CHAPTER 14. NET NATIONAL EMPLOYMENT IMPACTS 

TABLE OF CONTENTS 

14.1 INTRODUCTION ................................................. 14-1


14.2 ASSUMPTIONS .................................................. 14-1


14.3 METHODOLOGY ................................................. 14-1


14.4 RESULTS ....................................................... 14-2


LIST OF TABLES 

Table 14.4.1 Net National Change in Jobs: Liquid-Immersed Transformers ........... 14-4


Table 14.4.2 Net National Change in Jobs: Dry-Type, Medium-Voltage Transformers ... 14-5


LIST OF FIGURES 

Figure 14.4.1 Employment Impacts: Liquid-Immersed Transformers ................. 14-3


Figure 14.4.2 Employment Impacts: Dry-Type, Medium-Voltage Transformers ......... 14-4


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CHAPTER 14. NET NATIONAL EMPLOYMENT IMPACTS 

14.1 INTRODUCTION 

The Department of Energy (DOE) conducted a net national employment impact analysis 

for the notice of proposed rulemaking (NOPR). It designed the employment impact analysis to 

estimate indirect national job creation or elimination resulting from possible standards, due to 

reallocation of the associated commercial expenditures for purchasing and operating distribution 

transformers. DOE estimated national impacts on major sectors of the U.S. economy, using 

publicly available data and incorporating different energy price scenarios. 

The net national employment impact analysis did not evaluate direct employment impacts 

at manufacturers' facilities; DOE considered these impacts in the manufacturer impact analysis 

(see Chapter 12 of this technical support document). 

14.2 ASSUMPTIONS 

DOE expects today’s distribution transformer energy-efficiency standards to decrease 

energy consumption, and therefore to reduce energy expenditures. The savings in energy 

expenditures may be spent on new investment or not at all (i.e., they may remain "saved"). The 

standards may increase the purchase price of distribution transformers, which includes the retail 

price plus sales tax, and any increases in installation costs. 

Using an input/output econometric model of the U.S. economy, this analysis estimated the 

year-to-year effect of these expenditure impacts on net economic output and employment. DOE 

intended this analysis to quantify the indirect employment impacts of reduced expenditures for 

energy and the reallocation of that money toward other sectors of the economy. 

14.3 METHODOLOGY 

The Pacific Northwest National Laboratory (PNNL) developed a spreadsheet model for 

DOE of the U.S. economy (IMBUILD II), focusing on the sectors of the economy most relevant 

to industrial, commercial, and residential building energy use.1

 PNNL originally developed 

IMBUILD II as a special-purpose version of the Impact Analysis for Planning (IMPLAN) national 

input-output model to specifically estimate the employment and income effects of 

energy-efficiency technologies.2

 IMPLAN is used by more than 1500 clients at all levels of the 

government, in academia, and in the private sector (http://www.implan.com/references.html). 

IMBUILD II includes structural coefficients to characterize economic flows among key sectors of 

the economy and track the inter-industry employment impacts resulting from energy-efficiency 

standards. 

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Efficiency standards are represented in IMBUILD II by a combination of capital 

investments and energy savings. These capital investments and energy savings divert spending 

away from some business sectors and toward others. Accordingly, IMBUILD II measures the 

economic effect of a standard as (1) the expansion enjoyed by businesses that receive diverted 

funds, minus (2) the contraction suffered by businesses that lose diverted funds. 

IMBUILD II includes a series of input tables that quantify the size of the capital 

investments and energy savings resulting from energy-efficiency standards. These tables also 

designate industrial sectors that manufacture efficient products (e.g., distribution transformers) 

and other sectors (including utilities) that lose sales as a result of efficiency standards. 

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., 

resulting from an efficiency standard) in one sector of the economy will affect flows in other 

sectors, which affects the overall level of employment. For example, distribution transformer 

standards may reduce energy expenditures and increase equipment prices in the utility sector and 

the commercial and industrial sectors. These expenditure changes are likely to reduce 

employment in these sectors. At the same time, transformer standards may increase commercial 

and industrial sector investment, and thus increase employment in other sectors of the economy. 

DOE designed the net employment impact analysis to estimate the year-to-year net employment 

effect of these different expenditure flows. 

IMBUILD calculates the total effect of standards on employment, including job creation 

or deletion in the manufacturing, commercial, industrial, and retail sectors of the economy, not 

including transformer manufacturers. Direct employment impacts, i.e., those that would occur at 

transformer manufacturing plants, are considered separately in the manufacturer impact analysis 

(Chapter 12). 

14.4 RESULTS 

Energy-efficiency standards for transformers are expected to reduce electricity bills for 

commercial and industrial customers, while increasing the costs of transformers. This shift in 

spending has beneficial implications for net national employment. The electric utility sector is 

more capital-intensive and less labor-intensive than other sectors. A shift in spending away from 

payments of electricity bills into other sectors is expected to increase employment. A previous 

study concluded: "By shifting economic activity away from energy supply and by saving 

consumers and businesses money that will be re-spent throughout the economy, energy-efficiency 

improvements will result in a net increase in jobs and personal income."3 Energy savings from 

national energy-efficiency standards for transformers are diffuse, spread among all commercial 

and industrial customers, and small relative to total national expenditures, so employment impacts 

are small relative to total national employment. 

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Figures 14.4.1 and 14.4.2 show the estimated net national employment impacts of the six 

different trial standard levels for the two distribution transformer superclasses: liquid-immersed 

and dry-type, medium-voltage transformers, respectively. These trial standard levels are 

presented in greater detail in the descriptions of the analyses of shipments (Chapter 9) and 

national energy savings and net present value (Chapter 10). The figures show, for any given year, 

the change in the number of jobs in the economy relative to the number of jobs if there were no 

change in standards (and thus no resulting change in spending and cash flow patterns throughout 

the economy). Similarly, Tables 14.4.1 and 14.4.2 show the net national employment impacts of 

the transformer standards, by standard level, for specified years. 

Figure 14.4.1 Employment Impacts: Liquid-Immersed Transformers 

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Figure 14.4.2 Employment Impacts: Dry-Type, Medium-Voltage 

Transformers 

Table 14.4.1 Net National Change in Jobs: Liquid-Immersed Transformers 

Trial Standard Net National Change in Jobs (in thousands) 

Level 2010 2020 2030 2038 

1 1.7 1.5 2.8 4.0 

2 2.3 2.0 3.9 5.4 

3 3.2 2.7 5.3 7.4 

4 3.4 2.9 5.7 8.1 

5 4.5 4.1 9.5 14.0 

6 3.3 1.5 8.0 13.4 

A 3.7 3.0 6.8 10.0 

B 2.9 2.5 5.2 7.4 

C 2.8 2.4 4.9 7.0 

D 2.5 2.2 4.4 6.2 

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Table 14.4.2 Net National Change in Jobs: Dry-Type, Medium-Voltage Transformers 

Trial Standard 

Level 

Net National Change in Jobs (in thousands) 

2010 2020 2030 2038 

1 0.1 0.1 0.2 0.3 

2 0.2 0.2 0.3 0.5 

3 0.2 0.3 0.4 0.8 

4 0.3 0.4 0.6 1.1 

5 0.4 0.5 0.8 1.5 

6 0.4 0.5 0.8 1.5 

As shown in Figures 14.4.1 and 14.4.2, distribution transformer standards for the two 

transformer superclasses can have an initial negative impact on jobs starting in year 2011 

immediately after the implementation of a standard. This is caused by the shift in spending toward 

transformer manufacturers. In later years, the standards have a positive impact on jobs, due to the 

shift in spending away from the electricity sector, with its low employment intensity (jobs per 

dollar expenditure), and toward other sectors of the economy, with higher employment intensity. 

The liquid-immersed transformer standard involves relatively high investment expenditures and 

leads to relatively larger employment impacts, compared to the dry-type, medium-voltage 

transformer standard. 

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REFERENCES


1.	 Scott, M. J., J. M. Roop, and R. W. Schultz. ImBuild II: Impact of Technologies on 

Energy Efficiency Programs. June, 2002. Pacific Northwest National Laboratory. 

Richland, WA. Report No. PNNL-13926. Prepared for the U.S. Department of Energy 

under Contract DE-AC06-76RLO1830. 

<http://www.pnl.gov/main/publications/external/technical_reports/PNNL-13926.pdf> 

2.	 Minnesota IMPLAN Group Inc. IMPLAN Professional: User's Guide, Analysis Guide, 

Data Guide. 1997. Stillwater, MN. 

3.	 Massachusetts Energy Efficiency Council. The Energy Efficiency Industry and the 

Massachusetts Economy. December, 1992. 

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