Revised on 4/2 7/ 2010

8-i 

### CHAPTER 8. LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYSES

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1 8.1.1 General Approach for LCC and PBP Analyses ................................................... 8-1

8.1.2 Overview of LCC and PBP Inputs ....................................................................... 8-3

8.2 LIFE

- CYCLE COST INPUTS ........................................................................................ 8-6

8.2.1 Definition ............................................................................................................. 8-6

8.2.2 Total Installed Cost Inputs ................................................................................... 8-7

8.2.2.1 Installation Costs ...................................................................................... 8-8 8.2.3 Operating Cost Inputs .......................................................................................... 8-9 8.2.3.1 Operating Hours ..................................................................................... 8-10

8.2.3.2 Power Rating .......................................................................................... 8-11

8.2.3.3 Electricity Prices .................................................................................... 8-11

8.2.3.4 Electricity Price Trend ........................................................................... 8-12

8.2.4 Lifetime .............................................................................................................. 8-13

8.2.5 Replacement Cost .............................................................................................. 8-14 8.2.6 Disposal Cost ..................................................................................................... 8-15

8.2.7 Analysis Period .................................................................................................. 8-15

8.2.8 Di scount Rate ..................................................................................................... 8-15

8.2.8.1 Residential Discount Rate ...................................................................... 8-16

8.2.8.2 Commercial Discount Rate .................................................................... 8-18

8.2.9 Effective Date of Standard ................................................................................. 8-22

8.3 PAYBACK PERIOD INPUT S ...................................................................................... 8-23

8.3.1 Definition ........................................................................................................... 8-23 8.3.2 Rebuttable Presumption Payback Period ........................................................... 8-23

8.3.3 Inputs.................................................................................................................. 8-24

8.4 BALLAST PURCHASING EVENTS ........................................................................... 8-24

8.5 LIFE

- CYCLE COST AND PAYBACK PERIOD RESULTS ...................................... 8-26

REFERENCES .......................................................................................................................... 8-35

LIST OF TABLES

Table 8.1.1. Summary Information of Inputs for the Life- Cycle Cost and Payback Period Analyses ............................................................................................................... 8-6

Tabl e 8.2.1. Labor Times for Fluorescent Lamp- and

- Ballast Systems (Commercial and Industrial) * 

### ............................................................................................................ 8-8 Table 8.2.2. Relamping and Lamp- and -Ballast Labor Costs for Fluorescent Lamp- and

Ballast Systems (Commercial and Industrial) * 

### .................................................... 8-9

Table 8.2.3. Average Operating Hours b y Sector ...................................................................... 8-10 Table 8.2.4. Average Operating Hours for Two- and Four- Lamp PS Ballasts Operating 4

- Foot MBP and 2-Foot U- Shaped Lamps in the Commercial Sector ................. 8-11 Table 8.2.5. Electricity Prices by Census Division, 2008 .......................................................... 8-11Revised on 4/2 7/ 2010

8- ii 

### Table 8.2.6. Average Percentage Shares of Household Debt and Equity Types ....................... 8-16 Table 8.2.7. Average Nominal and Real Interest Rates for Household Debt Classes ............... 8-17

Ta ble 8.2.8. Average Nominal and Real Interest Rates for Household Equity Types .............. 8-17 Table 8.2.9. Shares and Interest or Return Rates Used for Household Debt and Equity Types .................................................................................................................. 8-18 Table 8.2.10. Variables Used to Estimate Company Discount Rates ........................................ 8-20

Table 8.2.11. Real Discount Rates by Ballast Ownership Category ......................................... 8-21

Table 8.2.12. Estimated Share of Ballast Purchases by Ownership Category in the

Commercial Sector * 

### ........................................................................................... 8-21 Table 8.2.13. Ballast Ownership by Sector * 

### .............................................................................. 8-21

Table 8.2.14. Average Discount Rate by Sector ........................................................................ 8-22

Table 8.2.15. Effective Dates of Standards for Ballast Designs Addressed in Life- Cycle

Cost an d Payback Period Analyses * 

### .................................................................. 8-22

Table 8.4.1. Framework of Event- Type Scenarios for Ballasts Operating 4 -Foot and 8- Foot T12 Lamps (including MBP, Slimline, and RDC) .................................... 8-25

Table 8.4.2. Framework of Event- Type Scenarios for Ballasts Operating 4 -Foot and 8- Foot T8 Lamps (including MBP, Slimline, and RDC) ...................................... 8-25

Table 8.4.3. Framework of Event- Type Scenarios for Ballasts Operating 4 -Foot T5

MiniBP Lamps ................................................................................................... 8-26

Table 8.5.1. LCC and PBP Results for Two- Lamp RS and IS Ballasts Operating 4 -Foot MBP and 2-Foot U-Shaped Lamps in the C ommercial Sector (F32T8 Baseline) ............................................................................................................ 8-28

Table 8.5.2. LCC and PBP Results for Two- Lamp PS Ballasts Operating 4 -Foot MBP

and 2-Foot U- Shaped Lamps in the Commercial Sector ................................... 8-28

Table 8.5.3. LCC and PBP Results for Two- Lamp RS and IS Ballasts Operating 4 -Foot

MBP an d 2-Foot U-Shaped Lamps in the Commercial Sector (F34T12 Baseline) ............................................................................................................ 8-29 Table 8.5.4. Summary of the LCC and PBP Results for 4- Lamp RS and IS Ballasts Operating 4 -Foot MBP and 2-Foot U- Shaped Lamps in the Commercial

Sector ................................................................................................................. 8-29

Table 8.5.5. LCC and PBP Results for Four- Lamp PS Ballasts Operating 4 -Foot MBP

and 2-Foot U- Shaped Lamps in the Commercial Sector ................................... 8-30

Table 8.5.6. LCC and PBP Results for Two- Lamp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps in the Industrial Sector (F96T12HO/ES Baseline)

................ 8-30

Table 8.5.7. LCC and PBP Results for Two- Lamp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps in the Industrial Sector (F96T8HO Baseline) ........................ 8-31

Table 8.5.8. LCC and PBP Results for Two- Lamp IS Ballasts Operating 8

- Foot Slimline Lamps in the Commerc ial Sector (F96T12ES Baseline) ................................... 8-31

Table 8.5.9. LCC and PBP Results for Two- Lamp IS Ballasts Operating 8

- Foot Slimline Lamps in the Commercial Sector (F96T8 Baseline) .......................................... 8-32

Table 8.5.10. LCC and PBP Results for Two

- Lamp PS Ballasts Operating 4

- Foot T5 MiniBP

SO L amps in the Commercial Sector ................................................................... 8-32

Table 8.5.11. LCC and PBP Results for Two

- Lamp PS Ballasts Operating 4

- Foot T5 MiniBP HO Lamps i n the Industrial Sector ........................................................ 8-32Revised on 4/2 7/ 2010

8- iii 

### Table 8.5.12. LCC and PBP Results for Two- Lamp RS and IS Ballasts Operating 4 -Foot

MBP and 2-Foot U- Sh aped Lamps in the Residential Sector (Low Power Factor, F34T12 Baseline) ................................................................................... 8-33 Table 8.5.13. LCC and PBP Results for Two-Lamp RS and IS Ballasts Operating 4 -Foot MBP and 2-Foot U-Shaped Lamps in the Residential Sector (Low Power Factor, F32T8 Baseline) ..................................................................................... 8-33

Table 8.5.14. LCC and PBP Results for Four- Lamp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps (Cold Temperature/Sign Ballasts) in the Commercial

Sector ................................................................................................................. 8-34

Table 8.5.15. LCC and PBP Results for Four- Lamp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps (Cold Temperature/Sign Ballasts) in the Industrial Sector .... 8-34

LIST OF FIGURES

Figure 8.1.1. Flow Diagram of Inputs for the Determination of LCC and PBP .......................... 8-5 Figure 8.2.1. Residential Sector Electricity Price Trend ........................................................... 8-12 Figure 8.2.2. Commercial Sector Electricity Price Trend .......................................................... 8-13 Figure 8.2.3. Industrial Sector Electricity Price Trend .............................................................. 8-13Revised on 4/2 7/ 2010

8-1 

### CH APTER 8. LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYSES

8.1 INTRODUCTION

This chapter describes the analysis the U.S. Department of Energy (DOE) conducts to evaluate the economic impacts on individual consumers of proposed amended energy conservation standards for fluorescent lamp ballasts (hereafter “ballasts”). Because ballasts are designed to operate fluorescent lamps, DOE chooses the most common fluorescent lamp used with each ballast to develop representative lamp -and- ballast systems. Fluorescent lamps will not be regulated under the proposed amended energy conservation standards for ballasts; however, the characteristics of complete lamp

- and

- ballast systems ( e.g. , energy consumption, installed cost, etc.) must be considered for estimating economic impacts of analyzed ballast designs.

Am ended standards usually decrease operating costs and increase purchase costs for consumers. This chapter describes the three metrics used in this analysis to determine the impact

of standards on individual consumers:

**•** 

### Life

- cycle cost (LCC) is the total (discounted) consumer cost over the analysis period including purchase price , operating costs (including energy expenditures), and

installation costs.

**•** 

### Payback period (PBP) is the number of years it takes a customer to recover the generally higher purchase price of a more energy -efficient product through the operating cost savings of using the more energy- efficient product. The PBP is calculated as the change in first cost divided by the change in operating costs in the first year.

**•** 

### Rebuttable payback period is a special case in which the PBP is calculated based on laboratory conditions, specifically DOE test procedure inputs. DOE calculates the aforementioned LCC and PBP using a range of inputs, which are designed to reflect

actual c onditions.

Sections 8.2 and 8.3 discuss inputs to the LCC and PBP, resp ectively. Section 8.4 discusses the different purchasing events DOE analyzes, which affect consumer economics.

Section 8.5 presents the results for the LCC and PBP. Key variables and calculations are presented for each metric. DOE performs the calculations discussed here using a series of

Micr osoft Excel spreadsheets developed for this rulemaking. Stakeholders are invited to download and examine the spreadsheets available at

www1.e ere.energy.gov/buildings/appliance_standards/residential/fluorescent_lamp_ballasts .html

. Appendix 8A presents details and instructions for using the spreadsheets.

8.1.1 General Approach for LCC and PBPAnalyses

Recognizing that several inputs to the LCC and PBP analysis are either variable or uncertain, DOE will incorporate Monte Carlo simulation and probability distributions into its

LCC and PBP model in the n otice of proposed r ulemaking (NOPR) stage of this rulemaking

. DOE incorporates both Monte Carlo simulation and probability distributions by using Microsoft Excel spreadsheets combined with Crystal Ball, a commercially available add -in program.Revised on 4/2 7/ 2010

8-2 

### The relationship between increasing selling price and increasing energy efficiency is the predominant influence on the LCC and PBP results. However, other factors related to the characteristics of the consumer using the products also affect the results. Based on the geographic region, sector, and application in which a consumer uses the ballasts , factors such as

energy prices, sales tax, and energy usage can vary. DOE will account for this variability by using the Monte Carlo simulation and separate sensitivity runs.

For the LCC and PBP analyses, DOE considers variability in the discount rate. DOE also

models variabilit y in operating hours by sector, ballast type, and building applications. By developing samples by building type, DOE can perform the LCC and PBP calculations and account for the variability in operating hours, electricity price, and sales tax among a varie ty of buildings. DOE uses the Energy Information Administration’s ( EIA ) 2005 Residential Energy Consumption Survey ( RECS ), 2003 Commercial Buildings Energy Consumption Survey ( CBECS ), and 2002 Manufacturing Energy Consumption Survey ( MECS ) to develop sampl es by building type, as well as U.S. Lighting Market Characterization: Volume I ( LMC ) to develop the operating hour characteristics by application in those buildings. The LCC and PBP spreadsheets present the results of the analysis as average values, relat ive to the baseline conditions.

In the standards case for the LCC and PBP analyses, DOE assumes that consumers will

achieve energy savings by choosing a ballast that meets or exceeds the standard while generally keeping system light output within 10 percent of the output of the baseline system. While consumers would have other choices in addition to those presented in the LCC, DOE considers only energy

- saving ballast designs in the LCC.

DOE considers various scenarios that prompt consumers to buy a b allast in the base versus standards cases. Specifically , the “event” that prompts the purchase of a new ballast ( either a ballast failure or new construction/renovation ) is assumed to influence the cost

effectiveness of the consumer purchase decision. For example, DOE assumes that a consumer will replace a failed ballast with an identical ballast in the base case , or a new standardscompliant lamp

- and

- ballast system with comparable light output in the standards case

. Section

8.4 discusses the ballast purchasing events in more detail. The LCC and PBP analyses spreadsheet reports results per purchasing event.

DOE is conducting the LCC and PBP analyses on the baseline ballasts from the representative product classes identified in the ballast market and technology assessment ( preliminary t echnical support document [TSD] chapter 3). The following list shows the representative product classes that DOE is evaluating in this analysis.

**•** Two -Lamp Instant Start (IS) and Rapid- Start (RS) Ballasts Operating 4 -Foot Medium Bipin (MBP) and 2- Foot U

- Shaped Lamps (Commercial Sector Only) (F32T8 Baseline)

**•** Two

- Lamp Programmed

- Start (PS) Ballasts Operating 4 -Foot MBP and 2-Foot U-Shaped Lamps (Commercial Sector Only)

**•** Two

- Lamp RS and IS Ballasts Operating 4 -Foot MBP and 2-Foot U- Shaped Lamps (Commercial Sector Only) (F34T12 Baseline)Revised on 4/2 7/ 2010

8-3 

### • Four- Lamp RS and IS Ballasts Operating 4 -Foot MBP and 2-Foot U- Shaped Lamps (Commercial Sector Only)

**•** Four- Lamp PS Ballasts Operating 4 -Foot MBP and 2-Foot U- Shaped Lamps (Commercial Sector Only)

**•** Two

- Lamp RS and IS Ballasts Operating 8 -Foot Recessed Double Contact (RDC) HighOutput (HO) Lamps (Industrial Sector Only) (F96T12HO/ES Baseline)

**•** Two

- Lamp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps (Industrial Sector Only) (F96T8HO Baseline)

**•** Two

- Lamp IS and RS Ballasts Operating 8 -Foot Single- Pin Slimline (Slimline) Lamps (Commercial Sector Only) (F96T12ES Baseline)

**•** Two

- Lamp IS and RS Ballasts Operating 8

- Foot Slimline Lamps (Commercial Sector Only) (F96T8 Baseline)

**•** Two

- Lamp PS Ballasts Operating 4 -Foot T5 Miniature Bipin (MiniBP) Standard Output (SO) Lamps (Commercial Sector Only)

**•** Two

- Lamp PS Ballasts Operating 4 -Foot T5 MiniBP HO Lamps (Industrial Sector Only)

**•** Two

- Lamp RS and IS Ballasts Operating 4 -Foot MBP and 2-Foot U- Shaped Lamps (Residential Sector Only, Low Power Factor) (F34T12 Baseline)

**•** Two

- Lamp RS and IS Ballasts Operating 4-Foot MBP and 2-Foot U- Shaped Lamps (Residential Sector Only, Low Power Factor) (F32T8 Baseline)

**•** Four- Lamp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps (Cold Temperature and Sign Ballasts) (Commercial and Industrial Sectors Only)

The time period used for the LCC and PBP analyses in this rulemaking is the service life of the baseline ballast, assumed as 49,054 hours (commercial and industrial sectors) and 11,385 hours (residential sector).

8.1.2 Overview of LCC and PBP Inputs

As mentioned previously, t he LCC represents the total consumer expense over the analysis period, including purchase expenses, operating costs (including energy expenditures), and installation costs. DOE discounts future operating costs to the time of purchase and su ms them over the analysis period. The PBP represents the number of years it takes customers to recover the purchase price of more energy -efficient equipment through lower operating costs. The PBP is calculated as the change in first cost divided by the cha nge in operating costs in the first year.

DOE categorizes inputs to the LCC and PBP analysis as follows: (1) inputs for establishing the purchase expense, otherwise known as the total installed cost; and (2) inputs for calculating the expenses incurred du ring operation of the lamp

- and

- ballast system otherwise known as the operating cost.Revised on 4/2 7/ 2010

8-4 

### The primary inputs for establishing the LCC and PBP are:

**•** 

### End

- User Product Price: The end

- user product prices represent the consumer price before

tax and installation.

**•** 

### Sa les Tax: DOE then applies sales tax to convert the end -user product price to a final product price including sales tax. Chapter 7 describes the sales tax markup in detail.

**•** 

### Installation Cost: This input represents the cost to the commercial or industrial cu stomers of installing the lamp

- and

- ballast systems. The installation cost represents all costs required to install the system but does not include the end-user product price. The installation cost includes labor and overhead. Thus, the total installed cost equals the end

user product price, including sales tax plus the installation cost.

**•** 

### Disposal Costs : After a ballast or fluorescent lamp reaches its end of life, some consumers pay to recycle those items . The disposal costs represent the cost of recycling a ballast or fluorescent lamp and are only applicable to those consumers in the commercial

and industrial sectors.

The primary inputs for calculating the operating cost include the following:

**•** 

### Annual Operating Hours: The annual operating hours are the hours that a lam p- and

ballast system is estimated to be in use during 1 year. The energy use characterization ( chapter 6) details how DOE determines the system operating hours as a function of enduser sector, geographic region, and building type.

**•** 

### Power Rating : The power consumption is the site- energy usage rate associated with operating the lamp

- and

- ballast system. The energy use characterization (chapter 6) details how DOE determines the power ratings for the lamp- and

- ballast s ystems considered in the analyses.

**•** 

### Electricity Prices: DOE uses the average price per kilowatt

- hour ( i.e. , $/kWh) paid by customers. DOE determines electricity prices using national average residential, commercial, and industrial electricity prices for the sample calculation. For the Monte Carlo distribution, DOE will use average residential, commercial, and industrial values for 13 regions and large States. DOE develops all electricity price inputs using 200 9 EIA data.

**•** 

### Electricity Price Trends : DOE uses th e EIA’s Annual Energy Outlook 2009 ( AEO200 9 ) to forecast electricity prices

. 1



### • 

### Lifetime: Lifetime is the total hours in operation after which the consumer retires the

ballast from service. For the results presented in this chapter, DOE uses the original (March) AEO200 9 reference case.

**•** 

### Discount Rate : The d iscount rate is the rate at which DOE discounts future expenditures to establish their present value.

**•** 

### Analysis Period: Analysis per iod is the time span over which DOE calculates the LCC.Revised on 4/2 7/ 2010

8-5 

### Figure 8.1.1 depicts the relationships between the installed cost and operating cost inputs for the calculation of the LCC and PBP. In this figure, the rectangular boxes indicate the inputs, the parallelograms indicate intermediate calculated values, and the diamond boxes indicate the analysis outputs (the LCC and PBP).

End-User

Product Price

Sales Tax Final

Product

Price Installation

Cost

Total

Installed

Cost

Electricity

Prices Annual Electricity

Usage

Cost PBP

Electricity

Price Trend

Discount Rate

Analysis

Period Operating

Cost Over Analysis

Period

Replacement

Cost LCC

Power Rating

Operating

Hours

Product

Lifetime Service

Life Energy Consumption

Total Replacement

Cost Calculated

Value LCC Input LCC Output Legend

Disposal Cost



### Figure 8.1.1. Flow Diagram of Inputs for the Determination of L CC and PBP

Table 8.1.1 summarizes the input values that DOE uses to calculate the LCC and PBP for

ballast s . Each row summarizes the total installed co st inputs, operating cost and replacement cost, including the lifetime, discount rate, and electricity price trend. DOE characterizes all of the total cost inputs with single -point values, but will characterize several of the operating cost inputs with probability distributions that capture the input’s uncertainty and/or variability in the Monte Carlo analysis. Table 8.1.1 also lists the TSD chapter that details the inputs.Revised on 4/2 7/ 2010

8-6 

### Table 8.1.1. Summary Information of Inputs for the Life -Cycle Cost and Payback Period Analyses

Factor Weighted

- Average Value TSD Reference Sec tion Total Installed Cost Primary Inputs

End

- User Product Price Varies with lamp

- and

- ballast system Chapters 5, 7

Sales Tax Varies by census region Chapter 7

Installation Cost Varies by equipment installed and sector Chapter 8 Operating Cost Primary Inputs Annual Operating Hours Vary by lamp

- and

- ballast system type, sector, and building type Chapter 6

Power Rating Varies with lamp

- and

- ballast type Chapter 6 Electricity Prices Vary by sector and census region Chapter 8 Electricity Price Trends Vary with price forecast scenario Chapter 8

Discount Rate Varies with sector Chapter 8 Analysis Period Varies with sector Chapter 8 Replacement Cost Primary Inputs

Total Installed Cost Varies with lamp

- and

- ballast system, census region, equipment installed and sector Chapters 7, 8

Ballast Lifetime Varies with lamp

- and

- ballast system Chapters 5, 8 Disposal Cost Varies by lamp

- and ballast system type and sector Chapter 8

Discount Rate Varies with sector Chapter 8 Analysis Period Varies with sector Chapter 8



### Sections 8.2 and 8.3 discuss the inputs depicted in this table of installed costs and operating costs.

8.2 LIFE

- CYCLE COST INPUTS

8.2.1 Definition

LCC is the total customer cost over the life of a product, including total installed costs, operating costs, replacement costs, and residual value. Future operating costs and replacement costs are discounted to the analysis start year ( 2014) and summed over the analysis period. The LCC is defined by the following equation:



# ∑

**=** 

###  ** **  ** **  ** **  ****

**+ +** 
**+ +**  **+=** N

t t t tt



### r DC

r RC OC ICLCC

1 

### )1()1( Eq. 8.1

Where:

LCC = life

- cycle cost ($),

IC = total installed cost ($),

N = analysis period, ∑ = sum over the analysis period, from year 1 to year N

, OC = operating cost ($),

RC = lamp replacement cost ($),

r

= discount rate,Revised on 4/2 7/ 2010

8-7 

### t = year for which operating cost

, replacement cost , or disposal cost is determined, and

DC = disposal cost of the ballast or lamp

.

DOE expresses all the costs in its LCC and PBP analyses in 200 8$.

8.2.2 Total Installed Cost Inputs

The total installed cost to the customer is defined by the following equation:



### INST FPP IC **+=** Eq. 8.2

W here :

FPP = final product price ( i.e. , customer price for the product only, including

sales tax ; $), and

INST = installation cost or the customer price to install products ( i.e. , the cost for

labor and materials ; $).

In the markups analysis ( chapter 7), DOE develops end-user product prices and sales taxes to derive final product prices. DOE then applies installation costs where necessary to

derive the total inst alled costs for use in the LCC. The following shows inputs to d etermine total

ins talled costs:

**•** end-u ser product p rice ($)

**•** s ales t ax ($) , and

**•** i nstallation cost ($).

The end -user product price represents the average purchase price a consumer pays before sales tax for lamp

- and

- ballast designs. The sales tax represents State and local sales taxes applied

to the end- user product price. It is a multiplicative factor that increases the end -user product price. The installation cost represents all costs required to install the lamp

- and

- ballast system but does not include the final product price. The installation cost includes labor and overhead. Thus, the total installed cost equals the final product price plus t he installation cost. DOE calculates the

total installed cost for the ballasts analyzed based on the following equation:

INST MU PRICE INST FPP IC

TAX 

### +×= **+=** 

### Eq. 8.3

W here :

IC = total installed cost,

FPP = final product price,

INST = installation cost,

PRICE = end -user product price, and

MU TAX 

### = sales tax mark up

.Revised on 4/2 7/ 2010

8-8 

### Chapter 7 provides detail on the end-user product price and sales tax. Discussion about

installation costs follows.

8.2.2.1 Installation Costs

On September 19, 2000, DOE issued a final rule establishing energy conservation standards for ballasts (hereafter “the 2000 Ballast Rule”). 65 FR 56740; 10 CFR 430.23(m)(4). To account for relamping that occurs during the analysis period , DOE uses estimate s of the prevalence of group versus spot relamping from the 2000 Ballast Rule. DOE then weighs the spot and group relamping times by the percent occurrence of spot versus group relamping to derive weighted averaged relamping times. According to the 2000 Ba llast Rule, group relamping occurs, on average, 25 percent of the time for 4- foot MBP systems, 37 percent for 8- foot slimline systems, and 31 percent for 8-foot r ecessed double c ontact ( RDC ) h igh output ( HO ) systems. 2



### Table 8.2.1 These percentages are used to calculate an average time to change fluorescent lamp s in conjunction with ballast purchase events. The 2000 Ballast Rule did not address relamping for 8-foot RDC HO cold temperature/sign applications; consequently, DOE assumes that labor time s and costs are the same as for standard 8- foot RDC HO systems.

lists average labor times to install a fluorescent lamp and ballast. For new

construction and renovation purchase events, DOE adds 2.5 minutes to the labor times in the

table to account for the installation of a luminaire disconnect. This is because the 2005 National Electric Code requires a means for disc onnecting luminaires before they are serviced for lamp or ballast replacements. 3



### Table 8.2.1. Labor Times for Fluorescent Lamp -and-Ballast Systems (Commercial and
Industrial) *

Lamp

- and

- Ballast System Type Time

minutes Relamp Install Lamps and

Ballasts ** Spot Group Average

Two

- L amp 4

- F oot MBP and 2

- F oot U

- Shaped 27.0 14.0 23.8 30.0

Four

- L amp 4

- F oot MBP and 2

- F oot U

- Shaped 28.0 15.0 24.8 40.0

Two

- L amp 8

- F oot Slimline 20.5 10.5 16.8 55.0

Two

- L amp 8

- F oot RDC HO 26.5 13.5 22.5 60.0

Two

- L amp 4

- F oot MiniBP 27.0 14.0 23.8 30.0

Four

- L amp 8

- F oot RDC HO (Sign Ballasts) 26.5 13.5 22.5 60.0

* Labor times are obtained from the 2000 Ballast Rule.

** For new construction and renovation ballast purchase events, labor times are increased by 2.5 minutes to

allow for the installation of a luminaire disconnect.



### For lamp

- and

- ballast system installations, DOE derives labor rates for electricians and helpers from RS Means

. Labor rates are the sum of the wage rate, employer

- paid fringe benefits ( i.e. , vacation pay, employer- paid health, and welfare costs), and any appropriate training an d industry advancement funds costs. According to RS Means , an electrician’s average hourly rate with overhead and profit is typically $69.79 (in 2008$) , and a helper’s average hourly rate is $45.28 (in 2008$) . DOE assumes that 50 percent of the electrician labor rate plus 50 percent of the helper labor rate (for a total of $55.41) comprise the lamp

- and

- ballast system installation rate.Revised on 4/2 7/ 2010

8-9 

### For lamp replacements in the commercial sector, DOE assumes that the task is performed by a general maintenance worker. The labor rate of $16.55 (adjusted to 2008$ from $15.01 in 2005) was obtained from the U.S. Bureau of Labor Statistics for a General Maintenance

Worker. 4 

### Table 8.2.1 Using these labor rates and the labor times listed in , DOE derives the average cost to install a lamp and the average cost to install a lamp and ballast , as shown in Table

8.2.2

.

Table 8.2.2. Relamping and Lamp-and- Ballast Labor Cost s for Fluorescent Lamp -andBallast Systems (Commercial and Industrial) *

Lamp

- and

- Ballast System Type Labor Cost $ Relamping Installation

Two

- L amp 4

- F oot MBP and 2

- F oot U

- Shaped 6.55 31.17

Four

- L amp 4

- F oot MBP and 2

- F oot U

- Shaped 6.83 40.76

Two

- L amp 8

- F oot Slimline 4.63 55.14

Two

- L amp 8

- F oot RDC HO 6.20 59.93

Two

- L amp 4

- F oot MiniBP 6.55 31.17

Four

- L amp 8

- F oot RDC HO (Sign Ballasts) 6.20 59.93

* For new construction and renovation ballast purchase events, labor times are increased by

2.5 minutes to allow for the installation of a luminaire disconnect.



### 8.2.3 Operating Cost Inputs

The operating cost represents the costs incurred in the operation of the lamp- and

- ballast

system. Below are the inputs for operating costs:

**•** annual operating hours

**•** power rating (W)

**•** electricity prices ($/kWh)

**•** electricity price trends

**•** discount rate (%), and

**•** analysis period (yrs)

.

The analysis period, discount rate, and effective date of the amended standard are required for determining the operating cost and for establishing the operating cost present value. The electricity consumption for the baseline and other candidate standard levels ( CS Ls) examined enable comparison of standards’ operating costs.

The annual operating hours are the estimated hours that a lamp

- and

- ballast system is in use during 1 year. Power rating refers to the rate of site energy usage associated with operating the lamp

- and -ballast system. Both the annual operating hours and power rating are used to calculate the total annual energy consumption. Electricity prices used in the analysis are the price per kilowatt-hour in cents or dollars ( e.g. , $/kWh) paid by each customer for electricity. DOE uses electricity price trends to forecast electricity prices for future year analysis. These trends with the electricity price and annual energy consumption are used to calculate the energy cost in each year. DOE defines energy cost by the following equation:Revised on 4/2 7/ 2010

8- 10 

# ( ) EPTEP OH PWR EPTEP E OC

cons



### ×××= **××=** Eq. 8.4

Where:

OC = operating costs,

E

cons 

### = annual energy consumed,

EP = electricity price,

EPT = electricity price trend factor relative to 2007,

PWR = power rating (rate of energy use, measured in watts), and

OH = annual operating hours.

The remainder of this section provides information about each of the above input variables that DOE used to calculate the operating costs.

8.2.3.1 Operating Hours

The energy use characterization (chapter 6) details how DOE determines the annual energy consumption for baseline and standard-compliant products. An important input to determining the energy consumption is the total hours per year that the product is in operation. The operating hours are also used to calculate the ballast service life, which is ultimately used in calculating the total replacement cost

.

As described in chapter 6, DOE establishes operating hour distributions for fluorescent lamp

- and

- ballast systems . In conjunction with data from LMC, DOE uses data from EIA’s CBECS 2003, RECS 2001, and the MECS 2002. These EIA studies provide information on the distribution of buildings within the United States by building type and census division. DOE

associ ates the LMC’s operating hour data by building type with the EIA’s data by building type and census division to derive operating hours by census division and large States. This allowed DOE to correlate its electricity price distribution and sales tax distr ibution ( chapter 7) with its operating hour distribution by census division and large State in the LCC spreadsheet.

Table 8.2.3 presents the mean opera ting hours for lamp

- and

- ballast systems for each sector.

Table 8.2.3. Average Operating Hours by Sector

Sector Averag e Annual Operating hrs/yr

Residential 789

Commercial 3,435

Industrial 4,795



### In this rulemaking, DOE evaluates two - and four- lamp PS ballasts operating 4-foot MBP

and 2-foot U- shaped lamps in the commercial sector, and assumes these lamp

- and

- ballast systems are operated on occupancy sensors . Occupancy sensors detect the presence or absence of people within their coverage area and turn lights on and off accordingly, thereby reducing operating time and energy consumption. Based on a range of estimated energy savings from occupancy sensors compiled in E Source, 5 

### DOE assumes energy savings of 30 percent for operating lamp

- and -ballast systems on occupancy sensors in the commercial sector. To accountRevised on 4/2 7/ 2010

8- 11 

### for the se energy savings, DOE reduces average operating hours for affected lamp

- and

- ballast systems by 30 percent

. Table 8.2.4 presents the adjusted mean operating hours for lamp -andballast systems operating on occupancy sensors in the commercial sector.

Table 8.2.4. Average Operating Hours for Two - and Four -Lamp PS Ballasts Operating 4-

F oot MBP and 2 -F oot U

- Shaped Lamps in the Commercial Sector

Sector Lamp

- and Ballast System Type Annual Operation hrs/yr

Commercial Two

- and Four

- Lamp PS Ballast Operating 4

- Foot T8 MBP Lamps 2,405



### 8.2.3.2 Power Rating

As described in the energy use and end load characterization ( chapter 6), DOE uses the power rating (in watts) with the annual operating hours (in hours) to calculate the annual energy usage (in kilowatt-hours) of th e lamp

- and -ballast designs DOE considers.

8.2.3.3 Electricity Prices

DOE estimates electricity prices for residential, commercial, and industrial consumers in each of the 13 regions and large States by using EIA Form 861 data. 6 

### Table 8.2.5 lists the 13 geographic regions.

Table 8.2.5. Electricity Prices by Census Division, 2008

Census Division Electricity Prices *

2008$/kWh

Residential Commercial Industrial New England 0.150 0.103 0.085

Middle Atlantic 0.124 0.096 0.066

East North Central 0.100 0.076 0.050

West North Central 0.086 0.071 0.053

South Atlantic 0.098 0.075 0.053

East South Central 0.087 0.084 0.052

West South Central 0.093 0.083 0.062

Mountain 0.097 0.080 0.056

Pacific 0.091 0.083 0.060

New York State 0.162 0.104 0.066

California 0.149 0.123 0.089

Texas 0.128 0.102 0.082

Florida 0.117 0.101 0.081 U.S. Weighted Average 0.110 0.090 0.061

* DOE converts dollars to 2008$ by multiplying costs in 200 7 $ by the ratio of 2008 CPI (215.30) to 200 7 CPI (2 07.34 ). DOE converts the price in 200 6 to the price in 2008 by multiplying the 200 price by the ratio of the average AEO electricity price in 2008 to the average AEO electricity price in 200 6.



### The EIA Form 861 data are published annually and include annual electricity sales in

kilowatt -hours; revenues from electricity sales; and number of consumers for the residential, commercial, and industrial sectors for every utility serving final consumers. The calculation of an average electricity prices proceeds in two steps:Revised on 4/2 7/ 2010

8- 12 

### 1. For each utility, estimate an average residential, commercial, or industrial price by dividing the residential, commercial, or industrial revenues by residential, commercial, or

industrial sales.

2. Calculate a regional average price, weighting each utility with customers in a region by the number of residential, commercial, or industrial consumers served in that region.

The calculation uses the most recent available EIA data at the time the analysis was conducted, from 2007. Table 8.2.5 shows the results for each geographic region. Because DOE conducted the LCC and PBP analyses in 2008 $, it needed to convert all electricity prices into 2008$. To perform the necessary monetary conversion, DOE uses the consumer price index (CPI) to convert the electricity prices from 200 7$ to 2008$. As described in the following section on electricity price trends, DOE normalizes energy prices to 2008. Therefore, to forecast energy prices f or any given future year, DOE establishes energy prices in 2008$ . In Table 8.2.5 , DOE uses data from the original March version of the AEO2009 to esti mate the electricity prices in 2008$. 1 

### DOE multiplies the electricity price in 200 7 by the ratio of the AEO200 9- estimated residential, commercial, or industrial prices for 200 8 and 2007.

8.2.3.4 Electricity Price Trend

The electricity price trend projects the future cost of electricity to 2030. DOE calculates the LCC and PBP using three separate projections from AEO200 9 : reference case, low economic growth, and high economic growth. 7



### Figure 8.2.1 These three cases reflect the uncerta inty of economic growth in the forecast period. The high and low growth cases show the projected effects of alternative growth assumptions on energy markets. DOE normalizes these three AEO200 9

scenarios to the 2008 electricity price, and then uses that electricity price factor to scale the 200 8 electricity prices. through Figure 8.2.3 show the residential, commercial, and industrial electricity price trends, respectively, based on the three AEO2009 projections. The LCC results presented in this chapter are based on the AEO200 9 reference case.

Figure 8.2.1. Residential Sector Electricity Price TrendRevised on 4/2 7/ 2010

8- 13 

### Figure 8.2.2. Commercial Sector Electricity Price Trend

Figure 8.2.3. Industrial Sector Electricity Price Trend

In the LCC spreadsheet, these electricity price trends are used to project electricity prices into the future, which are then multiplied by the annual energy usage. The resu lting operating costs are presented in both the LCC spreadsheets and the LCC results tables in this chapter.

8.2.4 Lifetime

DOE defines lifetime as the age in hours in operation when a ballast or lamp is retired

from service. For ballasts in the commercial and industrial sectors, DOE uses the average ballast lifetime used in the 2000 Ballast Rule (49,054 hrs). Combining DOE’s estimate of 49,054 hours

and the average operating hours for fluorescent lamps in the commercial and industrial sectors ( Table 8.2.3 ) yields average ballast lifetimes of 14.2 years and 10.2 years, respectively. The

commercial sector lifetime is consistent with a study on th e “measure life” of ballasts ( i.e. , the true service life of a ballast in the field), which found that the average ballast lifetime after a retrofit in the commercial sector is 13 years, and the average ballast lifetime after new construction is 15 years. 8 

### Manufacturer interviews indicate that ballasts in the industrial sector

are typically operated in higher temperature environments and are commonly replaced on an approximate 10- year renovation cycle, which corroborates the shorter estimated lifetime. DOE found in a separate measure life report that the average fixture and ballast in the residential sectorRevised on 4/2 7/ 2010

8- 14 

### lasts for 15 years. 9



### 8.2.3.1 Therefore, DOE established 15 years as the average ballast lifetime in the

residential sector

. Assuming the average annual operating lifetime of a fluorescent lamp in the

residential sector of 789 hours as discussed in section , the ballast lifetime is therefore 11,835 hours in the reside ntial sector.

As with the calculation of relamping costs, DOE averages the group versus spot relamping impact on lamp lifetime by their percent occurrence. DOE assumes a lamp subject to group relamping practices operates for 75 percent of its rated life. DOE obtained this estimate from the 2000 Ballast Rule. DOE then applies this life impact factor to the rated lifetimes from the manufacturing literature for the lamps in the lamp

- and

- ballast systems it is analyzing. For

4-foot MBP lamps and 4-foot MiniBP lamps, the average lifetime DOE uses in the analysis is 94 percent of the rated lifetime. For 8

- foot slimline lamps , the average lifetime is 91 percent of

the rated lifetime. For 8 -foot RDC HO lamps , t he average lifetime is 92 percent of the rated

lifetime.

As discussed in the technology assessment ( chapter 3), ballast technology options ( e.g. , starting method) often affect the lifetime of the lamp. For this reason, the baseline and standard level designs for the LCC and PBP analyses have a range of lamp lifetimes.

8.2.5 Replacement Cost

As stated previously, the l ifetime is the age (total hours in operation) at which a ballast or lamp is retired from service. The lifetime paired with the operating hours yie lds the service life

of the ballast or lamp in years. Because lamp lifetimes are typically shorter than ballast lifetimes, DOE must address lamp replacements within the analysis period for the lamp

- and

- ballast system designs considered. Replacement costs include the labor and materials costs associated with replacing a lamp at the end of its lifetime. By using the service life and replacement cost, one can calculate the total replacement cost each year.

Each year in which a lamp reaches the end of its lif e, a new lamp is purchased and installed at the beginning of that year, and the first cost and installation cost are discounted back to the base year of the analysis period. During years in which replacement is necessary, DOE based the replacement costs on the total installed cost inputs, as seen in the following equation:

L TAX L L L


### INST MU PRICE INST FPPRC

**+×= +=**  Eq. 8.5

Where:

RC = replacement cost, expressed in dollars,

FPP L 

### = final product price (price for the product only) expressed in dollars,

INST L 

### = installation cost,

PRICE L 

### = end -user product price expressed in dollars, and

MU TAX 

### = sales tax.

For the years when no replacement is necessary, the replacement costs are set to zero.

T he replacement costs only include the end -user product price of the lamp and the installationRevised on 4/2 7/ 2010

8- 15 

### cost of the lamp, rather than prices or costs associated with the entire lamp

- and

- ballast system. For the LCC and PBP analyses, the analysis period corresponds with the ballast lifetime; f or this reason, ballast replacement is not considered and only lamp price and labor costs are included in

the calculation of total installed costs.

8.2.6 Disposal Cost

When a ballast or fluorescent lamp fails, some consumers choose to recycle these system components. The cost o f recycling the ballast or lamp is its disposal cost. DOE performed research on recycling costs for ballasts and fluorescent lamps and found that, on average, disposing of a ballast costs about $3.50 and disposing of lamps costs about 10 cents per linear

foot. 10 

### Balla st recycling rate data are not available, so DOE conservatively assumes 5 percent of ballasts used in the commercial and industrial sectors are recycled , and assumes no ballasts are recycled in the residential sector

. A report released by the As sociation of Lighting and Mercury Recyclers in 2004 noted that, nationwide, approximately 30 percent of lamps used by businesses and 2 percent of lamps in the residential sector are recycled. 11



### 8.2.7 Analysis Period Thus, DOE applies a cost of 10 cents per linear foot in the com mercial and industrial sectors every time a lamp is replaced during the LCC analysis period. In the Monte Carlo analysis, DOE will assume that commercial and industrial consumers pay recycling costs for approximately 5 percent of ballast failures and 30 pe rcent of lamp failures. DOE does not expect the 2 percent residential lamp recycling rate to impact the residential sector LCC substantially, however, and thus does not apply the recycling

costs to this sector.

The analysis period is the time span over which the LCC is calculated. DOE bases the analysis period on the baseline ballast life in a certain sector divided by the annual operating

hours of that ballast . If the user chooses to run the LCC using weighted avera ge values ( i.e. , in “sample calculation” mode), then the analysis period is based on the baseline ballast life divided by the average annual operating hours for that ballast in a chosen sector. For example, the

baseline ballast life for commercial and indu strial sectors is 49,054 hours. If the user chooses to analyze this ballast in the commercial sector, then the analysis period is the ballast lifetime of 49,054 hours divided by the average annual operating hours of this product in the commercial

sector, 3,435 hours per year, or 14.3 years. If the user chooses to run the LCC using the Monte Carlo simulation ( i.e. , in “Crystal Ball mode ”), the analysis period is based on the baseline

ballast life divided by Crystal Ball’s chosen annual operating hours. For e xam ple, the user may choose to evaluate a product in the commercial sector using Crystal Ball. If Crystal Ball selects a building used for religious worship, the analysis period for the ballast for that selection will be

based on a ballast lifetime of 49,054 hours divided by the annual operating hours in a building used for religious worship, 1,609 hours per year (30.5 years ).

8.2.8 Discount Rate

The discount rate is the rate at which DOE discounts future expenditures to establish their present values. DOE derives the discount rates for this rulemaking separately for residential and commercial/industrial consumers. For residential consumers, DOE estimates the discount rate by looking across all possible debt or asset classes that might be used to purchase ballasts . For theRevised on 4/2 7/ 2010

8- 16 

### commercial and industrial consumers, DOE estimates the cost of capital for commercial and industrial companies by examining both debt and equity capital, and develops an appropriately weighted average of the cost to the company of equity and debt financing.

8.2.8.1 Residential Discount Rate

DOE’s approach involves identifying all possible debt or asset classes that might be used to purchase replacement equipment, including household assets that might be affected indirectly ( e.g. , household assets sold to pay off a loan or credit card debt that might have been used to

finance the actual equipment purchase). DOE does not include debt from primary mortgages and equity of assets considered non-liquid (such as retirement accounts), since these would likely not

be used to finance lighting equipment purchases. DOE estimates the average shares of the various debt and equity classes in the average U.S. household equity and debt portfolios using

the Federal Reserve’s Survey of Consumer Finances ( SCF ) data for 1989, 1992, 1995, 1998, 2001, and 2004. 12 

### Table 8.2.6 shows the average shares of each considered class. DOE uses the mean share of each class across the six survey years (15 years) as the basis for estimating household financing of lighting equipment.

Table 8.2.6. Average Percentage Shares of Household Debt and Equity Types

Type SCF

1989 1992 1995 1998 2001 2004 Mean

% Home Equity Loans 4.3 4.5 2.7 2.8 2.8 4.4 3.6

Credit Cards 1.6 2.1 2.6 2.2 1.7 2.0 2.0

Other Installment Loans 2.8 1.7 1.4 1.7 1.1 1.3 1.7

Other Residential Loans 4.4 6.9 5.2 4.3 3.1 5.8 4.9

Other Line of Credit 1.1 0.6 0.4 0.2 0.3 0.5 0.5 Checking Accounts 5.8 4.7 4.9 3.9 3.6 4.2 4.5 Savings and Money Market 19.2 18.8 14.0 12.8 14.2 15.1 15.7 Certificate of Deposit (CD) 14.5 11.7 9.4 7.0 5.4 5.9 9.0 Savings Bond 2.2 1.7 2.2 1.1 1.2 0.9 1.5

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 10.0

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 29.1

Mutual Funds 8.0 11.1 20.9 20.1 21.3 23.4 17.5

Total * 100.1 100.1 100.1 100 .0 100.1 99.9 100 .0

* Total may not equal 100 percent due to rounding.



### DOE estimates interest or return rates associated with each type of equity and debt. The data source for the interest rates for loans, credit cards, and lines of credit is the Federal Reserve

Board’s SCF in 1989, 1992, 1995, 1998, 2001, and 2004. The top h alf of Table 8.2.7 shows the average nominal interest rates in each year and the inflation rates used to calculate real rates. For home equity loans, DOE calculates effective interest rates in a similar manner as for mortgage rates, since interest on such loans is tax deductible. The bottom half of the table shows the average effective real interest rates in each year and the mean rate across all the years. Since the interest rates for each debt carried by households in these years were established over 15 years, DOE believes they are representative of rates that may be in effect in 201 4

.Revised on 4/2 7/ 2010

8- 17 

### Table 8.2.7. Average Nominal and Real Interest Rates for Household Debt Classes

Type SCF

1989 1992 1995 1998 2001 2004 Mean

%

Nominal Interest Rates (%) Home Equity Loans 11.5 9.6 9.6 9.8 8.7 5.7 9.2

Credit Cards *

-- -- 14.2 14.5 14.2 11.7 13.6

Other Installment Loans 9.0 7.8 9.3 7.8 8.7 7.4 8.3

Other Residential Loans 8.8 7.6 7.7 7.7 7.5 6.0 7.5

Other Line of Credit 14.8 12.7 12.4 11.9 14.7 8.8 12.5

Inflation Rate 4.82 3.01 2.83 1.56 2.85 2.66

-- Real Interest Rates (%) Home Equity Loans 3.8 4.3 4.4 5.8 3.8 1.9 4.0

Credit Cards *

-- -- 11.0 12.7 11.1 9.1 11.0

Other Installment Loans 4.9 5.8 7.0 6.6 6.1 5.4 6.0

Other Residential Loans 4.0 4.7 4.8 6.0 4.6 3.3 4.6

Other Line of Credit 9.6 9.4 9.3 10.2 7.3 6.0 8.7

* No interest rate data available for credit cards in 1989 or 1992.



### To account for variation among new households, DOE samples a rate for each household from a distribution of rates for each of the above debt classes. DOE develops a probability

distribution of interest rates for each debt class based on the SCF data. Appen dix 8C presents the probability distribution of interest rates for each debt class that DOE used in the LCC and PBP analyses.

Similar rate data are not available from the SCF for the asset classes, so DOE derives

data for these classes from national historical data. The interest rates associated with certificates of deposit (CDs), 13 

### savings bonds, 14 

### and bonds (AAA corporate bonds) 15 

### are from Federal

Reserve Board time -series data 1977–2005. DOE assumes rates on checking accounts to be zero. Rates on savings and money market accounts are from Cost of Savings Index data covering

1984–2005. 16 

### The rates for stocks are the annual returns on the Standard and Poor’s (S&P) 500

1977–2005. 17



### Table 8.2.8 The mutual fund rates are a weighted average of the stock rates (two -thirds weigh t) and the bond rates (one-third weight) in each year from 1977 to 2005. DOE adjusts the nominal rates to real rates using the annual inflation rate in each year. Average nominal and real

interest rates for the classes of assets are shown in . Since the interest and return rates for each asset type cover a range of time, DOE believes they are representative of rates that may

be in effect in 20 14.

Table 8.2.8. Average Nominal and Real Interest Rates for Household Equity Types

Type Average Rate

%

Nominal Real Checking Accounts

-- 0.0 Savings and Money Market 5.5 2.3

CDs 6.9 2.4 Savings Bonds 8.0 3.5

Bonds 8.8 4.2

Stocks 13.3 8.8

Mutual Funds 11.6 7.0Revised on 4/2 7/ 2010

8- 18 

### To account for variation among new households, DOE samples a rate for each household from a distribution of rates for each of the above asset types. DOE develops a normal probability distribution of interest rates for each asset type by using the mean value and standard deviation from the distribution. Appendix 8C presents the probability distribution of interest rates for each asset type that DOE used in the LCC and PBP analysis

.

Table 8.2.9 summarizes the mean real effective rates of each type of equity or debt. DOE determines the average share of each debt and asset using SCF data for 1989, 1992, 1995, 1998, 2001, and 2004. Each year of SCF data provides the debt and asset shares for U.S. households. DOE averages the debt and asset shares over the 6 years of survey data to arrive at the shares shown below. The average rate across a ll types of household debt and equity, weighted by the shares of each class, is 5.6 percent.

Table 8.2.9. Shares and Interest or Return Rates Used for Household Debt and Equity
Types

Type Average Share of Household Debt Plus Equity

% * Mean Effective Real Rate

% **

Home Equity Loans 3.6 4.0

Credit Cards 2.0 11.0

Other Installment Loans 1.7 6.0

Other Residential Loans 4.9 4.6

Other Line of Credit 0.5 8.7 Checking Accounts 4.5 0.0 Savings and Money Market Accounts 15.7 2.3

CDs 9.0 2.4 Savings Bonds 1.5 3.5

Bonds 10.0 4.2

Stocks 29.1 8.8

Mutual Funds 17.5 7.0 Total/Weighted

- Average Discount Rate 100 .0 5.6

* Not including primary mortgage or retirement accounts.

** Adjusted for inflation and, for home equity loans, loan interest tax deduction.



### 8.2.8.2 Commercial Discount Rate

Most companies use both debt and equity capital to fund investments; for most companies, therefore, the cost of capital is the weighted average of the cost to the firm of equity and debt financing. 18



### DOE estimates the cost of equity financing using the Capital Asset Pricing Model (CAPM) . A mong the most widely used models to estimate the cost o f equity financing, the

CAPM assumes that the cost of equity is proportional to the amount of systematic risk associated with a firm. For example, the cost of equity financing tends to be high when a firm faces a large degree of systematic risk, and the cost tends to be low when the firm faces a small degree of systematic risk.

The degree of systematic risk facing a firm and the subsequent cost of equity financing are determined by several variables, including the risk coefficient of a firm (beta

, 

## β ), theRevised on 4/2 7/ 2010

8- 19 

### expected return on risk- free assets ( R f 

### ), and the additional return expected on assets facing average market risk (known as the equity risk premium, or ERP). The beta indicates the degree of risk associated with a given firm, relative to the level of risk (or price variability) in the overall stock market. Betas usually vary between 0.5 and 2.0. A firm with a beta of 0.5 faces half the risk of other stocks in the market; a firm with a beta of 2.0 faces twice the overall stock

market risk.

Following this approach, the cost of equity financing for a particular company is by the equation:



# ( ) ERP Rk

fe



### ×+= **β** 

### Eq. 8.6

Where:

k

e 

### = the cost of equity for a company, expressed in dollars,

R

f 

### = the expected return of the risk free asset, expressed in dollars,



## Β = the risk coefficient , and

ERP = the expected equity risk premium, expressed in dollars.

The cost of debt financing (k d 

### ) is the yield or interest rate paid on money borrowed by a company (raised, for example, by selling bonds). As defined here, the cost of debt includes compensation for default risk and excludes deductions for taxes.

DOE estimates the cost of debt for companies by adding a risk adjustment factor to the current yield on long-term corporate bonds (the risk- free rate). This procedure is used to estimate current and future company costs to obtain debt financing. The adjustment factor is based on indicators of company risk, such as credit rating or variability of stock returns.

The discount rate of companies is the weighted average cost of debt and equity financing, less expected inflation. DOE estimates the discount rate using the equation:

Eq. 8.7

Where:

k = the ( nominal ) cost of capital,

k

e 

### and k d 

### = the expected rates of return on equity and debt, respectively, and

w e 

### and w d 

### = the proportion of equity and debt financing, respectively.

The real discount rate deducts expected inflation from the nominal rate.

The expected return on risk- free assets, or the risk

- free rate, is defined by the current yield on long- term (20

- year) government bonds, as suggested by Ibbotson’s Associates 19 

### and

D amodaran. 20



### Table 8.2.10 The ERP represents the difference between the expected (average) stock market

return and the risk- free rate. As shows, DOE uses an ERP estimate of 5. 1 percent, which it took from the Damodaran Online site (a private website associated with New York d d e e 

### w k w k k **× +**  **× =** Revised on 4/2 7/ 2010

8- 20 

### University’s Stern School of Business, which aggregates information on corporate finance, investment, and valuation). 21



### Table 8.2.10. Variables Used to Estimate Company Discount Rates

Variable Symbol Average Value

% Source

Risk

- Free Asset Return R f 7.3 Damodaran Online Equity Risk Premium ERP 5.6 Damodaran Online Expected Inflation R 3.1 U.S. Bureau of Economic Analysis Cost of Debt (After Tax) k d 6.9 Damodaran Online Percent Debt Financing w d 25.6 Damodaran Online Systematic Firm Risk B 1.02 Damodaran Online



### DOE calculates an expected inflation of 3.1 percent from the average of five quarters’ change in gross domestic product prices. 22



### Table 8.2.10 DOE obtained the cost of debt, percent debt financing, and systematic firm risk from the Damodaran Online website. shows average values across all private companies. However, the cost of debt, percent debt financing, and systematic firm risk vary by sect or.

In the commercial building sector, ballasts are purchased and owned by commercial building property owners, commercial companies, industrial companies and the government. DOE uses a sample of 4,207 companies drawn from these owner categories to represent ballast purchasers. It took the sample from the list of companies included in the Value Line investment

survey 23



### DOE estimates the cost of debt financing for these companies from the long

- term government bond rate and the standard deviation of the stock price. For government- office

- type owners, the disco unt rate represents an average of the Federal rate and the State and local bond rate. DOE drew the Federal rate directly from the U.S. Office of Management and Budget discount rate for investments in government building energy efficiency. and listed on the Damodaran Online website. DOE obtained the cost of debt, the firm beta, the percent of debt and equity financing, the risk-free return, and the equity risk premium

from Damodaran Online.

24 

### DOE estimates th e State and local discount rate from the interest rate on State and local bonds between 1977 and

2001. 25



### The cost of capital may be viewed as the discount rate that should be used to reduce the future value of typical company project cash flows. It is a nominal discount rate, since anticipated future inflation is include d in both stock and bond expected returns. Deducting expected inflation from the cost of capital provides estimates of the real discount rate by ownership category ( DOE uses this information to estimate the weighted -average cost of capital for the sample of companies included in the commercial property owner, commercial, and industrial company database

.

Table 8.2.11 ). The mean real discount rate for these companies varies

between 2.3 percent ( government offices) and 8.3 percent ( commercial companies).Revised on 4/2 7/ 2010

8- 21 

### Table 8.2.11. Real Discount Rates by Ballast Ownership Category

Ownership Category Mean Real

Discount Rate

% Standard

Deviation

% Number of

Observations

Industrial Companies 7.6 2.3 1942 Commercial Companies 8.3 2.4 2339 Commercial Property Owners 6.3 2.0 7

Government Offices 2.3 1.1 N/A



### DOE’s approach for estimating the cost of capital provides a measure of the discount rate spread as well as the average discount rate. DOE infers the discount rate spread by ownership category from the standard deviation, which ranges between 1.1 percent and 2.4 percent ( Table 8.2.11 ).

Different combinations of commercial property owners and commercial, industrial, and government buyers purchase the b allast types considered in the LCC analysis. Accordingly, DOE constructs the discount rates associated with each building sector from different combinations of commercial property owner, commercial, industrial, and g overnment rates.

To estimate the share of each ownership category in total commercial sector purchases of

ballast s, DOE uses the share of each category in total commercial building square footage with lighting provided by EIA’s 2003 CBECS. 26 

### Table 8.2.12 presents the estimated shares of

commercial ballast purchases by ownership category of commercial building space.

Table 8.2.12. Estimated Share of Ballast Purchases by Ownership Category in the

Commercial Sector *

Ownership Category Percent Property Owners and Managers 22.3

Industrial Firms 10.1

Commercial Firms 54.8

Government 12.8

* Source: 2003 CBECS. The share of total square footage occupied by property owners is actually 44.6 percent. However, in some of these buildings, the tenants purchase ballasts. DOE assumes that this is the case for half of the square footage occupied by pr operty owners. DOE allocates this quantity among the other categories in proportion to their shares of total square footage.



### Table 8.2.13 presents the distribution of ballast ownership for the commercial and industrial lighting sectors.

Table 8.2.13. Ballast Ownership by Sector *

Sector Property Owners

% Industrial Companies

% Commercial Companies

% Government

%

Industrial 0 .0 100 .0 0 .0 0 .0

Commercial 22.3 10.1 54.8 12.8

* Sources: Commercial, CBECS; Industrial, DOE estimate.



### DOE estimates discount rate distributions for the different sectors as a weighted average of the distributions for the different ownership types. The resulting weighted average discountRevised on 4/2 7/ 2010

8- 22 

### rates are 7. 6 percent for the industrial sector and 7.0 percent for the commercial sector.

Table 8.2.14 summarizes the weighted average discount rates in all three sectors.

Table 8.2.14. Average Discount Rate by Sector

Sector Discount Rate

%

Industrial 7. 6

Commercial 7.0

Residential 5.6



### 8.2.9 Effective Date of Standard

The effective date is the date when an amended standard becomes operative ( i.e. , the date by which ballast manufacturers must manufacture products that comply with the amended

standard ). DOE’s publication of a final rule in this standards rulemaking is scheduled for completion in June 2011

. For ballast designs not addressed in previous rulemakings ( i.e.

, ballasts operating T8 MBP and T5 MiniBP lamps , and low power factor ballasts for residential use), t he effective date of any new energy conservation standards for these ballasts must be at least 3 years after the final rule is p ublished, (42 U.S.C. 6295(g )( 4) (C )), which will be June 2014. For ballast designs subject to existing standards ( i.e. , certain T12 ballasts) , the effective date of any amended energy conservation standards for these ballasts must be at least 5 years after the effective date of the previous amendment (42 U.S.C. 6295(g)(4)(C) (i)). Table 8.2.15 presents the anticipated effective dates of standards for representative ballast designs addressed in th e LCC and PBP analyses

. The new standards will also affect additional ballast designs not directly addressed in the LCC and PBP analyses ( e.g. , one- and three -lamp versions of ballasts operating 4-foot MBP lamps).

Table 8.2.15. Effective Dates of Standards for Ballast Design s Addressed in L ife

- Cycle Cost

and Payback Period Analyses *

Ballast Design Existing

Standard Effective Date of Existing Standard Effective Date

of Amended

Standard

Two

- Lamp F34T12

Two

- Lamp F96T12/ES

Two -L amp F96T12HO/ES 42 U.S.C. 6295(g)(8) Manufactured for L uminaires July 1, 2009 July 1, 2014

Sold to L uminaire M anufacturer October 1, 2009 October 1, 2014

Incorporated into L uminaire s July 1, 2010 July 1, 2015

Manufactured as R eplacement July 1, 2010 July 1, 2015

Sold as R eplacement October 1, 2010 October 1, 2015

Commercial and

Industrial

Two -L amp F32T8

Four

- Lamp F32T8

Two

- Lamp F96T8

Two

- Lamp F96T8HO

Two

- Lamp F28T5

Two

- Lamp F54T5HO N/A N/A June 2014

Residential, Low

- PF

Two

- Lamp F34T12

Two

- Lamp F32T8 N/A ** N/A June 2014

* T he new standards also affect additional ballast designs not directly addressed in the LCC and PBP analyses ( e.g. , one - and three

- lamp versions of ballasts operating 4

- foot MBP lamps), with an effective date of June 2014.

** Residential ballasts were not regulated under the 2000 Ballas t Rule.Revised on 4/2 7/ 2010

8- 23 

### DOE calculates the LCCs for all consumers as if each would purchase a new product in the year the amended standard takes effect. However, DOE bases the cost of the equipment on the most recent available data; all dollar values are expressed in 200 8$.

8.3 PAYBACK PERIOD INPUT S

8.3.1 Definition

The PBP is the amount of time it takes the consumer to recover the assumed higher purchase cost of a more energy -efficient product as a result of lower operating costs. Numerically, the PBP is the ratio of the increase in purchase cost ( i.e. , from a less efficient design to a more efficient design) to the decrease in annual operating expenditures. This type of calculation is known as a “simple” PBP, because is does not take into account changes in operating cost over time or the time value of money. That is, the calculation is done at an

effective discount rate of 0 percent.

The equation for PBP is:

OC IC PBP **∆ ∆** 

**=** 

### Eq. 8.9

Where:

PBP = payback period ( years ),

∆ IC = difference in the total installed cost between the more effic acious standard level; equipment (effic acy levels 1, 2, etc.) and baseline (effica cy level 0) equipment, and



## ∆ OC = difference in annual operating costs.

PBPs are expressed in years. PBPs greater than the life of the product mean that the

inc reased total installed cost of the more effic acious product is not recovered in reduced operating costs over the lifetime of that product. Because all lamp

- and

- ballast designs in the LCC and PBP analyses save energy and thus yield a positive 

## ∆ OC , PBPs that are negative indicate that the total installed cost of the equipment that meets the more effic acious CSL is less

than that of the baseline.

8.3.2 Rebuttable Presumption Payback Period

Section 325(o)(2)(B)(iii) of the Energy Policy and Conservation Act ( EPCA ) establishes a rebuttable presumption that a n amended standard for ballast s is economically justified if the Secretary finds that “the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy. . . savings during the first yea r 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)) This rebuttable presumption test is an alternative path to establishing economic justification compared to consideration of the seven factors set forth in 42 U.S.C. 6295(o)(2)(B)(i)(I)– (VII).Revised on 4/2 7/ 2010

8- 24 

### The applicable ballast test procedure uses resistors to simulate a lamp load and measure input power for the lamp- and

- ballast system rather than measure energy consumption ( i. e. , measured over a duration or operating time period). Therefore, to calculate energy savings for the rebuttable presumption payback period, one would need to multiply the input power rating of the lamp

- and

- ballast system by the usage profile ( i.e. , hours of operation) of that

system. For the engineering analysis, DOE measured the input power of ballasts operating actual lamps, essentially duplicating real -world operating conditions for these lamp

- and

- ballast

systems . Energy savings calculations in the LCC and PBP analyses use both the real-world system power ratings as well as the applicable usage profile s. Because DOE calculates PBP s in a methodology consistent with the rebuttable presumption test in the LCC and PBP analyses, DOE is not performing a stand-alone rebuttable presumption analysis, as it is already embodied in the LCC and PBP analyses. Because calculations of energy savings in the LCC are based under real

world conditions, DOE will also rely on standard PBP s for this rulemaking

.

8.3.3 Inputs

The data inputs to PBP are the total installed cost of the product to the customer for each

CSL and the annual (first year) operating costs for each CSL . The inputs to the total installed cost are the final product price and the installation cost. The inputs to the operating costs are the lamp

- and

- ballast system input power rating, annual operating hours, and electricity cost. The

PBP uses the same inputs as the LCC calculation described in section 8.2 , except that electricity price trends are not required. Since the PBP is a “simple” (undiscounted) PBP, the required electricity cost is only for the year in which a n amended energy conservation standard is to take

effect ( e.g. , 2014) . The electricity price DOE uses in the PBP calculation for electricity cost is the price projected for 2 01 4, expressed in 2008$, but not discounted to 2008. DOE does not use

discount rates in the PBP calculation.

8.4 BALLAST PURCHASING EVENTS

DOE designs the LCC and PBP analyses for this rulemaking around scenarios where

consumers need to purchase a ballast ; DOE refers to these collectively as “ ballast purchasing events.” Each of these events may present the consumer with a different set of ballast or lamp

and

- ballast designs and therefore a different set of LCC savings for a certain CSL . For ballasts

, DOE has identified two possible scenarios under which consumers would purchase a ballast and potentially be affected by an amended energy conservation standard. These scenarios are: ( 1) ballast failure ; and (2) new construction/renovation. T he two balla st purchasing events are described in more detail below. In addition to these descriptions, Table 8.4.1 and Ta ble 8.4.2

summarize the ballast purchasing events considered in this analysis.

**•** 

### Ballast failure: This is a scenario in which the installed ballast has failed. DOE recognizes that energy conservation standards set by the 2000 Ballast Rule and the Energy Policy Act of 2005 (EPACT 2005), Pub. L. 109–58, are effective in 2010 and may affect the types of systems available to the consumer to purchase. These standards ban the sale of most magnet ic 4 -foot MBP and 8-foot slimline ballasts. The 2000 Ballast Rule, however, allows the continued sale of magnetic cold temperature ballasts, which operate a large portion of the installed base of T12 RDC HO lamps. Magnetic ballasts will also continue to be sold for the residential sector. Therefore, in the baseline, mostRevised on 4/2 7/ 2010

8- 25 

### users who had a magnetic or electronic T12 ballast would be expected to replace it with an electronic T12 ballast and corresponding standards- compliant lamp (if available), but failed HO ballasts as well as residential ballasts and fixtures are expected to be replaced with magnetic ballasts or fixtures containing magnetic ballasts . Users who had a T8ballast fail would be expected to replace it with a T8 ballast and corresponding standardscompliant lamp. However, in the standards case, end-users would generally select a

standards- compliant lamp -ballast combination such that the system light output never drops below 10 percent of the baseline system. There are exceptions to this assumption

wi th residential sector pr oducts, where typical standards- compliant systems produce significantly ( i.e. , greater than 10 percent) more light than the baseline system. Although

more efficacious , the residential sector CSL s have higher input wattages than the baseline systems, yielding negative LCC values and precluding economic payback.

**•** 

### New construction and renovation: This ballast purchasing event encompasses all the new fixture installations where the lighting design will be completely new or can be complete ly changed. In response to this event, the spatial layout of fixtures in the building space is not constrained to any previous configuration. Because new fixtures can be installed, consumers could install a lamp

- and

- ballast system that would not maintain the light output of the baseline system. For instance, if light output of the standards case system is lower than the base case system, consumers can increase the number of standards case lamp

- and

- ballast systems installed in the building by a certain perce ntage to maintain the light output of base case lamp

- and

- ballast systems. Table 8.4.1

, Table

8.4.2 , and Table 8.4.3 outline the events and actions taken by consumers in response to

those events both in the base case and the standards case.

Table 8.4.1. Framework of Event -Type Scenarios for Ballasts Operating 4-Foot and 8 -Foot T12 Lamps (including MBP, Slimline

, and RDC)

Event Base Case Action Standards Case Action Type 1 . Ballast Failure Installs a T12 ballast and lamps in the existing fixture. HO ballasts are magnetic,

while other ballasts are electronic. Installs a new T12 or T8 ballast and lamps,

where the system light output generally never drops below 9 0 percent of the baseline system

. Type 2 . New

Construction and

Renovation Installs a new T12 system. Installs a new T12 or T8 system where the system light output never drops below 9 0 percent of the baseline system. Light output can be maintained through spacing.



### Table 8.4.2. Framework of Event -Type Scenarios for Ballasts Operating 4-Foot and 8 -Foot

T8 Lamps (including MBP, Slimline

, and RDC)

Event Base Case Action Standards Case Action Type 1 . Ballast Failure Installs a T8 electronic ballast and lamps in the existing fixture. Installs new T8 ballast and lamps, where the system light output generally never drops

below 9 0 percent of the baseline system

. Type 2 . New

Construction and

Renovation Installs a new T8 system. Installs a new T8 system, where the system light output never drops below 9 0 percent of the baseline system

. Light output can be maintained through spacing.Revised on 4/2 7/ 2010

8- 26 

### Table 8.4.3. Framework of Event -Type Scenarios for Ballasts Operating 4-Foot T5 MiniBP
Lamps

Event Base Case Action Standards Case Action

Type 1 . Ballast

Failure /Replacement Installs a T5 electronic ballast and lamps in the existing fixture. Installs new T5 ballast and lamps, where the system li ght output never drops below

90 percent of the baseline system

. Type 2 . New

Construction and

Renovation Installs a new T5 system. Installs a new T5 system, where the system light output never drops below 9 0 percent of the baseline system

. Light output can be maintained through spacing.



### 8.5 LIFE

- CYCLE COST AND PAYBA CK PERIOD RESULTS

This section presents LCC results for each lamp -and-ballast design DOE considers. This section uses the terms “positive LCC savings” and “negative LCC savings.” When an amended standard results in “positive LCC savings,” the LCC of the standards- compliant system is less

than the LCC of the baseline system and the consumer benefits. A consumer is adversely

affected when a n amended standard results in “negative LCC savings” ( i.e. , when the LCC of the

standards- compliant system is higher than the LCC of the baseline system ).

As stated earlier, DOE conducts a series of LCC calculations for each baseline lamp

- and

ballast system

. Key inputs consist of using historical electricity price s from EAI File 861, electricity price projections from the AEO2009 reference case, and an analysis period of 31

years. In all cases, DOE considers only designs that save energy and maintain light output above a maximum 10 percent decrease from the baselin e lamp or system whenever possible.

All replacement options are designed around two possible ballast purchasing events where consumers be affected by an amended energy conservation standard. These events are

ballast failure /replacement , and new construction/renovation . The LCC spreadsheet calculates the LCC impacts for each of these scenarios separately.

DOE is analyzing 14 representative product classes for ballasts, as discussed in section

8.1.1

. Table 8.5.1 through Table 8.5.15 present the preliminary results for each of these representative product classes by ballast purchasing event, which influence s the LCC and PBP

results. DOE is also presenting the installed prices of the lamp

- and

- ballast systems in order to compare the up

- front costs that consumers must bear when purchasing baseline or standards

- case

sy stems.

In general

, the results show higher installed prices and lower operating costs at higher efficiency levels. However, this is not always the case. For example , b allasts operating 4 -f oot MBP

and 2 -f oot U -s haped lamps in the residential sector ( Table 8.5.12 ) have a lower installed price but higher operating costs at higher efficiency levels than in the base case. This is from the significantly higher input power for the evaluated CSLs, which would result in increased energy

use and costs despite their more efficient designs . The evaluated CSLs also produce significantly more light output ( i.e. , greater than 30 percent more ) than the baseline system, which would exceed the illumination requirements for a replacement scenario

. On the other hand, for ballasts operating

4- foot MBP and 2

- foot U

- shaped lamps in the commercial sector (Revised on 4/2 7/ 2010

8- 27 

### Table 8.5.3 ) , the higher CSLs exhibit both lower installed prices and lower operating costs than the

F34T12 base case.Revised on 4/2 7/ 2010

8- 28 

### Table 8.5.1. LCC and PBP Results for Two -L amp RS and IS Ballasts Operating 4 -Foot MBP and 2 -Foot U- Shaped Lamps in

the Commercial Sector (F32T8 Baseline)

Event Response CSL Ballast Efficacy

Factor (BEF) Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0/1 1.450 F32T8 273.24 N/A 55.87 N/A N/A N/A Lamp and Ballast

Replacement 2 1.535 F32T8 265.90 7.35 61.25 1.39 3.9 (2)

3 1.561 F32T8 264. 88 8. 37 59.08 1.26 2.5 (1)

II: New

Construction/

Renovation Baseline 0/1 1.450 F32T8 275.52 N/A 58.27 N/A N/A N/A Lamp and Ballast

Replacement 2 1.535 F32T8 271.21 4.30 63.65 1.06 5.1 0

3 1.561 F32T8 267. 57 7.95 61.47 1.22 2.6 0

* A number in parenthes e s indicate s a negative value

.



### Table 8.5.2. LCC and PBP Results for Two -L amp PS Ballasts Operating 4-Foot MBP and 2 -Foot U- Shaped Lamps in the

Commercial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 1.418 F32T8 251.57 N/A 59.19 N/A N/A N/A Lamp and Ballast

Replacement 1 1.518 F32T8 238.54 13.03 61.89 1.46 1.9 (4)*

II: New

Construction/

Renovation Baseline 0 1.418 F32T8 253.99 N/A 61.58 N/A N/A N/A Lamp and Ballast

Replacement 1 1.518 F32T8 246.29 7.70 64.29 0.96 2.8 0

* A number in parentheses ind icates a negative value.Revised on 4/2 7/ 2010

8- 29 

### Table 8.5.3. LCC and PBP Results for Two -L amp RS and IS Ballasts Operating 4 -Foot MBP and 2 -Foot U- Shaped Lamps in

the Commercial Sector (F34T12 Baseline)

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 1.359 F34T12 315.84 N/A 75.66 N/A N/A N/A Lamp and Ballast

Replacement 1 1.450 F32T8 273.24 42.59 55.87 2.53 ( 7.8 )* (2)

2 1.535 F32T8 265.90 49.94 61.25 3.92 ( 3.7 ) (3)

3 1.561 F32T8 264. 88 50.96 59.08 3.80 ( 4.4) (3)

II: New

Construction/

Renovation Baseline 0 1.359 F34T12 318.14 N/A 78.06 N/A N/A N/A Lamp and Ballast

Replacement 1 1.450 F32T8 271.47 46.67 58.27 2.98 ( 6.6 ) 0

2 1.535 F32T8 267.40 50.74 63.65 4.01 ( 3 .6) 0

3 1.561 F32T8 263. 79 54. 35 61.47 4.17 ( 4.0 ) 0

* A number in parentheses indicates a negative value. For PBP , negative values indicate standards that reduce operating and installed costs.



### Table 8.5.4. Summary of the LCC and PBP Results for 4-L amp RS and IS Ballasts Operating 4-Foot MBP and 2 -F oot U

Shaped Lamps in the Commercial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.768 F32T8 489.53 N/A 101.23 N/A N/A N/A Lamp and Ballast

Replacement 1 0.781 F32T8 503.97 ( 14.44 )* 107.29 (0.91) ( never ) ** 3

II: New

Construction/

Renovation Baseline 0 0.768 F32T8 491.78 N/A 103.63 N/A N/A N/A Lamp and Ballast

Replacement 1 0.781 F32T8 495.25 ( 3.47 ) 109.69 0.28 21.5 0

* A number in parentheses indicates a negative value.

** An e ntr y of “ n ever” for PBP indicate s standards that do not reduce operating costs.Revised on 4/2 7/ 2010

8- 30 

### Table 8.5.5. LCC and PBP Results for Four -L amp PS Ballasts Operating 4-Foot MBP and 2 -Foot U- Shaped Lamps in the

Commercial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.708 F32T8 454.92 N/A 104.88 N/A N/A N/A Lamp and Ballast

Replacement 1 0.755 F32T8 447.61 7.31 107.59 0.93 2.9 2

II: New

Construction/

Renovation Baseline 0 0.708 F32T8 457.36 N/A 107.28 N/A N/A N/A Lamp and Ballast

Replacement 1 0.755 F32T8 445.47 11.89 109.99 1.35 2.0 0



### Table 8.5.6. LCC and PBP Results for Two -L amp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps in the Industrial

Sector (F96T12HO/ES Baseline)

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.440 F96T12HO/ES 757.35 N/A 150.71 N/A N/A N/A Lamp and Ballast

Replacement 1 0.500 F96T12HO/ES 679.49 77.86 153.74 11.39 0.3 (8)*

1 0.550 F96T8HO 523.52 233.82 135.39 31.06 (0.5) (11)

2 0.549 F96T8HO 492.41 264.94 140.51 36.16 (0. 3 ) (18)

II: New

Construction/

Renovation Baseline 0 0.440 F96T12HO/ES 759.81 N/A 153.11 N/A N/A N/A Lamp and Ballast

Replacement 1 0.500 F96T12HO/ES 710.06 49.75 156.14 7.43 0.4 0

1 0.550 F96T8HO 585.50 174.32 137.79 22.68 (0.7) 0

2 0.549 F96T8HO 654.86 104.95 142.91 13.64 (0. 7 ) 0

* A number in parentheses indicates a negative value.Revised on 4/2 7/ 2010

8- 31 

### Table 8.5.7. LCC and PBP Results for Two -L amp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps in the Industrial

Sector (F96T8HO Baseline)

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0/1 0.550 F96T8HO 523.52 N/A 135.39 N/A N/A N/A Lamp and Ballast

Replacement 2 0.549 F96T8HO 492.41 31.11 140.51 5.10 1.0 (8)*

II: New

Construction/

Renovation Baseline 0/1 0.550 F96T8HO 525.92 N/A 137.79 N/A N/A N/A Lamp and Ballast

Replacement 2 0.549 F96T8HO 585.63 ( 59.71 ) 142.91 (7.68) ( never ) ** 0

* A number in parentheses indicates a negative value.

** An e ntr y of “never” for PBP indicate standards that do not reduce operating costs.



### Table 8.5.8. LCC and PBP Results for Two -L amp IS Ballasts Operating 8-Foot Slimline Lamps in the Commercial Sector
(F96T12ES Baseline)

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.797 F96T12ES 516.55 N/A 111.15 N/A N/A N/A Lamp and Ballast

Replacement 1 0.807 F96T12ES 525.09 (8.54) 124.32 0.50 26.1 0

II: New

Construction/

Renovation Baseline 0 0.797 F96T12ES 518.85 N/A 113.55 N/A N/A N/A Lamp and Ballast

Replacement 1 0.807 F96T12ES 527.67 (8.82) 126.71 0.47 27.8 0Revised on 4/2 7/ 2010

8- 32 

### Table 8.5.9. LCC and PBP Results for Two -L amp IS Ballasts Operating 8-Foot Slimline Lamps in the Commercial Sector
(F96T8 Baseline)

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.790 F96T8 463.12 N/A 91.98 N/A N/A N/A Lamp and Ballast

Replacement 1 0.809 F96T8 458.81 4.31 92.58 0.54 1.1 1

II: New

Construction/

Renovation Baseline 0 0.790 F96T8 465.38 N/A 94.37 N/A N/A N/A Lamp and Ballast

Replacement 1 0.809 F96T8 457.95 7.42 94.98 0.88 0.7 0



### Table 8.5

. 10

. LCC and PBP Results for Two -L amp PS Ballasts Operating 4 -F oot T5 MiniBP SO Lamps in the Commercial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 1.309 F28T5 326.11 N/A 67.16 N/A N/A N/A Lamp and Ballast

Replacement 1 1.441 F28T5 291.02 35.10 69.37 4.07 0.5 0

2 1.482 F28T5 303.62 22.50 80.52 3.91 3.4 (2)*

II: New

Construction/

Renovation Baseline 0 1.309 F28T5 328.63 N/A 69.56 N/A N/A N/A Lamp and Ballast

Replacement 1 1.441 F28T5 293.32 35.31 71.77 4.09 0.5 0

2 1.482 F28T5 298.32 30.31 82.92 4.76 2.8 0

* A n umber in parentheses indicates a negative value.



### Table 8.5 .11

. LCC and PBP Results for Two -L amp PS Ballasts Operating 4 -F oot T5 MiniBP HO Lamps in the Industrial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.688 F54T5HO 403.19 N/A 69.54 N/A N/A N/A Lamp and Ballast

Replacement 1 0.791 F54T5HO 366.26 36.93 72.01 5.54 0.4 0

2 0.837 F54T5HO 369.13 34.06 79.93 6.26 1.7 0

II: New

Construction/

Renovation Baseline 0 0.688 F54T5HO 405.66 N/A 71.94 N/A N/A N/A Lamp and Ballast

Replacement 1 0.791 F54T5HO 368.69 36.97 74.40 5.55 0.4 0

2 0.837 F54T5HO 364.61 41.06 82.33 7.24 1.4 0Revised on 4/2 7/ 2010

8- 33 

### Table 8.5.12. LCC and PBP Results for Two -L amp RS and IS Ballasts Operating 4 -Foot MBP and 2 -Foot U- Shaped Lamps in

the Residential Sector (Low Power Factor , F34T12 Baseline)

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 1.277 F34T12 115.82 N/A 60.26 N/A N/A N/A Lamp and Ballast

Replacement 1 1.457 F32T8 113.98 1.84 55.29 (0.29) * ( never ) ** 29

2 1.492 F32T8 122.79 (6.97) 62.10 (0.49) ( never ) 38

II: New

Construction/

Renovation Baseline 0 1.277 F34T12 118.20 N/A 62.66 N/A N/A N/A Lamp and Ballast

Replacement 1 1.457 F32T8 104.04 14.16 57.68 0.90 ( 5.5 ) 0

2 1.492 F32T8 110.01 8.19 64.49 0.98 1.9 0

* A number in parentheses indicates a negative value.

** Negative PBP values indicate standards that reduce operating costs and installed costs. Entries of “ n ever” for PBP indicate standards that do not reduce operating costs.



### Table 8.5.13. LCC and PBP Results for Two -L amp RS and IS Ballasts Operating 4 -Foot MBP and 2 -Foot U- Shaped Lamps in

the Residential Sector (Low Power Factor, F32T8 Baseline)

Event Response CSL BEF Lamp Type L CC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0/1 1.457 F32T8 113.98 N/A 55.29 N/A N/A N/A Lamp and Ballast

Replacement 2 1.492 F32T8 122.79 ( 8.81 ) * 62.10 (0.19) ( never ) ** 7

II: New

Construction/

Renovation Baseline 0/1 1.457 F32T8 116.37 N/A 57.68 N/A N/A N/A Lamp and Ballast

Replacement 2 1.492 F32T8 122.05 ( 5.68 ) 64.49 0.11 62.0 0

* A number in parentheses indicates a negative value.

** An e ntr y of “never” for PBP indicate s standards that do not reduce operating costs.Revised on 4/2 7/ 2010

8- 34 

### Table 8.5.14. LCC and PBP Results for Four -L amp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps (Cold Temperature/ Sign Ballasts) in the Commercial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.196 F96T12HO 1552.56 N/A 224.53 N/A N/A N/A Lamp and Ballast

Replacement 1 0.238 F96T12HO 1167.42 385.14 214.18 40.87 (0.3) 0

II: New

Construction/

Renovation Baseline 0 0.196 F96T12HO 1554.86 N/A 226.92 N/A N/A N/A Lamp and Ballast

Replacement 1 0.238 F96T12HO 1343.48 211.38 216.58 21.92 (0.5) 0



### Table 8.5.15. LCC and PBP Results for Four -L amp RS and IS Ballasts Operating 8 -Foot RDC HO Lamps (Cold Temperature/ Sign Ballasts) in the Industrial Sector

Event Response CSL BEF Lamp Type LCC $ LCC Savings $ Installed

Price

$ Operating Cost Savings $ PBP

yrs System

Mean Lumens

from Baseline

%

I: Ballast

Failure/ Replacement Baseline 0 0.196 F96T12HO 1242.84 N/A 224.53 N/A N/A N/A Lamp and Ballast

Replacement 1 0.238 F96T12HO 959.50 283.33 214.18 38.43 (0.3) 0

II: New

Construction/

Renovation Baseline 0 0.196 F96T12HO 1245.17 N/A 226.92 N/A N/A N/A Lamp and Ballast

Replacement 1 0.238 F96T12HO 1088.40 156.77 216.58 20.61 (0.5) 0Revised 4/23/10

8- 35 

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