4.2 PAYBACK PERIODS BY ENERGY-EFFICIENCY LEVEL
The payback period (PAY) is the amount of time needed to recover through lower operating costs, AOC, the additional consumer investment, APC, in increased efficiency. PAY is found by solving the equation:

PAY



### APC + E AOCt = 0 t_1
for PAY. In general, PAY is found by interpolating between the two years when the expression in Eq. 4.4 changes sign. If the operating cost is constant , the equation has the simple solution:



### PAY APC

AOC Numerically, the payback period is the ratio of the difference in purchase (and installation) price between the base and the energy-efficient models to the decrease in annual operating expenditures (including maintenance). Annual operating costs for ballasts include annual lamp replacement cost plus annual electricity cost.

PAY = - APC

AEC+ALRC 

### where EC is the electricity cost and LRC is the lamp replacement cost. Because the life of a lamp with a CC or EIS ballast is less than that of a lamp with an EEM or ERS ballast, lamp replacement costs may occur at different times during the life of the ballast, depending upon the ballast-lamp combination. A longer lamp life results in a lower operating cost. In order to account for differences in lamp life, the cost of lamp replacement has been divided over the life of the lamp so that an annual lamp replacement cost (LRC) is equal to:

LRC = Cost ofLamp Replacement

Lamp Life
For example, consider the payback calculation for going from an EEM to a CC ballast for the 2F40T12/ES case. Suppose the ballast equipment and labor costs are $34.54 and $39.43 for the EEM and CC options, respectively. The annual electricity costs are $19.55 and $17.81, respectively, and the lamp equipment and labor cost is $14.78 for each. The lamp service life for EEM ballasts is 5.28 yrs and for CC it is 4.49 yrs. Thus, we have APC = $-4.89, AEC = $1.74/yr and



### 4-20 

### 4.2 PAYBACK PERIODS BY ENERGY-EFFICIENCY LEVEL

Thepaybackperiod (PAY) is the amount oftime needed to recover through loweroperating costs, ,6.OC, the additional consumer investment, ,6.PC, in increased efficiency. PAY is found by solving the equation:

PAY ,6.PC + 

# :E ,6.0Ct 

### = 0 (4.4) bl for 

### PAY. In general, 

### PAYis found by interpolating between the two years when the expression in Eq. 4.4 changes sign. Ifthe operating cost is constant, the equation has the simple solution:

PAY ,6.PC



### ---

,6.0C (4.5)
Numerically, the payback period is the ratio ofthe difference in purchase (and installation) price between the base and the energy-efficient models to the decrease in annual operating expenditures (including maintenance). Annual operating costs for ballasts include annual lamp replacement cost plus annual electricity cost.



### PAY = ,6.EC + ,6.LRC (4.6)

where EC is the electricity cost and LRC is the lamp replacement cost. Because the life ofa lamp with a CC orEIS ballast is less than that ofa lamp with an EEM or ERS ballast, lamp replacement costs may occur at different times during the life ofthe ballast, depending upon the ballast-lamp combination. A longer lamp liferesults in a lower operatingcost. In orderto accountfor differences in lamp life, the cost oflampreplacementhas been divided overthe life ofthe lamp sothat an annual lamp replacement cost (LRC) is equal to:

LRC 

### = Cast afLamp Replacement Lamp Life (4.7)

For example, consider the payback calculation for going from an EEM to a CC ballast for the 2F40T12/ES case. Suppose the ballast equipment and labor costs are $34.54 and $39.43 for the EEMandCCoptions,respectively. The annual electricitycosts are $19.55 and$17.81,respectively, and the lamp equipment and labor cost is $14.78 for each. The lamp service life for EEM ballasts is 5.28 yrs and for CC it is 4.49 yrs. Thus, we have ,6.PC 

### = $-4.89, ,6.EC = $ 1.74/yr and

4-20 

### 4.2 PAYBACK PERIODS BY ENERGY-EFFICIENCY LEVEL

Thepaybackperiod (PAY) is the amount oftime needed to recover through loweroperating costs, ,6.OC, the additional consumer investment, ,6.PC, in increased efficiency. PAY is found by solving the equation:

PAY ,6.PC + 

# :E ,6.0Ct 

### = 0 (4.4) bl for 

### PAY. In general, 

### PAYis found by interpolating between the two years when the expression in Eq. 4.4 changes sign. Ifthe operating cost is constant, the equation has the simple solution:

PAY ,6.PC



### ---

,6.0C (4.5)
Numerically, the payback period is the ratio ofthe difference in purchase (and installation) price between the base and the energy-efficient models to the decrease in annual operating expenditures (including maintenance). Annual operating costs for ballasts include annual lamp replacement cost plus annual electricity cost.



### PAY = ,6.EC + ,6.LRC (4.6)

where EC is the electricity cost and LRC is the lamp replacement cost. Because the life ofa lamp with a CC orEIS ballast is less than that ofa lamp with an EEM or ERS ballast, lamp replacement costs may occur at different times during the life ofthe ballast, depending upon the ballast-lamp combination. A longer lamp liferesults in a lower operatingcost. In orderto accountfor differences in lamp life, the cost oflampreplacementhas been divided overthe life ofthe lamp sothat an annual lamp replacement cost (LRC) is equal to:

LRC 

### = Cast afLamp Replacement Lamp Life (4.7)

For example, consider the payback calculation for going from an EEM to a CC ballast for the 2F40T12/ES case. Suppose the ballast equipment and labor costs are $34.54 and $39.43 for the EEMandCCoptions,respectively. The annual electricitycosts are $19.55 and$17.81,respectively, and the lamp equipment and labor cost is $14.78 for each. The lamp service life for EEM ballasts is 5.28 yrs and for CC it is 4.49 yrs. Thus, we have ,6.PC 

### = $-4.89, ,6.EC = $ 1.74/yr and

4-20

### ®LRC = 14.78 14.78 = _$0.49/yr 5.28 4.49
This results in a payback period of equation as follows: 

### PAY = - -4.89 = 3.9yrs

1.74 - 0.49 Note there has been no discounting of lamp costs or electricity costs in this formulation of payback period. Payback periods are expressed in years. A payback period of three years means that the increased purchase price for an energy-efficient ballast relative to a baseline ballast is recovered in approximately three years because of lower operating expenses. Payback periods greater than the life of the product mean that the increased purchase price is not recovered through reduced operating expenses. 4.2.1 Payback Period Results The output from the payback period analysis is a distribution of paybacks that may contain negative values. Occasionally, very large negative values (for cathode-cutout ballasts) distort the mean payback period value. For this reason, we present the median payback period. Therefore, for the 10,000 cases analyzed for each lamp/ballast combination, 5000 have payback periods below and 5,000 have payback periods above the median values shown in the table. It is possible for the median payback period to be negative if the first cost of the ballast plus lamp is lower for the more efficient technology than for the baseline. We interpret negative payback periods (e.g., for three-lamp non tandem, T8 ERS and 4 lamp T8 ERS) as essentially immediate paybacks. A summary listing the median payback period for each lamp/ballast combination is presented in Table 4.6. The corresponding probability distributions are presented in Figures 4.38 to 4.59. Table 4.7 and Figures 4.60 to 4.64 present the summary results and corresponding probability distributions using the energy efficient T8 magnetic ballast as the baseline. The last column in the summary table presents the percent of cases for which the median payback period is less than 15 years. A 15-year period was chosen because it approximates average ballast life for most of the lamp/ballast combinations. f).LRC 

### = 14.78 5.28 14.78



## --- 4.49

This results in a payback period ofequation as follows: -$0.49/yr

PAY 

### = - -4.89 

### = 3.9yrs 1.74

- 0.49

Note there has been no discounting oflamp costs orelectricity costs in this formulation ofpayback period. Payback periods are expressed in years. A payback period of three years means that the increasedpurchase price for an energy-efficient ballastrelative to a baseline ballast is recovered in approximately three years because oflower operating expenses. Payback periods greater than the life oftheproductmeanthatthe increasedpurchaseprice is notrecoveredthrough reducedoperating expenses. 

### 4.2.1 Payback Period Results
The output from the paybackperiod analysis is a distribution ofpay backs that may contain negative values. Occasionally, very large negative values (for cathode-cutout ballasts) distort the meanpaybackperiod value. Forthis reason, we presentthe median paybackperiod. Therefore, for the 10,000cases analyzed for each lamp/ballast combination, 5000havepaybackperiodsbelow and 5,000havepaybackperiods abovethemedian values showninthetable. Itis possible forthe median payback period to be negative ifthe first cost ofthe ballastplus lamp is lowerfor the more efficient technology than for the baseline. We interpret negative payback periods (e.g., for three-lamp non tandem, T8 ERS and 4 lamp T8 ERS) as essentially immediate paybacks. A summary listing the median payback period for each lamp/ballast combination is presented in Table 4.6. The correspondingprobabilitydistributions are presented in Figures4.38 to 4.59. Table 4.7 andFigures 4.60to4.64presentthe summaryresults andcOITespondingprobabilitydistributionsusingthe energy efficient T8 magnetic ballast as the baseline. The last column in the summary table presents the percent ofcases for which the median payback period is less than 15 years. A IS-year period was chosen because it approximates average ballast life for most ofthe lamplballast combinations.

4-21 f).LRC 

### = 14.78 5.28 14.78



## --- 4.49

This results in a payback period ofequation as follows: -$0.49/yr

PAY 

### = - -4.89 

### = 3.9yrs 1.74

- 0.49

Note there has been no discounting oflamp costs orelectricity costs in this formulation ofpayback period. Payback periods are expressed in years. A payback period of three years means that the increasedpurchase price for an energy-efficient ballastrelative to a baseline ballast is recovered in approximately three years because oflower operating expenses. Payback periods greater than the life oftheproductmeanthatthe increasedpurchaseprice is notrecoveredthrough reducedoperating expenses. 

### 4.2.1 Payback Period Results
The output from the paybackperiod analysis is a distribution ofpay backs that may contain negative values. Occasionally, very large negative values (for cathode-cutout ballasts) distort the meanpaybackperiod value. Forthis reason, we presentthe median paybackperiod. Therefore, for the 10,000cases analyzed for each lamp/ballast combination, 5000havepaybackperiodsbelow and 5,000havepaybackperiods abovethemedian values showninthetable. Itis possible forthe median payback period to be negative ifthe first cost ofthe ballastplus lamp is lowerfor the more efficient technology than for the baseline. We interpret negative payback periods (e.g., for three-lamp non tandem, T8 ERS and 4 lamp T8 ERS) as essentially immediate paybacks. A summary listing the median payback period for each lamp/ballast combination is presented in Table 4.6. The correspondingprobabilitydistributions are presented in Figures4.38 to 4.59. Table 4.7 andFigures 4.60to4.64presentthe summaryresults andcOITespondingprobabilitydistributionsusingthe energy efficient T8 magnetic ballast as the baseline. The last column in the summary table presents the percent ofcases for which the median payback period is less than 15 years. A IS-year period was chosen because it approximates average ballast life for most ofthe lamplballast combinations.

4-21Table 4.6 Summary of Pa back Periods Usin g the T12 EEM as the Baseline

Product Class Design Option Sector Median Payback Period (yrs) % With Payback

Less Than 15 yrs


### 1F40 T12 CC Commercial 24.8 26 

### T12 ERS Commercial 6.4 94 T8 ERS Commercial 2.7 99 2F40 T12 CC Commercial 10.7 71 T12 ERS Commercial 5.4 96 T8 ERS Commercial 3.1 99 3F40 Tandem-Wired T12 CC Commercial 9.9 76 T12 ERS Commercial 6.4 93 T8 ERS Commercial 3.1 99 Not Tandem-Wired T12 CC Commercial 11.5 68 T12 ERS Commercial 3.3 99 T8 ERS Commercial 0.0 100 4F40 T12 CC Commercial 9.3 80 T12 ERS Commercial 4.8 97 Dual Switching T8 ERS Commercial 1.9 100 w/o Dual Switching T8 ERS Commercial 0.4 100 2F96 T12 EIS Commercial 5.9 94 

### T12 EIS Industrial 8.8 84 2F96HO T12 CC Commercial 2.1 98 T12 ERS Commercial 2.4 99 

### T12 CC Industrial 5.4 76 T12 ERS Industrial 3.1 99

4-22 

### T 

### bi 46 S

a e 

# . ummary 0f 

### P b k P . d U· th T12 EEM th B 

## r ayl ac eno s SlOg 

### e as 

### e ase me Product Class Design Sector Median 

### % With Payback Option Payback Less Than 15 yrs Period (yrs) IF40 TI2 CC Commercial 24.8 26 TI2 ERS Commercial 6.4 94 T8 ERS Commercial 2.7 99 2F40 TI2 CC Commercial 10.7 71 TI2 ERS Commercial 5.4 96 T8 ERS Commercial 3.1 99 3F40 Tandem-Wired TI2 CC Commercial 9.9 76 TI2 ERS Commercial 6.4 93 T8 ERS Commercial 3.1 99 Not Tandem-Wired TI2CC Commercial 11.5 68 TI2 ERS Commercial 3.3 99 T8 ERS Commercial 0.0 100 4F40 TI2 CC Commercial 9.3 80 TI2 ERS Commercial 4.8 97 Dual Switching T8ERS Commercial 1.9 100 w/o 

### Dual Switching T8 ERS Commercial 0.4 100 2F96 TI2 EIS Commercial 5.9 94 TI2 EIS Industrial 8.8 84 2F96HO TI2 CC Commercial 2.1 98 TI2 ERS Commercial 2.4 99 TI2 CC Industrial 5.4 76 TI2 ERS Industrial 3.1 99

4-22 

### T 

### bi 46 S

a e 

# . ummary 0f 

### P b k P . d U . h T12 EEM ayl ac eno s SlOg 

### t e h B 

## r as t 

### e ase me Product Class Design Sector Median 

### % With Payback Option Payback Less Than 15 yrs Period (yrs) IF40 TI2 CC Commercial 24.8 26 TI2 ERS Commercial 6.4 94 T8 ERS Commercial 2.7 99 2F40 TI2 CC Commercial 10.7 71 TI2 ERS Commercial 5.4 96 T8 ERS Commercial 3.1 99 3F40 Tandem-Wired TI2 CC Commercial 9.9 76 TI2 ERS Commercial 6.4 93 T8 ERS Commercial 3.1 99 Not Tandem-Wired TI2CC Commercial 11.5 68 TI2 ERS Commercial 3.3 99 T8 ERS Commercial 0.0 100 4F40 TI2 CC Commercial 9.3 80 TI2 ERS Commercial 4.8 97 Dual Switching T8ERS Commercial 1.9 100 w/o 

### Dual Switching T8 ERS Commercial 0.4 100 2F96 TI2 EIS Commercial 5.9 94 TI2 EIS Industrial 8.8 84 2F96HO TI2 CC Commercial 2.1 98 TI2 ERS Commercial 2.4 99 TI2 CC Industrial 5.4 76 TI2 ERS Industrial 3.1 99

4-22Forecast: Payback 1F40 (Commercial) - CC Frequency Chart

30.0
Figure 4.38 Payback Distribution for 1F40T12 CC in Commercial Sector

Forecast: Payback 1F40 (Commercial) - ERS 10,000 Trials Frequency Chart .044

.033

.000 0.0 

## L --...•---•-----------

7.5 15.0 22.5 Certainty is 93.54% from 0.0 to 15.0 - 109
0 30.0 -in

rD

S9 Qr

Figure 4.39 Payback Distribution for 1F40T12 ERS in Commercial Sector

Forecast: Payback 1 F40 (Commercial) - T8 ERS 10,000 Trials Frequency Chart .106 132 Outliers 436

327

- 218

19 Outliers -1- 1060

. . . . . . . . . . • . . • .1- 795

----------------------------530

- --•----265

0.0 7.5 15.0 22.5 30.0

Certainty is 99.20% from 0.0 to 15.0 -in P^6 O rA

Figure 4.40 Payback Distribution for 1F32T8 ERS in Commercial Sector



### 4-23 Forecast: Payback 1F40 (Commercial)· CC 10,000 Trials Frequency Chart 4,064 Outliers**.~** .c**~** .c E a. .010.;-----------,-----------"1. 103

0.0 7.5 15.0 22.5 Certainty is 26.42% from 0.0 to 15.0 30.0 77.25 

## .,., 

# ... C"D 51.50 -§ n 

# = 25.75**~**
o

Figure 4.38 Payback Distribution for lF40T12 CC in Commercial Sector

Forecast: Payback 1F40 (Commercial)· ERS 10,000 Trials Frequency Chart 132 Outliers .r----.".----------------'·436

0.0 7.5 15.0 22.5 Certainty is 93.54% from 0.0 to 15.0 30.0 327 

## .,.,**~** 218 -§ n 

# = 109**~**

Figure 4.39 Payback Distribution for lF40T12 ERS in Commercial Sector

Forecast: Payback 1F40 (Commercial)
. T8 ERS Frequency Chart 10,000 Trials .106.;----;------------------,· 19 Outliers 1060

795 

## .,.,


## ... n 530 .c c: n 

# = 265**~**
0 0.0 7.5 15.0 22.5 30.0 Certainty is 99.20% from 0.0 to 15.0 Figure 4.40 Payback Distribution for 1F32T8 ERS in Commercial Sector

4-23 Forecast: Payback 1F40 (Commercial)· CC 10,000 Trials Frequency Chart 4,064 Outliers**.~** .c**~** .c E a. .010.,-----------,-----------..,. 103

0.0 7.5 15.0 22.5 Certainty is 26.42% from 0.0 to 15.0 30.0 77.25 

## .,., 

# ... C"D 51.50 -§ n 

# = 25.75**~**
o

Figure 4.38 Payback Distribution for lF40T12 CC in Commercial Sector

Forecast: Payback 1F40 (Commercial)· ERS 132 Outliers**nll~-----..---------------------------'·436** 10,000 Trials Frequency Chart

### ~ 

## :c 

## '" .c 1:1 

### d: .011

0.0 7.5 15.0 22.5 Certainty is 93.54% from 0.0 to 15.0 -- -- -- . 327

30.0 

## .,.,**~** 218 -§ n 

# = 109**~**

Figure 4.39 Payback Distribution for lF40T12 ERS in Commercial Sector

Forecast: Payback 1F40 (Commercial)
. T8 ERS Frequency Chart 10,000 Trials .106.,----.---------------------------..,· 19 Outliers

### ~ 

## :c 

# '" ..Q 1:1


## ... a.

0.0 7.5 15.0 22.5 Certainty is 99.20% from 0.0 to 15.0 1060

795 

## .,.,


## ... n 530 .c c: n 

# = 265**~**
0 30.0
Figure 4.40 Payback Distribution for 1F32T8 ERS in Commercial Sector

4-23Forecast: Payback 2F40 (Commercial) - CC Frequency Chart

0.0 7.5 15.0 22.5

Certainty is 70.92% from 0.0 to 15.0 30.0
Figure 4.41 Payback Distribution for 2F40T12 CC in Commercial Sector

10,000 Trials .052 -F-

.039 Forecast: Payback 2F40 (Commercial)- ERS Frequency Chart 62 Outliers -w - 517



# .0001 IIIIIIIIIIIIIIIIIIIIIIIIIIIIII^^il^^l^^tx„=gh.

0.0 7.5 15

. 0 22.5 30.0

Certainty is 95.90% from 0.0 to 15.0 Figure 4.42 Payback Distribution for 2F40T12 ERS in Commercial Sector

Forecast: Payback 2F40 (Commercial )- T8 ERS 10,000 Trials .088--

a`

0.0 Frequency Chart 23 Outliers 881

------------------ 660.7
M - - - - - - - - - - - - - - - - - - - - - - - - - - - 440.5 c i9

---------------------- zzo.z
® 0 7.5 15.0 22.5 30.0 Certainty is 98.91% from 0.0 to 15.0 Figure 4.43 Payback Distribution for 2F32T8 ERS in Commercial Sector

4-24 Forecast: Payback 2F40 (Commercial) - CC 10,000 Trials Frequency Chart 636 Outliers .024.,-------.-------------,. 243

.018**.~** ,Q .012**~** ,Q E a. .006

.000 0.0 7.5 15.0 22.5 Certainty is 70.92% from 0.0 to 15.0 182.2 "T1 f1 121.5 

### -g n := 60.75 !J 

### _lillllllJlIl.-J·o
30.0 

### Figure 4.41 Payback Distribution for 2F40T12 CC in Commercial Sector

Forecast: Payback 2F40 (Commercial)- ERS 10,000 Trials Frequency Chart 62 Outliers .052.,------;----------------,· 517

.039

### ~ :0 .026**~** ,Q o 

### d: .013

.000 0.0 7.5 15.0 22.5 Certainty is 95.90% from 0.0 to 15.0 30.0 387.7 "T1 f1 258.5 

### -g n := 129.2 !J



### Figure 4.42 Payback Distribution for 2F40T12 ERS in Commercial Sector

Forecast: Payback 2F40 (Commercial)- T8 ERS 10,000 Trials Frequency Chart 23 Outliers -r---,------------------,. 881

0.0 7.5 15.0 22.5 Certainty is 98.91% from 0.0 to 15.0 30.0 660.7 "T1 f1 440.5 

### -g n := 220.2 !J



### Figure 4.43 Payback Distribution for 2F32T8 ERS in Commercial Sector

4-24 Forecast: Payback 2F40 (Commercial) - CC 10,000 Trials Frequency Chart 636 Outliers .024.,-------.-------------,. 243

.018**.~** ,Q .012**~** ,Q E a. .006

.000 0.0 7.5 15.0 22.5 Certainty is 70.92% from 0.0 to 15.0 182.2 "T1 f1 121.5 

### -g n := 60.75 !J 

### _lillllllJlIl.-J·o
30.0 

### Figure 4.41 Payback Distribution for 2F40T12 CC in Commercial Sector

Forecast: Payback 2F40 (Commercial)- ERS 10,000 Trials Frequency Chart 62 Outliers .052.,------;----------------,· 517

.039

### ~ :0 .026**~** ,Q o 

### d: .013

.000 0.0 7.5 15.0 22.5 Certainty is 95.90% from 0.0 to 15.0 30.0 387.7 "T1 f1 258.5 

### -g n := 129.2 !J



### Figure 4.42 Payback Distribution for 2F40T12 ERS in Commercial Sector

Forecast: Payback 2F40 (Commercial)- T8 ERS 10,000 Trials Frequency Chart 23 Outliers -r---,------------------,. 881

0.0 7.5 15.0 22.5 Certainty is 98.91% from 0.0 to 15.0 30.0 660.7 "T1 f1 440.5 

### -g n := 220.2 !J



### Figure 4.43 Payback Distribution for 2F32T8 ERS in Commercial Sector

4-24Forecast: Payback 3F40 Tandem-Wired (Commercial) - 10,000 Trials Frequency Chart 449 Outliers .025 ss .t - 251

30.0

Forecast : Payback 3F40 Tandem -Wired (Commercial) - 10,000 Trials Frequency Chart .044 113 Outliers - 437

327.7 -fl {'6 ----------------------218.5 C

.000 0.0

.065
--

.043--

.022-- .000 I 30.0
Figure 4.45 Payback Distribution for Tandem-Wired 3F40T12 ERS in Commercial Sector

Forecast: Payback 3F40 Tandem-Wired (Commercial) - 10,000 Trials Frequency Chart 23 Outliers .086 .f - 861.999999

ii Cd
. . • . . . . . • . -- 109.2 -2

0 ® 7.5 15.0 22.5 Certainty is 93.37% from 0.0 to 15.0

- - - - - - - - - - - - - - - - - - - - - - - - -1- 646.5 -rl - - - - - - - - - - - - - - - - - - - - - - - - - -430.9

. . . . . . . . . . . . . . . . . . . 215.5

.111-t ,,1. ,.. 0
0.0 7.5 15.0 22.5 30.0

Certainty is 98.90% from 0.0 to 15.0 

### Figure 4.46 Payback Distribution for Tandem-Wired 3F32T8 ERS in Commercial Sector

4-25 Forecast: Payback 3F40 Tandem-Wired (Commercial) - 449 Outliers**n?~'--------'''~------------------------'-251** 10,000 Trials Frequency Chart**.~**

0.0 7.5 15.0 22.5 Certainty is 76.21% from 0.0 to 15.0 30.0 188.2 ."

.... rD 125.5**~** rD := 62.75 Q

Figure 4.44 Payback Distribution for Tandem-Wired 3F40T12 CC in Commercial Sector

Forecast: Payback 3F40 Tandem-Wired (Commercial) - 113 Outliers nM,-------.-----------------------------'-437 10,000 Trials Frequency Chart**.~** .c \9 .c 

## e a. .011

0.0 7.5 15.0 22.5 Certainty is 93.37% from 0.0 to 15.0 30.0 327.7 ."

.... rD 218.5**~** rD := 109.2 Q

Figure 4.45 Payback Distribution for Tandem-Wired 3F40T12 ERS in Commercial Sector

Forecast: Payback 3F40 Tandem-Wired (Commercial) - 23 Outliers nRR,-----.-------,--------------------------,- 861.999999 10,000 Trials Frequency Chart

0.0 7.5 15.0 22.5 Certainty is 98.90% from 0.0 to 15.0 30.0 646.5 ." (1 430.9**~** rD := 215.5 Q

Figure 4.46 Payback Distribution for Tandem-Wired 3F32T8 ERS in Commercial Sector

4-25 Forecast: Payback 3F40 Tandem-Wired (Commercial) - 449 Outliers**n?~'--------'''~------------------------'-251** 10,000 Trials Frequency Chart**.~**

0.0 7.5 15.0 22.5 Certainty is 76.21% from 0.0 to 15.0 30.0 188.2 ."

.... rD 125.5**~** rD := 62.75 Q

Figure 4.44 Payback Distribution for Tandem-Wired 3F40T12 CC in Commercial Sector

Forecast: Payback 3F40 Tandem-Wired (Commercial) - 113 Outliers nM,-------.-----------------------------'-437 10,000 Trials Frequency Chart**.~** .c \9 .c 

## e a. .011

0.0 7.5 15.0 22.5 Certainty is 93.37% from 0.0 to 15.0 30.0 327.7 ."

.... rD 218.5**~** rD := 109.2 Q

Figure 4.45 Payback Distribution for Tandem-Wired 3F40T12 ERS in Commercial Sector

Forecast: Payback 3F40 Tandem-Wired (Commercial) - 23 Outliers nRR,-----.-------,--------------------------,- 861.999999 10,000 Trials Frequency Chart

0.0 7.5 15.0 22.5 Certainty is 98.90% from 0.0 to 15.0 30.0 646.5 ." (1 430.9**~** rD := 215.5 Q

Figure 4.46 Payback Distribution for Tandem-Wired 3F32T8 ERS in Commercial Sector

4-25Forecast: Payback 3F40 Non-Tandem (Commercial) - C 10,000 Trials Frequency Chart 628 Outliers

.0001 a^^^^I^I^^^^^E^€I€9E (E#i#;aa^a, o 0.0 7.5 15.0 22.5

Certainty is 68.48% from 0.0 to 15.0 30.0
Figure 4.47 Payback Distribution for Non-Tandem-Wired 3F40T12 CC in Commercial Sector

Forecast: Payback 3F40 Non-Tandem (Commercial) - E 10,000 Trials Frequency Chart .083 1 23 Outliers 1- 828

.062+ - - 1111111 . - - - - - - - - - - - - - - - - - - - - - - - - - -1- 621

d

J-0

0.0 7.5 15.0 22.5 30.0

Certainty is 98.97% from 0.0 to 15.0 ' C rp

Figure 4

.48 Payback Distribution for Non-Tandem-Wired 3F40T12 ERS in Commercial Sector

Forecast: Payback 3F40 Non-Tandem (Commercial) - T 10,000 Trials Frequency Chart 1.000

.000 0 Outliers



### Figure 4.49 Payback Distribution for Non-Tandem-Wired 3F32T8 ERS in Commercial Sector

021 207



### 4-26 Forecast: Payback 3F40 Non-Tandem (Commercial) - C 10,000 Trials Frequency Chart 628 Outliers 250

187.5 '"T'1


## ... ("D 125 .c c: ("D 

# = 62.5 Q

0 0.0 7.5 15.0 22.5 30.0 Certainty is 68.48% from 0.0 to 15.0 

### Figure 4.47 Payback Distribution for Non-Tandem-Wired 3F40T12 CC in Commercial Sector

Forecast: Payback 3F40 Non-Tandem (Commercial) - E

10,000 Trials Frequency Chart 23 Outliers .083 828

.062 621**.~** '"T'1 

### n ..Q .041 414 .c I¥ c: ..Q ("D Q 

# =
... .021 207 Q c..

.000 0 0.0 7.5 15.0 22.5 30.0 Certainty is 98.97% from 0.0 to 15.0 

### Figure 4.48 Payback Distribution for Non-Tandem-Wired 3F40T12 ERS in Commercial Sector

Forecast: Payback 3F40 Non-Tandem (Commercial) - T

10,000 Trials Frequency Chart oOutliers 1.000

- 9997

.750 .••.•••..•••••.............••...



## .**~** ..Q .500 I¥ ..Q 

# e c.. .250**.000.L-~-~--,--~-** ......**~--~-.,.....-~--r,...1.** 0 0.0 7.5 15.0 22.5 30.0 '"T'1


## ... ("D .c c: ("D 

# = Q



### Figure 4.49 Payback Distribution for Non-Tandem-Wired 3F32T8 ERS in Commercial Sector

4-26 Forecast: Payback 3F40 Non-Tandem (Commercial) - C 10,000 Trials Frequency Chart 628 Outliers 250

187.5 '"T'1


## ... ("D 125 .c c: ("D 

# = 62.5 Q

0 0.0 7.5 15.0 22.5 30.0 Certainty is 68.48% from 0.0 to 15.0 

### Figure 4.47 Payback Distribution for Non-Tandem-Wired 3F40T12 CC in Commercial Sector

Forecast: Payback 3F40 Non-Tandem (Commercial) - E

10,000 Trials Frequency Chart 23 Outliers .083 828

.062 621**.~** '"T'1 

### n ..Q .041 414 .c I¥ c: ..Q ("D Q 

# =
... .021 207 Q c..

.000 0 0.0 7.5 15.0 22.5 30.0 Certainty is 98.97% from 0.0 to 15.0 

### Figure 4.48 Payback Distribution for Non-Tandem-Wired 3F40T12 ERS in Commercial Sector

Forecast: Payback 3F40 Non-Tandem (Commercial) - T

10,000 Trials Frequency Chart oOutliers 1.000

- 9997

.750 .••.•••..•••••.............••...



## .**~** ..Q .500 I¥ ..Q 

# e c.. .250**.000.L-~-~--,--~-** ......**~--~-.,.....-~--r,...1.** 0 0.0 7.5 15.0 22.5 30.0 '"T'1


## ... ("D .c c: ("D 

# = Q



### Figure 4.49 Payback Distribution for Non-Tandem-Wired 3F32T8 ERS in Commercial Sector

4-2610,000 Trials .028 -

.021

M .014 Forecast: Payback 4F40 (Commercial) - CC Frequency Chart 352 Outliers - 279

--------------------- 

# ^Illl^ti^^ .

------------ -

.000 0.0 W 1 -7.5 15.0 22.5 30.0 Certainty is 79.66% from 0.0 to 15.0 Figure 4.50 Payback Distribution for 4F40T12 CC in Commercial Sector

Forecast: Payback 4F40 ( Commercial) - ERS 10,000 Trials .056 -17- Frequency Chart 46 Outliers - 559.999999

-----•......-•-----•---••.420

CG --------------------•--280

140

. . . . . . . . . . . . . . . . .. ® 0 7.5 15.0 22.5 30.0 Certainty is 96.94% from 0.0 to 15.0 Figure 4.51 Payback Distribution for 4F40T12 ERS in Commercial Sector

Forecast: Payback 4F40 (Commercial) - T8 ERS 10,000 Trials .138-

0.0 Frequency Chart 7 Outliers - 1381

S9 . . . . . . . . . . . . . . . . . . 345.2 w rD t9 - - - - - - - - - - - - - - - - - - - - - - - - - - - 690.5

7.5 15.0 22.5 30.0 Certainty is 99.61% from 0.0 to 15.0 

### Figure 4.52 Payback Distribution for 4F32'T8 ERS with Dual Switching Capability in Commercial Sector

4-27 Forecast: Payback 4F40 (Commercial)

- CC 352 Outliers**n~~;-------~--.-------------------------,-** 279 10,000 Trials Frequency Chart

.021

### ~ 

## :c .01**~** .c c "- .007 Il.

0.0 7.5 15.0 22.5 Certainty is 79.66% from 0.0 to 15.0 30.0 209.2 .."**~** 139.5**~** n 

# = 69.75 Q



### Figure 4.50 Payback Distribution for 4F40T12 CC in Commercial Sector

Forecast: Payback 4F40 (Commercial)

- ERS 10,000 Trials Frequency Chart 46 Outliers 'Fif\-r-----.-------------------------------,- 559.999999

420 .." 

## ... n 280**~** n 140 

## Q

0.0 7.5 15.0 22.5 30.0 Certainty is 96.94% from 0.0 to 15.0 

### Figure 4.51 Payback Distribution for 4F40T12 ERS in Commercial Sector

Forecast: Payback 4F40 (Commercial)

- T8 ERS 10,000 Trials Frequency Chart 7 Outliers**1~~;--.----------------------------------,-** 1381

0.0 7.5 15.0 22.5 Certainty is 99.61% from 0.0 to 15.0 30.0 .."**~** 690.5**~** n 

### = 345.2 Q



### Figure 4.52 Payback Distribution for 4F32T8 ERS with Dual Switching Capability in Commercial Sector

4-27 Forecast: Payback 4F40 (Commercial)

- CC 352 Outliers**n~~;-------~--.-------------------------,-** 279 10,000 Trials Frequency Chart

.021

### ~ 

## :c .01**~** .c c "- .007 Il.

0.0 7.5 15.0 22.5 Certainty is 79.66% from 0.0 to 15.0 30.0 209.2 .."**~** 139.5**~** n 

# = 69.75 Q



### Figure 4.50 Payback Distribution for 4F40T12 CC in Commercial Sector

Forecast: Payback 4F40 (Commercial)

- ERS 10,000 Trials Frequency Chart 46 Outliers 'Fif\-r-----.-------------------------------,- 559.999999

420 .." 

## ... n 280**~** n 140 

## Q

0.0 7.5 15.0 22.5 30.0 Certainty is 96.94% from 0.0 to 15.0 

### Figure 4.51 Payback Distribution for 4F40T12 ERS in Commercial Sector

Forecast: Payback 4F40 (Commercial)

- T8 ERS 10,000 Trials Frequency Chart 7 Outliers**1~~;--.----------------------------------,-** 1381

0.0 7.5 15.0 22.5 Certainty is 99.61% from 0.0 to 15.0 30.0 .."**~** 690.5**~** n 

### = 345.2 Q



### Figure 4.52 Payback Distribution for 4F32T8 ERS with Dual Switching Capability in Commercial Sector

4-27Forecast: Payback 4F40 (Commercial ) - T8 ERS 10,000 Trials .4901 e

.000 0.0 7.5 Frequency Chart 0 Outliers - 4899

15.0 -- 0

22.5 30.0
Figure 4.53 Payback Distribution for 4F32T8 ERS without Dual Switching Capability in Commercial Sector

Forecast: Payback 2F96 (Commercial) - EIS

Frequency Chart 150 Outliers

Figure 4.54 Payback Distribution for 2F96T12 EIS in Commercial Sector

10,000 Trials .031 - Forecast: Payback 2F96 (Industrial) - EIS Frequency Chart 150 Outliers -.3 - 307

.023------

.0151 0. .0081----

.

0.0 7.5 15.0 22.5 30.0

Certainty is 84.26% from 0.0 to 15.0 

### Figure 4.55 Payback Distribution for 2F96'T12 EIS in Industrial Sector €I 230.2 -in ro f9 153.5 r4
7R 75 Ec 0 E E€ °



### 4-28 Forecast: Payback 4F40 (Commercial)

- T8 ERS 10,000 Trials Frequency Chart 

### oOutliers .490

- 4899

.367

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --

### -~ .CI .245 Q;I .CI 

## e a. .122

.000 0.0II,
7.5**~** 15.0 22.5 , - 0 30.0 

### Figure 4.53 Payback Distribution for 4F32T8 ERS without Dual Switching Capability in Commercial Sector

Forecast: Payback 2F96 (Commercial)

- EIS 10,000 Trials Frequency Chart 150 Outliers**.M7~----~------------------------------~** 472

.035 354 ." ..,**.~** ("f) 236 .Q c: 

## :c .024 Q;I .CI ("f) :::J 118**~** Q


### ... .012 a.

.000 0 0.0 7.5 15.0 22.5 30.0 Certainty is 93.38% from 0.0 to 15.0 

### Figure 4.54 Payback Distribution for 2F96T12 EIS in Commercial Sector

Forecast: Payback 2F96 (Industrial)

- EIS 10,000 Trials Frequency Chart 150 Outliers .031 ,-----------,,,-----------------------------,- 307

0.0 7.5 15.0 22.5 Certainty is 84.26% from 0.0 to 15.0 30.0 230.2 ." (il 153.5**~** ("f) :::J 76.75**~**



### Figure 4.55 Payback Distribution for 2F96T12 EIS in Industrial Sector

4-28 Forecast: Payback 4F40 (Commercial)

- T8 ERS 10,000 Trials Frequency Chart 

### oOutliers .490

- 4899

.367

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --

### -~ .CI .245 Q;I .CI 

## e a. .122

.000 0.0II,
7.5**~** 15.0 22.5 , - 0 30.0 

### Figure 4.53 Payback Distribution for 4F32T8 ERS without Dual Switching Capability in Commercial Sector

Forecast: Payback 2F96 (Commercial)

- EIS 10,000 Trials Frequency Chart 150 Outliers**.M7~----~------------------------------~** 472

.035 354 ." ..,**.~** ("f) 236 .Q c: 

## :c .024 Q;I .CI ("f) :::J 118**~** Q


### ... .012 a.

.000 0 0.0 7.5 15.0 22.5 30.0 Certainty is 93.38% from 0.0 to 15.0 

### Figure 4.54 Payback Distribution for 2F96T12 EIS in Commercial Sector

Forecast: Payback 2F96 (Industrial)

- EIS 10,000 Trials Frequency Chart 150 Outliers .031 ,-----------,,,-----------------------------,- 307

0.0 7.5 15.0 22.5 Certainty is 84.26% from 0.0 to 15.0 30.0 230.2 ." (il 153.5**~** ("f) :::J 76.75**~**



### Figure 4.55 Payback Distribution for 2F96T12 EIS in Industrial Sector

4-28Forecast: Payback 2F96HO (Commercial) - CC 10,000 Trials .110-(-

Z, .0824-

.000 

### I 0.0 Frequency Chart 97 Outliers 1098

------...---• • •---------•-.1-823.5 't1
- • ---------------------- • - -549 

# kL^L ----------------- 

## - ^., -274.5 0 7.5 15.0 22.5 30.0 Certainty is 97.91%from 0.0 to 15.0 Figure 4.56 Payback Distribution for 2F96T12II® CC in Commercial Sector

Forecast: Payback 2F96HO (Commercial) - ERS 10,000 Trials.111-rFrequency Chart 56 Outliers - 1106

. . . . . . • . . • . . . • . . . . . • . • . . . . -- 829.5 -T1 fD ----------------------------553 CP - - - - - • --.-... - - - • • - - - - - - -- 276.5

7.5 15.0 22.5 Certainty is 98.88% from 0.0 to 15.0 Figure 4.57 Payback Distribution for 2F96T12H0 ERS in Commercial Sector

Forecast: Payback 2F96HO (Industrial) - CC 10,000 Trials Frequency Chart .040 . s

.030

k- i1 .010

.000 0.0 

# Il f l dpGfAAt3 1333?BBeEEtltk...<.2....s

.......... 0 30.0

1,782 Outliers -l 404

7.5 15.0 22.5 30.0 Certainty is 76.29% from 0.0 to 15.0 - 303

0



### Figure 4.58 Payback Distribution for 2F96I' 12II® CC in Industrial Sector

4-29 Forecast: Payback 2F96HO (Commercial) - CC 10,000 Trials .1

0.0 Frequency Chart

7.5 15.0 22.5 Certainty is 97.91% from 0.0 to 15.0 97 Outliers 1098

30.0 823.5 ..,., (il 549**~** n 

# = 274.5 fJ

Figure 4.56 Payback Distribution for 2F96T12HO CC in Commercial Sector

Forecast: Payback 2F96HO (Commercial) - ERS 10,000 Trials Frequency Chart 56 Outliers .111..---;-------------------,. 1106

0.0 7.5 15.0 22.5 Certainty is 98.88% from 0.0 to 15.0 30.0 829.5 ..,., (il 553**~** n 

### = 276.5 fJ

Figure 4.57 Payback Distribution for 2F96T12HO ERS in Commercial Sector

10,000 Trials**.~** .Q 11:1 .Q 

### E Co

0.0 Forecast: Payback 2F96HO (Industrial) - CC Frequency Chart

7.5 15.0 22.5 Certainty is 76.29% from 0.0 to 15.0 1,782 Outliers 404

303 ..,., 

## ... n 202 .c c: n 

# = 101 fJ

0 30.0 Figure 4.58 Payback Distribution for 2F96T12HO CC in Industrial Sector

4-29 Forecast: Payback 2F96HO (Commercial) - CC 10,000 Trials .1

0.0 Frequency Chart

7.5 15.0 22.5 Certainty is 97.91% from 0.0 to 15.0 97 Outliers 1098

30.0 823.5 ..,., (il 549**~** n 

# = 274.5 fJ

Figure 4.56 Payback Distribution for 2F96T12HO CC in Commercial Sector

Forecast: Payback 2F96HO (Commercial) - ERS 10,000 Trials Frequency Chart 56 Outliers .111..---;-------------------,. 1106

0.0 7.5 15.0 22.5 Certainty is 98.88% from 0.0 to 15.0 30.0 829.5 ..,., (il 553**~** n 

### = 276.5 fJ

Figure 4.57 Payback Distribution for 2F96T12HO ERS in Commercial Sector

10,000 Trials**.~** .Q 11:1 .Q 

### E Co

0.0 Forecast: Payback 2F96HO (Industrial) - CC Frequency Chart

7.5 15.0 22.5 Certainty is 76.29% from 0.0 to 15.0 1,782 Outliers 404

303 ..,., 

## ... n 202 .c c: n 

# = 101 fJ

0 30.0 Figure 4.58 Payback Distribution for 2F96T12HO CC in Industrial Sector

4-29Forecast: Payback 2F96HO (Industrial) - ERS 10,000 Trials Frequency Chart .088

.000- 0.0 20 Outliers - 876 

# IIII}-------------------------

a J-0

7.5 15.0 22.5 30.0 Certainty is 99.16% from 0.0 to 15.0 

### Figure 4.59 Payback Distribution for 2F96T12IIO ERS in Industrial Sector

Table 4.7 Summary of Pa back Periods Using a T8 EEM Ballast as the Baseline Product Class Design Option Sector Median Payback Period (yrs) % With Payback

Less Than 15 yrs


### 1F32 T8 ERS Commercial 3.4 99% T8 EIS Commercial 6.6 81% 2F32 T8 CC Commercial 8.2 78% T8 ERS Commercial 3.3 100% T8 EIS Commercial 4.0 95%

10,000 Trials
.083 1

.062

Z 042

CL .021

.000 0.0 Forecast : Payback 1 F32 ERS Comm Frequency Chart 31 Outliers
833

. . . . . . . . . . . . . . . . . . . . . . . . . - 624.7

. . . . . . . . . . . . . . . . . . . . . . . •. 416.5

- - - - - - - - - - - - - - - - - - - -- 208.2

® 0 7.5 15.0 22.5 30.0 Certainty is 08.57% from 0.D to 15.0 T

= f9

Figure 4.60 Payback Distribution for 1F32T8 ERS in Commercial Sector



### 4-30 Forecast: Payback 2F96HO (Industrial)

- ERS 10,000 Trials Frequency Chart 20 Outliers 876

657 ."


## ... ("'b 438 .c c: ("'b 219

### ~
0 0.0 7.5 15.0 22.5 30.0 Certainty is 99.16% from 0.0 to 15.0 

### Figure 4.59 Payback Distribution for 2F96T12HO ERS in Industrial Sector

T bi 47

S a e 

# . ummary 0

### fP b kP . d U' ayl ac erIO s smga T8 EEM B II t th B 

## r a as as e ase me Product Class Design Sector Median % 

### With Payback

IF32

2F32

10,000 Trials 

### Option

T8ERS T8 EIS
T8CC T8ERS T8 EIS

Forecast: Payback 1F32 ERS Comm Frequency Chart 

### Payback Period (yrs)
Commercial 3.4 Commercial 6.6
Commercial 8.2 Commercial 3.3 Commercial 4.0

31 Outliers .083**~--~-----------------------------'-~3**

.062**.~** 

## -= .042 \II 

## -= C)



### ... .021 0-

.000 0.0 7.5 15.0 22.5 30.0 Certainty is 98.57% from 0.0 to 15.0 624.7 ." .., ("'b 416.5 .c c: ("'b
208.2

### ~ Less Than 15 yrs

99% 81%
78% 100%

95%

Figure 4.60 Payback Distribution for IF32T8 ERS in Commercial Sector

4-30 Forecast: Payback 2F96HO (Industrial)

- ERS 10,000 Trials Frequency Chart 20 Outliers 876

657 ."


## ... ("'b 438 .c c: ("'b 219

### ~
0 0.0 7.5 15.0 22.5 30.0 Certainty is 99.16% from 0.0 to 15.0 

### Figure 4.59 Payback Distribution for 2F96T12HO ERS in Industrial Sector

T bi 47

S a e 

# . ummary 0

### fP b kP . d U' ayl ac erIO s smga T8 EEM B II t th B 

## r a as as e ase me Product Class Design Sector Median % 

### With Payback

IF32

2F32

10,000 Trials 

### Option

T8ERS T8 EIS
T8CC T8ERS T8 EIS

Forecast: Payback 1F32 ERS Comm Frequency Chart 

### Payback Period (yrs)
Commercial 3.4 Commercial 6.6
Commercial 8.2 Commercial 3.3 Commercial 4.0

31 Outliers .083**~--~-----------------------------'-~3**

.062**.~** 

## -= .042 \II 

## -= C)



### ... .021 0-

.000 0.0 7.5 15.0 22.5 30.0 Certainty is 98.57% from 0.0 to 15.0 624.7 ." .., ("'b 416.5 .c c: ("'b
208.2

### ~ Less Than 15 yrs

99% 81%
78% 100%

95%

Figure 4.60 Payback Distribution for IF32T8 ERS in Commercial Sector

4-30Forecast: Payback 1F32 EIS Comm 10,000 Trials Frequency Chart
.035 1

.026 -I0,0 11

A

Figure 4.61 Payback Distribution for 1F32T8 EIS in Commercial Sector

Figure 4.62 Payback Distribution for 2F32T8 CC in Commercial Sector

Forecast: Payback 2F32 ERS Comm 10,000 Trials .085

0.0 Frequency Chart 346

259.5

173

86.5

30.0 _ 0

23 Outliers
854

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 640.5 7.5 15.0 22.5 Certainty is 80,53% from 0.0 to 15.0

. . . . . . . . . . . . . . . . . . . .. 427

. . . . . . . . . . . . . . . . . . . . . . . . 213.5

7.5 15.0 22.5 Certainty is 99.77% from 0.0 to 30.0 T1 f9 C C9

Figure 4.63 Payback Distribution for 2F32T8 ERS in Commercial Sector



### 4-31 886 Outliers Forecast: Payback 1F32 EIS Comm 10,000 Trials Frequency Chart 886 Outliers .035**;---~'-----------------------------------'-~6**

.020**.~** ..Q .017 «:I ..Q C


## ... .009 0-

.000 0.0 7.5 15.0 22.5 30.0 Certainty is 80.53% from 0.0 to 15.0 259.5 

# "**~** 173 .c c: ('D**~** 86.5 '4!



### Figure 4.61 Payback Distribution for 1F32T8 EIS in Commercial Sector

10,000 Trials Forecast: Payback 2F32 CC Comm Frequency Chart 704 Outliers .028 .,--------;-:---------------------------------,- 279

.021

### ~ 

## :c .014 «:I ..Q C


## ... .007 0-

.000 0.0 7.5 15.0 22.5 Certainty is 77.aga/o from 0.0 to 15.0 30.0 209.2 

# "**~** 139.5**~** ('D := 69.75**~**



### Figure 4.62 Payback Distribution for 2F32T8 CC in Commercial Sector

10,000 Trials Forecast: Payback 2F32 ERS Comm Frequency Chart 23 Outliers .085**;----.------------------------------------'-8~**

.064**.~** ..Q .043 «:I ..Q C


## ... .021 0-

.000 0.0 7.5 15.0 22.5 30.0 Certainty is 99.77% from 0.0 to 30.0 640.5 

# "**~** 427 .c c: ('D 213.5

### ~

Figure 4.63 Payback Distribution for 2F32T8 ERS in Commercial Sector

4-31 Forecast: Payback 1F32 EIS Comm 10,000 Trials Frequency Chart 886 Outliers .035**;---~'-----------------------------------'-~6**

.020**.~** ..Q .017 «:I ..Q C


## ... .009 0-

.000 0.0 7.5 15.0 22.5 30.0 Certainty is 80.53% from 0.0 to 15.0 259.5 

# "**~** 173 .c c: ('D**~** 86.5 '4!



### Figure 4.61 Payback Distribution for 1F32T8 EIS in Commercial Sector

10,000 Trials Forecast: Payback 2F32 CC Comm Frequency Chart 704 Outliers .028 .,--------;-:---------------------------------,- 279

.021

### ~ 

## :c .014 «:I ..Q C


## ... .007 0-

.000 0.0 7.5 15.0 22.5 Certainty is 77.aga/o from 0.0 to 15.0 30.0 209.2 

# "**~** 139.5**~** ('D := 69.75**~**



### Figure 4.62 Payback Distribution for 2F32T8 CC in Commercial Sector

10,000 Trials Forecast: Payback 2F32 ERS Comm Frequency Chart 23 Outliers .085**;----.------------------------------------'-8~**

.064**.~** ..Q .043 «:I ..Q C


## ... .021 0-

.000 0.0 7.5 15.0 22.5 30.0 Certainty is 99.77% from 0.0 to 30.0 640.5 

# "**~** 427 .c c: ('D 213.5

### ~

Figure 4.63 Payback Distribution for 2F32T8 ERS in Commercial Sector

4-31Forecast: Payback 2F32 EIS Comm 10,000 Trials Frequency Chart
.057

.042

.000 180 Outliers
- 588

- 424.5

- 283

. . . . . . . . . . . . 141.5

0.0 7.5 15.0 22.5 30.0 Certainty is 94.54% from 0.0 to 15.0 4 .=1

Figure 4.64 Payback Distribution for 2F32T8 EIS in Commercial Sector

4.3 SENSITIVITY ANALYSIS 

### In order to observe the sensitivity of LCC to discount rates and electricity prices, we performed additional analyses. For discount rates, we recalculated the LCC savings using a low (4%) and a high (15%) estimate of the consumer discount rate. Tables 4.8 and 4.9 show the results of this sensitivity analysis for each case respectively. For electricity prices, we recalculated the LCC savings and the Payback using the both the AEO 1999 High Economic Growth Forecast, and the AEO 1999 Low Economic Growth Forecast. Tables 4.10 and 4.11 show the LCC and Payback results for the High Growth Forecast. Tables 4.12 and 4.13 show the results for the Low Growth Forecast.



### 4-32 10,000 Trials Forecast: Payback 2F32 EIS Comm Frequency Chart 180 Outliers .057**,---.----------------------------,-~6**

.042**.~** ,.Q .028**~** ,.Q C II.. .014 il.

.000 0.0 7.5 15.0 Certainty is 94.54% from 0.0 to 15.022.5 30.0 424.5 ..,., nl 283 .c 

# = n :::l 141.5 !J



### Figure 4.64 Payback Distribution for 2F32T8 EIS in Commercial Sector

4.3 SENSITIVITY ANALYSIS
In order to observe the sensitivity of Lee to discount rates and electricity prices, we performed additional analyses. For discountrates, we recalculatedthe Lee savingsusing a low (4%) and a high (15%) estimate ofthe consumer discount rate. Tables 4.8 and 4.9 showthe results ofthis sensitivity analysis for each case respectively.
For electricity prices, we recalculated the Lee savings and the Payback using the both the AEO 1999 High Economic Growth Forecast, and the AEO 1999 Low Economic Growth Forecast. Tables 4.10 and 4.11 show the Lee and Payback results for the High Growth Forecast. Tables 4.12 and 4.13 show the results for the Low Growth Forecast.

4-32 10,000 Trials Forecast: Payback 2F32 EIS Comm Frequency Chart 180 Outliers .057**,---.----------------------------,-~6**

.042**.~** ,.Q .028**~** ,.Q C II.. .014 il.

.000 0.0 7.5 15.0 Certainty is 94.54% from 0.0 to 15.022.5 30.0 424.5 ..,., nl 283 .c 

# = n :::l 141.5 !J



### Figure 4.64 Payback Distribution for 2F32T8 EIS in Commercial Sector

4.3 SENSITIVITY ANALYSIS
In order to observe the sensitivity of Lee to discount rates and electricity prices, we performed additional analyses. For discountrates, we recalculatedthe Lee savingsusing a low (4%) and a high (15%) estimate ofthe consumer discount rate. Tables 4.8 and 4.9 showthe results ofthis sensitivity analysis for each case respectively.
For electricity prices, we recalculated the Lee savings and the Payback using the both the AEO 1999 High Economic Growth Forecast, and the AEO 1999 Low Economic Growth Forecast. Tables 4.10 and 4.11 show the Lee and Payback results for the High Growth Forecast. Tables 4.12 and 4.13 show the results for the Low Growth Forecast.

4-32Table 4.8 Summary of Delta LCC* Sensitivity Results with 4% Discount Rate



### Product Class I Design Option I Sector I Delta LCC Mean % of % 

### Table 4.8 

### Summary ofDelta LCC* Sensitivity Results with 4% Discount Rate

Product Class Design Option Sector Delta LCC Mean 

# I % of 

# I % Table 4.8 

### Summary ofDelta LCC* Sensitivity Results with 4% Discount Rate

Product Class Design Option Sector Delta LCC Mean 

# I % of 

# I %(1997$) Baseline LCC Reduced**

LCC 

### 11740 T12 CC Commercial -4 -3% 18% T12 ERS Commercial 9 6% 87% T8 ERS Commercial 24 15% 

### 100% 2F40 T12 CC Commercial 

### 0 0% 

### 49% T12 ERS 

### Commercial 11 5% 

### 93% T8 ERS Commercial 27 11% 

### 99% 3F40 Tandem-Wired T12 CC Commercial 1 0% 

### 52% T12 ERS Commercial 12 4% 

### 86% T8 ERS 

### Commercial 39 12% 99% Not Tandem-Wired T12 CC 

### Commercial -1 0% 

### 42% T12 ERS 

### Commercial 24 7% 

### 99% T8 ERS 

### Commercial 72 

### 21% 100% 4F40 T12 CC Commercial 3 1% 56% T12 ERS 

### Commercial 21 5% 

### 96% Tandem-Wired* * * T8 ERS Commercial 61 14% 

### 100% Not Tandem-Wired T8 ERS 

### Commercial 70 17% 100% 2F96 T12 EIS Commercial 15 4% 91% T12 EIS Industrial 3 1% 59% 

### 2F96HO T12 CC Commercial 14 2% 91% T12 ERS 

### Commercial 40 6% 

### 99% T12 CC Industrial 2 0% 54% T12 ERS 

### Industrial 22 4% 97%

* A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC. * % ballasts with reduced life

-cycle costs. *** 4F32T8 ERS ballast with Dual Switching includes a $ 10 incremental increase in materials and labor



### 4-33 (1997$) Baseline Reduced** 

### LCC 1F40 T12 CC Commercial -4 -3% T12 ERS Commercial 9 6% T8 ERS Commercial 24 15% 2F40 T12 CC Commercial 0 0% T12 ERS Commercial 11 5% T8 ERS Commercial 27 11% 3F40 Tandem-Wired T12 CC Commercial 1 0% T12 ERS Commercial 12 4% T8 ERS Commercial 39 12% Not Tandem-Wired T12 CC Commercial -1 0% T12 ERS Commercial 24 7% T8 ERS Commercial 72 21% 4F40 T12 CC Commercial 3 1% T12 ERS Commercial 21 5% Tandem-Wired*** T8ERS Commercial 61 14% Not Tandem-Wired T8 ERS Commercial 70 17% 2F96 TI2 EIS Commercial 15 4% TI2 EIS Industrial 3 1% 2F96HO T12 CC Commercial 14 2% TI2 ERS Commercial 40 6% TI2 CC Industrial 2 0% TI2 ERS Industrial 22 4%



## *A positive Delta 

### Lee implies a 

### Lee savings whereas a negative number implies an increase in 

### Lee. 

## ** % ballasts with reduced life-cycle costs. 

## *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in materials and labor

4-33 LCC
18% 87% 100%

49% 93% 99%
.52% 86% 99% 42% 99% 100%
56% 96% 100% 100%
91% 59%
91% 99% 54% 97% (1997$) Baseline Reduced** 

### LCC 1F40 T12 CC Commercial -4 -3% T12 ERS Commercial 9 6% T8 ERS Commercial 24 15% 2F40 T12 CC Commercial 0 0% T12 ERS Commercial 11 5% T8 ERS Commercial 27 11% 3F40 Tandem-Wired T12 CC Commercial 1 0% T12 ERS Commercial 12 4% T8 ERS Commercial 39 12% Not Tandem-Wired T12 CC Commercial -1 0% T12 ERS Commercial 24 7% T8 ERS Commercial 72 21% 4F40 T12 CC Commercial 3 1% T12 ERS Commercial 21 5% Tandem-Wired*** T8ERS Commercial 61 14% Not Tandem-Wired T8 ERS Commercial 70 17% 2F96 TI2 EIS Commercial 15 4% TI2 EIS Industrial 3 1% 2F96HO T12 CC Commercial 14 2% TI2 ERS Commercial 40 6% TI2 CC Industrial 2 0% TI2 ERS Industrial 22 4%



## *A positive Delta 

### Lee implies a 

### Lee savings whereas a negative number implies an increase in 

### Lee. 

## ** % ballasts with reduced life-cycle costs. 

## *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in materials and labor

4-33 LCC
18% 87% 100%

49% 93% 99%
.52% 86% 99% 42% 99% 100%
56% 96% 100% 100%
91% 59%
91% 99% 54% 97%Table 4.9 Summary of Delta LCC* Sensitivity Results with 15% Discount Rate

Product Class Design Option 

### Sector Delta LC

### C Mean (1997$) % of

Baseline LCC %

Reduced"* LCC 

### 1F40 T12 CC 

### Commercial -5 -5% 1% T12 ERS 

### Commercial -1 -1% 

### 35% T8 ERS 

### Commercial 9 9% 

### 93% 2F40 T12 CC Commercial -4 -3% 12% 

### T12 ERS Commercial 1% 

### 50% T8 ERS Commercial 10 7% 90% 3F40 Tandem-Wired T12 CC Commercial -5 -3% 

### 13% T12 ERS 

### Commercial -2 -1% 

### 36% T8 ERS 

### Commercial 14 7% 

### 90% Not Tandem-Wired T12 CC 

### Commercial -8 -4% 7% T12 ERS 

### Commercial 8 4% 86% T8 ERS 

### Commercial 40 19% 100% 4F40 T12 CC Commercial -7 -3% 15% T12 ERS 

### Commercial 3 1% 

### 61% Tandem-Wired* * * T8 ERS Commercial 27 11% 97% Not Tandem-Wired T8 ERS Commercial 37 15% 100% 2F96 T12 EIS Commercial 0 0% 

### 43% T12 EIS 

### Industrial -6 -3% 13% 2F96HO T12 CC Commercial 6 1% 

### 85% T12 ERS Commercial 17 4% 93% T12 CC Industrial 0 0% 

### 41% T12 ERS Industrial 8 

## 2% 83% * A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC. * % ballasts with reduced life-cycle costs. *** 4F32T8 ERS ballast with Dual Switching includes a $ 10 incremental increase in materials and labor.



### 4-34 

### T bI 49 S

a e 

# . ummary 0fD It LCC* S Of °t R It °th 15% DO e a ens] IVHY esu s WI 0 lscountR t ae Product Class Design Option Sector Delta LCC Mean %of % 

### (1997$) Baseline Reduced** LCC IF40 T12 CC Commercial -5 -5% T12 ERS Commercial -1 -1% T8 ERS Commercial 9 9% 2F40 T12 CC Commercial -4 -3% T12 ERS Commercial 1 1% T8 ERS Commercial 10 7% 3F40 Tandem-Wired T12 CC Commercial -5 -3% T12 ERS Commercial -2 -1% T8 ERS Commercial 14 7% Not Tandem-Wired T12CC Commercial -8 -4% T12 ERS Commercial 8 4% T8 ERS Commercial 40 19% 4F40 T12 CC Commercial -7 -3% T12 ERS Commercial 3 1% Tandem-Wired*** T8ERS Commercial 27 11% Not Tandem-Wired T8 ERS Commercial 37 15% 2F96 TI2 EIS Commercial 0 0% T12 EIS Industrial -6 -3% 2F96HO TI2 CC Commercial 6 1% TI2 ERS Commercial 17 4% T12 CC Industrial 0 0% TI2 ERS Industrial 8 2%



### .. 

### *A posItIve Delta LCC ImplIes a LCC savmgs whereas a negative number ImplIes an mcrease in LCC. 

### ** % ballasts with reduced life-cycle costs. LCC
1% 35% 93%
12% 50% 90%
13% 36% 90%

7% 86% 100%

15% 61% 97% 100%
43% 13%
85% 93% 41% 83% 

### *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in materials and labor.

4-34 

### T bI 49 S

a e 

# . ummary 0fD It LCC* S Of °t R It °th 15% DO e a ens] IVHY esu s WI 0 lscountR t ae Product Class Design Option Sector Delta LCC Mean %of % 

### (1997$) Baseline Reduced** LCC IF40 T12 CC Commercial -5 -5% T12 ERS Commercial -1 -1% T8 ERS Commercial 9 9% 2F40 T12 CC Commercial -4 -3% T12 ERS Commercial 1 1% T8 ERS Commercial 10 7% 3F40 Tandem-Wired T12 CC Commercial -5 -3% T12 ERS Commercial -2 -1% T8 ERS Commercial 14 7% Not Tandem-Wired T12CC Commercial -8 -4% T12 ERS Commercial 8 4% T8 ERS Commercial 40 19% 4F40 T12 CC Commercial -7 -3% T12 ERS Commercial 3 1% Tandem-Wired*** T8ERS Commercial 27 11% Not Tandem-Wired T8 ERS Commercial 37 15% 2F96 TI2 EIS Commercial 0 0% T12 EIS Industrial -6 -3% 2F96HO TI2 CC Commercial 6 1% TI2 ERS Commercial 17 4% T12 CC Industrial 0 0% TI2 ERS Industrial 8 2%



### .. 

### *A posItIve Delta LCC ImplIes a LCC savmgs whereas a negative number ImplIes an mcrease in LCC. 

### ** % ballasts with reduced life-cycle costs. LCC
1% 35% 93%
12% 50% 90%
13% 36% 90%

7% 86% 100%

15% 61% 97% 100%
43% 13%
85% 93% 41% 83% 

### *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in materials and labor.

4-34Table 4.10 Summary of Delta LCC* Sensitivity Results using AEO 1999 High Growth Forecast Product Class Design Option Sector Delta LC

### C Mean (1997$) % of

Baseline LCC %

Winners**


### 1F40 T12 CC Commercial -4 -3% 9% T12 ERS Commercial 5 4% 

### 73% T8 ERS 

### Commercial 18 13% 99% 2F40 T12 CC 

### Commercial -1 -1% 35% T12 ERS 

### Commercial 7 4% 84% T8 ERS 

### Commercial 20 10% 

### 98% 3F40 Tandem-Wired T12 CC 

### Commercial -1 0% 

### 38% T12 ERS 

### Commercial 6 2% 

### 73% T8 ERS Commercial 

### 30 11% 

### 98% Not Tandem-Wired T12 CC Commercial -3 1% 

### 27% T12 ERS 

### Commercial 18 6% 98% T8 ERS 

### Commercial 59 20% 100% 4F40 T12 CC 

### Commercial 0% 

### 41% T12 ERS 

### Commercial 14 

### 4% 90% Dual Switching*** T8 ERS Commercial w/o Dual Switching T8 ERS 

### Commercial 57 16% 100% 2F96 T12 EIS Commercial 8 1% 

### 78% T12 EIS Industrial -1 0% 

### 39% 2F96H0 T12 CC Commercial 12 2% 

### 92% T12 ERS Commercial 30 5% 

### 98% T12 CC Industrial 2 0% 

### 54% T12 ERS Industrial 17 4% 

### 95% * A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC. % ballasts with reduced life-cycle costs (winners). *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in purchase price.



### 4-35 Table 4.10 Summary ofDelta LCC* Sensitivity Results using AEO 1999 High Growth Forecast Product Class Design Option Sector Delta LCC Mean %of % (1997$) Baseline Winners** LCC IF40 T12 CC Commercial -4 -3% T12 ERS Commercial 5 4% T8 ERS Commercial 18 13% 2F40 T12 CC Commercial -1 -1% T12 ERS Commercial 7 4% T8 ERS Commercial 20 10% 3F40 Tandem-Wired T12CC Commercial -1 0% T12 ERS Commercial 6 2% T8 ERS Commercial 30 11% Not Tandem-Wired T12 CC Commercial -3 1% T12 ERS Commercial 18 6% T8 ERS Commercial 59 20% 4F40 T12 CC Commercial -1 0% T12 ERS Commercial 14 4% Dual Switching*** T8ERS Commercial w/o 

### Dual Switching T8 ERS Commercial 57 16% 2F96 TI2 EIS Commercial 8 1% TI2 EIS Industrial -1 0% 2F96HO TI2 CC Commercial 12 2% TI2 ERS Commercial 30 5% TI2 CC Industrial 2 0% TI2 ERS Industrial 17 4% 

### * A positive Delta 

### Lee implies a 

### Lee savings whereas a negative number implies an mcrease m 

### Lee. 

### ** % ballasts with reduced life-cycle costs (winners). 

### *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in purchase price.



### 4-35 9% 73% 99%
35% 84% 98%
38% 73% 98% 27% 98% 100%
41% 90%
100%
78% 39%
92% 98% 54% 95% Table 4.10 Summary ofDelta LCC* Sensitivity Results using AEO 1999 High Growth Forecast Product Class Design Option Sector Delta LCC Mean %of % (1997$) Baseline Winners** LCC IF40 T12 CC Commercial -4 -3% T12 ERS Commercial 5 4% T8 ERS Commercial 18 13% 2F40 T12 CC Commercial -1 -1% T12 ERS Commercial 7 4% T8 ERS Commercial 20 10% 3F40 Tandem-Wired T12CC Commercial -1 0% T12 ERS Commercial 6 2% T8 ERS Commercial 30 11% Not Tandem-Wired T12 CC Commercial -3 1% T12 ERS Commercial 18 6% T8 ERS Commercial 59 20% 4F40 T12 CC Commercial -1 0% T12 ERS Commercial 14 4% Dual Switching*** T8ERS Commercial w/o 

### Dual Switching T8 ERS Commercial 57 16% 2F96 TI2 EIS Commercial 8 1% TI2 EIS Industrial -1 0% 2F96HO TI2 CC Commercial 12 2% TI2 ERS Commercial 30 5% TI2 CC Industrial 2 0% TI2 ERS Industrial 17 4%



## . . 

### * A posItIve Delta 

### Lee ImplIes a 

### Lee savIngs whereas a negatIve number ImplIes an Increase In 

### Lee

. 

### ** % ballasts with reduced life-cycle costs (winners). 

### *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in purchase price.



### 4-35 9% 73% 99%
35% 84% 98%
38% 73% 98% 27% 98% 100%
41% 90%
100%
78% 39%
92% 98% 54% 95%Table 4.11 Summary of Payback Sensitivity using AEO 1999 High Growth Forecast



### Product Class Design Option Sector Median Payback Period (yrs) 

### % With Payback

Less Than 15 yrs

11740 

### T12 CC Commercial 23.5 29% T12 ERS 

### Commercial 6.3 93% T8 ERS Commercial 

### 2.6 99% 2F40 T12 CC 

### Commercial 10.3 74% T12 ERS Commercial 5.3 96% T8 ERS Commercial 

### 3.0 99% 3F40 Tandem-Wired T12 CC Commercial 9.6 79% T12 ERS Commercial 

### 6.2 94% T8 ERS 

### Commercial 3.0 99% Not Tandem-Wired T12 CC 

### Commercial 11.1 71% T12 ERS 

### Commercial 3.2 99% T8 ERS 

### Commercial 0.0 100% 4F40 T12 CC Commercial 9.1 82% T12 ERS 

### Commercial 4.7 97% Dual Switching T8 ERS Commercial 1.8 100% w/o Dual Switching T8 ERS 

### Commercial 0.4 100% 2F96 T12 EIS Commercial 5.7 94% T12 EIS 

### Industrial 8.6 85% 2F96HO T12 CC Commercial 2.0 98% T12 ERS 

### Commercial 2.3 99% T12 CC Industrial 5.0 78% T12 ERS 

### Industrial 3.1 99%

4-36 

### Table 

### 4 1 S .1 ummary 0

### fP b kS ayl ac ensltIvIty usmg AEO 1999 H' h G igl 

### rowt hForecast Product Class Design Sector Median 

### % With Payback Option Payback Less Than 15 yrs Period (yrs) IF40 TI2 CC Commercial 23.5 29% TI2 ERS Commercial 6.3 93% T8 ERS Commercial 2.6 .99% 2F40 TI2 CC Commercial 10.3 74% TI2 ERS Commercial 5.3 96% T8 ERS Commercial 3.0 99% 3F40 Tandem-Wired TI2CC Commercial 9.6 79% TI2 ERS Commercial 6.2 94% T8 ERS Commercial 3.0 99% Not Tandem-Wired TI2CC Commercial ILl 71% TI2 ERS Commercial 3.2 99% T8 ERS Commercial 0.0 100% 4F40 TI2 CC Commercial 9.1 82% TI2 ERS Commercial 4.7 97% Dual Switching T8ERS Commercial 1.8 100% w/o 

### Dual Switching T8 ERS Commercial 0.4 100% 2F96 Tl2 EIS Commercial 5.7 94% TI2 EIS Industrial 8.6 85% 2F96HO TI2 CC Commercial 2.0 98% TI2 ERS Commercial 2.3 99% TI2 CC Industrial 5.0 78% TI2 ERS Industrial 3.1 99%

4-36 T 

### bi 411 S

a e 

# . ummary 0

### fP b k S 'f 't 

### ayl ac enSl IVHy 

### usmg AEO 1999 H' h G th F 19l 

### row orecast Product Class Design Sector Median % With Payback Option Payback Less Than 15 yrs Period (yrs) IF40 TI2 CC Commercial 23.5 29% TI2 ERS Commercial 6.3 93% T8 ERS Commercial 2.6 .99% 2F40 TI2 CC Commercial 10.3 74% TI2 ERS Commercial 5.3 96% T8 ERS Commercial 3.0 99% 3F40 Tandem-Wired TI2CC Commercial 9.6 79% TI2 ERS Commercial 6.2 94% T8 ERS Commercial 3.0 99% Not Tandem-Wired TI2CC Commercial ILl 71% TI2 ERS Commercial 3.2 99% T8 ERS Commercial 0.0 100% 4F40 TI2 CC Commercial 9.1 82% TI2 ERS Commercial 4.7 97% Dual Switching T8ERS Commercial 1.8 100% w/o 

### Dual Switching T8 ERS Commercial 0.4 100% 2F96 Tl2 EIS Commercial 5.7 94% TI2 EIS Industrial 8.6 85% 2F96HO TI2 CC Commercial 2.0 98% TI2 ERS Commercial 2.3 99% TI2 CC Industrial 5.0 78% TI2 ERS Industrial 3.1 99%

4-36Table 4.12 Summary of Delta LCC* Sensitivity Results using AEO 1999 Low Growth Forecast Product Class Design Option 

### Sector Delta LC C Mean (1997$) % of

Baseline LCC %

Winners**


### 1F40 T12 CC Commercial -5 -4% 

### 6% T12 ERS Commercial 3 2% 

### 61% T8 ERS 

### Commercial 15 12% 98% 2F40 T12 CC Commercial -3 2% 25% 

### T12 ERS Commercial 5 3% 76% T8 ERS Commercial 

### 16 9% 

### 97% 3F40 Tandem-Wired 

### T12 CC Commercial -3 -1% 

### 28% T12 ERS 

### Commercial 3 1% 

### 61% T8 ERS 

### Commercial 24 10% 

### 97% Not Tandem-Wired T12 CC 

### Commercial -5 2% 

### 18% T12 ERS 

### Commercial 14 5% 

### 96% T8 ERS Commercial 52 19% 100% 4F40 T12 CC 

### Commercial -3 -1% 30% T12 ERS 

### Commercial 10 3% 83% Dual Switching*** T8 ERS Commercial 

### 40 12% 

### 99% w/o Dual Switching T8 ERS Commercial 49 15% 100% 2F96 T12 EIS Commercial 6 2% 

### 69% T12 EIS 

### Industrial -2 -1% 

### 3`1% 2F96HO T12 CC Commercial 9 2% 

### 86% T12 ERS 

### Commercial 26 5% 

### 97% T12 CC Industrial 0 0% 45% T12 ERS 

### Industrial 14 3% 

### 93% * A positive Delta LCC implies a LCC savings whereas a negative number implies an increase in LCC. ** % ballasts with reduced life-cycle costs (winners). *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in purchase price.



### 4-37 Table 4.12 Summary ofDelta LCC* Sensitivity Results using AEO 1999 Low Growth Forecast Product Class Design Option Sector Delta LCC Mean %of % (1997$) Baseline Winners** LCC IF40 T12 CC Commercial -5 -4% T12 ERS Commercial 3 2% T8 ERS Commercial 15 12% 2F40 T12 CC Commercial -3 2% T12 ERS Commercial 5 3% T8 ERS Commercial 16 9% 3F40 Tandem-Wired T12CC Commercial -3 -1% T12 ERS Commercial 3 1% T8 ERS Commercial 24 10% Not Tandem-Wired T12 CC Commercial -5 2% T12 ERS Commercial 14 5% T8 ERS Commercial 52 19% 4F40 T12 CC Commercial -3 -1% T12 ERS Commercial 10 3% Dual Switching*** T8ERS Commercial 40 12% w/o 

### Dual Switching T8 ERS Commercial 49 15% 2F96 T12 EIS Commercial 6 2% T12 EIS Industrial -2 -1% 2F96HO T12 CC Commercial 9 2% T12 ERS Commercial 26 5% TI2 CC Industrial 0 0% TI2 ERS Industrial 14 3%



### . . 

### *A posItive Delta 

### Lee ImplJes a 

### Lee savmgs whereas a negatIve number ImplJes an mcrease In 

### Lee

. 

### ** % ballasts with reduced life-cycle costs (winners). 

### *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in purchase price.



### 4-37 6% 61% 98%
25% 76% 97%
28% 61% 97% 18% 96% 100%
30% 83% 99% 100%
69% 3'1%
86% 97% 45% 93% Table 4.12 Summary ofDelta LCC* Sensitivity Results using AEO 1999 Low Growth Forecast Product Class Design Option Sector Delta LCC Mean %of % (1997$) Baseline Winners** LCC IF40 T12 CC Commercial -5 -4% T12 ERS Commercial 3 2% T8 ERS Commercial 15 12% 2F40 T12 CC Commercial -3 2% T12 ERS Commercial 5 3% T8 ERS Commercial 16 9% 3F40 Tandem-Wired T12CC Commercial -3 -1% T12 ERS Commercial 3 1% T8 ERS Commercial 24 10% Not Tandem-Wired T12 CC Commercial -5 2% T12 ERS Commercial 14 5% T8 ERS Commercial 52 19% 4F40 T12 CC Commercial -3 -1% T12 ERS Commercial 10 3% Dual Switching*** T8ERS Commercial 40 12% w/o 

### Dual Switching T8 ERS Commercial 49 15% 2F96 T12 EIS Commercial 6 2% T12 EIS Industrial -2 -1% 2F96HO T12 CC Commercial 9 2% T12 ERS Commercial 26 5% TI2 CC Industrial 0 0% TI2 ERS Industrial 14 3%



### . . 

### *A posItive Delta 

### Lee ImplJes a 

### Lee savmgs whereas a negatIve number ImplJes an mcrease In 

### Lee

. 

### ** % ballasts with reduced life-cycle costs (winners). 

### *** 4F32T8 ERS ballast with Dual Switching includes a $10 incremental increase in purchase price.



### 4-37 6% 61% 98%
25% 76% 97%
28% 61% 97% 18% 96% 100%
30% 83% 99% 100%
69% 3'1%
86% 97% 45% 93%Table 4.13 Summary of Payback Sensitivity using AEO 1999 Low Growth Forecast



### Product Class Design Option Sector Median Payback Period (yrs) % With Payback

Less Than 15 yrs


### 1F40 T12 CC 

### Commercial 27.8 24 T12 ERS 

### Commercial 6.7 92 T8 ERS Commercial 2.8 99 2F40 T12 CC Commercial 11.6 66 T12 ERS Commercial 5.7 95 T8 ERS 

### Commercial 3.3 99 3F40 Tandem-Wired T12 CC 

### Commercial 10.6 72 T12 ERS Commercial 6.7 93 T8 ERS Commercial 3.3 99 Not Tandem-Wired 

### T12 CC Commercial 12.3 64 T12 ERS 

### Commercial 3.5 99 T8 ERS 

### Commercial 0.0 100 4F40 T12 CC Commercial 10.0 76 T12 ERS 

### Commercial 5.1 96 Dual Switching T8 ERS 

### Commercial 2.0 100 w/o Dual Switching T8 ERS Commercial 0.4 100 2F96 T12 EIS Commercial 6.1 93 T12 EIS Industrial 9.1 83 2F96HO T12 CC Commercial 2.3 98 T12 ERS 

### Commercial 2.5 99 T12 CC Industrial 6.0 73 T12 ERS 

### Industrial 3.2 99

4-38 

### T bi 413 S

a e 

# . ummary 0

### fP b k S of °t 

### ay ac enSl IVl

### ty usmg AEO 1999 L G 

### th F ow row orecast 

### Product Class Design Sector Median % 

### With Payback Option Payback Less Than 15 yrs Period (yrs) IF40 T12 CC Commercial 27.8 24 T12 ERS Commercial 6.7 

### 92 T8 ERS Commercial 2.8 99 2F40 TI2 CC Commercial 11.6 66 T12 ERS Commercial 5.7 95 T8 ERS Commercial 3.3 99 3F40 Tandem-Wired TI2CC Commercial 10.6 

### 72 T12 ERS Commercial 6.7 93 T8 ERS Commercial 3.3 99 Not Tandem-Wired T12CC Commercial 12.3 64 T12 ERS Commercial 3.5 99 T8 ERS Commercial 0.0 100 4F40 T12 CC Commercial 10.0 76 T12 ERS Commercial 5.1 96 Dual Switching T8ERS Commercial 2.0 100 w/o 

### Dual Switching T8 ERS Commercial 0.4 100 2F96 T12 EIS Commercial 6.1 93 T12 EIS Industrial 9.1 83 2F96HO T12 CC Commercial 2.3 98 T12 ERS Commercial 2.5 99 TI2 CC Industrial 6.0 73 T12 ERS Industrial 3.2 99

4-38 

### T bi 413 S

a e 

# . ummary 0

### fP b k S of °t 

### ay ac enSl IVl

### ty usmg AEO 1999 L G 

### th F ow row orecast 

### Product Class Design Sector Median % 

### With Payback Option Payback Less Than 15 yrs Period (yrs) IF40 T12 CC Commercial 27.8 24 T12 ERS Commercial 6.7 

### 92 T8 ERS Commercial 2.8 99 2F40 TI2 CC Commercial 11.6 66 T12 ERS Commercial 5.7 95 T8 ERS Commercial 3.3 99 3F40 Tandem-Wired TI2CC Commercial 10.6 

### 72 T12 ERS Commercial 6.7 93 T8 ERS Commercial 3.3 99 Not Tandem-Wired T12CC Commercial 12.3 64 T12 ERS Commercial 3.5 99 T8 ERS Commercial 0.0 100 4F40 T12 CC Commercial 10.0 76 T12 ERS Commercial 5.1 96 Dual Switching T8ERS Commercial 2.0 100 w/o 

### Dual Switching T8 ERS Commercial 0.4 100 2F96 T12 EIS Commercial 6.1 93 T12 EIS Industrial 9.1 83 2F96HO T12 CC Commercial 2.3 98 T12 ERS Commercial 2.5 99 TI2 CC Industrial 6.0 73 T12 ERS Industrial 3.2 99

4-38CHAPTER 5. NATIONAL. ENERGY AND ECONOMIC I MPACTS All of the information and results in this Chapter pertain to our analysis for the twelve standards scenarios (1A through 6B) described below. The analysis for the proposed consensus standard (scenarios 7A through 7C) is found in Appendix E. Assumptions for those scenarios that differ from the assumptions described in this chapter are noted in Appendix E.

5.1. METHODOLOGY Analyzing the national impacts of trial standards for fluorescent ballasts required comparing projected U.S. commercial and industrial lighting energy consumption with and without these standards. In this analysis, we projected interior lighting energy savings as well as net energy impacts of lighting systems on heating, ventilating and air conditioning energy use that would result from trial standards for fluorescent lamp ballasts. Projections of energy consumption in the absence of standards are referred to as base case projections. These base case projections were compared to projections of energy consumption if each trial standard scenario were implemented. For each scenario, the difference between the energy consumption of the base case and the standards scenario projection was defined as the energy savings impact of the standard. The time series of annual energy savings was used along with projected annual electricity prices to calculate fuel cost savings. Lighting equipment expenditures were also projected for the base case as well as for standards. Expenditures and fuel cost savings were used to calculate the national net present value (NPV) of each scenario. The national energy savings and net present value of the scenarios were calculated using the National Energy Savings (NES) spreadsheet model created by LBNL (NES_v.4). Inputs to the model were: national shipments forecasts, electricity price projections, ballast system characteristics, percentages of different ballast types in fixtures, percentages of ballasts converted to different ballast types under standards, years of standards implementation, and social discount rate. The NES model calculates the energy savings, fuel cost savings, equipment costs, and net present value for the four major magnetic ballast lamp-ballast combinations: 1F40T12, 2F40T12, 2F96T 12, and 2F96T 12/HO. In this analysis, a simplifying assumption was made that the 1 F40T12, 2F40T12, and 2F96T12 lamp-ballast combinations operated in the commercial sector and that the 2F96T 12/HO lamp-ballast combination operated in the industrial sector. The spreadsheet model is available to interested parties from the U.S. Department of Energy (DOE) website (www.eren.doe.gov/buildings/codes_standards/applbrf/ballast.html). Users may adjust inputs and observe the resulting national energy savings and NPV. In this chapter, we report results using the input assumptions described below. NES results for projected ballast shipments were also used as inputs to the GRIM model for

5-1 

### CHAPTER S. NATIONAL ENERGY AND ECONOMIC IMPACTS
All ofthe infonnation and results in this Chapter pertain to our analysis for the twelve standards scenarios (lA through 6B) described below. The analysis for the proposed consensus standard (scenarios 7 A through 7C) is found in Appendix E. Assumptions for those scenarios that differ from the assumptions described in this chapter are noted in Appendix E.



### S.l. METHODOLOGY Analyzingthe national impacts oftrial standards for fluorescent ballastsrequired comparing projected U.S. commercial and industrial lighting energy consumption with and without these standards. In this analysis, we projected interior lighting energy savings as well as net energy impacts oflighting systems on heating, ventilating and air conditioning energyuse thatwouldresult from trial standards for fluorescent lamp ballasts. Projections ofenergy consumption in the absence ofstandards are referred to as base caseprojections. These base case projections were compared to projections ofenergy consumption ifeach trial standard scenario were implemented. For each scenario, the differencebetweenthe energy consumption ofthe base case and the standards scenario projection was defined as the energy savings impact ofthe standard.
The time series of annual energy savings was used along with projected annual electricity prices to calculate fuel cost savings. Lighting equipment expenditures were also projected for the base case as well as for standards. Expenditures and fuel cost savings were used to calculate the national net present value (NPV) ofeach scenario.
The national energy savings and netpresentvalue ofthe scenarios were calculatedusingthe National Energy Savings (NES) spreadsheet model created by LBNL (NES_vA). Inputs to the modelwere: national shipments forecasts, electricitypriceprojections,ballastsystem characteristics, percentagesofdifferentballasttypes infixtures, percentages of ballasts convertedto differentballast types under standards, years ofstandards implementation, and social discount rate. The NES model calculates the energy savings, fuel cost savings, equipment costs, and net present value for the four major magnetic ballast lamp-ballast combinations: IF40T12, 2F40T12, 2F96T12, and 2F96Tl2/HO. hlthis analysis, a simplifying assumptionwasmadethatthe 1 F40T12, 2F40T12, and 2F96T12 lamp-ballast combinations operated in the commercial sector and that the 2F96T12/HO lamp-ballast combination operated in the industrial sector. The spreadsheet model is available to interestedparties from the U.S. Department ofEnergy (DOE) website (www.eren.doe.gov/buildings/codes

_standards/applbrf/ballast.html). Users may adjust inputs and observe the resulting national energy savings andNPV. In this chapter, we report results using the input assumptions described below.
NES results for projectedballast shipments were also used as inputs to the GRIM model for

5-1 

### CHAPTER S. NATIONAL ENERGY AND ECONOMIC IMPACTS
All ofthe infonnation and results in this Chapter pertain to our analysis for the twelve standards scenarios (lA through 6B) described below. The analysis for the proposed consensus standard (scenarios 7 A through 7C) is found in Appendix E. Assumptions for those scenarios that differ from the assumptions described in this chapter are noted in Appendix E.



### S.l. METHODOLOGY Analyzingthe national impacts oftrial standards for fluorescent ballastsrequired comparing projected U.S. commercial and industrial lighting energy consumption with and without these standards. In this analysis, we projected interior lighting energy savings as well as net energy impacts oflighting systems on heating, ventilating and air conditioning energyuse thatwouldresult from trial standards for fluorescent lamp ballasts. Projections ofenergy consumption in the absence ofstandards are referred to as base caseprojections. These base case projections were compared to projections ofenergy consumption ifeach trial standard scenario were implemented. For each scenario, the differencebetweenthe energy consumption ofthe base case and the standards scenario projection was defined as the energy savings impact ofthe standard.
The time series of annual energy savings was used along with projected annual electricity prices to calculate fuel cost savings. Lighting equipment expenditures were also projected for the base case as well as for standards. Expenditures and fuel cost savings were used to calculate the national net present value (NPV) ofeach scenario.
The national energy savings and netpresentvalue ofthe scenarios were calculatedusingthe National Energy Savings (NES) spreadsheet model created by LBNL (NES_vA). Inputs to the modelwere: national shipments forecasts, electricitypriceprojections,ballastsystem characteristics, percentagesofdifferentballasttypes infixtures, percentages of ballasts convertedto differentballast types under standards, years ofstandards implementation, and social discount rate. The NES model calculates the energy savings, fuel cost savings, equipment costs, and net present value for the four major magnetic ballast lamp-ballast combinations: IF40T12, 2F40T12, 2F96T12, and 2F96Tl2/HO. hlthis analysis, a simplifying assumptionwasmadethatthe 1 F40T12, 2F40T12, and 2F96T12 lamp-ballast combinations operated in the commercial sector and that the 2F96T12/HO lamp-ballast combination operated in the industrial sector. The spreadsheet model is available to interestedparties from the U.S. Department ofEnergy (DOE) website (www.eren.doe.gov/buildings/codes

_standards/applbrf/ballast.html). Users may adjust inputs and observe the resulting national energy savings andNPV. In this chapter, we report results using the input assumptions described below.
NES results for projectedballast shipments were also used as inputs to the GRIM model for

5-1the manufacturer analysis, described in Chapter 6.



### The NES model was used for the Regulatory Impact Analysis, as described in the RIA section.
5.2. DATA Data on ballast system characteristics (wattages, lifetimes, operating hours, light output, and equipment prices) were identical to those used in the Life-Cycle Cost (LCC) analysis (see Chapters 3 and 4). Electricity price projections for the commercial and industrial sectors were also the same as those used in the LCC analysis and described in Chapter 4. The NES model requires data in addition to those required by the other analyses. These data include: shipments forecasts, percentages of base case ballasts converted to different ballast types in the scenarios, standards implementation dates, social discount rate, and factors for conversion of site energy to source energy. 

### 5.2.1 Shipments The NES model tracks magnetic ballast shipments from 1997 through 2030. (Savings are calculated beginning with the year the standard is projected to take effect.) It is important to note that the shipments in the NES model are only the magnetic ballasts projected to be used in the base case(s), and those ballasts (electronic or cathode cutout) that replace them in the standards scenarios. The model does not track the total ballast market, i.e. the electronic ballasts that would be installed in the base case(s). Magnetic ballasts shipments were assumed to decline over time under two base case scenarios, as described in section 5.3.1. Both of these scenarios used as their starting point historical ballast shipments data from 1993 to 1997, disaggregated by ballast type, provided to DOE byNEMA for products covered by this analysis. (The Bureau of Census Current Industrial Reports for fluorescent ballasts have slightly different data because they contain ballasts exempted from the standards, including residential low-power factor ballasts, dimming ballasts, and ballasts for several special applications.) The NEMA data presented in Table 5.1 show a modest overall increase in annual total shipments (with a small decrease in 1996); magnetic shipments decrease (with the exception of a small increase in 1997) and magnetic ballasts represent a decreasing percentage over time (with the exception of a small increase in 1996).' the manufacturer analysis, described in Chapter 6. The NES model was used for the Regulatory hnpact Analysis, as described in the 

### RIA section. 

### 5.2. DATA
Dataon ballast system characteristics (wattages, lifetimes, operatinghours, light output, and equipment prices) were identical to those used in the Life-Cycle Cost (LCC) analysis (see Chapters 3 and 4). Electricity price projections for the commercial and industrial sectors were also the same as those used in the LCC analysis and described in Chapter 4. The NES model requires data in addition to those required by the other analyses. These data include: shipments forecasts, percentages ofbase case ballasts converted to different ballast types in the scenarios, standards implementationdates, socialdiscountrate, and factors for conversion ofsite energyto source energy. 

### 5.2.1 Shipments The NES model tracks magnetic ballast shipments from 1997 through 2030. (Savings are calculated beginning with the year the standard is projected to take effect.) It is important to note that the shipments in the NES model are only the magnetic ballasts projected to be used in the base case(s), andthose ballasts (electronic orcathode cutout) thatreplace them inthe standards scenarios. The model does nottrack the total ballast market, i.e. the electronic ballasts thatwould be installed in the base case(s). Magnetic ballasts shipments were assumed to decline over time under two base case scenarios, as described in section 5.3.1. Both of these scenariosused as their startingpointhistorical ballastshipments data from 1993 to 1997, disaggregatedbyballasttype, providedto DOEbyNEMA for products covered by this analysis. (The Bureau of Census Current Industrial Reports for fluorescent ballasts have slightly different data because they contain ballasts exempted from the standards, includingresidential low-power factorballasts, dimmingballasts, and ballasts for several special applications.) The NEMA data presented in Table 5.1 show a modest overall increase in annual total shipments (with a small decrease in 1996); magnetic shipments decrease (with the exception ofa small increase in 1997) and magnetic ballasts represent a decreasingpercentage over time (with the exception ofa small increase in 1996).1

5-2 the manufacturer analysis, described in Chapter 6. The NES model was used for the Regulatory hnpact Analysis, as described in the 

### RIA section. 

### 5.2. DATA
Dataon ballast system characteristics (wattages, lifetimes, operatinghours, light output, and equipment prices) were identical to those used in the Life-Cycle Cost (LCC) analysis (see Chapters 3 and 4). Electricity price projections for the commercial and industrial sectors were also the same as those used in the LCC analysis and described in Chapter 4. The NES model requires data in addition to those required by the other analyses. These data include: shipments forecasts, percentages ofbase case ballasts converted to different ballast types in the scenarios, standards implementationdates, socialdiscountrate, and factors for conversion ofsite energyto source energy. 

### 5.2.1 Shipments The NES model tracks magnetic ballast shipments from 1997 through 2030. (Savings are calculated beginning with the year the standard is projected to take effect.) It is important to note that the shipments in the NES model are only the magnetic ballasts projected to be used in the base case(s), andthose ballasts (electronic orcathode cutout) thatreplace them inthe standards scenarios. The model does nottrack the total ballast market, i.e. the electronic ballasts thatwould be installed in the base case(s). Magnetic ballasts shipments were assumed to decline over time under two base case scenarios, as described in section 5.3.1. Both of these scenariosused as their startingpointhistorical ballastshipments data from 1993 to 1997, disaggregatedbyballasttype, providedto DOEbyNEMA for products covered by this analysis. (The Bureau of Census Current Industrial Reports for fluorescent ballasts have slightly different data because they contain ballasts exempted from the standards, includingresidential low-power factorballasts, dimmingballasts, and ballasts for several special applications.) The NEMA data presented in Table 5.1 show a modest overall increase in annual total shipments (with a small decrease in 1996); magnetic shipments decrease (with the exception ofa small increase in 1997) and magnetic ballasts represent a decreasingpercentage over time (with the exception ofa small increase in 1996).1

5-2Table 5.1 U.S. Fluorescent Ballast Disaggregated Shipments, Covered Products, 1993 - 1997* Millions of Ballasts

Year Magnetic Electronic Total F40T12 1740T12 F40T12 Magnetic Electronic Total 2F96T12 2F96T12 2F96T12 Magnetic 2F96T12/HO Electronic

2F96T12/H0 Total

2F96T12/H0 1993 31.0 2.3 33.4 6.9 1.1 8.0 0.4 0.5 0.9 1994 28.1 1.3 29.4 6.9 0.7 7.6 0.4 0.3 0.7 1995 25.6 1.2 26.8 6.4 0.6 7.0 0.4 0.3 0.7 1996 24.7 1.2 25.9 5.9 0.6 6.5 0.3 0.4 0.7 1997 25.4 1.2 26.6 6.0 0.5 6.5 0.3 0.4 0.7

Total T12 All T12 T12 + T8 Total Percent Year Magnetic Electronic Ballasts Electroni Ballasts Magnetic c 1993 38.3 3.9 42.3 22.9 61.3 63% 1994 35.4 2.4 37.7 26.0 61.4 58% 1995 32.3 2.1 34.5 33.1 65.4 49% 1996 30.9 2.2 33.1 30.3 61.3 51% 1997 31.7 2.1 33.7 35.0 66.6 48% * 1997 values are based on six months' of data Table 5.2 contains data also provided by NEMA, updated through 1998. While these data are more current, they are not disaggregated at the level needed by the NES model. The totals for each year, on which the NES model shipments projection were based, are similar in both data sets, so no appreciable impact on the NES results would be expected from using the more recent data.2 

### Table 5.2 U.S. Fluorescent Ballast Shipments , Covered Products, 1993 - 1998 Year Ma netic Electronic Total % Magnetic % Electronic 1993 39.0 22.9 61.9 63% 37% 1994 36.0 26.0 62.0 58% 42% 1995 32.7 33.1 65.8 50% 50% 1996 30.1 29.7 59.8 50% 50% 1997 31.1 35.4 66.5 47% 53% 1998 30.9 37.8 68.7 45% 55% Total 199.8 185.0 384.7


### Figure 5.1 shows the percentage of the total shipments made up of magnetic and electronic ballasts, based on the NEMA data in Table 5.2. Figure 5.2 shows the annual shipments of magnetic and electronic ballasts from these data by year. It can be seen that magnetic ballast shipments have remained essentially constant over the last three years. Figure 5.3 shows the NEMA shipments data for 1993-1998 and the two shipments forecasts used in the NES analyses. These shipments forecasts are described in section 5.3.1, Base Cases, below.'
'A third shipments scenario, Constant Shipments, was used in addition to these two for the consensus standards analysis and is described in Appendix E. 5-3 Table 

### 5.1 U.s.FluorescentBallastDisaggregated Shipments, Covered Products, 

### 1993 -1997* Millions of Ballasts Magnetic Electronic Total Magnetic Electronic Total Magnetic Electronic Total Year F40T12 F40T12 F40T12 2F96T12 2F96T12 2F96T12 2F96T12fHO 2F96T12fHO 2F96T12fHO 1993 31.0 2.3 33.4 6.9 1.1 8.0 0.4 0.5 0.9 1994 28.1 1.3 29.4 6.9 0.7 7.6 0.4 0.3 0.7 1995 25.6 1.2 26.8 6.4 0.6 7.0 0.4 0.3 0.7 1996 24.7 1.2 25.9 5.9 0.6 6.5 0.3 0.4 0.7 1997 25.4 1.2 26.6 6.0 0.5 6.5 0.3 0.4 0.7
Total T12 All T12 T12 +T8 Total Percent Year Magnetic Electronic Ballasts Electroni Ballasts Magnetic c 1993 38.3 3.9 42.3 22.9 61.3 63% 1994 35.4 2.4 37.7 26.0 61.4 58% 1995 32.3 2.1 34.5 33.1 65.4 49% 1996 30.9 2.2 33.1 30.3 61.3 51% 1997 31.7 2.1 33.7 35.0 66.6 48% 

### * 1997 values are based on SIX months' ofdata Table 5.2 contains data also provided byNEMA, updated through 1998. While these data are more current, they are not disaggregated at the level needed by the NES model. The totals for each year, on which the NES model shipments projection were based, are similar in both data sets, so no appreciable impact on the NES results would be expected from using the more recent data. 2


### T bi 

### 52 US FI

a e 

# . . . uorescent 

### B 11 Sh' a ast lpments, CoveredP d ro uets

### ,1993 -1998 Year Magnetic Electronic Total % Magnetic % Electronic 1993 39.0 22.9 61.9 63% 37% 1994 36.0 26.0 62.0 58% 42% 1995 32.7 33.1 65.8 50% 50% 1996 30.1 29.7 59.8 50% 50% 1997 31.1 35.4 66.5 47% 53% 1998 30.9 37.8 68.7 45% 55% Total 199.8 185.0 384.7
Figure 5.1 shows the percentage ofthe total shipments made up ofmagnetic and electronic ballasts, based on the NEMA data in Table 5.2. Figure 5.2 shows the annual shipments ofmagnetic and electronic ballasts from these data byyear. Itcan be seen that magnetic ballast shipments have remained essentially constant overthe last three years. Figure 5.3 shows the NEMA shipments data for 1993-1998 andthetwo shipments forecasts usedintheNES analyses. These shipments forecasts are described in section 5.3.1, Base Cases, below. l

lA third shipments scenario, Constant Shipments, was used in addition to these two for the consensus standards analysis and is described in Appendix E. 5-3 Table 

### 5.1 U.s.FluorescentBallastDisaggregated Shipments, Covered Products, 

### 1993 -1997* Millions of Ballasts Magnetic Electronic Total Magnetic Electronic Total Magnetic Electronic Total Year F40T12 F40T12 F40T12 2F96T12 2F96T12 2F96T12 2F96T12fHO 2F96T12fHO 2F96T12fHO 1993 31.0 2.3 33.4 6.9 1.1 8.0 0.4 0.5 0.9 1994 28.1 1.3 29.4 6.9 0.7 7.6 0.4 0.3 0.7 1995 25.6 1.2 26.8 6.4 0.6 7.0 0.4 0.3 0.7 1996 24.7 1.2 25.9 5.9 0.6 6.5 0.3 0.4 0.7 1997 25.4 1.2 26.6 6.0 0.5 6.5 0.3 0.4 0.7
Total T12 All T12 T12 +T8 Total Percent Year Magnetic Electronic Ballasts Electroni Ballasts Magnetic c 1993 38.3 3.9 42.3 22.9 61.3 63% 1994 35.4 2.4 37.7 26.0 61.4 58% 1995 32.3 2.1 34.5 33.1 65.4 49% 1996 30.9 2.2 33.1 30.3 61.3 51% 1997 31.7 2.1 33.7 35.0 66.6 48% 

### * 1997 values are based on SIX months' ofdata Table 5.2 contains data also provided byNEMA, updated through 1998. While these data are more current, they are not disaggregated at the level needed by the NES model. The totals for each year, on which the NES model shipments projection were based, are similar in both data sets, so no appreciable impact on the NES results would be expected from using the more recent data. 2


### T bi 

### 52 US FI

a e 

# . . . uorescent 

### B 11 Sh' a ast lpments, CoveredP d ro uets

### ,1993 -1998 Year Magnetic Electronic Total % Magnetic % Electronic 1993 39.0 22.9 61.9 63% 37% 1994 36.0 26.0 62.0 58% 42% 1995 32.7 33.1 65.8 50% 50% 1996 30.1 29.7 59.8 50% 50% 1997 31.1 35.4 66.5 47% 53% 1998 30.9 37.8 68.7 45% 55% Total 199.8 185.0 384.7
Figure 5.1 shows the percentage ofthe total shipments made up ofmagnetic and electronic ballasts, based on the NEMA data in Table 5.2. Figure 5.2 shows the annual shipments ofmagnetic and electronic ballasts from these data byyear. Itcan be seen that magnetic ballast shipments have remained essentially constant overthe last three years. Figure 5.3 shows the NEMA shipments data for 1993-1998 andthetwo shipments forecasts usedintheNES analyses. These shipments forecasts are described in section 5.3.1, Base Cases, below. l

lA third shipments scenario, Constant Shipments, was used in addition to these two for the consensus standards analysis and is described in Appendix E. 5-3121% Magnetic ®% Electronic

Year Figure 5.1 Market Share of Magnetic and Electronic Ballasts

-®-Magnetic .... A... Electronic

15

10

5

0 1993 1994 1995 1996 1997 1998 Year Figure 5.2 Shipments of Magnetic and Electronic Ballasts in Millions.



### 5-4 100%

90%

80%

70%

60% C Q) 50%**~** Q) Il. 40%

30%

20%

10%

0%

1993 1994 1995 1996 1997 1998 Year Figure 5.1 Market Share ofMagnetic and Electronic Ballasts

45

40

35

# r---------

30 ...... j.

# ~ .....

. -----

. - --. ......

.....

..

.' 

### '" ] 

### ..... - .. m 25 III '0**~** c**~** 20 :i
15

10

1993 1994 1995 1996 1997 1998 Year Figure 5.2 Shipments ofMagnetic and Electronic Ballasts in Millions.



### 5-4 100%

90%

80%

70%

60% C Q) 50%**~** Q) Il. 40%

30%

20%

10%

0%

1993 1994 1995 1996 1997 1998 Year Figure 5.1 Market Share ofMagnetic and Electronic Ballasts

45

40

35

# r---------

30 ...... j.

# ~ .....

. -----

. - --. ......

.....

..

.' 

### '" ] 

### ..... - .. m 25 III '0**~** c**~** 20 :i
15

10

1993 1994 1995 1996 1997 1998 Year Figure 5.2 Shipments ofMagnetic and Electronic Ballasts in Millions.



### 5-4_..__....._ 45 T--------------- °----- ..................

40

35

30

--t--Scenario 1 Scenario 2 Actual

15

10

5

0r r i r i r i r i 1990 1995 2000 2005 2010 2015 2020 2025 2030
Year 

### Figure 5.3 . MAGNETIC BALLAST SHIPMENT SCENARIOS
The historical shrinking of the market share for magnetic ballasts was projected to continue over time in this analysis. During the first half of the 1990s, this trend was caused in large part by incentive programs, such as utility demand-side management rebates and voluntary federal agency programs, which promoted efficient (primarily electronic) ballasts. As discussed in Appendix B, utility programs have diminished since 1995, but other non-regulatory programs as well as building codes were expected to continue to provide future incentives for installation of efficient ballasts. The NES model tracks magnetic ballast shipments data for four major lamp-ballastcombinations using T 12 lamps: one-lamp F40T 12, two-lamp F40T 12, two-lamp F96T 12, and twolamp F96T12/HO. For the three- and four-lamp T12 lamp-ballast combinations, there are very few magnetic ballast models. T8 magnetic ballasts have a tiny market share. In the standards scenarios, the T 12 magnetic ballasts that would persist in the base case were assumed to be converted to other ballast types as described below. "Converted" meant that the end user, instead of purchasing a new magnetic ballast, purchased and installed another type of ballast because magnetic ballasts were no longer available as the result of efficiency standards. As discussed in section 5.3.1, some scenarios included ballast/lamp system conversions using T8 systems in place of T12 systems. 

### 5-5 45**,.~---~----------------~------** -----------------------------------..**---------------------.---------------~-----------~-----.--~----,** 

## i ::.':::: 40 j

35 

## i**30:~----~~~~--_+----------------------------------~**
en : 00 :**~25:~------------~-+~~------------------------------~** al : '0**~** II> :**~20:~--------------~~~-----=~----------------------~** i**~ 15~:----------------+_----4r--------~----------------~** **10~:----------------+_--------~----------~~--------~ 5:----------------~------------_4r_------------_=~--~** **Or-----~----~--~--~----~----~----~~----~----~** 1990 1995 2000 2005 2010 Year 2015 2020 

### Figure 5.3. MAGNETIC BALLAST SHIPMENT SCENARIOS 2025 2030

The historical shrinking ofthe market share for magnetic ballasts was projected to continue over time in this analysis. During the first halfofthe 1990s, this trend was caused in large paIi by incentive programs, such as utility demand-side management rebates and voluntary federal agency programs, which promoted efficient (primarily electronic) ballasts. As discussed in Appendix B, utilityprograms have diminished since 1995, but othernon-regulatoryprograms as well asbuilding codes were expected to continue to provide future incentives for installation ofefficient ballasts. The 

### NES model tracks magnetic ballast shipments data for four major lamp-ballast combinations usingT12 lamps: one-lamp F40T12, two-lamp F40T12, two-lamp F96T12, and twolamp F96T12/HO. Forthe three- and four-lamp TI2 lamp-ballast combinations, there are very few magnetic ballast models. T8 magnetic ballasts have a tiny market share.
Inthe standards scenarios, the T 12 magnetic ballasts thatwould persist in the base case were assumed to be converted to otherballast types as described below. "Converted" meantthatthe end user, instead ofpurchasing a new magnetic ballast, purchased and installed another type ofballast because magnetic ballasts were no longer available as the result of efficiency standards. As discussed in section 5.3.1, some scenarios included ballast/lamp system conversions using T8 systems in place ofT12 systems. 5-5 45**,.~---~----------------~------** -----------------------------------..**---------------------.---------------~-----------~-----.--~----,** 

## i ::.':::: 40 j

35 

## i**30:~----~~~~--_+----------------------------------~**
en : 00 :**~25:~------------~-+~~------------------------------~** al : '0**~** II> :**~20:~--------------~~~-----=~----------------------~** i**~ 15~:----------------+_----4r--------~----------------~** **10~:----------------+_--------~----------~~--------~ 5:----------------~------------_4r_------------_=~--~** **Or-----~----~--~--~----~----~----~~----~----~** 1990 1995 2000 2005 2010 Year 2015 2020 

### Figure 5.3. MAGNETIC BALLAST SHIPMENT SCENARIOS 2025 2030

The historical shrinking ofthe market share for magnetic ballasts was projected to continue over time in this analysis. During the first halfofthe 1990s, this trend was caused in large paIi by incentive programs, such as utility demand-side management rebates and voluntary federal agency programs, which promoted efficient (primarily electronic) ballasts. As discussed in Appendix B, utilityprograms have diminished since 1995, but othernon-regulatoryprograms as well asbuilding codes were expected to continue to provide future incentives for installation ofefficient ballasts. The 

### NES model tracks magnetic ballast shipments data for four major lamp-ballast combinations usingT12 lamps: one-lamp F40T12, two-lamp F40T12, two-lamp F96T12, and twolamp F96T12/HO. Forthe three- and four-lamp TI2 lamp-ballast combinations, there are very few magnetic ballast models. T8 magnetic ballasts have a tiny market share.
Inthe standards scenarios, the T 12 magnetic ballasts thatwould persist in the base case were assumed to be converted to otherballast types as described below. "Converted" meantthatthe end user, instead ofpurchasing a new magnetic ballast, purchased and installed another type ofballast because magnetic ballasts were no longer available as the result of efficiency standards. As discussed in section 5.3.1, some scenarios included ballast/lamp system conversions using T8 systems in place ofT12 systems. 5-5Energy savings resulted from conversion of magnetic ballasts to more efficient ballasts over

time. Total energy savings accrued for ballasts operating from the year in which standards were assumed to take effect, through the year 2030. For NPV, the electricity cost savings and equipment costs accrued past 2030

. The equipment costs of ballasts purchased in the later years of our forecast would be associated with electricity savings beyond 2030

. Therefore, electricity cost savings associated with any ballasts purchased before 2030 and occurring in years after 2030 were included in the total for the NPV calculations. For the same reason, the costs of replacement lamps purchased after 2030 to be used in ballasts purchased before 2030 were also counted in the equipment costs. As discussed in Chapter 4, electricity prices were assumed to be constant at the 2020 price after the year 2020. 

### Two-lamp ballasts are used in two-, three -, and four-lamp fixtures. The percentages of total two-lamp ballast shipments used in each fixture type were estimated as described in Appendix B. Ballast weights for the year 1997 are fixed in the NES model, but ballast weights for the year 2009 can be adjusted by the user

. The assumed ballast weights for this analysis are shown in Appendix B. 5.2.2 Market Weights 

### This analysis contained different scenarios in which the percentages of ballasts converted to the trial standard ballast type (electronic or cathode cutout) varied.
5.2.2.1 Electronic Ballast Trial Standards 

### Under a trial standard requiring electronic ballasts, some magnetic ballast users would select T12 electronic ballasts while some might select T8 electronic ballasts. This percentage varied in the standards scenarios as described in section 5.3.1. 5.2.2.2 Market Segments The ballast market has three segments : ( 1) the new/major renovation market, (2) the replacement market, and (3) the early retrofit market. The new/renovation market consists of luminaires installed in new buildings or buildings where entire lighting systems are replaced; this is also called the original equipment manufacturer (OEM) market

. The replacement market consists of ballasts replaced at the end of life (typically spot-replaced at failure). Some of the trial standards scenarios analyzed had different standards implementation dates for the new/renovation and the replacement markets (see section 5.2.3) as well as different assumptions for the percentage of magnetic ballasts converted to electronic T12 and electronic T8 ballasts for these two markets. The early retrofit market, which consists of ballasts replaced with more efficient models before they fail, was considered to be covered in the base case scenarios with their decreasing magnetic ballast shipments

. This market is already installing efficient ballasts and would be little affected by the trial standards. 5-6 Energy savingsre1)ulted from conversion ofmagnetic ballasts to more efficientballasts over**time~** Total energy savings accrued for ballasts operating from the year in which standards were assumed to take effect, through the year 2030.
ForNPV,the electricitycostsavings and equipmentcosts accruedpast2030. Theequipment costs ofballasts purchased in the later years of our forecast would be associated with electricity savings beyond 2030. Therefore, electricity cost savings associated with any ballasts purchased before 2030 and occurring in years after 2030 were included in the total for the NPV calculations. For the same reason, the costs ofreplacement lamps purchased after 2030 to be used in ballasts purchased before 2030 were also counted in the equipment costs. As discussed in Chapter 4, electricity prices were assumed to be constant at the 2020 price after the year 2020. Two-lamp ballasts are used in two-, three-, and four-lamp fixtures. The percentages oftotal two-lamp ballast shipments used in each fixture type were estimated as described in Appendix B. Ballast weights for the year 1997 are fixed in the NES model, butballastweights for the year 2009 can be adjusted by the user. The assumed ballast weights for this analysis are shown in Appendix 

### B.
5.2.2 Market Weights
This analysis contained different scenarios in which the percentages ofballasts converted to the trial standard ballast type (electronic or cathode cutout) varied.
5.2.2.1 Electronic Ballast Trial Standards
Undera trial standardrequiring electronicballasts, some magneticballastusers wouldselect TI2 electronicballastswhile somemightselectT8 electronicballasts. Thispercentagevariedinthe standards scenarios as described in section 5.3.1.
5.2.Z.2 Market Segments
The ballast market has three segments: (1) the new/major renovation market, (2) the replacement market, and (3) the early retrofit market. The new/renovation market consists of luminaires installed in new buildings or buildings where entire lighting systems are replaced; this is also calledthe original equipmentmanufacturer(OEM) market. The replacementmarket consists ofballastsreplaced atthe end oflife (typically spot-replaced at failure). Some ofthe trial standards scenarios analyzed had different standards implementation dates for the new/renovation and the replacement markets (see section 5.2.3) as well as different assumptions for the percentage of magnetic ballasts converted to electronic TI2 and electronic T8 ballasts for these two markets.
The early retrofit market, which consists of ballasts replaced with more efficient models before they fail, was considered to be covered in the base case scenarios with their decreasing magnetic ballast shipments. This market is already installing efficient ballasts and would be little affected by the trial standards. 5-6 Energy savingsre1)ulted from conversion ofmagnetic ballasts to more efficientballasts over**time~** Total energy savings accrued for ballasts operating from the year in which standards were assumed to take effect, through the year 2030.
ForNPV,the electricitycostsavings and equipmentcosts accruedpast2030. Theequipment costs ofballasts purchased in the later years of our forecast would be associated with electricity savings beyond 2030. Therefore, electricity cost savings associated with any ballasts purchased before 2030 and occurring in years after 2030 were included in the total for the NPV calculations. For the same reason, the costs ofreplacement lamps purchased after 2030 to be used in ballasts purchased before 2030 were also counted in the equipment costs. As discussed in Chapter 4, electricity prices were assumed to be constant at the 2020 price after the year 2020. Two-lamp ballasts are used in two-, three-, and four-lamp fixtures. The percentages oftotal two-lamp ballast shipments used in each fixture type were estimated as described in Appendix B. Ballast weights for the year 1997 are fixed in the NES model, butballastweights for the year 2009 can be adjusted by the user. The assumed ballast weights for this analysis are shown in Appendix 

### B.
5.2.2 Market Weights
This analysis contained different scenarios in which the percentages ofballasts converted to the trial standard ballast type (electronic or cathode cutout) varied.
5.2.2.1 Electronic Ballast Trial Standards
Undera trial standardrequiring electronicballasts, some magneticballastusers wouldselect TI2 electronicballastswhile somemightselectT8 electronicballasts. Thispercentagevariedinthe standards scenarios as described in section 5.3.1.
5.2.Z.2 Market Segments
The ballast market has three segments: (1) the new/major renovation market, (2) the replacement market, and (3) the early retrofit market. The new/renovation market consists of luminaires installed in new buildings or buildings where entire lighting systems are replaced; this is also calledthe original equipmentmanufacturer(OEM) market. The replacementmarket consists ofballastsreplaced atthe end oflife (typically spot-replaced at failure). Some ofthe trial standards scenarios analyzed had different standards implementation dates for the new/renovation and the replacement markets (see section 5.2.3) as well as different assumptions for the percentage of magnetic ballasts converted to electronic TI2 and electronic T8 ballasts for these two markets.
The early retrofit market, which consists of ballasts replaced with more efficient models before they fail, was considered to be covered in the base case scenarios with their decreasing magnetic ballast shipments. This market is already installing efficient ballasts and would be little affected by the trial standards. 5-65.2.2.3 Cathode Cutout Trial Standards Under a trial standard requiring cathode cutout ballasts, magnetic ballast users could select cathode cutout ballasts, or they could purchase electronic ballasts, which would also comply with the standard

. In the scenarios analyzed, the percentage of magnetic ballasts converted to cathode cutout ballasts varied , as described below. In the scenario with some electronic ballasts, a certain percentage was assumed to be T12, ballasts and remainder to be T8 ballasts.
5.2.3 Year of Standards 

### The effective date for trial standards was assumed to be 2003. For some electronic ballast scenarios, the effective date applied to the new/renovation market, with a delay period of two or five years for the replacement market.
5.2.4 Social Discount Rate The DOE selected a 7 percent social discount rate for the national NPV analysis. 5.2.5 Electricity Conversion Rates The NES model calculates site energy in terawatt-hours and converts the results to source energy in quads using values from the Annual Energy Outlook 1999 (AEO 99). The conversion factor from quads to exajoules is: 1 quadrillion Btus (quad) = 1.055 exajoules ( 1 Btu = 1.055 joules) 

### AEO 99, Table AS (Commercial Sector Key Indicators and Consumption), lists delivered electricity energy and electricity

-related losses in site quads for the years 1996 and 1997 , as well as for the years 2000 to 2020 in five year intervals ; EIA provided the data for the intermediate years. The conversion factor for source energy is calculated using the formula:

SourceEnergy(MMBtu) = kWh * 1000 * 3412Btu * SiteEnergy(Quads) + Losses(Quads) kWh SiteEnergy(Quads) Losses are in electricity generation , transmission, and distribution

. For 2020 to 2030, the conversion rates are estimated using the rate of change between 2010 and 2020. 

### Table 5.3 shows the site- to source

-energy conversion rates for the analysis period.

5-7 

### 5.2.2.3 Cathode Cutout Trial Standards Under a trial standard requiring cathode cutout ballasts, magnetic ballast users could select cathode cutout ballasts, or they could purchase electronic ballasts, which would also comply with the standard. In the scenarios analyzed, the percentage ofmagnetic ballasts converted to cathode cutout ballasts varied, as described below. In the scenario with some electronic ballasts, a certain percentage was assumed to be Til- ballasts and remainder to be T8 ballasts. 

### 5.2.3 Year ofStandards
The effective date for trial standards was assumed to be 2003. For some electronic ballast scenarios, the effective date appliedto the new/renovation market, with a delayperiodoftwo or five years for the replacement market. 

### 5.2.4 Social Discount Rate The DOE selected a 7 percent social discount rate for the national NPV analysis. 

### 5.2.5 Electricity Conversion Rates The NES model calculates site energy in terawatt-hours and converts the results to source energy in quads using values from the Annual Energy Outlook 1999 (AEO 99). The conversion factor from quads to exajoules is:
1 quadrillion Btus (quad) 

### = 1.055 exajoules (1 Btu 

### = 1.055joules) AEO 99, Table AS (Commercial Sector Key Indicators and Consumption), lists delivered electricity energy and electricity-related losses in site quads for the years 1996 and 1997, as well as for the years 2000 to 2020 in five year intervals; ETA provided the data for the intermediate years. The conversion factor for source energy is calculated using the formula:

h 

### * 3412Btu _S_ite_E_n_e-=rg",-Y..:;CQ:=..l_W_d-,s ),-+_Lo_s_s_es..o;CQ:::::.....-u a_d---,-s) SourceEnergyCMMBtu) = kW. 1000* * kWh SiteEnergyCQuads)
Losses are in electricity generation, transmission, and distribution. For 2020 to 2030, the conversion rates are estimated using the rate ofchange between 2010 and 2020. Table 5.3 shows the site- to source-energy conversion rates for the analysis period.

5-7 

### 5.2.2.3 Cathode Cutout Trial Standards Under a trial standard requiring cathode cutout ballasts, magnetic ballast users could select cathode cutout ballasts, or they could purchase electronic ballasts, which would also comply with the standard. In the scenarios analyzed, the percentage ofmagnetic ballasts converted to cathode cutout ballasts varied, as described below. In the scenario with some electronic ballasts, a certain percentage was assumed to be Til- ballasts and remainder to be T8 ballasts. 

### 5.2.3 Year ofStandards
The effective date for trial standards was assumed to be 2003. For some electronic ballast scenarios, the effective date appliedto the new/renovation market, with a delayperiodoftwo or five years for the replacement market. 

### 5.2.4 Social Discount Rate The DOE selected a 7 percent social discount rate for the national NPV analysis. 

### 5.2.5 Electricity Conversion Rates The NES model calculates site energy in terawatt-hours and converts the results to source energy in quads using values from the Annual Energy Outlook 1999 (AEO 99). The conversion factor from quads to exajoules is:
1 quadrillion Btus (quad) 

### = 1.055 exajoules (1 Btu 

### = 1.055joules) AEO 99, Table AS (Commercial Sector Key Indicators and Consumption), lists delivered electricity energy and electricity-related losses in site quads for the years 1996 and 1997, as well as for the years 2000 to 2020 in five year intervals; ETA provided the data for the intermediate years. The conversion factor for source energy is calculated using the formula:

h 

### * 3412Btu _S_ite_E_n_e-=rg",-Y..:;CQ:=..l_W_d-,s ),-+_Lo_s_s_es..o;CQ:::::.....-u a_d---,-s) SourceEnergyCMMBtu) = kW. 1000* * kWh SiteEnergyCQuads)
Losses are in electricity generation, transmission, and distribution. For 2020 to 2030, the conversion rates are estimated using the rate ofchange between 2010 and 2020. Table 5.3 shows the site- to source-energy conversion rates for the analysis period.

5-7Table 5.3 Site

-to-Source Ener Conversion Factors

Year Conversion

Factor MMBtu/KWh Year Conversion Factor MMBtu/KWh Year Conversion Factor MMBtu/KWh 2001 0.010871 2011 0.010145 2021 0.009638 2002 0.010780 2012 0.010072 2022 0.009587 2003 0.010691 2013 0.010022 2023 0.009538 2004 0.010552 2014 0.009946 2024 0.009488 2005 0.010460 2015 0.009871 2025 0.009439 2006 0.010397 2016 0.009818 2026 0.009390 2007 0.010335 2017 0.009782 2027 0.009341 2008 0.010299 2018 0.009750 2028 0.009292 2009 0.010270 2019 0.009713 2029 0.009244 2010 0.010206 2020 0.009688 2030 0.009196 

### 5.2.6 Lighting/ AC Interactions When lighting energy consumption is reduced through installation of more efficient equipment, there is a secondary impact on cooling and heating energy consumed by the building heating, ventilating, and air conditioning (HVAC) systems. Because less heat is given off by the more efficient lighting systems, less cooling is needed in some buildings or spaces while more heating is needed in other buildings or spaces

. The annual HVAC impact varies by climate zone and building type

. As explained in Appendix B, this analysis used a national average for HVAC impacts that included a cooling decrease for some climates and building types and a heating increase for others. This net national average impact was estimated to be an additional 6.25 percent of the total national lighting energy savings from each scenario . HVAC savings were not included in the total energy cost benefit and therefore were not in the NPV calculation.



### 5.3 STANDARDS SCENARIO ANALYSIS DOE analyzed the impact of two trial standard levels, one for electronic ballasts and the other for cathode cutout ballasts. We considered the following scenarios for electronic ballast standards: end users of magnetic ballast T12 systems choose (1) 100 percent T12 electronic ballasts or (2) 95 percent T8 and 5 percent T 12 electronic ballasts, which is consistent with current market shares. We also considered two other scenarios. Scenario (3) assumed that the standard requires than the new/renovation market segment converts all ballasts to electronic, with 100 percent becoming T8 ballasts, starting on the effective date for efficiency standards. This segment was assumed to make up 70 percent of the total ballast market based on current market data supplied by NEMA for magnetic ballasts sold to OEMs3. The remaining 30 percent, the replacement market, delayed for five years and then converted to electronic ballasts; 5 percent became T12 ballasts and 95 percent

5-8 

### Table 5.3 Site-to-Source En

Year Conversion Factor MMBtu/KWh 

### Conversion Factors Conversion

Factor MMBtu/KWh 0.010145



### 5.2.6 Lighting/HVAC Interactions Conversion Factor MMBtu/KWh 0.009638

When lighting energy consumption is reduced through installation of more efficient equipment, there is a secondary impact on cooling and heating energy consumed by the building heating, ventilating, and air conditioning (HVAC) systems. Because less heat is given offby the more efficient lighting systems, less cooling is needed in some buildings or spaces while more heating is neededin otherbuildings or spaces. The annual HV AC impactvariesbyclimate zone and buildingtype. Asexplainedin Appendix B, this analysis used anational average for HV AC impacts that included a cooling decrease for some climates and building types and a heating increase for others. This netnational average impact was estimated to be an additional 6.25 percent ofthe total national lighting energy savings from each scenario. HV AC savings were not included in the total energy cost benefit and therefore were not in the NPV calculation.



### 5.3 STANDARDS SCENARIO ANALYSIS
DOEanalyzedthe impact oftwo trial standard levels, one for electronicballasts andthe other for cathode cutout ballasts. We considered the following scenarios for electronic ballast standards: end users ofmagnetic ballast Tl2 systems choose (1) 100 percent TI2 electronic ba:1lasts or (2) 95 percent T8 and5percentT 12 electronicballasts, which is consistentwith currentmarketshares. We also considered two other scenarios. Scenario (3) assumed that the standard requires than the new/renovation market segment convelis all ballasts to electronic, with 100 percent becoming T8 ballasts, starting on the effective date for efficiency standards. This segment was assumedto make up 70 percent of the total ballast market based on current market data supplied by NEMA for magnetic ballasts sold to OEMs3. The remaining 30 percent, the replacement market, delayed for five years and then converted to electronic ballasts; 5 percent became TI2 ballasts and 95 percent
5-8 

### Table 5.3 Site-to-Source En

Year Conversion Factor MMBtu/KWh 

### Conversion Factors Conversion

Factor MMBtu/KWh 0.010145



### 5.2.6 Lighting/HVAC Interactions Conversion Factor MMBtu/KWh 0.009638

When lighting energy consumption is reduced through installation of more efficient equipment, there is a secondary impact on cooling and heating energy consumed by the building heating, ventilating, and air conditioning (HVAC) systems. Because less heat is given offby the more efficient lighting systems, less cooling is needed in some buildings or spaces while more heating is neededin otherbuildings or spaces. The annual HV AC impactvariesbyclimate zone and buildingtype. Asexplainedin Appendix B, this analysis used anational average for HV AC impacts that included a cooling decrease for some climates and building types and a heating increase for others. This netnational average impact was estimated to be an additional 6.25 percent ofthe total national lighting energy savings from each scenario. HV AC savings were not included in the total energy cost benefit and therefore were not in the NPV calculation.



### 5.3 STANDARDS SCENARIO ANALYSIS
DOEanalyzedthe impact oftwo trial standard levels, one for electronicballasts andthe other for cathode cutout ballasts. We considered the following scenarios for electronic ballast standards: end users ofmagnetic ballast Tl2 systems choose (1) 100 percent TI2 electronic ba:1lasts or (2) 95 percent T8 and5percentT 12 electronicballasts, which is consistentwith currentmarketshares. We also considered two other scenarios. Scenario (3) assumed that the standard requires than the new/renovation market segment convelis all ballasts to electronic, with 100 percent becoming T8 ballasts, starting on the effective date for efficiency standards. This segment was assumedto make up 70 percent of the total ballast market based on current market data supplied by NEMA for magnetic ballasts sold to OEMs3. The remaining 30 percent, the replacement market, delayed for five years and then converted to electronic ballasts; 5 percent became TI2 ballasts and 95 percent
5-8became T8 ballasts

. Scenario (4) was identical to (3) except the delay in conversion for the

replacement market was two years

. We considered the following scenarios for cathode cutout ballasts: end users choose ( 1) 100 percent cathode cutout ballasts and (2) 30 percent cathode cutout and 70 percent electronic ballasts. See sections 5.3.3 and 5.3.4 and Table 5.4 for further explanation of the Scenarios. 

### Two base case forecasts of shipments of magnetic ballasts without standards were used as a reference case to which the standards scenarios were compared

. Therefore, there were a total of eight possible electronic ballast standards scenarios and four cathode

-cutout standards scenarios, as described below.
5.3.1 Base Cases
5.3.1.1 Decreasing Shipments to 2015 

### In this base case, ballast shipments from 1997 through 2030 were assumed to decrease at the rate at which most magnetic ballast shipments declined from 1993 through 1997. This rate was based on a linear regression through the historical shipments data for those years (shown in Table 5.1). This rate represented a 5 percent annual decrease from 1997 shipments levels. To account for the fact that without regulatory action some magnetic ballasts would continue to be used, shipments decreased to a base level (rather than zero ) in 2015 and remained at this level through 2030

. The base level was calculated as 10 percent of the magnetic ballast shipments in 1997 for each ballast lamp-ballast combination. 5.3.1.2 Decreasing Shipments to 2027
In this base case , shipments from 1997 through 2030 were assumed to decrease at a slower rate than in the 2015 case, reaching the base level by 2027. This rate represented a 3 percent annual decrease from 1997 shipments levels. The base level was 10 percent of the magnetic ballast shipments in 1997.



### 5.3.1.3 Market Incentive Impacts As discussed in Market Weights (section 5

.2.2) and in the Decreasing Shipments Scenarios above, the base case scenarios implicitly assumed that some magnetic ballast systems were being converted to higher efficiency ballast systems through early retrofit programs. Prior to 1996, electric utility demand

-side management (DSM) programs provided rebates for ballast conversions. Although these rebates are being phased out under utility deregulation, other voluntary programs have begun to affect the market

. Major programs are the Environmental Protection Agency (EPA) Green Lights (now Energy Star Buildings) program, the Federal Energy Management Program (FEMP) Procurement Challenge and Federal Relighting Initiative, DOE's Rebuild America program, and NEMA's Energy Cost Savings Council

. Building codes being adopted by states to conform with 

### 5-9 became T8 ballasts. Scenario (4) was identical to (3) except the delay in conversion for the replacement market was two years. We considered the following scenarios for cathode cutout ballasts: endusers choose (1) 100 percent cathode cutout ballasts and (2) 30percent cathode cutout and 70 percent electronic ballasts. See sections 5.3.3 and 5.3.4 andTable 5..4 for further explanation ofthe Scenarios.
Two base case forecasts ofshipments ofmagnetic ballasts without standards were used as a reference case to which the standards scenarios were compared. Therefore, there were a total of eightpossible electronic ballast standards scenarios and four cathode-cutout standards scenarios, as described below. 

### 5.3.1 Base Cases 5.3.1.1 Decreasing Shipments to 2015
In this base case, ballast shipments from 1997 through 2030 were assumedto decrease atthe rate at which most magnetic ballast shipments declined from 1993 through 1997. This rate was based on a linear regression through the historical shipments data for those years (shown in Table 5.1). This rate represented a 5 percent annual decrease from 1997 shipments levels.
To account for the factthatwithoutregulatory action some magneticballastswouldcontinue to be used, shipments decreased to a base level (rather than zero) in 2015 and remained atthis level through 2030. The base level was calculated as 10 percentofthe magneticballast shipments in 1997 for each ballast lamp-ballast combination. 

### 5.3.1.2 Decreasing Shipments to 2027
Inthis base case, shipments from 1997 through 2030 were assumed to decrease at a slower rate than in the 2015 case, reachingthe base level by 2027. This rate represented a 3 percent annual decrease from 1997 shipments levels. The base level was 10 percent of the magnetic ballast shipments in 1997.



### 5.3.1.3 Market Incentive Impacts
As discussed in Market Weights (section 5.2.2) and in the Decreasing Shipments Scenarios above, the base case scenarios implicitly assumed that some magnetic ballast systems were being convertedto higherefficiencyballastsystems through eaTlyretrofitprograms. Priorto 1996, electric utility demand-side management (DSM) programs provided rebates for ballast conversions. Although these rebates are being phased out under utility deregulation, other voluntary programs have begun to affect the market. Major programs are the Environmental Protection Agency (EPA) Green Lights (now Energy Star Buildings) program, the Federal Energy Management Program (FEMP)ProcurementChallenge and Federal RelightingInitiative, DOE'sRebuildAmericaprogram, andNEMA'sEnergy Cost Savings Council. Buildingcodesbeing adoptedbystatesto confoTIn with 5-9 became T8 ballasts. Scenario (4) was identical to (3) except the delay in conversion for the replacement market was two years. We considered the following scenarios for cathode cutout ballasts: endusers choose (1) 100 percent cathode cutout ballasts and (2) 30percent cathode cutout and 70 percent electronic ballasts. See sections 5.3.3 and 5.3.4 andTable 5..4 for further explanation ofthe Scenarios.
Two base case forecasts ofshipments ofmagnetic ballasts without standards were used as a reference case to which the standards scenarios were compared. Therefore, there were a total of eightpossible electronic ballast standards scenarios and four cathode-cutout standards scenarios, as described below. 

### 5.3.1 Base Cases 5.3.1.1 Decreasing Shipments to 2015
In this base case, ballast shipments from 1997 through 2030 were assumedto decrease atthe rate at which most magnetic ballast shipments declined from 1993 through 1997. This rate was based on a linear regression through the historical shipments data for those years (shown in Table 5.1). This rate represented a 5 percent annual decrease from 1997 shipments levels.
To account for the factthatwithoutregulatory action some magneticballastswouldcontinue to be used, shipments decreased to a base level (rather than zero) in 2015 and remained atthis level through 2030. The base level was calculated as 10 percentofthe magneticballast shipments in 1997 for each ballast lamp-ballast combination. 

### 5.3.1.2 Decreasing Shipments to 2027
Inthis base case, shipments from 1997 through 2030 were assumed to decrease at a slower rate than in the 2015 case, reachingthe base level by 2027. This rate represented a 3 percent annual decrease from 1997 shipments levels. The base level was 10 percent of the magnetic ballast shipments in 1997.



### 5.3.1.3 Market Incentive Impacts
As discussed in Market Weights (section 5.2.2) and in the Decreasing Shipments Scenarios above, the base case scenarios implicitly assumed that some magnetic ballast systems were being convertedto higherefficiencyballastsystems through eaTlyretrofitprograms. Priorto 1996, electric utility demand-side management (DSM) programs provided rebates for ballast conversions. Although these rebates are being phased out under utility deregulation, other voluntary programs have begun to affect the market. Major programs are the Environmental Protection Agency (EPA) Green Lights (now Energy Star Buildings) program, the Federal Energy Management Program (FEMP)ProcurementChallenge and Federal RelightingInitiative, DOE'sRebuildAmericaprogram, andNEMA'sEnergy Cost Savings Council. Buildingcodesbeing adoptedbystatesto confoTIn with 5-9

### the ASHRAE

-IES 90

. 1-1989 building code under the Energy Policy Act of 1992 also affect ballast

choices in new buildings. To better estimate these impacts, we analyzed non-regulatory program and building code impacts on the ballast market. Lawrence Berkeley National Laboratory (LBNL) conducted a study2 to estimate the number of fluorescent ballasts affected by DSM rebates from 1992 to 1997. Detailed analysis of data on spending amounts and units receiving rebates from several major utilities, accounting for up to 30 percent of the national total , was combined with EIA estimates of national DSM spending to produce estimates ofballasts rebated

. Results indicated that the number of rebates and the percentage of the ballast market affected by rebates both declined since 1995. When the ASHRAE/IES code is revised (90.1-1999), the lower lighting power density limits will be an incentive for increasing use of electronic ballasts after 2005. DOE is preparing a new revision of the code for federal buildings that will also encourage the use of electronic ballasts. The EPA programs have resulted in a growing number of voluntary lighting upgrades that include electronic ballasts. The FEMP programs are expected to have modest but important impacts increasing the market share for electronic ballasts purchased for federal buildings. More details on these shipments forecasts, as well as the impact of market incentive programs, are found in Appendix B. 

### 5.3.2 Standards Scenarios All of the scenarios assumed that users who would buy magnetic ballasts in the base case would purchase another ballast type in the standards case. In some scenarios, users would purchase the ballast type whose Ballast Efficacy Factor (BEF) just met the standard. In other scenarios, a fraction of the users would respond to the standard by purchasing ballasts even more efficient than required by the standard. In some cases , those more efficient ballasts would be part of a ballast/lamp system that would involve a shift to a different lamp type. For all scenarios, the effective date was January, 2003. For some scenarios, the effective date applied to one portion of the ballast market, and a delay was assumed for the other market segment. Each scenario was modeled using three different fuel price forecasts from the AEO 99: the Reference Case forecast, the High Economic Growth forecast, and the Low Economic Growth forecast

. Savings from the Reference Case forecast were in between the higher savings under the High forecast and the lower savings under the Low forecast , because these scenarios assumed higher and lower energy prices respectively, for the base case

. See section 5.3.4 below for the results of these three forecasts.

2Busch, C., 1. Turiel, B.A. Atkinson, J.E. McMahon, J.H. Eto

. 1999. "DSM Rebates for Electronic Ballasts: National Estimates ( 1992-1997) and Assessment of Market Impact ." Lawrence Berkeley National Laboratory. 5-10 the ASHRAE-IES 90.1-1989 building code under the Energy PolicyAct of 1992 also affectballast choices in new buildings.
To better estimate these impacts, we analyzed non-regulatory program and building code impacts onthe ballast market. Lawrence BerkeleyNational Laboratory (LBNL) conducted a study to estimatethe numberoffluorescent ballasts affectedbyDSMrebates from 1992 to 1997. Detailed analysis of data on spending amounts and units receiving rebates from several major utilities, accounting for up to 30 percent ofthe national total, was combined with EIA estimates ofnational DSM spendingto produce estimates of ballastsrebated. Results indicatedthatthe number ofrebates and the percentage ofthe ballast market affected by rebates both declined since 1995. When the ASHRAE/IES code is revised (90.1-1999), the lower lighting power density limits will be an incentive for increasinguse ofelectronicballasts after 2005. DOEis preparing a newrevision ofthe code for federal buildings that will also encourage the use ofelectronic ballasts. The EPA programs have resulted in a growing number ofvoluntary lighting upgrades that include electronic ballasts. The FEMP programs are expectedto have modestbutimportantimpacts increasingthe market share for electronic ballasts purchased for federal buildings.
More details on these shipments forecasts, as well as the impact of market incentive programs, are found in Appendix B. 

### 5.3.2 Standards Scenarios
All ofthe scenarios assumed that users who would buy magnetic ballasts in the base case would purchase another ballast type in the standards case. In some scenarios, users wouldpurchase the ballast type whose Ballast Efficacy Factor (BEF)just met the standard. In other scenarios, a fraction ofthe users would respond to the standard by purchasingballasts even more efficient than requiredbythe standard. In some cases, those more efficientballasts wouldbe partofaballast/lamp system that would involve a shift to a different lamp type.
Forall scenarios, the effective datewas January, 2003. Forsome scenarios, the effective date applied to oneportion ofthe ballast market, and a delay was assumed for the othermarket segment. Each scenario was modeled using three different fuel price forecasts from the AEO 99: the Reference Case forecast, the High Economic Growth forecast, and the Low Economic Growth forecast. Savings from the Reference Case forecast were in between the higher savings under the High forecast and the lower savingsundertheLowforecast, becausethese scenarios assumedhigher and lower energy prices respectively, for the base case. See section 5.3.4 below for the results of these three forecasts.

2Busch, C., l. Turiel, B.A. Atkinson, J.E. McMahon, J.H. Eto. 1999. "DSM Rebates for Electronic Ballasts: National Estimates (1992-1997) and Assessment ofMarket Impact." Lawrence Berkeley National Laboratory. 5-10 the ASHRAE-IES 90.1-1989 building code under the Energy PolicyAct of 1992 also affectballast choices in new buildings.
To better estimate these impacts, we analyzed non-regulatory program and building code impacts onthe ballast market. Lawrence BerkeleyNational Laboratory (LBNL) conducted a study to estimatethe numberoffluorescent ballasts affectedbyDSMrebates from 1992 to 1997. Detailed analysis of data on spending amounts and units receiving rebates from several major utilities, accounting for up to 30 percent ofthe national total, was combined with EIA estimates ofnational DSM spendingto produce estimates of ballastsrebated. Results indicatedthatthe number ofrebates and the percentage ofthe ballast market affected by rebates both declined since 1995. When the ASHRAE/IES code is revised (90.1-1999), the lower lighting power density limits will be an incentive for increasinguse ofelectronicballasts after 2005. DOEis preparing a newrevision ofthe code for federal buildings that will also encourage the use ofelectronic ballasts. The EPA programs have resulted in a growing number ofvoluntary lighting upgrades that include electronic ballasts. The FEMP programs are expectedto have modestbutimportantimpacts increasingthe market share for electronic ballasts purchased for federal buildings.
More details on these shipments forecasts, as well as the impact of market incentive programs, are found in Appendix B. 

### 5.3.2 Standards Scenarios
All ofthe scenarios assumed that users who would buy magnetic ballasts in the base case would purchase another ballast type in the standards case. In some scenarios, users wouldpurchase the ballast type whose Ballast Efficacy Factor (BEF)just met the standard. In other scenarios, a fraction ofthe users would respond to the standard by purchasingballasts even more efficient than requiredbythe standard. In some cases, those more efficientballasts wouldbe partofaballast/lamp system that would involve a shift to a different lamp type.
Forall scenarios, the effective datewas January, 2003. Forsome scenarios, the effective date applied to oneportion ofthe ballast market, and a delay was assumed for the othermarket segment. Each scenario was modeled using three different fuel price forecasts from the AEO 99: the Reference Case forecast, the High Economic Growth forecast, and the Low Economic Growth forecast. Savings from the Reference Case forecast were in between the higher savings under the High forecast and the lower savingsundertheLowforecast, becausethese scenarios assumedhigher and lower energy prices respectively, for the base case. See section 5.3.4 below for the results of these three forecasts.

2Busch, C., l. Turiel, B.A. Atkinson, J.E. McMahon, J.H. Eto. 1999. "DSM Rebates for Electronic Ballasts: National Estimates (1992-1997) and Assessment ofMarket Impact." Lawrence Berkeley National Laboratory. 5-105.3.3. Electronic Ballast Trial Standards Scenarios



### Scenario 1. This scenario assumed that 100 percent of magnetic ballasts were converted to electronic T12 ballasts. This scenario was intended to model the impacts of minimal compliance with the standard. Scenario 2. This scenario assumed that all magnetic ballasts were converted to electronic ballasts, with 5 percent becoming T12 ballasts and 95 percent becoming T8 ballasts

. This scenario was intended to model the likely market behavior under a standard , based on historical shipment data showing that nearly all (95 percent) of electronic ballasts purchased from 1993 - 1997 were T8 ballasts.
This Scenario , as well as Scenarios 3 and 4 below that also contained some usage of T8 systems, assumed that the T8 lamps were driven by electronic rapid start (ERS) ballasts. In the current market, about 25 percent of T8 electronic ballasts are rapid start, with the remaining 75 percent being instant start4

. Despite the higher market share of instant start ballasts, this analysis focused on rapid start ballasts; a standard level requiring electronic instant start ballasts would not be appropriate since these ballasts are not used in applications where lamps are switched frequently (such as with occupancy sensors) as the instant start mode shortens lamp life. The assumption of rapid start ballasts therefore gave somewhat conservative results, as the savings from T8 instant start ballasts would be higher than those from T8 rapid start ballasts.
Scenario 3. This scenario assumed that the new/renovation luminaire market segment converted all ballasts to electronic, with 100 percent becoming T8 ballasts, starting on the effective date for standards

. This segment was assumed to make up 70 percent of the total ballast market. The replacement market had a delay period of five years, after which magnetic ballasts were converted to electronic ballasts, with 5 percent becoming T12 ballasts and 95 percent becoming T8 ballasts. The replacement segment was 30 percent of the total market (see sections 5.2.2 and 5.3.1 above for descriptions of these market segments). This scenario reflected the differing impacts of standards on the two market segments , allowing an adjustment period for the replacement market users in existing buildings to prepare for the new ballast type

. Adding individual electronic ballasts to a space with magnetically

-ballasted fixtures could complicate maintenance and inventory, and cause a variation in light quality because of different lamp colors. 

### Scenario 4. This scenario made identical assumptions to Scenario 3, except that the delay period for the replacement market was two years. Each of these four scenario forecasts above was compared with those of the two base cases. As described above in section 5.3.1, magnetic shipments decreased more rapidly in the base case called "Decreasing Shipments to 2015 ." Comparisons of the four electronic ballast standards forecasts above with the 2015 base case are referred to as Scenario IA, Scenario 2A, Scenario 3A, and Scenario 4A. Forecasts runs using the "Decreasing Shipments to 2027" base case are called Scenario 1B, Scenario 2B, Scenario 3B, and Scenario 4B.

5-11 

### 5.3.3. Electronic Ballast Trial Standards Scenarios Scenario 1. This scenario assumed that 100 percent ofmagnetic ballasts were converted to electronic T12 ballasts. This scenario was intended to model the impacts ofminimal compliance with the standard. Scenario 2. This scenario assumed that all magnetic ballasts were converted to electronic ballasts, with 5 percent becoming T 12 ballasts and 95 percentbecoming T8 ballasts. This scenario was intendedto modelthe likelymarketbehaviorundera standard,based on historical shipmentdata showing that nearly all (95 percent) of electronic ballasts purchased from 1993

- 1997 were T8 ballasts. This Scenario, as well as Scenarios 3 and 4 below that also contained some usage ofT8 systems, assumed that the T8 lamps were driven by electronic rapid start (ERS) ballasts. In the current market, about 25 percent ofT8 electronic ballasts are rapid start, with the remaining 75 percent being instant start4• Despite the higher market share ofinstant start ballasts, this analysis focused on rapid start ballasts; a standard level requiring electronic instant start ballasts would not be appropriate since these ballasts are notused in applications where lamps are switched frequently (such as with occupancy sensors) as the instant start mode shortens lamp life. The assumption of rapid startballaststherefore gave somewhatconservativeresults, as the savings from T8 instant start ballasts would be higher than those from T8 rapid start ballasts. Scenario 3. This scenario assumed that the new/renovation luminaire market segment converted all ballasts to electronic, with 100 percentbecomingT8 ballasts, starting on the effective date for standards. This segment was assumed to make up 70 percent ofthe total ballast market. The replacement market had a delay period of five years, after which magnetic ballasts were convertedto electronic ballasts, with 5 percentbecoming T12 ballasts and 95 percent becoming T8 ballasts. The replacement segment was 30 percent ofthe total market (see sections 5.2.2 and 5.3.1 above for descriptions ofthese market segments). This scenario reflected the differing impacts of standards on the two market segnlents, allowing an adjustment period for the replacement market users in existingbuildings to prepare for the new ballasttype. Adding individual electronic ballasts to a space with magnetically-ballasted fixtures could complicate maintenance and inventory, and cause a variation in light quality because ofdifferent lamp colors. Scenario 4. This scenario made identical assumptions to Scenario 3, except that the delay period for the replacement market was two years. Each ofthese four scenario forecasts above was comparedwith those ofthe two base cases. As described above in section 5.3.1, magnetic shipments decreased more rapidly in the base case called "Decreasing Shipments to 2015." Comparisons of the four electronic ballast standards forecasts above with the 2015 base case are referred to as Scenario lA, Scenario 2A, Scenario 3A, and Scenario 4A. Forecasts runs using the "Decreasing Shipments to 2027" base case are called Scenario 1B, Scenario 2B, Scenario 3B, and Scenario 4B.

5-11 

### 5.3.3. Electronic Ballast Trial Standards Scenarios Scenario 1. This scenario assumed that 100 percent ofmagnetic ballasts were converted to electronic T12 ballasts. This scenario was intended to model the impacts ofminimal compliance with the standard. Scenario 2. This scenario assumed that all magnetic ballasts were converted to electronic ballasts, with 5 percent becoming T 12 ballasts and 95 percentbecoming T8 ballasts. This scenario was intendedto modelthe likelymarketbehaviorundera standard,based on historical shipmentdata showing that nearly all (95 percent) of electronic ballasts purchased from 1993

- 1997 were T8 ballasts. This Scenario, as well as Scenarios 3 and 4 below that also contained some usage ofT8 systems, assumed that the T8 lamps were driven by electronic rapid start (ERS) ballasts. In the current market, about 25 percent ofT8 electronic ballasts are rapid start, with the remaining 75 percent being instant start4• Despite the higher market share ofinstant start ballasts, this analysis focused on rapid start ballasts; a standard level requiring electronic instant start ballasts would not be appropriate since these ballasts are notused in applications where lamps are switched frequently (such as with occupancy sensors) as the instant start mode shortens lamp life. The assumption of rapid startballaststherefore gave somewhatconservativeresults, as the savings from T8 instant start ballasts would be higher than those from T8 rapid start ballasts. Scenario 3. This scenario assumed that the new/renovation luminaire market segment converted all ballasts to electronic, with 100 percentbecomingT8 ballasts, starting on the effective date for standards. This segment was assumed to make up 70 percent ofthe total ballast market. The replacement market had a delay period of five years, after which magnetic ballasts were convertedto electronic ballasts, with 5 percentbecoming T12 ballasts and 95 percent becoming T8 ballasts. The replacement segment was 30 percent ofthe total market (see sections 5.2.2 and 5.3.1 above for descriptions ofthese market segments). This scenario reflected the differing impacts of standards on the two market segnlents, allowing an adjustment period for the replacement market users in existingbuildings to prepare for the new ballasttype. Adding individual electronic ballasts to a space with magnetically-ballasted fixtures could complicate maintenance and inventory, and cause a variation in light quality because ofdifferent lamp colors. Scenario 4. This scenario made identical assumptions to Scenario 3, except that the delay period for the replacement market was two years. Each ofthese four scenario forecasts above was comparedwith those ofthe two base cases. As described above in section 5.3.1, magnetic shipments decreased more rapidly in the base case called "Decreasing Shipments to 2015." Comparisons of the four electronic ballast standards forecasts above with the 2015 base case are referred to as Scenario lA, Scenario 2A, Scenario 3A, and Scenario 4A. Forecasts runs using the "Decreasing Shipments to 2027" base case are called Scenario 1B, Scenario 2B, Scenario 3B, and Scenario 4B.

5-115.3.4 Cathode Cutout Trial Standards Scenarios



### Scenario 5. This scenario assumed that 100 percent of magnetic ballasts were converted to cathode cutout ballasts. The exception is the F96T12 ballast lamp-ballast combination , for which there is no cathode cutout option. These ballasts were assumed to remain magnetic under standards. This scenario modeled the impacts of minimal compliance with the standard. Scenario 6. This scenario assumed that 30 percent of ballasts were converted to cathode cutout ballasts, and 70 percent were converted to electronic ballasts, with 5 percent becoming T 12 electronic ballasts and 95 percent becoming T8 electronic ballasts. The assumption was that some users would respond to a cathode cutout standard by selecting more efficient and cost-effective electronic ballasts, which would also comply with the standard. Cathode cutout forecasts run with the Decreasing Shipments to 2015 base case are denoted as 5A and 6A. Cathode cutout forecasts run with the Decreasing Shipments to 2027 base case are called 5B and 6B. 

### Table 5.4 summarizes the assumptions for the six scenarios run under the two base cases. 

### 5.3.4 Cathode Cutout Trial Standards Scenarios Scenario 5. This scenario assumed that 100 percent ofmagnetic ballasts were converted to cathode cutout ballasts. The exception is the F96Tl2 ballast lamp-ballast combination, for which there is no cathode cutoutoption. These ballasts were assumedto remainmagneticunder standards. This scenario modeled the impacts ofminimal compliance with the standard. Scenario 6. This scenario assumed that 30 percent ofballasts were converted to cathode cutout ballasts, and 70 percent were converted to electronic ballasts, with 5 percentbecoming T12 electronic ballasts and 95 percent becoming T8 electronic ballasts. The assumption was that some users would respond to a cathode cutout standard by selecting more efficient and cost-effective electronic ballasts, which would also comply with the standard. Cathode cutout forecasts run with the Decreasing Shipments to 2015 base case are denoted as 5A and 6A. Cathode cutout forecasts run with the Decreasing Shipments to 2027 base case are called 5B and 6B. Table 5.4 summarizes the assumptions for the six scenarios run under the two base cases.

5-12 

### 5.3.4 Cathode Cutout Trial Standards Scenarios Scenario 5. This scenario assumed that 100 percent ofmagnetic ballasts were converted to cathode cutout ballasts. The exception is the F96Tl2 ballast lamp-ballast combination, for which there is no cathode cutoutoption. These ballasts were assumedto remainmagneticunder standards. This scenario modeled the impacts ofminimal compliance with the standard. Scenario 6. This scenario assumed that 30 percent ofballasts were converted to cathode cutout ballasts, and 70 percent were converted to electronic ballasts, with 5 percentbecoming T12 electronic ballasts and 95 percent becoming T8 electronic ballasts. The assumption was that some users would respond to a cathode cutout standard by selecting more efficient and cost-effective electronic ballasts, which would also comply with the standard. Cathode cutout forecasts run with the Decreasing Shipments to 2015 base case are denoted as 5A and 6A. Cathode cutout forecasts run with the Decreasing Shipments to 2027 base case are called 5B and 6B. Table 5.4 summarizes the assumptions for the six scenarios run under the two base cases.

5-12Table 5.4. Ballast Scenario Assumptions



### i S Ballast Electronic Ballast Percent Market Segment Delay

Period for Base Case

Decreasing 

### cenar o Type T12 

### T8 New Repl Repl.Mkt. (years) Shipments

Year


### IA ERS 100 0 NA 

### NA 0 2015 113 

### ERS 100 NA NA 0 2027 2A ERS 5 

### 95 NA NA 0 2015 

### 2B ERS 5 

### 95 NA NA 

### 0 2027 3A ERS New 

### Repl New 

### Repl 70 30 2015

0 5 

### 100 95 3B ERS New 

### Repl New 

### Repl 70 30 5 2027

0 5 

### 100 95 4A ERS New 

### Repl New 

### Repl 70 30 2 

### 2015

0 5 100 95 4B CC 0 0 NA NA 0 2015 

### 513 CC 

## 0 

## 0 NA NA 0 2027 6A CC 3.5 66.5 NA NA 0 2015 6B CC 3.5 66.5 NA NA 0 2027 For Scenarios 6A and 6B, cathode cutout ballasts represented 30 percent of the magnetic ballast conversions. Of the 70 percent that convert to electronic, 5 percent were T12 (3.5 percent of the total) and 95 percent were T8 (66.5 percent of the total).


### 5.3.5 Alternative Electricity Price Projections The EIA prepares annual forecasts of electricity prices to the year 2020. The projection thought to be the most likely given current economic trends was the Reference Case forecast. The High Economic Growth forecast assumes higher electricity rates in the future because of a high rate of economic growth. The Low Economic Growth forecast assumes lower electricity rates in the future in response to economic growth. The Gas Research Institute's 1999 electricity price
5-13 

### T bi 54 B 

## n S 

### 'A

a e •• a ast cenano f 

### ssumpllons Electronic Ballast Market Delay Base Case Ballast Percent Segment Period for Decreasing Scenario Type Rep}. Mkt. Shipments T12 T8 New Repl (years) Year lA ERS 100 0 NA NA 0 2015 IB ERS 100 0 NA NA 0 2027 2A ERS 5 95 NA NA 0 2015 2B ERS 5 95 NA NA 0 2027 3A ERS New Repl New Repl 70 30 5 2015 0 5 100 95 3B ERS New Repl New Repl 70 30 5 2027 0 5 100 95 4A ERS New Repl New Repl 70 30 2 2015 0 5 100 95 4B CC 0 0 NA NA 0 2015 5B CC 0 0 NA NA 0 2027 6A CC 3.5 66.5 NA NA 0 2015 6B CC 3.5 66.5 NA NA 0 2027
For Scenarios 6A and 6B, cathode cutout ballasts represented 30 percent ofthe magnetic ballast conversions. Ofthe 70 percent that convert to electronic, 5 percent were TI2 (3.5 percent ofthe total) and 95 percent were T8 (66.5 percent ofthe total).

5.3.5 Alternative Electricity Price Projections The EIA prepares annual forecasts of electricity prices to the year 2020. The projection thought to be the most likely given current economic trends was the Reference Case forecast. The High Economic Growth forecast assumes higher electricityrates in the future because ofa high rate ofeconomic growth. The Low Economic Growth forecast assumes lower electricity rates in the future in response to economic growth. The Gas Research Institute's 1999 electricity price
5-13 

### T bi 54 B 

## n t S

a e •• a as 

### 'A cenano f 

### ssump110ns Electronic Ballast Market Delay Base Case Ballast Percent Segment Period for Decreasing Scenario Type Rep}. Mkt. Shipments T12 T8 New Repl (years) Year lA ERS 100 0 NA NA 0 2015 IB ERS 100 0 NA NA 0 2027 2A ERS 5 95 NA NA 0 2015 2B ERS 5 95 NA NA 0 2027 3A ERS New Repl New Repl 70 30 5 2015 0 5 100 95 3B ERS New Repl New Repl 70 30 5 2027 0 5 100 95 4A ERS New Repl New Repl 70 30 2 2015 0 5 100 95 4B CC 0 0 NA NA 0 2015 5B CC 0 0 NA NA 0 2027 6A CC 3.5 66.5 NA NA 0 2015 6B CC 3.5 66.5 NA NA 0 2027
For Scenarios 6A and 6B, cathode cutout ballasts represented 30 percent ofthe magnetic ballast conversions. Ofthe 70 percent that convert to electronic, 5 percent were TI2 (3.5 percent ofthe total) and 95 percent were T8 (66.5 percent ofthe total).

5.3.5 Alternative Electricity Price Projections The EIA prepares annual forecasts of electricity prices to the year 2020. The projection thought to be the most likely given current economic trends was the Reference Case forecast. The High Economic Growth forecast assumes higher electricityrates in the future because ofa high rate ofeconomic growth. The Low Economic Growth forecast assumes lower electricity rates in the future in response to economic growth. The Gas Research Institute's 1999 electricity price
5-13

### projection was also considered, but because it falls within the range of the AEO High and Low cases,

we decided not to use it. However, it is available as an alternative projection in the NES model. 5,3.6 Results The results presented used the three AEO electricity price forecasts. The different price forecasts affected only the Total Benefit (energy cost savings) and NPV; the energy savings and equipment costs were the same as those in the Reference Case forecast. Tables 5.5 through 5.10 show the energy savings, energy savings with lighting/HVAC impacts, energy cost savings, equipment costs, and NPV for the six scenarios and the two shipments base cases. These results were totaled for the four lamp-ballast combinations; tables in Appendix B present the detailed results by lamp-ballast combination. Table 5.5 National Energy Savings Results, AEO Reference Case, Electronic Standards

For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)

SCENARIO Seen IA T12 Scen 1B

T12 7 Sce,, 2A

T12/T8 Scen 2B

T12/T8
a .ecr Scen 3A Seen 3B Seen 4A

Decr2015 Scen 4B
Total Quads Saved 1.01 1.79 1.66 2.93 1.43 2.66 1.57 2.84 Total Quads Saved w/HVAC* 1.08 1.90 1.76 3.12 1.52 2.82 1.67 3.02 Total Exaioules Saved 1.07 1.89 1.75 3.09 1.51 2.80 1.65 3.00 Total Exajoules Saved w/ HVAC* 1.14 2.01 1.86 3.29 1.60 2.98 1.76 3.18 Total Benefit 1.97 3.13 3.22 5.13 2.68 4.46 2.98 4.85 Total Equipment Cost 1.01 1.62 0.80 1.27 0.64 1.08 0.72 1.18 Net Present Value 0.96 1.51 2.43 3.86 2.03 3.38 2.26 3.68 *For energy savings only; Total Benefit and Net Present Value do not include HVAC savings. projectionwas also considered,butbecause it falls withinthe range of the AEO High and Low cases, we decided not to use it. However, it is available as an alternative projection in the NES model. 

### 5.3.6 Results The results presented used the three AEO electricity price forecasts. The different price forecasts affected only the Total Benefit (energy cost savings) and NPV; the energy savings and equipment costs were the same as those in the Reference Case forecast. Tables 5.5 through 5.10 show the energy savings, energy savings with lighting/HVAC impacts, energy cost savings, equipment costs, andNPV for the six scenarios and the two shipments base cases. These results were totaled for the four lamp-ballast combinations; tables in Appendix B present the detailed results by lamp-ballast combination.

For Units Sold from 2003 to 2030

*For energy savings only; Total Benefit and Net Present Value do not include HVAC savings.

5-14 projectionwas also considered,butbecause it falls withinthe range of the AEO High and Low cases, we decided not to use it. However, it is available as an alternative projection in the NES model. 

### 5.3.6 Results The results presented used the three AEO electricity price forecasts. The different price forecasts affected only the Total Benefit (energy cost savings) and NPV; the energy savings and equipment costs were the same as those in the Reference Case forecast. Tables 5.5 through 5.10 show the energy savings, energy savings with lighting/HVAC impacts, energy cost savings, equipment costs, andNPV for the six scenarios and the two shipments base cases. These results were totaled for the four lamp-ballast combinations; tables in Appendix B present the detailed results by lamp-ballast combination.

For Units Sold from 2003 to 2030

*For energy savings only; Total Benefit and Net Present Value do not include HVAC savings.

5-14Table 5.6 National Energy Savings Results, AEO Reference Case. CC Standards 40tc,d ^'a,xost'St ii la d5::: For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)

SCENARIO Scen 5A 100°0 CC Decr2015 Scen 5B

100% CC Decr2027 Seen 6A 30% CC Decr2015 Scen 6B

30% CC Decr2027 Total Quads Saved 0.48 0.85 1.12 1.98 Total Quads Saved w/HVAC* 0.51 0.91 1.19 2.11 Total Exajoules Saved 0.51 0.90 1.18 2.09 Total Exajoules Saved w/HVAC* 0.54 0.96 1.26 2.22 Total Benefits 0.94 1.49 2.18 3.47 Total Equipment Cost 0.78 1.26 0.58 0.93 Net Present Value 0.16 0.23 1.60 2.54
Table 5.7 National Energy Savings Results, AEO High Case , Electronic Standards

For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)

SCENARIO Seen IA T12 Seen IB

T12 Seen 2A

T12/T8 Seen 2B

T12/T8 Seen 3A Scen 3B Seen 4A Scen 4B

7 7 Total Quads Saved 1.01 1.79 1.66 2.93 1.43 2.66 1.57 2.84 Total Quads Saved w/HVAC* 1.08 1.90 1.76 3.12 1.52 2.82 1.67 3.02 Total Exajoules Saved 1.07 1.89 1.75 3.09 1.51 2.80 1.65 3.00 Total Exajoules Saved w/ HVAC* 1.14 2.01 1.86 3.29 1.60 2.98 1.76 3.18 Total Benefit 2.11 3.37 3.46 5.53 2.88 4.81 3.30 5.24 Total Equipment Cost 1.01 1.62 

### 0.80 1.27 0.64 1.08 0.72 1.18 Net Present Value 1.10 1.75 2.66 4.25 2.23 3.73 2.48 4.06 *For energy savings only; Total Benefit and Net Present Value do not include HVAC savings. SCENARIO

*For energy savings only; For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)
Sce/15A lOO%CC Decr2015 Sce/15B lOO%CC Decr2027

Total Benefit and Net Present Value do not include HVAC savings.



### 5-15 Sce/16A 30%CC Decr2015 Sce/16B 30%CC Decr2027 SCENARIO

*For energy savings only; For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)
Sce/15A lOO%CC Decr2015 Sce/15B lOO%CC Decr2027

Total Benefit and Net Present Value do not include HVAC savings.



### 5-15 Sce/16A 30%CC Decr2015 Sce/16B 30%CC Decr2027Table 5.8 National Energy Savings Results, AEO High Case. CC Standards C Qat lode Cutmit Sturldaas ds For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)

SCENARIO Scen 5A 100% CC Decr2015 Scen 5B

100% CC Decr2027 Scen 6A 30% CC Decr2015 Scen 6B

30% CC Decr2027 Total Quads Saved 0.48 0.85 1.12 1.98 Total Quads Saved w/HVAC* 0.51 0.91 1.19 2.11 Total Exajoules Saved 0.51 0.90 1.18 2.09 Total Exajoules Saved w/HVAC* 0.54 0.96 1.26 2.22 Total Benefits 1.00 1.60 2.34 3.74 Total Equipment Cost 0.78 1.26 0.58 0.93 Net Present Value 0.22 0.35 1.76 2.81
Table 5.9 National Energy Savings Results, AEO Low Case, Electronic Standards

For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)

SCENARIO Seen IA T12 Scen III

T12 Seen 2A

T12/T8 Seen 2B

T12/T8 Seen 3A Seen 3B Seen 4A Seen 4B

7 5 7 7 Total Quads Saved 1.01 1.79 1.66 2.93 1.43 2.66 1.57 2.84 Total Quads Saved w/HVAC* 1.08 1.90 1.76 3.12 1.52 2.82 1.67 3.02 Total Exajoules Saved 1.07 1.89 1.75 3.09 1.51 2.80 1.65 3.00 Total Exajoules Saved w/ HVAC* 1.14 2.01 1.86 3.29 1.60 2.98 1.76 3.18 Total Benefit 1.79 2.84 2.94 4.65 2.43 4.03 2.71 4.39 Total Equipment Cost 1.01 1.62 

### 0.80 1.27 0.64 1.08 0.72 1.18 Net Present Value 0.78 1.22 2.14 3.38 1.79 2.95 1.99 3.22 *For energy savings only; Total Benefit and Net Present Value do not include HVAC savings.



### 5-16 SCENARIO

*For energy savings only; For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)
Seen 5A lOO%CC Deer2015 Seen 5B lOO%CC Deer2027

Total Benefit and Net Present Value do not include HVAC savings.

5-16 Seen 6A 30%CC Deer2015 Seen 6B 30%CC Deer2027 SCENARIO

*For energy savings only; For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)
Seen 5A lOO%CC Deer2015 Seen 5B lOO%CC Deer2027

Total Benefit and Net Present Value do not include HVAC savings.

5-16 Seen 6A 30%CC Deer2015 Seen 6B 30%CC Deer2027Table 5.10 National Energy Savings Results, AEO Low Case. CC Standards

`iiiiii:Ei For Units Sold from 2003 to 2030

Discounted at 7% to 1997 (in billion 1997 $)

SCENARIO Scen 5A 100% CC Decr2015 Scen 5B

100% CC Decr2027 Seen 6A 30% CC Decr2015 Scen 6B

30% CC Decr2027 Total Quads Saved 0.48 0.85 1.12 1.98 Total Quads Saved w/HVAC* 0.51 0.91 1.19 2.11 Total Exajoules Saved 0.51 0.90 1.18 2.09 Total Exajoules Saved w/HVAC* 0.54 0.96 1.26 2.22 Total Benefits 0.85 1.35 1.99 3.15 Total Equipment Cost 0.78 1.26 0.58 0.93 Net Present Value 0.07 0.09 1.41 2.22 Energy Savings Energy savings from the electronic ballast trial standards scenarios with the AEO Reference Case ranged from about 1 Quad (1.1 exajoules) to 2.9 Quads (3.1 exajoules) of source energy. With the slower decreasing shipments forecast (to 2027), energy savings increased by approximately 75 percent for Scenarios 1 and 2 and 80 to 85 percent for Scenarios 3 and 4 (with delay periods) over those with the faster decreasing shipments forecast (to 2015). Energy savings for Scenario 2 with T8 electronic ballasts were almost 65 percent those for Scenario 1 with T12 electronic ballasts. For Scenario 3, which may be compared with Scenario 2 because the percentage of T12 vs. T8 ballasts is nearly identical, the five-year delay period caused a savings reduction of around 10 to 15 percent. For Scenario 4, the two-year delay period resulted in a savings reduction of about 5 percent from Scenario 2. For the cathode cutout trial standards scenarios with the AEO Reference Case, energy savings ranged from 0.5 to 2.0 Quads (0.5 to 2.1 exajoules). For both scenarios, the slower decreasing shipments forecast (to 2027) resulted in increased savings of about 75 percent compared with those from the faster decreasing shipments (to 2015). The Scenario 6 savings from partial conversion to electronic ballasts were approximately 2.3 times higher than those of Scenario 5. 

### Additional HVAC savings increased the total energy savings by 6.25 percent. Energy Consumption As explained below, we estimated that base case cumulative fluorescent lighting energy consumption for the period from 2003 to 2030 was approximately 83.3 Quads (87.8 EJ) for the Decreasing Shipments to 2015 base case and 90.6 Quads (95.6 EJ) for the Decreasing Shipments to 2027 base case. The savings from standards ranged from 1 percent to 3 percent of the total estimated consumption for the period.
5-17 SCENARIO

Energy Savings For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)
Seen 5A lOO%CC Deer2015 Seen 5B lOO%CC Deer2027 Seen 6A 30%CC Deer2015 Seen 6B 30%CC Deer2027

Energy savings from the electronic ballasttrial standards scenarios with the AEO Reference Case ranged from about 1Quad (1.1 exajoules) to 2.9 Quads (3.1 exajoules) ofsource energy. With the slower decreasing shipments forecast (to 2027), energy savings increased by approximately 75 percent for Scenarios 1 and 2 and 80 to 85 percent for Scenarios 3 and 4 (with delay periods) over those with the faster decreasing shipments forecast (to 2015). Energy savings for Scenario 2 with T8 electronicballastswere almost 65 percent those for Scenario 1with T12 electronicballasts. For Scenario 3, which may be compared with Scenario 2 because the percentage ofT12 vs. T8 ballasts is nearly identical, the five-year delay period caused a savings reduction ofaround 10 to 15 percent. For Scenario 4, the two-year delay period resulted in a savings reduction ofabout 5 percent from Scenario 2.
Forthe cathode cutouttrial standards scenarioswiththe AEOReference Case, energysavings ranged from 0.5 to 2.0 Quads (0.5 to 2.1 exajoules). For both scenarios, the slower decreasing shipments forecast (to 2027) resulted in increased savings ofabout 75 percent compared with those from the faster decreasing shipments (to 2015). The Scenario 6 savings from partial conversion to electronic ballasts were approximately 2.3 times higher than those ofScenario 5.
Additional HVAC savings increased the total energy savings by 6.25 percent. Energy Consumption
As explained below, we estimated that base case cumulative fluorescent lighting energy consumption for the period from 2003 to 2030 was approximately 83.3 Quads (87.8 E1) for the Decreasing Shipments to 2015 base case and 90.6 Quads (95.6 E1) for the Decreasing Shipments to 2027 base case. The savings from standards ranged from 1 percent to 3 percent of the total estimated consumption for the period.
5-17 SCENARIO

Energy Savings For Units Sold from 2003 to 2030 Discounted at 7% to 1997 (in billion 1997 $)
Seen 5A lOO%CC Deer2015 Seen 5B lOO%CC Deer2027 Seen 6A 30%CC Deer2015 Seen 6B 30%CC Deer2027

Energy savings from the electronic ballasttrial standards scenarios with the AEO Reference Case ranged from about 1Quad (1.1 exajoules) to 2.9 Quads (3.1 exajoules) ofsource energy. With the slower decreasing shipments forecast (to 2027), energy savings increased by approximately 75 percent for Scenarios 1 and 2 and 80 to 85 percent for Scenarios 3 and 4 (with delay periods) over those with the faster decreasing shipments forecast (to 2015). Energy savings for Scenario 2 with T8 electronicballastswere almost 65 percent those for Scenario 1with T12 electronicballasts. For Scenario 3, which may be compared with Scenario 2 because the percentage ofT12 vs. T8 ballasts is nearly identical, the five-year delay period caused a savings reduction ofaround 10 to 15 percent. For Scenario 4, the two-year delay period resulted in a savings reduction ofabout 5 percent from Scenario 2.
Forthe cathode cutouttrial standards scenarioswiththe AEOReference Case, energysavings ranged from 0.5 to 2.0 Quads (0.5 to 2.1 exajoules). For both scenarios, the slower decreasing shipments forecast (to 2027) resulted in increased savings ofabout 75 percent compared with those from the faster decreasing shipments (to 2015). The Scenario 6 savings from partial conversion to electronic ballasts were approximately 2.3 times higher than those ofScenario 5.
Additional HVAC savings increased the total energy savings by 6.25 percent. Energy Consumption
As explained below, we estimated that base case cumulative fluorescent lighting energy consumption for the period from 2003 to 2030 was approximately 83.3 Quads (87.8 E1) for the Decreasing Shipments to 2015 base case and 90.6 Quads (95.6 E1) for the Decreasing Shipments to 2027 base case. The savings from standards ranged from 1 percent to 3 percent of the total estimated consumption for the period.
5-17Since the NES model calculates energy savings rather than energy consumption, we

performed a separate calculation to estimate fluorescent lighting energy consumption for the period 2003 to 2030. We estimated consumption separately for each "Decreasing Shipments" base case.The first step was to estimate the number of ballasts in existing buildings. We based this on the ESource Strategic memo "How Far Have We Come? Remaining Opportunities for Upgrading Fluorescent Ballasts and Lamps,"5 which estimated 657 million ballasts for the year 1996 (722 million ballasts minus 9 percent or 65 million low power factor ballasts exempted from the standards). This estimate was based on a simple vintaging model applied to estimated sales of ballast shipments from 1971 through 1996. We subtracted another 4 percent (26 million) as an estimate of exempted types other than low power factor ballasts. Since the E-Source calculations assumed a ballast service lifetime of 12.5 years and the ballast lifetime we would have assumed was 13.9 years (50,000 hour ballast life divided by 3600 annual lighting hours for all ballasts), we adjusted the number of ballasts by the ratio of the two lifetimes (13.9 / 12.5), yielding about 700 million ballasts. For the 1997 existing stock, 80 percent was assumed to be magnetic ballasts, derived from E-Source percentages for energy-efficient and standard magnetic ballasts. To estimate the magnetic ballasts in existing buildings, we used a turnover rate of 6.8 percent per year (3400 annual lighting hours divided by 50,000 hour ballast life for magnetic ballasts, as discussed in Chapter 3). These magnetic ballasts were assumed to be removed from the magnetic ballast stock each year, and the annual magnetic ballast shipments projected by the NES model were added to the magnetic ballast stock (separately for each scenario). The total ballast stock was assumed to grow by 1 percent per year, based on the floor space projections shown in Table B.34 in Appendix B. The number of electronic ballasts was calculated by subtracting the magnetic ballasts from the total ballasts. For the 2015 scenario, the stock became 50 percent magnetic by 2010, and was 14 percent magnetic by 2030. For the 2027 scenario, the stock was 50 percent magnetic by 2013 and 20 percent magnetic by 2030. Energy consumption was calculated by multiplying the annual ballast shipments times a weighted unit energy consumption (UEC) per ballast. The NES model calculates the UEC for each each of the four major lamp/ballast combinations in the NES model (see Appendix B). The percentage of total shipments represented by each combination was estimated from the NES model shipments data, and the percentage magnetic of each combination was derived from the NEMA data in Table B.1 above. We used these percentages to weight the four UECs, performing separate calculations for magnetic and electronic ballasts. The results for the four lamp/ballast combinations were summed for an annual consumption in 1997 for both scenarios of 285 Twh or 3.13 Quads (using the site to source energy conversion factor for 1997 from Table 5.3). For the years 2003 to 2030, a similar procedure was followed, multiplying each year's shipments by the unit energy consumption. For the Decreasing Shipments to 2015 scenario, the result was 8325 Twh or 83.3 source Quads, using a heat rate of 10,000 .Btu/kWh (the average for the period using AEO99 projections shown in Table 5.3). For the Decreasing Shipments to 2027 scenario, the result was 9061 Twh or 90.6 source Quads.



### 5-18 Since the NES model calculates energy savings rather than energy consumption, we performed a separate calculation to estimate fluorescent lighting energy consumption for the period 2003 to 2030. We estimated consumption separately for each "Decreasing Shipments" base case. The first step was to estimate the number ofballasts in existing buildings. We based this on the ESource Strategic memo "How Far Have We Come? Remaining Opportunities for Upgrading Fluorescent Ballasts and Lamps,,,5 which estimated 657 million ballasts for the year 1996 (722 million ballasts minus 9 percent or 65 million low power factor ballasts exempted from the standards). This estimate was based on a simple vintaging model applied to estimated sales of ballast shipments from 1971 through 1996. We subtracted another 4 percent (26 million) as an estimate ofexempted types other than low power factor ballasts. Since the E-Source calculations assumed aballast service lifetime of 12.5 years and the ballast lifetime wewould have assumed was 13.9 years (50,000 hour ballast life divided by 3600 annual lighting hours for all ballasts), we adjusted the number ofballasts by the ratio ofthe two lifetimes (13.9/ 12.5), yielding about 700 million ballasts. For the 1997 existing stock, 80 percent was assumed to be magnetic ballasts, derived from E-Source percentages for energy-efficient and standard magnetic ballasts.
To estimate the magneticballasts in existingbuildings, weused aturnoverrate of6.8percent per year (3400 annual lighting hours divided by 50,000 hour ballast life for magnetic ballasts, as discussed in Chapter 3). These magnetic ballasts were assumed to be removed from the magnetic ballast stock each year, andthe annual magnetic ballast shipmentsprojectedbytheNES model were added to the magnetic ballast stock (separately for each scenario). The total ballast stock was assumed to grow by 1 percent per year, based on the floor space projections shown in Table B.34 in Appendix B. The number of electronic ballasts was calculated by subtracting the magnetic ballasts from the total ballasts. For the 2015 scenario, the stock became 50 percent magnetic by 2010, and was 14 percent magnetic by 2030. For the 2027 scenario, the stock was 50 percent magnetic by 2013 and 20 percent magnetic by 2030. Energy consumption was calculated by multiplying the annual ballast shipments times a weighted unit energy consumption (UEC) perballast. TheNES model calculates the UEC for each each of the four major lamplballast combinations in the NES model (see Appendix B). The percentage oftotal shipments represented by each combination was estimated from the NES model shipments data, and the percentage magnetic ofeach combinationwas derived from the NEMA data in Table B.l above. We used these percentages to weight the four UECs, performing separate calculations for magnetic and electronic ballasts. The results for the four lamplballast combinations were summed for an annual consumption in 1997 for both scenarios of 285 Twh or 3.13 Quads (using the site to source energy conversion factor for 1997 from Table 5.3). For the years 2003 to 2030, a similar procedure was followed, multiplying each year's shipments by the unit energy consumption. For the Decreasing Shipments to 2015 scenario, the result was 8325 Twh or 83.3 source Quads, using a heat rate of 10,000 Btu/kWh (the average for the period using AE099 projections shown in Table 5.3). For the Decreasing Shipments to 2027 scenario, the result was 9061 Twh or 90.6 source Quads.

5-18 Since the NES model calculates energy savings rather than energy consumption, we performed a separate calculation to estimate fluorescent lighting energy consumption for the period 2003 to 2030. We estimated consumption separately for each "Decreasing Shipments" base case. The first step was to estimate the number ofballasts in existing buildings. We based this on the ESource Strategic memo "How Far Have We Come? Remaining Opportunities for Upgrading Fluorescent Ballasts and Lamps,,,5 which estimated 657 million ballasts for the year 1996 (722 million ballasts minus 9 percent or 65 million low power factor ballasts exempted from the standards). This estimate was based on a simple vintaging model applied to estimated sales of ballast shipments from 1971 through 1996. We subtracted another 4 percent (26 million) as an estimate ofexempted types other than low power factor ballasts. Since the E-Source calculations assumed aballast service lifetime of 12.5 years and the ballast lifetime wewould have assumed was 13.9 years (50,000 hour ballast life divided by 3600 annual lighting hours for all ballasts), we adjusted the number ofballasts by the ratio ofthe two lifetimes (13.9/ 12.5), yielding about 700 million ballasts. For the 1997 existing stock, 80 percent was assumed to be magnetic ballasts, derived from E-Source percentages for energy-efficient and standard magnetic ballasts.
To estimate the magneticballasts in existingbuildings, weused aturnoverrate of6.8percent per year (3400 annual lighting hours divided by 50,000 hour ballast life for magnetic ballasts, as discussed in Chapter 3). These magnetic ballasts were assumed to be removed from the magnetic ballast stock each year, andthe annual magnetic ballast shipmentsprojectedbytheNES model were added to the magnetic ballast stock (separately for each scenario). The total ballast stock was assumed to grow by 1 percent per year, based on the floor space projections shown in Table B.34 in Appendix B. The number of electronic ballasts was calculated by subtracting the magnetic ballasts from the total ballasts. For the 2015 scenario, the stock became 50 percent magnetic by 2010, and was 14 percent magnetic by 2030. For the 2027 scenario, the stock was 50 percent magnetic by 2013 and 20 percent magnetic by 2030. Energy consumption was calculated by multiplying the annual ballast shipments times a weighted unit energy consumption (UEC) perballast. TheNES model calculates the UEC for each each of the four major lamplballast combinations in the NES model (see Appendix B). The percentage oftotal shipments represented by each combination was estimated from the NES model shipments data, and the percentage magnetic ofeach combinationwas derived from the NEMA data in Table B.l above. We used these percentages to weight the four UECs, performing separate calculations for magnetic and electronic ballasts. The results for the four lamplballast combinations were summed for an annual consumption in 1997 for both scenarios of 285 Twh or 3.13 Quads (using the site to source energy conversion factor for 1997 from Table 5.3). For the years 2003 to 2030, a similar procedure was followed, multiplying each year's shipments by the unit energy consumption. For the Decreasing Shipments to 2015 scenario, the result was 8325 Twh or 83.3 source Quads, using a heat rate of 10,000 Btu/kWh (the average for the period using AE099 projections shown in Table 5.3). For the Decreasing Shipments to 2027 scenario, the result was 9061 Twh or 90.6 source Quads.

5-18

### Net Present Value (NPV)
The NPV is the difference between fuel cost savings and equipment costs. Fuel cost savings are calculated by the NES model using annual site energy savings multiplied by each year's projected marginal electricity rate for the appropriate sector. Ballast and lamp equipment costs are calculated from the model inputs (see Appendix A and Appendix B). Both fuel cost savings and equipment costs are discounted to the year 1997 in $1997 . Note that HVAC energy cost savings are not included in the NPV calculations.
The NPV for the electronic ballast trial standards scenarios ranged from about 1 billion to 3.9 billion dollars

. For all the scenarios , NPV increased by almost 60 to 70 percent when the slower decreasing shipments forecast to 2027 was used. NPVs for Scenario 2 with T8 electronic ballasts were about 2.5 times those for Scenario 1 with T 12 electronic ballasts. For Scenario 3, the five-year delay period caused an NPV reduction of around 15 percent from Scenario 2. For Scenario 4, the two-year delay period resulted in an NPV reduction of about 5 percent from Scenario 2.
For the cathode cutout trial standard level scenarios , NPV ranged from 0

.2 to 2.5 billion dollars. The slower decreasing shipments forecast (to 2027 ) increased the NPV for Scenario 5 compared with the faster decreasing shipments forecast (to 2015) by about 45 to 60 percent. For Scenario 6, the NPV was 10 to 11 times greater than that of Scenario 5.

5.4 NET NATIONAL. EMPLOYMENT Net national employment impacts from ballast standards were defined as net jobs created or eliminated in the general economy as a consequence of reduced spending by commercial and industrial sector businesses on electricity, increased spending on the purchase price of ballasts and reduced spending on new power plants by the utility industry (along with the indirect effects of these three factors). Figure 5.4 shows the estimated net national employment impact of four different electronic ballast standards scenarios that are described in the NES results section (5.3.6). These results came from our use of an input/output model of the U.S. economy to estimate the effects of standards on different major sectors of the U.S. economy most relevant to buildings and their net impact on jobs. The model was developed by the DOE Office of Building Technologies and State Programs

. ImBuild (which stands for Impact of Building Energy Efficiency Programs) was created by the Pacific Northwest National Laboratory as a special-purpose version of the IMPLAN national input-output model. This software, ImBuild , is a PC-based economicanalysis system that characterizes the interconnections among 35 economic sectors as national inputoutput structural matrices . The model can be applied to future time periods

. ImBuild output includes employment and wage income

. In comparison with simple economic multiplier approaches,ImBuild allows for more complete and automated analysis of the economic impacts of energyefficiency investments in buildings

. The impacts of new ballast standards were estimated in the NES spreadsheet as energy savings (reduced electricity use), energy cost savings , and increased ballast
5-19 

### Net Present Value (NPV) TheNPVis the difference between fuel cost savings and equipment costs. Fuel cost savings are calculatedbytheNESmodelusing annual site energy savings multipliedbyeachyear'sprojected marginal electricityrate for the appropriate sector. Ballast and lamp equipment costs are calculated from the model inputs (see Appendix A and Appendix B). Both fuel cost savings and equipment costs are discounted to the year 1997 in $1997. Note that HVA C energy cost savings are not included in the NPV calculations. The NPV for the electronic ballast trial standards scenarios ranged from about 1 billion to 3.9 billion dollars. For all the scenarios, NPV increased by almost 60 to 70percentwhen the slower decreasing shipments forecast to 2027 was used. NPVs for Scenario 2 with T8 electronic ballasts were about 2.5 timesthose for Scenario 1with TI2 electronic ballasts. ForScenario 3, the five-year delay period caused an NPV reduction ofaround 15 percent from Scenario 2. For Scenario 4, the two-year delay period resulted in an NPV reduction ofabout 5 percent from Scenario 2.
For the cathode cutout trial standard level scenarios, NPV ranged from 0.2 to 2.5 billion dollars. The slower decreasing shipments forecast (to 2027) increased the NPV for Scenario 5 compared with the faster decreasing shipments forecast (to 2015) by about 45 to 60 percent. For Scenario 6, the NPV was 10 to 11 times greater than that ofScenario 5.



### 5.4 NET NATIONAL EMPLOYMENT
Netnational employment impacts from ballast standards were defined as netjobs created or eliminated in the general economy as a consequence of reduced spending by commercial and industrial sectorbusinesses on electricity, increased spending on the purchase price ofballasts and reduced spending on newpowerplants bythe utility industry (alongwiththe indirecteffects of these three factors). Figure 5.4 shows the estimated net national employment impact offour different electronic ballast standards scenarios that are described in the NES results section (5.3.6). These results came from our use ofan input/output model ofthe U.S. economy to estimate the effects ofstandards on different major sectors ofthe U.S. economy most relevant to buildings and their net impact on jobs. The model was developed by the DOE Office of Building Technologies and State Programs. ImBuild (which stands for Impact ofBuildingEnergyEfficiency Programs) was created by the Pacific Northwest National Laboratory as a special-purpose version of the IMPLAN national input-output model. This software, ImBuild, is a PC-based economic analysis systemthatcharacterizesthe interconnections among35 economic sectors as national inputoutput structural matrices. The model can be applied to future time periods. ImBuild output includes employmentandwageincome. Incomparisonwith simple economicmultiplier approaches, ImBuild allows for more complete and automated analysis ofthe economic impacts of energyefficiencyinvestments inbuildings. The impacts ofnewballast standardswere estimatedintheNES spreadsheet as energy savings (reduced electricity use), energy cost savings, and increased ballast 5-19 

### Net Present Value (NPV) TheNPVis the difference between fuel cost savings and equipment costs. Fuel cost savings are calculatedbytheNESmodelusing annual site energy savings multipliedbyeachyear'sprojected marginal electricityrate for the appropriate sector. Ballast and lamp equipment costs are calculated from the model inputs (see Appendix A and Appendix B). Both fuel cost savings and equipment costs are discounted to the year 1997 in $1997. Note that HVA C energy cost savings are not included in the NPV calculations. The NPV for the electronic ballast trial standards scenarios ranged from about 1 billion to 3.9 billion dollars. For all the scenarios, NPV increased by almost 60 to 70percentwhen the slower decreasing shipments forecast to 2027 was used. NPVs for Scenario 2 with T8 electronic ballasts were about 2.5 timesthose for Scenario 1with TI2 electronic ballasts. ForScenario 3, the five-year delay period caused an NPV reduction ofaround 15 percent from Scenario 2. For Scenario 4, the two-year delay period resulted in an NPV reduction ofabout 5 percent from Scenario 2.
For the cathode cutout trial standard level scenarios, NPV ranged from 0.2 to 2.5 billion dollars. The slower decreasing shipments forecast (to 2027) increased the NPV for Scenario 5 compared with the faster decreasing shipments forecast (to 2015) by about 45 to 60 percent. For Scenario 6, the NPV was 10 to 11 times greater than that ofScenario 5.



### 5.4 NET NATIONAL EMPLOYMENT
Netnational employment impacts from ballast standards were defined as netjobs created or eliminated in the general economy as a consequence of reduced spending by commercial and industrial sectorbusinesses on electricity, increased spending on the purchase price ofballasts and reduced spending on newpowerplants bythe utility industry (alongwiththe indirecteffects of these three factors). Figure 5.4 shows the estimated net national employment impact offour different electronic ballast standards scenarios that are described in the NES results section (5.3.6). These results came from our use ofan input/output model ofthe U.S. economy to estimate the effects ofstandards on different major sectors ofthe U.S. economy most relevant to buildings and their net impact on jobs. The model was developed by the DOE Office of Building Technologies and State Programs. ImBuild (which stands for Impact ofBuildingEnergyEfficiency Programs) was created by the Pacific Northwest National Laboratory as a special-purpose version of the IMPLAN national input-output model. This software, ImBuild, is a PC-based economic analysis systemthatcharacterizesthe interconnections among35 economic sectors as national inputoutput structural matrices. The model can be applied to future time periods. ImBuild output includes employmentandwageincome. Incomparisonwith simple economicmultiplier approaches, ImBuild allows for more complete and automated analysis ofthe economic impacts of energyefficiencyinvestments inbuildings. The impacts ofnewballast standardswere estimatedintheNES spreadsheet as energy savings (reduced electricity use), energy cost savings, and increased ballast 5-19purchase prices. These three impacts (see Figures 5.5 - 5.7 below) were output from NES and input

to ImBuild. Direct employment impacts, which would occur at ballast manufacturing plants, are discussed in the Manufacturer Impact Analysis results section in Chapter 6. Additional details about the ImBuild model follow. Energy-efficiency technology affects the U. S. economy primarily through three mechanisms. First, if the incremental costs of the new technology per installed unit are different from those of the conventional technology, changes in purchases will occur in the sectors involved in manufacturing, distribution, and installation for both technologies, which will change the overall mix of economic activity. Second, depending on how the efficiency investment is financed, it may "crowd out" other domestic savings, investments, and consumer spending, somewhat reducing overall economic activity. Third, energy expenditures will be reduced. On one hand, this reduction lowers final demand in the electric utility sector as well as in the trade and services sectors that provide maintenance, parts, and services for the utility sector. On the other hand, it increases net disposable business income and increases general business spending in all sectors. In an input/output model, the level of employment in an economy is determined by the relationship of different sectors of the economy and the spending flows among them. Different sectors have different levels of labor intensity and so changes in the level of spending (e.g., such as via an efficiency standard) in one sector of the economy will affect flows in others, which affects the overall level of employment. 

### Jobs are created when the net change in spending flows into more job-intensive sectors relative to the base case; jobs are lost when the net change in spending flows into less job-intensive sectors relative to the base case. An energy-efficiency standard for ballasts would create such changes in the spending flows of the economy. Standards would reduce ballast operating costs, which would in turn increase the amount of disposable income to consumers. A standard might also increase purchase price (reducing disposable income to consumers) and increase the demand for capital in the ballast manufacturing industry. purchase prices. Thesethree impacts (see Figures 5.5

- 5.7 below) were output from NES and input to ImBuild. Direct employment impacts, which would occur at ballast manufacturing plants, are discussed inthe ManufacturerImpactAnalysis results sectionin Chapter 6. Additional details about the ImBuild model follow. Energy-efficiencytechnologyaffectstheU.S. economyprimarilythroughthree mechanisms. First, ifthe incremental costs ofthe new technologyper installedunit are different from those ofthe conventional technology, changes in purchases will occur in the sectors involved in manufacturing, distribution, and installation for both technologies, which will change the overall mix ofeconomic activity. Second, depending on how the efficiency investment is financed, itmay "crowd out" other domestic savings, investments, and consumer spending, somewhat reducing overall economic activity. Third, energy expenditures will be reduced. On one hand, this reduction lowers final demand in the electric utility sector as well as in the trade and services sectors that provide maintenance, parts, and services for theutility sector. Onthe otherhand, it increases net disposable business income and increases general business spending in all sectors.
In an input/output model, the level of employment in an economy is determined by the relationship of different sectors ofthe economy and the spending flows among them. Different sectors have different levels oflaborintensity and so changes in the level ofspending (e.g., such as via an efficiency standard) in one sector ofthe economywill affect flows in others, which affects the overall level ofemployment. Jobs are created when the net change in spending flows into more job-intensive sectors relative to the base case; jobs are lost when the net change in spendingflows into lessjob-intensive sectors relative to the base case. An energy-efficiency standard for ballasts would create such changes in the spending flows ofthe economy. Standards would reduce ballast operating costs, whichwouldin turn increasethe amount ofdisposable income to consumers. A standard might also increase purchase price (reducing disposable income to consumers) and increase the demand for capital in the ballast manufacturing industry.

5-20 purchase prices. Thesethree impacts (see Figures 5.5

- 5.7 below) were output from NES and input to ImBuild. Direct employment impacts, which would occur at ballast manufacturing plants, are discussed inthe ManufacturerImpactAnalysis results sectionin Chapter 6. Additional details about the ImBuild model follow. Energy-efficiencytechnologyaffectstheU.S. economyprimarilythroughthree mechanisms. First, ifthe incremental costs ofthe new technologyper installedunit are different from those ofthe conventional technology, changes in purchases will occur in the sectors involved in manufacturing, distribution, and installation for both technologies, which will change the overall mix ofeconomic activity. Second, depending on how the efficiency investment is financed, itmay "crowd out" other domestic savings, investments, and consumer spending, somewhat reducing overall economic activity. Third, energy expenditures will be reduced. On one hand, this reduction lowers final demand in the electric utility sector as well as in the trade and services sectors that provide maintenance, parts, and services for theutility sector. Onthe otherhand, it increases net disposable business income and increases general business spending in all sectors.
In an input/output model, the level of employment in an economy is determined by the relationship of different sectors ofthe economy and the spending flows among them. Different sectors have different levels oflaborintensity and so changes in the level ofspending (e.g., such as via an efficiency standard) in one sector ofthe economywill affect flows in others, which affects the overall level ofemployment. Jobs are created when the net change in spending flows into more job-intensive sectors relative to the base case; jobs are lost when the net change in spendingflows into lessjob-intensive sectors relative to the base case. An energy-efficiency standard for ballasts would create such changes in the spending flows ofthe economy. Standards would reduce ballast operating costs, whichwouldin turn increasethe amount ofdisposable income to consumers. A standard might also increase purchase price (reducing disposable income to consumers) and increase the demand for capital in the ballast manufacturing industry.

5-20$ Million

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### REFERENCES

1. Data submitted by NEMA to Lawrence Berkeley National Laboratory on Jan 6, 1995, Jan 29, 1997 and Feb 4, 1998. 2. NEMA Comment #50, Attachment B, May 181h, 1999. 

### 3. Ibid. 4. Lighting Research Institute. 1995. Research for Lawrence Berkeley National Laboratory, Energy Analysis Program, by the Lighting Research Institute under LBNL Subcontract No. 4602810. 5. E-Source Inc. (Calwell, Dowers and Johnson). 1998. "How Far Have We Come? Remaining Opportunities for Upgrading Fluorescent Ballasts and Lamps," SM-98-4, Boulder, CO, May 1998, Figure 7. 

### REFERENCES

1. Data submitted byNEMA to Lawrence Berkeley National Laboratory on Jan 6, 1995, Jan 29, 1997 and Feb 4, 1998. 2. NEMA Comment #50, Attachment B, May 18th

, 1999. 3. Ibid. 4. Lighting Research Institute. 1995. Research for Lawrence Berkeley National Laboratory, Energy Analysis Program, by the Lighting Research Institute under LBNL Subcontract No. 4602810. 5. E-Source Inc. (Calwell, Dowers and Johnson). 1998. "How Far Have We Corne? Remaining Opportunities for Upgrading Fluorescent Ballasts and Lamps," SM-98-4, Boulder, CO, May 1998, Figure 7.

5-23 

### REFERENCES

1. Data submitted byNEMA to Lawrence Berkeley National Laboratory on Jan 6, 1995, Jan 29, 1997 and Feb 4, 1998. 2. NEMA Comment #50, Attachment B, May 18th

, 1999. 3. Ibid. 4. Lighting Research Institute. 1995. Research for Lawrence Berkeley National Laboratory, Energy Analysis Program, by the Lighting Research Institute under LBNL Subcontract No. 4602810. 5. E-Source Inc. (Calwell, Dowers and Johnson). 1998. "How Far Have We Corne? Remaining Opportunities for Upgrading Fluorescent Ballasts and Lamps," SM-98-4, Boulder, CO, May 1998, Figure 7.

5-23C PTER 6. MANUFACTURER IMPACT ANALYSIS

6A IMPACT ON FLUORESCENT LAMP BALLAST MANUFACTURER 6A.1 Manufacturer Impact Analysis Methodology In determining whether a standard is economically justified, the Secretary of Energy is statutorily required to consider "the economic impact of the standard on the manufacturers and on the consumers of the products subject to such a standard." The legislation also calls for an assessment of the impact of any lessening of competition as determined in writing by the Attorney General. The purpose of the Manufacturer Impact Analysis (MIA) is to provide information that can be used to evaluate these impacts. The MIA estimates the financial impact of standards on manufacturers and calculates impacts on employment and manufacturing capacity. Prior to initiating the detailed MIA for the ballast rulemaking, the Department prepared an approach document titled "Ballast Manufacturer Impact Analysis Analytical Approach." This document was presented at a public workshop held on April 28, 1998. It was based on the general framework for the MIA presented by the Department at a workshop in March 1997 and was modified for its application to the ballast rule. The revised document outlined procedural steps and identified issues for consideration. As proposed in the approach document, the MIA was conducted in four phases. Phase 1, Industry Profile and Issue Definition, consisted of two activities, namely, preparation of an industry characterization and the conduct of an issue identification workshop. The second phase, "Strawman" Industry Cash Flow, had as its focus the larger industry. In this phase, the Government Regulatory Impact Model (GRIM) was used to prepare a "strawman" industry cash flow analysis. Here the Department used publicly available information developed in Phase 1 to adapt the GRIM structure to facilitate the analysis of new ballast standards. In the Phase 3, Sub-Group Impact Analysis, the strawman cash flow was used as a template from which individual company level cash flows were developed by DOE and our firm (ADL). Phase 3 also entailed documenting additional impacts on employment and manufacturing capacity through an interview process. Finally in Phase 4, Industry Cash Flow, we aggregated the individual cash flows into three groups; group 1 includes all manufacturers, group 2 includes full line manufacturers of magnetic and electronic ballasts, and group 3 includes manufacturers producing only electronic ballasts. 

### 6A.1.1 Phase 1: Industry Profile and Issue Identification Phase 1 of the MIA consisted of two activities, namely, preparation of an Industry Characterization, and the conduct of an issue analysis workshop. Prior to initiating the detailed impact studies, the Department received input on the present and past structure and market characteristics of the ballast industry. This activity involved both quantitative and qualitative efforts to assess the industry and products to be analyzed. Issues addressed included manufacturer market shares and characteristics, trends in number of firms, the financial situation of manufacturers, and

6-1 

### CHAPTER 6. MANUFACTURER IMPACT ANALYSIS 6A IMPACT ON FLUORESCENT LAMP BALLAST MANUFACTURER 6A.1 Manufacturer Impact Analysis Methodology
In determining whether a standard is economically justified, the Secretary of Energy is statutorily required to consider "the economic impact ofthe standard on the manufacturers and on the consumers of the products subject to such a standard." The legislation also calls for an assessment ofthe impact ofany lessening ofcompetition as detelmined in writing by the Attorney General. Thepurpose ofthe ManufacturerImpact Analysis (MIA) is to provide information that can be used to evaluate these impacts. The MIA estimates the financial impact of standards on manufacturers and calculates impacts on employment and manufacturing capacity.
Prior to initiating the detailed MIA for the ballastrulemaking, the Department prepared an approach document titled "Ballast Manufacturer Impact Analysis Analytical Approach." This document was presented at a public workshop held on April 28, 1998. It was based on the general framework for the MIApresentedbythe Department at a workshop in March 1997 andwasmodified for its application to the ballastrule. Therevised document outlinedprocedural steps and identified issues for consideration.
As proposed in the approach document, the MIA was conducted in four phases. Phase 1, Industry Profile and Issue Definition, consisted oftwo activities, namely, preparation ofan industry characterizationandthe conductofan issue identificationworkshop. The secondphase, "Strawman" Industry Cash Flow, had as its focus the larger indusny. In this phase, the Government Regulatory Impact Model (GRIM) was used to prepare a "strawman" indusny cash flow analysis. Here the Department used publicly available information developed in Phase 1to adapt the GRIM structure to facilitate the analysis ofnew ballast standards. In the Phase 3, Sub-Group Impact Analysis, the strawman cash flow was used as a template from which individual company level cash flows were developed by DOE and our firm (ADL). Phase 3 also entailed documenting additional impacts on employment and manufacturing capacitythrough an interviewprocess. Finally in Phase 4, Industry Cash Flow, we aggregated the individual cash flows into three groups; group 1 includes all manufacturers, group 2 includes full line manufacturers of magnetic and electronic ballasts, and group 3 includes manufacturers producing only electronic ballasts. 

### 6A.1.1 Phase 1: Industry Profile and Issue Identification
Phase 1 of the MIA consisted of two activities, namely, preparation of an Industry Characterization, and the conduct of an issue analysis workshop. Prior to initiating the detailed impact studies, the Department received input on the present and past structure and market characteristics oftheballastindusny. This activity involvedboth quantitative and qualitative efforts to assess the industry and products to be analyzed. Issues addressed included manufacturer market shares and characteristics, trends in number offinns, the financial situation ofmanufacturers, and

6-1 

### CHAPTER 6. MANUFACTURER IMPACT ANALYSIS 6A IMPACT ON FLUORESCENT LAMP BALLAST MANUFACTURER 6A.1 Manufacturer Impact Analysis Methodology
In determining whether a standard is economically justified, the Secretary of Energy is statutorily required to consider "the economic impact ofthe standard on the manufacturers and on the consumers of the products subject to such a standard." The legislation also calls for an assessment ofthe impact ofany lessening ofcompetition as detelmined in writing by the Attorney General. Thepurpose ofthe ManufacturerImpact Analysis (MIA) is to provide information that can be used to evaluate these impacts. The MIA estimates the financial impact of standards on manufacturers and calculates impacts on employment and manufacturing capacity.
Prior to initiating the detailed MIA for the ballastrulemaking, the Department prepared an approach document titled "Ballast Manufacturer Impact Analysis Analytical Approach." This document was presented at a public workshop held on April 28, 1998. It was based on the general framework for the MIApresentedbythe Department at a workshop in March 1997 andwasmodified for its application to the ballastrule. Therevised document outlinedprocedural steps and identified issues for consideration.
As proposed in the approach document, the MIA was conducted in four phases. Phase 1, Industry Profile and Issue Definition, consisted oftwo activities, namely, preparation ofan industry characterizationandthe conductofan issue identificationworkshop. The secondphase, "Strawman" Industry Cash Flow, had as its focus the larger indusny. In this phase, the Government Regulatory Impact Model (GRIM) was used to prepare a "strawman" indusny cash flow analysis. Here the Department used publicly available information developed in Phase 1to adapt the GRIM structure to facilitate the analysis ofnew ballast standards. In the Phase 3, Sub-Group Impact Analysis, the strawman cash flow was used as a template from which individual company level cash flows were developed by DOE and our firm (ADL). Phase 3 also entailed documenting additional impacts on employment and manufacturing capacitythrough an interviewprocess. Finally in Phase 4, Industry Cash Flow, we aggregated the individual cash flows into three groups; group 1 includes all manufacturers, group 2 includes full line manufacturers of magnetic and electronic ballasts, and group 3 includes manufacturers producing only electronic ballasts. 

### 6A.1.1 Phase 1: Industry Profile and Issue Identification
Phase 1 of the MIA consisted of two activities, namely, preparation of an Industry Characterization, and the conduct of an issue analysis workshop. Prior to initiating the detailed impact studies, the Department received input on the present and past structure and market characteristics oftheballastindusny. This activity involvedboth quantitative and qualitative efforts to assess the industry and products to be analyzed. Issues addressed included manufacturer market shares and characteristics, trends in number offinns, the financial situation ofmanufacturers, and

6-1

### trends in ballast characteristics and markets. Publicly available quantitative data published by U.S. Bureau of Census with regards to the ballast industry were presented at the April 28, 1998 workshop

. These reports include such statistics as the number of companies , manufacturing establishments, employment, payroll, value added, cost of materials consumed, capital expenditures, product shipments, and concentration ratios. To further assist in performing the Industry Profile and to define key issues, the Department conducted a series of interviews with ballast manufacturers in late 1996 and early 1997. Summaries of these interviews were distributed at the "Public Workshop on the Revised Life Cycle Cost and Engineering Analysis of Fluorescent Lamp Ballasts," held on March 18, 1997. The interviews and review of public literature suggested that the following guidelines be followed to assess the impacts of a new ballast standard. First, the MIA should be performed on a company-by-company basis and the industry impact constructed from an aggregation of impacts on individual companies. Second, the analysis should recognize the increasingly global nature of the ballast industry. Gains or losses in U.S. sales will bestow consequences to manufacturers regardless of where their production facilities are located. Where possible, the analysis should be structured to assess impacts at U.S. national, North American, and Global levels. Finally, the MIA should include consideration of direct industry suppliers.
6A.1.2 Phase 2 : "Strawman" Industry Cash Fl ow Analysis 

### Phase 2 of the MIA had as its focus the "larger" industry. The analytical tool used for calculating the financial impacts of standards on manufacturers is the Government Regulatory Impact Model (GRIM). In Phase 2, GRIM was used to perform a "strawman" industry cash flow analysis. Given the relatively small number of firms in the industry, the Department proposed to create an Industry Cash Flow Analysis using a "bottom-up" approach. Essentially, each manufacturer was asked to provide, or assist us in developing, its own cash flow analysis to be aggregated with all other manufacturer submittals. 

### In order to facilitate individual manufacturer analysis, the DOE prepared "strawman" scenarios using publicly available financial information. Individual cash flows were prepared by modifying relevant parameters in the strawman to meet their own situation (price, cost, financial, shipments, etc.). For the strawman, the Department prepared a list of financial values to be used in the GRIM industry analysis. These were calculated by studying publicly available financial statements of fluorescent lamp ballast manufacturers. A detailed definition of financial inputs and their values for a "prototypical" ballast manufacturer was presented in the document entitled "Financial Inputs to GRIM for the Ballast Rulemaking Analysis." This document was presented at the public workshop held on April 28,1998. Strawman values for prices were derived from the Bureau of Census' Current



### 6-2 trends in ballast characteristics and markets. Publicly available quantitative data published byU.S. Bureau ofCensus with regards to the ballastindustrywere presented atthe April 28, 1998 workshop. These reports include such statistics as the number ofcompanies, manufacturing establishments, employment, payroll, value added, cost ofmaterials consumed, capital expenditures, product shipments, and concentration ratios.
To further assist in performing the Industry Profile and to define key issues, the Department conducted a series ofinterviews with ballastmanufacturers in late 1996 and early 1997. Summaries ofthese interviews were distributed at the "Public Workshop on the Revised Life Cycle Cost and Engineering Analysis ofFluorescent Lamp Ballasts," held on March 18, 1997. The interviews and review ofpublic literature suggested that the following guidelines be followed to assess the impacts ofa new ballast standard. First, the MIA should be perromled on a company-by-companybasis andthe industry impact constructed from an aggregation ofimpacts on individual companies. Second, the analysis should recognize the increasingly global nature ofthe ballast industry. Gains orlosses in U.S. sales will bestow consequencesto manufacturers regardless ofwhere theirproduction facilities are located. Where possible, the analysis should be structured to assess impacts atU.S. national, NorthAmerican, and Global levels. Finally, the MIA shouldinclude consideration ofdirect industry suppliers.
6A.1.2 

### Phase 2: "Strawman" Industry Cash Flow Analysis
Phase 2 of the MIA had as its focus the "larger" industry. The analytical tool used for calculatingthe financial impacts ofstandards on manufacturersis the GovernmentRegulatory Impact Model (GRIM). In Phase 2, GRIM was used to perfoml a "strawman" industry cash flow analysis.
GiventherelativelysmallnumberoffilIDS in the industry, the Departmentproposedto create an Industry Cash FlowAnalysis using a "bottom-up" approach. Essentially, each manufacturerwas asked to provide, or assist us in developing, its own cash flow analysis to be aggregated with all other manufacturer submittals.
In order to facilitate individual manufacturer analysis, the DOE prepared "strawman" scenarios using publicly available financial information. Individual cash flows were prepared by modifying relevant parameters in the strawman to meet their own situation (price, cost, financial, shipments, etc.).
Forthe strawman, the Departmentprepared a list offinancial values to be used in the GRIM industry analysis. These were calculated by studying publicly available financial statements of fluorescent lamp ballast manufacturers. A detailed definition offinancial inputs and theirvalues for a "prototypical" ballast manufacturer was presented in the document entitled "Financial Inputs to GRIM for the BallastRulemaking Analysis." This document was presented at the public workshop held on Apri128, 1998. Strawmanvalues forpriceswere derivedfrom the Bureau ofCensus' Current

6-2 trends in ballast characteristics and markets. Publicly available quantitative data published byU.S. Bureau ofCensus with regards to the ballastindustrywere presented atthe April 28, 1998 workshop. These reports include such statistics as the number ofcompanies, manufacturing establishments, employment, payroll, value added, cost ofmaterials consumed, capital expenditures, product shipments, and concentration ratios.
To further assist in performing the Industry Profile and to define key issues, the Department conducted a series ofinterviews with ballastmanufacturers in late 1996 and early 1997. Summaries ofthese interviews were distributed at the "Public Workshop on the Revised Life Cycle Cost and Engineering Analysis ofFluorescent Lamp Ballasts," held on March 18, 1997. The interviews and review ofpublic literature suggested that the following guidelines be followed to assess the impacts ofa new ballast standard. First, the MIA should be perromled on a company-by-companybasis andthe industry impact constructed from an aggregation ofimpacts on individual companies. Second, the analysis should recognize the increasingly global nature ofthe ballast industry. Gains orlosses in U.S. sales will bestow consequencesto manufacturers regardless ofwhere theirproduction facilities are located. Where possible, the analysis should be structured to assess impacts atU.S. national, NorthAmerican, and Global levels. Finally, the MIA shouldinclude consideration ofdirect industry suppliers.
6A.1.2 

### Phase 2: "Strawman" Industry Cash Flow Analysis
Phase 2 of the MIA had as its focus the "larger" industry. The analytical tool used for calculatingthe financial impacts ofstandards on manufacturersis the GovernmentRegulatory Impact Model (GRIM). In Phase 2, GRIM was used to perfoml a "strawman" industry cash flow analysis.
GiventherelativelysmallnumberoffilIDS in the industry, the Departmentproposedto create an Industry Cash FlowAnalysis using a "bottom-up" approach. Essentially, each manufacturerwas asked to provide, or assist us in developing, its own cash flow analysis to be aggregated with all other manufacturer submittals.
In order to facilitate individual manufacturer analysis, the DOE prepared "strawman" scenarios using publicly available financial information. Individual cash flows were prepared by modifying relevant parameters in the strawman to meet their own situation (price, cost, financial, shipments, etc.).
Forthe strawman, the Departmentprepared a list offinancial values to be used in the GRIM industry analysis. These were calculated by studying publicly available financial statements of fluorescent lamp ballast manufacturers. A detailed definition offinancial inputs and theirvalues for a "prototypical" ballast manufacturer was presented in the document entitled "Financial Inputs to GRIM for the BallastRulemaking Analysis." This document was presented at the public workshop held on Apri128, 1998. Strawmanvalues forpriceswere derivedfrom the Bureau ofCensus' Current

6-2Industrial Reports (CIRs). The dollar value of ballast shipments from factories is divided by the

quantity of ballasts shipped to arrive at the per unit manufacturer price. In order to estimate manufacturing costs-labor, materials, depreciation/tooling, etc.-from the average manufacturer prices obtained from CIRs, a typical ballast industry cost structure was developed using publicly available information from the Census of Manufacturers (CMs) and from transformer industry statistics (SIC# 3612) obtained from Robert Morris Associates (RMA) reports. Finally, in preparing the "strawman" industry cash flow analysis, the Department used the same ballast shipment scenarios developed for the National Energy Savings (NES) spreadsheet. The strawman was used to provide a starting point which manufacturers could then use to come up with more recent and accurate inputs. The intent of the strawman was to use "placeholder" values in order to illustrate the working of the GRIM spreadsheet. Given the concerns raised over the accuracy of the strawman data, the Department does not intend to compare or refer back to these values.
6A.1.3 Phase 3: Sub-Group Impact Analysis The Department conducted detailed interviews with ballast manufacturers representing over 95% of domestic ballast sales to gain insight into the potential impacts of standards. During these interviews, the Department solicited the information necessary to evaluate cash flows and to assess employment and capacity impacts. 

### The interview process played a key role in the MIA, since it provided an opportunity for manufacturers to privately express their views on important issues and provide confidential information needed to assess financial, employment and other business impacts. To support the development of company cash flows, an interview guide solicited information on the possible impacts of new standards on manufacturing costs, product prices, and sales. The evaluation of the possible impacts on direct employment and manufacturing assets also drew heavily on the information gathered during the interviews. The interview guide solicited both qualitative and quantitative information. Supporting information was requested whenever applicable. Interview participants were requested to identify all confidential information provided in writing or orally. Approximately two weeks following the interview, an interview summary was provided to give manufacturers the opportunity to confirm the accuracy and protect the confidentiality of all collected information. 6A.1.4 Phase 4: Industry Cash Flow 

### As previously described, using the GRIM spreadsheet and an interview guide, the ballast MIA was performed on a company-by-company basis. This process has the benefit of allowing the impacts of standards to be evaluated at multiple levels of aggregation. The total industry impact was constructed from an aggregation of impacts on individual companies. Manufacturers used their 1997 market shares in the 31.5 million "affected" magnetic ballast and the 36.5 million electronic ballast

6-3 Industrial Reports (CIRs). The dollar value ofballast shipments from factories is divided by the quantity of ballasts shipped to anive at the per unit manufacturer price. In order to estimate manufacturing costs-labor, materials, depreciation/tooling, etc.-from the average manufacturer prices obtained from CIRs, a typical ballast industry cost structure was developed using publicly available infornlation from the Census of Manufacturers (CMs) and from transformer industry statistics (SIC# 3612) obtained from RobertMorris Associates (RMA) repOlis. Finally, inpreparing the "strawman" industry cash flow analysis, the Department used the same ballast shipment scenarios developed for the National Energy Savings (NES) spreadsheet. The strawman was used to provide a statiing point which manufacturers could then use to come up with more recent and accurate inputs. The intent ofthe strawman was to use "placeholder" values in order to illustrate the working ofthe GRIM spreadsheet. Given the concerns raised over the accuracy ofthe strawman data, the Depatiment does not intendto compare orreferbackto these values.
6A.1.3 Phase 3: Sub-Group Impact Analysis
The Departmentconducted detailed interviews with ballastmanufacturers representing over 95% ofdomestic ballast sales to gain insight into the potential impacts ofstandards. During these interviews, the Department solicited the information necessaryto evaluate cash flows and to assess employment and capacity impacts. The interview process played a key role in the MIA, since it provided an opportunity for manufacturers to privately express their views on important issues and provide confidential information needed to assess financial, employment and other business impacts. To support the development of company cash flows, an interview guide solicited information on the possible impacts ofnew standards on manufacturing costs, product prices, and sales. The evaluation ofthe possible impacts on direct employment and manufacturing assets also drew heavily on the information gathered during the interviews. The interview guide solicited both qualitative and quantitative infonnation. Supporting information was requested whenever applicable.
Interview participants were requested to identify all confidential information provided in writing or orally. Approximately two weeks following the interview, an interview summary was provided to give manufacturers the oppOliunity to confirm the accuracy and protect the confidentiality ofall collected information.
6A.1.4 Phase 4: Industry Cash Flow
As previously described, using the GRIM spreadsheet and an interview guide, the ballast MIA was perfonned on a company-by-company basis. This process has the benefit ofallowing the impacts ofstandardsto be evaluated atmultiple levels ofaggregation. The total industryimpactwas constructed from an aggregation ofimpacts on individual companies. Manufacturersusedtheir 1997 market shares in the 31.5 million "affected" magnetic ballast and the 36.5 million electronic ballast

6-3 Industrial Reports (CIRs). The dollar value ofballast shipments from factories is divided by the quantity of ballasts shipped to anive at the per unit manufacturer price. In order to estimate manufacturing costs-labor, materials, depreciation/tooling, etc.-from the average manufacturer prices obtained from CIRs, a typical ballast industry cost structure was developed using publicly available infornlation from the Census of Manufacturers (CMs) and from transformer industry statistics (SIC# 3612) obtained from RobertMorris Associates (RMA) repOlis. Finally, inpreparing the "strawman" industry cash flow analysis, the Department used the same ballast shipment scenarios developed for the National Energy Savings (NES) spreadsheet. The strawman was used to provide a statiing point which manufacturers could then use to come up with more recent and accurate inputs. The intent ofthe strawman was to use "placeholder" values in order to illustrate the working ofthe GRIM spreadsheet. Given the concerns raised over the accuracy ofthe strawman data, the Depatiment does not intendto compare orreferbackto these values.
6A.1.3 Phase 3: Sub-Group Impact Analysis
The Departmentconducted detailed interviews with ballastmanufacturers representing over 95% ofdomestic ballast sales to gain insight into the potential impacts ofstandards. During these interviews, the Department solicited the information necessaryto evaluate cash flows and to assess employment and capacity impacts. The interview process played a key role in the MIA, since it provided an opportunity for manufacturers to privately express their views on important issues and provide confidential information needed to assess financial, employment and other business impacts. To support the development of company cash flows, an interview guide solicited information on the possible impacts ofnew standards on manufacturing costs, product prices, and sales. The evaluation ofthe possible impacts on direct employment and manufacturing assets also drew heavily on the information gathered during the interviews. The interview guide solicited both qualitative and quantitative infonnation. Supporting information was requested whenever applicable.
Interview participants were requested to identify all confidential information provided in writing or orally. Approximately two weeks following the interview, an interview summary was provided to give manufacturers the oppOliunity to confirm the accuracy and protect the confidentiality ofall collected information.
6A.1.4 Phase 4: Industry Cash Flow
As previously described, using the GRIM spreadsheet and an interview guide, the ballast MIA was perfonned on a company-by-company basis. This process has the benefit ofallowing the impacts ofstandardsto be evaluated atmultiple levels ofaggregation. The total industryimpactwas constructed from an aggregation ofimpacts on individual companies. Manufacturersusedtheir 1997 market shares in the 31.5 million "affected" magnetic ballast and the 36.5 million electronic ballast

6-3market to develop their shipments of the "affected" magnetic ballasts and their direct electronic

replacements respectively. As the total market shares added to a number greater than 100% of the market, we scaled each manufacturer's market share in the same ratio to bring the total market share to a 100%. We found close agreement in total market share for magnetic ballasts and a slightly more significant over-reporting of electronic ballast shares. We aggregated the individual cash flows into three groups, the first grouping includes all manufacturers, the second includes full line manufacturers of magnetic and electronic ballasts only, and the third group includes manufacturers producing only electronic ballasts. This aggregation scheme was selected as being the most representative of the range of impacts on individual manufacturers compared to the . industry aggregate values.
6A.2 MIA RESULTS 6A.2.1 Industry Characterization We developed an initial industry characterization using information from relevant industry and market publications, industry trade organizations, company financial reports, and product literature. This industry characterization report helped us in developing the "strawman" industry cash flow analysis and also aided in the development of a detailed and focused interview guide to perform the MIA. Specifically, shipment information was obtained from publicly available Current Industrial Reports (CIRs) published by the U.S. Bureau of Census. Financial and cost information was obtained from the Census of Manufactures (another Bureau of Census publication), SEC 10-K statements, Dun & Bradstreet reports, Robert Morris Associates' reports, and Moody's Company reports. 

### 6A.2.1.1 Industry Shipments Current Industrial Reports (CIRs), published by the U.S. Bureau of Census, provide detailed data on quantity and total value of U.S. shipments of fluorescent lamp ballast products. Census uses SIC code 36124 to describe the fluorescent lamp ballast industry. According to CIR data, 103.9 million fluorescent lamp ballasts, valued at $906 million, were shipped in 1997. Census groups all ballast products into three main categories: 1) uncorrected power-factor magnetics, 2) corrected power-factor magnetics, and 3) electronics. In 1997, power-factor corrected (85% PF or above) magnetic ballasts accounted for 41% of the quantity and 38% of the value of shipments of all fluorescent lamp ballasts. In the same year, electronic ballasts made up 35% of the quantity and 54% of the value of shipments. Figure 6A.1 presents the trend in the dollar value of manufacturers' shipments of lamp ballasts over the period 1990 through 1997. It shows that the shipment value of the uncorrected power-factor magnetic segment has remained fairly steady over the past 8 years-it increased an average 12% a year from 1990 to 1992 and has remained flat since then. The shipment value of corrected power-factor magnetics has been coming down gradually, while that of electronics has been increasing as they have gained market share over corrected power-factor magnetics.



### 6-4 market to develop their shipments ofthe "affected" magnetic ballasts and their direct electronic replacements respectively. As the total market shares added to a number greater than 100% ofthe market, we scaled each manufacturer's market share in the same ratio to bringthe total market share to a 100%. We found close agreement in total market share for magnetic ballasts and a slightlymore significant over-reporting ofelectronic ballast shares. We aggregated the individual cash flows into three groups, the first grouping includes all manufacturers, the second includes full line manufacturers ofmagnetic and electronic ballasts only, and the third group includes manufacturers producing only electronic ballasts. This aggregation scheme was selected as being the most representative of the range of impacts on individual manufacturers compared to the industry aggregate values. 

### 6A.2 MIA RESULTS 6A.2.1 Industry Characterization
We developed an initial industty characterization using information from relevant industry and market publications, industty trade organizations, company financial reports, and product literature. Thisindusuy characterizationreporthelpedus in developingthe "strawman"industrycash flow analysis and also aided in the development ofa detailed and focused interview guide toperform theMIA. Specifically, shipmentinformationwas obtained from publiclyavailable CurrentIndustrial Reports (CIRs)publishedbythe U.S. BureauofCensus. Financial and costinformationwas obtained from the Census ofManufactures (another Bureau ofCensus publication), SEC lO-K statements, Dun & Bradstreet reports, Robert Morris Associates' reports, and Moody's Company reports. 

### 6A.2.1.1 Industry Shipments
CurrentIndustrial Reports (CIRs), publishedbythe U.S. Bureau ofCensus, provide detailed data on quantity and total value ofU.S. shipments offluorescent lamp ballastproducts. Censususes SIC code 36124 to describe the fluorescent lamp ballast industry. According to CIR data, 103.9 million fluorescent lamp ballasts, valued at $906 million, were shipped in 1997.
Census groups all ballast products into three main categories: 1) uncorrected power-factor magnetics, 2) correctedpower-factormagnetics, and 3) electronics. In 1997, power-factor corrected (85% PF or above) magnetic ballasts accounted for 41% ofthe quantity and 38% ofthe value of shipments ofall fluorescent lamp ballasts. In the same year, electronic ballasts made up 35% ofthe quantity and 54% ofthe value ofshipments. Figure 6A.1 presents the u"end in the dollar value of manufacturers' shipments of lamp ballasts over the period 1990 through 1997. It shows that the shipment value ofthe uncorrected power-factor magnetic segnlent has remained fairly steady over the past 8 years-it increased an average 12% a year from 1990 to 1992 and has remained flat since then. The shipment value of corrected power-factor magnetics has been coming down gradually, while that ofelectronics has been increasing as they have gained market share over corrected power-factor magnetics.

6-4 market to develop their shipments ofthe "affected" magnetic ballasts and their direct electronic replacements respectively. As the total market shares added to a number greater than 100% ofthe market, we scaled each manufacturer's market share in the same ratio to bringthe total market share to a 100%. We found close agreement in total market share for magnetic ballasts and a slightlymore significant over-reporting ofelectronic ballast shares. We aggregated the individual cash flows into three groups, the first grouping includes all manufacturers, the second includes full line manufacturers ofmagnetic and electronic ballasts only, and the third group includes manufacturers producing only electronic ballasts. This aggregation scheme was selected as being the most representative of the range of impacts on individual manufacturers compared to the industry aggregate values. 

### 6A.2 MIA RESULTS 6A.2.1 Industry Characterization
We developed an initial industty characterization using information from relevant industry and market publications, industty trade organizations, company financial reports, and product literature. Thisindusuy characterizationreporthelpedus in developingthe "strawman"industrycash flow analysis and also aided in the development ofa detailed and focused interview guide toperform theMIA. Specifically, shipmentinformationwas obtained from publiclyavailable CurrentIndustrial Reports (CIRs)publishedbythe U.S. BureauofCensus. Financial and costinformationwas obtained from the Census ofManufactures (another Bureau ofCensus publication), SEC lO-K statements, Dun & Bradstreet reports, Robert Morris Associates' reports, and Moody's Company reports. 

### 6A.2.1.1 Industry Shipments
CurrentIndustrial Reports (CIRs), publishedbythe U.S. Bureau ofCensus, provide detailed data on quantity and total value ofU.S. shipments offluorescent lamp ballastproducts. Censususes SIC code 36124 to describe the fluorescent lamp ballast industry. According to CIR data, 103.9 million fluorescent lamp ballasts, valued at $906 million, were shipped in 1997.
Census groups all ballast products into three main categories: 1) uncorrected power-factor magnetics, 2) correctedpower-factormagnetics, and 3) electronics. In 1997, power-factor corrected (85% PF or above) magnetic ballasts accounted for 41% ofthe quantity and 38% ofthe value of shipments ofall fluorescent lamp ballasts. In the same year, electronic ballasts made up 35% ofthe quantity and 54% ofthe value ofshipments. Figure 6A.1 presents the u"end in the dollar value of manufacturers' shipments of lamp ballasts over the period 1990 through 1997. It shows that the shipment value ofthe uncorrected power-factor magnetic segnlent has remained fairly steady over the past 8 years-it increased an average 12% a year from 1990 to 1992 and has remained flat since then. The shipment value of corrected power-factor magnetics has been coming down gradually, while that ofelectronics has been increasing as they have gained market share over corrected power-factor magnetics.

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Figure 6A.1 Historical Trend in Value of Shipments of Fluorescent Lamp Ballast Products Table 6A.1 presents the lamp ballast products that would be impacted by a DOE standard. These will be referred to as "affected" magnetic ballasts in this MIA report. The table also lists the cathode cutout and electronic ballast product classes that might serve as energy-efficient replacements to meet potential DOE standards at the cathode cutout ballast performance level or at the electronic ballast performance level. Table 6A.1 "Affected" Magnetic Ballasts and Ener -Efficient Replacements "Affected " Magnetic Ballasts Cathode Cutout Replacements Electronic replacements
1F40T12 1F40T12 1F40T12,3F40T12,1F32T8,3F32T8 2F40T12 2F40T12 2F40T12,3F40T12,2F32T8,3F32T8,4F32T8 2F96T12 2F96T12 2F96T12H0 2F96T12H0 2F96T12H0

Most of the manufacturers interviewed believe that standard levels set at the cathode cutout ballast performance levels would not result in cathode cutout ballasts becoming a viable alternative as a mass market replacement for the "affected" magnetic ballasts. They reported that cathode cutout ballasts have been available in the marketplace for many years and have not achieved substantial market share, despite serious promotional efforts. In fact the sales of cathode cutout ballasts have declined over the past four years. The data submitted by the National Electrical Manufacturers Association (NEMA) to the Lawrence Berkeley National Lab (LBNL) show total industry shipments


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### 6A.l Historical Trend in Value of Shipments ofFluorescent Lamp Ballast Products Table 6A.l presents the lamp ballast products that would be impacted by a DOE standard. These will be referred to as "affected" magnetic ballasts in this MIA report. The table also lists the cathode cutout and electronic ballast product classes that might serve as energy-efficient replacements to meet potential DOE standards atthe cathode cutout ballast performance level or at the electronic ballast performance level.


### T bi 

### 6A 1 "An t 

### d" M

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### t agne IC a as sandEnergy-Effi' 

### t R 1 

### t ICIen eplacemen s "Affected" Magnetic Cathode Cutout Electronic replacements Ballasts Replacements 

### IF40Tl2 1 F40Tl2 IF40T12,3F40T12,lF32T8,3F32T8 2F40T12 2F40T12 2F40T12,3F40T12,2F32T8,3F32T8,4F32T8 2F96Tl2 2F96Tl2 2F96T12HO 2F96Tl2HO 2F96T12HO

Most ofthe manufacturers interviewedbelieve that standard levels set at the cathode cutout ballastperformance levels would notresult in cathode cutout ballasts becoming a viable alternative as amassmarketreplacement for the "affected"magnetic ballasts. TheyrepOliedthatcathode cutout ballasts have been available in the marketplace for many years and have not achieved substantial market share, despite serious promotional effolis. In fact the sales ofcathode cutout ballasts have declined over the past four years. The data submitted by the National Electrical Manufacturers Association (NEMA)to the Lawrence BerkeleyNational Lab (LBNL) showtotalindustry shipments
6-5 l.AXlaD,---------------,

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### / )l /8--,_ -18' '**'''.~*** /

Figure 

### 6A.l Historical Trend in Value of Shipments ofFluorescent Lamp Ballast Products Table 6A.l presents the lamp ballast products that would be impacted by a DOE standard. These will be referred to as "affected" magnetic ballasts in this MIA report. The table also lists the cathode cutout and electronic ballast product classes that might serve as energy-efficient replacements to meet potential DOE standards atthe cathode cutout ballast performance level or at the electronic ballast performance level.


### T bi 

### 6A 1 "An t 

### d" M

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# . ec e f B II 

### t agne IC a as sandEnergy-Effi' 

### t R 1 

### t ICIen eplacemen s "Affected" Magnetic Cathode Cutout Electronic replacements Ballasts Replacements 

### IF40Tl2 1 F40Tl2 IF40T12,3F40T12,lF32T8,3F32T8 2F40T12 2F40T12 2F40T12,3F40T12,2F32T8,3F32T8,4F32T8 2F96Tl2 2F96Tl2 2F96T12HO 2F96Tl2HO 2F96T12HO

Most ofthe manufacturers interviewedbelieve that standard levels set at the cathode cutout ballastperformance levels would notresult in cathode cutout ballasts becoming a viable alternative as amassmarketreplacement for the "affected"magnetic ballasts. TheyrepOliedthatcathode cutout ballasts have been available in the marketplace for many years and have not achieved substantial market share, despite serious promotional effolis. In fact the sales ofcathode cutout ballasts have declined over the past four years. The data submitted by the National Electrical Manufacturers Association (NEMA)to the Lawrence BerkeleyNational Lab (LBNL) showtotalindustry shipments
6-5of cathode cutout ballasts as follows: 1993-580,000; 1994-614,000; 1995-460,000;

1996-382,000; 1997-422,000. (Shipments for 1997 are annualized based on six months actual shipments). Manufacturers attributed this lack of success to both technical and marketplace factors. Most manufacturers stated that a rule requiring cathode cutout ballast performance levels would just be a de facto electronic ballast rule. Manufacturers noted the downward trend in electronic ballast prices, which will thereby reduce the price advantage that cathode cutouts currently have over electronics. Additionally, not all magnetic ballast manufacturers produce cathode cutout ballasts. Those who did not manufacture cathode cutouts indicated that patented designs could lead to higher costs of manufacturing these ballasts. For these reasons, we were only able to collect data and assess the impacts of an electronic ballast performance level in this MIA report. In 1997, 31.5 million "affected" magnetic ballasts were sold in the United States.' They represent 73% of all power-factor corrected magnetic ballasts sold in 1997. Table 6A.2 presents the value of shipments of "affected" magnetic ballasts, assuming that the average price of these "affected" magnetic ballasts ($8 per unit) is the same as that of all power-factor corrected magnetic ballasts. Table 6A.2 Ship ment and Value of Fluorescent Lamp Ballasts in 1997

Product 1997 Shipments mil 1997 Value of

Shipments ($ mil % of Revenues of all ballasts Average Price

$ er unit All Power-factor corrected magnetic ballasts 42.9 343.9 37.9% 8.0 "Affected" magnetic ballasts 31.5* 252.6 27.9% 8.0 Uncorrected power-factor ballasts 24.5 68.5 7.6% 2.8
Electronic ballasts 36.5 494.0 54.5% 13.5 All ballasts 103.9 906.5 100% 8.7 A subset of "All Power-factor corrected magnetic ballasts." Data provided by NEMA (all other information was obtained from CIRs) ** Assumes price is the same as that of all PF corrected magnetics 

### Using this average price of $8, revenues from "affected" magnetic ballasts in 1997 constituted approximately 28% of all manufacturer revenues in the fluorescent lamp ballast industry.
6A.2.1.2 Manufacturer Market Shares and Characteristics 

### Table 6A.3 lists the major fluorescent lamp ballast manufacturers and their characteristics. We conducted manufacturer interviews and plant visits with all of them during the October to December 1998 time frame.

' Information provided by National Electrical Manufacturers Association (NEMA). 

### 6-6 of cathode cutout ballasts as follows: 

### 1993-580,000; 1994-614,000; 1995-460,000; 1996-382,000; 1997-422,000. (Shipments for 

### 1997 are annualized based on six months actual shipments). Manufacturers attributedthis lack ofsuccess to both technical and marketplace factors.
Most manufacturers stated that a rule requiring cathode cutout ballast performance levels would just be a 

### de Jacto electronic ballast rule. Manufacturers noted the downward trend in electronicballastprices, whichwill therebyreducethe price advantage thatcathodecutoutscurrently have over electronics. Additionally, not all magnetic ballast manufacturers produce cathode cutout ballasts. Those who did not manufacture cathode cutouts indicated that patented designs could lead to higher costs ofmanufacturing these ballasts. Forthese reasons, we were only able to collect data and assess the impacts ofan electronic ballast perf0TI11anCe level in this MIA repOli.
In 

### 1997,31.5 million "affected" magnetic ballasts were sold in the United States.! They represent 

### 73% ofall power-factor corrected magnetic ballasts sold in 

### 1997. Table 

### 6A.2 presents the value of shipments of "affected" magnetic ballasts, assuming that the average price of these "affected" magnetic ballasts 

### ($8 per unit) is the same as that ofall power-factor corrected magnetic ballasts. 

### T bi 6A2Sh'

a e 

# . lpment d V I 

### an a ue 0

### fFl

### uorescentL

### amp B II t . 

### 1997 a as SIn 1997 Shipments 1997 Value of % ofRevenues Average Price Product (mil) Shipments ($ mil) ofall ballasts ($ per unit) All Power-factor corrected 42.9 343.9 37.9% 8.0 magnetic ballasts "Affected" magnetic ballasts 31.5' 252.6 27.9% 8.0" Vncorrected power-factor 24.5 68.5 7.6% 2.8 ballasts Electronic ballasts 36.5 494.0 54.5% 13.5 All ballasts 103.9 906.5 100% 8.7 * A subset of"All Power-factor corrected magnetic ballasts." Dataprovided byNEMA (all other information was obtained from CIRs) •• Assumes price is the same as that ofall PF corrected magnetics Using this average price of 

### $8, revenues from "affected" magnetic ballasts in 

### 1997 constitutedapproximately

### 28% ofall manufacturerrevenuesinthe fluorescent lampballastindustry. 

### 6A.2.1.2 Manufacturer Market Shares and Characteristics
Table 

### 6A.3 lists the major fluorescent lamp ballast manufacturers and their characteristics. We conducted manufacturer interviews and plant visits with all of them during the October to December 

### 1998 time frame.

1 Information provided byNational Electrical Manufacturers Association (NEMA). 

### 6-6 of cathode cutout ballasts as follows: 

### 1993-580,000; 1994-614,000; 1995-460,000; 1996-382,000; 1997-422,000. (Shipments for 

### 1997 are annualized based on six months actual shipments). Manufacturers attributedthis lack ofsuccess to both technical and marketplace factors.
Most manufacturers stated that a rule requiring cathode cutout ballast performance levels would just be a 

### de Jacto electronic ballast rule. Manufacturers noted the downward trend in electronicballastprices, whichwill therebyreducethe price advantage thatcathodecutoutscurrently have over electronics. Additionally, not all magnetic ballast manufacturers produce cathode cutout ballasts. Those who did not manufacture cathode cutouts indicated that patented designs could lead to higher costs ofmanufacturing these ballasts. Forthese reasons, we were only able to collect data and assess the impacts ofan electronic ballast perf0TI11anCe level in this MIA repOli.
In 

### 1997,31.5 million "affected" magnetic ballasts were sold in the United States.! They represent 

### 73% ofall power-factor corrected magnetic ballasts sold in 

### 1997. Table 

### 6A.2 presents the value of shipments of "affected" magnetic ballasts, assuming that the average price of these "affected" magnetic ballasts 

### ($8 per unit) is the same as that ofall power-factor corrected magnetic ballasts. 

### T bi 6A2Sh'

a e 

# . lpment d V I 

### an a ue 0

### fFl

### uorescentL

### amp B II t . 

### 1997 a as SIn 1997 Shipments 1997 Value of % ofRevenues Average Price Product (mil) Shipments ($ mil) ofall ballasts ($ per unit) All Power-factor corrected 42.9 343.9 37.9% 8.0 magnetic ballasts "Affected" magnetic ballasts 31.5' 252.6 27.9% 8.0" Vncorrected power-factor 24.5 68.5 7.6% 2.8 ballasts Electronic ballasts 36.5 494.0 54.5% 13.5 All ballasts 103.9 906.5 100% 8.7 * A subset of"All Power-factor corrected magnetic ballasts." Dataprovided byNEMA (all other information was obtained from CIRs) •• Assumes price is the same as that ofall PF corrected magnetics Using this average price of 

### $8, revenues from "affected" magnetic ballasts in 

### 1997 constitutedapproximately

### 28% ofall manufacturerrevenuesinthe fluorescent lampballastindustry. 

### 6A.2.1.2 Manufacturer Market Shares and Characteristics
Table 

### 6A.3 lists the major fluorescent lamp ballast manufacturers and their characteristics. We conducted manufacturer interviews and plant visits with all of them during the October to December 

### 1998 time frame.

1 Information provided byNational Electrical Manufacturers Association (NEMA). 

### 6-6Table 6A.3 List of Lamp Ballast Manufacturers

Manufacturer Characteristics in "affected" categories 

### Advance Transformer Company Producer of magnetic and electronic ballasts with domestic, Mexican and foreign facilities Howard Industries Producer of electronic ballasts with domestic production facilities 

### MagneTek Producer of magnetic and electronic ballasts with domestic and Mexican production facilities Motorola Lighting Producer of electronic ballasts with domestic production facilities Osram Sylvania Producer of electronic ballasts with foreign production facilities Robertson Worldwide Producer of magnetic and electronic ballasts for specialty applications with domestic production facilities SLi Lighting/PLP Producer of electronic and magnetic ballasts with Mexican production facilities The interviews conducted in 1996/1997 suggested that product mix, firm size, location of production facilities, and level of vertical integration were possible characteristics to be used in defining sub-group categories. After consultation with industry, we elected to group manufacturers exhibiting similar product mix characteristics for the MIA. This aggregation scheme was selected as it represents the most comprehensive way of reporting the variation of impacts on different manufacturers while ensuring confidentiality of individual manufacturers' positions. Based oninformation presented in Table 6A.3, the manufacturers were divided into the following two subgroups: 

### Sub-group 1: Manufacturers of both magnetic and electronic ballasts • Advance Transformer Company MagneTek, Inc. Robertson Worldwide SLi Lighting / PowerLighting Products Sub-group 2: Manufacturers that produce only electronic ballasts ® Howard Industries ® Motorola Lighting, Inc. 

### ® Osram Sylvania Products Inc. The magnetic ballast industry has fewer manufacturers and, hence, is more concentrated than the electronic ballast industry. Table 6A.4 provides an overview of the number of manufacturers and market shares. Table 6A.4 Number of Manufacturers and Market Shares Number of major manufacturers Market share of the 4 largest manufacturers Market share of top 7 manufacturers Magnetic 4 >95% >95% Electronic 7 >70% >95%



### 6-7 T bI 6A 3 L' 

### t f L

a e 

# . IS 0 amp B 

### n tM a as f t anu ac urers Manufacturer Characteristics in "affected" categories Advance Transfonner Producer ofmagnetic and electronic ballasts with domestic, Company Mexican and foreiml facilities Howard Industries Producer ofelectronic ballasts with domestic production facilities MagneTek Producer ofmagnetic and elech'onic ballasts with domestic and Mexican production facilities Motorola Lighting Producer ofelectronic ballasts with domestic production facilities Osram Sylvania Producer ofelectronic ballasts with foreign production facilities Robertson Worldwide Producer ofmagnetic and electronic ballasts for specialty applications with domestic production facilities SLi Lighting/PLP Producer ofelectronic and magnetic ballasts with Mexican production facilities
The interviews conducted in 1996/1997 suggested that product mix, finn size, location of production facilities, and level of vertical integration were possible characteristics to be used in defining sub-group categories. After consultation with industry, we elected to group manufacturers exhibiting similar product mix characteristics for the MIA. This aggregation scheme was selected as it represents the most comprehensive way of repoliing the variation of impacts on different manufacturers while ensuring confidentiality of individual manufacturers' positions. Based on infonnation presented in Table 6A.3, the manufacturers were divided into the following two subgroups: Sub-group 1: Manufacturers ofboth magnetic and electronic ballasts • Advance Transfoffiler Company MagneTek, Inc. Robertson Worldwide SLi Lighting 

### 1PowerLighting Products Sub-group 2: Manufacturers that produce only electronic ballasts • Howard Industries • Motorola Lighting, Inc. • Osram Sylvania Products Inc.
The magnetic ballastindushyhas fewermanufacturers and, hence, is more concentratedthan the electronicballastindustry. Table 6A.4provides an overview ofthe numberofmanufacturers and market shares. Table 6A.4 Number ofManufacturers and Market Shares Number ofmajor Market share ofthe 4 Market share oftop 7

manufacturers largest manufacturers manufacturers Magnetic 4 >95% >95% Electronic 7 >70% >95%

6-7 T bI 6A 3 L' 

### t f L

a e 

# . IS 0 amp B 

### n tM a as f t anu ac urers Manufacturer Characteristics in "affected" categories Advance Transfonner Producer ofmagnetic and electronic ballasts with domestic, Company Mexican and foreiml facilities Howard Industries Producer ofelectronic ballasts with domestic production facilities MagneTek Producer ofmagnetic and elech'onic ballasts with domestic and Mexican production facilities Motorola Lighting Producer ofelectronic ballasts with domestic production facilities Osram Sylvania Producer ofelectronic ballasts with foreign production facilities Robertson Worldwide Producer ofmagnetic and electronic ballasts for specialty applications with domestic production facilities SLi Lighting/PLP Producer ofelectronic and magnetic ballasts with Mexican production facilities
The interviews conducted in 1996/1997 suggested that product mix, finn size, location of production facilities, and level of vertical integration were possible characteristics to be used in defining sub-group categories. After consultation with industry, we elected to group manufacturers exhibiting similar product mix characteristics for the MIA. This aggregation scheme was selected as it represents the most comprehensive way of repoliing the variation of impacts on different manufacturers while ensuring confidentiality of individual manufacturers' positions. Based on infonnation presented in Table 6A.3, the manufacturers were divided into the following two subgroups: Sub-group 1: Manufacturers ofboth magnetic and electronic ballasts • Advance Transfoffiler Company MagneTek, Inc. Robertson Worldwide SLi Lighting 

### 1PowerLighting Products Sub-group 2: Manufacturers that produce only electronic ballasts • Howard Industries • Motorola Lighting, Inc. • Osram Sylvania Products Inc.
The magnetic ballastindushyhas fewermanufacturers and, hence, is more concentratedthan the electronicballastindustry. Table 6A.4provides an overview ofthe numberofmanufacturers and market shares. Table 6A.4 Number ofManufacturers and Market Shares Number ofmajor Market share ofthe 4 Market share oftop 7

manufacturers largest manufacturers manufacturers Magnetic 4 >95% >95% Electronic 7 >70% >95%

6-7

### 6A.2.2 Cash Flow Impacts Manufacturers worked with us using the GRIM spreadsheet to evaluate the cash flow impacts of regulations on individual manufacturers. The GRIM spreadsheet calculates the change in net present value (NPV) for the manufacturer(s) following a regulation. Net present value (NPV) is defined, for the purposes of this analysis, as the present value of cash flows for the manufacturer(s) in question. The basic structure of the GRIIv1 is a standard annual cash flow analysis which uses price and shipment information as an input, builds on manufacturing cost information, and accepts a set of regulatory conditions as changes in costs, associated margins and investments. The model calculates actual cash flows by year and then determines the present value of these cash flows, both without regulations (Base Case) and with regulations (Standard Case), using the appropriate discount rate. For the purpose of this analysis, the Base Case scenario represents the business scenario in the absence of a standard. In case an electronic ballast standard comes into effect, it will change the mix of ballast products being sold in the market and their associated prices, costs and shipments. Such a scenario is called the Standard Case scenario. Hence, Base Case NPV implies the present value of cash flows in the absence of a standard. Similarly, Standard Case NPV implies the present value of cash flows in the scenario where a standard comes into effect. To project future cash flows, this analysis assumes 2000 as the announcement year of the standard, and 2003 as the year when the standard will come into effect. 

### In cooperation with us, individual manufacturers' cash flows were developed. To do this, manufacturers estimated future industry price trends, manufacturing costs, and the value and timing of necessary capital investments, both in the Base Case and the Standard Case. In preparing the GRIM cash flows, manufacturers used their own current and future forecasts of product mix for the various magnetic and electronic ballast product classes identified in Table 6A. 1. In developing cash flow estimates under the Manufacturer Submittal scenarios it is assumed that manufacturers retain their 1997 shares of the electronic market in the new electronic market. The "Electronic Ballast New Entrant" scenario was devised in order to capture the likely cash flow impacts resulting from the redistribution of market shares among the existing manufacturers as a new entrant gains a 15% market share of the new electronic market. In order to analyze the potential impact of a new entrant(s) in the magnetic ballast industry, a "Magnetic Ballast New Entrant " scenario was also developed This scenario captures the likely cash flow impacts resulting from the redistribution of market shares among the existing manufacturers as a new entrant gains a 15% market share of the magnetic ballast market. Furthermore, this scenario assumes that the new entrant(s) will result in increased competition, which will reduce the profitability of the magnetic ballast business from its current levels to those seen in the more competitive electronic ballast business post-standards. 

### Some of the important inputs required to develop cash flow estimates and NPV are industry

6-8 6A.2.2 

### Cash Flow Impacts Manufacturersworkedwithus usingthe GRIM spreadsheetto evaluatethe cashflow impacts of regulations on individual manufacturers. The GRIM spreadsheet calculates the change in net present value (NPV) for the manufacturer(s) following a regulation. Net present value (NPV) is defined, for the purposes ofthis analysis, as the present value ofcash flows for the manufacturer(s) in question. Thebasic structure ofthe GRIM is a standard annual cash flow analysiswhichusesprice and shipment information as an input, builds on manufacturing cost information, and accepts a set of regulatory conditions as changes in costs, associated margins and investments. The model calculates actual cash flows by year and then determines the present value ofthese cash flows, both without regulations 

### (Base Case) and with regulations 

### (Standard Case), using the appropriate discount rate. For the purpose ofthis analysis, the 

### Base Case scenario represents the business scenario in the absence ofa standard. In case an electronic ballast standard comes into effect, it will change the mix ofballast products being sold in the market and their associated prices, costs and shipments. Such a scenario is called the 

### Standard Case scenario. Hence, 

### Base Case NPV implies the present value ofcash flows in the absence ofa standard. Similarly, 

### Standard Case NPV implies the present value ofcash flows in the scenario where a standard comes into effect. Toproject future cash flows, this analysis assumes 2000 as the announcementyear ofthe standard, and 2003 as the year when the standard will come into effect. In cooperation with us, individual manufacturers' cash flows were developed. To do this, manufacturers estimated future industryprice trends, manufacturing costs, and the value and timing ofnecessary capital investments, both in the 

### Base Case and the 

### Standard Case. In preparing the GRIM cash flows, manufacturers usedtheir own CU1Tent and future forecasts ofproduct mix for the various magnetic and electronic ballast product classes identified in Table 6A.l.
In developing cash flow estimatesunderthe

### MamifacturerSubmittal scenarios it is assumed thatmanufacturersretaintheir 1997 shares oftheelectronic marketinthe newelectronicmarket. The "Electronic Ballast New Entrant" scenario was devised in order to capture the likely cash flow impactsresultingfrom theredistribution ofmarketshares amongthe existingmanufacturers as anew entrant gains a 15% market share ofthe new electronic market.
In order to analyze the potential impact ofa new entrant(s) in the magnetic ballast industry, a "Magnetic Ballast New Entrant" scenario was also developed This scenario captures the likely cash flow impacts resulting from the redistribution of market shares among the existing manufacturers as a new entrant gains a 15% market share of the magnetic ballast market. Furthermore, this scenario assumes that the new entrant(s) will result in increased competition, which will reduce the profitability ofthe magnetic ballast business from its current levels to those seen in the more competitive electronic ballast business post-standards.
Some ofthe important inputs required to develop cash flow estimates and NPV are industry

6-8 6A.2.2 

### Cash Flow Impacts Manufacturersworkedwithus usingthe GRIM spreadsheetto evaluatethe cashflow impacts of regulations on individual manufacturers. The GRIM spreadsheet calculates the change in net present value (NPV) for the manufacturer(s) following a regulation. Net present value (NPV) is defined, for the purposes ofthis analysis, as the present value ofcash flows for the manufacturer(s) in question. Thebasic structure ofthe GRIM is a standard annual cash flow analysiswhichusesprice and shipment information as an input, builds on manufacturing cost information, and accepts a set of regulatory conditions as changes in costs, associated margins and investments. The model calculates actual cash flows by year and then determines the present value ofthese cash flows, both without regulations 

### (Base Case) and with regulations 

### (Standard Case), using the appropriate discount rate. For the purpose ofthis analysis, the 

### Base Case scenario represents the business scenario in the absence ofa standard. In case an electronic ballast standard comes into effect, it will change the mix ofballast products being sold in the market and their associated prices, costs and shipments. Such a scenario is called the 

### Standard Case scenario. Hence, 

### Base Case NPV implies the present value ofcash flows in the absence ofa standard. Similarly, 

### Standard Case NPV implies the present value ofcash flows in the scenario where a standard comes into effect. Toproject future cash flows, this analysis assumes 2000 as the announcementyear ofthe standard, and 2003 as the year when the standard will come into effect. In cooperation with us, individual manufacturers' cash flows were developed. To do this, manufacturers estimated future industryprice trends, manufacturing costs, and the value and timing ofnecessary capital investments, both in the 

### Base Case and the 

### Standard Case. In preparing the GRIM cash flows, manufacturers usedtheir own CU1Tent and future forecasts ofproduct mix for the various magnetic and electronic ballast product classes identified in Table 6A.l.
In developing cash flow estimatesunderthe

### MamifacturerSubmittal scenarios it is assumed thatmanufacturersretaintheir 1997 shares oftheelectronic marketinthe newelectronicmarket. The "Electronic Ballast New Entrant" scenario was devised in order to capture the likely cash flow impactsresultingfrom theredistribution ofmarketshares amongthe existingmanufacturers as anew entrant gains a 15% market share ofthe new electronic market.
In order to analyze the potential impact ofa new entrant(s) in the magnetic ballast industry, a "Magnetic Ballast New Entrant" scenario was also developed This scenario captures the likely cash flow impacts resulting from the redistribution of market shares among the existing manufacturers as a new entrant gains a 15% market share of the magnetic ballast market. Furthermore, this scenario assumes that the new entrant(s) will result in increased competition, which will reduce the profitability ofthe magnetic ballast business from its current levels to those seen in the more competitive electronic ballast business post-standards.
Some ofthe important inputs required to develop cash flow estimates and NPV are industry

6-8shipments , market shares , manufacturer prices, profit margins and capital investments. These are

discussed in the next sections. 

### 6A.2.2.1 Shipments Magnetic ballast shipments have decreased in the past decade as electronic ballasts have been gaining market share. Some industry observers believe that the rate of decrease of magnetic ballast shipments will decline in the future while others maintain that it will continue at similar rates in the future. There was a general sentiment , however, that magnetic ballast sales will continue to decline in the future. In 1997, 31

.5 million "affected " magnetic ballasts were sold in the product classes for which DOE proposes to amend the energy efficiency standard

. Analysis conducted by LBNL suggests that these 31

. 5 million "affected" magnetic ballasts will be replaced by 23.6 million electronic ballasts. LBNL' s analysis takes into account that , on average, electronic ballasts drive more lamps than magnetic ballasts. The National Energy Savings (NES) spreadsheet developed by LBNL calculates the change in shipments of magnetic and electronic ballasts both in the Base Case and the Standard Case, by product categories, year-by-year. The GRIM spreadsheet uses shipment forecasts from the NES spreadsheet in conducting the cash flow analysis. 

### The fluorescent lamp ballast industry represented by its trade association (NEMA) and the Department of Energy (DOE) have agreed to consider two shipment scenarios that will bound the range of possible outcomes in future shipments. Scenario 1: In the absence of a DOE standard, "affected" magnetic ballast shipments will decrease linearly until 2015 when they reach 10% of the 1997 value. Beyond 2015, shipments will remain constant at 10% of their 1997 value. This assumption equates to shipments declining at the rate of 5% of 1997 shipments per year, until 2015 , This scenario is referred to as the "5%" shipment scenario in this report.
Scenario 2: In the absence of a DOE standard, " affected" magnetic ballast shipments will decrease linearly until 2027 when they reach 10% of the 1997 value

. Beyond 2027, shipments will remain constant at 10% of their 1997 value. This assumption equates to shipments declining at the rate of 3% of 1997 shipments per year, until 2027. This scenario is referred to as the "3%" shipment scenario in this report.
Based on the trend in U

. S. magnetic ballast closures in the past decade, a sensitivity analysis was also conducted to analyze the impact of standards under a scenario where the one remaining large U.S. magnetic ballast plant closes in 2003 , irrespective of a standard

. This analysis was conducted on the Manufacturer Submittal scenario under the 2015 shipment scenario

. In conducting this sensitivity analysis, it is assumed that changes in market demand would cause magnetic ballast shipments to decline at twice the rate, i.e. 10% per year between 1999 and 2002 , remain constant through 2005 and then continue declining at 5% per year beginning 2006. It is further assumed that



### 6-9 shipments, market shares, manufacturer prices, profit margins and capital investments. These are discussed in the next sections. 

### 6A.2.2.1 Shipments Magneticballastshipmentshave decreased in the pastdecade as electronicballastshavebeen gaining market share. Some industry observers believe thatthe rate ofdecrease ofmagnetic ballast shipments will decline in the future while others maintain that it will continue at similarrates in the future. There was a general sentiment, however, that magnetic ballast sales will continue to decline in the future.
In 1997, 31.5 million "affected" magnetic ballasts were sold in theproduct classes for which DOEproposesto amend the energyefficiency standard. Analysis conductedby LBNL suggeststhat these 31.5 million "affected" magnetic ballasts will be replaced by 23.6 million electronic ballasts. LBNL's analysis takes into account that, on average, electronic ballasts drive more lamps than magnetic ballasts. The National Energy Savings (NES) spreadsheet developed by LBNL calculates the change in shipments ofmagnetic and electronic ballasts both in theBase Case and the Standard Case, byproduct categories, year-by-year. The GRIM spreadsheetuses shipmentforecasts from the NES spreadsheet in conducting the cash flow analysis.
The fluorescent lamp ballast industry represented by its trade association (NEMA) and the Department ofEnergy (DOE) have agreed to consider two shipment scenarios that will bound the range ofpossible outcomes in future shipments. Scenario 1: In the absence ofa DOE standard, "affected" magnetic ballast shipments will decrease linearly until 2015 when they reach 10% ofthe 1997 value. Beyond 2015, shipments will remain constant at 10% oftheir 1997 value. This assumption equates to shipments declining atthe rate of5% of 1997 shipments peryear, until 2015. This scenario is referredto as the 

### "5%" shipment scenario in this report. Scenario 2: In the absence of a DOE standard, "affected" magnetic ballast shipments will decrease linearly until 2027 when they reach 10% ofthe 1997 value. Beyond 2027, shipments will remain constant at 10% oftheir 1997 value. This assumption equates to shipments declining at the rate of3% of 1997 shipmentsperyear, unti12027. This scenario is referred to as the 

### "3%" shipment scenario in this report. Based onthe trend in U.S. magnetic ballast closures in the past decade, a sensitivityanalysis was also conducted to analyze the impact of standards under a scenario where the one remaining large U.S. magnetic ballast plant closes in 2003, irrespective of a standard. This analysis was conductedontheManufacturerSubmittal scenariounderthe 2015 shipment scenario. In conducting this sensitivity analysis, it is assumed that changes in market demand would cause magnetic ballast shipments to decline at twice the rate, i.e. 10% per year between 1999 and 2002, remain constant through 2005 and then continue declining at 5% peryear beginning 2006. Itis further assumed that

6-9 shipments, market shares, manufacturer prices, profit margins and capital investments. These are discussed in the next sections. 

### 6A.2.2.1 Shipments Magneticballastshipmentshave decreased in the pastdecade as electronicballastshavebeen gaining market share. Some industry observers believe thatthe rate ofdecrease ofmagnetic ballast shipments will decline in the future while others maintain that it will continue at similarrates in the future. There was a general sentiment, however, that magnetic ballast sales will continue to decline in the future.
In 1997, 31.5 million "affected" magnetic ballasts were sold in theproduct classes for which DOEproposesto amend the energyefficiency standard. Analysis conductedby LBNL suggeststhat these 31.5 million "affected" magnetic ballasts will be replaced by 23.6 million electronic ballasts. LBNL's analysis takes into account that, on average, electronic ballasts drive more lamps than magnetic ballasts. The National Energy Savings (NES) spreadsheet developed by LBNL calculates the change in shipments ofmagnetic and electronic ballasts both in theBase Case and the Standard Case, byproduct categories, year-by-year. The GRIM spreadsheetuses shipmentforecasts from the NES spreadsheet in conducting the cash flow analysis.
The fluorescent lamp ballast industry represented by its trade association (NEMA) and the Department ofEnergy (DOE) have agreed to consider two shipment scenarios that will bound the range ofpossible outcomes in future shipments. Scenario 1: In the absence ofa DOE standard, "affected" magnetic ballast shipments will decrease linearly until 2015 when they reach 10% ofthe 1997 value. Beyond 2015, shipments will remain constant at 10% oftheir 1997 value. This assumption equates to shipments declining atthe rate of5% of 1997 shipments peryear, until 2015. This scenario is referredto as the 

### "5%" shipment scenario in this report. Scenario 2: In the absence of a DOE standard, "affected" magnetic ballast shipments will decrease linearly until 2027 when they reach 10% ofthe 1997 value. Beyond 2027, shipments will remain constant at 10% oftheir 1997 value. This assumption equates to shipments declining at the rate of3% of 1997 shipmentsperyear, unti12027. This scenario is referred to as the 

### "3%" shipment scenario in this report. Based onthe trend in U.S. magnetic ballast closures in the past decade, a sensitivityanalysis was also conducted to analyze the impact of standards under a scenario where the one remaining large U.S. magnetic ballast plant closes in 2003, irrespective of a standard. This analysis was conductedontheManufacturerSubmittal scenariounderthe 2015 shipment scenario. In conducting this sensitivity analysis, it is assumed that changes in market demand would cause magnetic ballast shipments to decline at twice the rate, i.e. 10% per year between 1999 and 2002, remain constant through 2005 and then continue declining at 5% peryear beginning 2006. Itis further assumed that

6-9these abrupt changes in shipments will impact the magnetic ballast industry competitive dynamics

by reducing profit margins in the 2000 through 2005 time frame. Most manufacturers in Sub-group 1 believe that an electronic ballast standard will result in stockpiling of "affected" magnetic ballasts in the year prior to the standard. This would then result in a corresponding drop in shipments of electronic ballasts in the year that the standard comes intoeffect. Manufacturers supported their argument by stating that the implementation of an energyefficiency standard on Jan 1, 1990 stimulated stockpiling and a "Boom/Bust" cycle. The industry fears that a costly "boom/bust" cycle may occur again if the new energy-efficiency standard is applied without provisions to discourage stockpiling. Quarterly shipment data was gathered to characterize the impact of the Jan 1, 1990 standard on shipments of magnetic ballasts. Figure 6A.2 graphs the quarterly shipment data. Shipment data in the few quarters proceeding the effective date of the 1990 standard show a 15% increase in shipments. This increase in shipments was followed by a 26% drop in shipments in the two quarters following the effective date of the 1990 standard.

Figure 6A.2 Impact ofJanuary 1, 1990 Energy-efficiency Standard on Shipment of Magnetic Ballasts We adapted the GRIM spreadsheet so that it could be used to analyze the impact of a shipment "spike," resulting from an electronic ballast standard. In conducting the MIA, we used a 15% shipment "spike" (increase in shipments by 15% in the year before the standard year, followed by a 15% decrease in shipments in the standard year) in modeling the impacts on cash flows. Figures 6A.3 and 6A.4 illustrate the 5% and the 3% shipment scenarios. Both of these scenarios include the 15% shipment "spike" assumption.



### 6-10 these abrupt changes in shipments will impact the magnetic ballast industry competitive dynamics byreducing profit margins in the 2000 through 2005 time frame.
Most manufacturers in Sub-group 1believe that an electronic ballast standard will result in stockpiling of"affected" magnetic ballasts in the year prior to the standard. This would then result in a conesponding drop in shipments ofelectronic ballasts in the year that the standard comes into effect. Manufacturers supported their argument by stating that the implementation of an energyefficiency standard on Jan 1, 1990 stimulated stockpiling and a "Boom/Bust" cycle. The industry fears that a costly "boom/bust" cycle may occur again if the new energy-efficiency standard is applied without provisions to discourage stockpiling. Quarterly shipment data was gathered to characterize the impact ofthe Jan 1, 1990 standard on shipments ofmagnetic ballasts. Figure 6A.2 graphs the quarterly shipment data. Shipment data in the few quatiers proceeding the effective date ofthe 1990 standard show a 15% increase in shipments. This increase in shipments was followed by a 26% drop in shipments in the two quatiers following the effective date ofthe 1990 standard.

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Figure 6A.2 Impact ofJanuary 1,1990Energy-efficiency Standard on Shipment ofMagnetic Ballasts We adapted the GRIM spreadsheet so that it could be used to analyze the impact of a shipment "spike," resulting from an electronic ballast standard. In conducting the MIA, we used a 15% shipment "spike" (increase in shipments by 15% in the yearbefore the standard year, followed by a 15% decrease in shipments in the standard year) in modeling the impacts on cash flows. Figures 6A.3 and 

### 6AA illustrate the 5% and the 3% shipment scenarios. Both of these scenarios include the 15% shipment "spike" assumption.

6-10 these abrupt changes in shipments will impact the magnetic ballast industry competitive dynamics byreducing profit margins in the 2000 through 2005 time frame.
Most manufacturers in Sub-group 1believe that an electronic ballast standard will result in stockpiling of"affected" magnetic ballasts in the year prior to the standard. This would then result in a conesponding drop in shipments ofelectronic ballasts in the year that the standard comes into effect. Manufacturers supported their argument by stating that the implementation of an energyefficiency standard on Jan 1, 1990 stimulated stockpiling and a "Boom/Bust" cycle. The industry fears that a costly "boom/bust" cycle may occur again if the new energy-efficiency standard is applied without provisions to discourage stockpiling. Quarterly shipment data was gathered to characterize the impact ofthe Jan 1, 1990 standard on shipments ofmagnetic ballasts. Figure 6A.2 graphs the quarterly shipment data. Shipment data in the few quatiers proceeding the effective date ofthe 1990 standard show a 15% increase in shipments. This increase in shipments was followed by a 26% drop in shipments in the two quatiers following the effective date ofthe 1990 standard.

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Figure 6A.2 Impact ofJanuary 1,1990Energy-efficiency Standard on Shipment ofMagnetic Ballasts We adapted the GRIM spreadsheet so that it could be used to analyze the impact of a shipment "spike," resulting from an electronic ballast standard. In conducting the MIA, we used a 15% shipment "spike" (increase in shipments by 15% in the yearbefore the standard year, followed by a 15% decrease in shipments in the standard year) in modeling the impacts on cash flows. Figures 6A.3 and 

### 6AA illustrate the 5% and the 3% shipment scenarios. Both of these scenarios include the 15% shipment "spike" assumption.

6-10Figure 6A.3 Base Case and Standard Case Shipments in the 5% Shipment scenario

YW



### Figure 6A.4 Base Case and Standard Case Shipments in the 3% Shipment Scenario 6A.2.2.2 Capital Investments 

### Manufacturers will have to increase their manufacturing capacities in order to meet the demand for additional electronic ballasts, both in the Base Case and the Standard Case. These onetime capital investments needed to increase manufacturing capacity are identified as capital conversion costs in the GRIM spreadsheet. Manufacturers provided capital conversion costs necessary to change over from "affected" magnetic to electronic ballasts. These costs are specified in dollars per electronic ballast. For example, a capital conversion cost of $2 per ballast means that a $2 million investment is needed to add manufacturing capacity to produce 1 million additional electronic ballasts annually.
6-11 

### Figure 6A.3 Base Case 

### and Standard Case 

### Shipments in the 5% Shipment scenario

Figure 6A.4 Base Case 

### and Standard Case 

### Shipments in the 3% Shipment Scenario 6A.2.2.2 Capital Investments
Manufacturers will have to increase their manufacturing capacities in order to meet the demand for additional electronic ballasts, both in the Base Case and the Standard Case. These onetime capital investments needed to increase manufacturing capacity are identified as capital conversion costs in the GRIM spreadsheet. Manufacturers provided capital conversion costs necessaryto change over from "affected" magnetic to electronic ballasts. These costs are specified in dollars per electronic ballast. For example, a capital conversion cost of$2 perballast means that a $2 million investment is needed to add manufacturing capacity to produce 1 million additional electronic ballasts annually.

6-11 

### Figure 6A.3 Base Case 

### and Standard Case 

### Shipments in the 5% Shipment scenario

Figure 6A.4 Base Case 

### and Standard Case 

### Shipments in the 3% Shipment Scenario 6A.2.2.2 Capital Investments
Manufacturers will have to increase their manufacturing capacities in order to meet the demand for additional electronic ballasts, both in the Base Case and the Standard Case. These onetime capital investments needed to increase manufacturing capacity are identified as capital conversion costs in the GRIM spreadsheet. Manufacturers provided capital conversion costs necessaryto change over from "affected" magnetic to electronic ballasts. These costs are specified in dollars per electronic ballast. For example, a capital conversion cost of$2 perballast means that a $2 million investment is needed to add manufacturing capacity to produce 1 million additional electronic ballasts annually.

6-11Interviews confirmed that manufacturers typically invest capital one year in advance in order

to meet the increased demand for electronic ballasts. The GRIM spreadsheet uses this assumption to model capital conversion costs both in the Base Case and the Standard Case. Capital conversion costs are needed in the Base Case to meet the increasing demand for electronic ballasts as magnetic ballast shipments gradually decline. In the Standard Case, capital conversion costs are required to prepare for the gradual market conversion to electronic ballasts in the years before the standard year, and also to meet the large increase in electronic ballast shipments resulting from the standard. Figure 6A.6 illustrates the timing and relative magnitude of capital conversion costs needed in the Base Case and the Standard Case.

Figure 6A. 5 Timing and Relative Magnitude of Capital Conversion Costs

6A.2.2.3 Industry Cash Flow Submittal Each manufacturer was asked to develop its Base Case and Standard Case cash flows based on its estimates of future prices, profit margins and capital expenditures. Manufacturers developed their "most likely" projections for future revenues and profit margins based on their views of the future industry structure and competition dynamics. This scenario is referred to as the Manufacturer Submittal scenario in this report. In developing cash flow estimates under the Manufacturer 

### 6-12 Interviews confirmedthatmanufacturers typicallyinvest capital oneyearin advance in order to meet the increased demand for electronic ballasts. The GRIM spreadsheet uses this assumption to model capital conversion costs both in the Base Case and the Standard Case. Capital conversion costs are needed in theBase Case to meetthe increasing demand for electronic ballasts as magnetic ballast shipments gradually decline. In the Standard Case, capital conversion costs are required to prepare for the gradual market conversion to electronic ballasts in the yearsbeforethe standardyear, and also to meetthe large increase in electronic ballast shipmentsresultingfrom the standard. Figure 6A.6 illustrates the timing and relative magnitude ofcapital conversion costs needed in the Base Case and the Standard Case.


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6A.2.2.3 Industry Cash Flow Submittal
Each manufacturerwas asked to develop its Base Case and Standard Case cash flows based on its estimates offuture prices, profit margins and capital expenditures. Manufacturers developed their "most likely" projections for future revenues and profit margins based on their views ofthe future industry structure and competition dynamics. This scenario is referredto as theManufacturer Submittal scenario in this report. In developing cash flow estimates under the Manufacturer
6-12 Interviews confirmedthatmanufacturers typicallyinvest capital oneyearin advance in order to meet the increased demand for electronic ballasts. The GRIM spreadsheet uses this assumption to model capital conversion costs both in the Base Case and the Standard Case. Capital conversion costs are needed in theBase Case to meetthe increasing demand for electronic ballasts as magnetic ballast shipments gradually decline. In the Standard Case, capital conversion costs are required to prepare for the gradual market conversion to electronic ballasts in the yearsbeforethe standardyear, and also to meetthe large increase in electronic ballast shipmentsresultingfrom the standard. Figure 6A.6 illustrates the timing and relative magnitude ofcapital conversion costs needed in the Base Case and the Standard Case.


### Capitallnvesb Iais

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### Figure 6A.5 Timing and Relative Magnitude of Capital Conversion Costs

6A.2.2.3 Industry Cash Flow Submittal
Each manufacturerwas asked to develop its Base Case and Standard Case cash flows based on its estimates offuture prices, profit margins and capital expenditures. Manufacturers developed their "most likely" projections for future revenues and profit margins based on their views ofthe future industry structure and competition dynamics. This scenario is referredto as theManufacturer Submittal scenario in this report. In developing cash flow estimates under the Manufacturer
6-12Submittal scenario it is assumed that manufacturers retain their 1997 shares of the existing electronic

market in the new electronic market-the market created as "affected" magnetic ballast shipments are converted to electronic ballasts. During interviews some manufacturers expressed their belief that a significant increase in the electronic ballast market resulting from an electronic ballast standard might encourage one or more new entrants into the U.S. market. They felt that this new entrant(s) might capture a significant portion of the new electronic market. 

### To ensure that the MIA captured the potential impacts of a new entrant(s) in the ballast market, cash flows and NPVs were evaluated assuming that a new market entrant(s) will capture 15% ofthe new electronic market in 2003. Manufacturer market shares in the 1997 electronic market are redistributed to accommodate the new market entrant(s). This scenario is referred to as the Electronic BallastNew Entrant scenario in this report. We used shipment weighted average financial parameters of all existing electronic ballast manufacturers (Sub-groups 1 and 2) to model the financial impact on the new entrant(s) in this scenario. In order to analyze the potential impact of a new entrant(s) in the magnetic ballast industry, a "Magnetic Ballast New Entrant" scenario was also developed. This scenario captures the likely cash flow impacts resulting from the redistribution of market shares among the existing manufacturers as a new entrant gains a 15% market share of the magnetic ballast market. From manufacturer interviews and cash flow submittals it was apparent that Sub-groups 1 and 2 had quite divergent views of the future industry competitiveness and corresponding electronic ballast profit margins. Most manufacturers in Sub-group 1 believed that there would be a squeeze in their margins in the Standard Case due to increased competitiveness and a potential new entrant. Sub-group 2, on the other hand, expected to gain efficiencies of scale from higher volumes and expressed the belief that their profit margins on this incremental part of their business would be equal to or higher than on their current electronic ballast business. To evaluate the impact of these divergent views, our firm (ADL) created an alternative scenario that assumes that each manufacturer's Base Case electronic ballast profit margins and market shares are maintained in the Standard Case. This scenario is referred to as the Existing Dynamics scenario in this report. 

### Table 6A.5 summarizes the various scenarios that were considered in conducting the ballast MIA. Base Case and Standard Case cash flows and NPVs were calculated for each manufacturer under each scenario. Individual manufacturer cash flows were then aggregated to report impacts on the two sub-groups. In addition to maintaining confidentiality, this sub-group level aggregation approach has the benefit of capturing variability between manufacturers. Hence, by aggregating cash flows at the sub-group level using the three different scenarios, both uncertainty and variability are being captured in this analysis.

6-13 Submittalscenario it is assumedthatmanufacturersretain their 1997 shares ofthe existing electronic market in the new electronic market-the market created as "affected" magnetic ballast shipments are converted to electronic ballasts. During interviews some manufacturers expressed their beliefthat a significant increase in the electronic ballast market resulting from an electronic ballast standard might encourage one or more new entrants into the U.S. market. Theyfelt thatthis new entrant(s) might capture a significant portion ofthe new electronic market.
To ensure that the MIA captured the potential impacts of a new entrant(s) in the ballast market, cash flows and NPVs were evaluated assuming that a new market entrant(s) will capture 15% ofthenew electronicmarketin 2003. Manufacturermarket shares in the 1997 electronicmarket are redistributed to accommodate the new market entrant(s). This scenario is referred to as the ElectronicBallastNewEntrant scenaIio in this report. Weused shipmentweighted average financial parameters of all existing electronic ballast manufacturers (Sub-groups 1 and 2) to model the financial impact on the new entrant(s) in this scenario.
In orderto analyze the potential impact ofa new entrant(s) in the magnetic ballast industry, a "Magnetic Ballast New Entrant" scenario was also developed. This scenario captures the likely cash flow impacts resulting from the redisttibution of market shares among the existing manufacturers as a new entrant gains a 15% market share ofthe magnetic ballast market.
From manufacturer interviews and cash flow submittals it was apparent that Sub-groups 1 and 2 had quite divergent views ofthe future industty competitiveness and corresponding electronic ballast profit margins. Most manufacturers in Sub-group I believed that there would be a squeeze in theirmargins in the Standard Case due to increased competitiveness and a potential new entrant. Sub-group 2, on the other hand, expected to gain efficiencies of scale from higher volumes and expressed the beliefthat their profit margins on this incremental part oftheir business would be equal to or higher than on their current electt'onic ballast business. To evaluate the impact ofthese divergent views, our firm (ADL) created an altemative scenario that assumes that each manufacturer'sBase Case electronic ballast profit margins and market shares are maintained in the Standard Case. This scenario is referred to as the Existing Dynamics scenario in this report. Table 6A.5 summarizesthe various scenarios that were considered in conductingthe ballast MIA. Base Case and Standard Case cash flows and NPVs were calculated for each manufacturer under each scenario. Individual manufacturer cash flows were then aggregated to report impacts on the two sub-groups. In addition to maintaining confidentiality, this sub-group level aggregation approachhasthebenefit ofcapturingvariabilitybetweenmanufacturers. Hence, by aggregating cash flows at the sub-group level using the three different scenarios, both uncertainty and variability are being captured in this analysis.

6-13 Submittalscenario it is assumedthatmanufacturersretain their 1997 shares ofthe existing electronic market in the new electronic market-the market created as "affected" magnetic ballast shipments are converted to electronic ballasts. During interviews some manufacturers expressed their beliefthat a significant increase in the electronic ballast market resulting from an electronic ballast standard might encourage one or more new entrants into the U.S. market. Theyfelt thatthis new entrant(s) might capture a significant portion ofthe new electronic market.
To ensure that the MIA captured the potential impacts of a new entrant(s) in the ballast market, cash flows and NPVs were evaluated assuming that a new market entrant(s) will capture 15% ofthenew electronicmarketin 2003. Manufacturermarket shares in the 1997 electronicmarket are redistributed to accommodate the new market entrant(s). This scenario is referred to as the ElectronicBallastNewEntrant scenaIio in this report. Weused shipmentweighted average financial parameters of all existing electronic ballast manufacturers (Sub-groups 1 and 2) to model the financial impact on the new entrant(s) in this scenario.
In orderto analyze the potential impact ofa new entrant(s) in the magnetic ballast industry, a "Magnetic Ballast New Entrant" scenario was also developed. This scenario captures the likely cash flow impacts resulting from the redisttibution of market shares among the existing manufacturers as a new entrant gains a 15% market share ofthe magnetic ballast market.
From manufacturer interviews and cash flow submittals it was apparent that Sub-groups 1 and 2 had quite divergent views ofthe future industty competitiveness and corresponding electronic ballast profit margins. Most manufacturers in Sub-group I believed that there would be a squeeze in theirmargins in the Standard Case due to increased competitiveness and a potential new entrant. Sub-group 2, on the other hand, expected to gain efficiencies of scale from higher volumes and expressed the beliefthat their profit margins on this incremental part oftheir business would be equal to or higher than on their current electt'onic ballast business. To evaluate the impact ofthese divergent views, our firm (ADL) created an altemative scenario that assumes that each manufacturer'sBase Case electronic ballast profit margins and market shares are maintained in the Standard Case. This scenario is referred to as the Existing Dynamics scenario in this report. Table 6A.5 summarizesthe various scenarios that were considered in conductingthe ballast MIA. Base Case and Standard Case cash flows and NPVs were calculated for each manufacturer under each scenario. Individual manufacturer cash flows were then aggregated to report impacts on the two sub-groups. In addition to maintaining confidentiality, this sub-group level aggregation approachhasthebenefit ofcapturingvariabilitybetweenmanufacturers. Hence, by aggregating cash flows at the sub-group level using the three different scenarios, both uncertainty and variability are being captured in this analysis.

6-13Table 6A.5 Scenarios Used to Characterize Variability and Uncertainty in the Cash
Sub- group 1 Sub-group 2 5% and 3% shipment scenarios 5% and 3% shipment scenarios
Scenarios Manufacturer Submittal Manufacturer Submittal

Electronic Ballast New Entrant Electronic Ballast New Entrant Magnetic Ballast New Entrant Magnetic Ballast New Entrant Existing Dynamics Existing Dynamics

Industry-wide impacts were calculated by simply adding the cash flow impacts on the two sub-groups that constitute the entire industry. For the industry, the New Entrant scenario is the same as the Manufacturer Submittal scenario because the new entrant(s) cash flow was modeled using shipment weighted average financial parameters of all existing electronic ballast manufacturers. Therefore industry-wide impacts in the 5% and 3% shipment scenarios are presented under the Manufacturer Submittal and Existing Dynamics scenarios only. Tables 6A.6 and 6A.7 present the aggregated results of the cash flow analysis for impacts on the industry's "affected" magnetic ballast business only.
Table 6A.6 Cash Flow Impacts Resulting from an Electronic Ballast Standard

Scenarios Base Case NPV $mil Standard Case

NPV ($mil) Change in

NPV ($mil) % Change in

NPV Cash flow impacts on the "affected" magnetic ballast business Su -group 1 Manufacturer Submittal 181.3 91.3 -90.0 -50% New Entrant 181.3 91.6 -89.7 -50% Existing Dynamics 181.3 111.4 -69.9 -39% Sub-group 2 Manufacturer Submittal 34.9 55.3 20.4 58% New Entrant 34.9 49.0 14.1 40% Existing Dynamics 34.9 44.2 9.3 27% Industry (=Sub- group 1 + Sub-group 2) Manufacturer Submittal 216.3 146.6 -69.7 -32% Existing Dynamics 216.3 155.6 -60.7 -28%

Flow Analysis

Under the 5% Shipment Scenario

6-14 Table 6A.S Scenarios Used to Characterize Variability and Uncertainty in the Cash 

### FI A I . ow nalYSIS Sub-group 1 Sub-group 2 5% and 3% shipment scenarios 5% and 3% shipment scenarios Scenarios Manufacturer Submittal Manufacturer Submittal Electronic BallastNew Entrant Electronic BallastNew Entrant Magnetic BallastNew Entrant Magnetic BallastNew Entrant Existing Dynamics Existing Dynamics

Industry-wide impacts were calculated by simply adding the cash flow impacts on the two sub-groups that constitute the entire industry. Forthe industry, the New Entrant scenario is the same as the Manufacturer Submittal scenario because the new entrant(s) cash flow was modeled using shipment weighted average financial parameters of all existing electronic ballast manufacturers. Therefore industry-wide impacts in the 5% and 3% shipment scenarios are presented under the Manufacturer Submittal and Existing Dynamics scenarios only. Tables 6A.6 and 6A.7 present the aggregatedresults ofthe cash flow analysis for impacts onthe industry's "affected"magneticballast business only.
Table 6A.6 Cash Flow Impacts Resulting from an Electronic Ballast Standard U d th 5%Sh" tS

n er e 0 lpmen cenano Scenarios Base Case Standard Case Change in % Change in 

### NPV NPV NPV NPV ($mil) ($mil) ($mil) Cash flow impacts on the "affected" ma!!netic ballast business Sub-group 1 Manufacturer Submittal 181.3 91.3 -90.0 -50% New Entrant 181.3 91.6 -89.7 -50% Existing Dynamics 181.3 lIlA -69.9 -39% Sub-group 2 Manufacturer Submittal 34.9 55.3 2004 58% New Entrant 34.9 49.0 14.1 40% Existing Dynamics 34.9 44.2 9.3 27% Industry (=Sub-grouJ) 1 

### + Sub-group 2) Manufacturer Submittal 216.3 146.6 -69.7 -32% Existing Dynamics 216.3 155.6 -60.7 -28%



### 6-14 Table 6A.S Scenarios Used to Characterize Variability and Uncertainty in the Cash 

### FI A I . ow nalysls Sub-group 1 Sub-group 2 5% and 3% shipment scenarios 5% and 3% shipment scenarios Scenarios Manufacturer Submittal Manufacturer Submittal Electronic BallastNew Entrant Electronic BallastNew Entrant Magnetic BallastNew Entrant Magnetic BallastNew Entrant Existing Dynamics Existing Dynamics

Industry-wide impacts were calculated by simply adding the cash flow impacts on the two sub-groups that constitute the entire industry. Forthe industry, the New Entrant scenario is the same as the Manufacturer Submittal scenario because the new entrant(s) cash flow was modeled using shipment weighted average financial parameters of all existing electronic ballast manufacturers. Therefore industry-wide impacts in the 5% and 3% shipment scenarios are presented under the Manufacturer Submittal and Existing Dynamics scenarios only. Tables 6A.6 and 6A.7 present the aggregatedresults ofthe cash flow analysis for impacts onthe industry's "affected"magneticballast business only.
Table 6A.6 Cash Flow Impacts Resulting from an Electronic Ballast Standard U d h 5% Sh" S

n er t e 0 IPment cenano Scenarios Base Case Standard Case Change in % Change in 

### NPV NPV NPV NPV ($mil) ($mil) ($mil) Cash flow impacts on the "affected" ma!!netic ballast business Sub-group 1 Manufacturer Submittal 181.3 91.3 -90.0 -50% New Entrant 181.3 91.6 -89.7 -50% Existing Dynamics 181.3 lIlA -69.9 -39% Sub-group 2 Manufacturer Submittal 34.9 55.3 2004 58% New Entrant 34.9 49.0 14.1 40% Existing Dynamics 34.9 44.2 9.3 27% Industry (=Sub-group 1 

### + Sub-group 2) Manufacturer Submittal 216.3 146.6 -69.7 -32% Existing Dynamics 216.3 155.6 -60.7 -28%



### 6-14Table 6A.7 Cash Flow Impacts Resulting from an Electronic Ballast Standard

Scenarios Base Case ITV ($mil) Standard

Case NPV $mil Change in

NPV ($mil) % Change in

NPV

Cash flow impacts on the "affected" magnetic ballast business Su - group I Manufacturer Submittal 210.7 97.1 -113.6 -54% New Entrant 210.7 97.4 -113.3 -54% Existing Dynamics 210.7 117.2 -93.5 -44% Su -group 2 Manufacturer Submittal 26.2 53.7 27.5 105% New Entrant 26.2 47.5 21.3 81% Existing Dynamics 26.2 42.7 16.5 63% Industry (Sub-group 1 + Sub-group 2 Manufacturer Submittal 237.0 150.8 -86.2 -36% Existing Dynamics 237.0 159.9 -77.1 -33% The cash flow results indicate that, looking solely at the impact on the "affected" magnetic ballast business, an electronic ballast standard will result in a loss in the value (NPV) of the ballast industry. Industry's NPV loss ranges from $60.7 million to $69.7 million and $77.1 million to $86.2 million under the 5% and 3% shipment scenarios respectively. Detailed year-by-year Industry cash flows for the Base Case and the Standard Case under the Manufacturer Submittal and Business As Usual scenarios are presented in Appendix C. Both sub-groups will be disproportionately impacted when compared to the impacts on the entire industry. For Sub-group 1 NPV loss ranges from $69.9 to $90.0 and $93.5 to $113.6 under the 5% and 3% shipment scenarios respectively. Sub-group 2, on the other hand, shows an increase in NPV ranging from $9.3 to $20.4 and $16.5 to $27.5 under the 5% and 3% shipment scenarios respectively. 

### Sub-group 1 will be negatively impacted because of the loss of its profitable "affected" magnetic ballast business. Interviews with Sub-group 1 indicated that, on average, their "affected" magnetic ballast business is significantly more profitable than their electronics business. Lower profitability in the electronic business combined with their reduced market shares in the electronic ballast market is responsible for the disproportionately large negative impacts on this sub-group. Additionally, restructuring costs associated with plant closures and changes in capacity utilization add to the loss in value.Any increase in electronic ballast sales represents an upside for Sub-group 2. Since this subgroup does not manufacture "affected" magnetic ballasts they experience no negative impacts. Hence, the overall impact of an electronic ballast standard on Sub-group 2 is positive.

under the 3% Shi p ment Scenario

6-15 Table 6A.7 Cash Flow Impacts Resulting from an Electronic Ballast Standard d h 3%Sh' tS un er t e 0 lpmen cenano Scenarios Base Case Standard Change in % Change in 

### NPV Case 

### NPV NPV ($mil) 

### NPV ($mil) ($mH) Cash flow impacts on the "affected" malrnetic ballast business Sub-group 1 Manufacturer Submittal 210.7 97.1 -113.6 -54% New Entrant 210.7 97.4 -113.3 -54% Existing Dynamics 210.7 117.2 -93.5 -44% Sub-group 

### 2 Manufacturer Submittal 26.2 53.7 27.5 105% New Entrant 26.2 47.5 21.3 81% Existing Dynamics 26.2 42.7 16.5 63% Industry (Sub-grou) 1 

### + Sub-group 

### 2) Manufacturer Submittal 237.0 150.8 -86.2 -36% Existing Dynamics 237.0 159.9 -77.1 -33% The cash flow results indicate that, looking solely at the impact on the "affected" magnetic ballast business, an electronic ballast standard will result in a loss in the value (NPV) ofthe ballast industry. Industry'sNPV loss ranges from $60.7 million to $69.7 million and $77.1 millionto $86.2 million underthe 5% and 3% shipment scenarios respectively. Detailed year-by-year Industry cash flows for the Base Case and the Standard Case under the Manufacturer Submittal andBusinessAs Usual scenarios are presented in Appendix C.
Both sub-groups will be dispropoliionately impacted when compared to the impacts on the entire industry. For Sub-group 1NPVloss ranges from $69.9 to $90.0 and $93.5 to $113.6underthe 5% and 3% shipment scenarios respectively. Sub-group 2, on the other hand, shows an increase in NPV ranging from $9.3 to $20.4 and $16.5 to $27.5 under the 5% and 3% shipment scenarios respectively. Sub-group 1 will be negatively impacted because ofthe loss of its profitable "affected" magnetic ballast business. Interviews with Sub-group 1 indicated that, on average, their "affected" magnetic ballast business is significantly more profitable than their electronics business. Lower profitability in the electronic business combined with their reduced market shares in the electronic ballast market is responsible for the disproportionately large negative impacts on this sub-group. Additionally, restructuring costs associated with plant closures and changes in capacityutilization add to the loss in value. Anyincrease in electronic ballast sales represents an upside for Sub-group 2. Since this subgroup does not manufacture "affected" magnetic ballasts they experience no negative impacts. Hence, the overall impact ofan electronic ballast standard on Sub-group 2 is positive.

6-15 Table 6A.7 Cash Flow Impacts Resulting from an Electronic Ballast Standard d th 3%Sh' tS un er e 0 lpmen cenano Scenarios Base Case Standard Change in % Change in 

### NPV Case 

### NPV NPV ($mil) 

### NPV ($mil) ($mH) Cash flow impacts on the "affected" malrnetic ballast business Sub

...group 1 Manufacturer Submittal 210.7 97.1 -113.6 -54% New Entrant 210.7 97.4 -113.3 -54% Existing Dynamics 210.7 117.2 -93.5 -44% Sub-2roup 2 Manufacturer Submittal 26.2 53.7 27.5 105% New Entrant 26.2 47.5 21.3 81% Existing Dynamics 26.2 42.7 16.5 63% Industry (Sub-2rou)1+Sub-2roup2) Manufacturer Submittal 237.0 150.8 -86.2 -36% Existing Dynamics 237.0 159.9 -77.1 -33% The cash flow results indicate that, looking solely at the impact on the "affected" magnetic ballast business, an electronic ballast standard will result in a loss in the value (NPV) ofthe ballast industry. Industry'sNPV loss ranges from $60.7 million to $69.7 million and $77.1 millionto $86.2 million underthe 5% and 3% shipment scenarios respectively. Detailed year-by-year Industry cash flows for the Base Case and the Standard Case under the Manufacturer Submittal andBusinessAs Usual scenarios are presented in Appendix C.
Both sub-groups will be dispropoliionately impacted when compared to the impacts on the entire industry. For Sub-group 1NPVloss ranges from $69.9 to $90.0 and $93.5 to $113.6underthe 5% and 3% shipment scenarios respectively. Sub-group 2, on the other hand, shows an increase in NPV ranging from $9.3 to $20.4 and $16.5 to $27.5 under the 5% and 3% shipment scenarios respectively. Sub-group 1 will be negatively impacted because ofthe loss of its profitable "affected" magnetic ballast business. Interviews with Sub-group 1 indicated that, on average, their "affected" magnetic ballast business is significantly more profitable than their electronics business. Lower profitability in the electronic business combined with their reduced market shares in the electronic ballast market is responsible for the disproportionately large negative impacts on this sub-group. Additionally, restructuring costs associated with plant closures and changes in capacityutilization add to the loss in value. Anyincrease in electronic ballast sales represents an upside for Sub-group 2. Since this subgroup does not manufacture "affected" magnetic ballasts they experience no negative impacts. Hence, the overall impact ofan electronic ballast standard on Sub-group 2 is positive.

6-156A.2.2.4 Industry Value of the Electronic Ballast Business Tables 6A.6 and 6A.7 present the percentage change in industry value based on the value of the "affected" magnetic ballast segment in isolation. However, all of the manufacturers also produce electronic ballasts. hi 1997, 36.5 million electronic ballasts were sold in the U.S. These sales generated $494 million in revenues for the industry (refer to Table 6A.2). We conducted a cash flow analysis to develop the industry value (NPV) of the business represented by these "unaffected" electronic ballasts. Results are presented in Table 6A.8. 

### Annual cash flows and NPV of the "unaffected" electronic ballast business were estimated using shipment weighted average values of prices, costs, and financial parameters provided by the manufacturers currently in that business. A future industry growth rate of 2.1 % was estimated based on forecasts of U.S. GDP growth for the years 1997 to 20202. Table 6A.8 presents the NPV calculated under two scenarios: 1) assuming there is no growth in electronic ballast sales, and 2) assuming a 2.1 % annual growth rate in electronic ballast sales. From the resulting NPV values it can be concluded that a small variation from the 2.1 % growth assumption will not materially affect the results of the analysis. Table 6A.8 Industry Value of "Unaffected" Electronic Ballast Business Under

Scenario NPV of " unaffected " electronics business $rnil 0% annual growth in electronic 191.5 

### ballast sales 2.1 % annual growth in electronic 204.3 

### ballast sales

Tables 6A.9 and 6A. 10 present the cash flow impacts of an electronic ballast standard on the ballast industry composed of all ballast product classes, both "affected" magnetic and electronic, considered under the DOE rulemaking. In 1997, the shipments of magnetic and electronic ballast product classes considered in the DOE rulemaking were approximately 31.5 million and 36.5 million ballasts respectively. In developing these cash flow impacts, it is assumed that the "unaffected" electronics business, represented by 36.5 million electronic ballasts, will grow 2.1% annually.

2 Source: Annual Energy Outlook, 1999, published by the Energy Information Administration, Department of Energy. Industry sources stated that average growth rates for ballast sales are approximately equal to increases in commercial floor space, which in turn can be approximated as being equal to the increase in U.S. GDP.

Different Growth Rate Projections



### 6-16 6A.2.2.4 Industry Value ofthe Electronic Ballast Business
Tables 6A.6 and 6A.7 presentthe percentage change in industry value based on the value of the "affected"magnetic ballast segn1ent in isolation. However, all ofthe manufacturers also produce electronic ballasts. ill 1997, 36.5 million electronic ballasts were sold in the U.S. These sales generated $494 million in revenues for the industry (referto Table 6A.2). We conducted a cash flow analysis to develop the industry value (NPV) of the business represented by these "unaffected" electronic ballasts. Results are presented in Table 6A.8.
Annual cash flows and NPV ofthe "unaffected" electronic ballast business were estimated using shipment weighted average values ofprices, costs, and financial parameters provided by the manufacturers currentlyinthatbusiness. A future industrygrowthrate of2.1% was estimatedbased on forecasts of U.S. GDP growth for the years 1997 to 20202• Table 6A.8 presents the NPV calculated under two scenarios: 1) assuming there is no growth in electronic ballast sales, and 2) assuming a 2.1 % annual growthrate in electronic ballast sales. Fromthe resultingNPV values it can be concluded that a small variation from the 2.1 % growth assumption will not materially affect the results ofthe analysis.
Table 6A.8 Industry Value of "Unaffected" Electronic Ballast Business Under 

### Don G hR P'

1 erent rowt ate rO.lechons Scenario NPV of "unaffected" electronics business ($mil) 0% annual growth in electronic 191.5 ballast sales 2.1 % annual growth in electronic 204.3 ballast sales

Tables 6A.9 and 6A.l0 presentthe cash flow impacts ofan electronicballast standard on the ballast industry composed ofall ballast product classes, both "affected" magnetic and electronic, considered under the DOE rulemaking. In 1997, the shipments ofmagnetic and electronic ballast productclasses considered in theDOErulemakingwere approximately31.5 million and 36.5 million ballasts respectively. In developing these cash flow impacts, it is assumed that the "unaffected" electronics business, represented by 36.5 million electronic ballasts, will grow 2.1% annually.

2 Source: Annual EnergyOutlook, 1999, publishedbythe EnergyInformation Administration, Department of Energy. Industry sources statedthat average growthrates forballast sales are approximately equal to increases in commercial floor space, which in tum can be approximated as being equal to the increase in U.S. GDP. 6-16 6A.2.2.4 Industry Value ofthe Electronic Ballast Business
Tables 6A.6 and 6A.7 presentthe percentage change in industry value based on the value of the "affected"magnetic ballast segn1ent in isolation. However, all ofthe manufacturers also produce electronic ballasts. ill 1997, 36.5 million electronic ballasts were sold in the U.S. These sales generated $494 million in revenues for the industry (referto Table 6A.2). We conducted a cash flow analysis to develop the industry value (NPV) of the business represented by these "unaffected" electronic ballasts. Results are presented in Table 6A.8.
Annual cash flows and NPV ofthe "unaffected" electronic ballast business were estimated using shipment weighted average values ofprices, costs, and financial parameters provided by the manufacturers currentlyinthatbusiness. A future industrygrowthrate of2.1% was estimatedbased on forecasts of U.S. GDP growth for the years 1997 to 20202• Table 6A.8 presents the NPV calculated under two scenarios: 1) assuming there is no growth in electronic ballast sales, and 2) assuming a 2.1 % annual growthrate in electronic ballast sales. Fromthe resultingNPV values it can be concluded that a small variation from the 2.1 % growth assumption will not materially affect the results ofthe analysis.
Table 6A.8 Industry Value of "Unaffected" Electronic Ballast Business Under 

### Don G hR P'

1 erent rowt ate rO.lechons Scenario NPV of "unaffected" electronics business ($mil) 0% annual growth in electronic 191.5 ballast sales 2.1 % annual growth in electronic 204.3 ballast sales

Tables 6A.9 and 6A.l0 presentthe cash flow impacts ofan electronicballast standard on the ballast industry composed ofall ballast product classes, both "affected" magnetic and electronic, considered under the DOE rulemaking. In 1997, the shipments ofmagnetic and electronic ballast productclasses considered in theDOErulemakingwere approximately31.5 million and 36.5 million ballasts respectively. In developing these cash flow impacts, it is assumed that the "unaffected" electronics business, represented by 36.5 million electronic ballasts, will grow 2.1% annually.

2 Source: Annual EnergyOutlook, 1999, publishedbythe EnergyInformation Administration, Department of Energy. Industry sources statedthat average growthrates forballast sales are approximately equal to increases in commercial floor space, which in tum can be approximated as being equal to the increase in U.S. GDP. 6-16Table 6A.9 Cash Flow Impacts under the 5% Shipment Scenario, Assuming 2.1% Annual Growth in "Unaffected" Electronic Ballast Sales Scenarios Base Case NPV mil Standard Case

NPV ($mil) Change in

NPV Smil % Change in

NPV

### Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-group 1 manufacturers of magnetic and electronic ballasts) 

### Manufacturer Submittal 288.9 198.9 -90.0 -31% Electronic Ballast New Entrant 

### 288.9 199.1 -89.8 -31% Magnetic Ballast New Entrant 

### 216.2 161.6 -54.6 -25% Existing Dynamics 288.9 219.0 -69.9 -24%

Sub-group 2 (manufacturers of electronic ballasts only 

### Manufacturer Submittal 131.7 152.0 20.3 15% Electronic Ballast New Entrant 

### 131.7 145.8 14.1 11% Magnetic Ballast New Entrant 131.7 152.0 20.3 15% 

### Existing Dynamics 131.7 141.0 9.3 7% Electronic Ballast New Entrant Electronic Ballast New Entrant 0.0 6.0 6.0

- Magnetic Ballast New Entrant Magnetic Ballast New Entrant 

### 4.5 2.0 -2.5 -55%
Industry (=Sub- roup 1 + Sub-pro p 2) 

### Manufacturer Submittal 420.6 350.9 -69.7 -17% Electronic Ballast New Entrant 

### 420.6 350.9 -69.7 -17% Magnetic Ballast New Entrant 

### 352.4 315.6 -36.8 -10% Existing Dynamics 420.6 359.9 -60.7 -14% Source: Ballast Manufacturer Impact Analysis, April 1999 Table 6A.9 Cash Flow Impacts under the 5% Shipment Scenario, Assuming 2.1

### % Annual Growth in "Unaffected" Electronic Ballast Sales Scenarios Base Case Standard Case Change in % Change in 

### NPV NPV NPV NPV ($mil) ($mil) ($mil) Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-group 1 manufacturers of magnetic and electronic ballasts) Manufacturer Submittal 288.9 198.9 -90.0 -31% Electronic Ballast New 288.9 199.1 -89.8 -31% Entrant Magnetic Ballast New 216.2 161.6 -54.6 -25% Entrant Existing Dynamics 288.9 219.0 -69.9 -24% Sub-group 2 (manufacturers of electronic ballasts only: Manufacturer Submittal 131.7 152.0 20.3 15% Electronic Ballast New 131.7 145.8 14.1 11% Entrant Magnetic Ballast New 131.7 152.0 20.3 15% Entrant Existing Dynamics 131.7 141.0 9.3 7% Electronic Ballast New Entrant Electronic Ballast New 0.0 6.0 6.0



### - Entrant Magnetic Ballast New Entrant Magnetic Ballast New 4.5 2.0 -2.5 -55% Entrant Industry(=Sub- 7roup 1 

### + Sub-group 2) Manufacturer Submittal 420.6 350.9 -69.7 -17% Electronic Ballast New 420.6 350.9 -69.7 -17% Entrant Magnetic Ballast New 352.4 315.6 -36.8 -10% Entrant ExistingDynamics 420.6 359.9 -60.7 -14% Source: Ballast Manufacturer Impact AnalysIs, Api'll 1999

6-17 Table 6A.9 Cash Flow Impacts under the 5% Shipment Scenario, Assuming 2.1

### % Annual Growth in "Unaffected" Electronic Ballast Sales Scenarios Base Case Standard Case Change in % Change in 

### NPV NPV NPV NPV ($mil)

.($mil) i$mil} Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-group 1 manufacturers of magnetic and electronic ballasts) Manufacturer Submittal 288.9 198.9 -90.0 -31% Electronic Ballast New 288.9 199.1 -89.8 -31% Entrant Magnetic Ballast New 216.2 161.6 -54.6 -25% Entrant Existing Dynamics 288.9 219.0 -69.9 -24% Sub-group 2 (manufacturers of electronic ballasts only: Manufacturer Submittal 131.7 152.0 20.3 15% Electronic Ballast New 131.7 145.8 14.1 11% Entrant Magnetic Ballast New 131.7 152.0 20.3 15% Entrant Existing Dynamics 131.7 141.0 9.3 7% Electronic Ballast New Entrant Electronic Ballast New 0.0 6.0 6.0



### - Entrant Magnetic Ballast New Entrant Magnetic Ballast New 4.5 2.0 -2.5 -55% Entrant Industry**(=Sub-~roup** 1 

### + Sub-group 21 Manufacturer Submittal 420.6 350.9 -69.7 -17% Electronic Ballast New 420.6 350.9 -69.7 -17% Entrant Magnetic Ballast New 352.4 315.6 -36.8 -10% Entrant Existing Dynamics 420.6 359.9 -60.7 -14% Source: Ballast Manufacturer Impact AnalysIs, Api'll 1999

6-17Table 6A.10 Cash Flow Impacts Under the 3% Shipment Scenario, Assuming 2.1% Annual Growth in "Unaffected" Electronic Ballast Sales Scenarios Base Case NPV $mil Standard Case

NPV ($mil) Change in

NPV ($mil) % Change in

NPV
Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-rou 1 (as above) 

### Manufacturer Submittal 318.3 204.6 -113.7 -36% Electronic Ballast New Entrant 

### 318.3 204.9 -113.4 -36% Magnetic Ballast New Entrant 

### 220.9 161.7 -59.2 -27% Existing Dynamics 318.3 224.7 -93.6 -29% Sub-group 2 (as above) 

### Manufacturer Submittal 123.0 150.5 27.5 22% Electronic Ballast New Entrant 

### 123.0 144.3 21.3 17% Magnetic Ballast New Entrant 

### 123.0 150.5 27.5 22% Existing Dynamics 123.0 139.5 16.5 13% Electronic Ballast New Entrant Electronic Ballast New Entrant 

### 0.0 6.0 6.0

- Magnetic Ballast New Entrant Magnetic Ballast New Entrant 

### 6.2 2.2 -4.0 -65%
Industry (=Sub-group 1 + Sub-group 2) 

### Manufacturer Submittal 441.3 355.1 -86.2 -20% Electronic Ballast New Entrant 

### 441.3 355.1 -86.2 -20% Magnetic Ballast New Entrant 

### 350.1 314.4 -35.7 -10% Existing Dynamics 441.3 364.2 -77.1 -17% Source: Ballast Manufacturer Impact Analysis, April 1999


### In order to arrive at the results in Tables 6A.9 and 6A.10, the NPV of each sub-group's "unaffected" electronic ballast business was added to both the Base Case and Standard Case NPVs associated with the "affected" magnetic ballast business (presented in Tables 6A.6 and 6A.7). This methodology is consistent with assumptions used by ballast manufacturers in developing their
6-18 Table 6A.I0 Cash Flow Impacts Under the 3% Shipment Scenario, Assuming 2.1 % Annual Growth in "Unaffected" Electronic Ballast Sales Scenarios Base Case Standard Case Change in 

### % Change in NPV NPV NPV NPV ($mil) ($mil) ($mil) Cash flow impacts on business represented by all regulated product classes**Ma~metic** and Electronic Sub-group 1 (as above) Manufacturer Submittal 318.3 204.6 -113.7 -36% Electronic Ballast New 318.3 204.9 -113.4 -36% Entrant Magnetic Ballast New 220.9 161.7 -59.2 -27% Entrant Existing Dynamics 318.3 224.7 -93.6 -29% Sub-group 2 (as above) Manufacturer Submittal 123.0 150.5 27.5 22% Electronic Ballast New 123.0 144.3 21.3 17% Entrant Magnetic Ballast New 123.0 150.5 27.5 22% Entrant Existing Dynamics 123.0 139.5 16.5 13% Electronic Ballast New Entrant Electronic Ballast New 0.0 

# I 6.0 6.0



### - Entrant Magnetic Ballast New Entrant Magnetic Ballast New 6.2 2.2 -4.0 -65% Entrant Industry (=Sub- Jroup 1 

### + Sub-group 2) Manufacturer Submittal 441.3 355.1 -86.2 -20% Electronic Ballast New 441.3 355.1 -86.2 -20% Entrant Magnetic Ballast New 350.1 314.4 -35.7 -10% Entrant Existing Dynamics 441.3 364.2 -77.1 -17% Source: Ballast Manufacturer Impact AnalysIS, Apnl J999

In order to arrive at the results in Tables 6A.9 and 6A.1O, the NPV ofeach sub-group's "unaffected" electronic ballastbusiness was added to both the Base Case and Standard Case NPVs associated with the "affected" magnetic ballast business (presented in Tables 6A.6 and 6A.7). This methodology is consistent with assumptions used by ballast manufacturers in developing their
6-18 Table 6A.I0 Cash Flow Impacts Under the 3% Shipment Scenario, Assuming 2.1 % Annual Growth in "Unaffected" Electronic Ballast Sales Scenarios Base Case Standard Case Change in 

### % Change in NPV NPV NPV NPV (Smil) (Smil) (Smil) Cash flow impacts on business represented by all regulated product classes**Ma~metic** and Electronic Sub-group 1 (as above) Manufacturer Submittal 318.3 204.6 -113.7 -36% Electronic Ballast New 318.3 204.9 -113.4 -36% Entrant Magnetic Ballast New 220.9 161.7 -59.2 -27% Entrant Existing Dynamics 318.3 224.7 -93.6 -29% Sub-group 2 (as abovel Manufacturer Submittal 123.0 150.5 27.5 22% Electronic Ballast New 123.0 144.3 21.3 17% Entrant Magnetic Ballast New 123.0 150.5 27.5 22% Entrant Existing Dynamics 123.0 139.5 16.5 13% Electronic Ballast New Entrant Electronic Ballast New 0.0 6.0 6.0



### - Entrant Magnetic Ballast New Entrant Magnetic Ballast New 6.2 2.2 -4.0 -65% Entrant Industry (=Sub- :!roup 1 

### + Sub-group 2) Manufacturer Submittal 441.3 355.1 -86.2 -20% Electronic Ballast New 441.3 355.1 -86.2 -20% Entrant Magnetic Ballast New 350.1 314.4 -35.7 -10% Entrant Existing Dynamics 441.3 364.2 -77.1 -17% Source: Ballast Manufacturer Impact AnalysIS, Apnl J999

In order to arrive at the results in Tables 6A.9 and 6A.1O, the NPV ofeach sub-group's "unaffected" electronic ballastbusiness was added to both the Base Case and Standard Case NPVs associated with the "affected" magnetic ballast business (presented in Tables 6A.6 and 6A.7). This methodology is consistent with assumptions used by ballast manufacturers in developing their
6-18

### Manufacturer Submittal scenario. Cash flow impacts on the "affected" ballast business accounted

for marginal effects on the entire electronics business. Sub-group 1 experiences a larger negative impact than the whole industry. In the Manufacturer Submittal scenario the NPV of Sub-group 1 will reduce from $288.9 million to $198.9 million in the 5% shipment scenario, representing an NPV loss of 31%. The corresponding percentage loss in NPV in the 3% shipment scenario is 36%. 

### Additionally, sub-group 1 manufacturers produce magnetic ballasts not included in the product classes considered by this rulemakin2. If the NPV of non-regulated magnetic ballasts were Manufacturer Submittal scenario. Cash flow impacts on the "affected" ballast business accounted for marginal effects on the entire electronics business. Sub-group 1 experiences a larger negative impact than the whole industry. In the ManufacturerSubmittalscenariothe NPV ofSub-group 1will reduce from $288.9 millionto $198.9 million in the 5% shipment scenario, representing an NPV loss of 31 %. The corresponding percentage loss in NPV in the 3% shipment scenario is 36%. Additionally, sub-group 1 manufacturers produce magnetic ballasts not included in the product classes considered bvthis rulemaking. Ifthe NPV ofnon-regulated magnetic ballasts were Manufacturer Submittal scenario. Cash flow impacts on the "affected" ballast business accounted for marginal effects on the entire electronics business. Sub-group 1 experiences a larger negative impact than the whole industry. In the ManufacturerSubmittalscenariothe NPV ofSub-group 1will reduce from $288.9 millionto $198.9 million in the 5% shipment scenario, representing an NPV loss of 31 %. The corresponding percentage loss in NPV in the 3% shipment scenario is 36%. Additionally, sub-group 1 manufacturers produce magnetic ballasts not included in the product classes considered bvthis rulemaking. Ifthe NPV ofnon-regulated magnetic ballasts wereincluded in the definition of industry NPV, the reductions in percentage NPV loss would be lower.

For instance the NPV loss for Sub-group 1 could be reduced from 31 % to between 24.5 and 27.5% for the 5% shipment scenario depending on the assumed profitability of the non

-power-factorcorrected market segment.3
6A.2.2.5 Uncertainty Analysis of Cash Flows The NPV values presented in Tables 6A.9 and 6A. 10 incorporate significant restructuring costs primarily associated with plant closures in the U.S. and Mexico. The large majority of these cost are directly associated with the closure of the remaining large magnetic U.S. -based ballast plant. In consideration of the past trend towards consolidation of magnetic ballast production in Mexico, a sensitivity analysis was conducted on the cash flows assuming that the restructuring costs associated with the plant closures would occur in the base case (in absence of standards ). It was found that these costs contribute approximately 14 million to the negative impacts under all scenarios. A sensitivity analysis was also conducted to analyze the impact of certain business risks. Specifically, a scenario was developed whereby changes in market demand would cause magnetic ballast shipments to decline at twice the rate, i.e. 10% per year between 1999 and 2002, remain constant through 2005 and then continue declining at 5% per year beginning 2006. It was further assumed that these abrupt changes in shipments impact the magnetic ballast industry competitive dynamics by reducing profit margins in the 2000 through 2005 time frame to levels observed in the electronic ballast market. The cash flow impacts with the 2003 plant closure assumption and the business risks are presented in Table 6A

. 11 below.

' Assuming non-power

-factor

-corrected ballast profit margins are equal to power

-factor-corrected ballastmargins the loss in industry value is estimated at 24.5%. Some manufacturers have commented that nonpower-factor ballast profit margins are lower than power

-factor

-corrected ballast margins. The value of 27.5% reduction in industry value is based on 50% lower margins for non-power

-factor ballasts. 

### 6-19 included in the definition ofindustry NPV, the reductions in percentage NPV loss would be lower. For instance the NPV loss for Sub-group 1 could be reduced from 31 % to between 24.5 and 27.5% for the 5% shipment scenario depending on the assumed profitability of the non-power-factorcorrected market segment.3



### 6A.2.2.5 Uncertainty Analysis of Cash Flows The NPV values presented in Tables 6A.9 and 6A.l0 incorporate significant restructuring costs primarily associated with plant closures in the U.S. and Mexico. The large majority ofthese cost are direct!yassociated with the closure oftheremaininglarge magneticU.S.-based ballastplant. In consideration ofthe past trend towards consolidation ofmagnetic ballast production in Mexico, a sensitivity analysis was conducted on the cash flows assuming that the restructuring costs associated with the plant closures would occur in the base case (in absence ofstandards). It was found that these costs contribute approximately 14 million to the negative impacts under all scenarios. A sensitivity analysis was also conducted to analyze the impact ofcertain business risks. Specifically, a scenario was developed whereby changes in market demand would cause magnetic ballast shipments to decline at twice the rate, i.e. 10% per year between 1999 and 2002, remain constant through 2005 and then continue declining at 5% per year beginning 2006. It was further assumed that these abrupt changes in shipments impact the magnetic ballast industry competitive dynamics byreducingprofitmargins in the 2000 through 2005 time frame to levels observed in the electronic ballast market. The cash flow impacts with the 2003 plant closure assumption and the business risks are presented in Table 6A.ll below.

3 Assuming non-power-factor-corrected ballast profit margins are equal to power-factor-corrected ballast margins the loss in industry value is estimated at 24.5%. Some manufacturers have commented that nonpower-factorballastprofitmargins are lowerthanpower-factor-correctedballastmargins. Thevalueof27.5% reduction in industry value is based on 50% lower margins for non-power-factor ballasts. 6-19 included in the definition ofindustry NPV, the reductions in percentage NPV loss would be lower. For instance the NPV loss for Sub-group 1 could be reduced from 31 % to between 24.5 and 27.5% for the 5% shipment scenario depending on the assumed profitability of the non-power-factorcorrected market segment.3



### 6A.2.2.5 Uncertainty Analysis of Cash Flows The NPV values presented in Tables 6A.9 and 6A.l0 incorporate significant restructuring costs primarily associated with plant closures in the U.S. and Mexico. The large majority ofthese cost are direct!yassociated with the closure oftheremaininglarge magneticU.S.-based ballastplant. In consideration ofthe past trend towards consolidation ofmagnetic ballast production in Mexico, a sensitivity analysis was conducted on the cash flows assuming that the restructuring costs associated with the plant closures would occur in the base case (in absence ofstandards). It was found that these costs contribute approximately 14 million to the negative impacts under all scenarios. A sensitivity analysis was also conducted to analyze the impact ofcertain business risks. Specifically, a scenario was developed whereby changes in market demand would cause magnetic ballast shipments to decline at twice the rate, i.e. 10% per year between 1999 and 2002, remain constant through 2005 and then continue declining at 5% per year beginning 2006. It was further assumed that these abrupt changes in shipments impact the magnetic ballast industry competitive dynamics byreducingprofitmargins in the 2000 through 2005 time frame to levels observed in the electronic ballast market. The cash flow impacts with the 2003 plant closure assumption and the business risks are presented in Table 6A.ll below.

3 Assuming non-power-factor-corrected ballast profit margins are equal to power-factor-corrected ballast margins the loss in industry value is estimated at 24.5%. Some manufacturers have commented that nonpower-factorballastprofitmargins are lowerthanpower-factor-correctedballastmargins. Thevalueof27.5% reduction in industry value is based on 50% lower margins for non-power-factor ballasts. 6-19Table 6A.11. Cash Flow Impacts of an Electronic Ballast Standard Under the 2015 

### (5% Decline) Shipment Scenario with Plant Closures in the Base Case in 2003 Scenarios Base Case Standard Case Change in % Change in NPV NPV NPV NPV ($mil) ($mil) 

### ($mil)Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-rou 1 (as above) 

### Manufacturer Submittal 288.9 198.9 -90.0 -31% Manufacturer Submittal 275.2 198.9 -76.3 -28% with plant closure in 2003 Business risk: abrupt 263.7 179.5 -84.2 -32% change in shipments Sub-rou 2 (as above) Manufacturer Submittal 131.7 152.0 20.3 15% 

### Manufacturer Submittal 131.7 152.0 20.3 15% with plant closure in 2003 Business risk: abrupt 131.7 152.0 20.3 15% change in shipments Industry (=Sub- rou 1 + Sub-group 2) 

### Manufacturer Submittal 420.6 350.9 -69.7 -17% Manufacturer Submittal 406.9 350.9 -56.0 -14% with plant closure in 2003 Business risk: abrupt 395.4 331.5 -63.9 -16% change in shipments

6A.2.2.6 Cash Flow Impacts 

### Tables 6A.9 and 6A.10 present the long-term cash flow impacts of a standard from the perspective of aggregate NPV. Since the GRIM spreadsheet calculates cash flows year-by-year it can be used to assess both long-term and short-term cash flow impacts from the perspective of annual cash flows. Short-term cash flow impacts can help quantify the impact of a standard on capital investments and costs in years preceding the standard, and therefore provide valuable insights into the industry's ability to meet the standard. Results from a short-term impact assessment can also beuseful to identify whether a standard will disproportionately burden anyparticular sub-group. Shortterm negative cash flows can have negative business consequences. Due to the reduced availability of internally generated cash flows manufacturers may find it necessary to increase borrowing thereby adding to financial leverage. Diminished free cash flow may also make it difficult to meet
6-20 Table 

### 6A.ll. Cash Flow Impacts of an Electronic Ballast Standard Under the 2015 (5% Decline) Shipment Scenario with Plant Closures in the Base Case in 2003 Scenarios Base Case Standard Case Change in % Change in NPV NPV NPV NPV ($mil) ($mil) ($mil) Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-group 1 (as above) Manufacturer Submittal 288.9 198.9 -90.0 -31% Manufacturer Submittal 275.2 198.9 -76.3 -28% with plant closure in 2003 Business risk: abrupt 263.7 179.5 -84.2 -32% change in shipments Sub-group 2 (as above) Manufacturer Submittal 131.7 152.0 20.3 15% Manufacturer Submittal 131.7 152.0 20.3 15% with plant closure in 2003 Business risk: abrupt 131.7 152.0 20.3 15% change in shipments Industry (=Sub-I!roupl 

### + Sub-group 2) Manufacturer Submittal 420.6 350.9 -69.7 -17% Manufacturer Submittal 406.9 350.9 -56.0 -14% withplant closure in 2003 Business risk: abrupt 395.4 331.5 -63.9 -16% change in shipments



### 6A.2.2.6 Cash Flow Impacts Tables 6A.9 and 6A.I0 present the long-term cash flow impacts of a standard from the perspective ofaggregate NPV. Sincethe GRIM spreadsheetcalculatescashflows year-by-yearitcan be used to assess both long-term and short-term cash flow impacts from the perspective ofannual cash flows. Short-term cash flow impacts can help quantify the impact of a standard on capital investments and costs in years preceding the standard, and therefore provide valuable insights into the industry's ability to meet the standard. Results from a short-term impact assessment can also be useful to identifywhether a standard will disproportionatelyburden anyparticularsub-group. Shortterm negative cash flows can have negative business consequences. Due to the reduced availability ofinternallygenerated cashflows manufacturersmayfind itnecessaryto increaseborrowingthereby adding to financial leverage. Diminished free cash flow may also make it difficult to meet
6-20 Table 

### 6A.ll. Cash Flow Impacts of an Electronic Ballast Standard Under the 2015 (5% Decline) Shipment Scenario with Plant Closures in the Base Case in 2003 Scenarios Base Case Standard Case Change in % Change in NPV NPV NPV NPV ($mil) ($mil) ($mil) Cash flow impacts on business represented by all regulated product classesMagnetic and Electronic Sub-group 1 (as above) Manufacturer Submittal 288.9 198.9 -90.0 -31% Manufacturer Submittal 275.2 198.9 -76.3 -28% with plant closure in 2003 Business risk: abrupt 263.7 179.5 -84.2 -32% change in shipments Sub-group 2 (as above) Manufacturer Submittal 131.7 152.0 20.3 15% Manufacturer Submittal 131.7 152.0 20.3 15% with plant closure in 2003 Business risk: abrupt 131.7 152.0 20.3 15% change in shipments Industry (=Sub- J"roup 1 

### + Sub-group 2) Manufacturer Submittal 420.6 350.9 -69.7 -17% Manufacturer Submittal 406.9 350.9 -56.0 -14% with plant closure in 2003 Business risk: abrupt 395.4 331.5 -63.9 -16% change in shipments



### 6A.2.2.6 Cash Flow Impacts Tables 6A.9 and 6A.I0 present the long-term cash flow impacts of a standard from the perspective ofaggregate NPV. Sincethe GRIM spreadsheetcalculatescashflows year-by-yearitcan be used to assess both long-term and short-term cash flow impacts from the perspective ofannual cash flows. Short-term cash flow impacts can help quantify the impact of a standard on capital investments and costs in years preceding the standard, and therefore provide valuable insights into the industry's ability to meet the standard. Results from a short-term impact assessment can also be useful to identifywhether a standard will disproportionatelyburden anyparticularsub-group. Shortterm negative cash flows can have negative business consequences. Due to the reduced availability ofinternallygenerated cashflows manufacturersmayfind itnecessaryto increaseborrowingthereby adding to financial leverage. Diminished free cash flow may also make it difficult to meet
6-20

### obligations to current and new debt holders and/or payment of dividends to shareholders.

Short-term impacts were quantified by summarizing the cash flow impacts on sub-groups of manufacturers in the few years proceeding and following the electronic ballast standard. Table 6A. 12 presents these impacts.

Table 6A.12 Short-term Cash Flow Impacts Resulting from an Electronic Ballast Standard

on the Business Represented by All Regulated Ballast Product Classes 

### Scenario: "Manufacturer Submittal" 

### Cash flows ($ mil)

Years preceding the Electronic Ballast Standard 2000 2001 2002



### Sub-group 1 Years following the Electronic Ballast Standard 

### 2003 2004


### Base Case 38.3 38.1 36A.1 34.9 33.1 Standard Case 38.1 35.3 1.5 9.1 12.8 Difference -0.2 -2.8 -34.6 -25.8 -20.3 Sub-group 2 

### Base Case 6.9 7.0 7.0 7.1 5.8 Standard Case 6.9 7.0 -0.3 1.4 10.2 Difference 0.0 0.0 -7.3 -5.7 4.4 Industry 

### Base Case 45.2 45.1 43.1 42.0 38.9 Standard Case 45.0 42.3 1.2 10.5 23.0 Difference -0.2 -2.8 -41.9 -31.5 -15.9 Table 6A. 12 shows the differential negative cash flows due to an electronic ballast standard. This negative impact in the short-term has the following causes:
In years preceding the electronic ballast standard:

capital investments required to build manufacturing capacity to meet the new standard; In years following the electronic ballast standard:

restructuring costs associated with plant closures and reduced capacity utilization, and reduced profitability of electronic ballasts in comparison to the magnetic ballast business.



### 6-21 obligations to current and new debt holders and/or payment ofdividends to shareholders. Short-term impacts were quantifiedby summarizingthe cash flow impacts on sub-groups of manufacturers inthe few years proceedingandfollowing the electronicballast standard. Table 6A.12 presents these impacts.



### Table 6A.12 Short-term Cash Flow Impacts Resulting from an Electronic Ballast Standard
on the Business Represented by All Regulated Ballast Product Classes Scenario: Cash flows ($ 

### mil) "Manufacturer Submittal" Years preceding the Electronic Years following the Electronic Ballast Standard Ballast Standard 2000 

# I 2001 

## I 2002 2003 

## I 2004 

### Sub-group 1 Base Case 38.3 38.1 36A.l 34.9 33.1 Standard Case 38.1 35.3 1.5 9.1 12.8 Difference -0.2 -2.8 -34.6 -25.8 -20.3 

### Sub-group 2 Base Case 6.9 7.0 7.0 7.1 5.8 Standard Case 6.9 7.0 -0.3 1.4 10.2 Difference 0.0 0.0 -7.3 -5.7 4.4 

### Industry Base Case 45.2 45.1 43.1 42.0 38.9 Standard Case 45.0 42.3 1.2 10.5 23.0 Difference -0.2 -2.8 -41.9 -31.5 -15.9

Table 6A.12 shows the differential negative cash flows due to an electronicballast standard. This negative impact in the short-teml has the following causes:

In years preceding the electronic ballast standard: capital investments required to build manufacturing capacity to meet the new standard; 

### In years following the electronic ballast standard: restructuring costs associated with plant closures and reduced capacity utilization, and reducedprofitabilityofelectronicballastsincomparisontothemagneticballastbusiness.

6-21 obligations to current and new debt holders and/or payment ofdividends to shareholders. Short-term impacts were quantifiedby summarizingthe cash flow impacts on sub-groups of manufacturers inthe few years proceedingandfollowing the electronicballast standard. Table 6A.12 presents these impacts.



### Table 6A.12 Short-term Cash Flow Impacts Resulting from an Electronic Ballast Standard
on the Business Represented by All Regulated Ballast Product Classes Scenario: Cash flows ($ 

### mil) "Manufacturer Submittal" Years preceding the Electronic Years following the Electronic Ballast Standard Ballast Standard 2000 

## I 2001 

# I 2002 2003 

# I 2004 

### Sub-group 1 Base Case 38.3 38.1 36A.l 34.9 33.1 Standard Case 38.1 35.3 1.5 9.1 12.8 Difference -0.2 -2.8 -34.6 -25.8 -20.3 

### Sub-group 2 Base Case 6.9 7.0 7.0 7.1 5.8 Standard Case 6.9 7.0 -0.3 1.4 10.2 Difference 0.0 0.0 -7.3 -5.7 4.4 

### Industry Base Case 45.2 45.1 43.1 42.0 38.9 Standard Case 45.0 42.3 1.2 10.5 23.0 Difference -0.2 -2.8 -41.9 -31.5 -15.9

Table 6A.12 shows the differential negative cash flows due to an electronicballast standard. This negative impact in the short-teml has the following causes:

In years preceding the electronic ballast standard: capital investments required to build manufacturing capacity to meet the new standard; 

### In years following the electronic ballast standard: restructuring costs associated with plant closures and reduced capacity utilization, and reducedprofitabilityofelectronicballastsincomparisontothemagneticballastbusiness.

6-21Figures 6A.6, 7 and 8 describe the short-term and long-term cash flows for Sub-group 1, Subgroup 2 and the whole industry.



### c A-s- 1 Rm.^tlnipl}d&evr Rmn^^ /&ar3urtad

..................................................................

0i

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100 1911 3X33 2711 200 3313 3113 230 3215 3117 2133 211) 2010 2111 2112 2013 2014 1615
Figure 6A. 6 Base Case and Standard Case Cash Flows for Sub- group 1 in the Manufacturer Submittal and 5% Shipment Scenario
For Sub-group 1 it is seen that the large initial dip in cash flow, in the Standard Case, is not fully recuperated even by 2014. Sub-group 2, however, experiences a large increase in cash flow following the initial cash drain required to build new manufacturing capacity.



### 6-22 Figures 6A.6, 7 and 8 describethe sholi-tel111 and long-term cash flows for Sub-group 

### 1, Subgroup 2 and the whole industry.



### Figure 6A.6 Base Case 

### and Standard Case 

### Cash Flows for Sub-group 1 in 

### the Manufacturer Submittal 

### and 5% Shipment Scenario

For Sub-group 1it is seen that the large initial dip in cash flow, in the Standard Case, is not fully recuperated even by 2014. Sub-group 2, however, experiences a large increase in cash flow following the initial cash drain required to build new manufacturing capacity.

6-22 Figures 6A.6, 7 and 8 describethe sholi-tel111 and long-term cash flows for Sub-group 

### 1, Subgroup 2 and the whole industry.



### Figure 6A.6 Base Case 

### and Standard Case 

### Cash Flows for Sub-group 1 in 

### the Manufacturer Submittal 

### and 5% Shipment Scenario

For Sub-group 1it is seen that the large initial dip in cash flow, in the Standard Case, is not fully recuperated even by 2014. Sub-group 2, however, experiences a large increase in cash flow following the initial cash drain required to build new manufacturing capacity.

6-22C4SIRJONTMALS Th, ,1lmp11L&xr H"_Rdk92)thd

... ............ ................° .......... ..............................

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(101990 1999 3111 21 0 21(1 210 2171 21G 211 3117 118 213) 2110 2711 2)12 2)13 2)14 2015
Figure 6A.7 Base Case and Standard Case Cash Flows for Sub-group 2 in the Manufacturer Submittal and 5% Shipment Scenario



### 6-23**Rlcnm:nlmp~lJo:rmicl1i1t1l9"dud** ffi.() •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.••••••••••••••••••••••••••

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I<>:B IWJ :rm JIll :rn2 JIll JIll m; m; XIJ1 :UN JIll :nlO al\l :n12 all3 all4 :!lIS
Figure 6A.7 Base Case and Standard Case Cash Flows for Sub-group 2 in the Manufacturer Submittal and 5% Shipment Scenario

6-23**Rlcnm:nlmp~lJo:rmicl1i1t1l9"dud** ffi.() •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.••••••••••••••••••••••••••

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1M**OJ)L-------~~~~----------------------~**

I<>:B IWJ :rm JIll :rn2 JIll JIll m; m; XIJ1 :UN JIll :nlO al\l :n12 all3 all4 :!lIS
Figure 6A.7 Base Case and Standard Case Cash Flows for Sub-group 2 in the Manufacturer Submittal and 5% Shipment Scenario

6-23CASiFLONTOAS-INIBW

am .............. ................. ........... .............................. ...... -----------......

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192; 199 ) 230 201 200 3113 301 2313 3533 33)7 231) 3007 3110 3111 2)12 2)13 2)14 3115


### Figure 6A.8 Base Case and Standard Case Cash Flows for the Industry in the Manufacturer Submittal and 5% Shipment Scenario
6A.2.3 Impacts on Manufacturing Capacity, Plant Closures and Loss of Capital Assets

One of the significant outcomes of new standards can be the consequential obsolescence of existing manufacturing assets, including tooling and investment. Our firm revised the GRIM spreadsheet in order to add features that explicitly provide the capability to include one-time chargessuch as plant closures and asset write-offs. Manufacturers incorporated their estimates for any onetime restructuring and other charges, when applicable, in developing their cash flows. The cash flow results presented in Tables 6A.6 through 6A. 11 incorporate one-time charges resulting from plant closures, restructuring or consolidation to improve capacity utilization. The Manufacturer Interview Guide used a series of questions to identify impacts on manufacturing capacity. These questions were developed to understand the impact of an electronic ballast standard on:

U.S. and North American manufacturing capacity associated with the production of magnetic and electronic ballasts 

### Capacity utilization and plant location decisions in the U.S. and North America both with and without standards The ability of manufacturers to upgrade or remodel existing facilities to accommodate

6-24 Ii'll 199) :nn 11)1 1112 llll 1llI :m; m; :nJ7 :m; :Jl)) :mo :nil :nl2 :n13 :n14 :n15 

### Figure 6A.8 Base Case 

### and Standard Case 

### Cash Flows for the Industry in the Manufacturer Submittal 

### and 5% Shipment Scenario

6A.2.3 Impacts on Manufacturing Capacity, Plant Closures and Loss ofCapitalAssets One ofthe significantoutcomes ofnew standards canbe the consequential obsolescence of existing manufacturing assets, including tooling and investment. Our fiml revised the GRIM spreadsheet in orderto addfeatures thatexplicitlyprovidethe capabilityto include one-time charges such as plant closures and asset write-offs. Manufacturers incorporated their estimates for any onetimerestructuring and othercharges, when applicable, in developingtheircash flows. The cashflow results presented in Tables 6A.6 through 6A.ll incorporate one-time charges resulting from plant closures, restructuring or consolidation to improve capacity utilization. The 

### Manufacturer Interview Guide used a series of questions to identify impacts on manufacturing capacity. These questions were developed to understand the impact ofan electronic ballast standard on: U.S. and North American manufacturing capacity associated with the production of magnetic and electronic ballasts Capacityutilization andplant location decisions in the U.S. andNorthAmericabothwith and without standards The ability ofmanufacturers to upgrade or remodel existing facilities to accommodate

6-24 Ii'll 199) :nn 11)1 1112 llll 1llI :m; m; :nJ7 :m; :Jl)) :mo :nil :nl2 :n13 :n14 :n15 

### Figure 6A.8 Base Case 

### and Standard Case 

### Cash Flows for the Industry in the Manufacturer Submittal 

### and 5% Shipment Scenario

6A.2.3 Impacts on Manufacturing Capacity, Plant Closures and Loss ofCapitalAssets One ofthe significantoutcomes ofnew standards canbe the consequential obsolescence of existing manufacturing assets, including tooling and investment. Our fiml revised the GRIM spreadsheet in orderto addfeatures thatexplicitlyprovidethe capabilityto include one-time charges such as plant closures and asset write-offs. Manufacturers incorporated their estimates for any onetimerestructuring and othercharges, when applicable, in developingtheircash flows. The cashflow results presented in Tables 6A.6 through 6A.ll incorporate one-time charges resulting from plant closures, restructuring or consolidation to improve capacity utilization. The 

### Manufacturer Interview Guide used a series of questions to identify impacts on manufacturing capacity. These questions were developed to understand the impact ofan electronic ballast standard on: U.S. and North American manufacturing capacity associated with the production of magnetic and electronic ballasts Capacityutilization andplant location decisions in the U.S. andNorthAmericabothwith and without standards The ability ofmanufacturers to upgrade or remodel existing facilities to accommodate

6-24a new product mix 

### The nature and value of stranded assets, if any

6A.2.3.1 Interview Results In general, interviews confirmed that manufacturing capacities associated with "affected" magnetic ballast production would be negatively impacted. Also, most manufacturers reported that they would add additional electronic ballast capacity to meet a new standard. None of the manufacturers stated that they would leave the industry or go out of business as a result of an electronic ballast standard. Some manufacturers in Sub-group 1 stated they would close plants within 6 to 24 months after the effective date of a standard. In all four plants could be impacted. Of these, two are in the U.S. and two are in Mexico. 

### U.S. Plants:

A first plant manufactures both "affected" and other types (referred to as "unaffected") of magnetic ballasts. A new standard resulting in the loss of "affected" magnetic ballast sales will significantly reduce the capacity utilization of this plant and hence the viability of its operation. The manufacturer plans to close this plant and consolidate manufacturing of its "unaffected" ballasts in its Mexican manufacturing facility that currently produces a mix of "affected" and "unaffected" magnetic ballasts. A second plant manufactures materials used in the production of "affected" magnetic ballasts. Approximately one-third ofthe plant's output is associated with the manufacture of "affected" magnetic ballasts. The manufacturer believes that this loss could be sufficiently large to render unviable its component manufacturing business and thus cause the plant to be closed. Mexican Plants:

One manufacturer reported that it would have to close part of its magnetic ballast manufacturing plant in order to continue operating at profitable levels. This is possible since the plant is modular in its design, manufacturing operations and construction. Another plant manufactures components used in the production of "affected" magnetic ballasts. Although this plant produces components for both "affected" and other types of ballasts, a new standard will dramatically reduce its capacity utilization thereby likely resulting in its closure.

### From interviews and plant tours, it was generally observed that larger manufacturers in Subgroup 1 produced their electronic and magnetic ballasts in separate plants. Their large market shares favored facilities with high levels of automation, thereby reducing their ability to change over from magnetic to electronic ballast production. As a result they reported disproportionately greater negative impacts on their manufacturing capacities than smaller manufacturers. Manufacturers in Sub-group 2 reported that they would add additional electronic ballast
6-25 a new product mix The nature and value ofstranded assets, ifany



### 6A.2.3.1 Interview Results In general, interviews confirmed that manufacturing capacities associated with "affected" magnetic ballast production would be negatively impacted. Also, most manufacturers reported that they would add additional electronic ballast capacity to meet a new standard. None of the manufacturers stated that they would leave the industry or go out of business as a result of an electronic ballast standard. Some manufacturers in Sub-group 

### 1 stated they would close plants within 6 to 24 months after the effective date ofa standard. In all four plants could be impacted. Ofthese, two are in the U.S. and two are in Mexico. 

## u.s. Plants: A first plant manufactures both "affected" and other types (referred to as "unaffected") ofmagnetic ballasts. A new standardresulting in the loss of"affected" magnetic ballast sales will significantlyreduce the capacityutilization ofthisplant andhencetheviability of its operation. The manufacturer plans to close this plant and consolidate manufacturing of its "unaffected" ballasts in its Mexican manufacturing facility that currently produces a mix of "affected" and "unaffected" magnetic ballasts. A second plant manufactures materials used in the production of "affected" magnetic ballasts. Approximatelyone-thirdoftheplant'soutputis associatedwiththemanufacture of "affected" magnetic ballasts. The manufacturer believes that this loss could be sufficiently large to render unviable its component manufacturing business and thus cause the plant to be closed. 

### Mexican Plants: One manufacturer repol1ed that it would have to close part of its magnetic ballast manufacturing plant in order to continue operating at profitable levels. This is possible since the plant is modular in its design, manufacturing operations and construction. Another plant manufactures components used in the production of"affected" magnetic ballasts. Althoughthis plantproduces components for both "affected" and othertypes of ballasts, a new standard will dramatically reduce its capacity utilization thereby likely resulting in its closure. From interviews andplanttours, itwas generally observedthat largermanufacturers in Subgroup 1producedtheirelectronic andmagnetic ballasts in separate plants. Theirlarge market shares favored facilities with high levels ofautomation, therebyreducingtheir abilityto change over from magnetic to electronic ballast production. As a result they reported disproportionately greater negative impacts on their manufacturing capacities than smaller manufacturers. Manufacturers in Sub-group 2 reported that they would add additional electronic ballast
6-25 a new product mix The nature and value ofstranded assets, ifany



### 6A.2.3.1 Interview Results In general, interviews confirmed that manufacturing capacities associated with "affected" magnetic ballast production would be negatively impacted. Also, most manufacturers reported that they would add additional electronic ballast capacity to meet a new standard. None of the manufacturers stated that they would leave the industry or go out of business as a result of an electronic ballast standard. Some manufacturers in Sub-group 

### 1 stated they would close plants within 6 to 24 months after the effective date ofa standard. In all four plants could be impacted. Ofthese, two are in the U.S. and two are in Mexico. 

## u.s. Plants: A first plant manufactures both "affected" and other types (referred to as "unaffected") ofmagnetic ballasts. A new standardresulting in the loss of"affected" magnetic ballast sales will significantlyreduce the capacityutilization ofthisplant andhencetheviability of its operation. The manufacturer plans to close this plant and consolidate manufacturing of its "unaffected" ballasts in its Mexican manufacturing facility that currently produces a mix of "affected" and "unaffected" magnetic ballasts. A second plant manufactures materials used in the production of "affected" magnetic ballasts. Approximatelyone-thirdoftheplant'soutputis associatedwiththemanufacture of "affected" magnetic ballasts. The manufacturer believes that this loss could be sufficiently large to render unviable its component manufacturing business and thus cause the plant to be closed. 

### Mexican Plants: One manufacturer repol1ed that it would have to close part of its magnetic ballast manufacturing plant in order to continue operating at profitable levels. This is possible since the plant is modular in its design, manufacturing operations and construction. Another plant manufactures components used in the production of"affected" magnetic ballasts. Althoughthis plantproduces components for both "affected" and othertypes of ballasts, a new standard will dramatically reduce its capacity utilization thereby likely resulting in its closure. From interviews andplanttours, itwas generally observedthat largermanufacturers in Subgroup 1producedtheirelectronic andmagnetic ballasts in separate plants. Theirlarge market shares favored facilities with high levels ofautomation, therebyreducingtheir abilityto change over from magnetic to electronic ballast production. As a result they reported disproportionately greater negative impacts on their manufacturing capacities than smaller manufacturers. Manufacturers in Sub-group 2 reported that they would add additional electronic ballast
6-25capacity in their current plants to meet the new standard. Most reported that a three-year lead-time

would provide them with sufficient time to expand manufacturing capacities. Since none of the manufacturers in this sub-group produce magnetic ballasts, they will not have any stranded assets. In addition, most plan to augment capacity in their current plants and hence did not report any significant restructuring costs resulting from plant consolidation or movement of manufacturing to other locations.
6A.2.3.2 Impact on Small Manufacturers Among the manufacturers in Sub-group 1. that would be negatively impacted by an electronic ballast standard, two are smaller in size than the others. From the manufacturer interviews we gained an understanding of their current business operations, product mix, scale of revenues associated with the sales of "affected" magnetic ballasts, and the negative impact on their profits and capital assets resulting from a standard. Particular emphasis was placed on understanding their ability to raise capital, if needed, to meet the new standard. The two "small" manufacturers currently produce both "affected" magnetic and electronic ballasts. Both the "small" manufacturers had their respective electronic and magnetic ballast manufacturing operations in the same plants. It seemed that their smaller size and less automated operations provided them with the flexibility to adapt to a new electronic ballast standard without significant asset write-offs or plant closures. In addition, neither of these manufacturers stated that an electronic ballast standard would force them to leave the industry or go out of business. All four manufacturers in Sub-group 1 viewed the electronic ballast business as less profitable than their magnetic ballast business. Hence the negative impacts on the "small" manufacturers' cash flows fromm operations were similar in proportion to those reported by the two large manufacturers in Sub-group 1. However, unlike the two large manufacturers, the "small" manufacturers did not report any significant one-time plant closure costs that would worsen the negative impact on their cash flows. Hence, the negative cash flow impacts on the overall business represented by all regulated products, appear disproportionately smaller on "small" manufacturers when compared to the two large manufacturers-in the 5% scenario, we estimate that small manufacturers will experience a 16% loss in their NPV compared to a 34% loss in NPV for all of Subgroup 1.

6A.2.4 Employment Impacts In order to assess employment impacts due to an electronic ballast standard, the Manufacturer Interview Guide was used to explore current trends in ballast production employment and solicit manufacturer views on changes in employment patterns resulting from new energy efficiency standards. The employment impacts section of the interview guide was used to understand:

### Current employment levels associated with ballast manufacturing at each production

facility

6-26 capacity in their current plants to meet the new standard. Most reported that a three-year lead-time would provide them with sufficient time to expand manufacturing capacities. Since none ofthe manufacturers in this sub-group produce magnetic ballasts, they will not have any stranded assets. In addition, most plan to augment capacity in their current plants and hence did not report any significantrestructuring costs resulting from plant consolidation ormovement ofmanufacturing to other locations.



### 6A.2.3.2 Impact on Small Manufactul'ers Amongthe manufacturers in Sub-group 1thatwouldbe negativelyimpactedbyanelectronic ballast standard, two are smallerin size thanthe others. Fromthe manufacturerinterviewswe gained anunderstandingoftheircurrentbusiness operations, productmix, scale ofrevenues associated with the sales of"affected" magnetic ballasts, and the negative impact on theirprofits and capital assets resulting from a standard. Particular emphasis was placed on understanding their ability to raise capital, ifneeded, to meet the new standard. The two "small" manufacturers currently produce both "affected" magnetic and electronic ballasts. Both the "small" manufacturers had their respective electronic and magnetic ballast manufacturing operations in the same plants. It seemed that their smaller size and less automated operations provided them with the flexibility to adapt to a new electronic ballast standard without significant asset write-offs or plant closures. In addition, neither ofthese manufacturers stated that an electronic ballast standard would force them to leave the industry or go out ofbusiness. All four manufacturers in Sub-group 1 viewed the electronic ballast business as less profitable than their magnetic ballast business. Hence the negative impacts on the "small" manufacturers' cash flows from operations were similar in proportion to those reported by the two large manufacturers in Sub-group 1. However, unlike the two large manufacturers, the "small" manufacturers did not report any significant one-time plant closure costs that would worsen the negative impact on their cash flows. Hence, the negative cash flow impacts on the overall business represented by all regulated products, appear disproportionately smaller on "small" manufacturers when compared to the two large manufacturers-in the 5% scenario, we estimate that small manufacturers will experience a 16% loss in their NPV compared to a 34% loss in NPV for all of Subgroup 1.



### 6A.2.4 Employment Impacts In order to assess employment impacts due to an electronic ballast standard, the ManufacturerInterview Guidewas usedto explore currenttrends inballastproduction employment and solicit manufacturer views on changes in employment patterns resulting from new energy efficiency standards. The employment impacts section of the interview guide was used to understand: Current employment levels associated with ballast manufacturing at each production facility

6-26 capacity in their current plants to meet the new standard. Most reported that a three-year lead-time would provide them with sufficient time to expand manufacturing capacities. Since none ofthe manufacturers in this sub-group produce magnetic ballasts, they will not have any stranded assets. In addition, most plan to augment capacity in their current plants and hence did not report any significantrestructuring costs resulting from plant consolidation ormovement ofmanufacturing to other locations.



### 6A.2.3.2 Impact on Small Manufactul'ers Amongthe manufacturers in Sub-group 1thatwouldbe negativelyimpactedbyanelectronic ballast standard, two are smallerin size thanthe others. Fromthe manufacturerinterviewswe gained anunderstandingoftheircurrentbusiness operations, productmix, scale ofrevenues associated with the sales of"affected" magnetic ballasts, and the negative impact on theirprofits and capital assets resulting from a standard. Particular emphasis was placed on understanding their ability to raise capital, ifneeded, to meet the new standard. The two "small" manufacturers currently produce both "affected" magnetic and electronic ballasts. Both the "small" manufacturers had their respective electronic and magnetic ballast manufacturing operations in the same plants. It seemed that their smaller size and less automated operations provided them with the flexibility to adapt to a new electronic ballast standard without significant asset write-offs or plant closures. In addition, neither ofthese manufacturers stated that an electronic ballast standard would force them to leave the industry or go out ofbusiness. All four manufacturers in Sub-group 1 viewed the electronic ballast business as less profitable than their magnetic ballast business. Hence the negative impacts on the "small" manufacturers' cash flows from operations were similar in proportion to those reported by the two large manufacturers in Sub-group 1. However, unlike the two large manufacturers, the "small" manufacturers did not report any significant one-time plant closure costs that would worsen the negative impact on their cash flows. Hence, the negative cash flow impacts on the overall business represented by all regulated products, appear disproportionately smaller on "small" manufacturers when compared to the two large manufacturers-in the 5% scenario, we estimate that small manufacturers will experience a 16% loss in their NPV compared to a 34% loss in NPV for all of Subgroup 1.



### 6A.2.4 Employment Impacts In order to assess employment impacts due to an electronic ballast standard, the ManufacturerInterview Guidewas usedto explore currenttrends inballastproduction employment and solicit manufacturer views on changes in employment patterns resulting from new energy efficiency standards. The employment impacts section of the interview guide was used to understand: Current employment levels associated with ballast manufacturing at each production facility

6-26

### Expected future employment levels both with and without an electronic ballast standard Differences in workforce skills, and issues related to retraining of employees In order to maintain confidentiality employment impacts were aggregated and reported at the industry level. In this section, employment impacts are reported using two categories: Direct employment impacts: These impacts consider jobs directly involved with the production of "affected" magnetic or electronic ballasts. In facilities producing "affected" and other types of ballasts, only direct and overhead jobs related to "affected" ballasts are considered in this category. In situations where ballast companies own component manufacturing operations, such as capacitor plants or magnet wire operations, job impacts on these plants are reported within this category. Impacts on other component suppliers are presented in a separate section titled "Impact on Suppliers to the Fluorescent Lamp Ballast Industry." Associated employment impacts: These impacts consider jobs impacted by business decisions driven by the "direct" employment impacts. For example, if in a manufacturing plant with 100 employees, 50 are producing "affected" magnetic ballasts and the remaining 50 are producing "unaffected" magnetic ballasts, then an electronic ballast standard would result in the loss of 50 direct jobs. Faced with this situation the company might decide to close operations in its plant due to the dramatically reduced capacity utilization. Such a decision would result in the loss of the remaining 50 jobs. These 50 jobs would then be reported as "associated" employment impacts.


### 6A.2.4.1 Employment Levels in 1998 Based on the manufacturer interviews, approximately one-third of the "affected" magnetic ballasts sold in the U.S. market are manufactured domestically, while the remaining two-thirds are manufactured in Mexico. Table 6A. 13 provides the direct employment levels associated with the production of "affected" magnetic ballasts in the year 1998. To obtain these numbers, we aggregated the information manufacturers provided on employment levels at each of their production facilities.
Table 6A.13 Direct Employment Levels for Manufacturing "Affected" Magnetic Ballasts Country of Manufacture Direct Employment Levels in 1998 

### U.S.A 738 Mexico 2945 

### 6A.2.4.2 Employment Levels in 2003 : Absent Standards All manufacturers in Sub-group 1 suggested that in the absence of a standard they would continue to manufacture "affected" magnetic ballasts in their current manufacturing plants. They did not anticipate any plant closures or shifting of production of "affected" magnetic ballasts from one 6-27 Expected future employment levels both with and without an electronic ballast standard Differences in workforce skills, and issues related to retraining ofemployees In orderto maintain confidentialityemploymentimpacts were aggregated andreported atthe industry level. In this section, employment impacts are reported using two categories: Direct employment impacts: These impacts considerjobs directly involved with the production of"affected"magnetic orelectronicballasts. In facilities producing "affected" andothertypes ofballasts, onlydirect and overhead jobsrelatedto "affected"ballasts are considered in this categOly. In situations where ballast companies own component manufacturing operations, such as capacitor plants or magnet wire operations, job impacts on these plants are reported within this category. Impacts on other component suppliers are presented in a separate section titled "Impact on Suppliers to the Fluorescent Lamp Ballast Industry." Associated employment impacts: These impacts consider jobs impacted by business decisions drivenbythe "direct"employment impacts. Forexample, ifin amanufacturing plant with 100 employees, 50 are producing "affected" magnetic ballasts and the remaining 50 are producing "unaffected" magnetic ballasts, then an electronic ballast standardwouldresult in the loss of50 directjobs. Facedwiththis situation the company might decide to close operations in its plant due to the dramatically reduced capacity utilization. Such a decision would result in the loss ofthe remaining 50jobs. These 50 jobs would then be repOlied as "associated" employment impacts.

6A.2.4.1 Employment Levels in 1998 Based on the manufacturer interviews, approximately one-third ofthe "affected" magnetic ballasts sold in the U.S. market are manufactured domestically, while the remaining two-thirds are manufactured in Mexico. Table 6A.13 provides the direct employment levels associated with the production of"affected"magnetic ballasts in the year 1998. To obtainthese numbers, we aggregated the information manufacturers provided on employment levels at each oftheirproductionfacilities.

Table 6A.13 Direct Employment Levels for Manufacturing "Affected" Magnetic Ballasts Country ofManufacture Direct Employment Levels in 1998 U.S.A 738 Mexico 2945

6A.2.4.2 Employment Levels in 2003: Absent Standards All manufacturers in Sub-group I suggested that in the absence of a standard they would continuetomanufacture "affected"magneticballasts intheir currentmanufacturingplants. Theydid not anticipate anyplant closures or shifting ofproduction of"affected" magnetic ballasts from one
6-27 Expected future employment levels both with and without an electronic ballast standard Differences in workforce skills, and issues related to retraining ofemployees In orderto maintain confidentialityemploymentimpacts were aggregated andreported atthe industry level. In this section, employment impacts are reported using two categories: Direct employment impacts: These impacts considerjobs directly involved with the production of"affected"magnetic orelectronicballasts. In facilities producing "affected" andothertypes ofballasts, onlydirect and overhead jobsrelatedto "affected"ballasts are considered in this categOly. In situations where ballast companies own component manufacturing operations, such as capacitor plants or magnet wire operations, job impacts on these plants are reported within this category. Impacts on other component suppliers are presented in a separate section titled "Impact on Suppliers to the Fluorescent Lamp Ballast Industry." Associated employment impacts: These impacts consider jobs impacted by business decisions drivenbythe "direct"employment impacts. Forexample, ifin amanufacturing plant with 100 employees, 50 are producing "affected" magnetic ballasts and the remaining 50 are producing "unaffected" magnetic ballasts, then an electronic ballast standardwouldresult in the loss of50 directjobs. Facedwiththis situation the company might decide to close operations in its plant due to the dramatically reduced capacity utilization. Such a decision would result in the loss ofthe remaining 50jobs. These 50 jobs would then be repOlied as "associated" employment impacts.

6A.2.4.1 Employment Levels in 1998 Based on the manufacturer interviews, approximately one-third ofthe "affected" magnetic ballasts sold in the U.S. market are manufactured domestically, while the remaining two-thirds are manufactured in Mexico. Table 6A.13 provides the direct employment levels associated with the production of"affected"magnetic ballasts in the year 1998. To obtainthese numbers, we aggregated the information manufacturers provided on employment levels at each oftheirproductionfacilities.

Table 6A.13 Direct Employment Levels for Manufacturing "Affected" Magnetic Ballasts Country ofManufacture Direct Employment Levels in 1998 U.S.A 738 Mexico 2945

6A.2.4.2 Employment Levels in 2003: Absent Standards All manufacturers in Sub-group I suggested that in the absence of a standard they would continuetomanufacture "affected"magneticballasts intheir currentmanufacturingplants. Theydid not anticipate anyplant closures or shifting ofproduction of"affected" magnetic ballasts from one 6-27plant to another before the year 2010. However, all agreed that the demand for "affected" magnetic

ballasts in the U.S. will continue to decrease at a rate of 3% to 5% a year until it reaches 10% of 1997 shipments. 

### Manufacturers in Sub-group 1 anticipate that direct employment associated with manufacturing "affected" magnetic ballasts will decrease approximately in the same proportion as shipments. Based on this information, in the year 2002 direct employment levels in "affected" magnetic ballast manufacturing will be 80% of the 1998 employment levels for the 5% scenario and 88% for the 3% scenario. This analysis assumes that there will be no loss in direct employment levels in 2002 as additional people will be needed to serve the likely surge in demand during the last two quarters. Hence direct employment levels in the year 2003 are assumed equal to 2002 levels. Despite reduced production of "affected" magnetic ballasts, manufacturers plan to maintain their total (direct + associated) employment levels in 2003 at the 1998 levels by implementing the following actions:

In small manufacturer plants where both magnetic and electronic ballasts are currently manufactured, manufacturers plan to maintain employment by moving "lost" jobs towards the production of products for other growing businesses. In large manufacturer plants where only magnetic ballasts are currently produced, manufacturers plan to continually consolidate their operations by increasing the production of other magnetic ballast product lines and by moving materials processing activities from other plants. One of the manufacturers interviewed suggested a possible, but less likely, scenario where it might close one of its U.S. plants sometime after 2010 in the 5% shipment scenario. The uncertainty with regards to the timing of any plant closures in the base case - after the year 2003 - results from the difficulty in anticipating how many associated jobs can be maintained in the long run. Gains in associated jobs will not necessarily maintain plant capacity utilization in the long run and a threshold may be reached that requires the plant to be closed. 

### Table 6A.14 provides the employment levels directly associated with the production of "affected" magnetic ballasts (and their components) in the year 2002.
Table 6A.14 Direct Employment Levels in 2002 Direct employment levels Direct employment levels in Country of manufacture in 2002 2002 

### 5% scenario 3% scenario U.S.A 611 662 Mexico 2356 2591 Transition Plans: Manufacturers in Sub-group 1 described their transition plans as their manufacturing capacities are converted to electronic ballast production only. It was observed that individual manufacturers' transition plans were primarily driven by their scale of operation.
6-28 plantto another before the year 2010. However, all agreed that the demand for "affected" magnetic ballasts in the U.S. will continue to decrease at a rate of 3% to 5% a year until it reaches 10% of 1997 shipments. Manufacturers in Sub-group 1 anticipate that direct employment associated with manufacturing "affected" magnetic ballasts will decrease approximately in the same proportion as shipments. Based on this information, in the year 2002 direct employment levels in "affected" magneticballast manufacturingwill be 80% ofthe 1998 employmentlevels for the 5%

### scenario and 88% for the 3% 

### scenario. This analysis assumes that there will be no loss in direct employment levels in 2002 as additional people will be needed to serve the likely surge in demand during the last two quarters. Hence direct employment levels in the year 2003 are assumed equal to 2002 levels. Despite reducedproduction of"affected"magnetic ballasts, manufacturers planto maintain their total (direct 

### + associated) employment levels in 2003 at the 1998 levels by implementing the following actions: In small manufacturer plants where both magnetic and electronic ballasts are currently manufactured, manufacturers plan to maintain employment by moving "lost" jobs towards the production ofproducts for other growing businesses. In large manufacturer plants where only magnetic ballasts are currently produced, manufacturers plan to continually consolidate their operations by increasing the production ofother magnetic ballast product lines and by moving materials processing activities from other plants. One ofthe manufacturers interviewed suggested a possible, but less likely, scenario where it might close one of its U.S. plants sometime after 2010 in the 5% 

### shipment scenario. The uncertainty with regards to the timing ofany plant closures in the base case - after the year 2003

- results from the difficulty in anticipating how many associatedjobs can be maintained in the long run. Gains in associatedjobswill notnecessarily maintain plant capacityutilization in the longrun and a threshold may be reached that requires the plant to be closed. Table 6A.14 provides the employment levels directly associated with the production of "affected" magnetic ballasts (and their components) in the year 2002.

Table 6A.14 Direct Employment Levels in 2002 Direct employment levels Direct employment levels in Country ofmanufacture in 2002 2002 5% 

### scenario 3% 

### scenario U.S.A 611 662 Mexico 2356 2591
Transition Plans: Manufacturers in Sub-group 1 described their transition plans as their manufacturing capacities are convelied to electronic ballast production only. It

### was observed that individual manufacturers' transition plans were primarily driven bytheir scale ofoperation.
6-28 plantto another before the year 2010. However, all agreed that the demand for "affected" magnetic ballasts in the U.S. will continue to decrease at a rate of 3% to 5% a year until it reaches 10% of 1997 shipments. Manufacturers in Sub-group 1 anticipate that direct employment associated with manufacturing "affected" magnetic ballasts will decrease approximately in the same proportion as shipments. Based on this information, in the year 2002 direct employment levels in "affected" magneticballast manufacturingwill be 80% ofthe 1998 employmentlevels for the 5%

### scenario and 88% for the 3% 

### scenario. This analysis assumes that there will be no loss in direct employment levels in 2002 as additional people will be needed to serve the likely surge in demand during the last two quarters. Hence direct employment levels in the year 2003 are assumed equal to 2002 levels. Despite reducedproduction of"affected"magnetic ballasts, manufacturers planto maintain their total (direct 

### + associated) employment levels in 2003 at the 1998 levels by implementing the following actions: In small manufacturer plants where both magnetic and electronic ballasts are currently manufactured, manufacturers plan to maintain employment by moving "lost" jobs towards the production ofproducts for other growing businesses. In large manufacturer plants where only magnetic ballasts are currently produced, manufacturers plan to continually consolidate their operations by increasing the production ofother magnetic ballast product lines and by moving materials processing activities from other plants. One ofthe manufacturers interviewed suggested a possible, but less likely, scenario where it might close one of its U.S. plants sometime after 2010 in the 5% 

### shipment scenario. The uncertainty with regards to the timing ofany plant closures in the base case - after the year 2003

- results from the difficulty in anticipating how many associatedjobs can be maintained in the long run. Gains in associatedjobswill notnecessarily maintain plant capacityutilization in the longrun and a threshold may be reached that requires the plant to be closed. Table 6A.14 provides the employment levels directly associated with the production of "affected" magnetic ballasts (and their components) in the year 2002.

Table 6A.14 Direct Employment Levels in 2002 Direct employment levels Direct employment levels in Country ofmanufacture in 2002 2002 5% 

### scenario 3% 

### scenario U.S.A 611 662 Mexico 2356 2591
Transition Plans: Manufacturers in Sub-group 1 described their transition plans as their manufacturing capacities are convelied to electronic ballast production only. It

### was observed that individual manufacturers' transition plans were primarily driven bytheir scale ofoperation.
6-28Large manufacturers with separate dedicated plants for manufacturing magnetic and

electronic ballasts: 

### For these manufacturers, the loss of "affected" magnetic ballasts would greatly reduce capacity utilization in plants dedicated to manufacturing magnetic ballasts.

One manufacturer anticipated closing its domestic magnetic ballast manufacturing plant and consolidating its magnetic ballast production in its Mexican plant. Such a scenario would result in loss of both " direct" and "associated" jobs. The "associated " jobs lost would, however, be added in the Mexican plant where the manufacturer plans to consolidate its "unaffected" ballast operations. 

### Another large manufacturer reported that it would have to close a section (s) of its Mexican plant in order to continue operating at profitable levels. This is possible since the plant is modular in its design, manufacturing operations and construction. Smaller manufacturers making both magnetic and electronic ballasts in the same plant: For this group of manufacturers an electronic ballast standard will result in the loss of "direct" jobs involved in manufacturing "affected " magnetic ballasts. One smaller manufacturer stated that it would be able to shift lost jobs to manufacturing electronic or other types of ballasts in the same plant.



### Sub-group 2 consists of three major manufacturers that produce only electronic ballasts. Two of them have manufacturing plants in the U. S and the third manufacturer produces its electronic ballasts in China. In the absence of a standard, these manufacturers reported a gradual increase in their employment levels as electronic ballasts gain market share over magnetic ballasts. An electronic ballast standard in the year 2003 will create a large additional market for electronic ballasts. Manufacturers in Sub-group 2 provided estimates of the additional direct jobs that would result.
6A.2.4.3 Employment Impacts on the Industry Employment impacts on the entire industry are obtained by aggregating the impacts on all seven manufacturers. Three of the seven manufacturers produce their electronic ballasts in the U.S., while the remaining produce them in Mexico or overseas. Table 6A. 15 summarizes the employment impacts of an electronic ballast standard on the entire industry. Large manufacturers with separate dedicated plants for manufacturing magnetic and electronic ballasts: For these manufacturers, the loss of "affected" magnetic ballasts would greatly reduce capacity utilization in plants dedicated to manufacturing magnetic ballasts. Onemanufacturer anticipated closing its domestic magneticballastmanufacturingplant and consolidating its magnetic ballast production in its Mexican plant. Such a scenario would result in loss ofboth "direct" and "associated"jobs. The "associated"jobs lost would, however, be added in the Mexican plant where the manufacturer plans to consolidate its "unaffected" ballast operations. Another large manufacturer repol1ed that it would have to close a section(s) of its Mexican plant in order to continue operating at profitable levels. This is possible since the plant is modular in its design, manufacturing operations and construction. Smaller manufacturers making both magnetic and electronic ballasts in the same plant: For this group of manufacturers an electronic ballast standard will result in the loss of "direct"jobs involved in manufacturing "affected" magnetic ballasts. One smaller manufacturer statedthat itwouldbe able to shift lostjobsto manufacturing electronic or othertypes ofballasts in the same plant. Sub-group 2 consists ofthree majormanufacturers thatproduce onlyelectronic ballasts. Two ofthemhave manufacturingplants intheU.S andthethirdmanufacturerproduces its electronic ballasts in China. In the absence ofa standard, these manufacturers reported a gradual increase in their employment levels as electronic ballasts gain market share over magnetic ballasts. An electronic ballast standard in the year 2003 will create a large additional market for electronicballasts. ManufacturersinSub-group2providedestimates ofthe additional direct jobsthat would result.



### 6A.2.4.3 Employment Impacts on the Industry Employment impacts on the entire industry are obtained by aggregating the impacts on all seven manufacturers. Three ofthe sevenmanufacturers producetheir electronic ballasts in the U.S., whiletheremainingproducethem in Mexico oroverseas. Table 6A.15 summarizesthe employment impacts ofan electronic ballast standard on the entire industry.

6-29 Large manufacturers with separate dedicated plants for manufacturing magnetic and electronic ballasts: For these manufacturers, the loss of "affected" magnetic ballasts would greatly reduce capacity utilization in plants dedicated to manufacturing magnetic ballasts. Onemanufacturer anticipated closing its domestic magneticballastmanufacturingplant and consolidating its magnetic ballast production in its Mexican plant. Such a scenario would result in loss ofboth "direct" and "associated"jobs. The "associated"jobs lost would, however, be added in the Mexican plant where the manufacturer plans to consolidate its "unaffected" ballast operations. Another large manufacturer repol1ed that it would have to close a section(s) of its Mexican plant in order to continue operating at profitable levels. This is possible since the plant is modular in its design, manufacturing operations and construction. Smaller manufacturers making both magnetic and electronic ballasts in the same plant: For this group of manufacturers an electronic ballast standard will result in the loss of "direct"jobs involved in manufacturing "affected" magnetic ballasts. One smaller manufacturer statedthat itwouldbe able to shift lostjobsto manufacturing electronic or othertypes ofballasts in the same plant. Sub-group 2 consists ofthree majormanufacturers thatproduce onlyelectronic ballasts. Two ofthemhave manufacturingplants intheU.S andthethirdmanufacturerproduces its electronic ballasts in China. In the absence ofa standard, these manufacturers reported a gradual increase in their employment levels as electronic ballasts gain market share over magnetic ballasts. An electronic ballast standard in the year 2003 will create a large additional market for electronicballasts. ManufacturersinSub-group2providedestimates ofthe additional direct jobsthat would result.



### 6A.2.4.3 Employment Impacts on the Industry Employment impacts on the entire industry are obtained by aggregating the impacts on all seven manufacturers. Three ofthe sevenmanufacturers producetheir electronic ballasts in the U.S., whiletheremainingproducethem in Mexico oroverseas. Table 6A.15 summarizesthe employment impacts ofan electronic ballast standard on the entire industry.

6-29Table 6A.15. Industry

-wide Employment Impacts of an Electronic Ballast Standard

Country of Direct Jobs Associated Jobs Direct Jobs t$ Net Direct Jobs Manufacture Lost in at Risk in Gained in lost Magnetic Magnetic Electronic Ballast Ballast Ballast Manufacturing Manufacturing Manufacturing

2015 (-5% decline) shipment scenario U.S.A 666* 406** 500 166 Mexico 1570 190- 700 870 2027 (-3% decline) shipment scenario U.S.A 717 363** 557 160 Mexico 1727 1613 769 958



### *** j' Includes both factory and non-factory jobs supporting magnetic ballast production. These "associated" jobs are assumed relocated to Mexico These "associated" jobs will be relocated to other plants in Mexico or elsewhere Includes jobs from Sub-groups 1 and 2 

### Does not include potential associated jobs added in these plants
Uncertainty in employment impacts 

### As previously discussed, there exists some uncertainty relative to the closure date of current magnetic ballast production facilities in the base case. The employment impacts presented in Table 6A.15 assume a base case with an orderly decline in U.S. magnetic ballast employment until 2015 or 2027. The large majority of these employment impacts are directly associated with the closure of the remaining large magnetic U.S.-based ballast plant. In consideration of the past trend towards consolidation of magnetic ballast production in Mexico, a sensitivity analysis was conducted on the employment impacts assuming that the employment impacts associated with the plant closures would occur in the base case (in absence of standards). These impacts are detailed in Table 6A.16. The scenario assumes that the lost U.S. jobs would be picked up by increased manufacturing activity in the Mexican plants, thereby increasing the employment impact of a standard on Mexican jobs.

6-30 

### Table 6A.1S. Industry-wide Employment Impacts of an Electronic Ballast Standard Country of Direct Jobs Associated Jobs Direct Jobs u Net Direct Jobs Manufacture Lost in at Risk in Gained in lost Magnetic Magnetic Electronic

Ballast Ballast Ballast Manufacturin!! Manufacturing Manufacturing 2015 (-5% decltne) shIpment scenano U.S.A 666* 406** 500 166 Mexico 1570 190'" 700 870 2027 (-3% decline) shipment scenario U.S.A 717 557 160 Mexico 1727 769 958 Includes both factory and non-factoryjobs supporting magnetic ballast production

. 

### •• These "associated"jobs are assumed relocated to Mexico *** 

# t t These "associated"jobs will be relocated to other plants in Mexico or elsewhere Includesjobs from Sub-groups 1 and 2 Does not include potential associatedjobs added in these plants
Uncertainty in employment impacts As previously discussed, there exists some uncertaintyrelative to the closure date ofcurrent magnetic ballastproduction facilities in the base case. The employment impactspresented in Table 6A.15 assume a base case with an orderly decline in U.S. magnetic ballast employment until 2015 or 2027. The large majority ofthese employment impacts are directly associated with the closure of the remaining large magnetic U.S.-based ballast plant. In consideration ofthe past trend towards consolidation ofmagneticballastproduction in Mexico, a sensitivity analysis was conducted onthe employmentimpacts assumingthatthe employmentimpacts associatedwiththe plantclosureswould occur in the base case (in absence ofstandards). These impacts are detailed in Table 6A.16. The scenario assumes that the lost U.S. jobs would be picked up by increased manufacturing activity in the Mexican plants, thereby increasing the employment impact ofa standard on Mexicanjobs.

6-30 

### Table 6A.1S. Industry-wide Employment Impacts of an Electronic Ballast Standard Country of Direct Jobs Associated Jobs Direct Jobs u Net Direct Jobs Manufacture Lost in at Risk in Gained in lost Magnetic Magnetic Electronic

Ballast Ballast Ballast Manufacturin!! Manufacturing Manufacturing 2015 (-5% decltne) shIpment scenano U.S.A 666* 406** 500 166 Mexico 1570 190'" 700 870 2027 (-3% decline) shipment scenario U.S.A 717 557 160 Mexico 1727 769 958 Includes both factory and non-factoryjobs supporting magnetic ballast production

. 

### •• These "associated"jobs are assumed relocated to Mexico *** 

# t t These "associated"jobs will be relocated to other plants in Mexico or elsewhere Includesjobs from Sub-groups 1 and 2 Does not include potential associatedjobs added in these plants
Uncertainty in employment impacts As previously discussed, there exists some uncertaintyrelative to the closure date ofcurrent magnetic ballastproduction facilities in the base case. The employment impactspresented in Table 6A.15 assume a base case with an orderly decline in U.S. magnetic ballast employment until 2015 or 2027. The large majority ofthese employment impacts are directly associated with the closure of the remaining large magnetic U.S.-based ballast plant. In consideration ofthe past trend towards consolidation ofmagneticballastproduction in Mexico, a sensitivity analysis was conducted onthe employmentimpacts assumingthatthe employmentimpacts associatedwiththe plantclosureswould occur in the base case (in absence ofstandards). These impacts are detailed in Table 6A.16. The scenario assumes that the lost U.S. jobs would be picked up by increased manufacturing activity in the Mexican plants, thereby increasing the employment impact ofa standard on Mexicanjobs.

6-30