18 -i CHAPTER 18. REGULATORY IMPACT ANALYSIS
TABLE OF CONTENTS

18.1 INTRODUCTION ............................................................................................................ 18-1 18.2 METHODOLOGY ........................................................................................................... 18-118 -1 CHAPTER 1 8. REGULATORY IMPACT ANALYSIS

18.1 INTRODUCTION As part of the notice of proposed rulemaking (NOPR) for high- intensity discharge (HID) lamps, the U.S. Department of Energy (DOE) will draft a regulatory impact analysis in compliance with Executive Order 12866, “Regulatory Planning and Review,” which will be subject to review by the Office of Management and Budget’s Office of Information and Regulatory Af fairs (ORIA). 58 FR 51735 (Sept. 30, 1993).
18.2 METHODOLOGY As p ar t of the regula to ry imp ac t analy sis, and a s d is cusse d in interim t ec hni cal suppor t document (TS D) chapter 13, Manufac tu rer Imp ac t A naly sis, D OE will id entify and seek to miti ga te the ov er lapping e ff ects on manufac tu r er s of ne w D O E st and ar ds and othe r regula to ry actions af f

ec ting the same equipment . Through manufac tu re r intervie ws and lit era tu r e searc hes, DOE will comp ile in formation on burdens fr om ex isting and impending regulations aff ec ting HID lamps.
The regula to ry imp ac t analy sis will also addre ss the potentia l for non-regula to r y appro ac hes to supplant or augment ene rg y conservation stand ar ds to impr ove the efficiency o f HID lamps . The NO PR analy sis will in clude a c ompl e te qua ntit a tive analy sis of a lt er na tiv es to the proposed cons er va tion st and ar d s. DOE will use the na tion a l ene rg y saving s ( NE S) sp readsh ee t mod el (a s discusse d in interim T S D chapter 11, Na tion al Imp ac t An aly sis) to
ca lcula te the NES and ne t p re sent value (NP V) for the a lt ernat iv es to the proposed cons er vation st andards. L ist ed below ar e so me of the a lt er na tive ways to achieve ene rg y eff iciency imp rovements th a t DOE h a s considered in prior r ul emakings. The TSD in support of DOE ’ s NO PR will in clude a comple te analy si s of each a lt er na tiv e. Some possible non-regula to r y a lt er na tiv e s in clude:

• no ne w regulatory ac tion,

• customer tax in ce ntiv e s,

• manu fac tu rer tax in ce ntiv e s,

• p erf ormance st and ar ds,

• customer re bate s,

• manu fac tu rer rebate s,

• voluntary ene rg y eff iciency targe ts,

• ear ly replacement ( i. e. , retrof it ), and

• bulk government pu rc hase s.
To comp ar e each a lt er na tive qua ntit a tiv ely to the proposed ene rg y cons er vation st and ar ds, DOE will n ee d to quantify the ef f

ec t of e ac h a lt er na tive on the pu rc ha se and use of
mo re- eff icie nt HID lamps. On ce DOE e stim ates the eff ects of alt er na tiv es on the stand ar d, DOE will run the se non-regula to ry a lt erna tive cases in the national impact analysis (NIA) sp rea dsh ee t model. Key inputs tha t DOE m ay adjust in the NIA sp r ea dsh ee t mod e l for this analy sis in clude:18 -2 • energy prices and escalation factors;

• implicit market discount rates for trading off purchase price against operating expense when choosing equipment efficiency;

• customer purchase price, operating cost, and shipment scenarios;

• customer price-versus-efficiency relationships; and

• equipment stock data (purchase of new equipment or turnover rates for inventories). The output from the NIA spreadsheet model for each alternative considered will be as follows:

• Energy use (in quadrillion British thermal units) is the cumulative energy use of the equipment purchased from 2017–2046. DOE will report electricity use as source energy.

• National energy savings is the cumulative national energy use from the base case projection less the alternative polic y case projection.

• Net present value is the value of future operating cost savings from HID lamps bought in the period between the effective date of the standard and the close of the analysis period. DOE calculates the NPV as the difference between the present value of equipment and operating expenditures ( e.g. , energy usage) in the base case, and the present value of equipment and operating expenditures in the various non- regulatory alternative cases. These differences will be discounted to the year the a nalysis is performed using two discount rates: 7 percent and 3 percent. DOE will also calculate operating expenses (including energy consumption) over the life of the equipment.