfos noted that this would provide 

transparency to consumers to make 

better purchasing considerations and 

would not be expected to result in 

significant additional burden. Grundfos 

added that markings should not conflict 

with other information presently 

included on nameplates, that additional 

bossing on the pump castings should 

not be required, but that potentially 

Energy Guide-type labels could be 

placed on pump packaging prior to 

shipping. Grundfos also recommended 

harmonization with EU 547. (Grundfos, 

No. 24 at p. 19). HI noted that including 

efficiency on the label would allow the 

buyer or end-user to select the most 

efficient product available. (HI, No. 25 

at p. 11). The Advocates also noted that 

development of a DOE test procedure 

for pumps including motors could 

facilitate a labeling scheme to encourage 

the greater use of pumps with VSDs 

across a wide horsepower range. (The 

Advocates, No. 32 at p. 7). 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
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70Manufacturers will likely deplete their stock of 

existing nameplates prior to the compliance date of 

any labeling requirements. Therefore, in order to 

meet the labeling requirements, they will be buying 

redesigned nameplates—likely at the same cost as 

the old ones—and then printing new information 

on them—likely at the same cost as previously. 

71HI estimated the average cost for updating 

marketing (literature, data sheets, curves, pump 

selection tools, sales training, compliance 

documentation, etc.) for a hydraulic redesign to 

range from $32,000 for a 1-hp model to $27,000 for 

a 200-hp model. DOE assumed $30,000 on average. 

The marketing costs provided by HI were for 

developing new materials for redesigned pump 

models. For this exercise only literature and data 

sheets are relevant, which DOE estimated would 

represent half of the marketing costs. In addition, 

in this case, DOE is estimating the incremental cost 

for making a few additions to literature rather than 

complete design of new materials. DOE assumed 

these additions would cost only 25% or less of full 

material development. 

72Approximately 3500 models are in the scope of 

this rulemaking. In the absence of the standard, 

none of these models would have to be redesigned 

and would thus incur $3750 each in costs for 

updating marketing materials. At TSL 2, 25% of 

pump models would have to be redesigned, and 

creating new marketing materials for these pumps 

is already accounted for in the MIA. The 75% of 

pump models that do not have to be redesigned 

would incur $3750 each. 

The CIP Working Group 

recommended labeling requirements in 

the term sheet. (See EERE–2013–BT– 

NOC–0039–0092, recommendation #12.) 

Specifically, the working group 

recommended that pumps be labeled 

based on the configuration in which 

they are sold. Table VI.1 shows the 

information that the CIP Working Group 

recommended be included on a pump 

nameplate. (See EERE–2013–BT–NOC– 

0039–0092, recommendation #12.) 

TABLE VI.1—LABELING REQUIREMENTS FOR PUMP NAMEPLATE

Bare pump Bare pump + motor Bare pump + motor + controls 

PEICL .................................................................. PEICL ................................................................ PEICL. 

Model number .................................................... Model number .................................................. Model number. 

Impeller diameter for each unit .......................... Impeller diameter for each unit ........................ Impeller diameter for each unit. 

Note: The impeller diameter referenced is the actual diameter of each unit as sold, not the full impeller diameter at which the pump is rated. 

DOE has reviewed the 

recommendations of the working group 

with respect to the three requirements 

in EPCA restricting the Secretary’s 

authority to promulgate labeling rules. 

(42 U.S.C. 6315(h)). DOE considered 

applying these requirements to both the 

pump nameplate and marketing 

materials. 

First, DOE finds that the working 

group labeling recommendations are 

technologically and economically 

feasible with respect to each equipment 

class in this rulemaking. Pump 

manufacturers currently include 

nameplates on their pumps and it is 

technologically feasible for them to 

provide energy efficiency information 

on a nameplate as well without 

presenting a significant incremental 

burden. Furthermore, as the additional 

information proposed to be added to the 

nameplate is minimal and, in some 

cases, may already be included on the 

nameplate of some pump 

manufacturers, DOE believes that the 

size of the nameplate typically will not 

be required to increase and, thus, there 

will not be an incremental cost for 

adding additional information to pump 

nameplates.70 Costs of updating 

marketing materials for pumps that 

must be redesigned to meet the standard 

were included in the conversion costs 

for the industry and are accounted for 

in the industry cash-flow analysis 

results and industry valuation figures in 

section V.B.2. For pumps that do not 

need to be redesigned to meet the 

standard, DOE estimates that the costs 

of updating marketing materials to 

include the labeling requirements 

would be up to $3750 per pump 

model.71 In the absence of a standard, 

this would result in additional cost to 

the industry of approximately $13 

million. DOE estimates that the 

investment could result in a loss of 

INPV compared to a base case with no 

labeling requirement of up to 

approximately 5%. For the proposed 

standard, the additional cost to industry 

for updating marketing materials for 

pumps that do not have to be redesigned 

would be approximately $10 million. 

DOE estimates that the investment 

could result in an additional loss of 

INPV compared to a base case with no 

labeling requirement of up to 

approximately 4% beyond that 

estimated from the proposed standard.72

Therefore, DOE has determined that 

establishing labeling requirements 

would be economically feasible. 

Second, DOE believes the labeling 

recommendations proposed by the 

working group will likely result in 

significant energy savings. The related 

energy conservation standards are 

expected to save 0.27 quads. Requiring 

labels that include the rated value 

subject to the standards will increase 

consumer awareness of the standards. 

As a result, requiring the labels may 

increase consumer demand for more 

efficient pumps, thus leading to 

additional savings beyond that 

calculated for the standards. In addition, 

the labels will make it easier for 

consumers to compare the expected 

performance of a bare pump to that of 

a pump with controls, thus increasing 

the likelihood that a consumer will 

select a pump with controls. Such 

purchasing decisions will result in 

additional energy savings beyond that of 

the standard by potentially increasing 

the market share of pumps sold with 

controls and therefore using less power 

during operating hours. 

Third, DOE finds that the 

recommended working group labeling 

requirements are likely to assist 

consumers in making purchasing 

decisions. By including the rated metric 

on the nameplate and marketing 

materials, consumers will have the 

information needed to compare 

performance between pump models, 

with the assurance that the ratings were 

calculated according to a DOE-specified 

test procedure. As stated previously, the 

labeling recommendations will assist 

consumers in making purchasing 

decisions between bare pumps and 

pumps with controls, by allowing them 

to fairly accurately estimate the 

potential energy savings from using 

controls in a variable load situation. As 

noted previously, Grundfos and HI both 

suggested in comments that labels 

would assist consumers in making 

purchasing decisions. (Grundfos, No. 24 

at p. 19; HI, No. 25 at p. 11). This was 

also a primary reason the 

recommendation was made by the 

working group. 

DOE also notes that the recommended 

working group labeling 

recommendations meet the EPCA 

requirement that labels, at a minimum, 

include the energy efficiency of the 

equipment to which the rulemaking 

applies, as tested under the prescribed 

DOE test procedure. (42 U.S.C. 6315(b)). 

In this case, that information is PEICL or 

PEIVL, depending on pump 

configuration. Therefore, DOE is 

proposing to adopt the labeling 

requirements recommended by the CIP 

Working Group, as shown in Table VI.1. 

Additionally, DOE proposes that these 

same labeling requirements be applied 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17883 

to marketing materials in addition to the 

pump nameplate. See 42 U.S.C. 

6315(c)(3). 

DOE is tentatively proposing the 

following requirements for display of 

information: All orientation, spacing, 

type sizes, type faces, and line widths 

to display this required information 

shall be the same as or similar to the 

display of the other performance data on 

the pump’s permanent nameplate. The 

PEICL or PEIVL, as appropriate to a given 

pump model, shall be identified in the 

form ‘‘PEICL ___’’ or ‘‘PEIVL ___.’’ The 

model number shall be in one of the 

following forms: ‘‘Model ____’’ or 

‘‘Model number ____’’ or ‘‘Model No. _

___.’’ The unit’s impeller diameter shall 

be in the form ‘‘Imp. Dia. ____(in.).’’ 

DOE seeks input on these proposed 

requirements. This is identified as Issue 

17 in section VIII.E, ‘‘Issues on Which 

DOE Seeks Comment.’’ 

DOE is aware that when pump 

manufacturers sell a bare pump to a 

distributor, the distributor may trim the 

impeller prior to selling the pump to a 

customer. Therefore, DOE requests 

comment on the feasibility of including 

the impeller diameter for each unit on 

the nameplate. Specifically, when 

shipping bare pumps to distributors, 

would it be more appropriate for this 

field to be left blank and filled in by the 

distributor? This is identified as Issue 

18 in section VIII.E, ‘‘Issues on Which 

DOE Seeks Comment.’’ 

B. Certification Requirements 

1. Certification Report Requirements 

Since pumps are a distinct type of 

covered equipment under EPCA and 

would have entirely separate reporting 

requirements from other types of 

covered equipment, DOE proposes to 

include the reporting requirements in a 

new section 429.59 within subpart B of 

10 CFR part 429. This section would 

also include sampling requirements, 

which are discussed in the test 

procedure NOPR. Consistent with other 

types of covered products and 

equipment, the proposed section (10 

CFR 429.59) would specify that the 

general certification report requirements 

contained in 10 CFR 429.12 apply to 

pumps. Proposed additional 

requirements established in 10 CFR 

429.59 would require manufacturers to 

supply certain additional information to 

DOE in certification reports for pumps 

to demonstrate compliance with any 

energy conservation standards 

established as a result of this 

rulemaking. 

The CIP Working Group 

recommended that the following data be 

included in the certification reports: 

• Manufacturer name; 

• Model number(s); 

• Equipment class; 

• PEICL or PEIVL as applicable; 

• BEP flow rate and head; 

• Rated speed; 

• Number of stages tested; 

• Full impeller diameter (in.); 

• Whether the PEICL or PEIVL is 

calculated or tested; and 

• Input power to the pump at each 

load point i (Pini). 

(See EERE–2013–BT–NOC–0039– 

0092, recommendation No. 13.) 

DOE has reviewed the working group 

recommendations and made some 

modifications and additions. DOE is 

proposing that the following 

recommended items be required in 

certification reports without 

modifications: 

• Manufacturer name; 

• Model number(s); 

• Equipment class; 

• PEICL or PEIVL as applicable; 

• Number of stages tested; 

• Full impeller diameter (in.); and 

• Whether the PEICL or PEIVL is 

calculated or tested. 

DOE is proposing that the following 

recommended items be required in 

certification reports with modifications 

for clarity relating to units and operating 

conditions: 

• BEP flow rate in gallons per minute 

(gpm) and head in feet when operating 

at nominal speed; 

• Rated (tested) speed in revolutions 

per minute (rpm) at the BEP of the 

pump; and 

• Driver power input at each required 

load point i (Pini), corrected to nominal 

speed, in horsepower (hp). 

DOE is proposing that the following 

additional items be required in 

certification reports to assist with 

verification: 

• Nominal speed for certification in 

revolutions per minute (rpm)— 

Æ Required to verify equipment class 

as well as calculations for parameters 

that must be corrected to nominal 

speed; 

• The configuration in which the 

pump is being rated (i.e., bare pump, a 

pump sold with a motor, or a pump sold 

with a motor and continuous or noncontinuous controls)— 

Æ Necessary for DOE to determine 

appropriate test procedure method to 

follow when verifying ratings; and 

• For pumps sold with electric 

motors regulated by DOE’s energy 

conservation standards for electric 

motors at § 431.25 other single-phase 

induction motors (with or without 

controls): Motor horsepower (hp) and 

nominal motor efficiency, in percent 

(%)— 

Æ Necessary for DOE to complete 

calculations in test procedure when 

verifying ratings. 

Finally, DOE is proposing that PERCL

or PERVL, as applicable, and pump 

efficiency at BEP be required in 

certification reports in order to provide 

additional performance information to 

assist with future regulatory efforts or 

utility programs related to pumps. 

DOE requests comment on 

modifications or additions to the 

proposed reporting requirements for 

certification of pumps. DOE requests 

comment on whether pump efficiency at 

BEP should be required to be included 

in the certification reports. This is 

identified as Issue 19 in section VIII.E, 

‘‘Issues on Which DOE Seeks 

Comment.’’ 

2. Definition of Manufacturer 

In 10 CFR part 431, regarding the 

energy efficiency program for certain 

commercial and industrial equipment, 

manufacturer is defined in section 431.2 

as ‘‘any person who manufactures 

industrial equipment, including any 

manufacturer of a commercial packaged 

boiler.’’ In addition, manufacture means 

‘‘to manufacture, produce, assemble, or 

import.’’ 

In response to the Framework 

Document, the CA IOUs and the 

Advocates suggested that DOE define 

‘‘manufacturer’’ more broadly such that 

distributors who package pumps with 

motors for sale would be subject to the 

standards. (CA IOUs, No. 26 at p. 3; The 

Advocates, No. 32 at pp. 6–7.) The 

Advocates added that it would support 

OEMs being subject to standards, but 

would not support contractors or 

installers to be considered 

‘‘manufacturers.’’ (Id.) 

Earthjustice noted that based on the 

definitions in EPCA, if a standard 

applies to pump/motor combinations, 

connecting or packaging a motor and 

pump would ordinarily count as 

manufacturing the combined product. 

(Earthjustice, No. 30 at p. 2.) It also 

added that contractors or installers 

would not be covered. (Id.) 

On the other hand, AHRI 

recommended that if DOE establishes a 

regulatory regime that includes pump 

packages with VSDs, that pump 

manufacturers manage compliance of 

the extended product and that 

separately sold VFDs remain outside of 

DOE’s authority. (AHRI, No. 28 at p. 2.) 

The CIP Working Group also 

discussed the definition of manufacturer 

on several occasions. (See EERE–2013– 

BT–NOC–0039–0014, pp. 32–33, pp. 

39–57, and pp. 79–82; EERE–2013–BT– 

NOC–0039–0015, pp. 134, 203–223; 

EERE–2013–BT–NOC–0039–0062, pp. 


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316–327; and EERE–2013–BT–NOC– 

0039–0106, pp. 174–176) 

DOE has reviewed the comments and 

notes that it has already proposed a 

definition that would apply when 

determining which entity constitutes 

the pump manufacturer in a separate 

rulemaking. DOE refers readers to its 

proposed test procedure for pumps. 

Today’s proposal would, however, 

detail the requirements that a pump 

manufacturer would need to meet when 

certifying a given pump as compliant 

with any energy conservation standards 

that DOE may adopt. These provisions, 

which would be part of 10 CFR part 429, 

would detail the general and productspecific information relating to each 

basic model of pump that a 

manufacturer must submit to the 

Department as part of the certification 

and compliance report. 

C. Enforcement Provisions 

DOE has reviewed the enforcement 

provisions specified in subpart C of 10 

CFR part 429 and is proposing that they 

are appropriate and sufficient for 

pumps. DOE is proposing a single 

modification to specify that 

§ 429.110(e)(ii) on enforcement testing 

would apply to pumps as well as the 

already listed equipment. 

VII. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866 and 13563 

Section 1(b)(1) of Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735, Oct. 4, 1993, 

requires each agency to identify the 

problem that it intends to address, 

including, where applicable, the failures 

of private markets or public institutions 

that warrant new agency action, as well 

as to assess the significance of that 

problem. The problems that today’s 

standards address are as follows: 

(1) The cost of gathering relevant 

information and difficulties in analyzing 

it leads some consumers to miss 

opportunities to make cost-effective 

investments in energy efficiency. 

(2) In some cases the benefits of more 

efficient equipment are not realized due 

to misaligned incentives between 

purchasers and users. An example of 

such a case is when the equipment 

purchase decision is made by a building 

contractor or building owner who does 

not pay the energy costs. 

(3) There are external benefits 

resulting from improved energy 

efficiency of pumps that are not 

captured by the users of such 

equipment. These benefits include 

externalities related to public health, 

environmental protection, and national 

security that are not reflected in energy 

prices, such as reduced emissions of air 

pollutants and greenhouse gases that 

impact human health and global 

warming. 

In addition, DOE has determined that 

today’s regulatory action is an 

‘‘economically significant regulatory 

action’’ under Executive Order 12866. 

DOE presented to the Office of 

Information and Regulatory Affairs 

(OIRA), which is part of OMB, a copy 

of the draft rule for review along with 

other documents prepared for this 

rulemaking, including a regulatory 

impact analysis (RIA). These documents 

are part of the rulemaking docket. The 

assessments prepared pursuant to 

Executive Order 12866 can be found in 

the technical support document for this 

rulemaking. 

DOE has also reviewed this regulation 

pursuant to Executive Order 13563, 

issued on January 18, 2011. (76 FR 3281, 

Jan. 21, 2011.) EO 13563 is 

supplemental to and explicitly reaffirms 

the principles, structures, and 

definitions governing regulatory review 

established in Executive Order 12866. 

To the extent permitted by law, agencies 

are required by Executive Order 13563 

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 

Executive Order 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, OIRA has 

emphasized 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, DOE believes 

that today’s NOPR is consistent with 

these principles, including the 

requirement that, to the extent 

permitted by law, benefits justify costs 

and that net benefits are maximized. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601, et seq.) requires preparation 

of a regulatory flexibility analysis (RFA) 

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 

Executive Order 13272, ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking,’’ 67 FR 53461, 

August 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 Web site (http://energy.gov/

gc/office-general-counsel). DOE has 

prepared the following IRFA for the 

products that are the subject of this 

rulemaking. 

For manufacturers of pumps, 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. 

65 FR 30836, 30848, May 15, 2000, as 

amended at 65 FR 53533, 53544, Sept. 

5, 2000, and codified at 13 CFR part 

121. The size standards are listed by 

North American Industry Classification 

System (NAICS) code and industry 

description and are available at http:// 

www.sba.gov/category/navigationstructure/contracting/contractingofficials/small-business-size-standards. 

Manufacturing of pumps is classified 

under NAICS 333911, ‘‘Pump and 

Pumping Equipment Manufacturing.’’ 

The SBA sets a threshold of 500 

employees or less for an entity to be 

considered as a small business for this 

category. 

1. Description and Estimated Number of 

Small Entities Regulated 

To estimate the number of small 

business manufacturers of equipment 

covered by this rulemaking, DOE 


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73HI membership includes 48 manufacturers of 

product within the scope of this rulemaking, of 

which 10 are small domestic manufacturers. 

conducted a market survey using 

available public information to identify 

potential small manufacturers. DOE’s 

research involved industry trade 

association membership directories 

(including HI), industry conference 

exhibitor lists, individual company and 

buyer guide Web sites, and market 

research tools (e.g., Hoovers reports) to 

create a list of companies that 

manufacture products covered by this 

rulemaking. DOE presented its list to 

manufacturers in MIA interviews and 

asked industry representatives if they 

were aware of any other small 

manufacturers during manufacturer 

interviews and at DOE public meetings. 

DOE reviewed publicly-available data 

and contacted select companies on its 

list, as necessary, to determine whether 

they met the SBA’s definition of a small 

business manufacturer of pumps that 

would be regulated by the proposed 

standards. DOE screened out companies 

that do not offer products covered by 

this rulemaking, do not meet the 

definition of a ‘‘small business,’’ or are 

foreign-owned and operated. 

DOE identified 86 manufacturers of 

covered pump products sold in the U.S. 

Thirty- eight of these manufacturers met 

the 500-employee threshold defined by 

the SBA to qualify as a small business, 

but only 25 were domestic companies. 

DOE notes that manufacturers 

interviewed stated that there are 

potentially a large number of small 

pumps manufacturers that serve small 

regional markets. These unidentified 

small manufacturers are not members of 

HI and typically have a limited 

marketing presence. The interviewed 

manufacturers and CIP Working Group 

participants were not able to name these 

smaller players. Based on this 

information, it is possible that DOE’s list 

of 25 small domestic players may not 

include all small U.S. manufacturers in 

the industry. DOE requests comment on 

the number and names of small 

manufacturers producing covered 

equipment. 

Before issuing this NOPR, DOE 

interviewed two small business 

manufacturers of pumps. DOE also 

obtained qualitative information about 

small business impacts while 

interviewing large manufacturers. 

Specifically, DOE discussed with large 

manufacturers the extent to which new 

standards might require small 

businesses to acquire new equipment or 

cause manufacturing process changes 

that could destabilize their business. 

Responses given by larger 

manufacturers supported and informed 

DOE’s description and estimate of 

compliance requirements, which are 

presented in section VII.B.2. In general, 

DOE found very little information in the 

public domain about the role of small 

manufacturers in this industry. 

Today’s proposed standards reflect 

the recommendation of the CIP Working 

Group, which consisted of 16 members, 

including one small manufacturer. DOE 

selected the 16 members of the working 

group after issuing a notice of intent to 

establish a CIP Working Group (78 FR 

44036) and receiving 19 nominations for 

membership. DOE notes that the three 

nominated parties who were not 

selected for the working group did not 

represent small businesses. Prior to the 

formation of the CIP Working Group, 

DOE issued an RFI (76 FR 34192), a 

Framework Document (78 FR 7304), and 

held a public meeting on February 20, 

2013, to discuss the Framework 

Document in detail—all of which 

publicly laid out DOE’s efforts to set out 

standards for pumps. The leading 

industry trade association, HI, was 

engaged in each of these stages and 

helped spread awareness of the 

rulemaking process to all of its 

members, which includes both small 

and large manufacturers.73

DOE requests additional information 

on the number of small businesses in 

the industry, the names of those small 

businesses, and their role in the market. 

This matter is identified as Issue 20 

under ‘‘Issues on Which DOE Seeks 

Comment’’ in section VIII.E of this 

NOPR. 

DOE made key assumptions about the 

market share and product offerings of 

small manufacturers in its analysis. 

Specifically, DOE estimated that small 

manufacturers accounted for 

approximately 36% of the total industry 

model offerings. 

DOE requests data on the market 

share of small manufacturers and on the 

number of model offerings from small 

manufacturers. This matter is identified 

as Issue 21 under ‘‘Issues on Which 

DOE Seeks Comment’’ in section VIII.E 

of this NOPR. 

2. Description and Estimate of 

Compliance Requirements 

At TSL 2, the level proposed in 

today’s notice, DOE estimates total 

conversion costs of $0.8 million for an 

average small manufacturer, compared 

to total conversion costs of $1.4 million 

for an average large manufacturer. DOE 

notes that it estimates a lower total 

conversion cost for small manufacturers, 

because of the previous assumption that 

small manufacturers offer fewer models 

than their larger competitors, which 

means small manufacturers would 

likely have fewer product models to 

redesign. DOE’s conversion cost 

estimates were based on industry data 

collected by HI (see section IV.C.5 for 

more information on the derivation of 

industry conversion costs). DOE applied 

the same per-model product conversion 

costs for both large and small 

manufacturers. DOE requests comment 

on the difference in the per-model 

redesign costs between small and large 

manufacturers. Table VI.1 below shows 

the relative impacts of conversion costs 

on small manufacturers relative to large 

manufacturers. 

DOE requests data on the cost of 

hydraulic redesigns for a small 

manufacturer. This matter is identified 

as Issue 22 under ‘‘Issues on Which 

DOE Seeks Comment’’ in section VIII.E 

of this NOPR. 

TABLE VII.1—IMPACTS OF CONVERSION COSTS ON A SMALL MANUFACTURER AT THE PROPOSED STANDARD

Capital conversion cost 

as a percentage of 

annual capital 

expenditures 

Product conversion cost 

as a percentage of 

annual R&D expense 

Total conversion cost as 

a percentage of annual 

revenue 

Total conversion cost as 

a percentage of annual 

EBIT 

Average Large Manufacturer ........... 303 1579 32 582 

Average Small Manufacturer ........... 374 1013 25 464 


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74Simon, Ruth, and Angus Loten, ‘‘SmallBusiness Lending Is Slow to Recover,’’ Wall Street 

Journal, August 14, 2014. Accessed August 2014, 

available at http://online.wsj.com/articles/smallbusiness-lending-is-slow-to-recover-1408329562. 

The total conversion costs are 

approximately 25% of revenue and 

464% of earnings before interest and tax 

(EBIT) for a small manufacturer. For 

large manufacturers, the total 

conversion costs are approximately 32% 

of revenue and 582% of EBIT. These 

initial findings indicate that small 

manufacturers face conversion costs that 

are proportionate relative to larger 

competitors. 

However, as noted in section V.B.2.a, 

the GRIM free cash flow results in 2019 

indicated that some manufacturers may 

need to access the capital markets in 

order to fund conversion costs directly 

related to the proposed standard. Given 

that small manufacturers have greater 

difficulty securing outside capital 74 and 

that the necessary conversion costs are 

not insignificant to the size of a small 

business, it is possible the small 

manufacturers will be forced to retire a 

greater portion of product models than 

large competitors. Also, smaller 

companies often have a higher cost of 

borrowing due to higher risk on the part 

of investors, largely attributed to lower 

cash flows and lower per unit 

profitability. In these cases, small 

manufacturers may observe higher costs 

of debt than larger manufacturers. 

Though conversion costs are similar 

in magnitude for small and large 

manufacturers, small manufacturers 

may not have the same resources to 

make the required conversions. For 

example, some small pump 

manufacturers may not have the 

technical expertise to perform hydraulic 

redesigns in-house. These small 

manufacturers would need to hire 

outside consultants to support their redesign efforts. This could be a 

disadvantage relative to companies that 

have internal resources and personnel 

for the redesign process. 

DOE requests data on the cost of 

capital for small manufacturers to better 

quantify how small manufacturers 

might be disadvantaged relative to large 

competitors. DOE also invites comment 

on DOE’s calculations in Table VII.1, 

which show that the relative impact of 

conversion costs on the average small 

business, as estimated as a percentage of 

annual research and development 

expenses and total revenue, would be 

less than the impact felt by average large 

manufacturer. This matter is identified 

as Issue 23 under ‘‘Issues on Which 

DOE Seeks Comment’’ in section VIII.E 

of this NOPR. 

DOE requests comment and data on 

the impact of the proposed standard on 

small business manufacturers. This 

matter is identified as Issue 24 under 

‘‘Issues on Which DOE Seeks Comment’’ 

in section VIII.E of this NOPR. 

3. Duplication, Overlap, and Conflict 

With Other Rules and Regulations 

DOE is unaware of any rules or 

regulations that duplicate, overlap, or 

conflict with the rule being considered 

today. 

4. Significant Alternatives to the Rule 

The primary alternatives to the 

proposed rule are the other TSLs 

besides the one being considered today, 

TSL 2. DOE explicitly considered the 

role of manufacturers, including small 

manufacturers, in its selection of TSL 2 

rather than TSLs 3, 4, or 5. With respect 

to TSL 5, DOE estimated that while 

there would be significant consumer 

benefits stemming from the projected 

energy savings of 1.32 quads (ranging 

from $1.51 billion using a 7% discount 

rate to $4.47 using a 3% discount rate) 

along with emissions reductions, the 

overall impacts would yield over a 288 

percent drop in INPV, which would 

create negative LCC benefits and a 

significant burden on the industry that 

outweighed the potential benefits at TSL 

5. Similarly, with respect to TSL 4, DOE 

projected that in spite of the 0.91 quads 

of energy savings (and accompanying 

consumer benefits ranging from $1.13 

billion using a 7-percent discount rate to 

$3.23 billion using a 3-percent discount 

rate) along with emission reduction 

benefits, the potential negative impacts 

on industry—estimated to be as much as 

a 170 percent drop in INPV—were 

sufficient to weigh against the adoption 

of this TSL. Finally, with respect to TSL 

3, DOE concluded that the estimated 

0.56 quads of energy savings (and 

accompanying consumer benefits 

ranging from $0.77 billion using a 7- 

percent discount rate to $2.13 billion 

using a 3-percent discount rate) along 

with emission reduction benefits, the 

potential negative impacts on 

industry—a nearly 82 percent drop in 

INPV—weighed against the adopting 

this TSL. (Chapter 12 of the NOPR TSD 

contains additional information about 

the impact of this rulemaking on 

manufacturers.) Accordingly, DOE is not 

adopting any of these alternatives and, 

instead, is proposing the standards set 

forth in this rulemaking. (See chapter 17 

of the NOPR TSD for further detail on 

the policy alternatives DOE considered.) 

In addition to the other TSLs being 

considered, chapter 17 of the NOPR 

TSD and section V.B.7 include reports 

on a regulatory impact analysis (RIA). 

For the pumps that would be affected by 

this rulemaking, the RIA discusses the 

following policy alternatives: (1) 

Consumer rebates; (2) consumer tax 

credits; (3) manufacturer tax credits; (4) 

voluntary energy efficiency targets; and 

(5) bulk government purchases. While 

these alternatives may mitigate to some 

varying extent the economic impacts on 

small entities compared to the 

standards, DOE determined that the 

energy savings of these alternatives are 

significantly smaller than those that 

would be expected to result from 

adoption of the proposed standard 

levels (ranging from approximately 0.2 

percent to 78 percent of the primary 

energy savings from the proposed 

standards). 

DOE notes that if a manufacturer finds 

that meeting the standard for pumps 

would cause special hardship, inequity, 

or unfair distribution of burdens, the 

manufacturer may petition the Office of 

Hearings and Appeals (OHA) for 

exception relief or exemption from the 

standard pursuant to OHA’s authority 

under section 504 of the DOE 

Organization Act (42 U.S.C. 7194), as 

implemented at subpart B of 10 CFR 

part 1003. OHA has the authority to 

grant such relief on a case-by-case basis 

if it determines that a manufacturer has 

demonstrated that meeting the standard 

would cause hardship, inequity, or 

unfair distribution of burdens. 

DOE seeks comment and, in 

particular, data on the impacts of this 

rulemaking on small businesses. (See 

Issue 24 under ‘‘Issues on Which DOE 

Seeks Comment’’ in section VIII.E. of 

this NOPR.) 

C. Review Under the Paperwork 

Reduction Act 

In the event that DOE adopts its 

proposed standards, pump 

manufacturers would need to certify to 

DOE that their products comply with 

any applicable energy conservation 

standards. In certifying compliance, 

manufacturers would need to test their 

products according to the applicable 

DOE test procedures for pumps that 

DOE may adopt to measure the energy 

efficiency of this equipment, including 

any amendments adopted for those test 

procedures. DOE has established 

regulations for the certification and 

recordkeeping requirements for all 

covered consumer products and 

commercial equipment, including 

pumps. 76 FR 12422, March 7, 2011. 

The collection-of-information 

requirement for the certification 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 


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control number 1910–1400. Public 

reporting burden for the certification is 

estimated to average 20 hours per 

response, including the time for 

reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing the collection 

of information. 

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 

Pursuant to the National 

Environmental Policy Act (NEPA) of 

1969, DOE has determined that the 

proposed rule fits within the category of 

actions included in Categorical 

Exclusion (CX) B5.1 and otherwise 

meets the requirements for application 

of a CX. See 10 CFR part 1021, App. B, 

B5.1(b); 1021.410(b) and App. B, B(1)– 

(5). The proposed rule fits within the 

category of actions, because it is a 

rulemaking that establishes energy 

conservation standards for consumer 

products or industrial equipment, and 

for which none of the exceptions 

identified in CX B5.1(b) apply. 

Therefore, DOE has made a CX 

determination for this rulemaking, and 

DOE does not need to prepare an 

Environmental Assessment or 

Environmental Impact Statement for 

this proposed rule. DOE’s CX 

determination for this proposed rule is 

available at http://cxnepa.energy.gov/. 

E. Review Under Executive Order 13132 

Executive Order 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. EPCA 

governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the products 

that are the subject of today’s proposed 

rule. States can petition DOE for 

exemption from such preemption to the 

extent and, based on criteria, set forth in 

EPCA. (42 U.S.C. 6297.) 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 

Executive Order 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; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. 61 FR 4729, Feb. 

7, 1996. Section 3(b) of Executive Order 

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 has determined 

that, to the extent permitted by law, this 

proposed rule meets the relevant 

standards of Executive Order 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, sec. 

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 small governments. 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 http://

energy.gov/gc/office-general-counsel. 

Although this proposed rule does not 

contain a Federal intergovernmental 

mandate, it may require expenditures of 

$100 million or more on the private 

sector. Specifically, the proposed rule 

will likely result in a final rule that 

could require expenditures of $100 

million or more. Such expenditures may 

include: (1) Investment in research and 

development and in capital 

expenditures by pump 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 pumps, starting on 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 

Executive Order 12866. The 

SUPPLEMENTARY INFORMATION section of 

the NOPR and the ‘‘Regulatory Impact 

Analysis’’ section of the TSD for this 

proposed rule respond to those 

requirements. 

Under section 205 of UMRA, the 

Department 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 


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otherwise, or the selection of such an 

alternative is inconsistent with law. As 

authorized by 42 U.S.C. 6311(1)(A), this 

proposed rule would establish energy 

conservation standards that are 

designed to achieve the maximum 

improvement in energy efficiency for 

pumps that DOE has determined to be 

both technologically feasible and 

economically justified. A full discussion 

of the alternatives considered by DOE is 

presented in the ‘‘Regulatory Impact 

Analysis’’ section 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 

DOE has determined, under Executive 

Order 12630, ‘‘Governmental Actions 

and Interference with Constitutionally 

Protected Property Rights,’’ 53 FR 8859, 

Mar. 18, 1988, that this proposed 

regulation 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 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. DOE has reviewed 

today’s 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 

Executive Order 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 regulatory action, which sets forth 

energy conservation standards for 

pumps, 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 the proposed rule. 

L. Review Under the Information 

Quality Bulletin for Peer Review 

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 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal in-progress peer 

reviews of the energy conservation 

standards development process and 

analyses, and has prepared a Peer 

Review Report pertaining to the energy 

conservation standards rulemaking 

analyses. 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. The ‘‘Energy Conservation 

Standards Rulemaking Peer Review 

Report,’’ dated February 2007, has been 

disseminated and is available at the 

following Web site: 

www1.eere.energy.gov/buildings/

appliance_standards/peer_review.html. 

VIII. 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 notice. If you plan to attend the 

public meeting, please notify Ms. 

Brenda Edwards at (202) 586–2945 or 

Brenda.Edwards@ee.doe.gov. 

Please note that foreign nationals 

visiting DOE Headquarters are subject to 

advance security screening procedures. 

Any foreign national wishing to 

participate in the meeting should advise 

DOE as soon as possible by contacting 

Ms. Edwards to initiate the necessary 

procedures. Please also note that those 

wishing to bring laptops into the 

Forrestal Building will be required to 

obtain a property pass. Visitors should 

avoid bringing laptops, or allow an extra 

45 minutes. 

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. Driver’s licenses from the 

following states or territory will not be 

accepted for building entry and one of 

the alternate forms of ID listed below 

will be required. DHS has determined 

that regular driver’s licenses (and ID 

cards) from the following jurisdictions 

are not acceptable for entry into DOE 

facilities: Alaska, American Samoa, 

Arizona, Louisiana, Maine, 

Massachusetts, Minnesota, New York, 

Oklahoma, and Washington. Acceptable 

alternate forms of Photo-ID include: U.S. 

Passport or Passport Card; an Enhanced 

Driver’s License or Enhanced ID-Card 

issued by the states of Minnesota, New 

York or Washington (Enhanced licenses 

issued by these states are clearly marked 

Enhanced or Enhanced Driver’s 

License); a military ID or other Federal 

government issued Photo-ID card. 

In addition, participants may attend 

the public meeting via webinar. 

Webinar registration information, 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17889 

participant instructions, and 

information about the capabilities 

available to webinar participants will be 

published on DOE’s Web site. 

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 NOPR. The request 

and advance copy of statements must be 

received at least one week before the 

public meeting and may be emailed, 

hand-delivered, or sent by mail. DOE 

prefers to receive requests and advance 

copies via email. 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. After the public 

meeting, interested parties may submit 

further comments on the proceedings as 

well as on any aspect of the rulemaking 

until the end of the comment period. 

The public meeting will be conducted 

in an informal, conference style. DOE 

will present summaries of comments 

received before the public meeting, 

allow time for prepared general 

statements by participants, and 

encourage all interested parties to share 

their views on issues affecting this 

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 and 

comment on statements made by others. 

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 

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 above 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 NOPR. 

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 NOPR. 

Submitting comments via 

regulations.gov. The 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 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 

regulations.gov cannot be claimed as 

CBI. Comments received through the 

Web site will waive any CBI claims for 

the information submitted. For 

information on submitting CBI, see the 

Confidential Business Information 

section below. 

DOE processes submissions made 

through 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 simultaneously, 

your comment may not be viewable for 

up to several weeks. Please keep the 

comment tracking number that 

regulations.gov provides after you have 

successfully uploaded your comment. 

Submitting comments via email, hand 

delivery/courier, or mail. Comments and 

documents submitted via email, hand 

delivery, or mail also will be posted to 

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 mail or hand delivery/

courier, please provide all items on a 

CD, if feasible. It is not necessary to 

submit printed copies. No facsimiles 

(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, are written in English, and 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. 

According to 10 CFR 1004.11, any 

person submitting information that he 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
17890 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

or she believes to be confidential and 

exempt by law from public disclosure 

should submit via email, postal mail, or 

hand delivery/courier 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. 

Submit these documents via email or on 

a CD, if feasible. DOE will make its own 

determination about the confidential 

status of the information and treat it 

according to its determination. 

Factors of interest to DOE when 

evaluating requests to treat submitted 

information as confidential include: (1) 

A description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by or available from 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

It is DOE’s policy that all comments 

may be included in the public docket, 

as received and without change, 

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. Whether all RSV models sold in the 

United States are based on a global 

platform. 

2. Whether there are any pump 

models that would pass the proposed 

standard at a nominal speed of 3600 but 

fail at a nominal speed of 1800 if the 

same C-values were used for each 

equipment class. 

3. Whether the market distribution 

channels include all appropriate 

intermediate steps, and the estimated 

market share of each channel. 

4. Information and data on average 

annual operating hours for the pump 

types and applications in the scope of 

this rulemaking. 

5. Information and data on typical 

load profiles for the pump types and 

applications in the scope of this 

rulemaking. 

6. The percent of pumps in scope 

operated by each fuel type other than 

electricity (e.g., diesel, gasoline, liquid 

propane gas, or natural gas) and the 

efficiency or losses of each type of nonelectric driver, including transmission 

losses if any, that would allow DOE to 

estimate the fuel use and savings of 

pumps sold with non-electric drivers. 

7. The most appropriate trend to use 

for real (inflation-adjust) pump prices. 

8. Whether any of the efficiency levels 

considered in this NOPR might lead to 

an increase in installation costs, and if 

so, data regarding the magnitude of the 

increased cost for each relevant 

efficiency level. 

9. DOE seeks comment on whether 

new standards would be likely to affect 

shipments. 

10. The penetration rate of VFDs 

relative to the scope of this rulemaking, 

the average power reduction from use of 

a VFD, the ‘‘effectiveness rate’’ of a VFD, 

the percent of shipments with trimmed 

impellers, and the average percent 

impeller trim. 

11. Whether a rebound effect should 

be included in the determination of 

annual energy savings and, if so, data to 

assist in calculation of the rebound 

effect. 

12. DOE requests comment on the 

capital conversion costs and product 

conversion costs estimated for each 

TSL. 

13. DOE requests comment on the 

potential impacts on manufacturer 

employment and the specific drivers of 

any expected change in production line 

employment. 

14. DOE requests comments and data 

on capacity constraints at each TSL— 

including production capacity 

constraints, engineering resource 

constraints, and testing capacity 

constraints. In particular, DOE requests 

comment on whether the proposed 

compliance date allows for a sufficient 

conversion period to make the 

equipment design and facility updates 

necessary to meet a new standard. 

15. DOE requests comments the 

cumulative regulatory burden on 

manufacturers. Specifically, DOE seeks 

input on any product-specific Federal 

regulations that go into effect within 

three years of the proposed effective 

date and recommendations on how DOE 

may be able to align varying regulations 

in order to mitigate cumulative burden. 

16. DOE seeks comment on the 

impacts, if any, there would be on the 

level of utility and available features 

currently offered by manufacturers with 

respect to the pumps that would be 

regulated under this proposal. 

17. DOE seeks input on the 

requirements for display of required 

information on labels. 

18. DOE seeks comment on the 

feasibility of including the impeller 

diameter for each unit on the nameplate. 

Specifically, when shipping bare pumps 

to distributors, would it be more 

appropriate for this field to be left blank 

and filled in by the distributor? 

19. DOE requests comment on 

modifications or additions to the 

proposed reporting requirements for 

certification of pumps. DOE requests 

comment on whether pump efficiency at 

BEP should be required to be included 

in the certification reports. 

20. DOE requests additional 

information on the number of small 

businesses in the industry, the names of 

those small businesses, and their role in 

the market. 

21. DOE requests data on the market 

share of small manufacturers and on the 

number of model offerings from small 

manufacturers. 

22. DOE requests data on the cost of 

hydraulic redesigns for a small 

manufacturer. 

DOE requests data on the cost of capital for 

small manufacturers to better quantify how 

small manufacturers might be disadvantaged 

relative to large competitors. DOE also invites 

comment on DOE’s calculations in Table 

VII.1, which show that the relative impact of 

conversion costs on the average small 

business, as estimated as a percentage of 

annual research and development expenses 

and total revenue, would be less than the 

impact felt by average large manufacturer. 

23. DOE requests comment and data 

on the impact of the proposed standard 

on small business manufacturers. 

IX. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s proposed rule. 

List of Subjects 

10 CFR Part 429 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Imports, Intergovernmental relations, 

small businesses. 

10 CFR Part 431 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Reporting and recordkeeping 

requirements. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 17891 

Issued in Washington, DC, on March 17, 

2015. 

David T. Danielson, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

For the reasons set forth in the 

preamble, DOE proposes 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 

■ 1. The authority citation for part 429 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. Section 429.12(b)(13) is revised to 

read as follows: 

§ 429.12 General requirements applicable 

to certification reports. 

* * * * * 

(b) * * * 

(13) Product specific information 

listed in §§ 429.14 through 429.59 of 

this chapter. 

* * * * * 

■ 3. Section 429.59 as proposed to be 

added in the April 1, 2015, issue of the 

Federal Register, is amended by adding 

paragraph (b) to read as follows: 

§ 429.59 Pumps. 

* * * * * 

(b) Certification reports. 

(1) The requirements of § 429.12 are 

applicable to pumps; and 

(2) Pursuant to § 429.12(b)(13), a 

certification report shall include the 

following public product-specific 

information: 

(i) For bare pumps, pumps sold with 

drivers other than electric motors, and 

pumps sold with single-phase electric 

motors: Manufacturer name; model 

number(s); equipment class from the 

table in § 431.465(b) of this chapter; 

PEICL; PERCL; the rated (tested) speed of 

rotation in revolutions per minute (rpm) 

at the best efficiency point (BEP) of the 

pump; the nominal speed of rotation in 

revolutions per minute (rpm); pump 

total head in feet (ft.) at BEP and 

nominal speed; volume per unit time 

(flow rate) in gallons per minute (gpm) 

at BEP and nominal speed; calculated 

driver power input at each load point i 

(Pini), corrected to nominal speed, in 

horsepower (hp); pump efficiency at 

BEP in percent (%); full impeller 

diameter in inches (in.); the pump 

configuration (i.e., bare pump); for RSV 

and VTS pumps, the number of stages 

tested; and for VTS pumps, the bowl 

diameter in inches (in.). 

(ii) For pumps sold with electric 

motors not equipped with continuous or 

non-continuous controls: Manufacturer 

name; model number(s); equipment 

class from the table in § 431.465(b) of 

this chapter; PEICL; PERCL; the rated 

(tested) speed of rotation in revolutions 

per minute (rpm) at the best efficiency 

point (BEP) of the pump; the nominal 

speed of rotation in revolutions per 

minute (rpm); pump total head in feet 

(ft.) at BEP and nominal speed; volume 

per unit time (flow rate) in gallons per 

minute (gpm) at BEP and nominal 

speed; driver power input at each load 

point i (Pini), corrected to nominal 

speed, in horsepower (hp); pump 

efficiency at BEP in percent (%); full 

impeller diameter in inches (in.); 

whether the PEICL is calculated or 

tested; the pump configuration (i.e., 

pump sold with an electric motor); for 

RSV and VTS pumps, number of stages 

tested; for VTS pumps, the bowl 

diameter in inches (in.); and for pumps 

sold with electric motors regulated by 

DOE’s energy conservation standards for 

electric motors at § 431.25 of this 

chapter other single-phase induction 

motors, the nominal motor efficiency in 

percent (%) and the motor horsepower 

(hp) for the motor with which the pump 

is being rated 

(iii) For pumps sold with electric 

motors, other than single-phase 

induction motors, and continuous or 

non-continuous controls: Manufacturer 

name; model number(s); equipment 

class from the table in § 431.465(b) of 

this chapter; PEIVL; PERVL; the rated 

(tested) speed of rotation in revolutions 

per minute (rpm) at the best efficiency 

point (BEP) of the pump; the nominal 

speed of rotation for certification in 

revolutions per minute (rpm); pump 

total head in feet (ft.) at BEP and 

nominal speed; volume per unit time 

(flow rate) in gallons per minute (gpm) 

at BEP and nominal speed; driver power 

input (measured as the input power to 

the driver and controls) at each load 

point i (Pini), corrected to nominal 

speed, in horsepower (hp); pump 

efficiency at BEP in percent (%); full 

impeller diameter in inches (in.); 

whether the PEIVL is calculated or 

tested; the pump configuration (i.e., 

pump sold with a motor and continuous 

or non-continuous controls); for RSV 

and VTS pumps, the number of stages 

tested; for VTS pumps, the bowl 

diameter in inches (in.); and for pumps 

sold with electric motors regulated by 

DOE’s energy conservation standards for 

electric motors at § 431.25 of this 

chapter, the nominal motor efficiency in 

percent (%) and the motor horsepower 

(hp) for the motor with which the pump 

is being rated. 

■ 4. Revise § 429.110(e)(1)(ii) 

introductory text to read as follows: 

§ 429.110 Enforcement testing. 

* * * * * 

(e) * * * 

(1) * * * 

(ii) For automatic commercial ice 

makers; commercial refrigerators, 

freezers, and refrigerator-freezers; 

refrigerated bottled or canned vending 

machines; commercial HVAC and WH 

equipment; and pumps, DOE will use an 

initial sample size of not more than four 

units and follow the sampling plans in 

appendix B of this subpart (Sampling 

Plan for Enforcement Testing of Covered 

Equipment and Certain Low-Volume 

Covered Products). If fewer than four 

units of a basic model are available for 

testing when the manufacturer receives 

the notice, then: 

* * * * * 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 5. The authority citation for part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 6. Section 431.465 is added to read as 

follows: 

§ 431.465 Pumps energy conservation 

standards and their compliance dates. 

(a) For the purposes of paragraph (b) 

of this section, ‘‘PEICL’’ means the 

constant load pump energy index and 

‘‘PEIVL’’ means the variable load pump 

energy index, both as determined in 

accordance with the test procedure in 

§ 431.464. For the purposes of paragraph 

(c) of this section, ‘‘BEP’’ means the best 

efficiency point as determined in 

accordance with the test procedure in 

§ 431.464. 

(b) Each pump that is manufactured 

starting on [DATE 4 YEARS AFTER 

PUBLICATION OF FINAL RULE] and 

that: 

(1) Is in one of the equipment classes 

listed in the table in this section; 

(2) Meets the definition of a clean 

water pump in § 431.462; and 

(3) Conforms to the characteristics 

listed in paragraph (c) of this section 

must have a PEICL or PEIVL rating of not 

more than 1.00 using the appropriate Cvalue in the table in this section: 

Equipment class 1 Maximum 

PEI 2 C-Value 3

ESCC.1800.CL ......... 1.00 128.47 

ESCC.3600.CL ......... 1.00 130.42 

ESCC.1800.VL ......... 1.00 128.47 


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17892 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Proposed Rules 

Equipment class 1 Maximum 

PEI 2 C-Value 3

ESCC.3600.VL ......... 1.00 130.42 

ESFM.1800.CL ......... 1.00 128.85 

ESFM.3600.CL ......... 1.00 130.99 

ESFM.1800.VL ......... 1.00 128.85 

ESFM.3600.VL ......... 1.00 130.99 

IL.1800.CL ................ 1.00 129.30 

IL.3600.CL ................ 1.00 133.84 

IL.1800.VL ................ 1.00 129.30 

IL.3600.VL ................ 1.00 133.84 

RSV.1800.CL ............ 1.00 129.63 

RSV.3600.CL ............ 1.00 133.20 

RSV.1800.VL ............ 1.00 129.63 

RSV.3600.VL ............ 1.00 133.20 

VTS.1800.CL ............ 1.00 134.13 

VTS.3600.CL ............ 1.00 134.13 

VTS.1800.VL ............ 1.00 134.13 

VTS.3600.VL ............ 1.00 134.13 

1Equipment class designations consist of a 

combination (in sequential order separated by 

periods) of: (1) an equipment family (ESCC = 

end suction close-coupled, ESFM = end suction frame mounted, IL = in-line, RSV = radially split, multi-stage, vertical, in-line, diffuser 

casing, VTS = vertical turbine submersible); 

(2) nominal speed of rotation (1800 = 1800 

rpm, 3600 = 3600 rpm); and (3) an operating 

mode (CL = constant load, VL = variable 

load). Determination of the operating mode is 

determined using the test procedure in appendix A to subpart Y of part 431. 2For equipment classes ending in .CL, the 

relevant PEI is PEICL. For equipment classes 

ending in .VL, the relevant PEI is PEIVL. 3The C-values shown in this table must be 

used in the equation for PERSTD when calculating PEICL or PEIVL, as described in section 

II.B of appendix A to subpart Y of part 431. 

(c) The energy conservation standards 

in paragraph (b) of this section apply 

only to pumps with the following 

characteristics: 

(1) Shaft power of at least 1 hp but no 

greater than 200 hp at the best efficiency 

point (BEP) at full impeller diameter for 

the number of stages required for testing 

(see appendix A to subpart Y of part 

431); 

(2) Flow rate of 25 gpm or greater at 

BEP at full impeller diameter; 

(3) Maximum head of 459 feet at BEP 

at full impeller diameter; 

(4) Design temperature range from 

¥10 to 120 °C; 

(5) Designed to operate with either: 

(i) A 2- or 4-pole induction motor; or 

(ii) A non-induction motor with a 

speed of rotation operating range that 

includes speeds of rotation between 

2,880 and 4,320 revolutions per minute 

and/or 1,440 and 2,160 revolutions per 

minute; and 

(6) For VTS pumps, a 6-inch or 

smaller bowl diameter. 

(7) Except that the energy efficiency 

standards in paragraph (b) of this 

section do not apply to the following 

pumps: 

(i) Fire pumps. 

(ii) Self-priming pumps. 

(iii) Prime-assist pumps. 

(iv) Sealless pumps. 

(v) Pumps designed to be used in a 

nuclear facility subject to 10 CFR part 

50, ‘‘Domestic Licensing of Production 

and Utilization Facilities.’’ 

(vi) Pumps meeting the design and 

construction requirements set forth in 

Military Specification MIL–P–17639F, 

‘‘Pumps, Centrifugal, Miscellaneous 

Service, Naval Shipboard Use’’ (as 

amended). 

■ 7. Section 431.466 is added to read as 

follows: 

§ 431.466 Pumps labeling requirements. 

(a) Pump nameplate—(1) Required 

information. The permanent nameplate 

of a pump for which standards are 

prescribed in § 431.465 must be marked 

clearly with the following information: 

(i) For bare pumps and pumps sold 

with electric motors but not continuous 

or non-continuous controls, the rated 

pump energy index—constant load 

(PEICL) as determined pursuant to 

§ 431.464, and for pumps sold with 

motors and continuous or noncontinuous controls, the rated pump 

energy index—variable load (PEIVL) as 

determined pursuant to § 431.464; 

(ii) The model number; and 

(iii) The unit’s actual impeller 

diameter, as distributed in commerce. 

(2) Display of required information. 

All orientation, spacing, type sizes, type 

faces, and line widths to display this 

required information shall be the same 

as or similar to the display of the other 

performance data on the pump’s 

permanent nameplate. The PEICL or 

PEIVL, as appropriate to a given pump 

model, shall be identified in the form 

‘‘PEICL ll’’ or ‘‘PEIVL ll.’’ The 

model number shall be in one of the 

following forms: ‘‘Model ll’’ or 

‘‘Model number ll’’ or ‘‘Model No. l

l.’’ The unit’s impeller diameter shall 

be in the form ‘‘Imp. Dia. ll (in.).’’ 

(b) Disclosure of efficiency 

information in marketing materials. (1) 

The same information that must appear 

on a pump’s permanent nameplate 

pursuant to paragraph (a)(1) of this 

section, shall also be prominently 

displayed: 

(i) On each page of a catalog that lists 

the pump; and 

(ii) In other materials used to market 

the pump. 

(2) [Reserved] 

[FR Doc. 2015–06947 Filed 4–1–15; 8:45 am] 

BILLING CODE 6450–01–P 


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