CHAPTER 2: ANALYTICAL FRAMEWORK, COMMENTS FROM

INTERESTED PARTIES, AND DOE RESPONSES

TABLE OF CONTENTS

**2.1 INTRODUCTION.................................................................................................................................2-1** 

**2.2 MARKET**  **AND TECHNOLOGY**  **ASSESSMENT..............................................................................2-3**

2.2.1 Scope of Coverage................................................................................................................2­3

**2.2.1.1 General-Purpose**  **Alternating-Current Motor...............................................................2-5** 

**2.2.1.2 Categories**  **of Induction**  **Motors...................................................................................2-7**

**2.2.1.3 Frame**  **Sizes and**  **Metric Equivalents**  **...........................................................................2-9**

**2.2.1.4 Motor**  **Enclosure ........................................................................................................2-10** 

2.2.2 Market Assessment .............................................................................................................2­11

**2.2.2.1 Manufacturers**  **of Small**  **Electric Motors**  **...................................................................2-11**

**2.2.2.2 Equipment**  **Classes.....................................................................................................2-12**

**2.2.2.3 Equipment**  **Shipments................................................................................................2-15**

**2.2.2.4 Regulatory**  **and Non-Regulatory**  **Programs ...............................................................2-16** 

2.2.3 Technology Assessment......................................................................................................2­17

**2.2.3.1 Reducing**  **I 2**  **R Losses..................................................................................................2-17** 

**2.2.3.2 Reducing**  **Core Losses**  **...............................................................................................2-17**

**2.2.3.3 Reducing**  **Friction and**  **Windage Losses**  **....................................................................2-18**

**2.2.3.4 Impact**  **on Motor**  **Performance...................................................................................2-18**

**2.3 SCREENING**  **ANALYSIS ..................................................................................................................2-19** 

2.3.1 Technology Options Screened Out.....................................................................................2­19

**2.3.1.1 Air**  **Gap between**  **Rotor and**  **Stator ............................................................................2-19** 

**2.3.1.2 Plastic**  **Bonded Iron**  **Powder ......................................................................................2-20** 

**2.3.1.3 Permanent**  **Magnet Electric**  **Motor ............................................................................2-20** 

2.3.2 Technology Screening ........................................................................................................2­21

2.3.3 Baseline Equipment............................................................................................................2­21

**2.4 ENGINEERING**  **ANALYSIS .............................................................................................................2-21** 

2.4.1 Approaches for Conducting the Engineering Analysis ......................................................2­22

**2.4.1.1 Design-Option**  **Approach...........................................................................................2-22**

**2.4.1.2 Efficiency-Level**  **Approach .......................................................................................2-23** 

**2.4.1.3 Cost-Assessment**  **Approach.......................................................................................2-23**

2.4.2 Preliminary Engineering Analysis Approach.....................................................................2­24

2.4.3 Equipment Classes and Efficiency Levels Analyzed...........................................................2­24

2.4.4 Baseline Models and Efficiency Levels Analyzed...............................................................2­26

2.4.5 Cost Model .........................................................................................................................2­27

**2.4.5.1 Bill**  **of Materials.........................................................................................................2-28** 

**2.4.5.2 Labor**  **Costs and**  **Assumptions ...................................................................................2-29** 

**2.4.5.3 Manufacturer**  **Markups ..............................................................................................2-29** 

2.4.6 Scaling Between Equipment Classes..................................................................................2­30

**2.5 ENERGY**  **USE AND**  **END-USE LOAD**  **CHARACTERIZATION ...................................................2-31** 

**2.6 MARKUPS**  **FOR EQUIPMENT**  **PRICE DETERMINATION...........................................................2-34** 

2.6.1 Distribution Channels ........................................................................................................2­34

2.6.2 Estimation of Markups .......................................................................................................2­35

2.6.3 Summary of Markups .........................................................................................................2­36

**2.7 LIFE-CYCLE**  **COST AND**  **PAYBACK PERIOD**  **ANALYSES ........................................................2-37** 

2.7.1 Approach............................................................................................................................2­37

**2-i**2.7.2 Life­Cycle Cost Inputs........................................................................................................2­38

**2.7.2.1 Baseline**  **Manufacturer Selling**  **Price and**  **Manufacturer Selling**  **Price Increase........2-39** 

**2.7.2.2 Distribution**  **Markups and**  **Sales Taxes......................................................................2-39** 

**2.7.2.3 Installation**  **Costs .......................................................................................................2-39** 

**2.7.2.4 Energy**  **Prices and**  **Energy Price**  **Trend......................................................................2-40**

**2.7.2.5 Repair**  **and Maintenance**  **Costs ..................................................................................2-40** 

**2.7.2.6 Lifetime**  **.....................................................................................................................2-40**

**2.7.2.7 Discount**  **Rate ............................................................................................................2-41** 

**2.7.2.8 Product**  **Energy Efficiency**  **in the**  **Base Case**  **.............................................................2-42**

**2.7.2.9 Payback**  **Period ..........................................................................................................2-42** 

**2.8 NATIONAL**  **IMPACT ANALYSIS....................................................................................................2-42** 

2.8.1 Shipments Analysis.............................................................................................................2­43

2.8.2 National Energy Savings and Net Present Value Analyses................................................2­44

2.8.3 Rebound Effect ...................................................................................................................2­46

2.8.4 Electricity Prices and Discount Rate .................................................................................2­46

**2.9 LIFE-CYCLE**  **COST SUBGROUP**  **ANALYSIS ................................................................................2-46** 

**2.10 MANUFACTURER**  **IMPACT ANALYSIS**  **.......................................................................................2-47**

2.10.1 Sources of Information for the Manufacturer Impact Analysis .....................................2­48

2.10.2 Industry Cash­Flow Analysis.........................................................................................2­48

2.10.3 Manufacturer Subgroup Analysis ..................................................................................2­49

2.10.4 Competitive Impacts Assessment ...................................................................................2­49

2.10.5 Cumulative Regulatory Burden......................................................................................2­49

2.10.6 Preliminary Results for the Manufacturer Impact Analysis ..........................................2­49

2.10.7 Production Line Capital Investment ..............................................................................2­50

2.10.8 Maintaining Product Availability and Features ............................................................2­50

2.10.9 Enforcement of Standards..............................................................................................2­50

**2.11 UTILITY**  **IMPACT ANALYSIS.........................................................................................................2-51** 

**2.12 EMPLOYMENT**  **IMPACT ANALYSIS.............................................................................................2-52** 

**2.13 ENVIRONMENTAL**  **ASSESSMENT ................................................................................................2-53** 

**2.14 REGULATORY**  **IMPACT ANALYSIS**  **.............................................................................................2-55**

LIST OF FIGURES

**F IGURE**  **2.4.1 S**  **TANDARD M**  **ETHOD OF**  **C OST**  **A CCOUNTING**  **FOR S**  **TANDARDS R**  **ULEMAKING .............2-27** 

LIST OF TABLES

**T ABLE**  **2.2.1 N**  **ATIONAL E**  **LECTRICAL M**  **ANUFACTURERS A**  **SSOCIATION MG1-1987**  **S ERVICE**  **F ACTOR** 

**R EQUIREMENTS**  **FOR S**  **MALL E**  **LECTRIC M**  **OTORS ..............................................................................2-6** 

**T ABLE**  **2.2.2 N**  **ATIONAL E**  **LECTRICAL M**  **ANUFACTURERS A**  **SSOCIATION MG1-1987**  **R EQUIREMENTS** 

**FOR M**  **INIMUM L**  **OCKED -R**  **OTOR T**  **ORQUE**

**, O**  **UNCE -F**  **EET** ***** **................................................................2-7**

**T ABLE**  **2.2.3 E**  **QUIPMENT C**  **LASSES FOR**  **P OLYPHASE**  **M OTORS**  **...........................................................2-14**

**T ABLE**  **2.2.4 E**  **QUIPMENT C**  **LASSES FOR**  **C APACITOR**  **-S TART** 

**, I**  **NDUCTION -R**  **UN M**  **OTORS ..................2-14** 

**T ABLE**  **2.2.5 E**  **QUIPMENT C**  **LASSES FOR**  **C APACITOR**  **-S TART** 

**, C**  **APACITOR -R**  **UN M**  **OTORS .................2-14** 

**T ABLE**  **2.2.6 E**  **STIMATED P**  **OLYPHASE S**  **MALL E**  **LECTRIC M**  **OTOR N**  **ATIONAL S**  **HIPMENTS**

**, 2007.......2-15** 

**T ABLE**  **2.2.7 E**  **STIMATED C**  **APACITOR -S**  **TART**

**, I**  **NDUCTION -R**  **UN S**  **MALL E**  **LECTRIC M**  **OTOR N**  **ATIONAL**

**S HIPMENTS** 

**, 2007**  **............................................................................................................................2-16**

**T ABLE**  **2.2.8 E**  **STIMATED C**  **APACITOR -S**  **TART**

**, C**  **APACITOR -R**  **UN S**  **MALL E**  **LECTRIC M**  **OTOR N**  **ATIONAL**

**S HIPMENTS** 

**, 2007**  **............................................................................................................................2-16**

**2-ii T**  **ABLE 2.4.1**  **C HARACTERISTICS**  **OF THE**  **T HREE**  **R EPRESENTATIVE**  **E QUIPMENT**  **C LASSES**  **A NALYZED**  **.2-**

**26**

**F IGURE**  **2.4.1 S**  **TANDARD M**  **ETHOD OF**  **C OST**  **A CCOUNTING**  **FOR S**  **TANDARDS R**  **ULEMAKING .............2-27** 

**T ABLE**  **2.5.1 M**  **OTOR O**  **PERATION C**  **HARACTERISTICS BY**  **A PPLICATION**  **............................................2-32**

**T ABLE**  **2.5.2 S**  **HARES OF**  **S MALL**  **E LECTRIC**  **M OTOR**  **A PPLICATIONS**  **BY E**  **QUIPMENT C**  **LASS ..............2-33** 

**T ABLE**  **2.5.3 A**  **VERAGE O**  **PERATING C**  **HARACTERISTICS FOR**  **S MALL**  **E LECTRIC**  **M OTORS**  **.................2-33**

**T ABLE**  **2.5.4 A**  **VERAGE A**  **NNUAL E**  **LECTRICITY U**  **SE BY**  **E FFICIENCY**  **L EVEL**  **FOR S**  **MALL E**  **LECTRIC**

**M OTORS**  **2-34**

**T ABLE**  **2.6.1 S**  **UMMARY OF**  **S MALL**  **E LECTRIC**  **M OTOR**  **D ISTRIBUTION**  **C HANNEL**  **M ARKUPS**  **............2-36**

**T ABLE**  **2.7.1 M**  **OTOR O**  **WNER T**  **YPE BY**  **A PPLICATION**  **........................................................................2-38**

**T ABLE**  **2.7.2 S**  **UMMARY OF**  **I NPUTS**  **U SED**  **IN THE**  **L IFE**  **-C YCLE**  **C OST**  **A NALYSIS**  **................................2-39**

**T ABLE**  **2.7.3 M**  **OTOR L**  **IFETIMES U**  **SED IN**  **THE L**  **IFE -C**  **YCLE C**  **OST A**  **NALYSIS ....................................2-40** 

**T ABLE**  **2.7.4 S**  **MALL E**  **LECTRIC M**  **OTOR E**  **NERGY E**  **FFICIENCY IN**  **THE B**  **ASE C**  **ASE .............................2-42** 

**T ABLE**  **2.8.1 A**  **NNUAL AND**  **C UMULATIVE**  **S HIPMENTS**  **F ORECAST**  **FOR S**  **MALL E**  **LECTRIC M**  **OTORS ..2-44** 

**2-iii**CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM

INTERESTED PARTIES, AND DOE RESPONSES

2.1 INTRODUCTION

**This chapter**  **provides a**  **description of**  **the analytical**  **framework that**  **the Department**  **of**

**Energy (DOE)**  **is using**  **to develop**  **energy conservation**  **standards for**  **small electric**  **motors,**

**including a**  **description of**  **the methodology,**  **the analytical**  **tools, and**  **relationships among**  **the**

**various analyses**  **that are**  **part of**  **this rulemaking.**  **Chapter 2,**  **also serves**  **as part**  **of the** 

**preliminary activities**  **conducted by**  **DOE, providing**  **an overview**  **of those**  **activities and**  **a**

**discussion of**  **the comments**  **received. In**  **addition, chapter**  **2 serves**  **as a**  **reference to**  **the**

**preliminary technical**  **support document**  **(preliminary TSD)**  **executive summary,**  **providing more** 

**detail on**  **key issues.**  **Finally, chapter**  **2 provides**  **citations and**  **cross-references to**  **the preliminary** 

**TSD chapters**  **that address**  **the analytical**  **approach, inputs,**  **and findings.** 

**The analyses**  **presented in**  **this preliminary**  **TSD include:** 

• **A market**  **and technology**  **assessment that**  **characterizes the**  **small electric**  **motor market,** 

**and reviews**  **techniques and**  **approaches that**  **improve the**  **efficiency of**  **small electric** 

**motors;**

• **A screening**  **analysis that**  **reviews technology**  **options to**  **improve small**  **electric motor** 

**efficiency and**  **weighs them**  **against the**  **four prescribed**  **screening criteria;** 

• **An engineering**  **analysis that**  **estimates the**  **manufacturer selling**  **prices (MSPs)**  **associated**

**with more**  **energy-efficient small**  **electric motors;** 

• **An energy**  **use and**  **end-use load**  **characterization that**  **generates energy**  **use estimates**  **and**

**end-use load**  **profiles of**  **small electric**  **motors;**

• **A markup**  **methodology that**  **converts average**  **MSPs to**  **consumer installed**  **prices;**

• **A life-cycle**  **cost (LCC)**  **analysis that**  **calculates, at**  **the consumer**  **level, the**  **discounted**

**savings in**  **operating costs**  **throughout the**  **estimated average**  **life of**  **the small**  **electric**

**motor, compared**  **to any**  **increase in**  **the installed**  **costs likely**  **to result**  **directly from**  **the**

**imposition of**  **the standard;** 

• **A payback**  **period (PBP)**  **analysis to**  **estimate the**  **amount of**  **time it**  **takes consumers**  **to**

**recover the**  **higher purchase**  **expense of**  **more energy**  **efficient equipment**  **through lower** 

**operating costs;** 

• **A shipments**  **analysis that**  **estimates shipments**  **of small**  **electric motors**  **over the**  **time**

**period examined**  **in the**  **analysis;**

**2-1**• **A national**  **impact analysis**  **that assesses**  **the aggregate**  **impacts at**  **the national**  **level of** 

**potential energy**  **conservation standards**  **as measured**  **by the**  **net present**  **value (NPV)**  **of**

**total consumer**  **economic impacts**  **and national**  **energy savings;**  **and**

• **A preliminary**  **manufacturer impact**  **analysis that**  **begins to**  **evaluate the**  **effects on** 

**manufacturers that**  **may result**  **from a**  **new efficiency**  **standard.**

**DOE may**  **revise any**  **of its**  **analyses, based**  **on comments**  **and new**  **information received.** 

**The analyses**  **DOE will**  **perform in**  **the subsequent**  **notice of**  **proposed rulemaking**  **(NOPR) stage** 

**include those**  **listed below:** 

• **An LCC**  **subgroup analysis**  **that evaluates**  **the economic**  **impacts on**  **identifiable groups**  **of**

**customers of**  **small electric**  **motors, including**  **various categories**  **of electric**  **motor**

**purchasers or**  **owners, who**  **may experience**  **disproportionate impacts**  **from a**  **national**

**energy conservation**  **standard;**

• **A manufacturer**  **impact analysis**  **(MIA) that**  **estimates the**  **financial impact**  **of standards**  **on**

**small electric**  **motor manufacturers**  **and calculates**  **impacts on**  **competition, employment**  **at**

**the manufacturing**  **plant, and**  **manufacturing capacity;** 

• **A utility**  **impact analysis**  **that estimates**  **the effects**  **of proposed**  **standards on**  **the installed** 

**capacity and**  **the generating**  **base of**  **electric utilities;** 

• **An employment**  **impact analysis**  **that estimates**  **the impacts**  **of standards**  **on net**  **jobs**

**eliminated or**  **created in**  **the general**  **economy as**  **a consequence**  **of increased**  **spending on** 

**the installed**  **price of**  **electric motors**  **and reduced**  **customer spending**  **on energy;** 

• **An environmental**  **assessment that**  **assesses the**  **impacts of**  **proposed standards**  **on certain** 

**environmental indicators;**  **and**

• **A regulatory**  **impact analysis**  **that presents**  **major alternatives**  **to proposed**  **standards that** 

**may achieve**  **comparable energy**  **savings at**  **a reasonable**  **cost.**

**DOE developed**  **this analytical**  **framework and**  **documented its**  **findings in**  **the Energy** 

**Conservation Standards**  **Rulemaking Framework**  **Document for**  **Small Electric**  **Motors (July**  **30,**

**2007). DOE**  **presented the**  **analytical approach**  **to interested**  **parties during**  **a public**  **meeting held** 

**on September**  **13, 2007.**  **The framework**  **document is**  **available at** 

**http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.h**

**tml.**

**In response**  **to the**  **publication of**  **the framework**  **document and**  **the framework**  **public**

**meeting, DOE**  **received comments**  **from interested**  **parties regarding**  **DOE’s analytical**  **approach.**

**This chapter**  **(chapter 2)**  **of the**  **preliminary TSD**  **summarizes the**  **key comments**  **DOE received** 

**from interested**  **parties and**  **describes DOE’s**  **responses to**  **those comments.**  **In addition,** 

**subsequent sections**  **of this**  **chapter summarize**  **any significant**  **changes in**  **analytical approach** 

**made since**  **the framework**  **document that**  **DOE used**  **in its**  **preliminary analyses.**  **Lastly, in**  **the**

**2-2 executive**  **summary of**  **the preliminary**  **TSD, DOE**  **identified issues**  **for which**  **DOE seeks**  **public**

**comment, each**  **of which**  **is explained**  **in the**  **relevant analysis**  **sections below.** 

2.2 MARKET AND TECHNOLOGY ASSESSMENT

**When DOE**  **begins a**  **standards rulemaking,**  **it develops**  **information that**  **provides an** 

**overall picture**  **of the**  **market for**  **the equipment**  **concerned, including**  **the nature**  **and market** 

**characteristics of**  **the equipment**  **and the**  **industry structure.**  **This activity**  **consists of**  **both**

**quantitative and**  **qualitative efforts**  **based primarily**  **on publicly**  **available information.**  **The**

**subjects addressed**  **in the**  **market and**  **technology assessment**  **for the**  **preliminary TSD**  **analysis**

**include the**  **scope of**  **coverage, equipment**  **classes, manufacturers,**  **retail market**  **trends, shipments** 

**of covered**  **equipment, regulatory**  **and non-regulatory**  **programs, and**  **technologies that**  **could be** 

**used to**  **improve the**  **efficiency of**  **small electric**  **motors. This**  **information serves**  **as a**  **resource**

**throughout the**  **rulemaking.**

**DOE reviewed**  **existing literature**  **and spoke**  **with manufacturers**  **to get**  **an understanding** 

**of the**  **small electric**  **motors industry**  **in the**  **United States.**  **Industry publications**  **(e.g.,**

**manufacturer catalogs,**  **trade journals),**  **government agencies,**  **and trade**  **organizations provided** 

**the bulk**  **of the**  **information, including**  **the overall**  **state of**  **the industry,**  **small motor** 

**manufacturing and**  **market shares,**  **shipments by**  **equipment class,**  **general technical**  **information**

**on small**  **electric motors,**  **and industry**  **trends.**

**The discussion**  **below summarizes**  **the analytical**  **approach and**  **the comments**  **DOE**

**received in**  **response to**  **the Framework**  **Document. a**  **More detailed**  **discussion on**  **DOE’s**

**approach can**  **be found**  **in the**  **market and**  **technology assessment,**  **Chapter 3**  **of the**  **preliminary**

**TSD.**

2.2.1 Scope of Coverage

**Section 340(13)(G)**  **of the**  **Energy Policy**  **and Conservation**  **Act, as**  **amended, (EPCA)** 

**defines the**  **term “small**  **electric motor”**  **to mean**  **“a NEMA**  **[National Electrical**  **Manufacturers**

**Association] general-purpose**  **alternating-current b**  **single-speed induction**  **motor, c**  **built in**  **a two** 

**digit frame**  **number series**  **d in**  **accordance with**  **NEMA Standards**  **Publication MG1–1987.**  **e ”**  **(42**

**a For**  **more information**  **on the**  **Framework Document,**  **visit**

**http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html**

**b “General-purpose**  **alternating current”**  **is a**  **NEMA term**  **used for**  **alternating-current motors**  **that are**  **not designed** 

**with a**  **specific application**  **in mind.** 

**c An**  **induction motor**  **is a**  **machine that**  **converts electrical**  **power into**  **rotational mechanical**  **power. It**  **depends on** 

**electromagnetic induction**  **for its**  **operation and**  **has one**  **or more**  **component members**  **capable of**  **rotary movement.** 

**d The**  **terms “two-digit**  **frame number**  **series” and**  **“frame size”**  **refers to**  **a motor’s**  **standard system**  **of numbers**  **in**

**combination with**  **letters for**  **designating the**  **size and**  **mounting dimensions**  **of a**  **motor, according**  **to NEMA** 

**Standards Publication**  **MG1 for**  **“Motors and**  **Generators.” In**  **the case**  **of small**  **motors, it**  **is the**  **“D” dimension**  **in**

**inches multiplied**  **by 16.**  **The “D”**  **dimension is**  **measured from**  **the centerline**  **of the**  **shaft to**  **the bottom**  **of the** 

**mounting feet.**  **For example,**  **a 48**  **frame motor**  **would have**  **a “D”**  **dimension of**  **3.00 inches**  **(16 x**  **3.00**

**= 48).**  **Such**

**standard dimensions**  **are essential**  **to fitting**  **a motor**  **to the**  **equipment it**  **drives and**  **for interchangeability**  **among**

**motors.**

**2-3 U.S.C.**  **6311(13)(G)) Such**  **motors include:**  **polyphase and**  **single-phase motors**  **specifically,**

**non-servo three-phase**  **motors; capacitor-start,**  **induction-run (CSIR)**  **motors; and**  **capacitor-start,**

**capacitor-run (CSCR)**  **motors. There**  **are many**  **other types**  **of small**  **electric motors** 

**manufactured, which**  **include, for**  **example, shaded-pole**  **motors, which**  **are not**  **part of**  **the**

**preliminary TSD**  **analyses f** 

**. Covered**  **motors for**  **the preliminary**  **TSD analyses**  **include**

**polyphase, CSIR,**  **and CSCR**  **small electric**  **motors that**  **are general**  **purpose; have**  **a NEMA**  **frame**

**size of**  **42, 48,**  **or 56**  **(or their**  **equivalents); and**  **are manufactured**  **with an**  **open construction.** 

**DOE discusses**  **how it**  **arrived at**  **this interpretation**  **of the**  **EPCA definition**  **in the**  **sections that** 

**follow, noting**  **that this**  **scope is**  **slightly narrower**  **than that**  **considered for**  **the determination** 

**analysis.**

**Section 346(b)(1)**  **of EPCA**  **directs the**  **Secretary of**  **Energy to**  **prescribe, by**  **rule, testing** 

**requirements and**  **energy conservation**  **standards for**  **those small**  **electric motors**  **for which**  **the**

**Secretary determines**  **that standards**  **would be**  **technologically feasible**  **and economically** 

**justified, and**  **would result**  **in significant**  **energy savings.**  **(42 U.S.C.**  **6317(b)(1))**

**Section 346(b)(3)**  **of EPCA**  **provides an**  **additional stipulation**  **relating to**  **the coverage**  **of**

**small electric**  **motors. (42**  **U.S.C. 6317(b)(3))**  **According to**  **the statute,**  **any energy**  **conservation**

**standard prescribed**  **under EPCA**  **section 346(b)(2)**  **shall not**  **apply to**  **small electric**  **motors that** 

**are components**  **of a**  **covered product**  **under section**  **322(a) of**  **EPCA or**  **of covered**  **equipment**

**under section**  **340. Such**  **small motors**  **are not**  **covered in**  **this preliminary**  **TSD. Some**  **examples**

**of covered**  **products and**  **equipment that**  **incorporate small**  **motors are**  **residential central**  **air**

**conditioners and**  **heat pumps,**  **furnaces, refrigerators**  **and freezers,**  **clothes washers**  **and dryers,** 

**commercial packaged**  **air-conditioning and**  **heating equipment,**  **and commercial**  **refrigeration**

**equipment.**

**On July**  **10, 2006,**  **DOE published**  **in the**  Federal Register **its determination**  **that energy** 

**conservation standards**  **for small**  **electric motors**  **appear to**  **be technologically**  **feasible and** 

**economically justified,**  **and would**  **result in**  **significant energy**  **savings. 71**  **FR 38799,**  **38807. A** 

**key issue**  **that arose**  **early in**  **the analytical**  **process was**  **the scope**  **of coverage**  **under the**  **EPCA**

**definition of**  **a “small**  **electric motor”.**  **The EPCA**  **definition of**  **this term**  **incorporates several**  **key**

**terms that**  **are defined**  **within the**  **context of**  **NEMA MG1-1987,**  **such as**  **“NEMA general** 

**purpose,” “two-digit**  **frame number**  **series,” and**  **“in accordance**  **with NEMA**  **Standards**

**Publication MG1–1987.”**  **Thus, EPCA’s**  **definition of**  **“small electric**  **motor” is**  **tied to**  **the**

**NEMA MG1-1987**  **terminology and**  **performance requirements**  **established for**  **(1) general** 

**purpose alternating-current**  **motors, (2)**  **certain categories**  **of induction**  **motors, and**  **(3) the**  **NEMA**

**system for**  **designating (two-digit)**  **frames. In**  **the following**  **subsections, DOE**  **addresses each**  **of**

**the elements**  **in the**  **definition of**  **“small electric**  **motor.”**

**e MG1**  **is a**  **standards publication**  **for electric**  **motors and**  **generators (MG)**  **issued by**  **NEMA and**  **updated**

**periodically. The**  **particular issue**  **of MG1**  **explicitly cited**  **in the**  **legislation for**  **the purposes**  **of defining**  **the scope**  **of**

**coverage for**  **the small**  **electric motors**  **rulemaking is**  **MG1-1987.**

**f In**  **general, these**  **motors do**  **not meet**  **certain performance**  **characteristics of**  **general-purpose alternating-current** 

**motors as**  **defined by**  **NEMA MG1-1987.** 

**2-4**2.2.1.1 General-Purpose Alternating-Current Motor

**One element**  **in the**  **statutory definition**  **of “small**  **electric motor,”**  **which derives**  **from**

**NEMA MG1-1987,**  **is “general-purpose**  **alternating-current.” In**  **NEMA MG1-1987,**  **paragraph**

**MG1–1.05, sets**  **forth the**  **definition of**  **“general-purpose alternating-current**  **motor:”**

**A general-purpose**  **alternating-current motor**  **is an**  **induction motor,**  **rated 200** 

**horsepower and**  **less, which**  **incorporates all**  **of the**  **following: (1)**  **open construction,**  **(2)**

**rated continuous**  **duty, (3)**  **service factor**  **in accordance**  **with MG1-12.47,**  **and (4)**  **Class A** 

**insulation system**  **with a**  **temperature rise**  **as specified**  **in MG1-12.42**  **for small**  **motors or** 

**Class B**  **insulation system**  **with a**  **temperature rise**  **as specified**  **in MG1-12.43**  **for medium** 

**motors. It**  **is designed**  **in standard**  **ratings with**  **standard operating**  **characteristics and** 

**mechanical construction**  **for use**  **under usual**  **service conditions**  **without restriction**  **to a** 

**particular application**  **or type**  **of application.** 

**The four**  **criteria that**  **NEMA uses**  **in MG1-1987**  **to define**  **a general-purpose**  **alternating**

**current motor**  **are open**  **construction, continuous**  **duty, service**  **factor, and**  **Class A**  **insulation**

**system. First,**  **the term**  **“open construction”**  **refers to**  **the type**  **of enclosure**  **that houses**  **the motor.** 

**An open**  **construction enclosure**  **allows outside**  **air to**  **pass through**  **and cool**  **the motor**  **when it**  **is**

**operating. Electric**  **motors are**  **also manufactured**  **with closed**  **construction housings,**  **which do** 

**not circulate**  **external air**  **for cooling.** 

**Second, a**  **motor “rated**  **continuous duty”**  **refers to**  **a motor**  **that can**  **operate a**  **driven**

**machine indefinitely**  **at rated**  **load, speed,**  **and temperature**  **without injury**  **to the**  **motor.**

**Representatives both**  **of Emerson**  **Motor Technologies**  **(Emerson) and**  **NEMA commented**  **that**

**“continuous duty”**  **is one**  **of the**  **critical elements**  **in the**  **definition of**  **an electric**  **motor, under**  **the**

**Energy Policy**  **Act of**  **1992. (Emerson,**  **Public Meeting**  **Transcript, No.**  **3.6 at**  **p. 35**  **and pp.**  **38–**

**39; NEMA**  **No. 5.1**  **at p.**  **1) DOE**  **agrees with**  **Emerson, recognizing**  **that the**  **statutory language** 

**directs DOE**  **to cover**  **and evaluate**  **general-purpose alternating-current**  **motors, which**  **are motors** 

**rated for**  **continuous duty,**  **which is**  **distinct from**  **other ratings**  **such as**  **“short-time.” (NEMA** 

**MG1-1987, paragraph**  **1.40.) Therefore,**  **in the**  **preliminary TSD**  **analyses, DOE**  **proposes to** 

**consider only**  **those motors**  **rated for**  **continuous duty.** 

**Third, MG1-1987**  **defines a**  **general-purpose alternating-current**  **motor as**  **having a**  **service**

**factor in**  **accordance with**  **MG1–12.47. Service**  **factor is**  **a measure**  **of the**  **overload capacity**  **at**

**which a**  **motor can**  **operate without**  **damage, while**  **operating normally**  **within the**  **correct voltage** 

**tolerances. The**  **rated horsepower**  **multiplied by**  **the service**  **factor determines**  **that overload** 

**capacity. For**  **example, a**  **1 horsepower**  **motor with**  **a 1.25**  **service factor**  **can operate**  **at 1.25** 

**horsepower (1**  **horsepower x**  **1.25 service**  **factor). NEMA**  **MG1-1987, requires**  **that the**  **service**

**factor for**  **general-purpose alternating-current**  **motors is**  **in accordance**  **with MG1–12.47.**  **(See**

**Table 2.2.1).**  **Therefore, in**  **the preliminary**  **TSD analyses,**  **DOE proposes**  **to cover**  **only those** 

**small electric**  **motors that**  **meet the**  **NEMA service**  **factor requirements.** 

**2-5**Table 2.2.1 National Electrical Manufacturers Association MG1-1987 Service Factor

Requirements for Small Electric Motors

Horsepower Required Service Factors by Synchronous Speed, revolutions per

minute (rpm)

3,600 1,800 1,200 900

1/20 **1.4 1.4**  **1.4 1.4** 

1/12 **1.4 1.4**  **1.4 1.4** 

1/8 **1.4 1.4**  **1.4 1.4** 

1/6 **1.35 1.35**  **1.35 1.35** 

1/4 **1.35 1.35**  **1.35 1.35** 

1/3 **1.35 1.35**  **1.35 1.35** 

1/2 **1.25 1.25**  **1.25**

**-**

3/4 **1.25 1.25** 

**- -** 

1 **1.25**

**- -**  **-**

**The MG1-1987**  **definition of**  **a general-purpose**  **alternating-current motor**  **next states**  **that**

**a small**  **motor has**  **a Class**  **A insulation**  **system with**  **a temperature**  **rise as**  **specified in**  **MG1–**

**12.42. This**  **section establishes**  **the maximum**  **temperature rise,**  **over a**  **40°Celsius (C)**  **ambient**

**temperature, the**  **various parts**  **of the**  **motor can**  **withstand without**  **injury to**  **the motor**  **in any** 

**respect. For**  **example, the**  **temperature rise**  **of the**  **windings of**  **a small**  **motor with**  **open**

**construction and**  **a Class**  **A insulation**  **system must**  **not exceed**  **60°C, or**  **if the**  **motor’s service** 

**factor is**  **greater than**  **1.15, it**  **cannot exceed**  **70°C. Manufacturers**  **do make**  **Class B,**  **Class F,**  **or**

**Class H**  **insulation systems**  **for small**  **electric motors.**  **However, DOE**  **proposes to**  **cover only** 

**motors with**  **Class A**  **insulation systems**  **to be**  **consistent with**  **the requirements**  **of NEMA**  **MG1–**

**1987.**

**Lastly, MG1-1987**  **requires that**  **a general-purpose**  **alternating-current motor**  **be designed** 

**in standard**  **ratings with**  **standard operating**  **characteristics and**  **mechanical construction**  **for use** 

**under usual**  **service conditions**  **without restriction**  **to a**  **particular application**  **or type**  **of**

**application. This**  **provision is**  **consistent with**  **the definition**  **of general-purpose**  **motor under**  **Title**

**10 of**  **the Code**  **of Federal**  **Regulations, Part**  **431 (10**  **CFR Part**  **431) at**  **10 CFR**  **431.12.**

**Essentially, both**  **MG1–1.05 and**  **10 CFR**  **431.12 require**  **general-purpose motors**  **to meet** 

**“standard ratings,”**  **which are**  **any performance**  **or physical**  **characteristics established**  **as a**  **rule or** 

**model by**  **authority, custom,**  **or general**  **consent. The**  **NEMA MG1**  **standard is**  **based on**  **general**

**consent, meaning**  **that NEMA**  **members who**  **manufacture motors**  **and generators**  **covered in** 

**MG1 can**  **vote to**  **approve (or**  **disapprove) a**  **standard. For**  **small electric**  **motors, examples**  **of**

**“standard ratings”**  **include minimum**  **breakdown torque**  **(see NEMA**  **MG1–12.32.1) and** 

**minimum locked-rotor**  **torque (see**  **NEMA MG1–12.32.2).**  **Such requirements**  **limit the**  **scope of** 

**covered small**  **motors. For**  **example, the**  **breakdown torques**  **of many**  **shaded-pole and** 

**permanent-split capacitor**  **motors do**  **not fall**  **within the**  **breakdown torque**  **ranges of**  **MG1 Table** 

**10–5. Section**  **12.32.2 of**  **MG1–1987 requires**  **that the**  **locked-rotor torque**  **shall be**  **not less**  **than**

**certain values,**  **as replicated**  **below in**  **Table 2.2.2.** 

**2-6**Table 2.2.2 National Electrical Manufacturers Association MG1-1987 Requirements for

Minimum Locked-Rotor Torque, Ounce-Feet*

Horsepower 60-Hz Synchronous Speed

(rpm) 50-Hz Synchronous Speed

(rpm)

**3,600**

**3,450 1,800** 

**1,725 1,200** 

**1,140 3,000** 

**2,850 1,500** 

**1,425 1,000** 

**950**

1/8

**- 24**  **32**

**- 29**  **39**

1/6 **15  ** 33** **43 18**  **39 51** 

1/4 **21 46**  **59 25**  **55 70** 

1/3 **26 57**  **73 31**  **69 88** 

1/2 **37 85**  **100 44**  **102 120** 

3/4 **50 119** 

**- 60**  **143**

**-**

1 **61**

**- -**  **73**

**- -** 

***** **On the**  **high-voltage connection**  **of dual-voltage**  **motors, minimum**  **locked-rotor torques**  **up to**  **10 percent**  **less than** 

**these values**  **may be**  **expected.**

****** **Each value**  **in this**  **table depicts**  **the ounce-feet**  **of locked**  **rotor torque**  **for this**  **combination of**  **horsepower and** 

**synchronous speed.**  **For this**  **particular combination**  **(** i.e.

**, 1/6**  **horsepower with**  **a speed**  **of between**  **3,450 and**  **3,600),**

**manufacturers must**  **ensure the**  **motor have**  **at least**  **15 ounce-feet**  **of locked**  **rotor torque**  **in order**  **to meet**  **this**

**requirement of**  **NEMA MG1-1987.** 

**In the**  **preliminary TSD**  **analyses, DOE**  **proposes to**  **cover only**  **those small**  **electric motors** 

**that meet**  **the standard**  **ratings defined**  **in MG1-1987,**  **including minimum**  **breakdown torque**  **and**

**locked-rotor torque**  **requirements.**

2.2.1.2 Categories of Induction Motors

**The statutory**  **definition of**  **small electric**  **motor also**  **provides that**  **small electric**  **motors**

**are induction**  **motors built**  **in accordance**  **with NEMA**  **MG1-1987. These**  **induction motors** 

**include five**  **categories: split-phase,**  **g shaded-pole,**  **h capacitor-start**  **(both CSIR**  **i and**  **CSCR j**  **),**

**permanent-split capacitor**  **(PSC), k**  **and polyphase**  **motors. l**  **In the**  **discussion that**  **follows, DOE** 

**addresses its**  **examination of**  **these induction**  **motor categories**  **and its**  **preliminary conclusion**  **that**

**g A**  **split-phase motor**  **is a**  **single-phase induction**  **motor equipped**  **with an**  **auxiliary winding**  **displaced in**  **magnetic**

**position from,**  **and connected**  **parallel to,**  **the main**  **winding. Unless**  **otherwise specified,**  **DOE assumed**  **that the** 

**auxiliary circuit**  **is open**  **when the**  **motor attains**  **a predetermined**  **speed. The**  **term “split-phase**  **motor” describes**  **a**

**motor to**  **be used**  **without impedance**  **other than**  **that offered**  **by the**  **motor windings**  **themselves.**

**h A**  **shaded-pole motor**  **is a**  **single-phase induction**  **motor provided**  **with an**  **auxiliary short-circuited**  **winding or** 

**windings displaced**  **in magnetic**  **position from**  **the main**  **winding.**

**i A**  **capacitor-start induction-run**  **motor is**  **a single-phase**  **motor with**  **a main**  **winding arranged**  **for direct**  **connection**

**to a**  **source of**  **power and**  **an auxiliary**  **winding connected**  **in series**  **with a**  **capacitor. The**  **motor has**  **a capacitor**  **phase,**

**which is**  **in the**  **circuit only**  **during the**  **starting period.** 

**j A**  **capacitor-start capacitor-run**  **motor is**  **a single-phase**  **motor which**  **has different**  **values of**  **effective capacitance**  **for**

**the starting**  **and running**  **conditions.**

**k A**  **permanent-split capacitor**  **motor is**  **another category**  **of single-phase**  **motor that**  **has the**  **same value**  **of capacitance** 

**for both**  **starting and**  **running conditions.** 

**l A**  **polyphase motor**  **is an**  **electric motor**  **that uses**  **the phase**  **changes of**  **the electrical**  **supply to**  **induce a**  **rotational**

**magnetic field**  **and thereby**  **supply torque**  **to the**  **rotor.**

**2-7 the**  **CSIR, CSCR,**  **and polyphase**  **motors are**  **the only**  **three categories**  **that meet**  **the requirements** 

**of EPCA**  **340(13)(G) and**  **are therefore**  **covered in**  **the preliminary**  **TSD analyses.** 

**At the**  **September 13,**  **2007, public**  **meeting, Emerson**  **agreed with**  **DOE’s determination** 

**that split-phase**  **motors are**  **not covered**  **under the**  **EPCA definition**  **of a**  **small electric**  **motor.**

**(Emerson, Public**  **Meeting Transcript,**  **No. 3.6**  **at pp.**  **35 and**  **36). Regal**  **Beloit agreed**  **with**

**Emerson, adding**  **that split-phase**  **motors were**  **considered definite-purpose**  **motors and**  **should not** 

**be covered.**  **(Regal Beloit,**  **Public Meeting**  **Transcript, No.**  **3.6 at**  **p. 52).**  **DOE understands**  **that**

**split-phase motors**  **are designed**  **for specific**  **purposes and**  **applications, and**  **is unaware**  **of any** 

**general-purpose split-phase**  **motors. DOE**  **agrees with**  **Emerson and**  **Regal Beloit**  **and concludes** 

**that split-phase**  **motors are**  **not covered**  **small electric**  **motors.**

**The American**  **Council for**  **an Energy**  **Efficient Economy**  **(ACEEE) expressed**  **interest in** 

**including shaded-pole**  **motors as**  **part of**  **this rulemaking.**  **(ACEEE, Public**  **Meeting Transcript,** 

**No. 3.6**  **at p.**  **59). Notwithstanding**  **this interest,**  **DOE understands**  **that shaded-pole**  **motors tend** 

**to have**  **low efficiency**  **ratings (**  i.e.

**, less**  **than 50**  **percent) and**  **are sold**  **in high**  **volume for** 

**consumer applications,**  **such as**  **portable fans.**  **DOE reviewed**  **the statutory**  **definition of**  **small**

**electric motor**  **and came**  **to the**  **preliminary conclusion**  **that shaded-pole**  **motors are**  **not covered** 

**because they**  **fail to**  **meet the**  **torque requirements**  **for general-purpose**  **motors, under**  **NEMA**

**MG1–1987.**

**Emerson commented**  **that PSC**  **motors do**  **not meet**  **the performance**  **requirements for** 

**NEMA general-purpose**  **continuous duty**  **motors and**  **should not**  **be given**  **further consideration.** 

**(Emerson, Public**  **Meeting Transcript,**  **No. 3.6**  **at p.**  **52). DOE**  **examined the**  **performance**

**characteristics of**  **PSC motors**  **in view**  **of the**  **statutory definition**  **of small**  **electric motor**  **and the** 

**explicit performance**  **requirements under**  **the NEMA**  **MG1–1987 definition**  **of general-purpose** 

**alternating-current motor.**  **DOE concluded**  **that PSC**  **motors, such**  **as those**  **used in**  **fans, business** 

**machines, and**  **hermetic motor**  **compressors used**  **in refrigeration**  **equipment are**  **not able**  **to meet** 

**the torque**  **requirements under**  **NEMA MG1-12.32**  **for covered**  **general purpose**  **small electric** 

**motors. m**  **Therefore, DOE**  **agrees with**  **Emerson’s comment**  **and will**  **not give**  **further**

**consideration to**  **PSC motors.** 

**In addition,**  **where the**  **“general purpose”**  **element in**  **the EPCA**  **definition of**  **small electric** 

**motor is**  **tied to**  **NEMA MG1–1987**  **performance requirements,**  **DOE considered**  **the Emerson,** 

**Regal Beloit,**  **and ACEEE**  **comments and**  **noted that**  **the NEMA**  **MG1–1987 definition**  **of**

**“general-purpose alternating-current**  **motor” provides**  **that the**  **motor be**  **“designed in**  **standard**

**ratings with**  **standard operating**  **characteristics and**  **mechanical construction**  **for use**  **under usual** 

**service conditions**  **without restriction**  **to a**  **particular application**  **or type**  **of application.”**  **(See**

**also the**  **definition of**  **“general purpose**  **motor” under**  **10 CFR**  **431.12.) Among**  **the small**  **motors**

**DOE considered**  **in its**  **“Analysis of**  **Energy Conservation**  **Standards for**  **Small Electric**  **Motors,”**

**in June**  **2006, DOE**  **examined shaded-pole,**  **permanent-split capacitor,**  **and split-phase**  **designs**

**and determined**  **that those**  **motors do**  **not meet**  **the performance**  **requirements established**  **for**

**m A**  **hermetic motor**  **consists of**  **a stator**  **and rotor**  **without a**  **shaft, end**  **shields or**  **bearings for**  **installation in** 

**refrigeration compressors**  **of the**  **hermetically sealed**  **type.**

**2-8 general-purpose**  **motors. n**  **DOE agrees**  **with Emerson**  **and Regal**  **Beloit, that**  **small motors**  **with**

**shaded-pole, permanent-split**  **capacitor, and**  **split-phase designs**  **do not**  **meet the**  **NEMA**

**requirements for**  **“general purpose”**  **and are**  **not covered**  **under the**  **EPCA definition**  **of small** 

**electric motor**  **at section**  **340(13)(G).**

**The remaining**  **categories of**  **small electric**  **motors include**  **CSIR, CSCR,**  **and polyphase.** 

**In view**  **of its**  **July 10,**  **2006 Determination**  **(71 FR**  **38799), DOE**  **reexamined the**  **standard**

**performance characteristics,**  **construction specifications,**  **and ratings**  **for these**  **three motor** 

**categories and**  **concluded that**  **they meet**  **the EPCA**  **requirements for**  **small electric**  **motors.**

**Furthermore, CSIR,**  **CSCR, and**  **polyphase small**  **motors are**  **manufactured in**  **two-digit frame** 

**sizes, can**  **be rated**  **for continuous-duty**  **applications, and**  **can meet**  **other performance** 

**requirements for**  **general-purpose motors,**  **including the**  **torque requirements**  **under NEMA**  **MG1–**

**1987, paragraph**  **12.32. Therefore,**  **DOE will**  **address three**  **classes of**  **small electric**  **motors in** 

**today’s preliminary**  **TSD: single-phase,**  **CSIR; single-phase,**  **CSCR; and**  **polyphase.**

2.2.1.3 Frame Sizes and Metric Equivalents

**Under the**  **statutory definition,**  **a small**  **electric motor**  **must be**  **“built in**  **a two-digit**  **frame**

**number series**  **in accordance**  **with NEMA**  **Standards Publication**  **MG1–1987.” NEMA**  **MG1–**

**1987 establishes**  **a system**  **for designating**  **frames of**  **motors, which**  **consists of**  **a series**  **of**

**numbers in**  **combination with**  **letters. The**  **frame number**  **for a**  **small motor**  **is determined**  **by**

**measuring the**  **distance in**  **inches between**  **the centerline**  **of the**  **shaft to**  **the bottom**  **of the** 

**mounting feet**  **multiplied by**  **16. The**  **two-digit frame**  **series encompasses**  **NEMA frames**  **42, 48,** 

**and 56.**  **Two-digit NEMA**  **frames have**  **standard dimensions**  **and tolerances**  **specified in** 

**paragraphs MG1–11.31**  **and MG1–11.34,**  **which are**  **necessary for**  **mounting and** 

**interchangeability among**  **general-purpose applications.** 

**At the**  **September 13,**  **2007, Framework**  **Document public**  **meeting, Emerson**  **commented**

**that NEMA**  **two-digit frames**  **only cover**  **the 42,**  **48, and**  **56 series,**  **and that**  **manufacturers had**  **not**

**perceived other**  **standard two-digit**  **NEMA frames.**  **(Emerson, Public**  **Meeting Transcript,**  **No.**

**3.6 at**  **p. 44).**  **NEMA MG1–1987**  **only assigns**  **standard dimensions**  **to 42,**  **48, and**  **56 frame** 

**motors. However,**  **DOE is**  **aware that**  **other non-standard**  **frame sizes,**  **such as**  **a 66**  **frame size,** 

**are manufactured**  **and sold.**  **While “66”**  **is a**  **“two-digit” frame**  **size, it**  **does not**  **appear in**  **NEMA**

**MG1–1987. Consequently,**  **DOE believes**  **that a**  **66 frame**  **motor is**  **not be**  **covered under**  **the**

**EPCA definition**  **of “small**  **electric motor.”**  **Further, DOE**  **believes that**  **any non-standard**  **two**

**digit frame**  **size (**  i.e.

**, other**  **than 42,**  **48, and**  **56) falls**  **outside the**  **scope of**  **the preliminary**  **TSD**

**analysis for**  **small electric**  **motors. Such**  **non-standard frame**  **sizes are**  **likely definite-purpose**  **or**

**special-purpose motors**  **and not**  **used in**  **general-purpose applications.** 

**Also at**  **the public**  **meeting there**  **was discussion**  **about metric**  **equivalents for**  **the two-digit** 

**NEMA frame**  **series, uncertainty**  **about cross-references,**  **and potential**  **issues with**  **imports of** 

**small electric**  **motors, whether**  **manufactured alone**  **or as**  **a component**  **of another**  **piece of** 

**equipment. Emerson**  **and Regal**  **Beloit both**  **indicated that**  **metric motors**  **would probably**  **not be** 

**sold in**  **the U.S.**  **market individually,**  **but would**  **certainly be**  **imported as**  **components of**  **systems**

**n For**  **more information,**  **see**

**http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html.**

**2-9 or**  **equipment purchased**  **overseas. (Emerson**  **and Regal**  **Beloit, Public**  **Meeting Transcript,**  **No.**

**3.6 at**  **pp. 45-46).**  **ACEEE asserted**  **that such**  **motors should**  **be covered**  **if they**  **are general** 

**purpose motors;**  **otherwise, loopholes**  **that create**  **enforcement problems**  **could develop.** 

**(ACEEE, Public**  **Meeting Transcript,**  **No. 3.6**  **at pp.**  **46-47).**

**EPCA section**  **340(13)(G), as**  **amended by**  **the Energy**  **Independence and**  **Security Act**  **of**

**2007 (EISA**  **2007), 42**  **U.S.C. 6311(13)(G),**  **defines a**  **small electric**  **motor in**  **terms of**  **“NEMA**

**Standards Publication**  **MG1–1987,” which**  **is based**  **on the**  **construction and**  **rating system**  **in**

**NEMA MG1–1987**  **and uses**  **English units**  **of measurement**  **and power**  **output ratings**  **in**

**horsepower. By**  **contrast, general-purpose**  **electric motors**  **manufactured outside**  **the United** 

**States and**  **Canada are**  **defined and**  **described with**  **reference to**  **International Electrotechnical** 

**Commission (IEC)**  **Standard 60034–1**  **series, “Rotating**  **electrical machines,”**  **which employs** 

**terminology and**  **criteria different**  **from EPCA.**  **The performance**  **attributes of**  **these IEC**  **motors**

**are rated**  **pursuant to**  **IEC Standard**  **60034–1, “Rating**  **and performance,”**  **which uses**  **metric units** 

**of measurement**  **and construction**  **standards that**  **are different**  **from NEMA**  **MG1–1987, and**  **a**

**rating system**  **based on**  **power input**  **in kilowatts**  **instead of**  **power output**  **in horsepower.**  **One**

**industry document,**  **however, the**  **Institute of**  **Electrical and**  **Electronics Engineers**  **Standard 112** 

**recognizes this**  **difference in**  **the market**  **and defines**  **the relationship**  **between horsepower**  **and**

**kilowatts. To**  **eliminate any**  **confusion over**  **coverage and**  **regulatory standards,**  **in 10**  **CFR**

**431.12, DOE**  **defines “electric**  **motor” in**  **terms of**  **both NEMA**  **and IEC**  **equivalents, and**  **10 CFR** 

**431.25 provides**  **a table**  **of horsepower**  **and kilowatt**  **equivalent ratings.**  **DOE views**  **this**

**treatment of**  **electric motors**  **as a**  **precedent for**  **similar treatment**  **of small**  **electric motors.** 

**Although the**  **statutory definition**  **of small**  **electric motor**  **does not**  **address metric**  **or**

**kilowatt-rated motors,**  **DOE believes**  **that EPCA**  **covers any**  **motor that**  **is equivalent**  **to or**  **can be** 

**used as**  **a substitute**  **for a**  **covered small**  **electric motor.**  **In general,**  **IEC metric**  **or kilowatt** 

**equivalent motors**  **can perform**  **the identical**  **functions of**  **covered small**  **electric motors**  **and**

**provide comparable**  **rotational mechanical**  **power to**  **the same**  **machines or**  **equipment. Moreover,** 

**IEC metric**  **or kilowatt-equivalent**  **motors can**  **be interchangeable**  **with covered**  **small electric** 

**motors. Therefore,**  **DOE interprets**  **EPCA to**  **mean that**  **a “small**  **electric motor”**  **is any**  **motor that** 

**is identical**  **or equivalent**  **to a**  **motor constructed**  **and rated**  **in accordance**  **with NEMA**  **MG1 and** 

**covered by**  **the statute.**  **Otherwise, placing**  **energy efficiency**  **requirements on**  **NEMA small** 

**electric motors,**  **but not**  **on equivalent**  **IEC or**  **kilowatt-rated small**  **electric motors,**  **could give** 

**preferential treatment**  **to the**  **latter by**  **not subjecting**  **them to**  **equivalent regulatory**  **requirements,**

**should DOE**  **adopt standards**  **for small**  **electric motors.** 

2.2.1.4 Motor Enclosure

**At the**  **September 13,**  **2007, Framework**  **Document public**  **meeting, Emerson**  **and Regal** 

**Beloit commented**  **that a**  **small electric**  **motor covered**  **by EPCA**  **is, by**  **definition, an**  **open motor,** 

**even though**  **general-purpose motors**  **are manufactured**  **as totally**  **enclosed motors**  **that might** 

**otherwise be**  **covered. Both**  **asserted that**  **only open**  **motors are**  **covered. (Emerson**  **and Regal** 

**Beloit, Public**  **Meeting Transcript,**  **No. 3.6**  **at p.**  **62).**

**DOE examined**  **the definition**  **of “general-purpose**  **alternating-current motor”**  **as it**  **appears**

**in NEMA**  **Standard MG1–1987.**  **It explicitly**  **states that**  **a general-purpose**  **alternating-current**

**2-10 motor**  **incorporates “open**  **construction.” Later**  **versions of**  **NEMA Standard**  **MG1 revised**  **the**

**definition and**  **expanded it**  **to incorporate**  **open or**  **enclosed construction.**  **Nevertheless, this**  **is not** 

**the case**  **with the**  **EPCA-directed definition,**  **which explicitly**  **directs DOE**  **to reference**  **MG1-**

**1987. Therefore,**  **in contrast**  **to DOE's**  **earlier views**  **regarding the**  **coverage of**  **small motors**  **(i.e.**

**open and**  **enclosed construction),**  **DOE now**  **interprets the**  **EPCA definition**  **of a**  **“small electric** 

**motor” to**  **cover only**  **open construction**  **because MG1-1987**  **only contemplates**  **open construction** 

**in its**  **definition of**  **“general-purpose alternating-current**  **motor.”**

2.2.2 Market Assessment

**The market**  **assessment focuses**  **on developing**  **a qualitative**  **and quantitative** 

**characterization of**  **the small**  **electric motors**  **industry. It**  **characterizes the**  **market structure**  **based**

**on publicly**  **available information**  **and data**  **supplied by**  **manufacturers and**  **other interested** 

**parties. Further,**  **the market**  **assessment includes**  **information about**  **manufacturers of**  **small**

**electric motors,**  **equipment classes,**  **equipment shipments,**  **and existing**  **regulatory and**  **non**

**regulatory efficiency**  **improvement initiatives.** 

2.2.2.1 Manufacturers of Small Electric Motors

**Four large**  **U.S. manufacturers**  **dominate the**  **small electric**  **motor market:**  **A.O. Smith** 

**Electrical Products**  **Company, Baldor**  **Electric Company,**  **Emerson Motor**  **Technologies, and** 

**Regal Beloit**  **Corporation. These**  **four manufacturers**  **have diverse**  **portfolios of**  **products,**

**including many**  **other categories**  **of electric**  **motors, other**  **related electrical**  **equipment, and** 

**switchgear.**

**DOE does**  **not have**  **data about**  **which company**  **holds the**  **largest market**  **share for**  **small**

**electric motors.**  **Nevertheless, shipments**  **of small**  **motors from**  **these four**  **companies constitute** 

**more than**  **90 percent**  **of the**  **total small**  **electric motor**  **shipments in**  **the United**  **States. All**  **four**

**companies are**  **members of**  **NEMA, which**  **provides some**  **assurance that**  **NEMA’s cumulative** 

**shipment estimates**  **constitute a**  **reasonable estimate**  **of overall**  **national shipments.** 

**Although the**  **small motor**  **market is**  **predominantly supplied**  **by large**  **manufacturers, for** 

**the NOPR**  **stage of**  **the rulemaking**  **analysis, DOE**  **intends to**  **conduct a**  **study of**  **small businesses** 

**that manufacture**  **small electric**  **motors. The**  **Regulatory Flexibility**  **Act (5**  **U.S.C. 601**  et seq **.)**

**requires preparation**  **of an**  **initial regulatory**  **flexibility analysis**  **for every**  **rule which**  **by law**  **must**

**be proposed**  **for public**  **comment, unless**  **the agency**  **certifies that**  **the rule,**  **if promulgated,**  **will**

**not have**  **a significant**  **economic impact**  **on a**  **substantial number**  **of small**  **entities. A**  **regulatory**

**flexibility analysis**  **examines the**  **impact of**  **the rule**  **on small**  **entities and**  **considers alternative** 

**ways of**  **reducing negative**  **impacts. The**  **Small Business**  **Administration defines**  **small business** 

**manufacturing enterprises**  **for small**  **electric motors**  **under the**  **North American**  **Industry**

**Classification System**  **product code**  **335312, Motor**  **and Generator**  **Manufacturing, as**  **those**

**having 1,000**  **or fewer**  **employees. This**  **includes the**  **total number**  **of employees**  **in the**  **parent**

**company, not**  **only those**  **in the**  **division that**  **produces small**  **electric motors.**  **DOE invites** 

**interested parties**  **to provide**  **names and**  **contact information**  **for any**  **small businesses**  **that**

**manufacture small**  **electric motors**  **who should**  **be consulted**  **before DOE**  **publishes a**  **NOPR.**

**2-11**2.2.2.2 Equipment Classes

**In general,**  **when evaluating**  **and establishing**  **energy conservation**  **standards, DOE**  **divides**

**covered equipment**  **into classes**  **by (1)**  **the type**  **of energy**  **used; (2)**  **the capacity**  **o of**  **the**

**equipment; or**  **(3) any**  **other performance-related**  **feature that**  **necessitates different**  **standard**

**levels, such**  **as features**  **affecting consumer**  **utility. (42**  **U.S.C. 6295(q))**  **Different energy** 

**conservation standards**  **may apply**  **to different**  **equipment classes.** 

**For the**  **determination analysis**  **of small**  **electric motors,**  **DOE examined**  **the following** 

**products as**  **separate equipment**  **class categories:**  **single-phase, capacitor-start,**  **induction-run**

**motors; single-phase,**  **capacitor-start, capacitor-run**  **motors; and**  **polyphase motors.**  **DOE**

**proposed these**  **divisions because**  **of the**  **different efficiency**  **values, physical**  **characteristics, and** 

**starting torques**  **(** i.e., **consumer utility).**  **In the**  **Framework Document,**  **DOE sought**  **comments on** 

**the appropriateness**  **of using**  **these categories,**  **and any**  **finer subdivision**  **of them,**  **for the**  **standards**

**rulemaking.**

**Emerson commented**  **that any**  **minimum efficiency**  **standard should**  **not be**  **set at**  **a level** 

**that prevents**  **installation of**  **a replacement**  **motor into**  **an existing**  **application, because**  **the new** 

**[energy efficient]**  **motor is**  **too large**  **to fit**  **within the**  **available space**  **of that**  **application.**

**(Emerson, Public**  **Meeting Transcript,**  **No. 3.6**  **at pp.**  **86 and**  **104) Regal**  **Beloit also**  **expressed**

**concern about**  **installation of**  **replacement motors,**  **indicating that**  **CSCR motors**  **are not** 

**necessarily replacements**  **for CSIR**  **motors. (Regal**  **Beloit, Public**  **Meeting Transcript,**  **No. 3.6**  **at**

**pp. 134-35)**  **DOE understands**  **that for**  **most capacitor-start**  **motors, the**  **starting capacitor**  **is**

**attached in**  **an external**  **shell on**  **the motor.**  **When a**  **run capacitor**  **is added**  **for CSCR**  **motors, a** 

**second external**  **shell is**  **usually added**  **to the**  **motor to**  **accommodate the**  **second capacitor.**  **The**

**second shell**  **often inhibits**  **a CSCR**  **motor from**  **replacing a**  **CSIR motor**  **because of**  **the physical** 

**and dimensional**  **differences associated**  **with the**  **CSCR motor**  **housing.**

**DOE studied**  **the issue**  **of equipment**  **categories and**  **efficiency and**  **decided to**  **classify the** 

**CSIR, CSCR,**  **and polyphase**  **small electric**  **motors separately,**  **as in**  **the determination**  **analysis.**

**DOE agrees**  **with both**  **Emerson and**  **Regal Beloit**  **that CSCR**  **and CSIR**  **motors belong**  **in separate** 

**equipment classes**  **because the**  **addition of**  **a run**  **capacitor affects**  **the efficiency**  **and performance** 

**of the**  **electric motor.**  **Furthermore, polyphase**  **motors should**  **be treated**  **separately from** 

**capacitor-start motors**  **because polyphase**  **motors do**  **not require**  **start or**  **run capacitors.**  **Instead,**

**they use**  **a slightly**  **different form**  **of electricity**  **(three-phase power**  **rather than**  **single-phase**

**power); and**  **all other**  **factors being**  **equal, they**  **are more**  **energy efficient.** 

**NEMA indicated**  **its support**  **for maintaining**  **the three**  **equipment categories.**  **(NEMA,**

**No. 5.1**  **at pp.**  **1-2) NEMA**  **also commented**  **that if**  **DOE were**  **to set**  **standards for**  **each**

**equipment class,**  **it should**  **subdivide the**  **equipment class**  **by horsepower,**  **speed, and**  **enclosure.**

**(NEMA, No.**  **5.1 at**  **pp. 1-2)**  **DOE evaluated**  **this comment**  **relative to**  **published efficiency**  **values**

**in catalogs**  **as well**  **as existing**  **standards for**  **1–200 horsepower**  **electric motors.** 

**DOE agrees**  **with NEMA**  **that horsepower**  **(or kilowatt)**  **ratings should**  **subdivide the** 

**equipment categories.**  **DOE found**  **that motor**  **efficiency varies**  **with rated**  **horsepower by** 

**o In**  **the context**  **of small**  **electric motors,**  **the term**  **“capacity” is**  **associated with**  **the horsepower**  **rating of**  **the motor.** 

**2-12 evaluating**  **manufacturers' catalog**  **data, the**  **efficiency ratings**  **of the**  **1–200 horsepower**  **energy**

**conservation standards**  **(10 CFR**  **431.25), and**  **the efficiency**  **requirements of**  **the NEMA**  **Premium**

**Motor program.**  **Therefore, this**  **aspect of**  **end-user utility**  **(** i.e., **rated power**  **capacity of**  **the**

**motor), has**  **a direct**  **impact on**  **small motor**  **efficiency. Thus,**  **DOE agrees**  **with NEMA**  **and**

**proposes to**  **subdivide the**  **small electric**  **motor equipment**  **categories by**  **horsepower ratings.** 

**DOE also**  **agrees with**  **NEMA that**  **motor speed**  **is another**  **differentiator for**  **equipment**

**classes because**  **of its**  **impact on**  **efficiency. The**  **rated speed**  **of a**  **small electric**  **motor varies**  **with**

**the number**  **of poles**  **incorporated into**  **the design.**  **Also, the**  **locked rotor**  **torque varies**  **with the** 

**number of**  **poles and**  **that the**  **motor with**  **the highest**  **number of**  **poles has**  **the slowest**  **speed and** 

**the highest**  **torque. The**  **most common**  **pole configurations**  **include two,**  **four, and**  **six, with**  **two**

**poles representing**  **the highest**  **speed/lowest torque**  **and six**  **poles representing**  **the lowest** 

**speed/highest torque.**  **By studying**  **the efficiency**  **ratings for**  **1–200 horsepower**  **motors (10**  **CFR**

**431.25), the**  **NEMA Premium**  **Motor standard,**  **and manufacturer**  **catalogs, DOE**  **observed that** 

**efficiency percentages**  **tend to**  **decrease with**  **the number**  **of poles.**  **Consequently, changing**  **the**

**number of**  **poles will**  **change the**  **speed and**  **torque characteristics**  **of a**  **motor and**  **affect end-user** 

**utility. For**  **this reason,**  **DOE proposes**  **to subdivide**  **small electric**  **motor categories**  **by the** 

**number of**  **poles.**

**DOE is**  **less certain**  **about what**  **NEMA intended**  **when suggesting**  **that DOE**  **differentiate**

**capacitor-start and**  **capacitor-run small**  **motors to**  **“account for**  **various combinations**  **of**

**horsepower, rpm,**  **and enclosure.”**  **(NEMA, No.**  **5.1 at**  **pp. 1-2)**  **In its**  **determination analysis,** 

**DOE considered**  **both open- and**  **enclosed-construction types**  **of small**  **electric motors.**  **However,**

**DOE now**  **believes that**  **the statutory**  **definition of**  **small electric**  **motor covers**  **only motors**  **with**

**open construction.**  **Presently, totally**  **enclosed small**  **electric motors**  **are not**  **considered in**  **the**

**preliminary TSD**  **analyses. If**  **NEMA’s comment**  **referencing “enclosure”**  **was intended**  **to be** 

**applicable to**  **the frame**  **size associated**  **with a**  **motor’s enclosure,**  **DOE requires**  **additional**

**information about**  **how frame**  **size affects**  **efficiency. DOE**  **is unaware**  **of any**  **impact or**  **technical**

**impediment associated**  **with the**  **efficiency of**  **two different**  **frame sizes**  **at the**  **same horsepower** 

**rating. Nevertheless,**  **DOE invites**  **comments on**  **this matter**  **from interested**  **parties.**

**In Table**  **2.2.3, 2.2.4,**  **and Table**  **2.2.5, DOE**  **presents its**  **proposals for**  **small electric**  **motor**

**equipment classes.**  **DOE proposes**  **to subdivide**  **each of**  **the three**  **categories of**  **small electric** 

**motors into**  **equipment classes**  **by horsepower**  **and number**  **of poles.**  **Although the**  **small electric** 

**motor industry**  **generally considers**  **3-horsepower as**  **the upper**  **limit for**  **rated capacity,**  **some**

**manufacturers produce**  **motors that**  **would otherwise**  **meet the**  **definition of**  **small electric**  **motor,**

**but have**  **higher horsepower**  **ratings. For**  **this reason,**  **DOE proposes**  **to insert**  **a “greater**  **than or** 

**equal to”**  **symbol (≥)**  **for the**  **3-horsepower equipment**  **class to**  **clarify that**  **the largest**  **motors are** 

**still covered**  **and subject**  **to standards**  **(presuming they**  **meet the**  **other design**  **requirements).**

**Therefore, the**  **efficiency rating**  **for these**  **equipment classes**  **will be**  **based on**  **DOE’s analysis**  **of a** 

**three horsepower**  **motor, yet**  **will be**  **applicable to**  **small electric**  **motors greater**  **than or**  **equal to**  **3-**

**horsepower. For**  **all three**  **equipment categories,**  **DOE proposes**  **72 equipment**  **classes for**  **small**

**electric motors.**  **DOE will**  **propose percentage**  **efficiency values**  **for each**  **equipment class**  **in the** 

**NOPR.**

**2-13**Table 2.2.3 Proposed Equipment Classes for Polyphase Motors

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles

1/4 hp/0.18 kW

1/3 hp/0.25 kW

1/2 hp/0.37 kW

3/4 hp/0.55 kW

1 hp/0.75 kW

11⁄2 hp/1.1 kW

2 hp/1.5 kW

≥ 3 hp/2.2 kW

Table 2.2.4 Proposed Equipment Classes for Capacitor-Start, Induction-Run Motors

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles

1/4 hp/0.18 kW

1/3 hp/0.25 kW

1/2 hp/0.37 kW

3/4 hp/0.55 kW

1 hp/0.75 kW

11⁄2 hp/1.1 kW

2 hp/1.5 kW

≥ 3 hp/2.2 kW

Table 2.2.5 Proposed Equipment Classes for Capacitor-Start, Capacitor-Run Motors

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles

1/4 hp/0.18 kW

1/3 hp/0.25 kW

1/2 hp/0.37 kW

3/4 hp/0.55 kW

1 hp/0.75 kW

11⁄2 hp/1.1 kW

2 hp/1.5 kW

≥ 3 hp/2.2 kW

**2-14**2.2.2.3 Equipment Shipments

**To calculate**  **the national**  **energy savings**  **from any**  **regulatory standard**  **on small**  **electric**

**motors, DOE**  **needs to**  **prepare shipment**  **estimates disaggregated**  **by equipment**  **class. For**  **the**

**preliminary TSD,**  **shipment estimates**  **were prepared**  **using the**  **shipment data**  **NEMA had** 

**provided to**  **DOE for**  **the determination**  **analysis in**  **2000. p**  **DOE also**  **used publicly**  **available**

**historical shipment**  **data from**  **the U.S.**  **Census Bureau**  **to calculate**  **an annual**  **growth rate**  **and**

**project the**  **2000 NEMA**  **data to**  **a shipment**  **estimate for**  **2007.**

**DOE disaggregated**  **the NEMA**  **data for**  **open construction**  **motors by**  **motor category** 

**(CSIR, CSCR,**  **and polyphase),**  **horsepower rating,**  **and number**  **of poles.**  **DOE then**  **used U.S.** 

**Census Bureau**  **data from**  **1990 through**  **1999 to**  **calculate a**  **market trend**  **to project**  **the NEMA** 

**data from**  **2000 to**  **2007. DOE**  **calculated an**  **average annual**  **growth rate**  **from the**  **capacitor-start**

**motor data**  **and then**  **applied it**  **to the**  **disaggregated NEMA**  **data for**  **both CSIR**  **and CSCR** 

**shipments. In**  **other words,**  **DOE assumed**  **the average**  **annual growth**  **rate to**  **be the**  **same for** 

**CSIR and**  **CSCR motors.**  **DOE used**  **the same**  **methodology for**  **projecting the**  **disaggregated**

**NEMA polyphase**  **motor data.**  **Table 2.2.6,**  **2.2.7, and**  **provide the**  **scaled shipment**  **results for**  **the**

**equipment classes**  **provided by**  **NEMA.**

Table 2.2.6 Estimated Polyphase Small Electric Motor National Shipments, 2007

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles Total

1/4 hp/0.18 kW 1,967 7,637 1,967 11,571

1/3 hp/0.25 kW 4,784 16,289 3,264 24,338

1/2 hp/0.37 kW 8,181 49,884 3,607 61,671

3/4 hp/0.55 kW 12,286 59,460 82,596 154,342

1 hp/0.75 kW 17,608 71,708 17,608 106,925

11⁄2 hp/1.1 kW 5,885 146,033 5,885 157,804

2-3 hp/1.5-2.2 kW

- 28,268 12,817 41,084

Total 50,712 379,278 127,745 557,735

**p “Energy**  **Conservation Program**  **for Certain**  **Industrial Equipment:**  **Determination Concerning**  **the Potential**  **for**

**Energy Conservation**  **Standards for**  **Small Electric**  **Motors,” 71**  **FR 38799**  **(July 10,**  **2006), docket**  **number: EE–** 

**DET–02–002 and**  **RIN 1904–AA87.** 

**2-15**Table 2.2.7 Estimated Capacitor-Start, Induction-Run Small Electric Motor National

Shipments, 2007

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles Total

1/4 hp/0.18 kW 348,160 384,581 223,615 956,357

1/3 hp/0.25 kW 597,471 659,971 383,742 1,641,183

1/2 hp/0.37 kW 326,266 534,194 504,566 1,365,025

3/4 hp/0.55 kW 290,405 475,480 449,108 1,214,994

1 hp/0.75 kW

- 57,456 155,520 212,976

>1 hp/0.75 kW

- 25,605 26,964 52,569

Total 1,562,302 2,137,288 1,743,514 5,443,104

Table 2.2.8 Estimated Capacitor-Start, Capacitor-Run Small Electric Motor National

Shipments, 2007

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles Total

1/4 hp/0.18 kW 18,324 20,241 11,769 50,335

1/3 hp/0.25 kW 31,446 34,735 20,197 86,378

1/2 hp/0.37 kW 17,172 28,115 26,556 71,843

3/4 hp/0.55 kW 15,284 25,025 23,637 63,947

1 hp/0.75 kW

- 3,024 8,185 11,209

> 1 hp/0.75 kW

- 1,348 1,419 2,767

Total 82,226 112,489 91,764 286,479

**Scaling the**  **small electric**  **motors shipment**  **data NEMA**  **provided in**  **2002, DOE**  **estimates**

**that the**  **2007 annual**  **shipments of**  **covered small**  **electric motors**  **to be**  **approximately 5.7**  **million**

**units for**  **capacitor-start motors**  **and 0.5**  **million units**  **for polyphase**  **motors. These**  **motors are** 

**used in**  **a wide**  **variety of**  **commercial and**  **industrial machine**  **and processing**  **applications, the** 

**largest of**  **which are**  **pumping equipment**  **and commercial/industrial**  **heating, ventilating,**  **and air** 

**conditioning equipment.**  **DOE requests**  **comments about**  **the shipment**  **estimates presented** 

**above, including**  **the methodology**  **DOE followed**  **and the**  **accuracy of**  **the scaled**  **shipments from** 

**NEMA. If**  **more recent**  **shipment data**  **are available,**  **DOE would**  **review that**  **data and**  **consider**

**using it**  **in preparing**  **the NOPR.** 

2.2.2.4 Regulatory and Non-Regulatory Programs

**DOE is**  **unaware of**  **any energy**  **efficiency non-regulatory**  **programs (**  e.g., **ENERGY**

**STAR, NEMA**  **Premium Motors)**  **that are**  **directly focused**  **on improving**  **the performance**  **of**

**small electric**  **motors. However,**  **several well-established**  **programs and**  **successful non** 

**regulatory initiatives**  **have worked**  **to improve**  **the efficiency**  **of larger**  **(** e.g., **1–200 horsepower)** 

**electric motors.**  **Chapter 3**  **of the**  **preliminary TSD**  **discusses these**  **programs and**  **initiatives.**

**2-16**2.2.3 Technology Assessment

**The purpose**  **of the**  **technology assessment**  **is to**  **develop a**  **preliminary list**  **of technology** 

**options that**  **could improve**  **the efficiency**  **of small**  **electric motors.**  **Motor efficiency**  **is a** 

**measurement of**  **the effectiveness**  **with which**  **electrical energy**  **is converted**  **to mechanical**  **energy**

**and is**  **expressed as**  **the ratio**  **of power**  **output to**  **power input.**  **Motor efficiencies**  **are usually** 

**reported at**  **full load,**  **3/4 load,**  **and 1/2**  **load. To**  **remain consistent**  **with EPCA**  **standards (as** 

**amended by**  **EPACT 1992)**  **for medium**  **motors and**  **to have**  **more repeatable**  **results, DOE**  **will**

**examine and**  **provide candidate**  **standard levels**  **at the**  **full-load efficiency**  **rating.**

**Motor losses**  **are typically**  **characterized in**  **four different**  **groups: conductor**  **losses (I**  **2 R),** 

**core losses,**  **friction and**  **windage losses,**  **and stray-load**  **losses, discussed**  **below. In**  **this section,** 

**DOE categorizes**  **the technology**  **options it**  **considered into**  **these categories**  **based on**  **the type**  **of**

**loss the**  **option aims**  **to reduce.**  **DOE did**  **not identify**  **any technology**  **options that**  **reduce stray** 

**load losses.** 

**DOE developed**  **this list**  **of technology**  **options by**  **reviewing manufacturer**  **catalogs,**

**recent trade**  **publications, and**  **technical journals,**  **and by**  **consulting with**  **technical experts** 

**familiar with**  **small electric**  **motor designs**  **and applications.**  **DOE examined**  **each of**  **these**

**technology options**  **in further**  **detail in**  **chapter 3**  **of the**  **preliminary TSD.** 

2 2.2.3.1 Reducing I R Losses

**I** 2 **R losses**  **originate from**  **the flow**  **of electrical**  **current through**  **the windings**  **in the**  **stator**

**and conductor**  **bars in**  **the rotor.**  **These conductor**  **bars are**  **usually made**  **of aluminum,**  **but some** 

**high-efficiency motors**  **use copper.**  **Reducing the**  **resistance in**  **the components**  **of the**  **motor**

**where electrical**  **current flows**  **will help**  **reduce I**  2 **R losses.**  **These losses**  **are manifested**  **as waste** 

**heat, which**  **can directly**  **affect the**  **winding insulation**  **and shorten**  **the service**  **life of**  **an electric** 

**motor. There**  **are several**  **ways that**  **manufacturers work**  **to reduce**  **losses created**  **by electrical** 

**currents, shown**  **in the**  **following list**  **of DOE’s**  **technology options:** 

• **using copper**  **die-cast rotor**  **cages;**

• **removing skew**  **on the**  **conductor cage;** 

• **increasing the**  **cross-sectional area**  **of the**  **rotor conductor**  **bars;**

• **increasing the**  **end-ring size;** 

• **changing gauges**  **of copper**  **wire in**  **the stator;** 

• **manipulating slot**  **size geometry;**  **and**

• **decreasing the**  **air gap**  **between the**  **rotor and**  **stator.**

2.2.3.2 Reducing Core Losses

**Core losses**  **are created**  **by the**  **type and**  **quantity of**  **magnetic steel**  **components in**  **an**

**electric motor.**  **These losses**  **are manifested**  **as heat,**  **which can**  **reduce the**  **service life**  **of a**  **motor.**

**There are**  **several ways**  **that manufacturers**  **work to**  **reduce core**  **losses, shown**  **in the**  **following list** 

**of DOE’s**  **technology options:** 

**2-17**• **adding stack**  **height (i.e.,**  **length, more**  **laminations) to**  **the motor;** 

• **changing grades**  **of electrical**  **steel (to**  **both conventional**  **or exotic**  **steel types);** 

• **annealing laminations;** 

• **thinning laminations;** 

• **using plastic**  **bonded iron**  **powder (PBIP)**  **as a**  **core material;**  **and**

• **using a**  **permanent magnet**  **electric motor.** 

2.2.3.3 Reducing Friction and Windage Losses

**Bearing friction**  **and an**  **imperfect cooling**  **fan system**  **create friction**  **and windage**  **losses in** 

**electric motors.**  **These losses**  **also add**  **heat to**  **a motor’s**  **system and**  **decrease the**  **overall**

**efficiency of**  **the motor.**  **Technology options**  **that DOE**  **identified to**  **reduce friction**  **and windage** 

**losses are**  **as follows:** 

• **improving mechanical**  **components and**  **design (**  e.g

**. ,**  **bearings and**  **bearing lubricant);**  **and**

• **improving the**  **efficiency of**  **the cooling**  **system.**

2.2.3.4 Impact on Motor Performance

**Emerson and**  **NEMA provided**  **the following**  **list of**  **motor characteristics**  **that DOE**  **should**

**examine in**  **its analysis**  **of efficiency**  **improvements in**  **order to**  **avoid oversimplifying**  **the analysis** 

**and potentially**  **designing a**  **motor that**  **would not**  **operate in**  **the same**  **application:**

• **rotor forces**  **and stresses;** 

• **bar shapes**  **and fits;** 

• **aluminum versus**  **copper cages**  **and other**  **alloys;**

• **rotor skew**  **and air**  **gap;**

• **the cooling**  **circuit;**

• **length to**  **diameter ratios;** 

• **speed torque**  **characteristics and**  **slip;**

• **end ring**  **forces;**

• **unbalanced magnetic**  **forces and**  **noise;**

• **application requirements;** 

• **stator core**  **design factors;** 

• **winding elements;** 

• **stator and**  **frame construction;**  **and**

• **rotor design**  **and construction.** 

**(Emerson, Public**  **Meeting Transcript,**  **No. 3.6**  **at pp.**  **70-71; NEMA,**  **No. 5.1**  **at p.**  **2)**

**DOE carefully**  **reviewed this**  **list of**  **motor characteristics**  **and discussed**  **them with**  **its**

**technical consultants.**  **DOE agrees**  **with Emerson**  **and NEMA**  **that incorporating**  **design changes** 

**to an**  **electric motor**  **to make**  **it more**  **efficient could**  **affect its**  **ability to**  **perform work.**  **If this** 

**were to**  **happen, the**  **more efficient**  **motor would**  **not work**  **in the**  **same application**  **and could**  **not**

**be considered**  **a substitute**  **for the**  **less efficient**  **motor. After**  **discussing this**  **issue with**  **its**

**technical consultants,**  **DOE established**  **a set**  **of specific**  **design parameters**  **that were**  **not**

**exceeded when**  **preparing the**  **engineering analysis.**  **Preliminary TSD**  **chapter 5**  **discusses these** 

**design parameters.** 

**2-18**2.3 SCREENING ANALYSIS

**After DOE**  **identified the**  **technologies in**  **the technology**  **assessment that**  **could potentially** 

**improve the**  **energy efficiency**  **of small**  **electric motors,**  **DOE conducted**  **the screening**  **analysis.**

**The purpose**  **of the**  **screening analysis**  **is to**  **evaluate the**  **technology options**  **that improve**  **the**

**efficiency of**  **equipment to**  **determine which**  **options to**  **consider further**  **and which**  **options to** 

**screen out.**  **DOE consults**  **with industry,**  **technical experts,**  **and other**  **interested parties**  **in**

**developing a**  **list of**  **design options.**  **DOE then**  **applies the**  **following set**  **of screening**  **criteria to** 

**determine which**  **design options**  **are unsuitable**  **for further**  **consideration in**  **the rulemaking**  **(10**

**CFR Part**  **430, subpart**  **C, appendix**  **A at**  **4(a)(4) and**  **5(b)):**

• Technological Feasibility **- DOE will**  **consider technologies**  **incorporated in**  **commercial**

**equipment or**  **in working**  **prototypes to**  **be technologically**  **feasible.**

• Practicability to Manufacture, Install, and Service **- If mass**  **production of**  **a technology** 

**in commercial**  **equipment and**  **reliable installation**  **and servicing**  **of the**  **technology could** 

**be achieved**  **on the**  **scale necessary**  **to serve**  **the relevant**  **market at**  **the time**  **of the**  **effective**

**date of**  **the standard,**  **then DOE**  **will consider**  **that technology**  **practicable to**  **manufacture,**

**install, and**  **service.**

• Adverse Impacts on Equipment Utility or Equipment Availability **- If DOE**  **determines a**  **technology to**  **have significant**  **adverse impact**  **on the**  **utility of**  **the equipment**  **to**

**significant subgroups**  **of consumers,**  **or to**  **result in**  **the unavailability**  **of any**  **covered**

**equipment type**  **with performance**  **characteristics (including**  **reliability), features,**  **sizes,**

**capacities, and**  **volumes that**  **are substantially**  **the same**  **as equipment**  **generally available** 

**in the**  **United States**  **at the**  **time, it**  **will not**  **further consider**  **this technology.** 

• Adverse Impacts on Health or Safety **- If DOE**  **determines that**  **a technology**  **will have** 

**significant adverse**  **impacts on**  **health or**  **safety, it**  **will not**  **further consider**  **this**

**technology.**

**For a**  **complete discussion**  **of the**  **screening analysis,**  **refer to**  **preliminary TSD**  **chapter 4.** 

**This section**  **of the**  **preliminary TSD**  **focuses on**  **three technology**  **options that**  **were**

**screened out**  **due to**  **their failure**  **to comply**  **with one**  **or more**  **of the**  **four screening**  **criteria. DOE** 

**discusses those**  **technology options**  **that were**  **not screened**  **out in**  **chapter 4**  **of the**  **preliminary**

**TSD.**

2.3.1 Technology Options Screened Out

**DOE examined**  **all of**  **the technology**  **options presented**  **in the**  **technology assessment.**  **Of**

**those options,**  **DOE screened**  **out three:**  **a radial**  **air gap**  **below ten**  **thousandths of**  **an inch,**  **plastic**

**bonded iron**  **powder, and**  **permanent magnet**  **electric motors.**  **The following**  **discussion details** 

**DOE’s consideration**  **of each**  **option in**  **the context**  **of the**  **four screening**  **criteria.**

2.3.1.1 Air Gap between Rotor and Stator

**Motor efficiency**  **can be**  **improved by**  **reducing the**  **radial air**  **gap between**  **the rotor**  **and**

**stator. For**  **small electric**  **motors, the**  **air gap**  **is commonly**  **set at**  **15 thousandths**  **of an**  **inch.**

**While this**  **air gap**  **can be**  **reduced to**  **improve efficiency,**  **at some**  **point, the**  **air gap**  **is too**  **tight for** 

**2-19 the**  **motor to**  **be practical**  **to manufacture.**  **DOE believes**  **that radial**  **air gaps**  **below ten** 

**thousandths of**  **an inch**  **would exceed**  **the threshold**  **for practicability**  **to manufacture.** 

**Considering the**  **four screening**  **criteria for**  **this technology**  **option, DOE**  **screened out** 

**decreasing the**  **radial air**  **gap below**  **ten thousandths**  **of an**  **inch as**  **a means**  **of improving** 

**efficiency. Because**  **smaller air**  **gaps do**  **not present**  **a technological**  **barrier, DOE**  **considers this** 

**option to**  **be technologically**  **feasible, but**  **it is**  **not “practicable**  **to manufacture,**  **install, and** 

**service.” Such**  **a tight**  **air gap**  **may cause**  **problems in**  **manufacturing and**  **service, because**  **the**

**rotor could**  **come into**  **contact with**  **the stator.**  **DOE also**  **believes this**  **technology option**  **fails the** 

**screening criterion**  **of adverse**  **impacts on**  **consumer utility**  **and reliability,**  **because the**  **motor may** 

**experience higher**  **failure rates**  **in service**  **when the**  **manufactured air**  **gaps are**  **less than**  **ten**

**thousandths of**  **an inch.**  **Finally, DOE**  **is unaware**  **of any**  **adverse impacts**  **on health**  **or safety**  **that**

**might be**  **associated with**  **reducing the**  **radial air**  **gap below**  **ten thousandths**  **of an**  **inch.**

2.3.1.2 Plastic Bonded Iron Powder

**Plastic bonded**  **iron powder**  **(PBIP) is**  **an invention**  **that could**  **cut production**  **costs while** 

**increasing the**  **output of**  **electric motors.**  **While there**  **may be**  **other researchers**  **working on**  **this**

**technology option,**  **DOE is**  **aware of**  **a research**  **team at**  **Lund University**  **in Sweden**  **who recently** 

**published a**  **paper about**  **PBIP. The**  **technology option**  **is based**  **on an**  **iron powder**  **alloy that**  **is**

**suspended in**  **plastic and**  **can be**  **used in**  **certain motor**  **applications such**  **as fans,**  **pumps, and** 

**household appliances.**  **The compound**  **is then**  **shaped into**  **motor components**  **using a**  **centrifugal**

**mold, reducing**  **the number**  **of manufacturing**  **steps. In**  **addition, researchers**  **claim that**  **this**

**technology option**  **could cut**  **core losses**  **by as**  **much as**  **50 percent.**  **The university**  **team is**  **already**

**producing inductors,**  **transformers, and**  **induction heating**  **coils using**  **PBIP, but**  **has not**  **yet**

**produced a**  **small electric**  **motor. In**  **addition, it**  **appears that**  **this technology**  **is aimed**  **at torus,** 

**claw-pole, and**  **transversal flux**  **motors–none of**  **which are**  **“small electric**  **motors” under**  **the**

**EPCA definition.** 

**Considering the**  **four screening**  **criteria for**  **this technology**  **option, DOE**  **screened out** 

**PBIP as**  **a means**  **of improving**  **efficiency. DOE**  **does not**  **consider this**  **technology option**  **to be** 

**technologically feasible,**  **because it**  **has never**  **been incorporated**  **into a**  **working prototype**  **of a** 

**small electric**  **motor and**  **DOE is**  **uncertain whether**  **the material**  **has the**  **structural integrity**  **to be** 

**formed into**  **the shape**  **of a**  **small electric**  **motor steel**  **frame. DOE**  **is also**  **uncertain whether**  **PBIP**

**would be**  **practical to**  **manufacture, install,**  **and service**  **because a**  **prototype PBIP**  **small electric** 

**motor has**  **not been**  **made and**  **there is**  **insufficient information**  **available on**  **the ability**  **to**

**manufacture this**  **technology to**  **make a**  **judgment. Furthermore,**  **if PBIP**  **proves applicable**  **to**

**small electric**  **motors, it**  **would represent**  **the only**  **path to**  **achieve a**  **higher efficiency**  **level and**  **be**

**screened out**  **as such.**  **DOE is**  **unaware of**  **any adverse**  **impacts on**  **product utility**  **or product** 

**availability that**  **may arise**  **from the**  **use of**  **PBIP in**  **small electric**  **motors, or**  **of any**  **adverse**

**impacts on**  **health or**  **safety.**

2.3.1.3 Permanent Magnet Electric Motor

**A permanent**  **magnet synchronous**  **motor is**  **a rotating**  **machine whose**  **stator is**  **similar to** 

**that of**  **a polyphase**  **induction motor,**  **but has**  **surface-mounted permanent**  **magnets. In**  **this**

**respect, the**  **permanent magnet**  **motor is**  **the same**  **as an**  **induction motor**  **except that**  **the air**  **gap**

**2-20 magnetic**  **field is**  **produced by**  **permanent magnets.**  **This use**  **of magnets**  **to create**  **the air**  **gap**

**magnetic flux**  **makes it**  **possible to**  **design highly**  **efficient permanent**  **magnet motors.** 

**Considering the**  **four screening**  **criteria for**  **this technology**  **option, DOE**  **screened out** 

**permanent magnet**  **electric motors**  **as a**  **means of**  **improving efficiency,**  **chiefly because**  **these**

**motors cannot**  **be manufactured**  **as small**  **electric motors,**  **as defined**  **in EPCA.**  **Because of**  **the**

**associated controls**  **necessary to**  **start and**  **operate the**  **motor, it**  **may be**  **impractical to**  **install the** 

**electric motor**  **in certain**  **equipment. DOE**  **considered but**  **is unaware**  **of, any**  **adverse impacts**  **on**

**consumer utility**  **or reliability**  **associated with**  **permanent magnet**  **electric motors.**  **Similarly,**

**DOE is**  **unaware of**  **any adverse**  **impacts on**  **health or**  **safety associated**  **with permanent**  **magnet**

**electric motors.** 

2.3.2 Technology Screening

**DOE developed**  **an initial**  **list of**  **efficiency enhancement**  **technology options**  **from the** 

**technologies identified**  **in the**  **technology assessment**  **(preliminary TSD**  **chapter 3).**  **In**

**consultation with**  **technical experts,**  **DOE then**  **reviewed the**  **list to**  **determine if**  **these technology** 

**options pass**  **all of**  **the screening**  **criteria. DOE**  **used efficiency**  **enhancement design**  **options that** 

**pass the**  **four screening**  **criteria in**  **the engineering**  **analysis. DOE**  **did not**  **consider those**  **options**

**that fail**  **one or**  **more of**  **the screening**  **criteria in**  **the analysis.**  **Preliminary TSD**  **chapter 4** 

**discusses which**  **design options**  **DOE considered**  **in the**  **small electric**  **motor engineering**  **analysis.**

**Also included**  **is a**  **list of**  **emerging technologies**  **that could**  **affect future**  **small electric**  **motor**

**manufacturing costs.** 

2.3.3 Baseline Equipment

**To analyze**  **design options**  **for energy**  **efficiency improvements,**  **DOE typically**  **defines a** 

**baseline unit**  **against which**  **to compare**  **more efficient**  **units. For**  **products with**  **existing**

**standards, the**  **baseline unit**  **is usually**  **a unit**  **just meeting**  **the standard.**  **However, small**  **electric**

**motors, those**  **with a**  **NEMA defined**  **two-digit frame**  **size, do**  **not have**  **existing efficiency** 

**standards. Therefore,**  **DOE consulted**  **manufacturers and**  **subject matter**  **experts to**  **obtain**

**reasonable performance**  **characteristics for**  **representative units.**  **Baseline units**  **were then**  **chosen**

**as the**  **lowest efficiency**  **units manufactured,**  **which represent**  **the most**  **commonly sold.**  **More**

**detail on**  **the baseline**  **equipment selected**  **can be**  **found in**  **preliminary TSD**  **chapter 5.** 

2.4 ENGINEERING ANALYSIS

**The engineering**  **analysis (detailed**  **in preliminary**  **TSD chapter**  **5) develops**  **curves that** 

**estimate the**  **manufacturer selling**  **price that**  **corresponds to**  **increasing small**  **electric motor** 

**efficiency. The**  **efficiency values**  **range from**  **a typical**  **motor sold**  **today (i.e.,**  **the baseline**  **motor)**

**to the**  **maximum technologically**  **feasible efficiency**  **level. DOE**  **then marks-up**  **the estimated** 

**manufacturer selling**  **prices to**  **determine retail**  **prices for**  **the life-cycle**  **cost analysis.** 

**2-21 The**  **engineering analysis**  **estimates the**  **efficiency improvement**  **associated with** 

**incorporating design**  **options that**  **meet the**  **four criteria**  **applied in**  **the screening**  **analysis. DOE** 

**always works**  **to identify**  **the least**  **cost path**  **to efficiency**  **(** i.e.

**, design**  **options that**  **provide the** 

**greatest efficiency**  **improvement for**  **the least**  **cost) when**  **conducting the**  **engineering analysis.** 

**As discussed**  **in chapter**  **1, DOE**  **considers establishing**  **energy conservation**  **standards for** 

**small electric**  **motors that**  **achieve the**  **maximum improvement**  **in energy**  **conservation that**  **the**

**Secretary determines**  **are technologically**  **feasible and**  **economically justified.**  **(42 U.S.C.** 

**6295(o)(2)(A)) In**  **the engineering**  **analysis, DOE**  **works to**  **identify the**  **maximum**

**technologically feasible**  **level. This**  **level is**  **reached by**  **adding efficiency**  **improvements and/or** 

**design options,**  **both commercially**  **available and**  **in prototypes,**  **to the**  **baseline units.**  **The design** 

**options comprising**  **the maximum**  **technologically feasible**  **level must**  **have been**  **physically**

**demonstrated in**  **at least**  **a prototype**  **form.**

2.4.1 Approaches for Conducting the Engineering Analysis

**In general,**  **the engineering**  **analysis is**  **based around**  **one of**  **three possible**  **approaches:**

**1. the**  **design-option approach–reporting**  **the incremental**  **costs of**  **adding design** 

**options to**  **a baseline**  **model;**

**2. the**  **efficiency-level approach–reporting**  **relative costs**  **of achieving**  **energy**

**efficiency improvements;**  **and**

**3. the**  **reverse-engineering or**  **cost-assessment approach–involves**  **a “bottoms-up”** 

**manufacturing cost**  **assessment based**  **on a**  **detailed bill**  **of materials**  **derived from** 

**tear downs**  **of commercially**  **available product**  **and/or prototypes.** 

**DOE considers**  **public comments**  **in determining**  **the best**  **approach for**  **a rulemaking,**  **and**

**sometimes selects**  **a combination**  **of these**  **approaches. The**  **following sections**  **describe each** 

**approach.**

2.4.1.1 Design-Option Approach

**The design-option**  **approach identifies**  **individual design**  **options or**  **combinations that** 

**increase efficiency.**  **These increases**  **in efficiency**  **are typically**  **based on**  **manufacturer or** 

**component supplier**  **estimates or**  **on engineering**  **computer simulation**  **models. DOE**  **then**

**determines the**  **incremental manufacturing**  **costs of**  **adding design**  **options to**  **a baseline**  **model.**

**DOE adds**  **individual design**  **options or**  **combinations to**  **the baseline**  **model in**  **ascending order**  **of**

**cost-effectiveness. Typically,**  **DOE uses**  **the payback**  **period to**  **establish a**  **design option’s**  **cost**

**effectiveness. The**  **payback period**  **is determined**  **by the**  **ratio of**  **the change**  **in total**  **consumer**

**cost to**  **the change**  **in operating**  **cost.**

**The primary**  **advantage of**  **the design-option**  **approach is**  **its ability**  **to analyze**  **individual**

**technologies. The**  **approach is**  **transparent because**  **the impact**  **of any**  **single technology**  **on cost** 

**and efficiency**  **is explicit.**  **An additional**  **advantage is**  **its ability**  **to incorporate**  **designs that**  **have**

**been demonstrated**  **to perform**  **in prototypes,**  **but are**  **not yet**  **commercialized. Thus,**  **maximum**

**technologically feasible**  **designs are**  **more easily**  **established in**  **the design-option**  **approach.**

**2-22 Although**  **individual technologies**  **are assessed,**  **the design-option**  **approach tends**  **to**

**complicate analysis.**  **The material**  **combinations DOE**  **considers are**  **sometimes combinations** 

**manufacturers do**  **not typically**  **use; this**  **makes it**  **difficult to**  **assess the**  **impact of**  **a design**  **on**

**system cost**  **and efficiency.**  **Another drawback**  **of the**  **design-option approach**  **is its**  **imperfect**

**compatibility with**  **the manufacturer**  **impact analysis.**  **DOE recognizes**  **that the**  **manufacturer**

**selling price**  **information derived**  **in a**  **component-based analysis**  **does not**  **reflect the**  **variability in** 

**baseline units,**  **design strategies,**  **and cost**  **structures that**  **can exist**  **among manufacturers.** 

**Therefore, in**  **the manufacturer**  **impact analysis**  **(see preliminary**  **TSD chapter**  **12), DOE**  **may**

**need to**  **derive additional**  **manufacturing cost**  **estimates, using**  **other approaches**  **developed in** 

**consultation with**  **manufacturers.**

2.4.1.2 Efficiency-Level Approach

**The efficiency-level**  **approach establishes**  **the relationship**  **between manufacturer**  **sales**

**price and**  **increased efficiency**  **at incremental**  **increases in**  **efficiency levels.**  **Manufacturers**

**provide incremental**  **manufacturer selling**  **prices for**  **incremental increases**  **in efficiency.**  **Then**

**cost-efficiency curves**  **are easily**  **constructed to**  **clearly identify**  **at what**  **point manufacturers**  **incur**

**significant costs**  **to raise**  **efficiency. Additionally,**  **the efficiency-level**  **approach allows** 

**manufacturers to**  **supply detailed**  **cost data**  **without revealing**  **their unique**  **design strategies**  **for**

**increasing efficiency**  **levels.**

**The simplicity**  **of the**  **efficiency-level approach**  **is also**  **its primary**  **drawback. Namely,** 

**since technological**  **details are**  **not provided,**  **it is**  **extremely difficult**  **to verify**  **whether the**  **costs**

**provided for**  **each specific**  **efficiency level**  **are truly**  **representative of**  **that level.**  **In addition,** 

**prototypical designs**  **become difficult**  **to evaluate**  **and maximum**  **technologically feasible**  **designs**

**are then**  **difficult to**  **ascertain. As**  **a result,**  **some other**  **type of**  **supplementary analysis**  **is likely** 

**needed to**  **verify the**  **accuracy of**  **the costs**  **supplied through**  **the efficiency-level**  **approach.**

2.4.1.3 Cost-Assessment Approach

**The cost-assessment**  **approach is**  **also called**  **the reverse-engineering**  **approach. Under** 

**this approach,**  **DOE dismantles**  **actual pieces**  **of equipment**  **on the**  **market, component**  **by**

**component, to**  **determine what**  **technologies and**  **designs manufacturers**  **use to**  **increase product** 

**energy efficiency.**  **DOE then**  **uses detailed**  **costing methods**  **and manufacturer**  **and component** 

**supplier data**  **to estimate**  **component costs.**  **This approach**  **has the**  **distinct advantage**  **of using**  **real**

**market equipment**  **to establish**  **the technologies**  **that manufacturers**  **use and**  **establish the** 

**manufacturing cost**  **to produce**  **more energy**  **efficient units.** 

**The primary**  **disadvantage of**  **reverse engineering**  **is the**  **time and**  **effort required**  **to**

**analyze real**  **equipment. Occasionally,**  **several models**  **from a**  **diverse range**  **of manufacturers**  **are**

**assessed to**  **ensure that**  **an accurate**  **representation of**  **technological paths**  **for increasing**  **efficiency**

**is identified.**  **In addition,**  **because DOE**  **only analyzes**  **equipment on**  **the market,**  **prototypical**

**designs are**  **periodically excluded,**  **which makes**  **it difficult**  **to establish**  **maximum technologically** 

**feasible designs.** 

**2-23**2.4.2 Preliminary Engineering Analysis Approach

**At the**  **Framework Document**  **public meeting,**  **DOE solicited**  **comments on**  **a proposed** 

**approach for**  **the engineering**  **analysis. DOE**  **proposed using**  **a modified**  **design-option approach,** 

**where DOE**  **would employ**  **a technical**  **expert with**  **motor design**  **software to**  **develop a**  **range of** 

**efficiencies for**  **a set**  **of representative**  **motors. DOE**  **invited comments**  **on this**  **proposed**

**approach, as**  **well as**  **any recommended**  **software tools.** 

**At the**  **meeting, stakeholders**  **commented that**  **motor design**  **software tools**  **are proprietary** 

**to manufacturers**  **and that**  **information is**  **not shared**  **between manufacturers.**  **Emerson and** 

**NEMA both**  **stated that**  **they had**  **no recommendations**  **for software**  **DOE might**  **use in**  **its**

**engineering analysis**  **because each**  **manufacturer is**  **only familiar**  **with its**  **own internal**  **software.**

**They added**  **that if**  **a commercial**  **product is**  **used, it**  **should be**  **disclosed so**  **manufacturers can** 

**validate its**  **performance. (Emerson,**  **Public Meeting**  **Transcript, No.**  **3.6 at**  **pp. 96-97;**  **NEMA,**

**No. 5.1**  **at p.**  **4) NEMA**  **committed to**  **provide engineering**  **data to**  **DOE for**  **use in**  **the preliminary** 

**TSD analysis.**  **However, DOE**  **was unable**  **to use**  **the data**  **because of**  **the small**  **number of** 

**companies on**  **which the**  **data were**  **based. Therefore,**  **DOE contracted**  **with a**  **third-party electric** 

**motor design**  **firm that**  **owns and**  **uses its**  **own proprietary**  **software design**  **tool. In**  **preliminary**

**TSD chapter**  **5, DOE**  **presents the**  **engineering analysis**  **for manufacturers**  **and other**  **stakeholders**

**to review**  **and/or run**  **their own**  **software design**  **models to**  **validate DOE’s**  **findings published** 

**with this**  **preliminary TSD.** 

**ACEEE and**  **Emerson recommended**  **that DOE**  **consider an**  **efficiency-level approach**  **to**

**the engineering**  **analysis. (ACEEE**  **and Emerson,**  **Public Meeting**  **Transcript, No.**  **3.6 at**  **p. 77**  **and**

**p. 97;**  **NEMA No.**  **5.1 at**  **p. 5)**  **They suggested**  **that either**  **NEMA or**  **an independent**  **consulting**

**group operating**  **under a**  **confidentiality agreement**  **would aggregate**  **the input**  **from each** 

**manufacturer to**  **create industry-wide**  **engineering curves.**  **ACEEE added**  **that DOE**  **should do**  **its**

**own analysis**  **verify the**  **reasonableness of**  **the data**  **it receives**  **from the**  **industry. (ACEEE,**  **Public**

**Meeting Transcript,**  **No. 3.6**  **at p.**  **77) NEMA**  **also recommended**  **establishing efficiency**  **levels**

**and allowing**  **each manufacturer**  **to generate**  **its own**  **motor designs**  **to comply**  **with those**  **levels.**

**(NEMA, No.**  **5.1 at**  **p. 5).** 

**DOE agreed**  **with these**  **comments and**  **worked with**  **motor manufacturers**  **to develop**  **data**

**on four**  **representative motors**  **for the**  **engineering analysis,**  **including information**  **on design** 

**options and**  **associated costs.**  **However, DOE**  **did not**  **receive sufficient**  **input from**  **manufacturers**

**so that**  **it could**  **aggregate the**  **data without**  **revealing proprietary**  **information. Therefore,**  **the**

**engineering analysis**  **curves presented**  **in the**  **preliminary TSD**  **today are**  **solely the**  **work of**  **a**

**small electric**  **motor design**  **consulting group**  **under subcontract**  **to DOE.**  **This consulting**  **group,**

**Yeadon Energy**  **Systems, was**  **retained because**  **of its**  **capabilities, including**  **with small**  **electric**

**motor design**  **software, and**  **past experience**  **working in**  **design engineering**  **within the**  **electric**

**motor industry.**  **More information**  **about Yeadon**  **Energy Systems**  **and DOE’s**  **methodology for** 

**the engineering**  **analysis can**  **be found**  **in chapter**  **5 of**  **the preliminary**  **TSD.**

2.4.3 Equipment Classes and Efficiency Levels Analyzed

**Of the**  **72 equipment**  **classes that**  **DOE is**  **considering in**  **today’s preliminary**  **TSD, NEMA** 

**recommended that**  **DOE examine**  **46, including**  **a baseline**  **model selected**  **from each**  **of the** 

**2-24 following**  **representative equipment**  **classes: 1/4,**  **1/3, 1/2,**  **3/4, and**  **1 horsepower**  **at two-,**  **four-,**

**and six-pole**  **configurations for**  **single-phase motors**  **(and the**  **IEC/kilowatt equivalents);**  **and**

**1/4,1/3, 1/2,**  **3/4, 1,**  **1.5, 2,**  **and 3**  **horsepower for**  **polyphase motors**  **(and the**  **IEC/kilowatt**

**equivalents). (NEMA,**  **No. 5.1**  **at p.**  **2). DOE**  **appreciates this**  **comment, and**  **ideally it**  **would**

**analyze every**  **equipment class**  **individually. DOE**  **found from**  **studying industry-generated** 

**efficiency tables,**  **such as**  **those published**  **in NEMA**  **MG1, that**  **losses for**  **electric motors**  **can be** 

**scaled with**  **certain performance**  **or design**  **characteristics. That**  **is, DOE**  **found it**  **possible to** 

**analyze and**  **curve-fit the**  **losses according**  **to horsepower**  **and number**  **of poles.**  **Therefore, DOE** 

**did not**  **follow NEMA’s**  **recommendation, but**  **instead selected**  **a limited**  **number of**  **representative**

**equipment classes**  **from which**  **it would**  **base its**  **analysis. Later**  **in its**  **analysis, DOE** 

**demonstrates how**  **it then**  **extrapolates these**  **representative equipment**  **classes to**  **other equipment** 

**classes that**  **are not**  **analyzed.**

**To guide**  **the selection**  **of representative**  **equipment classes**  **to analyze,**  **DOE reviewed** 

**data from**  **the small**  **electric motor**  **determination analysis**  **and from**  **manufacturers' sales**  **catalogs.**

**DOE had**  **three variables**  **to consider**  **when selecting**  **which equipment**  **classes to**  **analyze: motor** 

**categories (three**  **categories); horsepower**  **rating (eight**  **rating categories);**  **and number**  **of poles** 

**(three configurations).**  **These categorizations**  **were selected**  **because they**  **are the**  **same ones**  **used**

**for the**  **1-200 horsepower**  **electric motor**  **energy conservation**  **standards, and**  **are the**  **same**

**categorizations used**  **in the**  **NEMA MG1**  **document. Specific**  **discussion on**  **each of**  **these three** 

**variables follows**  **in the**  **paragraphs below.** 

**The highest**  **priority when**  **selecting representative**  **equipment classes**  **was to**  **ensure that** 

**each motor**  **category was**  **represented. DOE**  **believed that**  **representing all**  **three motor**  **categories**

**among the**  **analyzed equipment**  **classes was**  **necessary to**  **obtain analytical**  **findings that**  **could**

**eventually be**  **scaled to**  **all equipment**  **classes within**  **those categories.**  **Therefore, DOE**  **analyzed**

**the CSIR,**  **CSCR, and**  **polyphase categories.** 

**Next, DOE**  **selected the**  **appropriate horsepower**  **ratings within**  **each of**  **the three**  **motor**

**categories. Motors**  **at different**  **horsepower ratings**  **will have**  **different cost-efficiency** 

**characteristics. Since**  **examination of**  **all horsepower**  **ratings within**  **each motor**  **category was**  **not**

**feasible, DOE**  **selected a**  **horsepower rating**  **for each**  **motor that**  **was commonly**  **available in** 

**several manufacturer**  **catalogs and**  **could readily**  **be scaled**  **to other**  **equipment classes.** 

**Finally, DOE**  **had to**  **select a**  **number of**  **poles for**  **its representative**  **equipment classes.** 

**After reviewing**  **the determination**  **analysis and**  **catalog data,**  **DOE chose**  **four-pole motors**  **for**

**each motor**  **category and**  **corresponding horsepower**  **level for**  **two reasons.**  **First, four-pole** 

**motors have**  **the highest**  **estimate shipment**  **volume for**  **2007. Second,**  **four-pole motors**  **fall**

**between two**  **and six**  **poles, so**  **that any**  **error that**  **may be**  **introduced by**  **scaling between**  **the**

**number of**  **poles would**  **be minimal.** 

**Table 2.4.1**  **shows the**  **characteristics of**  **the three**  **motors that**  **DOE studied**  **in its** 

**engineering analysis.**  **DOE also**  **considered a**  **fourth motor**  **-- a CSIR**  **1/2 horsepower,**  **four-pole,**

**56 frame**  **motor that**  **had the**  **same (scaled)**  **cost-efficiency curve**  **as the**  **CSIR 1/2**  **horsepower,**

**four-pole, 48**  **frame size**  **motor analyzed.**  **DOE decided**  **not to**  **include the**  **56 frame**  **size CSIR** 

**2-25 motor**  **because efficiency**  **does not**  **scale with**  **frame size**  **and DOE**  **believes that**  **the smaller** 

**horsepower ratings**  **are more**  **commonly manufactured**  **in the**  **smaller frame**  **sizes.**

Table 2.4.1 Characteristics of the Three Representative Equipment Classes Analyzed

Motor Category Horsepower Number of Poles Frame Size

**Polyphase 1**  **4 56** 

**CSIR 1/2**  **4 48** 

**CSIR*** **1/2 4**  **56**

**CSCR 3/4**  **4 56** 

***** **DOE identified**  **these four**  **motors as**  **the representative**  **units to**  **study, and**  **then conducted**  **an engineering**  **analysis**

**to study**  **the relationship**  **between motor**  **efficiency and**  **manufacturer selling**  **price. DOE**  **found that**  **there was** 

**virtually no**  **difference between**  **the 48**  **and 56**  **frame sizes**  **for the**  **1⁄2-horsepower, four-pole**  **CSIR motors.**  **Therefore,**

**DOE elected**  **to drop**  **the 56**  **frame size**  **from its**  **analysis, since**  **frame size**  **tends to**  **scale with**  **horsepower, and**  **at this** 

**rating it**  **would be**  **more common**  **to find**  **a 48**  **frame than**  **a 56.**  **This issue**  **is discussed**  **in some**  **detail in**  **the**

**engineering analysis**  **(chapter 5)**  **and the**  **appendix to**  **the engineering**  **chapter (appendix**  **5A).**

**Using the**  **collected data**  **it analyzed,**  **DOE developed**  **efficiency ranges**  **for each**  **of the** 

**representative small**  **electric motors.**  **As discussed**  **in the**  **market assessment,**  **EPCA (as**  **amended**

**by EPACT**  **1992) did**  **not establish**  **standards or**  **create incentive**  **programs for**  **small electric** 

**motors and**  **DOE is**  **unaware of**  **any voluntary**  **or market**  **transformation programs**  **designed to** 

**improve the**  **efficiency of**  **these motors.**  **Therefore, DOE**  **selected a**  **baseline efficiency** 

**(referencing low-efficiency**  **designs available**  **in several**  **manufacturer catalogs),**  **a level** 

**equivalent to**  **the EPACT**  **1992 efficiency**  **level, a**  **level approximately**  **equal to**  **the NEMA** 

**Premium Motor**  **level, and**  **a maximum**  **technologically feasible**  **efficiency level**  (i.e.

**, max**  **tech).**

**For the**  **polyphase motor,**  **the range**  **of efficiency**  **values spans**  **from a**  **baseline motor**  **of**

**75.8 percent**  **to a**  **higher efficiency**  **of 86.7**  **percent with**  **silicon steel**  **and 90.4**  **percent with**  **a**

**boron-based steel.**  **The CSIR**  **motor ranges**  **from a**  **baseline efficiency**  **of 62.3**  **percent to**  **81.7**

**percent with**  **silicon steel**  **and 82.0**  **percent with**  **boron-based steel.**  **The CSCR**  **motor efficiency** 

**ranges from**  **a baseline**  **efficiency of**  **68.6 percent**  **to a**  **higher efficiency**  **of 87.0**  **percent with** 

**silicon steel**  **and 88.3**  **percent with**  **boron-based steel.** 

2.4.4 Baseline Models and Efficiency Levels Analyzed

**For each**  **equipment class,**  **DOE selected**  **a baseline**  **model as**  **a reference**  **point against** 

**which to**  **measure changes**  **resulting from**  **energy conservation**  **standards. As**  **discussed in**  **section**

**I.B.1 above,**  **DOE chose**  **the baseline**  **model in**  **each equipment**  **class to**  **represent the**  **typical**

**characteristics of**  **equipment in**  **that class.**  **Because there**  **are no**  **existing minimum**  **energy**

**conservation standards**  **for small**  **electric motors,**  **DOE based**  **its selection**  **of baseline**  **model**

**efficiency on**  **the motors**  **used in**  **the determination**  **analysis, manufacturer**  **catalogs, conversations** 

**with manufacturers,**  **and consultation**  **with technical**  **experts.**

**DOE used**  **the performance**  **characteristics of**  **these motors**  **and other**  **published catalog** 

**data to**  **identify the**  **baseline motor.**  **DOE paid**  **particular attention**  **to characteristics**  **such as** 

**breakdown torque,**  **locked-rotor torque,**  **and locked-rotor**  **current. DOE**  **was careful**  **to select** 

**2-26 baseline**  **motors with**  **performance characteristics**  **within the**  **specifications of**  **NEMA MG1-1987** 

**for general-purpose**  **small electric**  **motors.**

**DOE conducted**  **its engineering**  **analysis using**  **the baseline**  **models DOE**  **selected. DOE** 

**started with**  **these baseline**  **models and**  **then applied**  **a modified**  **design-option approach**  **to**

**improve their**  **efficiency. DOE**  **was careful**  **to ensure**  **that critical**  **performance characteristics**  **of**

**the baseline**  **model performance**  **were maintained**  **to the**  **greatest extent**  **possible and**  **that the** 

**motor designs**  **can be**  **manufactured. q**  **DOE worked**  **to ensure**  **that modifications**  **to the**  **baseline**

**models could**  **serve as**  **drop-in replacements**  **for the**  **baseline model**  **itself, so**  **that the**  **cost**

**efficiency curve**  **would be**  **an accurate**  **representation of**  **that equipment**  **class. To**  **do this,**  **DOE**

**set design**  **constraints on**  **some critical**  **performance characteristics**  **(** e.g., **maintaining locked-rotor** 

**torque within**  **10 percent**  **of the**  **baseline model**  **value) and**  **other design**  **constraints focused**  **on**

**manufacturability** ( e.g.

, **an air**  **gap no**  **less than**  **10 thousandths**  **of an**  **inch or**  **not exceeding**  **75-**

**percent peak**  **slot fill).**  **DOE invites**  **comments from**  **interested parties**  **about these**  **constraints,**

**presented in**  **chapter 5**  **of the**  **preliminary TSD.** 

2.4.5 Cost Model

**DOE uses**  **a standard**  **method of**  **cost accounting**  **to determine**  **the manufacturer’s** 

**production costs,**  **illustrated in**  **Figure 2.4.1.**  **DOE combined**  **production costs**  **and non** 

**production costs**  **to determine**  **the full**  **cost of**  **a product.** 

Manufacturer Production Cost (MPC)

Full Production Cost Non­Production Cost

Interest Research &

Develop. General &

Admin. Selling Overhead Direct

Material Direct

Labor

Figure 2.4.1 Standard Method of Cost Accounting for Standards Rulemaking

**To develop**  **the cost**  **estimates shown**  **in Figure**  **2.4.1, DOE**  **consulted with**  **technical**

**experts in**  **the motor**  **industry; experts**  **in related**  **industries; and**  **SEC-10K reports**  **from A.O.** 

**Smith Corporation,**  **Baldor Electric**  **Company, Emerson**  **Motor Company,**  **and Regal**  **Beloit**

**Corporation. Full**  **production cost**  **is a**  **combination of**  **direct labor,**  **direct materials,**  **and**

**overhead. The**  **overhead contributing**  **to full**  **production cost**  **includes indirect**  **labor, indirect** 

**material, maintenance,**  **depreciation, taxes,**  **and insurance**  **related to**  **company assets.**  **Non**

**q DOE**  **discussed whether**  **a particular**  **design option**  **could be**  **manufactured with**  **its technical**  **experts and**  **some**

**manufacturers. For**  **example, DOE**  **did not**  **reduce the**  **air gap**  **between the**  **rotor (moving**  **parts) and**  **stator (static** 

**parts) to**  **less than**  **ten thousandths**  **of an**  **inch. While**  **further reducing**  **the air**  **gap would**  **theoretically improve** 

**efficiency, DOE**  **believes that**  **doing so**  **would be**  **impractical to**  **manufacture and**  **create operational**  **reliability**

**problems such**  **as the**  **rotor striking**  **the stator**  **during use,**  **particularly when**  **stack length**  **is increasing.** 

**2-27 production**  **cost includes**  **the cost**  **of selling**  **(e.g., market**  **research, advertising,**  **sales**

**representatives, logistics),**  **general and**  **administrative costs,**  **research and**  **development, and** 

**interest payments.** 

**DOE used**  **this cost**  **methodology to**  **estimate the**  **manufacturer’s cost**  **of production**  **for**

**the engineering**  **analysis. The**  **output from**  **the small**  **electric motor**  **design software**  **includes a** 

**complete bill**  **of materials**  **that specifies**  **quantities and**  **dimensions of**  **all parts**  **associated with**  **the**

**manufacturing of**  **each finished**  **design. DOE**  **multiplied these**  **materials by**  **their associated**  **costs**

**and manufacturer**  **markups. The**  **software output**  **also includes**  **an estimate**  **of labor**  **time**

**associated with**  **each step**  **of motor**  **construction. DOE**  **multiplied these**  **time estimates**  **by fully** 

**burdened labor**  **rates to**  **estimate the**  **labor cost**  **portion of**  **the total**  **cost. DOE**  **then combined** 

**these labor**  **costs with**  **the marked-up**  **bill of**  **materials to**  **arrive at**  **an estimate**  **of the**  **manufacturer**

**selling price.** 

**DOE discusses**  **each of**  **these component**  **costs below.**  **See preliminary**  **TSD chapter**  **5 for** 

**more detail**  **on these**  **component costs.** 

2.4.5.1 Bill of Materials

**DOE developed**  **and presented**  **a bill**  **of materials**  **(BOM) for**  **each of**  **the small**  **electric**

**motors designed**  **for the**  **engineering analysis**  **in preliminary**  **TSD chapter**  **5 and**  **its appendices.** 

**The BOM**  **contains three**  **types of**  **material costs:**  **fixed costs,**  **semi-fixed costs,**  **and variable** 

**costs. Fixed**  **costs represent**  **material costs**  **that remain**  **constant across**  **a range**  **of efficiencies.** 

**These parts**  **are found**  **in all**  **motors, regardless**  **of the**  **operating efficiency.**  **Semi-fixed costs**  **vary**

**by design**  **as a**  **function of**  **the amount**  **of material**  **found in**  **the motor.**  **For example,**  **rotor bars**  **are**

**made of**  **either aluminum**  **or copper.**  **The assumed**  **price per**  **pound for**  **aluminum or**  **copper is**  **the**

**same from**  **design to**  **design; however,**  **the cost**  **per design**  **can vary**  **because the**  **quantity of** 

**aluminum or**  **copper may**  **vary with**  **efficiency. DOE**  **considered variable**  **costs for**  **each motor** 

**design that**  **incorporated the**  **cost of**  **the raw**  **material and**  **the quantity**  **of that**  **material the**  **motor**

**used. For**  **example, stator**  **and rotor**  **lamination costs**  **are variable**  **costs because**  **the price**  **for the** 

**different steel**  **grades changes**  **as well**  **as the**  **amount of**  **the steel**  **needed (**  i.e., **stack height)**  **for**

**each design.** 

**Emerson and**  **NEMA commented**  **that motor**  **pricing information**  **over the**  **last few**  **years**

**may not**  **be an**  **accurate representation**  **of future**  **prices due**  **to the**  **recent increase**  **in the**  **price of** 

**copper. Emerson**  **and NEMA**  **believe that**  **motor pricing**  **information in**  **mid-2007 would**  **be a** 

**more appropriate**  **indicator of**  **future prices.**  **(Emerson, Public**  **Meeting Transcript,**  **No. 3.6**  **at pp.** 

**95-96; NEMA,**  **No. 5.1**  **at p.**  **3) DOE**  **consulted with**  **other industry**  **experts and**  **steel suppliers,** 

**and agrees**  **with Emerson**  **and NEMA.**  **DOE is**  **concerned about**  **material prices**  **and accurately** 

**projecting the**  **cost-efficiency relationship**  **for small**  **electric motors.**  **DOE gathered**  **material**

**pricing in**  **late 2007**  **and used**  **these prices**  **to calculate**  **the MSP**  **for the**  **small electric**  **motors in** 

**the engineering**  **analysis. DOE**  **obtained pricing**  **data through**  **publicly available**  **data sources,** 

**which DOE**  **then reviewed**  **and verified**  **with industry**  **experts and**  **component suppliers,**  **such as** 

**steel suppliers.** 

**2-28**2.4.5.2 Labor Costs and Assumptions

**Labor costs**  **are a**  **significant part**  **of a**  **manufacturer's costs**  **in building**  **a small**  **electric**

**motor. As**  **an input**  **to the**  **engineering spreadsheet,**  **DOE used**  **the same**  **fully burdened**  **hourly**

**labor rate**  **for all**  **small electric**  **motors manufactured.**  **DOE took**  **the base**  **hourly rate**  **from the** 

**2002 Economic**  **Census of**  **Industry by**  **the U.S.**  **Census Bureau.**  **DOE applied**  **several markups**  **to**

**this hourly**  **rate to**  **obtain a**  **fully burdened**  **hourly rate**  **of $58.75,**  **which is**  **representative of** 

**average labor**  **costs associated**  **with manufacturing**  **electric motors.**  **The markups**  **applied include** 

**percentages for**  **indirect production,**  **overhead, fringe**  **benefits, assembly,**  **labor up-time,**  **and non** 

**production markup.**  **DOE also**  **used 2002**  **U.S. Census**  **data to**  **determine the**  **markup for**  **fringe.**

**DOE derived**  **the non-production**  **markup by**  **studying the**  **2006 and**  **2007 SEC-10K**  **reports for** 

**four major**  **motor manufacturers**  **in the**  **United States.** 

**DOE used**  **design software**  **to estimate**  **the manufacturing**  **time per**  **motor by**  **labor task**  **for**

**the stator**  **assembly, rotor**  **assembly, end**  **cap assembly,**  **housing and**  **hardware assembly,**  **and final** 

**assembly. The**  **majority of**  **the labor**  **times DOE**  **calculated consisted**  **of fixed**  **component times.** 

**The stator**  **assembly list**  **includes time**  **estimates for**  **punching and**  **stacking the**  **laminations,**

**adding slot**  **liner, winding**  **coils, inserting**  **coils, forming**  **end-turns, lead**  **stripping, placing** 

**terminals, splicing**  **wires, applying**  **varnish, and**  **testing. Rotor**  **assembly labor**  **tasks include** 

**adding the**  **fan, machining**  **the shaft,**  **pressing the**  **shaft onto**  **the rotor,**  **balancing the**  **rotor, and** 

**heat shrinking**  **bearings onto**  **the shaft.**  **For end**  **cap assembly,**  **the software**  **estimates time**  **for**

**machining the**  **bearing bore**  **at each**  **end, pressing**  **the cap,**  **washing, and**  **performing the**  **die-cast**

**press. The**  **labor times**  **under the**  **housing and**  **hardware section**  **are estimates**  **of adding**  **the**

**following components**  **to the**  **motor: various**  **washers, bolts,**  **studs, screws,**  **grommets for** 

**capacitor wire**  **(when applicable),**  **start and/or**  **run capacitors**  **(when applicable),**  **and adding**  **a**

**start switch**  **(when applicable).**  **The last**  **section for**  **fixed labor**  **costs is**  **the final**  **assembly, which** 

**includes times**  **for actual**  **assembly, motor**  **testing, labeling,**  **and packaging.** 

**Across the**  **designs prepared**  **for the**  **engineering analysis,**  **DOE found**  **little variance**  **in the** 

**labor estimates**  **between the**  **baseline efficiency**  **and higher**  **efficiency motor**  **designs. The**  **labor**

**process steps**  **and estimated**  **corresponding manufacturing**  **times for**  **small electric**  **motors were** 

**discussed with**  **technical experts**  **and manufacturers,**  **asking specifically**  **which steps**  **might have** 

**longer manufacturing**  **times associated**  **with high-efficiency**  **designs. While**  **most acknowledged** 

**that the**  **labor time**  **to manufacturer**  **a motor**  **with a**  **longer stack**  **and more**  **copper wire**  **would be** 

**greater, manufacturers**  **considered this**  **difference to**  **be small,**  **if not**  **negligible.**

2.4.5.3 Manufacturer Markups

**DOE used**  **three markups,**  **described below,**  **to account**  **for the**  **costs associated**  **with the** 

**materials used**  **in manufacturing**  **each motor.**  **The markups**  **are meant**  **to represent**  **average**

**markups for**  **the industry**  **as a**  **whole. Scrap**  **factors, factory**  **overhead, and**  **non-production**

**markups will**  **be different**  **for each**  **manufacturer. DOE**  **based these**  **markups on**  **conversations**

**with manufacturers**  **and experts**  **familiar with**  **the electric**  **motor manufacturing**  **industry. Also,** 

**DOE averaged**  **non-production markups**  **taken from**  **the SEC-10K**  **reports of**  **four manufacturers** 

**based in**  **the United**  **States.**

**2-29**• Scrap factor: 2.5­percent markup

**. DOE**  **applied a**  **scrap factor**  **markup to**  **the total**  **of**

**costs associated**  **with the**  **BOM. The**  **scrap factor**  **markup is**  **part of**  **the direct**  **material**

**production costs**  **of each**  **motor. It**  **accounts for**  **the handling**  **of material**  **(loading into** 

**assembly or**  **winding equipment)**  **and the**  **scrap material**  **that cannot**  **be used**  **in the** 

**production of**  **a finished**  **small electric**  **motor (**  e.g., **lengths of**  **wire too**  **short to**  **wind).**

• Factory overhead: 12.5­percent markup

**. Factory**  **overhead includes**  **all the**  **indirect costs** 

**associated with**  **production, indirect**  **materials, energy**  **use, taxes,**  **and insurance.**  **DOE**

**only applied**  **factory overhead**  **to the**  **direct material**  **production costs.** 

• Non­production: 37­percent markup

**. This**  **markup reflects**  **costs including**  **sales and** 

**general administrative**  **costs, research**  **and development,**  **interest payments,**  **and profit.** 

**DOE applied**  **the non-production**  **markup to**  **the sum**  **of the**  **direct material**  **production, the** 

**direct labor,**  **and the**  **factory overhead.**  **Note that**  **this markup**  **is accounted**  **for in**  **the fully** 

**burdened labor**  **rate applied**  **to the**  **labor time**  **estimates.**

**NEMA commented**  **that when**  **DOE aggregates**  **cost information,**  **DOE should**  **incorporate**

**weighting to**  **the average,**  **based on**  **individual manufacturer**  **sales volumes.**  **(NEMA, No.**  **5.1 at** 

**p. 3).**  **While DOE**  **recognizes this**  **approach would**  **result in**  **a more**  **accurate average**  **value for**  **the**

**Nation, manufacturers**  **did not**  **provide individual**  **company-level sales**  **volumes, so**  **DOE has**  **no**

**data with**  **which to**  **calculate the**  **weighted average.**  **If manufacturers**  **were to**  **provide this**  **data**

**during the**  **preliminary TSD**  **comment period,**  **DOE with**  **use the**  **data to**  **calculate average**  **values**

**for the**  **NOPR.**

2.4.6 Scaling Between Equipment Classes

**As discussed**  **earlier, DOE**  **reduced the**  **analytical burden**  **associated with**  **small electric** 

**motors by**  **identifying and**  **studying select**  **representative units**  **for analysis.**  **DOE would**  **then**

**extrapolate the**  **findings from**  **those representative**  **motors to**  **other covered**  **equipment classes**  **that**

**were not**  **analyzed. DOE**  **discusses the**  **extrapolation, or**  **scaling of**  **analysis results**  **between**

**equipment classes,**  **in the**  **engineering analysis**  **(see preliminary**  **TSD chapter**  **5). However,**  **the**

**results of**  **the scaling**  **are actually**  **used in**  **the national**  **impacts analysis**  **(see preliminary**  **TSD,**

**chapter 10).** 

**In developing**  **its scaling**  **relationships between**  **equipment classes,**  **DOE found**  **that power** 

**law scaling**  **equations can**  **approximate the**  **energy loss**  **characteristics and**  **incremental cost**  **of**

**small electric**  **motors. r**  **DOE found**  **that the**  **relative losses**  **of a**  **motor at**  **full-load scales**  **as the** 

**motor’s rated**  **horsepower raised**  **to the**  **exponent -0.25.**  **That is,**  **if one**  **compares two**  **motors of** 

**different sizes**  **but a**  **similar category**  **and construction,**  **the relative**  **losses of**  **the larger**  **motor will** 

**be smaller**  **by a**  **factor that**  **is equal**  **to the**  **ratio of**  **the horsepower**  **ratings raised**  **to the**  **negative**

**0.25 power.** 

**Detail on**  **the scaling**  **relationships between**  **equipment classes,**  **including the**  **derivation of** 

**the equations,**  **are presented**  **in chapter**  **5 of**  **the preliminary**  **TSD. DOE**  **invites public**  **comment**

**r A**  **power law**  **is a**  **standard type**  **of relationship**  **between parameters**  **or variables**  **in engineering.**  **The variable**  Y **is**

**related to**  X **by a**  **power law**  **of exponent**  a **if there**  **is a**  **constant** C **such that:**  **Y**

**= C**  ***** **X a** 

**2-30 on**  **the use**  **of this**  **scaling relationship**  **to extrapolate**  **findings from**  **the representative**  **equipment**

**classes to**  **other equipment**  **classes.**

2.5 ENERGY USE AND END-USE LOAD CHARACTERIZATION

**The energy**  **use and**  **end-use load**  **characterization analysis**  **(chapter 6)**  **produces energy** 

**use estimates**  **and end-use**  **load shapes**  **for small**  **electric motors.**  **The energy**  **use by**  **small**

**electric motors**  **derives from**  **three components:**  **energy converted**  **to useful**  **mechanical shaft** 

**power, motor**  **losses, and**  **reactive power.**  **s Motor**  **losses consist**  **of I**  **2 R**  **losses, core**  **losses, stray** 

**losses and**  **friction and**  **windage losses.**  **Core losses**  **and friction**  **and windage**  **losses are**  **relatively**

**constant with**  **variations in**  **motor loading,**  **while I**  **2 R**  **losses increase**  **with the**  **square of**  **the motor** 

**loading. Stray**  **losses are**  **also dependent**  **upon loading.**  **DOE models**  **the I**  **2 R**  **losses and**  **stray**

**losses as**  **load-dependent losses.** 

**In practice,**  **reactive power**  **may not**  **result in**  **substantial increases**  **in energy**  **consumption**

**if capacitors**  **in the**  **electrical system**  **compensate (**  i.e.

**, mitigate)**  **the reactive**  **power. DOE** 

**assumes that,**  **while reactive**  **power may**  **result in**  **extra energy**  **supply costs,**  **actual losses**  **before**

**power factor**  **compensation (through**  **distribution system**  **capacitor banks)**  **are likely**  **to be**  **small.**

**Actual fractional**  **consumptive losses**  **due to**  **reactive power**  **are approximately**  **equal to**  **the**

**fractional losses**  **on the**  **electrical distribution**  **system in**  **general, which**  **means that**  **actual**

**consumptive losses**  **due to**  **reactive power**  **are likely**  **to be**  **less than**  **10 percent**  **of total**  **reactive**

**power and**  **indicates that**  **reactive power**  **makes a**  **minor contribution**  **to net**  **energy use**  **compared**

**to the**  **other two**  **types of**  **losses.**

**DOE’s analysis**  **of energy**  **use separates**  **motor losses**  **into a**  **constant component**  **and a** 

**component that**  **depends on**  **motor loading.**  **In DOE’s**  **analysis, the**  **design efficiency**  **of the**  **motor**

**at full**  **load determines**  **the total**  **losses at**  **100-percent motor**  **loading. DOE**  **then estimates**  **that**

**approximately 50**  **percent of**  **these losses**  **are load**  **independent, while**  **50 percent**  **vary as**  **the**

**square of**  **the motor**  **loading. DOE**  **analyzed motor**  **efficiency data**  **available from**  **voluntary**

**industrial efficiency**  **programs to**  **determine the**  **approximate equality**  **of constant**  **and load** 

**dependent losses**  **at full**  **load. (See**  **chapter 6**  **of the**  **preliminary TSD**  **for details.)**  **To determine** 

**the annual**  **energy use**  **in kilowatt**  **hours (kWh),**  **DOE adjusts**  **the full-load**  **losses using**  **the**

**estimate of**  **the motor**  **duty factor**  **(hours of**  **operation per**  **year) and**  **loading. All**  **losses are** 

**proportional to**  **duty factor,**  **and DOE**  **approximates the**  **load-dependent losses**  **as proportional**  **to**

**both the**  **duty factor**  **and the**  **square of**  **the loading.**  **Annual energy**  **use** E

ann **is represented**  **by the** 

**following equation:** 

**s In**  **an alternating**  **current power**  **system, the**  **reactive power**  **is the**  **root mean**  **square (RMS)**  **voltage times**  **multiplied**

**by the**  **RMS current,**  **multiplied by**  **the sine**  **of the**  **phase difference**  **between the**  **voltage and**  **the current.**  **Reactive**

**power occurs**  **when the**  **inductance or**  **capacitance of**  **the load**  **shifts the**  **phase of**  **the voltage**  **relative to**  **the phase**  **of**

**the current.**  **While reactive**  **power does**  **not consume**  **energy, it**  **can increase**  **losses and**  **costs for**  **the electricity** 

**distribution system.**  **Motors tend**  **to create**  **reactive power**  **because the**  **windings in**  **the motor**  **coils have**  **high**

**inductance.**

**2-31**2 E

ann = H

op **×** (P NL + P LL **×** L )

**Where:**

E

ann **= annual**  **energy use;** 

H

op **= the**  **annual operating**  **hours, also**  **known as**  **the duty**  **factor;**

P

NL **= the**  **power of**  **load-independent losses**  **(set equal**  **to 0.5**  **times the**  **losses at**  **full load);** 

P

LL **= the**  **power of**  **load-dependent losses**  **(set equal**  **to 0.5**  **times the**  **losses at**  **full load);**  **and**

L

**= motor**  **loading as**  **a fraction**  **of rated**  **power.**

**To calculate**  **the annual**  **kWh use**  **at each**  **efficiency level**  **in each**  **equipment class,**  **DOE**

**used the**  **efficiencies and**  **losses from**  **the engineering**  **analysis, along**  **with estimates**  **of operating** 

**hours and**  **motor loading**  **from the**  **determination analysis**  **for the**  **applications that**  **use equipment** 

**containing small**  **electric motors**  **(Table 2.5.1).** 

Table 2.5.1 Motor Operation Characteristics by Application

Motor Loading

No. Application Hours/Year (Percent of Rated)

**1 Air**  **and gas**  **compressors 800**  **85**

**2 Commercial**  **and Industrial**  **heating, ventilating,**  **air**

**conditioning (HVAC)/refrigeration**  **equipment 2,500**  **60**

**3 Commercial**  **laundry machinery**  **2,000 60** 

**4 Conveyors**  **3,000 50** 

**5 Farm**  **machinery 1,000**  **70**

**6 Food**  **machinery 3,000**  **60**

**7 General**  **industrial machinery**  **2,000 70** 

**8 Industrial**  **and commercial**  **fans and**  **blowers 5,000**  **80**

**9 Machine**  **tools 2,000**  **60**

**10 Packaging**  **machinery 3,000**  **60**

**11 Pumps**  **and pumping**  **equipment 3,000**  **65**

**12 Service**  **industry machinery**  **1,500 60** 

**13 Textile**  **machinery 3,000**  **70**

**14 Woodworking**  **machinery 2,000**  **35**

**DOE derived**  **the distribution**  **of values**  **for operating**  **hours and**  **motor loading**  **from the** 

**shares of**  **the applications**  **in the**  **motor stock**  **for each**  **equipment class,**  **as estimated**  **in the** 

**determination analysis**  **(Table 2.5.2).** 

**2-32**Table 2.5.2 Shares of Small Electric Motor Applications by Equipment Class

No. Application Polyphase

(%) CSIR

(%) CSCR

(%)

**1 Air**  **and gas**  **compressors 9.2**  **8.1 8.1** 

**2 Commercial**  **and Industrial**  **HVAC/refrigeration**

**equipment 4.3**  **8.4 8.4** 

**3 Commercial**  **laundry machinery**  **0.4 1.2**  **1.2**

**4 Conveyors**  **18.8 11.8**  **11.8**

**5 Farm**  **machinery 3.0**  **10.9 10.9** 

**6 Food**  **machinery 8.2**  **2.1 2.1** 

**7 General**  **industrial machinery**  **3.4 2.4**  **2.4**

**8 Industrial**  **and commercial**  **fans and**  **blowers 5.6**  **5.9 5.9** 

**9 Machine**  **tools 7.3**  **1.9 1.9** 

**10 Packaging**  **machinery 1.0**  **0.3 0.3** 

**11 Pumps**  **and pumping**  **equipment 33.0**  **41.1 41.1** 

**12 Service**  **industry machinery**  **1.5 3.0**  **3.0**

**13 Textile**  **machinery 1.2**  **0.4 0.4** 

**14 Woodworking**  **machinery 3.1**  **2.4 2.4** 

**TOTAL 100.0**  **100.0 100.0** 

**Table 2.5.3**  **shows the**  **average values**  **of operating**  **hours and**  **motor loading**  **for each** 

**equipment class,**  **weighted by**  **the shares**  **of each**  **application.**

Table 2.5.3 Average Operating Characteristics for Small Electric Motors

Equipment Class Annual Operating Hours Motor Loading

(% of rated)

**Polyphase 2,665**  **63.2**

**CSIR 2,557**  **64.8**

**CSCR 2,557**  **64.8**

**Table 2.5.4**  **shows the**  **average annual**  **electricity use**  **for each**  **energy efficiency**  **level in** 

**each equipment**  **class.**

**2-33**Table 2.5.4 Average Annual Electricity Use by Efficiency Level for Small Electric

Motors

Polyphase CSIR CSCR

Efficiency

(%) kWh Efficiency

(%) kWh Efficiency

(%) kWh

**75.8 444**  **62.3 410**  **68.6 465** 

**84.0 265**  **70.9 278**  **80.2 250** 

**85.5 236**  **73.6 243**  **82.1 222** 

**86.5 217**  **75.4 220**  **83.3 203** 

**88.0 190**  **78.2 189**  **85.2 177** 

**90.0 154**  **81.8 151**  **87.6 143** 

**See chapter**  **6 of**  **the preliminary**  **TSD for**  **additional detail**  **on the**  **energy use** 

**characterization.**

2.6 MARKUPS FOR EQUIPMENT PRICE DETERMINATION

**DOE’s markup**  **analysis estimates**  **the markups**  **to equipment**  **prices that**  **it used**  **to derive** 

**installed prices**  **for small**  **electric motors.**  **DOE added**  **the supply-chain**  **markups it**  **developed**

**(along with**  **sales taxes**  **and installation**  **prices) to**  **the manufacturer**  **selling prices**  **that were** 

**developed from**  **the engineering**  **analysis, to**  **arrive at**  **the final**  **installed prices**  **for baseline** 

**equipment as**  **well as**  **higher-efficiency equipment.**  **Details of**  **this analysis**  **are provided**  **chapter**

**7 of**  **the preliminary**  **TSD.**

2.6.1 Distribution Channels

**Before it**  **could develop**  **markups, DOE**  **needed to**  **identify distribution**  **channels (**  i.e., **how**

**the equipment**  **is distributed**  **from the**  **manufacturer to**  **the end**  **user) for**  **each category**  **of motor** 

**addressed in**  **the preliminary**  **analyses. Because**  **most of**  **the small**  **electric motors**  **are used**  **as**

**components in**  **larger pieces**  **of equipment,**  **most of**  **the market**  **passes through**  **original equipment** 

**manufacturers (OEMs)**  **that design,**  **assemble, and**  **brand products**  **that contain**  **small electric** 

**motors. OEMs**  **obtain their**  **motors either**  **directly from**  **the motor**  **manufacturers or**  **from**

**distributors.**

**For small**  **electric motors,**  **DOE defined**  **three distribution**  **channels and**  **estimated their** 

**respective shares**  **of shipments**  **in the**  **Determination Analysis:**  **(1) from**  **manufacturers to**  **OEMs**

**and then**  **to end-users**  **through OEM**  **distribution: 40**  **percent of**  **shipments; (2)**  **from**

**manufacturers to**  **wholesale distributors**  **to OEMs**  **and then**  **to end-users**  **through OEM**  **equipment**

**distribution: 25**  **percent of**  **shipments; and**  **(3) from**  **manufacturers to**  **end-users through** 

**distributors and**  **retailers: 35**  **percent of**  **shipments. Contractors**  **also play**  **a role**  **in installing** 

**motors in**  **equipment. DOE**  **used the**  **same distribution**  **channel types**  **and market**  **shares in**  **the**

**preliminary TSD**  **analysis.**

**2-34**2.6.2 Estimation of Markups

**DOE based**  **its markups**  **on financial**  **data from**  **the U.S.**  **Census Bureau**  **Business**

**Expenses Survey**  **(BES). In**  **this analysis,**  **DOE assumed**  **that the**  **sales revenues**  **reported by** 

**firms reflect**  **the prices**  **that they**  **charge for**  **products, while**  **the expenses**  **that they**  **reported to**  **the**

**BES reflect**  **costs. DOE**  **organized the**  **financial data**  **into balance**  **sheets that**  **break down**  **cost**

**components incurred**  **by firms**  **that sell**  **the products**  **and related**  **these cost**  **components to** 

**revenues to**  **estimate the**  **markups that**  **determine sales**  **price.**

**NEMA commented**  **that DOE**  **should consult**  **manufacturers’ published**  **pricing to** 

**determine channel**  **price relationships.**  **(NEMA, No.**  **5.1 at**  **p. 5)**  **While DOE**  **collected data**  **on**

**published motor**  **prices from**  **a range**  **of manufacturers,**  **these data**  **were not**  **sufficient to** 

**determine how**  **the installed**  **price of**  **equipment will**  **change with**  **increasing efficiency.**  **Instead,**

**DOE used**  **BES data**  **to calculate**  **markups. Such**  **data allow**  **DOE to**  **estimate the**  **increased**

**installed price**  **of equipment**  **when there**  **is a**  **specific efficiency**  **improvement.**

**DOE’s markup**  **analysis developed**  **both baseline**  **and incremental**  **markups to**  **transform**

**the manufacturer**  **sales price**  **into an**  **end-user equipment**  **price. DOE**  **used the**  **baseline markups** 

**to determine**  **the price**  **of baseline**  **models. DOE**  **considers baseline**  **models to**  **be equipment**  **sold**

**under existing**  **market conditions**  **(** i.e., **without new**  **energy conservation**  **standards). Incremental** 

**markups are**  **coefficients that**  **describe the**  **change in**  **the manufacturer**  **sales price**  **of higher** 

**efficiency models**  **to the**  **change in**  **the OEM,**  **retailer, or**  **distributor sales**  **price. DOE**  **considers**

**higher-efficiency models**  **to be**  **equipment sold**  **under market**  **conditions with**  **new energy** 

**conservation standards.** 

**DOE used**  **financial data**  **from the**  **following BES**  **categories: “Electrical**  **Goods Merchant** 

**Wholesalers”(to calculate**  **markups used**  **by distributors**  **of motors**  **for direct**  **distribution);**

**“Machinery, Equipment,**  **and Supplies**  **Merchant Wholesalers”**  **(to calculate**  **markups used**  **by**

**distributors of**  **equipment containing**  **small electric**  **motors); and**  **“Building materials,**  **hardware,**

**garden supply**  **and mobile**  **home dealers”**  **(to calculate**  **markups used**  **by retailers**  **for products** 

**containing motors).** 

**DOE based**  **the OEM**  **markups on**  **data from**  **the “2002**  **Economic Census**  **Manufacturing**

**Industry Series,”**  **which reports**  **on the**  **payroll (production**  **and total),**  **cost of**  **materials, capital** 

**expenditures, and**  **total value**  **of shipments**  **for manufacturers**  **of various**  **types of**  **machinery. Six** 

**years of**  **data are**  **reported for**  **each manufacturer**  **type. DOE**  **collected data**  **for 11**  **types of** 

**OEMs.**

**For the**  **OEM markups,**  **DOE calculated**  **baseline markups**  **for each**  **U.S. Census**  **Bureau**

**industry category.**  **The resulting**  **markups range**  **between 1.20**  **(industrial machinery,**  **machine**

**tools) and**  **1.56 (heating**  **equipment), with**  **an average**  **of 1.37.**  **DOE estimated**  **incremental**

**markups using**  **a least**  **squares regression**  **of the**  **value of**  **shipments on**  **payroll and**  **cost of** 

**materials. Because**  **there is**  **a large**  **range in**  **the size**  **of OEM**  **types, companies**  **with sales**  **values**

**greater than**  **$10 billion**  **were separated**  **from those**  **with sales**  **values less**  **than $10**  **billion. The** 

**incremental markup**  **for larger**  **companies was**  **1.28; the**  **incremental markup**  **for smaller** 

**companies was**  **1.33. DOE**  **assumed that**  **larger companies**  **obtained their**  **motors directly**  **from**

**manufacturers, and**  **smaller OEMs**  **obtain their**  **motors through**  **wholesale distributors.** 

**2-35 DOE**  **used information**  **from RS**  **Means Electrical**  **Cost Data**  **t to**  **estimate markups**  **used by** 

**contractors to**  **install motors**  **and OEM**  **equipment. RS**  **Means estimates**  **material expense** 

**markups for**  **electrical contractors**  **as 10**  **percent, leading**  **to a**  **markup factor**  **of 1.10.** 

**The sales**  **tax represents**  **state and**  **local sales**  **taxes that**  **are applied**  **to the**  **end-user**

**equipment price.**  **DOE derived**  **state and**  **local taxes**  **from data**  **provided by**  **the Sales**  **Tax**

**Clearinghouse. These**  **data represent**  **weighted averages**  **that include**  **county and**  **city rates.**  **DOE**

**then derived**  **population-weighted average**  **tax values**  **for each**  **U.S. Census**  **Bureau division**  **and**

**large state,**  **and then**  **derived U.S.**  **average tax**  **values using**  **a populated-weighted**  **average of**  **the**

**U.S. Census**  **Bureau division**  **and large**  **State values.**  **This approach**  **provides a**  **national average** 

**tax rate**  **of 6.84**  **percent.**

2.6.3 Summary of Markups

**Table 2.6.1**  **summarizes the**  **markups at**  **each stage**  **in the**  **distribution channel**  **and the** 

**overall baseline**  **and incremental**  **markups, as**  **well as**  **sales taxes,**  **for each**  **of the**  **three identified** 

**channels. Weighting**  **the markups**  **in each**  **channel by**  **its share**  **of shipments**  **yields an**  **average**

**overall baseline**  **markup of**  **2.42 and**  **an overall**  **incremental markup**  **of 1.75.**  **DOE used**  **these**

**markups for**  **each equipment**  **class.**

Table 2.6.1 Summary of Small Electric Motor Distribution Channel Markups

Direct to OEMs

(40%) Via Distributors to

OEMs (25%) Via Distributors to EndUsers (35%)

Baseline Incremental Baseline Incremental Baseline Incremental

**Wholesale Distributor** 

**- -**  **1.28 1.10**  **1.28 1.10** 

**OEM 1.37**  **1.27 1.37**  **1.33**

**- -** 

**Retail and**  **Post-OEM**

**Distributor 1.43**  **1.18 1.43**  **1.18 1.44**  **1.18**

**Contractor or**  **Installer 1.10**  **1.10 1.10**  **1.10 1.10**  **1.10**

**Sales Tax**  **1.0684 1.0684**  **1.0684**

**Overall 2.30**  **1.76 2.95**  **2.03 2.17**  **1.53**

**Using these**  **markups, DOE**  **generated motor**  **end user**  **prices for**  **each efficiency**  **level it** 

**considered, assuming**  **that each**  **level represents**  **a new**  **minimum efficiency**  **standard. Because**  **it**

**generated a**  **range of**  **price estimates,**  **DOE describes**  **prices within**  **a range**  **of uncertainty.** 

**Chapter 7**  **of the**  **preliminary TSD**  **provides additional**  **detail on**  **the markups**  **analysis.**

**t RS**  **Means Construction**  **Publishers &**  **Consultants, “Electrical**  **Cost Data,**  **31 st**  **Annual Edition.”**  **2008. J.H.**  **Chiang,**

**ed. Kingston,**  **MA.**

**2-36**2.7 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES

**The LCC**  **and PBP**  **analysis is**  **used to**  **determine the**  **economic impact**  **of potential** 

**standards on**  **end users.**  **The effects**  **of standards**  **on individual**  **end users**  **include changes**  **in**

**operating expenses**  **(usually lower)**  **and changes**  **in total**  **installed cost**  **(usually higher).**  **DOE**

**analyzed the**  **net effect**  **of these**  **changes for**  **small electric**  **motors, first**  **by calculating**  **the changes** 

**in end-users’**  **LCCs likely**  **to result**  **from various**  **candidate standard**  **levels compared**  **to a**  **base**

**case (no**  **new standards).**  **The LCC**  **calculation considers**  **total installed**  **cost (which**  **includes**

**manufacturer selling**  **price, sales**  **taxes, distribution**  **chain markups,**  **and installation**  **cost),**

**operating expenses**  **(energy, repair,**  **and maintenance**  **costs), equipment**  **lifetime, and**  **discount**

**rate. DOE**  **performed the**  **LCC analysis**  **from the**  **perspective of**  **users of**  **small electric**  **motors.**

**DOE also**  **analyzed the**  **effect of**  **changes in**  **operating expenses**  **and installed**  **costs by** 

**calculating the**  **PBP of**  **potential standards**  **relative to**  **a base**  **case. The**  **PBP estimates**  **the amount** 

**of time**  **it would**  **take the**  **end user**  **to recover**  **the higher**  **purchase expense**  **of more**  **energy**

**efficient equipment**  **through lower**  **operating costs.**  **Similar to**  **the LCC,**  **the PBP**  **is based**  **on the** 

**total installed**  **cost and**  **operating expenses.**  **However, unlike**  **the LCC,**  **only the**  **first year's** 

**operating expenses**  **are considered**  **in the**  **PBP calculation.**  **Because the**  **PBP does**  **not account**  **for**

**changes in**  **operating expense**  **over time**  **or the**  **time value**  **of money,**  **it is**  **also referred**  **to as**  **a**

**simple payback**  **period. For**  **more detail**  **on the**  **LCC and**  **PBP analyses,**  **see chapter**  **8 of**  **the**

**preliminary TSD.** 

2.7.1 Approach

**DOE conducted**  **the LCC**  **and PBP**  **analysis by**  **modeling both**  **the uncertainty**  **and**

**variability in**  **the inputs**  **using Monte**  **Carlo simulation**  **methods and**  **probability distributions.** 

**(See appendix**  **8B of**  **the preliminary**  **TSD for**  **a detailed**  **explanation of**  **Monte Carlo**  **simulation**

**and the**  **use of**  **probability distributions.)**  **DOE implemented**  **Monte Carlo**  **simulation and** 

**probability distributions**  **by using**  **Microsoft Excel**  **spreadsheets combined**  **with Crystal**  **Ball, a** 

**commercially available**  **add-in program.** 

**DOE defined**  **the use**  **characteristics of**  **small electric**  **motors by**  **characterizing a**  **set of** 

**end-use applications**  **for the**  **equipment that**  **contains small**  **electric motors.**  **These end-use** 

**applications determine**  **the profiles**  **of motor**  **use and**  **the economic**  **characteristics of**  **motor**

**owners.**

**DOE used**  **data from**  **the Energy**  **Information Administration**  **(EIA) on**  **electricity prices** 

**for different**  **customer classes**  **and electrical**  **utilities to**  **establish the**  **variability in**  **energy pricing.** 

**Due to**  **the large**  **range of**  **applications and**  **motor use**  **characteristics considered**  **in the**  **LCC and** 

**PBP analysis,**  **the range**  **of annual**  **energy use**  **is quite**  **broad. Although**  **the annual**  **energy use** 

**and/or energy**  **pricing are**  **not uncertain**  **for any**  **particular application,**  **the variability**  **across all** 

**applications contributes**  **to the**  **range of**  **LCCs and**  **PBPs calculated**  **for any**  **particular standard** 

**level.**

**In each**  **Monte Carlo**  **simulation, one**  **application is**  **identified by**  **sampling a**  **distribution**

**of applications**  **for each**  **equipment class.**  **The selected**  **application determines**  **the number**  **of**

**2-37**(%) **operating hours**  **per year**  **as well**  **as the**  **motor loading.**  **DOE used**  **the operating**  **hours and**  **the**

**motor loading**  **for each**  **application to**  **estimate motor**  **energy use.** 

**There is**  **also a**  **distribution of**  **owner types**  **associated with**  **each application**  **(Table 2.7.1).** 

**The sector**  **to which**  **the application**  **belongs determines**  **the energy**  **price and**  **discount rate**  **DOE**

**used in**  **the LCC**  **calculation in**  **each simulation.** 

Table 2.7.1 Motor Owner Type by Application

Motor Owner Type

No. Application Industrial

(%) Commercial

(%) Agricultural

(%) Residential

(%)

**1 Air**  **and gas**  **compressors 40**  **49 10**  **1**

**2 Commercial**  **and industrial**  **HVAC/refrigeration**

**equipment 40**  **50 10**  **0**

**3 Commercial**  **laundry machinery**  **0 100**  **0 0** 

**4 Conveyors**  **40 40**  **20 0** 

**5 Farm**  **machinery 0**  **0 100**  **0**

**6 Food**  **machinery 20**  **60 20**  **0**

**7 General**  **industrial machinery**  **40 40**  **20 0** 

**8 Industrial**  **and commercial**  **fans and**  **blowers 50**  **50 0**  **0**

**9 Machine**  **tools 65**  **20 10**  **5**

**10 Packaging**  **machinery 75**  **10 10**  **5**

**11 Pumps**  **and pumping**  **equipment 40**  **40 20**  **0**

**12 Service**  **industry machinery**  **40 40**  **20 0** 

**13 Textile**  **machinery 100**  **0 0**  **0**

**14 Woodworking**  **machinery 75**  **10 5**  **10**

2.7.2 Life-Cycle Cost Inputs

**For each**  **efficiency level**  **analyzed, the**  **LCC analysis**  **requires input**  **data for**  **the total** 

**installed cost**  **of the**  **motor, the**  **operating cost,**  **and the**  **discount rate.**  **Table 2.7.2**  **summarizes the** 

**inputs DOE**  **used to**  **calculate the**  **total installed**  **cost and**  **operating cost**  **of various**  **energy**

**efficiency levels**  **for small**  **electric motors.**  **A more**  **detailed discussion**  **of the**  **inputs follows.**  **For**

**more information**  **on data**  **sources and**  **assumptions used,**  **see chapter**  **8 of**  **the preliminary**  **TSD.**

**2-38**Table 2.7.2 Summary of Inputs Used in the Life-Cycle Cost Analysis

Input Characterization

**Baseline Manufacturer**  **Selling**

**Price Single-point**  **value**

**Manufacturer Selling**  **Price**

**Increase Cost**  **curve using**  **power law**  **interpolation**

**Markups Single-point**  **value**

**Sales Tax**  **Single-point value** 

**Installation Cost**  **Single-point value** 

**Hours of**  **Operation Variability**  **determined from**  **distribution of**  **applications**

**Annual Energy**  **Use Variability**  **based on**  **applications**

**Energy Prices**  **Variability based**  **on application,**  **owner types,**  **and utility** 

**Repair and**  **Maintenance Costs**  **No cost**  **increase with**  **efficiency**

**Lifetime Weibull**  **distribution from**  **minimum to**  **maximum values** 

**Discount Rate**  **Variability based**  **on application**  **owner types**  **and variation**  **in the**  **cost of**  **capital**

**Energy Price**  **Trend Two**  **sensitivities: High**  **and Low**  **Growth Cases** 

2.7.2.1 Baseline Manufacturer Selling Price and Manufacturer Selling Price

Increase

**DOE determined**  **the baseline**  **MSP and**  **the MSP**  **increases associated**  **with increases**  **in**

**product efficiency**  **standard levels**  **for each**  **small electric**  **motor equipment**  **class in**  **the**

**engineering analysis**  **(chapter 5**  **of the**  **preliminary TSD).**  **MSPs are**  **the prices**  **of the**  **equipment**

**at the**  **factory door.**  **They do**  **not include**  **distribution markups,**  **but do**  **include manufacturer** 

**markups.**

2.7.2.2 Distribution Markups and Sales Taxes

**DOE determined**  **the baseline**  **and incremental**  **markups for**  **each point**  **in the**  **small**

**electric motor**  **supply chain,**  **as well**  **as the**  **sales tax,**  **in the**  **markups analysis**  **(chapter 7**  **of the** 

**preliminary TSD).**  **The overall**  **baseline (2.42)**  **and incremental**  **(1.75) markups,**  **which include** 

**sales tax,**  **are weighted**  **averages based**  **on the**  **share of**  **shipments in**  **each of**  **the three**  **identified**

**distribution channels.**  **DOE applied**  **the same**  **markups for**  **each equipment**  **class.**

2.7.2.3 Installation Costs

**DOE derived**  **installation costs**  **for small**  **electric motors**  **from data**  **in the**  **“RS Means** 

**Electrical Cost**  **Data, 2008.”**  **u This**  **book provides**  **estimates on**  **the labor**  **required to**  **install**

**electric motors.**  **DOE estimated**  **that the**  **average installation**  **cost is**  **$253. Since**  **it found**  **no**

**information to**  **indicate differences**  **in installation**  **costs among**  **motor applications,**  **DOE used**  **the**

**same installation**  **cost for**  **each equipment**  **class. DOE**  **determined that**  **installation costs**  **would**

**not be**  **affected with**  **increased energy**  **efficiency levels.** 

**u RS**  **Means Construction**  **Publishers &**  **Consultants, “Electrical**  **Cost Data,**  **31 st**  **Annual Edition.”**  **2008. J.H.** 

**Chiang, ed.**  **Kingston, MA.** 

**2-39**2.7.2.4 Energy Prices and Energy Price Trend

**DOE developed**  **nationally representative**  **distributions of**  **electricity prices**  **for different** 

**customer categories**  **(industrial, commercial,**  **and residential)**  **from 2006**  **EIA Form**  **861 data.** 

**DOE estimates**  **that marginal**  **energy prices**  **for electric**  **motors are**  **close to**  **average prices,**  **which**

**vary by**  **customer type**  **and utility.**  **The average**  **prices for**  **each sector**  **are 6.3**  **cents for**  **the**

**industrial and**  **agricultural sectors,**  **9.5 cents**  **for the**  **commercial sector,**  **and 10.7**  **cents for**  **the**

**residential sector.** 

**DOE used**  **recent price**  **forecasts by**  **EIA to**  **estimate future**  **trends in**  **electricity prices**  **in**

**each sector.**  **To arrive**  **at prices**  **in future**  **years, DOE**  **multiplied the**  **average prices**  **described in** 

**the preceding**  **section by**  **the forecast**  **of annual**  **average price**  **changes in**  **EIA’s “Annual**  **Energy**

**Outlook (AEO)**  **2008.” v**  **To estimate**  **the trend**  **after 2030,**  **DOE followed**  **past guidelines** 

**provided to**  **the Federal**  **Energy Management**  **Program (FEMP)**  **by EIA**  **and used**  **the average**  **rate**

**of change**  **from 2020**  **to 2030**  **for electricity.** 

**DOE calculated**  **LCC and**  **PBP using**  **three separate**  **projections from**  **“AEO 2008:** 

**Reference, Low**  **Economic Growth,**  **and High**  **Economic Growth.”**  **These three**  **cases reflect**  **the**

**uncertainty of**  **economic growth**  **in the**  **forecast period.**  **For the**  **LCC results**  **presented in**  **this**

**preliminary analysis,**  **DOE used**  **only the**  **energy price**  **forecasts from**  **the** Annual Energy Outlook

**(** AEO **) reference**  **case.**

2.7.2.5 Repair and Maintenance Costs

**Small electric**  **motors are**  **not usually**  **repaired, because**  **they usually**  **outlast equipment** 

**where they**  **are an**  **essential component**  **and the**  **cost of**  **repair would**  **generally exceed**  **the cost**  **of**

**a new**  **replacement motor.**  **DOE found**  **no evidence**  **that repair**  **or maintenance**  **costs would** 

**increase with**  **higher motor**  **energy efficiency.**  **Thus, DOE**  **did not**  **include changes**  **in repair**  **and**

**maintenance costs**  **for motors**  **that are**  **more efficient**  **than baseline**  **products.**

2.7.2.6 Lifetime

**For the**  **preliminary analysis,**  **DOE used**  **the information**  **it gathered**  **for the**  **determination**

**analysis for**  **small electric**  **motors. DOE**  **elected to**  **use a**  **mean lifetime**  **of 7**  **years for**  **capacitor**

**start motors**  **and 9**  **years for**  **polyphase motors**  **as the**  **values that**  **are most**  **consistent with** 

**available information.**  **DOE then**  **characterized each**  **product lifetime**  **with a**  **Weibull probability** 

**distribution that**  **ranged from**  **the minimum**  **to maximum**  **lifetime estimates**  **shown in**  **Table 2.7.3.** 

Table 2.7.3 Motor Lifetimes Used in the Life-Cycle Cost Analysis

Equipment Class Group Minimum

Years Average

Years Maximum

Years

**Polyphase 7**  **9 11** 

**CSIR and**  **CSCR 5**  **7 9** 

**DOE will**  **conduct the**  **NOPR analysis**  **using the**  **latest available**  **version of**  **the AEO.** 

**2-40 v** **NEMA stated**  **that motor**  **lifetimes depend**  **on their**  **annual hours**  **of use**  **in addition**  **to the** 

**variances of**  **motor loading**  **for various**  **applications. NEMA**  **added that**  **end users**  **may decide**  **to**

**prematurely dispose**  **of the**  **equipment containing**  **a motor,**  **and that**  **the motors**  **often outlast**  **the**

**end-use equipment.**  **Thus, DOE**  **should take**  **into account**  **the life**  **of the**  **end-use equipment**  **and**

**not only**  **the potential**  **life of**  **the motor**  **alone. (NEMA,**  **No. 5.1**  **at p.**  **7) DOE**  **believes that**  **the**

**range of**  **lifetimes it**  **used for**  **small electric**  **motors accounts**  **for a**  **variety of**  **applications,**

**including those**  **in which**  **the end-use**  **equipment fails**  **or is**  **discarded while**  **the motor**  **is still** 

**functional.**

**NEMA also**  **stated that**  **life expectancy**  **does not**  **change dramatically**  **with a**  **premium**

**efficient product**  **compared to**  **a standard**  **product. (NEMA,**  **No. 5.1**  **at pp.**  **6-7) DOE** 

**acknowledges this**  **information and**  **used the**  **same lifetime**  **range for**  **all energy**  **efficiency levels.** 

2.7.2.7 Discount Rate

**The discount**  **rate is**  **the rate**  **at which**  **future expenditures**  **are discounted**  **to estimate**  **their**

**present value.**  **DOE used**  **the classic**  **economic definition**  **that discount**  **rates are**  **equal to**  **the cost** 

**of capital.**  **The cost**  **of capital**  **is a**  **combination of**  **debt interest**  **rates and**  **the cost**  **of equity**  **capital**

**to the**  **affected firms**  **and industries.**  **For each**  **end-use sector,**  **DOE developed**  **a distribution**  **of**

**discount rates**  **from which**  **the Monte**  **Carlo simulations**  **sample.**

**For the**  **industrial and**  **commercial sectors,**  **DOE assembled**  **data on**  **debt interest**  **rates and** 

**the cost**  **of equity**  **capital for**  **representative firms**  **that use**  **the applications**  **listed in**  **Table 2.7.1.** 

**DOE determined**  **a distribution**  **of discount**  **rates (the**  **weighted-average cost**  **of capital)**  **for each** 

**class of**  **potential owners**  **using data**  **from the**  **Damodaran online**  **investment survey.**  **w The** 

**discount rate**  **distribution for**  **each equipment**  **class DOE**  **analyzed in**  **the LCC**  **analysis is**  **a**

**weighted sample**  **that combines**  **estimated ownership**  **percentages (Table**  **2.7.1) with**  **their**

**respective discount**  **rates. DOE**  **used the**  **same distribution**  **of discount**  **rates for**  **the industrial**  **and**

**agricultural sectors.**  **The average**  **discount rates**  **in DOE’s**  **analysis, weighted**  **by the**  **shares of** 

**each rate**  **value in**  **the sectoral**  **distributions, are**  **5.86 percent**  **for commercial**  **end users**  **and 5.92** 

**percent for**  **industrial and**  **agricultural end**  **users.**

**For the**  **residential sector,**  **DOE assembled**  **a distribution**  **of interest**  **or return**  **rates on** 

**various equity**  **investments and**  **debt types**  **from a**  **variety of**  **financial sources,**  **including the** 

**Federal Reserve**  **Board’s “Survey**  **of Consumer**  **Finances” (SCF)**  **in 1989,**  **1992, 1995,**  **1998,**

**2001, and**  **2004. DOE**  **assigned weights**  **in the**  **distribution based**  **on the**  **shares of**  **each financial** 

**instrument in**  **household financial**  **holdings according**  **to SCF**  **data. The**  **weighted-average**

**discount rate**  **for residential**  **product owners**  **is 5.5**  **percent.**

**The effective**  **date is**  **the future**  **date when**  **a new**  **standard becomes**  **operative. Based**  **on**

**DOE’s implementation**  **report for**  **energy conservation**  **standards activities**  **submitted pursuant**  **to**

**section 141**  **of the**  **Energy Policy**  **Act of**  **2005, a**  **final rule**  **for the**  **small electric**  **motors being** 

**considered for**  **the preliminary**  **TSD analyses**  **will be**  **completed in**  **February 2010.**  **The statute** 

**says, in**  **relevant part,**  **that “[a]ny**  **standard prescribed**  **under paragraph**  **(2) [that**  **affect small** 

**electric motors**  **for which**  **DOE prescribed**  **test procedures]**  **shall apply**  **to small**  **electric motors** 

**w The**  **survey is**  **available at**  **http://pages.stern.nyu.edu/adamodar.**

**2-41 manufactured**  **60 months**  **after the**  **date such**  **rule is**  **published”. (42**  **USC 6317(b)(3))**  **Therefore,**

**the effective**  **date of**  **any new**  **energy conservation**  **standards for**  **these products**  **would be** 

**February 2015.**  **DOE calculated**  **the LCC**  **for all**  **end users**  **as if**  **each one**  **would purchase**  **a new** 

**piece of**  **equipment in**  **the year**  **the standard**  **takes effect.** 

2.7.2.8 Product Energy Efficiency in the Base Case

**For purposes**  **of conducting**  **the LCC**  **analysis, DOE**  **analyzed candidate**  **standard levels** 

**relative to**  **a base**  **case (**  i.e.

**, a**  **case without**  **new energy**  **conservation standards).**  **This requires**  **an**

**estimate of**  **the distribution**  **of product**  **efficiencies in**  **the base**  **case** (i.e., **what consumers**  **would**

**have purchased**  **in 2015**  **in the**  **absence of**  **new standards).**  **In the**  **market and**  **technology**

**assessment, DOE**  **estimated the**  **baseline efficiency**  **for each**  **equipment category**  **from available** 

**market data,**  **which provided**  **the rated**  **efficiency for**  **selected models**  **and manufacturers.**  **DOE**

**calculated a**  **market-weighted average**  **efficiency for**  **each equipment**  **category, shown**  **in Table** 

**2.7.4. Chapter**  **3 of**  **the preliminary**  **TSD provides**  **details of**  **the calculation**  **of market-weighted** 

**baseline efficiency.**  **Since there**  **is no**  **evidence of**  **a change**  **in market-average**  **efficiency in** 

**recent years,**  **DOE assumed**  **that the**  **current averages**  **are reasonable**  **to use**  **as a**  **base case**  **for**

**2015.**

Table 2.7.4 Small Electric Motor Energy Efficiency in the Base Case

Equipment Class Efficiency (%)

**Polyphase 76.4** 

**CSIR 63.3** 

**CSCR 67.9** 

2.7.2.9 Payback Period

**As described**  **above, the**  **PBP is**  **the amount**  **of time**  **it takes**  **the customer**  **to recover**  **the**

**assumed additional**  **installed cost**  **of more**  **efficient equipment**  **through energy**  **cost savings.** 

**Payback analysis**  **is a**  **common technique**  **used to**  **evaluate investment**  **decisions. This**  **calculation**

**is known**  **as a**  **simple payback**  **period because**  **it does**  **not account**  **for changes**  **in operating** 

**expense over**  **time or**  **the time**  **value of**  **money.**

**The inputs**  **to the**  **PBP calculation**  **are the**  **total installed**  **cost of**  **the equipment**  **to the**  **end**

**user for**  **each efficiency**  **level and**  **the annual**  **(first-year) operating**  **expenditures for**  **each**

**efficiency level.**  **The PBP**  **calculation uses**  **the same**  **inputs as**  **the LCC**  **analysis, except**  **that**

**energy price**  **trends and**  **discount rates**  **are not**  **needed. The**  **calculation needs**  **energy prices**  **only**

**for the**  **year in**  **which a**  **new standard**  **is expected**  **to take**  **effect, in**  **this case**  **2015.**

2.8 NATIONAL IMPACT ANALYSIS

**The national**  **impact analysis**  **estimates future**  **national energy**  **savings of**  **candidate**

**standards levels**  **and the**  **economic impacts**  **on end**  **users. The**  **analysis measures**  **economic**

**impacts using**  **the net**  **present value**  **(i.e., future**  **amounts discounted**  **to the**  **present) of**  **total end** 

**user costs**  **and savings**  **expected to**  **result from**  **new standards**  **at specific**  **efficiency levels.**  **The**

**analysis begins**  **with a**  **shipments analysis**  **that estimates**  **future sales**  **of new**  **equipment and**  **the**

**2-42 rate**  **at which**  **existing equipment**  **is replaced.**  **The national**  **impact analysis**  **then calculates**  **the**

**energy savings**  **impacts of**  **candidate standard**  **levels with**  **the NES,**  **and the**  **economic impacts**  **of**

**candidate standards**  **with the**  **NPV. Both**  **the NES**  **and the**  **NPV calculate**  **impacts as**  **the**

**difference between**  **a base**  **case forecast**  **and the**  **standards case.**  **NES is**  **estimated in**  **terms of** 

**savings in**  **source energy**  **(primary fuel**  **inputs to**  **electricity production**  **and delivery).** 

2.8.1 Shipments Analysis

**DOE’s shipments**  **analysis is**  **a key**  **input into**  **the national**  **impact analysis**  **(preliminary**

**TSD chapter**  **10). DOE**  **also will**  **use shipment**  **estimates as**  **an input**  **to the**  **MIA, discussed**  **in**

**preliminary TSD**  **chapter 12.**  **As noted**  **above, DOE**  **has performed**  **a preliminary**  **MIA for**  **this**

**preliminary TSD.**  **DOE will**  **complete this**  **analysis after**  **the preliminary**  **TSD is**  **published, and** 

**will report**  **the MIA**  **findings in**  **the NOPR.** 

**DOE developed**  **a set**  **of shipment**  **forecasts for**  **each small**  **electric motor**  **equipment**

**category. Within**  **each category,**  **small electric**  **motor shipments**  **are comprised**  **of products**  **in a** 

**number of**  **horsepower ratings**  **and three**  **rotation speeds**  **(3,600 rpm**  **or two-pole,**  **1,800 rpm**  **or**

**four-pole, and**  **1,200 rpm**  **or six-pole).**  **DOE conducted**  **its analysis**  **using representative**  **motors**

**in each**  **equipment category.**  **To calculate**  **national impacts,**  **DOE used**  **the total**  **shipments for**  **all**

**speeds and**  **horsepower ratings.**  **This amounts**  **to an**  **assumption that**  **the four-pole**  **motors are** 

**representative of**  **the entire**  **market.**

**DOE’s shipment**  **forecast assumes**  **that motors**  **sales are**  **driven by**  **macroeconomic**

**activity of**  **the sector**  **within which**  **they are**  **used. Small**  **electric motors**  **are mainly**  **used in**  **the**

**industrial, agricultural,**  **and commercial**  **sectors. DOE**  **estimates that**  **less than**  **one percent**  **of the** 

**motors covered**  **in this**  **rule are**  **used in**  **the residential**  **sector. DOE**  **assumed that**  **shipment**

**growth rates**  **for each**  **sector are**  **equal to**  **growth rates**  **in the**  **following economic**  **drivers,**

**provided by**  **AEO 2008**  **until 2030:** 

• **industrial and**  **agricultural - manufacturing**  **activity (total**  **shipments**

**– manufacturing** 

**only, in**  **dollars);**

• **commercial - commercial**  **floor space;**  **and**

• **residential - number**  **of households.** 

**The resulting**  **average annual**  **growth rates**  **for shipments**  **from 2015**  **to 2030**  **are 1.4** 

**percent for**  **polyphase motors**  **and 1.1**  **percent for**  **CSIR and**  **CSCR motors.**  **In each**  **case, motor** 

**sales follow**  **the sector**  **trend year**  **by year,**  **according to**  **the time**  **series provided**  **by AEO**  **2008.**

**Therefore, the**  **growth rate**  **is not**  **constant. After**  **2030, DOE**  **forecasted shipments**  **using the** 

**average growth**  **rates for**  **2020**

− **2030.**

**Sales of**  **small electric**  **motors may**  **be sensitive**  **to increases**  **in the**  **installed cost.**  **Totally**

**enclosed motors**  **are potential**  **substitutes for**  **the open-construction**  **motors covered**  **in the** 

**preliminary TSD**  **analyses. Totally**  **enclosed motors**  **come in**  **the same**  **frame sizes**  **and**

**horsepower ratings**  **and have**  **similar performance**  **characteristics. Today,**  **the incremental**  **cost of** 

**using a**  **totally enclosed**  **motor instead**  **of an**  **open-construction motor**  **is approximately**  **18**

**2-43 percent.**  **If the**  **installed cost**  **of open-construction**  **motors were**  **to increase**  **much beyond**  **18**

**percent due**  **to energy**  **conservation standards,**  **there might**  **be some**  **migration to**  **totally enclosed** 

**motors. In**  **its comments**  **on the**  **Framework Document,**  **NEMA stated**  **that price**  **tends to**  **have a** 

**greater impact**  **than operating**  **cost on**  **the purchase**  **of equipment**  **containing small**  **electric**

**motors. Thus,**  **the higher**  **cost of**  **more efficient**  **motors could**  **reduce the**  **sales of**  **some equipment** 

**and affect**  **motor purchases**  **by OEMs.**  **(NEMA, No.**  **5.1 at**  **p. 7)** 

**DOE agrees**  **that increases**  **in the**  **installed cost**  **of small**  **electric motors**  **could reduce**  **their**

**purchase due**  **to migration**  **by OEMs**  **to totally**  **enclosed motors**  **or other**  **factors. However,**  **DOE**

**has not**  **found any**  **data that**  **would allow**  **it to**  **estimate the**  **elasticity of**  **small electric**  **motor**

**shipments with**  **respect to**  **purchase price**  **or other**  **factors. Therefore,**  **DOE requests**  **information**

**on the**  **level of**  **price change**  **for the**  **small electric**  **motors covered**  **in the**  **preliminary analyses**  **that**

**would be**  **likely to**  **induce migration**  **to totally**  **enclosed motors,**  **as well**  **as data**  **on what**  **would be** 

**an appropriate**  **value to**  **use for**  **purchase price**  **elasticity.**

**Table 2.8.1**  **shows DOE’s**  **forecast of**  **small electric**  **motor shipments.**  **Additional detail** 

**on the**  **shipments analyses**  **can be**  **found in**  **chapter 9**  **of the**  **preliminary TSD.** 

Table 2.8.1 Annual and Cumulative Shipments Forecast for Small Electric Motors

Equipment Class Annual Shipments (millions)

2015 2025 2035 2045 Cumulative

2015–2045

**Polyphase 0.638**  **0.732 0.831**  **0.944 24.3** 

**CSIR 6.001**  **6.640 7.423**  **8.431 219.6** 

**CSCR 0.316**  **0.349 0.385**  **0.423 11.4** 

**The base**  **case shipments**  **forecast also**  **provides information**  **on efficiency**  **trends for**  **small**

**electric motors,**  **if any.**  **In the**  **determination analysis,**  **DOE estimated**  **that the**  **base case** 

**efficiency during**  **the 2010**  **to 2030**  **period would**  **average from**  **1⁄4 percent**  **to one**  **percent higher** 

**than current**  **base case**  **motors. At**  **the Framework**  **Document public**  **meeting, DOE**  **received**

**comments on**  **the tendency**  **of the**  **small electric**  **motors market**  **to value**  **efficiency without** 

**regulation. Emerson**  **commented that**  **voluntary programs**  **that try**  **to convince**  **customers to**  **buy a** 

**more efficient**  **product at**  **the point**  **of sale**  **are not**  **“particularly effective.”**  **(Emerson, Public** 

**Meeting Transcript,**  **No. 3.6**  **at p.**  **175) Given**  **the lack**  **of data**  **indicating effective**  **voluntary**

**efficiency programs**  **or trends**  **of efficiency**  **improvement and**  **the very**  **small size**  **of the**  **efficiency**

**trend analyzed**  **in the**  **determination analysis,**  **DOE assumed**  **that there**  **is no**  **significant increase** 

**in efficiency**  **for the**  **base case**  **forecast for**  **this equipment**  **in the**  **national impact**  **analysis for**  **the**

**preliminary TSD.**  **DOE invites**  **comment on**  **this assumption.** 

2.8.2 National Energy Savings and Net Present Value Analyses

**The national**  **impact analysis**  **estimates future**  **national energy**  **savings of**  **candidate**

**standards levels**  **and the**  **economic impacts**  **on end**  **users. The**  **analysis measures**  **economic**

**impacts using**  **the net**  **present value**  (i.e., **future amounts**  **discounted to**  **the present)**  **of total**  **end**

**user costs**  **and savings**  **expected to**  **result from**  **new standards**  **at specific**  **efficiency levels.**  **For a** 

**given candidate**  **standard level,**  **DOE calculated**  **the NPV,**  **as well**  **as the**  **NES, as**  **the difference** 

**2-44 between**  **a base**  **case forecast**  **and the**  **standards case.**  **NES is**  **estimated in**  **terms of**  **savings in** 

**source energy**  **(primary fuel**  **inputs to**  **electricity production**  **and delivery).** 

**At the**  **Framework Document**  **public meeting,**  **DOE received**  **comments on**  **the tendency** 

**of the**  **small electric**  **motors market**  **to value**  **efficiency without**  **regulation. Emerson**  **commented**

**that voluntary**  **programs that**  **try to**  **convince customers**  **to buy**  **a more**  **efficient product**  **at the** 

**point of**  **sale are**  **not “particularly**  **effective.” (Emerson,**  **Public Meeting**  **Transcript, No.**  **3.6 at**  **p.**

**175) Given**  **the lack**  **of data**  **indicating effective**  **voluntary efficiency**  **programs or**  **trends of** 

**efficiency improvement,**  **DOE assumed**  **a constant**  **efficiency for**  **the base**  **case forecast**  **for this** 

**equipment in**  **the national**  **impact analysis.** 

**DOE determined**  **national annual**  **energy savings**  **by combining**  **unit level**  **savings relative** 

**to the**  **base case**  **with national**  **stock estimates**  **based on**  **the shipments**  **forecast. Cumulative** 

**energy savings**  **are the**  **sum of**  **the annual**  **NES determined**  **over a**  **specific time**  **period. DOE** 

**calculated net**  **economic savings**  **each year**  **as the**  **difference between**  **total operating**  **cost savings** 

**and increases**  **in total**  **installed costs.**  **Cumulative savings**  **are the**  **sum of**  **the annual**  **NPV**

**determined over**  **the forecast**  **period.**

**Chapter 10**  **of the**  **preliminary TSD**  **provides additional**  **detail on**  **the national**  **impact**

**analysis for**  **small electric**  **motors.**

**In the**  **NES and**  **NPV analyses,**  **more-efficient equipment**  **gradually replaces**  **less-efficient**

**equipment in**  **the standards**  **case over**  **time, making**  **both NES**  **and NPV**  **a function**  **of the**  **total**

**number of**  **units in**  **use and**  **their efficiencies,**  **and dependent**  **on annual**  **shipments and**  **equipment**

**lifetimes. Both**  **calculations start**  **by using**  **the estimate**  **of shipments**  **and the**  **quantity of**  **units in** 

**service that**  **are derived**  **from the**  **shipments model.** 

**Because more-efficient**  **motors gradually**  **replace less-efficient**  **ones, the**  **energy per**  **unit**

**of capacity**  **used by**  **motors in**  **service gradually**  **decreases in**  **the standards**  **case relative**  **to the** 

**base case.**  **To estimate**  **the resulting**  **total energy**  **savings for**  **each candidate**  **efficiency level,** 

**DOE first**  **calculated the**  **national site-energy**  **consumption for**  **small electric**  **motors for**  **each**

**year, beginning**  **with the**  **expected effective**  **date of**  **the standards**  **(2015). Then,**  **DOE converted** 

**the annual**  **site-energy savings**  **into the**  **annual amount**  **of energy**  **saved at**  **the source**  **of electricity** 

**generation (the**  **source energy),**  **using a**  **site-to-source conversion**  **factor to**  **account for**  **losses in** 

**electricity generation,**  **transmission, and**  **distribution. DOE**  **used annual**  **site-to-source conversion** 

**factors based**  **on the**  **version of**  **the National**  **Energy Modeling**  **System (NEMS)**  **that corresponds** 

**to EIA’s**  AEO **2008 through**  **2030**

. **DOE assumed**  **that conversion**  **factors remain**  **constant at** 

**2030 values**  **throughout the**  **remainder of**  **the forecast.**  **Finally, DOE**  **summed the**  **annual source** 

**energy savings**  **from 2015**  **to 2045**  **to calculate**  **the total**  **NES for**  **that period.**  **DOE performed** 

**these calculations**  **for each**  **candidate standard**  **level.**

**To estimate**  **NPV, DOE**  **calculated the**  **net financial**  **impact each**  **year as**  **the difference** 

**between total**  **operating cost**  **(electricity) and**  **increases in**  **total installed**  **costs (which**  **consist of** 

**MSP, distribution**  **chain markups,**  **sales taxes,**  **and installation**  **cost). DOE**  **calculated the**  **NPV of** 

**each candidate**  **standard level**  **over the**  **life of**  **the equipment**  **using the**  **following three**  **steps.**

**First, DOE**  **calculated the**  **difference between**  **the equipment**  **costs under**  **the candidate**  **standard**

**2-45 level**  **case and**  **the base**  **case to**  **determine the**  **net equipment**  **cost increase**  **resulting from**  **the**

**candidate standard**  **level. Second,**  **DOE calculated**  **the difference**  **between the**  **base case** 

**operating costs**  **and the**  **candidate standard**  **level operating**  **costs to**  **determine the**  **net operating** 

**cost savings**  **from the**  **candidate standard**  **level. Third,**  **DOE calculated**  **the difference**  **between**

**the net**  **operating cost**  **savings and**  **the net**  **equipment cost**  **increase to**  **determine the**  **net savings** 

**(or expense)**  **for each**  **year. DOE**  **then discounted**  **the annual**  **net savings**  **(or expenses)**  **to 2008** 

**for small**  **electric motors**  **bought on**  **or before**  **2045, and**  **summed the**  **discounted values**  **to provide** 

**the NPV**  **of a**  **candidate standard**  **level.**

2.8.3 Rebound Effect

**For some**  **types of**  **equipment, a**  **significant “rebound**  **effect” can**  **occur when**  **more**

**efficient equipment**  **is used**  **more intensely**  **in response**  **to the**  **economic savings**  **from energy** 

**efficiency. Accounting**  **for a**  **significant rebound**  **effect will**  **decrease energy**  **savings compared**  **to**

**a scenario**  **with no**  **rebound effect.**  **Small electric**  **motors are**  **predominantly components**  **of larger** 

**pieces of**  **equipment or**  **an integrated**  **production process.**  **Typically, energy**  **losses from** 

**inefficient operation**  **of the**  **larger equipment**  **or process**  **that contains**  **a small**  **electric motor**  **are**

**much greater**  **than losses**  **due to**  **inefficiencies of**  **the individual**  **motor. In**  **addition, consumers** 

**rarely have**  **direct control**  **over the**  **intensity of**  **motor operation.**  **Given these**  **considerations and**  **a**

**lack of**  **data indicating**  **a rebound**  **effect for**  **small electric**  **motors, DOE**  **assumed that**  **there is**  **no**

**significant rebound**  **effect for**  **this equipment.** 

2.8.4 Electricity Prices and Discount Rate

**Electricity prices**  **paid by**  **users of**  **small electric**  **motors depend**  **on customer**  **type (sector)** 

**and use**  **patterns. For**  **each equipment**  **class, DOE**  **estimated average**  **prices in**  **2006 weighted**  **by**

**the sectoral**  **distribution of**  **motors for**  **that class**  **(see preliminary**  **TSD chapter**  **8). To**  **determine**

**the trend**  **in prices**  **over the**  **forecast period,**  **DOE scaled**  **current price**  **estimates by**  **the trend**  **in**

**electricity prices**  **provided by**  **AEO 2008**  **by sector**  **until 2030.**  **DOE extrapolated**  **electricity**

**prices after**  **2030 according**  **to average**  **annual price**  **trend from**  **2020 to**  **2030.**

**DOE estimated**  **national impacts**  **with both**  **a three**  **percent and**  **seven percent**  **real discount** 

**rate. DOE**  **used these**  **discount rates**  **in accordance**  **with OMB’s**  **guidance to**  **Federal agencies**  **on**

**the development**  **of regulatory**  **analysis (OMB**  **Circular A-4,**  **September 17,**  **2003), and**  **section E,** 

**“Identifying and**  **Measuring Benefits**  **and Costs,”**  **therein. The**  **seven percent**  **discount rate**  **is an** 

**estimate of**  **the average**  **before-tax return**  **on private**  **capital in**  **the U.S.**  **economy, while**  **three**

**percent approximates**  **the “social**  **rate of**  **time preference,”**  **which is**  **the rate**  **at which**  **society**

**discounts future**  **consumption flows**  **to their**  **present value.**  **DOE defines**  **the present**  **year as** 

**2008.**

2.9 LIFE-CYCLE COST SUBGROUP ANALYSIS

**The LCC**  **subgroup analysis**  **evaluates impacts**  **of standards**  **on identifiable**  **groups of** 

**customers, such**  **as customers**  **of different**  **business types,**  **which may**  **be disproportionately** 

**affected by**  **an energy**  **conservation standard.**  **For the**  **NOPR, DOE**  **will analyze**  **the LCCs**  **and**

**2-46 PBPs**  **for motor**  **users that**  **fall into**  **such groups.**  **The analysis**  **will determine**  **whether any** 

**particular group**  **of end**  **users would**  **be adversely**  **affected by**  **any of**  **the candidate**  **standard**

**levels.**

**DOE will**  **determine the**  **effect on**  **customer subgroups**  **using the**  **LCC spreadsheet**  **model.**

**The spreadsheet**  **model used**  **for the**  **LCC analysis**  **can be**  **used with**  **different data**  **inputs. The** 

**standard LCC**  **analysis includes**  **various customer**  **types that**  **use small**  **electric motors.**  **DOE can** 

**analyze the**  **LCC for**  **any subgroup,**  **such as**  **small manufacturers**  **or agricultural**  **motor owners,**  **by**

**using the**  **LCC spreadsheet**  **model and**  **sampling only**  **that subgroup.**  **Details of**  **this model**  **are**

**explained in**  **preliminary TSD**  **chapter 8,**  **which describes**  **the LCC**  **and PBP**  **analyses. DOE**  **will**

**be especially**  **sensitive to**  **potential negative**  **economic impacts**  **on identifiable**  **population groups** 

**such as**  **small businesses**  (i.e., **those with**  **low annual**  **revenues) or**  **farmers, which**  **may not**  **be able** 

**to afford**  **a substantial**  **increase in**  **the price**  **of small**  **electric motors.** 

**NEMA stated**  **that there**  **is no**  **significant consumer**  **subgroup impact**  **using the**  **EPCA**

**definition. (NEMA,**  **No. 5.1**  **at p.**  **8) DOE**  **acknowledges NEMA’s**  **comment and**  **will revisit**  **the**

**matter in**  **the NOPR.** 

2.10 MANUFACTURER IMPACT ANALYSIS

**The purpose**  **of the**  **MIA is**  **to identify**  **the likely**  **impacts of**  **higher energy**  **conservation**

**standards on**  **manufacturers. The**  **Process Rule**  **provides guidance**  **for conducting**  **this analysis** 

**with input**  **from manufacturers**  **and other**  **interested parties.**  **DOE will**  **apply this**  **methodology to** 

**its evaluation**  **of standards**  **for small**  **electric motors.**  **The Process**  **Rule gives**  **guidelines for**  **the**

**consideration of**  **financial impacts**  **and a**  **wide range**  **of quantitative**  **and qualitative**  **industry**

**impacts that**  **might occur**  **following the**  **adoption of**  **a standard.**  **For example,**  **a particular** 

**standard level**  **could require**  **changes to**  **manufacturing practices**  **of small**  **electric motors.**  **DOE**

**will identify**  **and discuss**  **these impacts**  **at interviews**  **with manufacturers**  **and other**  **interested**

**parties during**  **the NOPR**  **stage of**  **its analysis.** 

**DOE will**  **conduct the**  **MIA in**  **three phases,**  **and will**  **further tailor**  **the analytical** 

**framework based**  **on comments**  **by interested**  **parties. In**  **Phase I,**  **DOE creates**  **an industry**  **profile**

**to characterize**  **the industry**  **and identify**  **important issues**  **that require**  **consideration. In**  **Phase II,** 

**DOE prepares**  **an industry**  **cash-flow model**  **and an**  **interview questionnaire**  **to guide**  **subsequent**

**discussions. In**  **Phase III,**  **DOE interviews**  **manufacturers, and**  **assesses the**  **impacts of**  **standards**

**both quantitatively**  **and qualitatively.**  **DOE assesses**  **industry and**  **subgroup cash**  **flow and**  **NPV**

**using the**  **Government Regulatory**  **Impact Model**  **(GRIM). DOE**  **then assesses**  **impacts on** 

**competition, manufacturing**  **capacity, employment,**  **and regulatory**  **burden based**  **on manufacturer** 

**interview feedback**  **and discussions.** 

**Until recently,**  **DOE reported**  **MIA results**  **in its**  **standards rulemakings**  **only in**  **the NOPR** 

**phase of**  **the rulemaking.**  **However, DOE**  **is now**  **evaluating and**  **reporting preliminary**  **MIA**

**information at**  **this preliminary**  **analytical phase.**  **DOE gathered**  **the information**  **for the**  **analysis**

**during the**  **manufacturer interviews**  **conducted after**  **the engineering**  **analysis. For**  **more detail**  **on**

**the MIA,**  **see chapter**  **12 of**  **the preliminary**  **TSD.**

**2-47**2.10.1 Sources of Information for the Manufacturer Impact Analysis

**Many of**  **the analyses**  **described above**  **provide important**  **information applicable**  **to the** 

**MIA. Such**  **information includes**  **manufacturing costs**  **and prices**  **from the**  **engineering analysis,** 

**retail price**  **forecasts, and**  **shipment forecasts.**  **DOE will**  **supplement this**  **information with** 

**company financial**  **data and**  **other information**  **gathered during**  **interviews with**  **manufacturers.**

**This interview**  **process plays**  **a key**  **role in**  **the MIA**  **because it**  **allows interested**  **parties to** 

**privately express**  **their views**  **on important**  **issues. To**  **preserve confidentiality,**  **DOE’s contractor** 

**aggregates these**  **perspectives across**  **manufacturers, creating**  **a combined**  **opinion or**  **estimate for** 

**DOE. This**  **process enables**  **DOE to**  **incorporate sensitive**  **information from**  **manufacturers in**  **the**

**rulemaking process.** 

**DOE conducts**  **detailed interviews**  **with manufacturers**  **to gain**  **insight into**  **the range**  **of**

**potential impacts**  **of standards.**  **Typically, DOE**  **solicits both**  **quantitative and**  **qualitative**

**information during**  **the interviews**  **on the**  **potential impacts**  **of efficiency**  **levels on**  **sales, direct** 

**employment, capital**  **assets, and**  **industrial competitiveness.**  **DOE prefers**  **an interactive**  **interview**

**process, rather**  **than a**  **written response**  **to a**  **questionnaire, because**  **it helps**  **clarify responses**  **and**

**identify additional**  **issues. Before**  **the interviews,**  **DOE will**  **circulate a**  **draft document**  **showing**

**estimates of**  **the financial**  **parameters based**  **on publicly**  **available information.**  **DOE will**  **solicit**

**comments on**  **these estimates**  **during the**  **interviews.**

**DOE will**  **ask interview**  **participants to**  **identify any**  **confidential information**  **that they** 

**have provided,**  **either orally**  **or in**  **writing. DOE**  **will consider**  **all information**  **collected, as** 

**appropriate, in**  **its decision-making**  **process. However,**  **DOE will**  **not make**  **confidential**

**information available**  **in the**  **public record.**  **DOE also**  **will ask**  **participants to**  **identify all** 

**information they**  **wish to**  **have included**  **in the**  **public record,**  **but do**  **not want**  **to have**  **associated**

**with their**  **interview. DOE**  **will incorporate**  **this information**  **into the**  **public record,**  **but will** 

**report it**  **without attribution.** 

**DOE will**  **collate the**  **completed interview**  **questionnaires and**  **prepare a**  **summary of**  **the**

**major issues.**  **For more**  **detail on**  **the methodology**  **used in**  **the MIA,**  **see chapter**  **12 of**  **the**

**preliminary TSD.** 

2.10.2 Industry Cash-Flow Analysis

**The industry**  **cash-flow analysis**  **relies primarily**  **on the**  **GRIM. DOE**  **uses the**  **GRIM to** 

**analyze the**  **financial impacts**  **of more**  **stringent energy**  **conservation standards**  **on the**  **industry.**

**The GRIM**  **analysis uses**  **several factors**  **to determine**  **annual cash**  **flows from**  **a new** 

**standard: annual**  **expected revenues;**  **manufacturer costs,**  **including cost**  **of goods**  **sold,**

**depreciation, research**  **and development,**  **selling, and**  **general and**  **administrative expenses;**  **taxes;**

**and conversion**  **capital expenditures.**  **DOE compares**  **the results**  **against base**  **case projections** 

**that involve**  **no new**  **standards. The**  **financial impact**  **of new**  **standards is**  **the difference**  **between**

**the two**  **sets of**  **discounted annual**  **cash flows.**  **Other performance**  **metrics, such**  **as return**  **on**

**invested capital,**  **also are**  **available from**  **the GRIM.**  **For more**  **information on**  **the industry**  **cash**

**flow analysis,**  **see chapter**  **12 of**  **the preliminary**  **TSD.**

**2-48**2.10.3 Manufacturer Subgroup Analysis

**Industry cost**  **estimates are**  **inadequate to**  **assess differential**  **impacts among**  **subgroups of** 

**manufacturers because**  **these subgroups**  **may have**  **different cost**  **structures or**  **regulatory**

**frameworks that**  **impact their**  **respective business**  **models. For**  **example, small**  **and niche** 

**manufacturers, or**  **manufacturers whose**  **cost structure**  **differs significantly**  **from the**  **industry**

**average, could**  **experience a**  **more negative**  **impact. Ideally,**  **DOE would**  **consider the**  **impact on** 

**every firm**  **individually; however,**  **since this**  **usually is**  **not possible,**  **DOE typically**  **uses the** 

**results of**  **the industry**  **characterization to**  **group manufacturers**  **exhibiting similar**  **characteristics.**

**During the**  **interview process,**  **DOE will**  **discuss the**  **potential subgroups**  **and subgroup** 

**members it**  **has identified**  **for the**  **analysis. DOE**  **will encourage**  **manufacturers to**  **recommend**

**subgroups or**  **characteristics that**  **are appropriate**  **for the**  **subgroup analysis.**  **For more**  **detail on** 

**the manufacturer**  **subgroup analysis,**  **see chapter**  **12 of**  **the preliminary**  **TSD.**

2.10.4 Competitive Impacts Assessment

**DOE also**  **considers whether**  **a new**  **standard is**  **likely to**  **reduce industry**  **competition and** 

**will ask**  **the Attorney**  **General to**  **determine the**  **impacts, if**  **any, of**  **reduced competition.**  **DOE**

**will make**  **a determined**  **effort to**  **gather and**  **report firm-specific**  **financial information**  **and**

**impacts.**

2.10.5 Cumulative Regulatory Burden

**DOE recognizes**  **and seeks**  **to mitigate**  **the overlapping**  **effects on**  **manufacturers of**  **new or** 

**revised DOE**  **standards and**  **other regulatory**  **actions affecting**  **the same**  **equipment. DOE**  **will**

**analyze and**  **consider the**  **impact on**  **manufacturers of**  **multiple, equipment-specific**  **regulatory**

**actions. While**  **DOE has**  **not found**  **any efficiency**  **regulations that**  **apply to**  **small electric**  **motors,**

**other motors**  **produced by**  **the same**  **manufacturers are**  **or will**  **be affected**  **by regulations.**  **DOE**

**identified several**  **regulations relevant**  **to small**  **electric motors,**  **including: existing**  **energy**

**conservation standards**  **DOE established**  **for 1–200**  **horsepower electric**  **motors on**  **October 5,** 

**1999 (64**  **FR 54114);**  **new energy**  **conservation standards**  **in EISA**  **2007 established**  **for 201** 

− **500**

**horsepower and**  **other motor**  **categories; and**  **standards applicable**  **to already-regulated**  **products**

**that incorporate**  **small electric**  **motors, such**  **as residential**  **air conditioners**  **and heat**  **pumps,**

**furnaces, refrigerators**  **and freezers,**  **clothes washers**  **and dryers,**  **commercial packaged**  **air**

**conditioning and**  **heating equipment,**  **and commercial**  **refrigeration equipment;**  **and safety**  **or**

**other requirements**  **associated with**  **covered equipment.**  **DOE will**  **study the**  **potential impacts**  **of**

**these cumulative**  **burdens in**  **greater detail**  **during the**  **MIA conducted**  **during the**  **NOPR phase.** 

2.10.6 Preliminary Results for the Manufacturer Impact Analysis

**DOE conducted**  **a series**  **of preliminary**  **interviews with**  **manufacturers to**  **discuss impacts** 

**that may**  **result from**  **a regulatory**  **standard for**  **small electric**  **motors. In**  **general, manufacturers** 

**and other**  **parties identified**  **three areas**  **of concern:**  **(a) capital**  **investment to**  **retool production** 

**lines in**  **response to**  **the standards;**  **(b) maintaining**  **product availability**  **and features**  **that**

**consumers use;**  **and (c)**  **enforcement of**  **the new**  **standards.**

**2-49**2.10.7 Production Line Capital Investment

**In general,**  **manufacturers expressed**  **concern over**  **the investment**  **that may**  **become**

**necessary to**  **re-tool existing**  **production lines**  **in order**  **to produce**  **standards-compliant small** 

**electric motors.**  **Emerson and**  **Regal Beloit**  **asserted that**  **each manufacturer**  **has unique**  **designs**

**and processes**  **for producing**  **these motors,**  **so the**  **level of**  **investment to**  **reach the**  **pending**

**standards will**  **be different**  **for each.**  **As the**  **standard levels**  **increase in**  **stringency, manufacturers** 

**will be**  **forced to**  **increase the**  **amount of**  **capital expenditure,**  **potentially forcing**  **an investment**  **in**

**new lamination**  **dies, winding**  **tooling, testing**  **equipment, or**  **even re-allotting**  **factory floor**  **space.**

**(Regal Beloit,**  **Public Meeting**  **Transcript, No.**  **3.5 at**  **p. 83;**  **Emerson, Public**  **Meeting Transcript,** 

**No. 3.5**  **at pp.**  **94–95 and**  **166)**

**DOE recognizes**  **this concern,**  **and will**  **take it**  **into consideration**  **when conducting**  **the**

**manufacturer impact**  **analysis in**  **the NOPR**  **phase of**  **the rulemaking.**  **DOE is**  **also interested**  **in**

**understanding how**  **production line**  **capital investment**  **could disproportionately**  **affect small** 

**businesses, which**  **tend to**  **amortize business**  **costs over**  **smaller shipment**  **volumes.**

2.10.8 Maintaining Product Availability and Features

**Manufacturers indicated**  **that if**  **DOE adopts**  **a standard**  **level that**  **would require**  **a**

**substantial overhaul**  **of the**  **production tools**  **and processes,**  **they are**  **likely to**  **seriously consider** 

**discontinuing the**  **production of**  **small electric**  **motors. If**  **many manufacturers**  **decide to**  **exit the** 

**market, there**  **could be**  **an impact**  **on the**  **availability of**  **small electric**  **motors to**  **meet consumer** 

**needs in**  **the market.** 

**Manufacturers also**  **expressed concern**  **about a**  **final efficiency**  **level chosen**  **by the** 

**Secretary and**  **its impact**  **on the**  **availability of**  **certain designs**  **and features.**  **Emerson stated**  **that**

**if standards**  **for certain**  **horsepower levels**  **are pushed**  **too high,**  **manufacturers may**  **need to** 

**increase motor**  **frame size,**  **which could**  **eliminate certain**  **horsepower ratings.**  **(Emerson, Public** 

**Meeting Transcript,**  **No. 3.6**  **at pp.**  **134) If**  **a particular**  **horsepower rating**  **is not**  **eliminated, the** 

**newer, larger**  **motor could**  **cause installation**  **problems for**  **end users.**  **The new**  **motor may**  **be**

**difficult or**  **even impossible**  **to fit**  **into dimensionally**  **constrained applications,**  **forcing end**  **users**

**to migrate**  **to another**  **horsepower or**  **motor category,**  **or change**  **their application**  **to permit**  **the**

**installation of**  **new, more-efficient**  **motors. Regal**  **Beloit added**  **that by**  **changing the**  **enclosure**

**configuration of,**  **for example,**  **a small**  **capacitor-start motor**  **by adding**  **another capacitor**  **to**

**increase efficiency,**  **it might**  **preclude the**  **motor from**  **fitting as**  **an established**  **component in**  **a**

**larger piece**  **of equipment.**  **(Regal Beloit,**  **Public Meeting**  **Transcript, No.**  **3.6 at**  **pp. 134-35)** 

2.10.9 Enforcement of Standards

**Commenters also**  **expressed concern**  **about the**  **ability to**  **enforce a**  **small electric**  **motor**

**regulation should**  **DOE adopt**  **standards. ACEEE,**  **Emerson, Regal**  **Beloit, and**  **NEMA expressed** 

**concern about**  **the feasibility**  **of enforcing**  **any pending**  **standards. (ACEEE,**  **Public Meeting** 

**Transcript, No.**  **3.5 at**  **pp. 46–47;**  **Emerson, Public**  **Meeting Transcript,**  **No. 3.5**  **at pp.**  **9, 56,**  **87,**

**and 160;**  **Regal Beloit,**  **Public Meeting**  **Transcript, No.**  **3.5 at**  **pp. 83–84;**  **NEMA, No.**  **5.1 at**  **p. 3)** 

**In particular,**  **manufacturers are**  **concerned that**  **they will**  **lose market**  **share and**  **be put**  **at a** 

**competitive disadvantage**  **because of**  **poor enforcement.**  **This situation**  **would be**  **particularly true** 

**2-50 of**  **imported equipment**  **incorporating small**  **electric motors.**  **DOE invites**  **comments on**  **the**

**degree to**  **which standards**  **for small**  **electric motors**  **may affect**  **manufacturing and**  **imports of** 

**OEM equipment,**  **and how**  **DOE may**  **enforce standards**  **for motors**  **contained within**  **such**

**equipment. This**  **is identified**  **as Issue**  **9 in**  **section IV.E** 

2.11 UTILITY IMPACT ANALYSIS

**The utility**  **impact analysis**  **estimates the**  **effects on**  **the utility**  **industry of**  **reduced energy** 

**consumption due**  **to improved**  **equipment efficiency.**  **The analysis**  **compares modeling**  **results for** 

**the base**  **case with**  **results for**  **each candidate**  **standards case.**  **The analysis**  **for small**  **electric**

**motors will**  **consist of**  **forecasted differences**  **between the**  **base and**  **standards cases**  **for electricity** 

**generation, installed**  **capacity, sales,**  **and prices.** 

**To estimate**  **these effects**  **of proposed**  **small electric**  **motor standards**  **on the**  **electric utility** 

**industry, DOE**  **intends to**  **use a**  **variant of**  **the EIA’s**  **NEMS. x**  **EIA uses**  **NEMS to**  **produce its** 

Annual Energy Outlook. **NEMS produces**  **a widely**  **recognized reference**  **case forecast**  **for the** 

**United States**  **and is**  **available in**  **the public**  **domain. DOE**  **will use**  **a variant**  **known as**  **NEMS**

**Building Technologies**  **(NEMS-BT) to**  **provide key**  **inputs to**  **the analysis.**  **y**

**The use**  **of NEMS**  **for the**  **utility impact**  **analysis offers**  **several advantages.**  **As the** 

**official DOE**  **energy forecasting**  **model, it**  **relies on**  **a set**  **of assumptions**  **that are**  **transparent and** 

**have received**  **wide exposure**  **and commentary.**  **NEMS allows**  **an estimate**  **of the**  **interactions**

**between the**  **various energy**  **supply and**  **demand sectors**  **and the**  **economy as**  **a whole.**  **The utility** 

**impact analysis**  **will determine**  **the changes**  **for electric**  **utilities in**  **installed capacity**  **and in** 

**generation by**  **fuel type**  **produced by**  **each candidate**  **standard level,**  **as well**  **as changes**  **in**

**electricity sales**  **to the**  **economic sectors**  **affected by**  **the standards.** 

**DOE conducts**  **the utility**  **impact analysis**  **as a**  **variant of**  AEO 2008

**, applying**  **the same** 

**basic set**  **of assumptions.**  **For example,**  **the utility**  **impact analysis**  **uses the**  **operating**

**characteristics (**  e.g., **energy conversion**  **efficiency, emissions**  **rates) of**  **future electricity** 

**generating plants**  **and the**  **prospects for**  **natural gas**  **supply as**  **specified in**  **the** AEO **reference case.** 

**DOE will**  **also explore**  **deviations from**  **some of**  **the reference**  **case assumptions**  **to**

**represent alternative**  **futures. Two**  **alternative scenarios**  **use the**  **high- and low-economic-growth** 

**cases of**  AEO 2008

**. (The**  **reference case**  **corresponds to**  **medium growth.)**  **The high-economic** 

**growth case**  **assumes higher**  **projected growth**  **rates for**  **population, labor**  **force, and**  **labor**

**productivity, resulting**  **in lower**  **predicted inflation**  **and interest**  **rates relative**  **to the**  **reference case** 

**x For**  **more information**  **on NEMS,**  **please refer**  **to the**  **U.S. Department**  **of Energy,**  **Energy Information** 

**Administration documentation.**  **A useful**  **summary is**  National Energy Modeling System: An Overview 2000

**, DOE/EIA-0581(2000),**  **March 2000.** 

**y DOE/EIA**  **approves use**  **of the**  **name NEMS**  **to describe**  **only an**  **official version**  **of the**  **model without**  **any**

**modification to**  **code or**  **data. Because**  **this analysis**  **entails some**  **minor code**  **modifications and**  **the model**  **is run** 

**under various**  **policy scenarios**  **that are**  **variations on**  **DOE/EIA assumptions,**  **in this**  **analysis, DOE**  **refers to**  **it by**  **the**

**name NEMS-BT.** 

**2-51 and**  **higher overall**  **aggregate economic**  **growth. The**  **opposite is**  **true for**  **the low-growth**  **case.**

**Different economic**  **growth cases**  **affect the**  **rate of**  **growth of**  **electricity demand.** 

**Since the**  AEO 2008 **version of**  **NEMS forecasts**  **only to**  **the year**  **2030, DOE**  **must**

**extrapolate results**  **to 2045.**  **DOE will**  **use EIA’s**  **approach for**  **forecasting fuel**  **prices for**  **FEMP**

**for Federal**  **sector energy**  **prices. FEMP**  **uses these**  **prices to**  **estimate life-cycle**  **costs of**  **Federal**

**equipment procurements.**  **DOE will**  **also use**  **NEMS-BT to**  **estimate the**  **size of**  **the impact**  **that**

**energy conservation**  **standards may**  **have on**  **electricity and**  **energy prices**  **in general.**  **DOE will** 

**examine general**  **energy price**  **impacts by**  **evaluating forecasts**  **with different**  **levels of**  **electricity**

**demand to**  **determine if**  **there are**  **utility sector**  **costs that**  **are not**  **reflected in**  **consumer electricity** 

**prices. Results**  **of the**  **utility impact**  **analysis will**  **include changes**  **in electricity**  **sales, and** 

**installed capacity**  **and generation**  **by fuel**  **type, for**  **each trial**  **standard level,**  **in five-year** 

**forecasted increments**  **extrapolated to**  **the year**  **2045.**

2.12 EMPLOYMENT IMPACT ANALYSIS

**DOE includes**  **employment impacts**  **among the**  **factors to**  **be considered**  **in selecting**  **a**

**proposed standard,**  **and provides**  **guidance for**  **consideration of**  **the impact**  **of candidate**  **standard**

**levels on**  **employment, both**  **direct and**  **indirect.**

**DOE estimates**  **the impacts**  **of standards**  **on employment**  **for equipment**  **manufacturers,**

**relevant service**  **industries, energy**  **suppliers, and**  **the economy**  **in general.**  **Both indirect**  **and**

**direct employment**  **impacts are**  **covered. Direct**  **employment impacts**  **would result**  **if standards** 

**led to**  **a change**  **in the**  **number of**  **employees at**  **manufacturing plants**  **and related**  **supply and** 

**service firms.**  **Direct impact**  **estimates are**  **covered in**  **the manufacturer**  **impact analysis.** 

**Indirect employment**  **impacts are**  **impacts on**  **the national**  **economy other**  **than in**  **the**

**manufacturing sector**  **being regulated.**  **Indirect impacts**  **may result**  **both from**  **expenditures**

**shifting among**  **goods (substitution**  **effect) and**  **changes in**  **income that**  **lead to**  **a change**  **in overall** 

**expenditure levels**  **(income effect).**  **DOE defines**  **indirect employment**  **impacts from**  **standards as** 

**net jobs**  **eliminated or**  **created in**  **the general**  **economy as**  **a result**  **of increased**  **spending driven**  **by**

**the increased**  **equipment prices**  **and reduced**  **spending on**  **energy.**

**DOE expects**  **standards for**  **small electric**  **motors to**  **increase the**  **total installed**  **cost of** 

**equipment and**  **to decrease**  **energy consumption,**  **and thus**  **expenditures on**  **energy. Over**  **time,**

**increased total**  **installed cost**  **is paid**  **back through**  **energy savings.**  **The savings**  **in energy** 

**expenditures may**  **be spent**  **on new**  **investment and**  **other items.** 

**Using an**  **input/output model**  **of the**  **U.S. economy,**  **this analysis**  **seeks to**  **estimate the** 

**effects on**  **different sectors**  **and the**  **net impact**  **on jobs.**  **DOE will**  **estimate national**  **employment**

**impacts for**  **major sectors**  **of the**  **U.S. economy**  **in the**  **NOPR, using**  **public and**  **commercially**

**available data**  **sources and**  **software. DOE**  **will make**  **all methods**  **and documentation**  **available**

**for review.** 

**To investigate**  **the combined**  **direct and**  **indirect employment**  **impacts, DOE**  **will use**  **the**

**Pacific Northwest**  **National Laboratory**  **(PNNL)’s ‘Impact**  **of Sector**  **Energy Technologies’** 

**2-52 (ImSET)**  **model. PNNL**  **developed ImSET,**  **a spreadsheet**  **model of**  **the U.S.**  **economy that** 

**focuses on**  **188 sectors**  **most relevant**  **to industrial,**  **commercial, and**  **residential building**  **energy**

**use, for**  **DOE’s Office**  **of Energy**  **Efficiency and**  **Renewable Energy.**  **ImSET is**  **a special-purpose** 

**version of**  **the U.S.**  **Benchmark National**  **Input-Output (I-O)**  **model, which**  **has been**  **designed to** 

**estimate the**  **national employment**  **and income**  **effects of**  **energy saving**  **technologies that**  **are**

**deployed by**  **DOE’s Office**  **of Energy**  **Efficiency and**  **Renewable Energy.**  **In comparison**  **with the** 

**previous versions**  **of the**  **model used**  **in earlier**  **rulemakings, this**  **version allows**  **for more** 

**complete and**  **automated analysis**  **of the**  **essential features**  **of energy**  **efficiency investments**  **in**

**buildings, industry,**  **transportation, and**  **the electric**  **power sectors.** 

**The ImSET**  **software includes**  **a computer-based**  **I-O model**  **with structural**  **coefficients to** 

**characterize economic**  **flows among**  **the 188**  **sectors. ImSET’s**  **national economic**  **I-O structure**  **is**

**based on**  **the 1997**  **Benchmark U.S.**  **table, specially**  **aggregated to**  **188 sectors.** 

**DOE intends**  **to use**  **the ImSet**  **model to**  **estimate changes**  **in employment,**  **industry output,**  **and**

**wage income**  **in the**  **overall U.S.**  **economy resulting**  **from changes**  **in expenditures**  **in the**  **various**

**sectors of**  **the economy**  **due to**  **an energy**  **conservation standard.**  **For example,**  **small electric** 

**motor standards**  **may reduce**  **energy expenditures**  **and increase**  **equipment prices**  **in primarily**  **the**

**commercial and**  **industrial sectors.**  **These expenditure**  **changes are**  **likely to**  **cause some**  **near**

**term reduction**  **in commercial,**  **industrial and**  **energy sector**  **employment. At**  **the same**  **time, over** 

**the longer-term**  **these equipment**  **standards may**  **increase commercial**  **and industrial**  **sector**

**investment, and**  **increase employment**  **in other**  **sectors of**  **the economy.**  **DOE designed**  **the**

**employment impact**  **analysis to**  **estimate the**  **year-to-year net**  **national employment**  **effect of**  **these**

**different expenditure**  **flows.**

**Although DOE**  **intends to**  **use ImSET**  **for its**  **analysis of**  **employment impacts,**  **it**

**welcomes input**  **on other**  **tools and**  **factors it**  **might consider.**  **For more**  **information on**  **the net** 

**national employment**  **impacts analysis,**  **refer to**  **chapter 14**  **of the**  **preliminary TSD.** 

2.13 ENVIRONMENTAL ASSESSMENT

**The primary**  **environmental effects**  **of energy**  **conservation standards**  **for small**  **electric**

**motors would**  **be reduced**  **power plant**  **emissions resulting**  **from reduced**  **consumption of** 

**electricity. DOE**  **will assess**  **these environmental**  **effects by**  **using NEMS-BT**  **to provide**  **key**

**inputs to**  **its analysis.**  **The environmental**  **assessment produces**  **results in**  **a manner**  **similar to** 

**those provided**  **in the**  AEO

**.**

**The intent**  **of the**  **environmental assessment**  **is to**  **provide emissions**  **results estimates,**  **and**

**to fulfill**  **requirements to**  **properly quantify**  **and consider**  **the environmental**  **effects of**  **all new** 

**Federal rules.**  **The portion**  **of the**  **environmental assessment**  **that will**  **be produced**  **by NEMS-BT** 

**considers three**  **pollutants, sulfur**  **dioxide (SO**  **2 ),**  **nitrogen oxides**  **(NO X**  **), and**  **mercury (Hg),**  **and**

**one other**  **emission (carbon,**  **as carbon**  **dioxide). For**  **each of**  **the candidate**  **standard levels,**  **DOE**

**will calculate**  **total undiscounted**  **and discounted**  **power plant**  **emissions using**  **NEMS-BT, and** 

**will use**  **external analysis**  **as needed.** 

**DOE will**  **conduct the**  **environmental assessment**  **as an**  **incremental policy**  **impact** (i.e., **a**

**small electric**  **motors standard)**  **of the**  AEO 2008 **forecast, applying**  **the same**  **basic set**  **of**

**2-53 assumptions**  **used in**  AEO 2008

**. For**  **example, the**  **emissions characteristics**  **of an**  **electricity**

**generating plant**  **will be**  **exactly those**  **used in**  AEO 2008

**. Also,**  **forecasts conducted**  **with NEMS** 

**BT consider**  **the supply-side**  **and demand-side**  **effects on**  **the electric**  **utility industry.**  **Thus,**

**DOE’s analysis**  **will account**  **for any**  **factors affecting**  **the type**  **of electricity**  **generation and,**  **in**

**turn, the**  **type and**  **amount of**  **airborne emissions**  **generated by**  **the utility**  **industry.**

**The NEMS-BT**  **model tracks**  **carbon dioxide**  **emissions with**  **a specialized**  **carbon**

**emissions estimation**  **subroutine, producing**  **reasonably accurate**  **results due**  **to the**  **broad coverage** 

**of all**  **sectors and**  **inclusion of**  **interactive effects.**  **Past experience**  **with carbon**  **results from** 

**NEMS suggests**  **that emissions**  **estimates are**  **somewhat lower**  **than emissions**  **based on**  **simple**

**average factors.**  **One of**  **the reasons**  **for this**  **divergence is**  **that NEMS**  **tends to**  **predict that** 

**conservation displaces**  **generating capacity**  **in future**  **years. On**  **the whole,**  **NEMS-BT provides** 

**carbon emissions**  **results of**  **reasonable accuracy,**  **at a**  **level consistent**  **with other**  **Federal**

**published results.**  **In addition**  **to providing**  **estimates of**  **quantitative impacts**  **of small**  **electric**

**motor standards**  **on carbon**  **dioxide emissions,**  **DOE will**  **consider the**  **use of**  **monetary values**  **to**

**represent the**  **potential value**  **of such**  **emissions reductions.**  **DOE expects**  **to base**  **its estimates**  **of**

**the monetary**  **value of**  **emissions reductions**  **on the**  **economic benefits**  **likely to**  **result from**  **such**

**reductions.l DOE**  **will also**  **examine a**  **range of**  **monetary values.** 

**NEMS-BT also**  **reports SO**  **2 and**  **NO**

**X ,**  **which DOE**  **has reported**  **in past**  **analyses, as**  **well**

**as Hg.**  **The Clean**  **Air Act**  **Amendments of**  **1990 set**  **an SO**  **2 emissions**  **cap on**  **all power** 

**generation. The**  **attainment of**  **this target,**  **however, is**  **flexible among**  **generators through**  **the use** 

**of emissions**  **allowances and**  **tradable permits.**  **Although NEMS**  **includes a**  **module for**  **SO 2** 

**allowance trading**  **and delivers**  **a forecast**  **of SO**  **2 allowance**  **prices, accurate**  **simulation of**  **SO 2**  **trading implies**  **that the**  **effect of**  **energy conservation**  **standards on**  **physical emissions**  **will be** 

**zero because**  **emissions will**  **always be**  **at or**  **near the**  **ceiling. However,**  **there is**  **an SO**  **2 benefit** 

**from energy**  **conservation, in**  **the form**  **of a**  **lower SO**  **2 allowance**  **expenditure. DOE**  **will examine** 

**the potential**  **monetary impact**  **or value**  **of an**  **SO 2**  **benefit that**  **may arise**  **from a**  **standard.**

**NOX and**  **Hg emissions**  **are not**  **currently subject**  **to regulatory**  **emissions caps.**  **The U.S.** 

**Environmental Protection**  **Agency (EPA)**  **issued the**  **Clean Air**  **Interstate Rule**  **(CAIR) on**  **March**

**10, 2005.**  **70 FR**  **25162 (May**  **12, 2005).**  **On July**  **11, 2008,**  **the U.S.**  **Court of**  **Appeals for**  **the**

**District of**  **Columbia Circuit**  **(D.C. Circuit)**  **issued its**  **decision in**  **North Carolina**  **v.**

**Environmental Protection**  **Agency, in**  **which the**  **court vacated**  **the CAIR**  **and remanded**  **to EPA**  **to**

**promulgate a**  **rule consistent**  **with the**  **court’s opinion.**  **531 F.3d**  **896 (D.C.**  **Cir. 2008).**  **If left**  **in**

**place, the**  **CAIR would**  **have permanently**  **capped emissions**  **of NOX**  **in 28**  **eastern States**  **and the** 

**District of**  **Columbia. However,**  **upon consideration**  **of petitions**  **for review,**  **the D.C.**  **Circuit**

**decided on**  **December 23,**  **2008 to**  **allow CAIR**  **to remain**  **in effect**  **until it**  **is replaced**  **by a**  **rule**

**consistent with**  **the court's**  **earlier opinion.**  **North Carolina**  **v. EPA,**  **No. 05-1244,**  **2008 WL** 

**5335481 (D.C.**  **Cir. Dec.**  **23, 2008).**  **Therefore, DOE’s**  **Environmental Analysis**  **is based**  **on**

**CAIR, pending**  **revision by**  **EPA. See**  **www.epa.gov/cleanairinterstaterule**

. **Similarly, the**  **EPA**

**issued the**  **Clean Air**  **Mercury Rule**  **(CAMR). 70**  **FR 28606**  **(May 18,**  **2005). CAMR**  **would have** 

**permanently capped**  **emissions of**  **mercury for**  **new and**  **existing coal-fired**  **power plants**  **in all** 

**States by**  **2010. On**  **February 8,**  **2008, the**  **D.C. Circuit**  **issued its**  **decision in**  New Jersey v.

**2-54**Environmental Protection Agency

**, z**  **in which**  **the D.C.**  **Circuit, among**  **other actions,**  **vacated the** 

**CAMR.**

**Both with**  **and without**  **emissions caps,**  **decreased power**  **production at**  **emitting power** 

**plants can**  **have environmental-related**  **economic benefits.**  **When NO**  **X and**  **Hg emissions**  **are**

**subject to**  **emissions caps,**  **electricity demand**  **reductions may**  **result in**  **incremental changes**  **in the** 

**prices of**  **emissions allowances**  **in cap-and-trade**  **emissions markets**  **rather than**  **physical**

**emissions reductions.**  **When there**  **are physical**  **emissions reductions,**  **economic benefits**  **can**

**accrue from**  **the decreased**  **environmental damage**  **from lower**  **emissions, which**  **means that,**  **both**

**with and**  **without emissions**  **caps, standards**  **can produce**  **an environmental-related**  **economic**

**benefit in**  **the form**  **of lower**  **prices for**  **emissions allowance**  **credits or**  **a monetary**  **value of**  **the**

**economic benefits**  **of lower**  **emissions. Therefore,**  **in addition**  **to potential**  **physical emissions** 

**reductions, DOE**  **will examine**  **the potential**  **monetary value**  **of NO**  **X and**  **Hg benefits**  **that may** 

**arise from**  **a standard.** 

**The results**  **for the**  **environmental assessment**  **are similar**  **to a**  **complete NEMS**  **run as** 

**published in**  **the** AEO 2008

**. These**  **results include**  **power sector**  **emissions for**  **SO 2**  **, NO** 

**X ,**  **Hg, and** 

**carbon in**  **five-year forecasted**  **increments. The**  **outcome of**  **the analysis**  **for each**  **candidate**

**standard level**  **is reported**  **as a**  **deviation from**  **the** AEO 2008 **reference (base)**  **case.**

**NEMA stated**  **that it**  **will require**  **energy use**  **to produce**  **the additional**  **components and/or** 

**materials needed**  **to make**  **higher-efficiency motors,**  **and such**  **additional energy**  **use should**  **be**

**considered in**  **the environmental**  **assessment. (NEMA,**  **No. 5.1**  **at p.**  **9) In**  **its analysis,**  **DOE**

**quantifies the**  **direct energy**  **consumption of**  **the appliance**  **by defining**  **“energy use”**  **as the** 

**“quantity of**  **energy directly**  **consumed by**  **a consumer**  **product at**  **point of**  **use ....”**  **42 U.S.C.** 

**6291(4). DOE**  **does not**  **include the**  **embedded energy**  **associated with**  **the materials**  **used in** 

**construction. Even**  **if DOE**  **were allowed**  **by law**  **to include**  **this embedded**  **energy, for** 

**completeness, it**  **would have**  **to also**  **account for**  **the energy**  **embedded in**  **other quantities** 

**impacted by**  **the standard,**  **such as**  **the energy**  **embedded in**  **the manufacture,**  **installation, and** 

**repair of**  **the product.**  **Because energy**  **use is**  **defined as**  **that energy**  **directly consumed**  **by the** 

**product, DOE**  **does not**  **account for**  **the energy**  **embedded in**  **any other**  **quantities that**  **are**

**impacted by**  **standards.**

**For more**  **detail on**  **the environmental**  **assessment, refer**  **to the**  **environmental assessment** 

**report in**  **the preliminary**  **TSD.**

2.14 REGULATORY IMPACT ANALYSIS

**For the**  **NOPR, DOE**  **expects to**  **prepare a**  **draft regulatory**  **impact analysis**  **in compliance** 

**with Executive**  **Order 12866,**  **“Regulatory Planning**  **and Review,”**  **which would**  **be subject**  **to**

**review by**  **the Office**  **of Management**  **and Budget’s**  **Office of**  **Information and**  **Regulatory Affairs.** 

**58 FR**  **51735 (October**  **4, 1993).** 

**z Case**  **No. 05-1097,**  **2008 WL**  **341338 at**  ***** **(DC Cir.**  **Feb. 9,2008)** 

**2-55 As**  **part of**  **the regulatory**  **impact analysis,**  **and as**  **discussed in**  **the preliminary**  **TSD**

**chapter 12,**  **“Manufacturer Impact**  **Analysis,” DOE**  **will identify**  **and seek**  **to mitigate**  **the**

**overlapping effects**  **on manufacturers**  **of new**  **or revised**  **DOE standards**  **and other**  **regulatory**

**actions affecting**  **the same**  **equipment. Through**  **manufacturer interviews**  **and literature**  **searches,**

**DOE will**  **compile information**  **on burdens**  **from existing**  **and impending**  **regulations affecting** 

**small electric**  **motors. DOE**  **also seeks**  **input from**  **interested parties**  **about regulations**  **it should** 

**consider.**

**The regulatory**  **impact analysis**  **also will**  **address the**  **potential for**  **non-regulatory**

**approaches to**  **supplant or**  **augment energy**  **conservation standards**  **to improve**  **the efficiency**  **of**

**small electric**  **motors. The**  **NOPR will**  **include a**  **complete quantitative**  **analysis of**  **alternatives to** 

**the proposed**  **energy conservation**  **standards. DOE**  **would use**  **the NES**  **spreadsheet model**  **(as**

**discussed in**  **the preliminary**  **TSD chapter**  **10, “National**  **Impact Analysis”)**  **to calculate**  **the NES** 

**and NPV**  **for the**  **alternatives to**  **the proposed**  **energy conservation**  **standards. The**  **following list** 

**includes non-regulatory**  **means of**  **achieving energy**  **savings that**  **DOE may**  **consider:**

• **No new**  **regulatory action;** 

• **Consumer tax**  **credits;**

• **Manufacturer tax**  **credits;**

• **Performance standards;** 

• **Rebates;**

• **Voluntary energy**  **efficiency targets;** 

• **Early replacement;**  **and**

• **Bulk government**  **purchases.**

**In support**  **of DOE’s**  **NOPR, the**  **NOPR TSD**  **will include**  **a quantitative**  **analysis of**  **each**

**alternative to**  **the proposed**  **conservation standard.**  **DOE will**  **use the**  **NES spreadsheet**  **model (see** 

**preliminary TSD**  **chapter 10)**  **to calculate**  **the NES**  **and the**  **NPV corresponding**  **to each**  **alternative**

**to the**  **proposed conservation**  **standards.**

**For more**  **information on**  **the regulatory**  **impact analysis,**  **refer to**  **the regulatory**  **impact**

**analysis report**  **in the**  **preliminary TSD.** 

**2-56**