CHAPTER 17. REGULATORY IMPACT ANALYSIS

TABLE OF CONTENTS

17.1 INTRODUCTION ......................................................................................................... 17-1

17.2 METHODOLOGY ........................................................................................................ 17-2

LIST OF TABLES

Table 17.1.1 Non-Regulatory Alternatives to Standards........................................................ 17-1

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CHAPTER 17. REGULATORY IMPACT ANALYSIS

17.1 INTRODUCTION

Under appendix A to subpart C of Title 10 of the Code of Federal Regulations, Part 430, 

Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer 

Products (Process Rule) the U.S. Department of Energy (DOE) is committed to explore nonregulatory alternatives to energy conservation standards. Accordingly, DOE will prepare a draft 

regulatory impact analysis pursuant to Executive Order 12866, “Regulatory Planning and 

Review,” which will be subject to review by the Office of Management and Budget’s Office of 

Information and Regulatory Affairs for the notice of proposed rulemaking (NOPR). Pursuant to 

the Process Rule, DOE has identified six major alternatives to standards that represent feasible 

policy options to reduce the energy consumption of miscellaneous refrigeration products. It will 

evaluate each alternative in terms of its ability to achieve significant energy savings at a 

reasonable cost, and will compare the effectiveness of each alternative to the effectiveness of 

each candidate standard.

Table 17.1.1 lists the non-regulatory means of achieving energy savings that DOE 

proposes to analyze. The technical support document (TSD) prepared in support of DOE’s notice 

of proposed rulemaking will include a complete quantitative analysis of each alternative, the 

methodology for which is briefly addressed below.

Table 17.1.1 Non-Regulatory Alternatives to Standards

No New Regulatory Action

Consumer Rebates

Consumer Tax Credits

Manufacturer Tax Credits

Voluntary Energy Efficiency Targets

Early Replacement

Bulk Government Purchases

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17.2 METHODOLOGY

DOE will use the national impact analysis (NIA) spreadsheet model for miscellaneous 

refrigeration products to calculate the national energy savings and the net present value (NPV) 

corresponding to each alternative to proposed standards. The NIA model for miscellaneous 

refrigeration products is discussed in chapter 10 of the TSD. To compare each alternative 

quantitatively to the proposed energy conservation standards, DOE will need to quantify the 

effect of each alternative on the purchase and use of energy efficient miscellaneous refrigeration 

products. DOE will create an integrated NIA-RIA model, built on the NIA model, in which to 

make the appropriate revisions to the inputs in the NIA models. Key inputs that DOE may revise 

in the NIA-RIA model are:

• Miscellaneous refrigeration product market shares of products meeting target efficiency 

levels (identical to the trial standard levels for the mandatory standards)

• Replacement rates of equipment in the stock

The following are the key measures of the impact of each alternative.

• Energy use: Cumulative energy use of miscellaneous refrigeration products during the 

30-year analysis period starting in the effective date of the new standard.

• National energy savings: Cumulative national energy use from the base-case projection 

minus the alternative-policy-case projection.

• Net present value: The value of future operating cost savings from the equipment bought 

during the period from the required compliance date of the new standard (2021) to 2050. 

DOE will calculate the NPV as the difference between the present value of equipment

and operating expenditures (including energy) in the base case, and the present value of 

expenditures under each alternative-policy case. DOE will discount future operating and 

equipment expenditures to the present year using a 7-percent and 3-percent real discount 

rate. It will calculate operating expenses (including energy costs) for the life of the

equipment.

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