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 calculation of annualized impacts in Preamble Table I17 

Chandana and Amanda – 

During the call yesterday, you asked for clarification 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 Value” and an “Annualized Value”, both at 3 

and 7% DRs. 

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

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

than the 3% DR. 

In addition, for the fuel savings, the Lifetime Present 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 spreadsheet, we show example calculations for fuel 

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

summary values are in cells F4:G5. You will see there 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, which shows the specific calculations we are 

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

Todd Sherwood directly at 734-214-4405. 

Thanks 

Bill 

Fuel savings example calc for OMB 20111110.xlsx 
Summary of results

3% 7%

NPV $444,134 $347,441Annualized $20,343 $26,654

MY lifetime 36 years 3% 

Millions of 2009 dollars Millions of 2009 dollars Total Fuel

CY \ MY-> 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sum 2017 2018 2019 2020 2021 2022 2023 2024 2025 S

2012 $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 2018 $564 $1,355 $0 $0 $0 $0 $0 $0 $0 $1,919 $540 $1,335 2019 $563 $1,352 $2,143 $0 $0 $0 $0 $0 $0 $4,058 $523 $1,294 $2,112 

2020 $550 $1,339 $2,125 $3,049 $0 $0 $0 $0 $0 $7,063 $496 $1,244 $2,033 $3,005 

2021 $532 $1,297 $2,083 $2,993 $4,508 $0 $0 $0 $0 $11,413 $466 $1,169 $1,935 $2,863 $4,443 

2022 $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 2023 $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 

2024 $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 

2025 $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 

2026 $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 2027 $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 

2028 $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 

2029 $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 

2030 $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 

2031 $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 

2032 $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 2033 $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 

2034 $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 

2035 $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 2036 $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 

2037 $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 

2038 $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 2039 $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 

2040 $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 

2041 $31 $79 $142 $229 $446 $710 $1,060 $1,549 $2,199 $6,444 $15 $39 $73 $121 $243 $399 $613 $924 $1,350 

2042 $27 $65 $116 $196 $371 $580 $861 $1,251 $1,789 $5,256 $13 $32 $58 $101 $197 $316 $484 $724 $1,067 2043 $20 $56 $96 $159 $322 $484 $704 $1,017 $1,445 $4,302 $9 $26 $46 $80 $166 $256 $384 $571 $836 2044 $18 $38 $81 $132 $264 $420 $588 $832 $1,175 $3,548 $8 $17 $38 $64 $132 $216 $312 $454 $660 

2045 $15 $34 $53 $112 $220 $346 $511 $695 $962 $2,948 $7 $15 $24 $52 $107 $173 $263 $368 $525 2046 $14 $30 $47 $72 $189 $289 $421 $604 $804 $2,469 $6 $13 $21 $33 $89 $140 $210 $311 $426 2047 $12 $26 $42 $63 $132 $248 $352 $498 $698 $2,071 $5 $11 $18 $28 $60 $117 $171 $249 $359 2048 $11 $23 $37 $56 $117 $175 $303 $416 $576 $1,713 $4 $9 $15 $24 $52 $80 $142 $202 $288 2049 $9 $20 $32 $49 $103 $155 $216 $358 $481 $1,424 $4 $8 $13 $21 $44 $69 $99 $169 $233 2050 $8 $18 $28 $43 $91 $137 $191 $256 $414 $1,186 $3 $7 $11 $18 $38 $59 $85 $117 $195 2051 $7 $16 $25 $38 $80 $121 $168 $226 $296 $978 $3 $6 $10 $15 $32 $50 $72 $100 $135 2052 $6 $14 $22 $34 $70 $106 $148 $200 $262 $863 $2 $5 $8 $13 $28 $43 $62 $86 $116 2053 $0 $12 $19 $30 $62 $94 $131 $176 $231 $755 $4 $7 $11 $24 $37 $53 $74 $100 2054 $0 $0 $17 $26 $55 $82 $115 $155 $204 $655 $6 $9 $20 $32 $45 $63 $85 2055 $0 $0 $0 $23 $48 $73 $101 $137 $180 $562 $8 $17 $27 $39 $54 $73 2056 $0 $0 $0 $0 $42 $64 $89 $120 $159 $474 $15 $23 $33 $46 $62 

2057 $0 $0 $0 $0 $0 $56 $79 $106 $139 $380 $20 $28 $39 $53 

2058 $0 $0 $0 $0 $0 $0 $69 $93 $123 $285 $24 $34 $46 2059 $0 $0 $0 $0 $0 $0 $0 $82 $108 $190 $29 $39 

2060 $0 $0 $0 $0 $0 $0 $0 $0 $95 $95 $33 

2061 $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 $444,1

Annualized $278 $657 $1,028 $1,456 $2,167 $2,794 $3,376 $3,984 $4,603 $20,3

Undiscounted Discounted at 3% 

Total Fuel Savings (untaxed) Total Fuel Savings (untaxed)