RIA-i

REGULATORY IMPACT ANALYSIS FOR SMALL 

ELECTRIC MOTORS 

TABLE OF CONTENTS 

RIA.1 INTRODUCTION ...................................................................................................... RIA-1 

RIA.2 METHODOLOGY ..................................................................................................... RIA-1 

LIST OF TABLES 

Table RIA.1.1 Non-Regulatory Alternatives to Standards ..................................................... RIA-1 

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REGULATORY IMPACT ANALYSIS FOR SMALL 

ELECTRIC MOTORS 

RIA.1 INTRODUCTION 

In view of Title 10 of the Code of Federal Regulations, Part 430, appendix A to subpart 

C, Procedures, Interpretations and Policies for Consideration of New or Revised Energy 

Conservation Standards for Consumer Products, the U.S. Department of Energy (DOE) is 

committed to fully consider effective non-regulatory approaches as alternatives to standards and 

support voluntary efforts by manufacturers, retailers, utilities and other to increase product 

efficiency.a DOE will prepare a draft regulatory impact analysis pursuant to Executive Order 

12866, “Regulatory Planning and Review,” which will be subject to review under the Executive 

Order by the Office of Management and Budget’s Office of Information and Regulatory Affairs. 

58 FR 51735 (September 30, 1993). DOE has identified performance standards and six major 

alternatives to standards as representing feasible policy options to achieve customer product 

energy efficiency, in comparison to no new regulatory action. It will evaluate each alternative in 

terms of its ability to achieve significant energy savings at a reasonable cost, and will compare 

the effectiveness of each one to the effectiveness of the proposed standards rule. 

The regulatory and non-regulatory means of achieving energy savings that DOE proposes 

to analyze are listed in Table RIA.1.1. The technical support document (TSD) in support of 

DOE’s notice of proposed rulemaking will include a complete quantitative analysis of each 

alternative, the methodology for which is discussed briefly below. 

Table RIA.1.1 Non-Regulatory Alternatives to Standards 

No new regulatory action 

Consumer tax credits 

Manufacturer tax credits 

Performance Standards 

Rebates 

Voluntary energy efficiency targets 

Early replacement 

Bulk government purchases 

RIA.2 METHODOLOGY 

DOE will use the national impact analysis (NIA) spreadsheet models to calculate the 

national energy savings and the net present value (NPV) corresponding to each alternative to the 

 

a

 Section 1.(e) of appendix A to subpart C of Title 10, Code of Federal Regulations, Part 430. 

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proposed energy conservation standards. The NIA spreadsheet model for each of the three 

appliance products is discussed in chapter 10 of the TSD. To compare each alternative 

quantitatively to the proposed energy conservation standards, DOE will need to quantify the 

effect of each alternative on the purchase and use of energy efficient small electric motors. Once 

it has quantified each alternative, DOE will make the appropriate revisions to the inputs in the 

NIA spreadsheet models. Key inputs that DOE may revise in these models are: 

• energy prices and escalation factors; 

• implicit market discount rates for trading off purchase price against operating expense 

when choosing equipment efficiency; 

• consumer purchase price, operating cost, and income elasticities; 

• consumer price-versus-efficiency relationships; and 

• equipment stock data (purchase of new equipment or turnover rates for inventories). 

The key measures of the impact of each alternative will be: 

• Energy use (in exajoules, or 1018 joules): Cumulative energy use of the equipment from 

the effective date of the new standard to the year 2045. DOE will report electricity 

consumption as primary (source) energy. 

• National energy savings: Cumulative national energy use from the base case projection 

minus the alternative policy case projection. 

• Net present value: The value of future operating cost savings from equipment bought in 

the period from the effective date of the new standard (2015) to the year 2045. DOE will 

calculate the NPV as the difference between the present value of equipment and 

operating expenditures (including energy) in the base case, and the present value of 

expenditures in each alternative policy case. DOE will discount future operating and 

equipment expenditures to 2008 using a seven-percent and three-percent real discount 

rate. It will calculate operating expenses (including energy costs) for the life of the 

equipment. 

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