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 of Lamp 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

EE-RM-97-500 COMMENT 104

4.2 PAYBACK PERIODS BY ENERGY-EFFICIENCY LEVEL 

The payback period (PAY) is the amount of time needed to recover through lower operating 

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, PAY is 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 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 oflamp replacement has been divided over the life of the lamp so that an annual 

lamp replacement cost (LRC) is equal to: 

LRC = Cast af Lamp 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 

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 ,6.PC = $-4.89, ,6.EC = $ 1. 74/yr and 

4-20 

4.2 PAYBACK PERIODS BY ENERGY-EFFICIENCY LEVEL 

The payback period (PAY) is the amount of time needed to recover through lower operating 

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, PAY is 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 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 oflamp replacement has been divided over the life of the lamp so that an annual 

lamp replacement cost (LRC) is equal to: 

LRC = Cast af Lamp 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 

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 ,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.

EE-RM-97-500 COMMENT 104

f).LRC = 14.78 

5.28 

14.78 ---

4.49 

This results in a payback period of equation as follows: 

-$0.49/yr 

PAY = -

-4.89 

= 3.9yrs 1.74 - 0.49 

Note there has been no discounting oflamp 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 pay backs 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 presentthe summary results and cOITesponding 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 IS-year period was 

chosen because it approximates average ballast life for most of the lamplballast combinations. 

4-21 

f).LRC = 14.78 

5.28 

14.78 ---

4.49 

This results in a payback period of equation as follows: 

-$0.49/yr 

PAY = -

-4.89 

= 3.9yrs 1.74 - 0.49 

Note there has been no discounting oflamp 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 pay backs 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 presentthe summary results and cOITesponding 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 IS-year period was 

chosen because it approximates average ballast life for most of the lamplballast combinations. 

4-21 
Table 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

EE-RM-97-500 COMMENT 104

T a bi e 46 . S ummary 0 f P b k P . d ayl ac eno s U· SlOg th e T12 EEM as th e B ase r 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 a bi e 46 . S ummary 0 f P b k P . d U . h ayl ac eno s SlOg t e T12 EEM as t h B e ase r 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 
Forecast: 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

EE-RM-97-500 COMMENT 104

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 1 F40 (Commercial) . T8 ERS 

10,000 Trials Frequency Chart 

.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 1 F32T8 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 1 F40 (Commercial) . T8 ERS 

10,000 Trials Frequency Chart 

.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 1 F32T8 ERS in Commercial Sector 

4-23 
Forecast: 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

EE-RM-97-500 COMMENT 104

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 

4-24 
Forecast: 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

EE-RM-97-500 COMMENT 104

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 

4-25 
Forecast: 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

EE-RM-97-500 COMMENT 104

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 o Outliers 

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 o Outliers 

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 
10,000 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

7.5 15.0 22.5 30.0

. . . . . . . . . . . . . . . . ..

® 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

FrequencyChart 7Outliers

- 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

EE-RM-97-500 COMMENT 104

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 

Certai nty 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 

Certai nty 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) - 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

E E€ ° 0

4-28

EE-RM-97-500 COMMENT 104

Forecast: Payback 4F40 (Commercial) - T8 ERS 

10,000 Trials Frequency Chart o Outliers 

.490 - 4899 

.367 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --

-~ 

.CI .245 Q;I 

.CI 

e a. .122 

.000 

0.0 

II, 

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 

... 

a. .012 

.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 o Outliers 

.490 - 4899 

.367 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --

-~ 

.CI .245 Q;I 

.CI 

e a. .122 

.000 

0.0 

II, 

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 

... 

a. .012 

.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 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

EE-RM-97-500 COMMENT 104

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 

4-29 
Forecast: 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

7.5 15.0 22.5 30.0

® 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

EE-RM-97-500 COMMENT 104

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 e 47 . S a ummary 0 fP ayl b ac kP erIO . d s U' smga T8 EEM B a II as t as th e B ase r me 

Product Class Design Sector Median % With Payback 

IF32 

2F32 

10,000 Trials 

Option 

T8ERS 

T8 EIS 

T8CC 

T8ERS 

T8 EIS 

Forecast: Payback 1 F32 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 e 47 . S a ummary 0 fP ayl b ac kP erIO . d s U' smga T8 EEM B a II as t as th e B ase r me 

Product Class Design Sector Median % With Payback 

IF32 

2F32 

10,000 Trials 

Option 

T8ERS 

T8 EIS 

T8CC 

T8ERS 

T8 EIS 

Forecast: Payback 1 F32 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 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

EE-RM-97-500 COMMENT 104

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 

4-31 
Forecast: 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

EE-RM-97-500 COMMENT 104

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 15.0 

22.5 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 discount rates, we recalculated the Lee savings using a low (4%) 

and a high (15%) estimate ofthe 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 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 15.0 

22.5 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 discount rates, we recalculated the Lee savings using a low (4%) 

and a high (15%) estimate ofthe 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 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 
Table 4.8 Summary of Delta LCC* Sensitivity Results with 4% Discount Rate

Product Class I Design Option I Sector I Delta LCC

Mean % of %

EE-RM-97-500 COMMENT 104

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

Product Class Design Option Sector Delta LCC 

Mean I % of I % 

Table 4.8 Summary of Delta 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

EE-RM-97-500 COMMENT 104

(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 LCC

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

EE-RM-97-500 COMMENT 104

T a bI e 49 . S ummary 0 fD e a It LCC* S ens] Of IVHY °t R esu It s WI °th 15% 0 DO lscoun tR ae t 

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 a bI e 49 . S ummary 0 fD e a It LCC* S ens] Of IVHY °t R esu It s WI °th 15% 0 DO lscoun tR ae t 

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 
Table 4.10 Summary of Delta LCC* Sensitivity Results using AEO 1999 High Growth

Forecast

Product Class Design Option Sector Delta LCC

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

EE-RM-97-500 COMMENT 104

Table 4.10 Summary of Delta 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 of Delta 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

EE-RM-97-500 COMMENT 104

Table 4 1 S .1 ummary 0 fP ayl b ac kS ensltIvIty usmg AEO 1999 H' igl h G rowt hF 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% 

4-36 

T a bi e 411 . S ummary 0 fP ayl b k S ac enSl 'f IVHy 't usmg AEO 1999 H' 19l h G row th F 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% 

4-36 
Table 4.12 Summary of Delta LCC* Sensitivity Results using AEO 1999 Low Growth

Forecast

Product Class Design Option Sector Delta LCC

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

EE-RM-97-500 COMMENT 104

Table 4.12 Summary of Delta 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 of Delta 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

EE-RM-97-500 COMMENT 104

T a bi e 413 . S ummary 0 fP ay b k S ac enSl of IVl °t ty usmg AEO 1999 L G ow row th F orecas t 

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 a bi e 413 . S ummary 0 fP ay b k S ac enSl of IVl °t ty usmg AEO 1999 L G ow row th F orecas t 

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 
CHAPTER 5. NATIONAL. ENERGY AND ECONOMIC IMPACTS

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

EE-RM-97-500 COMMENT 104

CHAPTER S. NATIONAL ENERGY AND ECONOMIC IMPACTS 

All of the 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 

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 ofthe scenarios were calculated using the 

National Energy Savings (NES) spreadsheet model created by LBNL (NES_vA). 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: IF40T12, 2F40T12, 

2F96T 12, and 2F96T l2/HO. hl this analysis, a simplifying assumption was made thatthe 1 F 40T 12, 

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 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 of the 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 

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 ofthe scenarios were calculated using the 

National Energy Savings (NES) spreadsheet model created by LBNL (NES_vA). 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: IF40T12, 2F40T12, 

2F96T 12, and 2F96T l2/HO. hl this analysis, a simplifying assumption was made thatthe 1 F 40T 12, 

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 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 
the 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).'

EE-RM-97-500 COMMENT 104

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 

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 by NEMA 

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).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 

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 by NEMA 

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).1 

5-2 
Table 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

EE-RM-97-500 COMMENT 104

Table 5.1 U.s. Fluorescent Ballast Disaggregated 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' 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 

T a bi e 52 . . . US FI uorescent B a 11 ast Sh' lpments, C overe dP ro d 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 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.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. Fluorescent Ballast Disaggregated 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' 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 

T a bi e 52 . . . US FI uorescent B a 11 ast Sh' lpments, C overe dP ro d 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 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.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 
121% 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

EE-RM-97-500 COMMENT 104

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 of Magnetic 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 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 of Magnetic 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 of Magnetic 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-ballast

combinations 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

EE-RM-97-500 COMMENT 104

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 half of the 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, 

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-ballast 

combinations usingT12 lamps: one-lamp F40T12, two-lamp F40T12, two-lamp F96T12, and twolamp F96T12/HO. For the three- and four-lamp TI2 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 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 half of the 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, 

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-ballast 

combinations usingT12 lamps: one-lamp F40T12, two-lamp F40T12, two-lamp F96T12, and twolamp F96T12/HO. For the three- and four-lamp TI2 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 ofT12 systems. 

5-5 
Energy 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

EE-RM-97-500 COMMENT 104

Energy savings re1)ulted 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 

TI2 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.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 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 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 savings re1)ulted 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 

TI2 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.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 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 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 
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 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

EE-RM-97-500 COMMENT 104

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 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 Til- 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; ETA provided the data for the intermediate years. 

The conversion factor for source energy is calculated using the formula: 

h * 3412 Btu _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 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 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 Til- 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; ETA provided the data for the intermediate years. 

The conversion factor for source energy is calculated using the formula: 

h * 3412 Btu _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 of change between 2010 and 2020. 

Table 5.3 shows the site- to source-energy conversion rates for the analysis period. 

5-7 
Table 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

EE-RM-97-500 COMMENT 104

Table 5.3 Site-to-Source En 

Year 

Conversion 

Factor 

MMBtu/KWh 

Conversion Factors 

Conversion 

Factor 

MMBtu/KWh 

0.010145 

5.2.6 Lighting/HV AC 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 (HV AC) 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 HV AC impact varies by climate zone and 

building type. As explained in Appendix B, this analysis used a national average for HV AC 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. 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 

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 Tl2 systems choose (1) 100 percent TI2 electronic ba:1lasts 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 convelis 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 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/HV AC 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 (HV AC) 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 HV AC impact varies by climate zone and 

building type. As explained in Appendix B, this analysis used a national average for HV AC 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. 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 

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 Tl2 systems choose (1) 100 percent TI2 electronic ba:1lasts 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 convelis 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 TI2 ballasts and 95 percent 

5-8 
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: 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

EE-RM-97-500 COMMENT 104

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: 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 eaTly 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 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: 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 eaTly 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 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

EE-RM-97-500 COMMENT 104

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 study 

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 of ballasts 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 ofthe 

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. 

F or 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., l. 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 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 study 

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 of ballasts 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 ofthe 

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. 

F or 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., l. 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 
5.3.3. 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

EE-RM-97-500 COMMENT 104

5.3.3. 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 T 12 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 segnlents, 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 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 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 T 12 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 segnlents, 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 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 
5.3.4 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.

EE-RM-97-500 COMMENT 104

5.3.4 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 F96Tl2 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 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 of magnetic ballasts were converted to 

cathode cutout ballasts. The exception is the F96Tl2 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 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 
Table 5.4. Ballast Scenario Assumptions

S i

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

EE-RM-97-500 COMMENT 104

T a bi e 54 •• B a n ast S cenano 'A ssumpllons f 

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. Of the 70 percent that convert to electronic, 5 percent were TI2 (3.5 percent 

ofthe 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 a bi e 54 •• B a n as t S cenano 'A ssump110ns f 

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. Of the 70 percent that convert to electronic, 5 percent were TI2 (3.5 percent 

ofthe 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 
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.

EE-RM-97-500 COMMENT 104

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/HV AC 

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. 

For Units Sold from 2003 to 2030 

*For energy savings only; 

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

5-14 

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/HV AC 

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. 

For Units Sold from 2003 to 2030 

*For energy savings only; 

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

5-14 
Table 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.

EE-RM-97-500 COMMENT 104

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 

Decr2027 
Table 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

EE-RM-97-500 COMMENT 104

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 

Deer2027 
Table 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

EE-RM-97-500 COMMENT 104

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 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 ofT12 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. 

F or 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 HV AC 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 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 ofT12 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. 

F or 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 HV AC 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 
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 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

EE-RM-97-500 COMMENT 104

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 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 of6.8 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 lamplballast 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.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 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 of6.8 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 lamplballast 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.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 economic

analysis 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

EE-RM-97-500 COMMENT 104

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 HV A 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 70 percent when the slower 

decreasing shipments forecast to 2027 was used. NPV s for Scenario 2 with T8 electronic ballasts 

were about 2.5 times those for Scenario 1 with TI2 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 ofthe 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 economic 

analysis 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) 

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 HV A 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 70 percent when the slower 

decreasing shipments forecast to 2027 was used. NPV s for Scenario 2 with T8 electronic ballasts 

were about 2.5 times those for Scenario 1 with TI2 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 ofthe 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 economic 

analysis 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 
purchase 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.

EE-RM-97-500 COMMENT 104

purchase 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 ofthe new technology per installed unit 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 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 oflabor intensity and so changes in the level of spending (e.g., such as 

via an efficiency standard) in one sector ofthe 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. 

5-20 

purchase 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 ofthe new technology per installed unit 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 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 oflabor intensity and so changes in the level of spending (e.g., such as 

via an efficiency standard) in one sector ofthe 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. 

5-20 
$ Million

04 A O W o N

O 0 0 0 0 0 0

2003

2004

2005

2006 gf::. •''^.

2007

2006

2009

2010

2011

m

2012 .;:

n

2013

N 2014 O o O

G

e

.

i mina N 3 2015 k: N .

r C,

{ 2016 m D

2017 6 c m

2018

S 01 '^ N

2019

N

N O

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

f j m D w D

2030

..,_,.._, ^...,,„ ....., .,,.,.^ ....... ,.,_.-....

,

Qm

Jobs(Thousands)

0 N .P 0) 00 O N 

1200

2004

2005

D W

2006

2007

12008

2009

12010

2011

2012

2013

i2014

t

2015

>.

2016

i2017

2018•

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

(2029

;.2030 .

10 

U) 

"CI 8 

C res 

II) 

::s 

0 

..c:: 

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t::-

II) 

..c 4 0 

., 

2 

0 

-2 

····2A 

··':<'··2B 

':.;' 

..... 

.... ...-.:.:: 

<D r- 0::> 0'> 0 

0 0 0 0 0 0 0 0 0 0 0 0 

N N N N N N N 

,.':. 

N (V) 

0 0 

N N 

.... 

. .-:" ..... 

.... L{) 

0 0 

N N 

;.:: .... ." .. :.: .... 

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N N N N N N N N N <'): 

0 0 0 0 0 0 0 0 0 0: 

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-

............................. 

-

.............. ..... ........... ........... 

----

........... ..... 

----

................ 

--------

..... 

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

..... 

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

........... 

Year 

Figure 5.4. Net National Employment Impacts 

1200 

1000 

800 

" 

600 !:E 

U> 

400 

200 

0 

Input Data Analysis 

Energy Costs Saved ($ MIllion) 

Fluorescent Lam p Ballasts 

.................................................................................................................................................................. 

.:/ .. , .. :.:.. ":.: ··: .. ··2A i 

.c· "·:.",,,·26 'I: 

: ..... 

'" 0 N '" '" '" '" 0 [ii [ii 0 0 N N 

Year 

Figure 5.5. Input Data: Energy Costs Saved 

5-21 

10 

U) 

"CI 8 

C res 

II) 

::s 

0 

..c:: 

6 

t::-

II) 

..c 4 0 

., 

2 

0 

-2 

····2A 

··':<'··2B 

':.;' 

..... 

.... ...-.:.:: 

<D r- 0::> 0'> 0 

0 0 0 0 0 0 0 0 0 0 0 0 

N N N N N N N 

,.':. 

N (V) 

0 0 

N N 

.... 

. .-:" ..... 

.... L{) 

0 0 

N N 

;.:: .... ." .. :.: .... 

<D r0 0 

N N 

':':'" 

·'Y; •.. 

.: .... 

0::> 0'> 0 

0 0 N 0 

N N N 

"};" 

N <') .... L{) <D r- 0::> 0'> 0' 

N N N N N N N N N <'): 

0 0 0 0 0 0 0 0 0 0: 

N N N N N N N N N N: 

-

............................. 

-

.............. ..... ........... ........... 

----

........... ..... 

----

................ 

--------

..... 

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

..... 

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

........... 

Year 

Figure 5.4. Net National Employment Impacts 

1200 

1000 

800 

" 

600 !:E 

U> 

400 

200 

0 

Input Data Analysis 

Energy Costs Saved ($ MIllion) 

Fluorescent Lam p Ballasts 

.................................................................................................................................................................. 

.:/ .. , .. :.:.. ":.: ··: .. ··2A i 

.c· "·:.",,,·26 'I: 

: ..... 

'" 0 N '" '" '" '" 0 [ii [ii 0 0 N N 

Year 

Figure 5.5. Input Data: Energy Costs Saved 

5-21 
Input Data Trend Analysis

Energy Saved (Btu)

Fluorescent Lamp Ballasts

70 ........................................................................................................................................................ ..........................

60 -®-1 A

^g...1 B

50 - 2A

CO ---2B

`

40-

F0 30 ^_ yg

W

d ar' ^a ^`^r

10-

0

M t (n co I-- W O O N M V (n O r- co of o N M V (n O

O O O O O O O N N N N N N N

O O O O O O O O O O O O O O O O O O O O O O O O

co O O

N N N M

O O O O

N N N N N N N N N N N N N N N N N N N N N N N N

Year

N N N N

Figure 5.6. Input Data: Site Energy Saved

Increase in Incremental Equipment Price

Fluorescent Lamp Ballasts

300-

250

200

150 ^^ xt_^ l xc 1 B

eA 2A

100

:....,

0

M (O O ti W 6^ O N M V' u'1 (D n W W O N

co 1 1

co ((] to N. N O O

O O O O O

O O O O O

N N N N N

o 8 N N N

O O O O O O O O O O O O O O O

N N N N N N N N N N N N N N N

N N N N N N N M

O O O O O O O O

N N N N N N N N

Year

Figure 5.7. Input Data : Incremental Equipment Price Increase

5-22

EE-RM-97-500 COMMENT 104

70 

60 

(j) 50 :::I 

III 

-

:e 40 t:.. 

>. 

Cl :u 30 c: 

W 

~ 20 Ci) 

10 

0 

Input Data Trend Analysis 

Energy Saved (Btu) 

Fluorescent Lamp Ballasts 

... ' ..... ".; 

,--

__ 1A 

"'118···16 

-t-----------------:->,~-------.-.' .. -'",:;~,:__----------_I ....... 2A-

... ; .. / "x" .... ; ... 28 .-; '----

+-------------------~ .. >~,/_'----------------------------~ .. /~~~----------------I ~ X 

'" '" It) (Jj .... cc en 0 '" '" '" It) (Jj .... cc en 0 N '" '" '" It) (Jj .... cc en 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 '" '" '" '" '" '" '" '" '" '" 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N 

Year 

Figure 5.6. Input Data: Site Energy Saved 

Increase in Incremental Equipment Price 

Fluorescent Lamp Ballasts 

300.----------------------------------------------~ 

250+-----~,~--------------------------------------------------------~ 

1I'J."'18... .. 1?s. . ';';'''''' "'" " . :''', '. '.: ' ... ,.,----------------------------------------------l 

200 

:i 150 fh 

100 

50 

0 

~--~:~v~·':··:·:·)~" "'5r' .. ~ <"'-7 .. :::" ...'"Il~~-"-------------l 

.''' ••••• :';. ":':, ,..' ........ J&, .::: ..... ::, .. , ~~:~,_ 

" "''''~'''' .. ''''~, "%, ~ .. ,'., ,.,.".:.-. ~ .. :~.:."". ~7.,;,.:-.,-._:"-: .. ,,-, .-"-.~---_~- •. -""'----------1 

« ~ ~ ~ AA ::ll: ••• ; .... ~ .... ~ ..... ~~.;......._>~~~;.;;~~;.:;.:::~:;:; 

'" '" It) (Jj .... cc en 0 '" '" '" It) (Jj .... cc en 0 N '" C') '" It) (Jj .... cc en 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N '" '" '" '" N '" N N '" 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N '" '" N '" '" '" '" '" '" '" N N N '" '" '" N '" N N N N N N '" '" '" Year 

Figure 5.7. Input Data: Incremental Equipment Price Increase 

5-22 

,---

-AA-1A 

. ··18 

_.:.,,,-2A 

__28 

'---

70 

60 

(j) 50 :::I 

III 

-

:e 40 t:.. 

>. 

Cl :u 30 c: 

W 

~ 20 Ci) 

10 

0 

Input Data Trend Analysis 

Energy Saved (Btu) 

Fluorescent Lamp Ballasts 

... ' ..... ".; 

,--

__ 1A 

"'118···16 

-t-----------------:->,~-------.-.' .. -'",:;~,:__----------_I ....... 2A-

... ; .. / "x" .... ; ... 28 .-; '----

+-------------------~ .. >~,/_'----------------------------~ .. /~~~----------------I ~ X 

'" '" It) (Jj .... cc en 0 '" '" '" It) (Jj .... cc en 0 N '" '" '" It) (Jj .... cc en 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 '" '" '" '" '" '" '" '" '" '" 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N 

Year 

Figure 5.6. Input Data: Site Energy Saved 

Increase in Incremental Equipment Price 

Fluorescent Lamp Ballasts 

300.----------------------------------------------~ 

250+-----~,~--------------------------------------------------------~ 

1I'J."'18... .. 1?s. . ';';'''''' "'" " . :''', '. '.: ' ... ,.,----------------------------------------------l 

200 

:i 150 fh 

100 

50 

0 

~--~:~v~·':··:·:·)~" "'5r' .. ~ <"'-7 .. :::" ...'"Il~~-"-------------l 

.''' ••••• :';. ":':, ,..' ........ J&, .::: ..... ::, .. , ~~:~,_ 

" "''''~'''' .. ''''~, "%, ~ .. ,'., ,.,.".:.-. ~ .. :~.:."". ~7.,;,.:-.,-._:"-: .. ,,-, .-"-.~---_~- •. -""'----------1 

« ~ ~ ~ AA ::ll: ••• ; .... ~ .... ~ ..... ~~.;......._>~~~;.;;~~;.:;.:::~:;:; 

'" '" It) (Jj .... cc en 0 '" '" '" It) (Jj .... cc en 0 N '" C') '" It) (Jj .... cc en 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N '" '" '" '" N '" N N '" 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N '" '" N '" '" '" '" '" '" '" N N N '" '" '" N '" N N N N N N '" '" '" Year 

Figure 5.7. Input Data: Incremental Equipment Price Increase 

5-22 

,---

-AA-1A 

. ··18 

_.:.,,,-2A 

__28 

'---
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.

EE-RM-97-500 COMMENT 104

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 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 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 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 
C 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

EE-RM-97-500 COMMENT 104

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 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 detelmined in writing by the Attorney 

General. The purpose ofthe 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 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 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 ofthe ballast indusny. 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 finns, 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 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 detelmined in writing by the Attorney 

General. The purpose ofthe 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 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 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 ofthe ballast indusny. 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 finns, the financial situation of manufacturers, 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

EE-RM-97-500 COMMENT 104

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 perromled 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 Flow 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 perfoml a "strawman" industry cash flow analysis. 

Given the relatively small number offilIDS 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 Apri128, 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 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 perromled 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 Flow 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 perfoml a "strawman" industry cash flow analysis. 

Given the relatively small number offilIDS 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 Apri128, 1998. Strawman values for prices were derived from the Bureau of Census ' Current 

6-2 
Industrial 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

EE-RM-97-500 COMMENT 104

Industrial Reports (CIRs). The dollar value of ballast 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 Robert Morris Associates (RMA) repOlis. 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 statiing 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 Depatiment 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 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 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 perfonned 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 of ballast 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 Robert Morris Associates (RMA) repOlis. 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 statiing 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 Depatiment 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 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 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 perfonned 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 
market 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

EE-RM-97-500 COMMENT 104

market 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 industty characterization using information from relevant industry 

and market publications, industty trade organizations, company financial reports, and product 

literature. This indusuy 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 lO-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% ofthe quantity and 38% of the value of 

shipments of all fluorescent lamp ballasts. In the same year, electronic ballasts made up 35% ofthe 

quantity and 54% ofthe value of shipments. 

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 of the 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 of electronics has 

been increasing as they have gained market share over corrected power-factor magnetics. 

6-4 

market 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 industty characterization using information from relevant industry 

and market publications, industty trade organizations, company financial reports, and product 

literature. This indusuy 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 lO-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% ofthe quantity and 38% of the value of 

shipments of all fluorescent lamp ballasts. In the same year, electronic ballasts made up 35% ofthe 

quantity and 54% ofthe value of shipments. 

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 of the 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 of electronics has 

been increasing as they have gained market share over corrected power-factor magnetics. 

6-4 
1=ADO

i,axui

8"AOD

I 8iaD

4gOb

2M030

0i-r-r r-r--r--r-^-I

1^ KB1 m2 1^3 1^i 19 1 K^ K) 8

Year

-s- O FF

KtglfiC

E11uic

-e- UTInT03M

FFMgEic

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

6-5

EE-RM-97-500 COMMENT 104

l.AXlaD,---------------, 

8:QaD /_ .. / 

)l 

/8--,_ -18' ' '''.~* 

/ 

Figure 6A.l Historical Trend in Value of Shipments of Fluorescent 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 at the cathode cutout ballast performance level or at 

the electronic ballast performance level. 

T a bi e 6A . 1 "An ec t e d" M agne f IC B a II as t san dE nergy-Effi' ICIen t R 1 eplacemen t s 

"Affected" Magnetic Cathode Cutout Electronic replacements 

Ballasts Replacements 

IF40Tl2 1 F40Tl 2 IF40T12,3F40T12,lF32T8,3F32T8 

2F40T12 2F40T12 2F40T12,3F40T12,2F32T8,3F32T8,4F32T8 

2F96Tl2 2F96Tl2 

2F96T12HO 2F96Tl2HO 2F96T12HO 

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 rep Olie d that cathode 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 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 

6-5 

l.AXlaD,---------------, 

8:QaD /_ .. / 

)l 

/8--,_ -18' ' '''.~* 

/ 

Figure 6A.l Historical Trend in Value of Shipments of Fluorescent 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 at the cathode cutout ballast performance level or at 

the electronic ballast performance level. 

T a bi e 6A . 1 "An ec t e d" M agne f IC B a II as t san dE nergy-Effi' ICIen t R 1 eplacemen t s 

"Affected" Magnetic Cathode Cutout Electronic replacements 

Ballasts Replacements 

IF40Tl2 1 F40Tl 2 IF40T12,3F40T12,lF32T8,3F32T8 

2F40T12 2F40T12 2F40T12,3F40T12,2F32T8,3F32T8,4F32T8 

2F96Tl2 2F96Tl2 

2F96T12HO 2F96Tl2HO 2F96T12HO 

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 rep Olie d that cathode 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 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 

6-5 
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 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 Shipment 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

EE-RM-97-500 COMMENT 104

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 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 Jacto 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 perf0TI11anCe level in this MIA repOli. 

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. 

T a bi e 6A2Sh' . lpmen t an d V I a ue 0 fFl uorescen tL amp B a II as t . SIn 1997 

1997 Shipments 1997 Value of % of Revenues Average Price 

Product (mil) Shipments ($ mil) of all 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" 

V ncorrected 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." 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. 

1 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 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 Jacto 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 perf0TI11anCe level in this MIA repOli. 

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. 

T a bi e 6A2Sh' . lpmen t an d V I a ue 0 fFl uorescen tL amp B a II as t . SIn 1997 

1997 Shipments 1997 Value of % of Revenues Average Price 

Product (mil) Shipments ($ mil) of all 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" 

V ncorrected 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." 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. 

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

6-6 
Table 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 on

information 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

EE-RM-97-500 COMMENT 104

T a bI e 6A . 3 L' IS t 0 f L amp B a n as tM anu f ac t urers 

Manufacturer Characteristics in "affected" categories 

Advance Transfonner Producer of magnetic and electronic ballasts with domestic, 

Company Mexican and foreiml facilities 

Howard Industries Producer of electronic ballasts with domestic production facilities 

MagneTek Producer of magnetic and elech'onic 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, 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 of both magnetic and electronic ballasts 

• Advance Transfoffiler Company 

MagneTek, Inc. 

Robertson Worldwide 

SLi Lighting 1 PowerLighting Products 

Sub-group 2: Manufacturers that produce only electronic ballasts 

• Howard Industries 

• Motorola Lighting, Inc. 

• Osram Sylvania Products Inc. 

The magnetic ballast indushy 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 Market share of the 4 Market share of top 7 

manufacturers largest manufacturers manufacturers 

Magnetic 4 >95% >95% 

Electronic 7 >70% >95% 

6-7 

T a bI e 6A . 3 L' IS t 0 f L amp B a n as tM anu f ac t urers 

Manufacturer Characteristics in "affected" categories 

Advance Transfonner Producer of magnetic and electronic ballasts with domestic, 

Company Mexican and foreiml facilities 

Howard Industries Producer of electronic ballasts with domestic production facilities 

MagneTek Producer of magnetic and elech'onic 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, 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 of both magnetic and electronic ballasts 

• Advance Transfoffiler Company 

MagneTek, Inc. 

Robertson Worldwide 

SLi Lighting 1 PowerLighting Products 

Sub-group 2: Manufacturers that produce only electronic ballasts 

• Howard Industries 

• Motorola Lighting, Inc. 

• Osram Sylvania Products Inc. 

The magnetic ballast indushy 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 Market share of the 4 Market share of top 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

EE-RM-97-500 COMMENT 104

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 ofthis analysis, as the present value of cash flows for the manufacturer(s) 

in question. The basic structure of the GRIM 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 CU1Tent and future forecasts of product mix for the 

various magnetic and electronic ballast product classes identified in Table 6A.l. 

In developing cash flow estimates under the Mamifacturer Submittal scenarios it is assumed 

that manufacturers retain their 1997 shares ofthe 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 

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 ofthis analysis, as the present value of cash flows for the manufacturer(s) 

in question. The basic structure of the GRIM 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 CU1Tent and future forecasts of product mix for the 

various magnetic and electronic ballast product classes identified in Table 6A.l. 

In developing cash flow estimates under the Mamifacturer Submittal scenarios it is assumed 

that manufacturers retain their 1997 shares ofthe 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 
shipments, 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

EE-RM-97-500 COMMENT 104

shipments, 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 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 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 of5% 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 of3% of 1997 shipments per year, unti12027. 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 

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 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 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 of5% 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 of3% of 1997 shipments per year, unti12027. 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 
these 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 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 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

EE-RM-97-500 COMMENT 104

these 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 conesponding drop in shipments of electronic 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 of the Jan 1, 1990 standard on shipments of magnetic ballasts. Figure 6A.2 

graphs the quarterly shipment data. Shipment data in the few quatiers 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 quatiers following the effective date of the 1990 standard. 

QB1a1y Sipmisdl\ll:gElicBllIasIs 

Ra<109M.Q tr 43"1.arJ:s 

Figure 6A.2 Impact of January 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 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 

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 conesponding drop in shipments of electronic 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 of the Jan 1, 1990 standard on shipments of magnetic ballasts. Figure 6A.2 

graphs the quarterly shipment data. Shipment data in the few quatiers 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 quatiers following the effective date of the 1990 standard. 

QB1a1y Sipmisdl\ll:gElicBllIasIs 

Ra<109M.Q tr 43"1.arJ:s 

-';"':~-'--- : i ..;..;-- ~ Lu_ :: • :..;-: 

:--.:--:- ; ;---:- ; ;,: : -:-.-" ~,: ;:, -~~--+--:-: . ; ~ :-:-:-; :: ::' 

+2Q.

1an :n+T t • ;; +-: i -1-1- iii • 

Figure 6A.2 Impact of January 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 6AA illustrate the 5% and the 3% shipment scenarios. Both of these 

scenarios include the 15% shipment "spike" assumption. 

6-10 
Figure 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

EE-RM-97-500 COMMENT 104

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 

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 

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 
Interviews 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

EE-RM-97-500 COMMENT 104

Interviews 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. 

CapitallnvestJ I ais 

Ea:e case Shrnents Ea:e case IrlI.eStrrenI:s 

ci fv1:g1Etic Balasts in Bedraic Balasts 

.... ! 'E 

~ 

I 

is; I 

g 

SldY_ SldY_ 

3m::iaUs case Sirnmts 3m::iaUs case IrMlStrrerts 

ci fv1:g1Etic Balasts in BedraicBalasts 

.... ! 'E 

~ 

I j is; 

g 

SldY_ SldY_ 

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 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. 

Capitallnvesb I ais 

Ea:e case Shrnents Ea:e case IrlI.eStrrenI:s 

ci fv1:g1Etic Balasts in Bedraic Balasts 

.... 

'E 

~ 

I 

g 

SldY_ SldY_ 

3m::iaUs case Sirnmts 3m::iaUs case IrMlStrrerts 

ci fv1:g1Etic Balasts in BedraicBalasts 

.... ~ 'E 

~ 

I j is; 

g 

SldY_ SldY_ 

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 
Submittalscenario 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

EE-RM-97-500 COMMENT 104

Submittal 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 Ballast New Entrant scenaIio 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 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 of the future industty competitiveness and corresponding electronic 

ballast profit margins. Most manufacturers in Sub-group I 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 electt'onic ballast business. To evaluate the impact ofthese 

divergent views, our firm (ADL) created an altemative 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 NPV s 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 

Submittal 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 Ballast New Entrant scenaIio 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 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 of the future industty competitiveness and corresponding electronic 

ballast profit margins. Most manufacturers in Sub-group I 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 electt'onic ballast business. To evaluate the impact ofthese 

divergent views, our firm (ADL) created an altemative 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 NPV s 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 
Table 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

EE-RM-97-500 COMMENT 104

Table 6A.S Scenarios Used to Characterize Variability and Uncertainty in the Cash 

FI ow A I . nalYSIS 

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 ofthe 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 

U d n er th e 5%Sh" 0 lpmen tS 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 ow A I . nalysls 

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 ofthe 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 

U d h n er t e 5% 0 Sh" IPment S 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% 

6-14 
Table 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% Shipment Scenario

6-15

EE-RM-97-500 COMMENT 104

Table 6A.7 Cash Flow Impacts Resulting from an Electronic Ballast Standard 

un d h er t e 3%Sh' 0 lpmen tS 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) 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 dispropoliionately 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 $113.6underthe 

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 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. 

6-15 

Table 6A.7 Cash Flow Impacts Resulting from an Electronic Ballast Standard 

un d er th e 3%Sh' 0 lpmen tS 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) 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 dispropoliionately 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 $113.6underthe 

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 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. 

6-15 
6A.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

EE-RM-97-500 COMMENT 104

6A.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 segn1ent in isolation. However, all of the 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 (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 of2.1 % 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 

Don 1 erent G rowt hR ate P' 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.l 0 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 tum can be approximated as being equal to the increase in U.S. GDP. 

6-16 

6A.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 segn1ent in isolation. However, all of the 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 (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 of2.1 % 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 

Don 1 erent G rowt hR ate P' 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.l 0 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 tum can be approximated as being equal to the increase in U.S. GDP. 

6-16 
Table 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

EE-RM-97-500 COMMENT 104

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 

Existing Dynamics 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 

6-17 
Table 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

EE-RM-97-500 COMMENT 104

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 classesMa~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 J 999 

In order to arrive at the results in Tables 6A.9 and 6A.1O, the NPV of each sub-group's 

"unaffected" electronic ballast business was added to both the Base Case and Standard Case NPV s 

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 classesMa~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 J 999 

In order to arrive at the results in Tables 6A.9 and 6A.1O, the NPV of each sub-group's 

"unaffected" electronic ballast business was added to both the Base Case and Standard Case NPV s 

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 Submittalscenario 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

EE-RM-97-500 COMMENT 104

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 bv this rulemaking. 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 

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 bv this rulemaking. If the NPV of non-regulated magnetic ballasts were 
included 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 ballast

margins 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

EE-RM-97-500 COMMENT 104

included 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.l 0 incorporate significant restructuring 

costs primarily associated with plant closures in the U.S. and Mexico. The large majority of these 

cost are direct! y associated with the cl osure of th e remaining large magnetic U. S. -b ased 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.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-factor ballast profit margins are lower than power-factor-corrected ballast margins. The value of27.5% 

reduction in industry value is based on 50% lower margins for non-power-factor ballasts. 

6-19 

included 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.l 0 incorporate significant restructuring 

costs primarily associated with plant closures in the U.S. and Mexico. The large majority of these 

cost are direct! y associated with the cl osure of th e remaining large magnetic U. S. -b ased 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.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-factor ballast profit margins are lower than power-factor-corrected ballast margins. The value of27.5% 

reduction in industry value is based on 50% lower margins for non-power-factor ballasts. 

6-19 
Table 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-grou p 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 be

useful 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

EE-RM-97-500 COMMENT 104

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 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 be 

useful to identify whether a standard will disproportionately burden any particular 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- 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 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 be 

useful to identify whether a standard will disproportionately burden any particular 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 
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

EE-RM-97-500 COMMENT 104

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: Cash flows ($ mil) 

"Man ufacturer 

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 electronic ballast 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 

reduced profitability of electronic ballasts in comparison to the magnetic ballast business. 

6-21 

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: Cash flows ($ mil) 

"Man ufacturer 

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 electronic ballast 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 

reduced profitability of electronic ballasts in comparison to the magnetic ballast business. 

6-21 
Figures 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

3)i

10

0

V

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

EE-RM-97-500 COMMENT 104

Figures 6A.6, 7 and 8 describe the 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 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 describe the 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 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 
C4SIRJONTMALS

Th, ,1lmp11L&xr H"_Rdk92)thd

... ............ ................° .......... ..............................

:0O

E

110

IOD

(10

1990 1999 3111 210 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

EE-RM-97-500 COMMENT 104

Rlcnm:nlmp~lJo:rmicl1i1t1l9"dud 

ffi.() •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.•••••••••••••••••••••••••• 

W 

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 

6-23 

Rlcnm:nlmp~lJo:rmicl1i1t1l9"dud 

ffi.() •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.•••••••••••••••••••••••••• 

W 

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 

6-23 
CASiFLONTOAS-INIBW

am .............. ................. ........... .............................. ...... -----------......

2i

-s-S-h,d

mn i

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 charges

such 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

EE-RM-97-500 COMMENT 104

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 of Capital Assets 

One ofthe significant outcomes of new standards can be the consequential obsolescence 

of existing manufacturing assets, including tooling and investment. Our fiml revised the GRIM 

spreadsheet in order to add features that explicitly provide the capability to include one-time charges 

such 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.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 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 of Capital Assets 

One ofthe significant outcomes of new standards can be the consequential obsolescence 

of existing manufacturing assets, including tooling and investment. Our fiml revised the GRIM 

spreadsheet in order to add features that explicitly provide the capability to include one-time charges 

such 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.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 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 
a 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

EE-RM-97-500 COMMENT 104

a 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 ofthis 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 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. 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 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 ofthis 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 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. 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 
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 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

EE-RM-97-500 COMMENT 104

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 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 Manufactul'ers 

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 oftheir 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 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 

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 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 Manufactul'ers 

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 oftheir 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 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 

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 
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

EE-RM-97-500 COMMENT 104

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 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 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 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 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 I 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 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 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 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 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 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 I 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 
plant 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

EE-RM-97-500 COMMENT 104

plant 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 convelied to electronic ballast production only. It was observed that 

individual manufacturers' transition plans were primarily driven by their scale of operation. 

6-28 

plant 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 convelied to electronic ballast production only. It was observed that 

individual manufacturers' transition plans were primarily driven by their scale of operation. 

6-28 
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.

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.

EE-RM-97-500 COMMENT 104

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. 

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 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 

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 ofthe 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 ofthe 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. 

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. 

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 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 

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 ofthe 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 ofthe 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. 

6-29 
Table 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

EE-RM-97-500 COMMENT 104

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 

Man ufacturin!! Manufacturing Man ufacturing 

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-factory jobs 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 

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 ofthese 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 

Man ufacturin!! Manufacturing Man ufacturing 

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-factory jobs 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 

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 ofthese 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