# From: William Charmley/AA/USEPA/US

To: Amanda_I._Lee@omb.eop.gov, Chandana_L._Achanta@omb. eop.gov

Cc: Ed Nam/AA/USEPA/US@EPA, Robin Moran/AA/USEPA/US@EPA , Ken

Davidson/DC/USEPA/US@EPA, Todd Sherwood/AA/USEPA/US @EPA, james.tamm@epa.gov,

rebecca.yoon@dot.gov

Date: 11/10/2011 02:15 PM

Subject: Follow-up from Wednesday's call regarding calculati on of annualized impacts in Preamble Table I17



# Chandana and Amanda –

During the call yesterday, you asked for clarificat ion regarding Table I-17 in section I of the draft

preamble – this table shows a high level summary of the costs and benefits of the proposed

EPA standards, including both a “Lifetime Present V alue” and an “Annualized Value”, both at 3

and 7% DRs.

Amanda pointed out that for the Lifetime Present Va lue, the 3% DR program costs are greater

than the 7% DR program costs, and for Annualized Va lue, the 7% DR program cost are greater

than the 3% DR.

In addition, for the fuel savings, the Lifetime Pre sent Value for the 3%DR are greater than for

the 7% DR, but for the Annualized Value, the 7% DR fuel savings are greater than the 3% DR.

OMB asked if there was an error in our calculation of the annualized values.

The EPA staff has gone back and looked at this, and to the best of our knowledge we think our

calculations are correct. In the attached spreadsh eet, we show example calculations for fuel

savings, for the lifetime present values and the an nualized values, for both 3% and 7%. The

summary values are in cells F4:G5. You will see th ere that for the lifetime present value, the

3% DR fuel savings are greater than the 7%, but for the annualized, the 7% fuel savings are

greater than the lifetime present value.

Please take a look at the attached spreadsheet, whi ch shows the specific calculations we are

performing. If Amanda has any questions on this sp readsheet and the calculations, she can call

Todd Sherwood directly at 734-214-4405.

Thanks

Bill

Fuel savings example calc for OMB 20111110.xlsxSummary of results3%7%NPV$444,134$347,441Annualized$20,343$26,654MY lifetime36years3%7%



# Millions of 2009 dollars Millions of 2009 dollars Millions of 2009 dollarsTotal FuelCY \ MY->2017 2018 2019 2020 2021 2022 2023 2024 2025 Sum 2017 2018 20192020 2021 2022 2023 2024 2025 Sum 2017 2018 2019 2020 2021 20222023 2024 2025 Sum2012 $0 $0 $0 $0 $0 $0 $0 $0 $0 $02013 $0 $0 $0 $0 $0 $0 $0 $0 $0 $02014 $0 $0 $0 $0 $0 $0 $0 $0 $0 $02015 $0 $0 $0 $0 $0 $0 $0 $0 $0 $02016 $0 $0 $0 $0 $0 $0 $0 $0 $0 $02017 $570 $0 $0 $0 $0 $0 $0 $0 $0 $570 $562$5512018 $564 $1,355 $0 $0 $0 $0 $0 $0 $0 $1,919 $540 $1,335$510 $1,3112019 $563 $1,352 $2,143 $0 $0 $0 $0 $0 $0 $4,058 $523 $1,294 $2,112$475 $1,222 $2,0732020 $550 $1,339 $2,125 $3,049 $0 $0 $0 $0 $0 $7,063 $496 $1,244 $2,033 $3,005$434 $1,131 $1,921 $2,9502021 $532 $1,297 $2,083 $2,993 $4,508 $0 $0 $0 $0 $11,413 $466$1,169 $1,935 $2,863 $4,443$393 $1,024 $1,760 $2,706 $4,3612022 $515 $1,269 $2,039 $2,966 $4,467 $5,841 $0 $0 $0 $17,096$438 $1,111 $1,839 $2,755 $4,273 $5,756$355 $936 $1,610 $2,506 $4,038 $5,6502023 $496 $1,232 $1,999 $2,907 $4,429 $5,789 $7,105 $0 $0 $23,957 $410 $1,047 $1,750 $2,622 $4,114 $5,539 $7,001$320 $849 $1,475 $2,296 $3,742 $5,234 $6,8722024 $474 $1,187 $1,940 $2,848 $4,335 $5,738 $7,038 $8,447 $0 $32,008 $380 $980 $1,649 $2,494 $3,910 $5,330 $6,734 $8,324 $285 $765 $1,338 $2,102 $3,423 $4,848 $6,363 $8,1712025 $448 $1,138 $1,876 $2,772 $4,255 $5,629 $6,991 $8,386 $9,862 $41,357 $349 $912 $1,548 $2,356 $3,725 $5,077 $6,494 $8,023 $9,718 $252 $686 $1,209 $1,912 $3,140 $4,445 $5,907 $7,581 $9,5392026 $421 $1,072 $1,789 $2,665 $4,111 $5,491 $6,818 $8,280 $9,732 $40,380 $318 $834 $1,434 $2,199 $3,494 $4,808 $6,149 $7,691 $9,311 $222 $604 $1,078 $1,718 $2,835 $4,052 $5,384 $6,995 $8,7982027 $389 $1,011 $1,688 $2,545 $3,952 $5,309 $6,658 $8,085 $9,622 $39,259 $285 $764 $1,313 $2,039 $3,262 $4,513 $5,829 $7,291 $8,938 $191 $532 $950 $1,533 $2,547 $3,661 $4,913 $6,384 $8,1302028 $349 $927 $1,578 $2,379 $3,732 $5,055 $6,373 $7,816 $9,302 $37,513 $249 $680 $1,192 $1,851 $2,990 $4,172 $5,418 $6,844 $8,389 $160 $456 $830 $1,340 $2,248 $3,258 $4,396 $5,768$7,3452029 $303 $844 $1,474 $2,263 $3,545 $4,856 $6,176 $7,617 $9,156 $36,235 $209 $601 $1,080 $1,710 $2,758 $3,891 $5,097 $6,475 $8,016 $130 $388 $725 $1,191 $1,996 $2,925 $3,981 $5,253$6,7562030 $251 $712 $1,311 $2,067 $3,290 $4,506 $5,794 $7,206 $8,709 $33,847 $168 $492 $933 $1,516 $2,485 $3,506 $4,642 $5,947 $7,403 $101 $306 $602 $1,017 $1,731 $2,537 $3,490 $4,645 $6,0062031 $207 $587 $1,105 $1,844 $3,010 $4,194 $5,394 $6,783 $8,269 $31,393 $135 $394 $764 $1,312 $2,207 $3,167 $4,196 $5,435 $6,824 $78 $236 $475 $847 $1,480 $2,207 $3,036 $4,086 $5,3302032 $169 $480 $908 $1,553 $2,688 $3,835 $5,017 $6,313 $7,781 $28,744 $107 $313 $610 $1,073 $1,914 $2,812 $3,789 $4,911 $6,235 $59 $180 $365 $667 $1,235 $1,886 $2,639 $3,554 $4,6872033 $139 $389 $740 $1,276 $2,280 $3,429 $4,591 $5,876 $7,248 $25,968 $85 $246 $482 $856 $1,576 $2,441 $3,366 $4,438 $5,639 $46 $136 $278 $512 $979 $1,576 $2,257 $3,092 $4,0812034 $113 $316 $596 $1,036 $1,883 $2,907 $4,099 $5,369 $6,736 $23,055 $67 $194 $377 $675 $1,263 $2,009 $2,918 $3,937 $5,087 $35 $103 $209 $389 $756 $1,248 $1,884 $2,640 $3,5442035 $91 $255 $484 $837 $1,548 $2,415 $3,493 $4,816 $6,182 $20,121 $53 $152 $297 $529 $1,008 $1,620 $2,414 $3,428 $4,533 $26 $78 $159 $293 $581 $969 $1,500 $2,213 $3,0402036 $75 $204 $389 $679 $1,265 $1,992 $2,911 $4,115 $5,558 $17,188 $42 $118 $232 $417 $800 $1,298 $1,953 $2,844 $3,957 $20$58 $119 $222 $443 $747 $1,169 $1,767 $2,5542037 $61 $165 $310 $544 $1,036 $1,629 $2,402 $3,428 $4,747 $14,322 $34 $93 $180 $325 $636 $1,030 $1,565 $2,300 $3,281 $15 $44 $89 $167 $339 $571 $901 $1,376 $2,0392038 $52 $134 $249 $433 $840 $1,337 $1,966 $2,829 $3,955 $11,794 $27 $73 $140 $251 $501 $821 $1,244 $1,843 $2,654 $12 $33 $66 $124 $257 $438 $689 $1,061 $1,5872039 $45 $111 $201 $346 $675 $1,085 $1,615 $2,317 $3,265 $9,661 $23 $59 $110 $194 $391 $647 $992 $1,466 $2,127 $10 $26 $50 $93 $193 $332 $529 $812 $1,2252040 $37 $96 $166 $279 $546 $875 $1,313 $1,904 $2,675 $7,892 $19 $49 $88 $152 $307 $506 $783 $1,169 $1,692 $8 $21 $39 $70 $146$250 $402 $624 $9382041 $31 $79 $142 $229 $446 $710 $1,060 $1,549 $2,199 $6,444 $15 $39 $73 $121 $243 $399 $613 $924 $1,350 $6 $16 $31 $54 $111 $190 $303 $474 $7202042 $27 $65 $116 $196 $371 $580 $861 $1,251 $1,789 $5,256 $13$32 $58 $101 $197 $316 $484 $724 $1,067 $5 $12 $24 $43 $87 $145 $230 $358 $5482043 $20 $56 $96 $159 $322 $484 $704 $1,017 $1,445 $4,302 $9 $26 $46 $80 $166 $256 $384 $571 $836 $3 $10 $18 $33 $70 $113 $176 $272 $4132044 $18 $38 $81 $132 $264 $420 $588 $832 $1,175 $3,548 $8 $17 $38 $64 $132 $216 $312 $454 $660 $3 $6 $15 $25 $54 $92 $137 $208 $3142045 $15 $34 $53 $112 $220 $346 $511 $695 $962 $2,948 $7 $15 $24$52 $107 $173 $263 $368 $525 $2 $5 $9 $20 $42 $71 $112 $162 $2402046 $14 $30 $47 $72 $189 $289 $421 $604 $804 $2,469 $6 $13 $21 $33 $89 $140 $210 $311 $426 $2 $4 $7 $12 $34 $55 $86 $132 $1882047 $12 $26 $42 $63 $132 $248 $352 $498 $698 $2,071 $5 $11 $18 $28 $60 $117 $171 $249 $359 $2 $4 $6 $10 $22 $44 $67 $102 $1522048 $11 $23 $37 $56 $117 $175 $303 $416 $576 $1,713 $4 $9 $15 $24 $52 $80 $142 $202 $288 $1 $3 $5 $8 $18 $29 $54 $79 $1182049 $9 $20 $32 $49 $103 $155 $216 $358 $481 $1,424 $4 $8 $13 $21$44 $69 $99 $169 $233 $1 $2 $4 $7 $15 $24 $36 $64 $922050 $8 $18 $28 $43 $91 $137 $191 $256 $414 $1,186 $3 $7 $11 $18 $38 $59 $85 $117 $195 $1 $2 $3 $6 $12 $20 $30 $43 $742051 $7 $16 $25 $38 $80 $121 $168 $226 $296 $978 $3 $6 $10 $15 $32$50 $72 $100 $135 $1 $2 $3 $5 $10 $16 $24 $35 $492052 $6 $14 $22 $34 $70 $106 $148 $200 $262 $863 $2 $5 $8 $13 $28 $43 $62 $86 $116 $1 $1 $2 $4 $8 $14 $20 $29 $412053 $0 $12 $19 $30 $62 $94 $131 $176 $231 $755 $4 $7 $11 $24 $37 $53 $74 $100 $1 $2 $3 $7 $11 $17 $24 $342054 $0 $0 $17 $26 $55 $82 $115 $155 $204 $655 $6 $9 $20 $32 $45 $63 $85$2 $3 $6 $9 $14 $20 $282055 $0 $0 $0 $23 $48 $73 $101 $137 $180 $562$8 $17 $27 $39 $54 $73$2 $5 $8 $11 $16 $232056 $0 $0 $0 $0 $42 $64 $89 $120 $159 $474$15 $23 $33 $46 $62$4 $6 $9 $13 $192057 $0 $0 $0 $0 $0 $56 $79 $106 $139 $380$20 $28 $39 $53$5 $8 $11 $152058 $0 $0 $0 $0 $0 $0 $69 $93 $123 $285$24 $34 $46$6 $9 $132059 $0 $0 $0 $0 $0 $0 $0 $82 $108 $190$29 $39$7 $102060 $0 $0 $0 $0 $0 $0 $0 $0 $95 $95$33$92061 $0 $0 $0 $0 $0 $0 $0 $0 $0 $02062 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $7,593 $17,902 $27,951 $39,543 $59,007 $76,051 $91,862 $108,362 $125,139 $553,409NPV in 1st yr of MY$6,061 $14,346 $22,446 $31,792 $47,321 $60,999 $73,704 $86,980 $100,486 $444,134 $4,715 $11,196 $17,550 $24,883 $36,976 $47,686 $57,653 $68,083 $78,699 $347,441Annualized$278 $657 $1,028 $1,456 $2,167 $2,794 $3,376 $3,984 $4,603 $20,343 $362 $859 $1,346 $1,909 $2,837 $3,658 $4,423 $5,223 $6,037 $26,654UndiscountedDiscounted at 3%Discounted at 7%Total Fuel Savings (untaxed)Total Fuel Savings (untaxed)Total Fuel Savings (untaxed)