[Federal Register Volume 74, Number 69 (Monday, April 13, 2009)]
[Proposed Rules]
[Pages 16920-17027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7634]



[[Page 16919]]

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Part II





Department of Energy





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10 CFR Part 430



Energy Conservation Program: Energy Conservation Standards for General 
Service Fluorescent Lamps and Incandescent Reflector Lamps; Proposed 
Rule

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / 
Proposed Rules

[[Page 16920]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EE-2006-STD-0131]
RIN 1904-AA92


Energy Conservation Program: Energy Conservation Standards for 
General Service Fluorescent Lamps and Incandescent Reflector Lamps

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes 
energy conservation standards for various consumer products and 
commercial and industrial equipment, including general service 
fluorescent lamps (GSFL) and incandescent reflector lamps (IRL), and 
the statute also requires the Department of Energy (DOE) to 
subsequently determine whether more stringent, amended standards for 
GSFL and IRL would be technologically feasible and economically 
justified, and would save a significant amount of energy. In addition, 
EPCA directs DOE to consider adoption of standards for additional GSFL 
not already covered by EPCA-prescribed standards. In this notice, DOE 
proposes amended energy conservation standards for certain GSFL and IRL 
and new energy conservation standards for certain additional GSFL not 
currently covered by standards.

DATES: DOE held a public meeting on Tuesday, February 3, 2009 in 
Washington, DC. DOE began accepting comments, data, and information 
regarding this notice of proposed rulemaking (NOPR) at the public 
meeting, and will continue to accept comments until no later than June 
12, 2009. See section VIII, ``Public Participation,'' of this NOPR for 
details.

ADDRESSES: The public meeting was held at the U.S. Department of 
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121.
    Any comments submitted must identify the NOPR for Energy 
Conservation Standards for Lighting Products, and provide the docket 
number EE-2006-STD-0131 and/or regulatory information number (RIN) 
number 1904-AA92. Comments may be submitted using any of the following 
methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#bfd9d3cad0cddaccdcdad1cbe0ded1dbe0d6d1dcded1dbdaccdcdad1cbe0d3ded2cfcc91cdcad3dad2ded4d6d1d8ffdada91dbd0da91d8d0c9"><span class="__cf_email__" data-cfemail="e88e849d879a8d9b8b8d869cb789868cb781868b89868c8d9b8b8d869cb7848985989bc69a9d848d85898381868fa88d8dc68c878dc68f879e">[email protected]</span></a>. Include the docket number EE-2006-STD-
0131and/or RIN 1904-AA92 in the subject line of the message.
    <bullet> Postal Mail: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, Mailstop EE-2J, 1000 
Independence Avenue, SW., Washington, DC 20585-0121. Please submit one 
signed paper original.
    <bullet> Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department 
of Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., 
Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. Please 
submit one signed paper original.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VIII of this 
document (Public Participation).
    Docket: For access to the docket to read background documents or 
comments received, visit the U.S. Department of Energy, Resource Room 
of the Building Technologies Program, 950 L'Enfant Plaza, SW., Suite 
600, Washington, DC, (202) 586-2945, between 9 a.m. and 4 p.m., Monday 
through Friday, except Federal holidays. Please call Ms. Brenda Edwards 
at the above telephone number for additional information regarding 
visiting the Resource Room.

FOR FURTHER INFORMATION CONTACT:  Ms. Linda Graves, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, 
DC 20585-0121. Telephone: (202) 586-1851. E-mail: 
<a href="/cdn-cgi/l/email-protection#75391c1b11145b3207140310063510105b111a105b121a03"><span class="__cf_email__" data-cfemail="25694c4b41440b6257445340566540400b414a400b424a53">[email protected]</span></a>.
    Mr. Eric Stas or Ms. Francine Pinto, U.S. Department of Energy, 
Office of the General Counsel, GC-72, Forrestal Building, Mail Station 
GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-0121. 
Telephone: (202) 586-9507. E-mail: <a href="/cdn-cgi/l/email-protection#1b5e69727835486f7a685b736a357f747e357c746d"><span class="__cf_email__" data-cfemail="9dd8eff4feb3cee9fceeddf5ecb3f9f2f8b3faf2eb">[email protected]</span></a> or 
<a href="/cdn-cgi/l/email-protection#400632212e23292e256e10292e342f0028316e242f256e272f36"><span class="__cf_email__" data-cfemail="c583b7a4aba6acaba0eb95acabb1aa85adb4eba1aaa0eba2aab3">[email protected]</span></a>.
    For information on how to submit or review public comments, contact 
Ms. Brenda Edwards, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 
1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone: 
(202) 586-2945. E-mail: <a href="/cdn-cgi/l/email-protection#2d6f5f4843494c0368495a4c5f495e6d484803494248034a425b"><span class="__cf_email__" data-cfemail="8fcdfdeae1ebeea1caebf8eefdebfccfeaeaa1ebe0eaa1e8e0f9">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Proposed Rule
II. Introduction
    A. Consumer Overview
    B. Authority
    C. Background
    1. Current Standards
    2. History of Standards Rulemaking for General Service 
Fluorescent Lamps, Incandescent Reflector Lamps, and General Service 
Incandescent Lamps
III. Issues Affecting the Scope of This Rulemaking
    A. Additional General Service Fluorescent Lamps for Which DOE is 
Proposing Standards
    1. Scope of EPCA Requirement that DOE Consider Standards for 
Additional Lamps
    2. Identification of the Additional Lamps for Which DOE Proposes 
Standards
    a. Coverage of T5 Lamps
    b. Extension of Lamp Wattage Ranges
    3. Summary GSFL Lamps to Which DOE Proposes to Extend Coverage
    B. Exempted Incandescent Reflector Lamps
    C. Amended Definitions
    1. ``Rated Wattage''
    2. ``Colored Fluorescent Lamp''
    D. Off Mode and Standby Mode Energy Consumption Standards
    E. Color Rendering Index Standards for General Service 
Fluorescent Lamps
IV. General Discussion
    A. Test Procedures
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    C. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    D. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need of the Nation to Conserve Energy
    g. Other Factors
    2. Rebuttable Presumption
V. Methodology and Discussion of Comments
    A. Product Classes
    1. General Service Fluorescent Lamps
    a. T12 and T8 Lamps
    b. T5 Lamps
    c. Correlated Color Temperature
    2. Incandescent Reflector Lamps
    a. Modified-Spectrum Lamps
    b. Long-Life Lamps
    c. Lamp Diameter
    d. Voltage
    B. Screening Analysis
    1. General Service Fluorescent Lamps
    a. Higher-Efficiency Lamp Fill Gas Composition
    b. Higher-Efficiency Phosphors
    c. Glass Coating
    d. Lamp Diameter
    e. Multi-Photon Phosphors
    2. Incandescent Reflector Lamps
    C. Engineering Analysis
    1. Approach
    2. Representative Product Classes
    3. Baseline Lamps and Systems

[[Page 16921]]

    a. General Service Fluorescent Lamps
    b. Incandescent Reflector Lamps
    4. Lamp and Lamp-and-Ballast Designs
    a. General Service Fluorescent Lamps
    b. Incandescent Reflector Lamps
    5. Efficiency Levels
    a. General Service Fluorescent Lamps
    i. Revisions to ANOPR Efficiency Levels
    ii. Four-Foot T5 Miniature Bipin Efficiency Levels
    b. Incandescent Reflector Lamps
    6. Engineering Analysis Results
    a. General Service Fluorescent Lamps
    b. Incandescent Reflector Lamps
    7. Scaling to Product Classes Not Analyzed
    a. General Service Fluorescent Lamps
    i. Correlated Color Temperature
    ii. U-Shaped Lamps
    b. Incandescent Reflector Lamps
    i. Modified-Spectrum IRL
    ii. Lamp Diameter
    iii. Voltage
    D. Life-Cycle Cost and Payback Period Analyses
    1. Consumer Product Price
    2. Sales Tax
    3. Installation Costs
    4. Disposal Costs
    5. Annual Operating Hours
    a. Sectors Analyzed
    b. Regional Variation
    c. Building Type
    6. Product Energy Consumption Rate
    7. Electricity Prices
    8. Electricity Price Trends
    9. Lifetime
    a. Ballast Lifetime
    b. Lamp Lifetime
    10. Discount Rates
    11. Analysis Period
    12. Effective Date
    13. Payback Period Inputs
    14. Lamp Purchase Events
    E. National Impact Analysis--National Energy Savings and Net 
Present Value Analysis
    1. General
    a. Overview of NIA Changes in This Notice
    2. Shipments Analysis
    a. Lamp Inventory
    b. Shipments Growth
    i. Floor Space and Building Growth
    ii. Lamps per Household
    iii. Wider Spacing of More-Efficient Fixtures
    c. Base-Case Scenarios: Emerging Technologies and Existing 
Technologies
    i. General Service Fluorescent Lamps
    ii. Incandescent Reflector Lamps
    d. Fluorescent Market Sectors Analyzed
    e. GSFL Product Migration
    i. Ballast Rule Effective Start Date
    ii. Four-Foot Medium Bipin T12 Lamp Replacements
    iii. Eight-Foot Single Pin Slimline T12 Lamp Replacements
    iv. Four-Foot T5 Lamps
    3. Base-Case Market-Share Matrices
    a. General Service Fluorescent Lamps
    b. Incandescent Reflector Lamps
    4. GSFL Standards-Case Shipment Scenarios and Forecasts
    a. Shift/Roll-Up Scenarios
    b. Lighting Expertise Scenarios
    c. Voluntary Retrofits
    5. IRL-Standards-Case Shipment Scenarios and Forecasts
    i. Shift/Roll-Up Scenarios
    ii. Product-Substitution Scenarios
    6. Other Inputs
    a. Analysis Period
    b. Total Installed Cost
    c. Electricity Price Forecast
    d. Energy Site-to-Source Conversion
    e. HVAC Interaction Factor
    f. Rebound Effect
    g. Discount Rates
    F. Consumer Subgroup Analysis
    G. Manufacturer Impact Analysis
    1. Overview
    a. Phase 1, Industry Profile
    b. Phase 2, Industry Cash-Flow Analysis
    c. Phase 3, Subgroup Impact Analysis
    2. Discussion of Comments
    3. Government Regulatory Impact Model Analysis
    4. Manufacturer Interviews
    a. Key Issues
    i. GSFL
    ii. IRL
    b. Government Regulatory Impact Model Scenarios and Key Inputs
    i. GSFL Base-Case Shipment Forecast
    ii. IRL Base Case Shipments Forecast
    iii. GSFL Standards Case Shipments Forecast
    iv. IRL Standards-Case Shipments Forecast
    v. Manufacturing Production Costs
    vi. Amended Energy Conservation Standards Markup Scenarios
    vii. Product and Capital Conversion Costs
    H. Employment Impact Analysis
    I. Utility Impact Analysis
    J. Environmental Analysis
VI. Analytical Results
    A. Trial Standard Levels
    1. General Service Fluorescent Lamps
    2. Incandescent Reflector Lamps
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Consumers
    a. Life-Cycle Cost and Payback Period
    i. General Service Fluorescent Lamps
    ii. Incandescent Reflector Lamps
    b. Consumer Subgroup Analysis
    i. Low-Income Households
    ii. Institutions of Religious Worship
    iii. Institutions That Serve Low-Income Populations
    iv. Historical Facilities
    v. Consumers of T12 electronic ballasts
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    i. General Service Fluorescent Lamps
    ii. Incandescent Reflector Lamps
    b. Cumulative Regulatory Burden
    c. Impacts on Employment
    d. Impacts on Manufacturing Capacity
    e. Impacts on Manufacturer Subgroups
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value
    c. Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    C. Proposed Standard
    1. Overview
    2. General Service Fluorescent Lamps Conclusion
    a. Trial Standard Level 5
    b. Trial Standard Level 4
    c. Trial Standard Level 3
    3. Incandescent Reflector Lamps Conclusion
    a. Trial Standard Level 5
    b. Trial Standard Level 4
VII. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VIII. Public Participation
    A. Submission of Comments
    B. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary

Acronyms and Abbreviations

ACEEE American Council for an Energy Efficiency Economy
AEO Annual Energy Outlook
ANOPR advance notice of proposed rulemaking
ANSI American National Standards Institute
ASAP Appliance Standards Awareness Project
ASE Alliance to Save Energy
BF ballast factor
BLS Bureau of Labor Statistics
BPAR bulged parabolic aluminized reflector
BR bulged reflector (reflector lamp shape)
BT Building Technologies Program
BTU British Thermal Unit
CAIR Clean Air Interstate Act
CAMR Clean Air Mercury Rule
CBECS Commercial Buildings Energy Consumption Survey
CCT correlated color temperature
CFR Code of Federal Regulations
CFL compact fluorescent lamp
CIE International Commission on Illumination
CMH ceramic metal halide
CO<INF>2</INF> carbon dioxide
CRI color rendering index
CSL candidate standard level
DIY do-it-yourself
DOE U.S. Department of Energy
DOJ U.S. Department of Justice
E26 Edison screw-base (incandescent lamp base type)
EERE Office of Energy Efficiency and Renewable Energy
EIA Energy Information Administration
EISA 2007 Energy Independence and Security Act of 2007
EL efficacy level
EPA Environmental Protection Agency
EPACT 1992 Energy Policy Act of 1992
EPACT 2005 Energy Policy Act of 2005
EPCA Energy Policy and Conservation Act
ER elliptical reflector (reflector lamp shape)

[[Page 16922]]

FEMP Federal Energy Management Program
FR Federal Register
FTC Federal Trade Commission
GE General Electric Lighting and Industrial
GRIM Government Regulatory Impact Model
GSFL general service fluorescent lamp
GSIL general service incandescent lamp
GW gigawatt
Hg mercury
HID high-intensity discharge
HIR halogen infrared reflector
HO high output
HVAC Heating, Ventilating and Air-Conditioning
IESNA Illuminating Engineering Society of North America
ImSET Impact of Sector Energy Technologies
INPV industry net present value
I-O input-output
IPCC Intergovernmental Panel on Climate Change
IR Infrared
IRFA initial regulatory flexibility analysis
IRL incandescent reflector lamp
K degrees Kelvin
kt kilotons
LCC life-cycle cost
LED Light-Emitting Diode
LMC U.S. Lighting Market Characterization Volume I
Lm/W lumens per watt
MBP medium bipin
MECS Manufacturer Energy Consumption Survey (MECS)
MIA Manufacturer Impact Analysis
MMt million metric tons
Mt metric tons
MW megawatts
NAICS North American Industry Classification System
NCLC National Consumer Law Center
NEEP Northeast Energy Efficiency Partnership
NEMA National Electrical Manufacturers Association
NEMS National Energy Modeling System
NEMS-BT National Energy Modeling System--Building Technologies
NES national energy savings
NIA National Impact Analysis
NIST National Institute of Standards and Technology
NOPR notice of proposed rulemaking
NO<INF>X</INF> nitrogen oxides
NPCC Northwest Power and Conservation Council
NPV net present value
NRDC Natural Resources Defense Council
NVLAP National Voluntary Laboratory Accreditation Program
OEM Original Equipment Manufacturer
OIRA Office of Information and Regulatory Affairs
OMB U.S. Office of Management and Budget
PAR parabolic aluminized reflector (reflector lamp shape)
PBP payback period
PG&E Pacific Gas and Electric
quad quadrillion BTU
R reflector (reflector lamp shape)
R-CFL reflector compact fluorescent lamp
R&D research and development
RDC recessed double contact
RECS Residential Energy Consumption Survey
RIA regulatory impact analysis
RoHS Restriction on Hazardous Substances directive
SBA Small Business Administration
SCF Survey of Consumer Finances
SEC Securities and Exchange Commission
SEL spectrally-enhanced lighting
SG&A selling, general, and administrative costs
SO standard output
SO<INF>2</INF> sulfur dioxide
SP single pin
S&P Standard & Poor's
T8, T10, T12 tubular fluorescent lamps, diameters of 1, 1.25 or 1.5 
inches, respectively
TSD technical support document
TSL trial standard level
TWh terawatt-hour
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code
UV ultraviolet
V volts
VHO very high output
W watts

I. Summary of the Proposed Rule

    The Energy Policy and Conservation Act (EPCA or the Act) (42 U.S.C. 
6291 et seq.), as amended, requires DOE to consider whether to amend 
the existing energy conservation standards for GSFL and IRL, and to 
also consider whether to adopt new energy conservation standards for 
additional types of GSFL beyond those already covered by EPCA-
prescribed standards. (42 U.S.C. 6295(i)(3)-(5)) The Act also specifies 
that any new or amended energy conservation standard DOE prescribes for 
certain consumer and/or commercial products, such as GSFL and IRL, 
shall be designed to ``achieve the maximum improvement in energy 
efficiency * * * which the Secretary determines is technologically 
feasible and economically justified.'' (42 U.S.C. 6295(o)(2)(A); 
6316(a)) Furthermore, the new or amended standard must ``result in 
significant conservation of energy.'' (42 U.S.C. 6295(o)(3)(B); 
6316(a)) In accordance with these and other statutory provisions 
discussed in this notice, DOE proposes new and amended energy 
conservation standards for GSFL and IRL, as shown in Table I.1 and 
Table I.2. The proposed standards would apply to all products listed in 
Table I.1 and Table I.2 that are manufactured in or imported into the 
United States on or after June 30, 2012.

     Table I.1--Summary of the Proposed Energy Conservation Standards for General Service Fluorescent Lamps
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                                                                                                      Percent
                                                                    Correlated                     increase over
                            Lamp type                                  color      Proposed level      current
                                                                    temperature        lm/W        standards or
                                                                                                     baseline
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4-Foot Medium Bipin.............................................       <= 4,500K              84             12%
                                                                        > 4,500K              78              4%
2-Foot U-Shaped.................................................       <= 4,500K              78        15%/22%*
                                                                        > 4,500K              73         7%/14%*
8-Foot Slimline.................................................       <= 4,500K              95             19%
                                                                        > 4,500K              91             14%
8-Foot High Output..............................................       <= 4,500K              88             10%
                                                                        > 4,500K              84              5%
4-Foot Miniature Bipin Standard Output..........................       <= 4,500K             103             20%
                                                                        > 4,500K              97             13%
4-Foot Miniature Bipin High Output..............................       <= 4,500K              89             16%
                                                                        > 4,500K              85             10%
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* For these product classes, EPCA has different efficacy standards for lamps with wattages less than 35W and
  greater than or equal to 35W.


[[Page 16923]]


                     Table I.2--Summary of the Proposed Energy Conservation Standard for IRL
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                                                                                                      Percent
                                                                                                   increase over
             Lamp type                         Diameter               Voltage     Proposed level      current
                                                                                       lm/W        standards or
                                                                                                     baseline
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Standard Spectrum 40W-205W.........  > 2.5 inches...............          >= 125      7.1P\0.27\        69%-100%
                                                                           < 125      6.2P\0.27\         47%-75%
                                     <= 2.5 inches..............          >= 125      6.3P\0.27\         50%-78%
                                                                           < 125      5.5P\0.27\         31%-55%
Modified Spectrum 40W-205W.........  > 2.5 inches...............          >= 125      5.8P\0.27\         38%-63%
                                                                           < 125      5.0P\0.27\         19%-41%
                                     <= 2.5 inches..............          >= 125      5.1P\0.27\         21%-44%
                                                                           < 125      4.4P\0.27\          7%-27%
----------------------------------------------------------------------------------------------------------------
Note: P is equal to the rated lamp wattage, in watts.

    DOE's analyses indicate that the proposed standards would save a 
significant amount of energy--an estimated 3.2 to 7.3 quads (for GSFL) 
and 1.3 to 2.3 quads (for IRL) of cumulative energy over 31 years 
(2012-2042). The economic impacts on most GSFL and all IRL individual 
and commercial consumers (i.e., the average life-cycle cost (LCC) 
savings) are positive.
    The cumulative national net present value (NPV) of total consumer 
costs and savings of the proposed standards from 2012 to 2042 in 2007$ 
ranges from $3.2 billion (at a 7-percent discount rate) to $25.7 
billion (at a 3-percent discount rate) for GSFL. For IRL, the NPV from 
2012 to 2042 in 2007$ ranges from $3.7 billion (at a 7-percent discount 
rate) to $14.0 billion (at a 3-percent discount rate). This is the 
estimated total value of future operating-cost savings minus the 
estimated increased product costs, discounted to 2007. DOE estimates 
the GSFL industry net present value (INPV) to currently be $575-602 
million in 2007$. If DOE were to adopt the proposed standards, it 
expects that manufacturers may lose up to 24 percent of their INPV, 
which is approximately $139 million. The NPV of the proposed standards 
for GSFL consumers (at least $3.2 billion at the 7-percent discount 
rate) would exceed anticipated industry losses by at least 23 times. 
DOE estimates the IRL industry net present value to be $207-267 million 
in 2007$. If DOE were to adopt the proposed standards, it expects that 
manufacturers may lose 29-46 percent of their INPV, which is 
approximately $77-94 million. The NPV of the proposed standards for IRL 
consumers (at least $3.7 billion at the 7-percent discount rate) would 
exceed anticipated industry losses by at least 39 times.
    In addition, the proposed standards would have significant 
environmental benefits. All of the energy saved would be in the form of 
electricity, and DOE expects the energy savings from the proposed 
standards to eliminate the need for approximately 1100 to 3400 
megawatts (MW) of generating capacity for GSFL and up to 450 MW for IRL 
by 2042. This would result in cumulative (undiscounted) greenhouse gas 
emission reductions of 184 to 395 million metric tons (MMT) of carbon 
dioxide (CO<INF>2</INF>) for GSFL and 59 to 114 MMT for IRL from 2012 
to 2042. During this same period, the standard would result in power 
plant emission reductions of 12 to 623 kilotons (kt) of nitrogen oxides 
(NO<INF>X</INF>) for GSFL and 4 to 181 kt NO<INF>X</INF> for IRL. 
Mercury (Hg) emission reductions would be up to 6.9 tons for GFSL and 
up to 1.7 tons avoided for IRL.
    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in significant 
conservation of energy. DOE further notes that products achieving these 
standard levels are already commercially available. Based upon the 
rulemaking analyses culminating in this proposal, DOE found that the 
benefits (energy savings, consumer LCC savings, national NPV increase, 
and emission reductions) to the Nation of the proposed standards 
outweigh the burdens (INPV decrease and LCC increases for some lamp 
users). DOE considered higher efficacy levels (ELs) as trial standard 
levels (TSLs), and is still considering them in this rulemaking; 
however, DOE has tentatively concluded that the burdens of the higher 
efficiency levels outweigh the benefits. Based upon consideration of 
public comments and related information, DOE may adopt either higher or 
lower ELs presented in this proposal or some level in between.

II. Introduction

A. Consumer Overview

    EPCA currently prescribes efficacy standards for certain IRL and 
GSFL. (42 U.S.C. 6295(i)(1)) DOE proposes to raise these standards and 
to set efficacy standards for certain other GSFL, as shown in Table I.1 
and Table I.2 above. The proposed standards would apply to products 
manufactured in the United States, or imported to it, three years after 
the final rule is published in the Federal Register.\1\ Table I.1 and 
Table I.2 also show the percentage improvement in efficacy that each 
standard level represents, relative to the current standard levels or 
to products typically on the market today. The proposed standards 
represent an overall improvement of approximately 4 to 22 percent and 7 
to 100 percent in the efficacies of the GSFL and IRL baselines, 
respectively, covered by the standards.
---------------------------------------------------------------------------

    \1\ The final rule is expected to be published by June 30, 2009; 
therefore, the effective date would be June 30, 2012.
---------------------------------------------------------------------------

    DOE's analyses suggest that residential and commercial consumers 
would see benefits from the proposed standards. Although DOE expects 
that under the proposed standards, the purchase price of high-efficacy 
GSFL would be higher (up to three times higher) than the average price 
of these products today, but that the energy efficiency gains would 
result in lower energy costs that more than offset such higher costs. 
When the potential savings due to efficiency gains are summed over the 
lifetime of the high-efficacy products, consumers would be expected to 
save up to $56.60 (depending on the lamp type), on average, compared to 
their expenditures on today's baseline GSFL.
    The results of DOE's analyses for IRL follow a similar pattern. 
Although DOE expects the purchase price of the high-efficacy IRL would 
be higher (ranging from 56 to 63 percent) than the average price of 
these products today, the energy efficiency gains would result in lower 
energy costs that more than offset the higher costs. When these 
potential

[[Page 16924]]

savings due to efficiency gains are summed over the lifetime of the 
high-efficacy IRL, it is estimated that consumers would save between 
$1.62 and $8.14, on average, compared to their expenditures on today's 
baseline IRL.

B. Authority

    Title III of EPCA sets forth a variety of provisions designed to 
improve energy efficiency. Part A \2\ of Title III (42 U.S.C. 6291-
6309) established the ``Energy Conservation Program for Consumer 
Products Other Than Automobiles.'' The program covers consumer products 
and certain commercial products (referred to hereafter as ``covered 
products''), including GSFL and IRL. (42 U.S.C. 6292(a)(14) and 
6295(i)) EPCA prescribes energy conservation standards for certain GSFL 
and IRL. (42 U.S.C. 6295(i)(1)) The statute further directs DOE to 
determine whether the existing standards for fluorescent and 
incandescent lamps should be amended and whether to adopt standards for 
additional GSFL. (42 U.S.C. 6295(i)(3)-(5)) This rulemaking represents 
the first round of amendments to the GSFL and IRL energy conservation 
standards as directed by 42 U.S.C. 6295(i)(3).
---------------------------------------------------------------------------

    \2\ This part was originally titled Part B; however, it was 
redesignated Part A after Part B was repealed by Pub. L. 109-58.
---------------------------------------------------------------------------

    The scope of coverage for these requirements for GSFL and IRL is 
dictated by EPCA's definitions of these and related terms, as explained 
below. EPCA defines ``general service fluorescent lamp'' as follows: * 
* * [F]luorescent lamps which can be used to satisfy the majority of 
fluorescent applications, but does not include any lamp designed and 
marketed for the following nongeneral lighting applications: (i) 
Fluorescent lamps designed to promote plant growth. (ii) Fluorescent 
lamps specifically designed for cold temperature installations. (iii) 
Colored fluorescent lamps. (iv) Impact-resistant fluorescent lamps. (v) 
Reflectorized or aperture lamps. (vi) Fluorescent lamps designed for 
use in reprographic equipment. (vii) Lamps primarily designed to 
produce radiation in the ultra-violet region of the spectrum. (viii) 
Lamps with a color rendering index of 87 or greater. (42 U.S.C. 
6291(30)(B))
    EPCA defines ``incandescent reflector lamp'' as follows: * * * [A] 
lamp in which light is produced by a filament heated to incandescence 
by an electric current * * * [and] (commonly referred to as a reflector 
lamp) which is not colored or designed for rough or vibration service 
applications, that contains an inner reflective coating on the outer 
bulb to direct the light, an R, PAR, ER, BR, BPAR, or similar bulb 
shapes with E26 medium screw bases, a rated voltage or voltage range 
that lies at least partially within 115 and 130 volts, a diameter which 
exceeds 2.25 inches, and has a rated wattage that is 40 watts or 
higher.
(42 U.S.C. 6291(30)(C), (C)(ii) and (F))
    EPCA further clarifies this definition of IRL by defining the lamp 
types excluded from the definition: The term ``rough service lamp'' 
means a lamp that--(i) has a minimum of 5 supports with filament 
configurations that are C-7A, C-11, C-17, and C-22 as listed in Figure 
6-12 of the 9th edition of the IESNA Lighting handbook, or similar 
configurations where lead wires are not counted as supports; and (ii) 
is designated and marketed specifically for `rough service' 
applications, with (I) the designation appearing on the lamp packaging; 
and (II) marketing materials that identify the lamp as being for rough 
service. (42 U.S.C. 6291(30)(X))
    The term ``vibration service lamp'' means a lamp that--(i) has 
filament configurations that are C-5, C-7A, or C-9, as listed in Figure 
6-12 of the 9th Edition of the IESNA Lighting Handbook or similar 
configurations; (ii) has a maximum wattage of 60 watts; (iii) is sold 
at retail in packages of 2 lamps or less; and (iv) is designated and 
marketed specifically for vibration service or vibration-resistant 
applications, with--(I) the designation appearing on the lamp 
packaging; and (II) marketing materials that identify the lamp as being 
vibration service only. (42 U.S.C. 6291(30)(AA))
    The term ``colored incandescent lamp'' means an incandescent lamp 
designated and marketed as a colored lamp that has--(i) a color 
rendering index of less than 50, as determined according to the test 
method given in C.I.E. publication 13.3-1995; or (ii) a correlated 
color temperature of less than 2,500K, or greater than 4,600K, where 
correlated temperature is computed according to the Journal of Optical 
Society of America, Vol. 58, pages 1528-1595 (1986). (42 U.S.C. 
6291(30)(EE)) \3\
---------------------------------------------------------------------------

    \3\ DOE notes that the publication year of the referenced 
article in the definition of ``colored incandescent lamp,'' as 
printed in section 321(a)(1)(B) of EISA, contains two typographical 
errors. The citation should read as follows: Journal of Optical 
Society of America, Vol. 58, pages 1528-1535 (1968).
---------------------------------------------------------------------------

    The advance notice of proposed rulemaking (ANOPR) in this 
proceeding (73 FR 13620, 13622, 13625, 13628-29 (March 13, 2008)), as 
well as subsection II.C and section III below, provide additional 
detail on the nature and statutory history of EPCA's requirements for 
GSFL and IRL.
    Under the Act, DOE's energy conservation program for covered 
products consists essentially of four parts: (1) Testing; (2) labeling; 
(3) Federal energy conservation standards, and (4) certification and 
enforcement procedures. The Federal Trade Commission (FTC) is 
responsible for labeling, and DOE implements the remainder of the 
program. Section 323 of the Act authorizes DOE, subject to certain 
criteria and conditions, to develop test procedures to measure the 
energy efficiency, energy use, or estimated annual operating cost of 
each covered product. (42 U.S.C. 6293) The test procedures for GSFL and 
IRL appear at title 10 Code of Federal Regulations (CFR) part 430, 
subpart B, appendix R.
    EPCA provides criteria for prescribing new or amended energy 
conservation standards for covered products. As indicated above, any 
new or amended standard for a covered product under Part A must be 
designed to achieve the maximum improvement in energy efficiency that 
is technologically feasible and economically justified (42 U.S.C. 
6295(o)(2)(A)), although EPCA precludes DOE from adopting any standard 
that would not result in significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B)) Moreover, DOE may not prescribe a standard: (1) For 
certain products, including GSFL and IRL, if no test procedure has been 
established for that type (or class) of product, or (2) if DOE 
determines by rule that the standard would not result in significant 
conservation of energy or is not technologically feasible or 
economically justified. (42 U.S.C. 6295(o)(3)) The Act also provides 
that, in deciding whether a standard is economically justified, DOE 
must determine whether the benefits of the standard exceed its burdens. 
(42 U.S.C. 6295(o)(2)(B)(i)) DOE must do so after receiving comments on 
the proposed standard and by considering, to the greatest extent 
practicable, the following seven factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the imposition of the 
standard;

[[Page 16925]]

    (3) The total projected amount of energy savings likely to result 
directly from the imposition of the standard;
    (4) Any lessening of the utility or the performance of the covered 
products likely to result from the imposition of the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    (6) The need for national energy conservation; and
    (7) Other factors the Secretary considers relevant. (42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII))
    Furthermore, EPCA contains what is commonly known as an ``anti-
backsliding'' provision, which mandates that the Secretary not 
prescribe any amended standard that either increases the maximum 
allowable energy use or decreases the minimum required energy 
efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the 
Secretary may not prescribe an amended or new standard if interested 
persons have established by a preponderance of evidence that the 
standard is likely to result in the unavailability in the United States 
of any covered product type (or class) with performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6295(o)(4))
    Under 42 U.S.C. 6295(o)(2)(b)(iii), EPCA establishes a rebuttable 
presumption that a standard is economically justified if the Secretary 
finds that ``the additional cost to the consumer of purchasing a 
product complying with an energy conservation standard level will be 
less than three times the value of the energy, and as applicable, 
water, savings during the first year that the consumer will receive as 
a result of the standard, as calculated under the applicable test 
procedure. * * *''
    Under 42 U.S.C. 6295(q)(1), EPCA sets forth additional requirements 
applicable to promulgating a standard for a type or class of covered 
product that has two or more subcategories. DOE must specify a 
different standard level than that which applies generally to such type 
or class of products ``for any group of covered products which have the 
same function or intended use, if * * * products within such group--(A) 
consume a different kind of energy from that consumed by other covered 
products within such type (or class); or (B) have a capacity or other 
performance-related feature which other products within such type (or 
class) do not have and such feature justifies a higher or lower 
standard'' than applies or will apply to the other products. Id. In 
determining whether a performance-related feature justifies such a 
different standard for a group of products, DOE must ``consider such 
factors as the utility to the consumer of such a feature'' and other 
factors DOE deems appropriate. Id. Any rule prescribing such a standard 
must include an explanation of the basis on which such higher or lower 
level was established. (42 U.S.C. 6295(q)(2))
    Federal energy efficiency requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) DOE can, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions of section 327(d) 
of the Act. (42 U.S.C. 6297(d))

C. Background

1. Current Standards
    EPCA prescribes the energy conservation standards that are 
currently applicable to specified types of GSFL and IRL. More 
specifically, the standards set efficacy levels and color rendering 
index (CRI) levels for certain GSFL, and efficacy standards for certain 
IRL. (42 U.S.C. 6295(i)(1); 10 CFR 430.32(n)) These statutory standard 
levels are set forth in Table II.1 and Table II.2 below.

                                    Table II.1--EPCA Standard Levels for GSFL
----------------------------------------------------------------------------------------------------------------
                                                                                                      Minimum
                            Lamp type                              Nominal lamp     Minimum CRI       average
                                                                      wattage                      efficacy lm/W
----------------------------------------------------------------------------------------------------------------
4-Foot Medium Bipin.............................................           > 35W              69            75.0
                                                                          <= 35W              45            75.0
2-Foot U-Shaped.................................................           > 35W              69            68.0
                                                                          <= 35W              45            64.0
8-Foot Slimline.................................................           > 65W              69            80.0
                                                                          <= 65W              45            80.0
8-Foot High Output..............................................          > 100W              69            80.0
                                                                         <= 100W              45            80.0
----------------------------------------------------------------------------------------------------------------


                Table II.2--EPCA Standard Levels for IRL
------------------------------------------------------------------------
                                                              Min. avg.
                          Wattage                           efficacy lm/
                                                                  W
------------------------------------------------------------------------
40-50.....................................................          10.5
51-66.....................................................          11.0
67-85.....................................................          12.5
86-115....................................................          14.0
116-155...................................................          14.5
156-205...................................................          15.0
------------------------------------------------------------------------

2. History of Standards Rulemaking for General Service Fluorescent 
Lamps, Incandescent Reflector Lamps, and General Service Incandescent 
Lamps
    As stated above, EPCA established energy conservation standards for 
certain types of GSFL and IRL. (42 U.S.C. 6295(i)(1)) EPCA also 
requires that DOE conduct two cycles of rulemakings to determine 
whether to amend these standards, and that DOE initiate a rulemaking to 
determine whether to adopt standards for additional types of GSFL. (42 
U.S.C. 6295(i)(3)-(5)) This rulemaking addresses both the amendment of 
existing GSFL and IRL standards, and the adoption of standards for 
additional GSFL.
    DOE initiated this rulemaking on May 31, 2006, by publishing on its 
Web site its ``Rulemaking Framework Document for General Service 
Fluorescent Lamps, Incandescent Reflector Lamps, and General Service 
Incandescent Lamps.'' \4\ DOE also published a notice in the Federal 
Register announcing the availability of the framework document

[[Page 16926]]

and a public meeting on the document, which requested public comments 
on the matters raised in the framework document. 71 FR 30834 (May 31, 
2006). The framework document described the procedural and analytical 
approaches that DOE anticipated using to evaluate energy conservation 
standards for the products covered by this rulemaking, and it 
identified various issues to be resolved in conducting the rulemaking.
---------------------------------------------------------------------------

    \4\ A PDF copy of the framework document published in May 2006 
is available at: http://www/eere.energy.gov/buildings/appliance_standards/residential/pdfs/lamps_framework.pdf.
---------------------------------------------------------------------------

    DOE held the public meeting on June 15, 2006, to present the 
framework document, describe the analyses it planned to conduct during 
the rulemaking, seek comments from stakeholders on these subjects, and 
inform stakeholders about and facilitate their involvement in the 
rulemaking. At the public meeting and during the comment period, DOE 
received many comments that both addressed issues raised in the 
framework document and identified additional issues relevant to this 
rulemaking.
    As the title of the framework document indicates, DOE initially 
included general service incandescent lamps (GSIL) in this rulemaking. 
This was done to address the requirement then present in section 
325(i)(5) of EPCA that DOE consider energy conservation standards for 
additional GSIL. (42 U.S.C. 6295(i)(5)) However, section 
321(a)(3)(A)(iii) of the Energy Independence and Security Act of 
2007,\5\ (EISA 2007) amended EPCA to remove this requirement, thereby 
eliminating DOE's authority to regulate additional GSIL. Instead, 
section 321(a)(3)(A)(ii) of EISA 2007 amended EPCA to prescribe energy 
conservation standards for GSIL. Therefore, this rulemaking no longer 
addresses GSIL.
---------------------------------------------------------------------------

    \5\ Pub. L. 110-140 (enacted Dec. 19, 2007).
---------------------------------------------------------------------------

    DOE issued the ANOPR for this rulemaking on February 21, 2008 and 
published it in the Federal Register on March 13, 2008. 73 FR 13620. On 
February 22, 2008, DOE posted the ANOPR, as well as the complete ANOPR 
technical support document (TSD), on its Web site.\6\ The TSD includes 
the results of the following DOE preliminary analyses: (1) Market and 
technology assessment; (2) screening analysis; (3) engineering 
analysis; (4) energy use characterization; (5) product price 
determinations; (6) life-cycle cost (LCC) and pay back period (PBP) 
analyses; (7) shipments analysis; and (8) national impact analysis 
(NIA).
---------------------------------------------------------------------------

    \6\ PDF copies of the ANOPR and ANOPR TSD published in March 
2008 are available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps_anopr.html.
---------------------------------------------------------------------------

    In the March 2008 ANOPR, DOE invited comment in particular on the 
following issues: (1) Consideration of additional GSFL; (2) amended 
definitions; (3) product classes; (4) scaling to product classes not 
analyzed; (5) screening of design options; (6) lamp operating hours; 
(7) energy consumption of GSFL; (8) LCC calculation; (9) installation 
costs; (10) base-case market-share matrices; (11) shipment forecasts; 
(12) base-case and standards-case forecasted efficiencies; (13) trial 
standard levels; and (14) period for lamp production equipment 
conversion. 73 FR 13620, 13686-88 (March 13, 2008).
    In the ANOPR, DOE described and sought comment on the analytical 
framework, models, and tools (e.g., LCC and national energy savings 
(NES) spreadsheets) DOE was using to analyze the impacts of energy 
conservation standards for GSFL and IRL. DOE held a public meeting in 
Washington, DC, on March 10, 2008, to present the methodologies and 
results for the March 2008 ANOPR analyses. At this meeting, 
stakeholders recommended that DOE revise certain analyses in the energy 
conservation standard ANOPR and the scope of covered products. DOE 
later received written comments from the National Electrical 
Manufacturers Association (NEMA). In addition, DOE received a joint 
comment from several stakeholders. The Joint Comment was submitted by 
the American Council for an Energy Efficient Economy (ACEEE), Alliance 
to Save Energy (ASE), Appliance Standards Awareness Project (ASAP), 
National Consumer Law Center, National Grid, Natural Resources Defense 
Council (NRDC), Northeast Energy Efficiency Partnerships (NEEP), 
Northwest Power and Conservation Council (NPCC), Pacific Gas and 
Electric Company (PG&E), and Vermont Energy Investment Corporation. The 
comments received since publication of the March 2008 ANOPR and during 
the March 10, 2008 public meeting have contributed to DOE's proposed 
resolution of the issues in this rulemaking. This NOPR quotes, 
summarizes, and responds to the issues raised in these public comments. 
(A parenthetical reference at the end of a quotation or paraphrase 
provides the location of the item in the public record.)
    Subsequent to the public meeting and at NEMA's request, DOE and 
NEMA met on June 26, 2008 to discuss appropriate lumens per watt (lm/W) 
standards for high correlated color temperature (CCT) fluorescent 
lamps. (DOE, No. 27) \7\ NEMA subsequently submitted a written comment 
documenting its presentation at this meeting (hereafter the ``June 2008 
NEMA meeting''). (NEMA, No. 26) Topics covered at this meeting included 
the expected market share of high-CCT fluorescent lamps, appropriate 
efficacy standard scaling factors for GSFL with a CCT greater than 
4,500K but less than or equal to 7,000K, and coverage of GSFL with a 
CCT greater than 7,000K. See sections III.C.2, V.A.1.c, and V.C.7.a.i 
of this notice for a more detailed discussion of NEMA's comments at 
this meeting, as well as DOE's responses.
---------------------------------------------------------------------------

    \7\ A notation in the form ``DOE, No. 27 '' identifies a written 
comment that DOE has received and has included in the docket of this 
rulemaking or a written docket submission. This particular notation 
refers to a comment: (1) Submitted by DOE; and (2) in document 
number 27 in the docket of this rulemaking.
---------------------------------------------------------------------------

III. Issues Affecting the Scope of This Rulemaking

A. Additional General Service Fluorescent Lamps for Which DOE Is 
Proposing Standards

1. Scope of EPCA Requirement That DOE Consider Standards for Additional 
Lamps
    As discussed above, EPCA established energy conservation standards 
for certain general service fluorescent lamps, (42 U.S.C. 6295(i)(1)) 
and directed the Secretary to ``initiate a rulemaking procedure to 
determine if the standards in effect for fluorescent lamps * * * should 
be amended so that they would be applicable to additional general 
service fluorescent [lamps]. * * *'' (42 U.S.C. 6295(i)(5)) Thus, DOE 
must consider whether to adopt energy efficacy standards for additional 
GSFL beyond those already covered by the statutorily-prescribed 
standards.
    The March 2008 ANOPR notes that a wide variety of GSFL are not 
currently covered by energy conservation standards, and they are 
potential candidates for coverage under 42 U.S.C. 6295(i)(5). 73 FR 
13620, 13628-29 (March 13, 2008). However, the requirement that DOE 
consider additional GSFL appears to conflict with EPCA's definitions of 
key terms, which it might be argued would preclude coverage of 
additional GSFL. As explained below, DOE has carefully considered these 
statutory provisions and is interpreting them in a manner so as to give 
effect to the requirement to consider additional GSFL.
    Specifically, the conflict is centered on the statutory definition 
of ``general service fluorescent lamp.'' As set forth above and 
repeated here for purposes of this discussion, ``general service 
fluorescent lamp'' is defined in 42

[[Page 16927]]

U.S.C. 6291(30)(B) to mean: ``fluorescent lamps which can be used to 
satisfy the majority of fluorescent lamp applications, but does not 
include any lamp designed and marketed for the following nongeneral 
lighting applications: [list of eight exclusions not relevant to the 
present issue].''
    As such, the term ``general service fluorescent lamp'' appears to 
be defined by reference to the term ``fluorescent lamp,'' which is also 
defined under the statute as follows: ``Except as provided in 
subparagraph (E), the term `fluorescent lamp' means a low pressure 
mercury electric-discharge source in which a fluorescing coating 
transforms some of the ultraviolet energy generated by the mercury 
discharge into light, including only the following: (i) Any straight-
shaped lamp (commonly referred to as 4-foot medium bi-pin lamps) with 
medium bi-pin bases of nominal overall length of 48 inches and rated 
wattage of 28 or more. (ii) Any U-shaped lamp (commonly referred to as 
2-foot U-shaped lamps) with medium bi-pin bases of nominal overall 
length between 22 and 25 inches and rated wattage of 28 or more. (iii) 
Any rapid start lamp (commonly referred to as 8-foot high output lamps) 
with recessed double contact bases of nominal overall length of 96 
inches and 0.800 nominal amperes, as defined in ANSI C78.1-1978 and 
related supplements. (iv) Any instant start lamp (commonly referred to 
as 8-foot slimline lamps) with single pin bases of nominal overall 
length of 96 inches and rated wattage of 52 or more, as defined in ANSI 
C78.3-1978 (R1984) and related supplement ANSI C78.3a-1985.'' 42 U.S.C. 
6291(30)(A) (Emphasis added).
    The term ``fluorescent lamp'' is, by its terms, limited to four 
enumerated types of lamps. Further, the four types of lamps set forth 
in the definition of ``fluorescent lamp'' have corresponding energy 
conservation standards prescribed under the statute at 42 U.S.C. 
6295(i)(1)(B). Given that the statutory definition of ``fluorescent 
lamp'' is limited to four specified types of lamps and that the statute 
prescribes standards for those four lamps, it is not possible to give 
effect to the congressional directive to consider establishing 
standards for additional GSFL if the term ``general service fluorescent 
lamp'' is limited by the definition of ``fluorescent lamp.''
    Given this identified conflict, DOE has determined that there is an 
inherent ambiguity in the statute in terms of how these provisions are 
to be implemented. In order to move forward with this standards 
rulemaking, DOE must resolve this legal conundrum.
    Although there is no legislative history to clarify this point, 
there are a number of reasons to believe that Congress did not intend 
to strictly limit consideration of ``additional'' GSFL. First, Congress 
adopted both the relevant statutory definitions and the ``additional'' 
lamps requirement as part of Energy Policy Act of 1992 (EPACT 1992; 
Pub. L. 102-486). DOE does not believe Congress would intentionally 
insert a legislative provision that, when read in conjunction with a 
simultaneously added provision, amounts to a nullity. Second, reading 
the definition to preclude consideration of additional GSFL would run 
counter to the energy-saving purposes of EPCA. It is reasonable to 
assume that Congress would not have intended to limit energy 
conservation standards to only those technologies available in 1992, 
but would instead cast a broader net that would achieve energy 
efficiency improvements in lighting products incorporating newer 
technologies.
    Consequently, DOE interprets these statutory provisions such that, 
in defining ``general service fluorescent lamp,'' Congress intended to 
incorporate the term ``fluorescent lamp'' in a broader, more generic 
sense. DOE understands that the industry routinely refers to 
``fluorescent lamps'' as including products in addition to the four 
enumerated in the statutory definition of that term. In fact, in the 
March 2008 ANOPR, DOE presented its plan for including additional GSFL 
for coverage, and did not receive adverse comment. Thus, DOE has 
determined to read the statutory definition of ``general service 
fluorescent lamp'' in this broader context.
    For these reasons, and for the additional reasons set forth in the 
March 2008 ANOPR,\8\ DOE views ``additional'' GSFL, as that term is 
used in 42 U.S.C. 6295(i)(5), as lamps that: (1) Meet the technical 
portion of the statutory definition of ``fluorescent lamp'' (i.e., a 
low-pressure mercury electric-discharge source in which a fluorescing 
coating transforms some of the ultraviolet energy generated by the 
mercury discharge into light) (42 U.S.C. 6291(30)(A)) without 
restriction to the four specified lamp types in that definition; (2) 
can be used to satisfy the majority of fluorescent lighting 
applications (42 U.S.C. 6291(30)(B)); (3) are not within the exclusions 
from the definition of GSFL specified in 42 U.S.C. 6291(30)(B); and (4) 
are ones for which EPCA does not prescribe standards. Such an 
interpretation does not alter the existing statutory provision or 
standards for ``fluorescent lamps,'' but it does permit DOE to give 
effect to section 6295(i)(5) of EPCA by expanding the universe of GSFL 
open to potential regulation. The scope of coverage reflected in this 
NOPR is in keeping with the interpretation outlined above.
---------------------------------------------------------------------------

    \8\ 73 FR 13620, 13629 (March 13, 2008).
---------------------------------------------------------------------------

2. Identification of the Additional Lamps for Which DOE Proposes 
Standards
    As set forth more fully in the March 2008 ANOPR, DOE took the 
following three steps in terms of identifying additional GSFL for which 
standard setting might be appropriate. DOE first conducted a 
comprehensive review of the fluorescent lighting market in order to 
identify particular types of lamps that meet the four criteria above to 
determine the additional GSFL for which DOE would consider adopting 
standards. Second, DOE examined each lamp type to determine potential 
energy savings that energy conservation standards would bring for that 
lamp. Third, DOE further evaluated selected lamps to determine if such 
standards would be technologically feasible and economically justified. 
In carrying out these steps before issuance of the March 2008 ANOPR, 
DOE considered comments on these issues that it had received 
previously. 73 FR 13620, 13629-30 (March 13, 2008).
    In implementing the first of these three steps, DOE identified the 
following categories of GSFL as meeting the four criteria for 
consideration as ``additional'' GSFL under 42 U.S.C. 6295(i)(5):
    <bullet> 4-foot, medium bipin (MBP), straight-shaped lamps, rated 
wattage of < 28W;
    <bullet> 2-foot, medium bipin, U-shaped lamps, rated wattage of < 
28W;
    <bullet> 8-foot, recessed double contact (RDC), rapid start, high 
output (HO) lamps not defined in ANSI Standard C78.1-1991 \9\ or with 
current other than 0.800 nominal amperes;
---------------------------------------------------------------------------

    \9\ Titled ``for Fluorescent Lamps--Rapid-Start Types--
Dimensional and Electrical Characteristics.''
---------------------------------------------------------------------------

    <bullet> 8-foot single pin (SP), instant start, slimline lamps with 
a rated wattage >= 52, not defined in ANSI Standard C78.3-1991 \10\;
---------------------------------------------------------------------------

    \10\ Titled ``for Fluorescent Lamps--Instant-Start and Cold-
Cathode Types--Dimensional and Electrical Characteristics.''
---------------------------------------------------------------------------

    <bullet> Very high output (VHO) straight-shaped lamps;
    <bullet> T5 \11\ miniature bipin (MiniBP) straight-shaped lamps;
---------------------------------------------------------------------------

    \11\ T5, T8, T10, and T12 are nomenclature used to refer to 
tubular fluorescent lamps with diameters of 0.625, 1, 1.25, and 1.5 
inches, respectively.
---------------------------------------------------------------------------

    <bullet> Additional straight-shaped and U-shaped lamps other than 
those listed

[[Page 16928]]

above (e.g., alternate lengths, diameters, or bases); and
    <bullet> Additional fluorescent lamps with alternate shapes (e.g., 
circline, pin-based compact fluorescent lamps (CFL)).

73 FR 13620, 13630 (March 13, 2008).

    DOE then assessed the potential energy savings of standards for 
these GSFL (second step) and whether candidate standards for those GSFL 
would be technologically feasible and economically justified (third 
step), in order to determine which GSFL to analyze in depth regarding 
whether, and at what levels, standards would be warranted under the 
EPCA criteria in 42 U.S.C. 6295(o). DOE's analytical process related to 
these additional GSFL categories is discussed generally below.
    In a review of 4-foot medium bipin lamps, DOE found that the 
current market lacked any products with a rated wattage below 25W. 
Therefore, in the March 2008 ANOPR, DOE preliminarily decided not to 
extend coverage to 4-foot medium bipin lamps below 25W. In the 
following section, DOE discusses its consideration in the March 2008 
ANOPR of possibly regulating lamps with rated wattages less than 28W 
and greater than or equal to 25W.
    Similar to the 4-foot medium bipin lamps, in the March 2008 ANOPR, 
DOE investigated the potential for regulating 2-foot U-shaped lamps 
less than 28W. A review of available manufacturer catalogs found no 
commercially-available products in that category. Therefore, DOE 
concluded that lowering the minimum wattage threshold of 2-foot U-
shaped lamps would likely not result in substantial energy savings and 
preliminarily decided not to expand coverage to these lamps.
    DOE also considered whether to expand coverage to include VHO 
fluorescent lamps. While VHO lamps consume large amounts of energy, 
they are commonly used in outdoor applications where high-intensity 
discharge (HID) lamps are rapidly gaining market share. Further 
research indicated that shipments of VHO T12 lamps are declining 
rapidly. Although individually these products have greater per-lamp 
energy savings than high output or standard output lamps, the total 
energy savings resulting from regulation would be small and would be 
expected to decrease over time as these lamps disappear from the 
market. Therefore, DOE preliminarily decided not to extend coverage to 
VHO lamps.
    In the March 2008 ANOPR, DOE also preliminarily decided not to 
expand coverage to T5 fluorescent lamps. DOE's initial analysis showed 
that T5 lamps currently have a relatively small share of the GSFL 
market, and, therefore, have limited potential to contribute to total 
energy savings. Although T5 lamps can serve as a substitute for T8 or 
T12 lamps, DOE found that T5 lamps tend to have higher efficacy. 
Research showed that the highest efficacy 32W 4-foot medium bipin T8 
lamp is 95 lm/W, compared to 104 lm/W for a standard output 4-foot 
miniature bipin T5 lamps. Thus, DOE stated that excluding T5 lamps from 
this rulemaking would be unlikely to undermine any energy savings that 
would result from a T12 and T8 standard, even if the standard caused 
increased sales of T5 systems
    Lastly, DOE preliminarily decided not to extend coverage to 
fluorescent lamps that had alternate lengths, diameters, bases, or 
shapes (or a combination thereof) than the lamps specifically 
mentioned. DOE reasoned that the products it had already selected for 
coverage represented the significant majority of the GSFL market, and, 
thus, the bulk of the potential energy savings. Furthermore, DOE 
tentatively concluded there was limited potential for lamps with 
miscellaneous lengths and bases to grow in market share, given the 
constraint of fixture lengths and socket compatibility.
    After eliminating the lamps aforementioned lamps from further 
consideration for the reasons cited above, DOE was left with the 
following additional GSFL to consider evaluating in depth for potential 
standards:
    <bullet> 4-foot, medium bipin lamps with wattages >= 25 and < 28;
    <bullet> 8-foot, recessed double contact (RDC), rapid start, high 
output (HO) lamps not defined in ANSI Standard C78.1-1991 or with 
current other than 0.800 nominal amperes;
    <bullet> 8-foot single pin (SP), instant start, slimline lamps with 
a rated wattage >= 52, not defined in ANSI Standard C78.3-1991;

73 FR 13620, 13632 (March 13, 2008).

    As mentioned in the March 2008 ANOPR, DOE explored extending 
coverage to 4-foot medium bipin lamps with wattages less than 28W. A 
product review found that manufacturers marketed and sold 25W 4-foot 
medium bipin T8 fluorescent lamps as replacements for higher wattage 4-
foot medium bipin T8 fluorescent lamps. Thus, DOE concluded that 
lowering the minimum wattage threshold to include these lamps would 
mitigate the risk of 25W lamps becoming a loophole and would maximize 
potential energy savings. In addition, as the technology and 
incremental costs associated with increased efficacy of 25W lamps are 
similar to their already regulated 28W counterparts, DOE tentatively 
concluded that standards for these lamps would be technologically 
feasible and economically justified.
    In the March 2008 ANOPR, DOE also preliminarily decided to extend 
coverage to 8-foot recessed double contact, rapid start, HO lamps not 
defined in ANSI Standard C78.1-1991. Due to the ampere specification in 
the definition, the statutory standards covered only T12 8-foot 
recessed double contact HO lamps, but none of the T8 8-foot recessed 
double contact HO lamps (which usually have 0.400 nominal amperes). 
Since the T8 8-foot lamps serve as substitutes for their T12 
counterparts, DOE risked losing potential energy savings unless such 
lamps are also covered by energy conservation standards. Consequently, 
DOE preliminarily extended coverage to T8, 8-foot recessed double 
contact HO lamps, thereby adding lamps previously restricted by the 
0.800 nominal ampere limitation in the definition of ``general service 
fluorescent lamp.''
    Furthermore, DOE planned to expand coverage to 8-foot recessed 
double contact, rapid start, high output fluorescent lamps not listed 
in ANSI Standard C78.1-1991. DOE made this decision because the ANSI 
standards referenced in DOE regulations were outdated.\12\ As new lamps 
are introduced to the market, it is likely they would not be covered by 
the 1991 ANSI standard and potentially even the currently most up-to-
date standard. Any of these lamps could serve as substitutes for 
regulated lamps. To maximize energy savings from these standards, DOE 
extended coverage to 8-foot recessed double contact, rapid start, high 
output fluorescent lamps not listed in ANSI Standard C78.1-1991.
---------------------------------------------------------------------------

    \12\ ANSI Standard C78.1-1991 has been updated and replaced by 
ANSI Standard C78.81-2005, ``for Electric Lamps--Double Capped 
Fluorescent Lamps--Electrical and Dimensional Characteristics.''
---------------------------------------------------------------------------

    Because the technologies of T8, 8-foot recessed double contact HO 
lamps and the 8-foot recessed double contact HO lamps not listed in the 
ANSI Standard C78.1-1991 were similar to the technologies of their 
already-regulated T12 counterparts, DOE tentatively concluded that 
standards for these lamps would meet the statutory criterion of 
technological feasibility. Preliminary analysis of these lamps in the 
LCC and NIA demonstrated substantial economic savings. Therefore, DOE 
tentatively concluded that energy conservation standards for these 
lamps would be expected to be economically justified.

[[Page 16929]]

    Similar to 8-foot recessed double contact HO lamps, in the March 
2008 ANOPR, DOE considered extending coverage to 8-foot, single pin, 
instant start, slimline lamps not included in ANSI Standard C78.3-1991 
(which includes T8 lamps as well). DOE's preliminary analysis indicated 
that regulation of these lamps has the potential to achieve substantial 
energy savings. Therefore, DOE preliminarily decided to expand the 
scope of energy conservation standard coverage to 8-foot single pin 
slimline lamps with a rated wattage greater than or equal to 52W not 
listed in ANSI Standard C78.3-1991. Since the technologies of T8, 8-
foot single pin slimline lamps and the 8-foot single pin slimline lamps 
not listed in ANSI Standard C78.3-1991 are similar to the technologies 
of their already-regulated counterparts, DOE tentatively concluded that 
standards for these lamps would be expected to meet the statutory 
criterion of technological feasibility. Analyses in the LCC and NIA 
confirmed the potential for substantial economic savings associated 
with regulation of these lamp types. As a result, in the March 2008 
ANOPR, DOE tentatively concluded that energy conservation standards for 
these lamps would be economically justified.
    During and after the public meeting, DOE received numerous verbal 
and written comments regarding the lamps included in or excluded from 
coverage in the March 2008 ANOPR. As a general matter, commenters 
supported DOE's approach for consideration of additional GSFL for 
coverage by energy conservation standards. However, commenters urged 
DOE to consider changes in its approach in two areas, specifically 
coverage of T5 lamps and extension of lamp wattage ranges. Sections 
III.A.2.a and III.A.2.b of this notice immediately below discuss the 
submitted comments and DOE's responses.
a. Coverage of T5 Lamps
    At the March 2008 ANOPR public meeting, NEMA announced that it was 
considering supporting coverage of T5 lamps to prevent the introduction 
of less-efficient T5 lamps into the market, particularly those 
containing halophosphors. (Public Meeting Transcript, No. 21 at pp. 71-
72) \13\ ACEEE likewise suggested that DOE should analyze opportunities 
involving regulation of T5 lamps. (Public Meeting Transcript, No. 21 at 
p. 73) In its written comments, NEMA stated that it would not oppose 
covering newer T5 fluorescent lamp technology (e.g., 28W 4-foot T5 
lamps), but would not recommend covering older technology (i.e., T5 
preheat fluorescent lamps). (NEMA, No. 22 at p. 3) In addition, the 
Joint Comment stated that DOE should extend coverage to T5 lamps. These 
organizations argued that if only T8 and T12 lamps are covered by the 
standard, it could possibly spur market introduction of less-efficient 
halophosphor T5 lamps with a lower first cost. Such a development would 
increase the overall market share of T5 lamps and decrease the 
potential energy savings associated with this rulemaking. (Joint 
Comment, No. 23 at pp. 2-5)
---------------------------------------------------------------------------

    \13\ A notation in the form ``Public Meeting Transcript, No. 21 
at pp. 71-72'' identifies a written comment that DOE has received 
and has included in the docket of this rulemaking. This particular 
notation refers to a comment: (1) Submitted during the public 
meeting on March 10-11, 2008; (2) in document number 21 in the 
docket of this rulemaking; and (3) appearing on pages 71 through 72 
of the transcript.
---------------------------------------------------------------------------

    DOE agrees with these comments. While most T5 lamps are currently 
more efficient than the T8 and T12 lamps for which they can be 
substituted, excluding them from energy conservation standards could 
provide an incentive for less-efficient T5 lamps to enter the market. 
Such trend would result in increased market share of less-efficient 
products, thereby creating the potential for significant energy savings 
losses unless these lamps are regulated. Because this potential 
substitution effect is a primary criterion which DOE uses to determine 
coverage for additional GSFL, DOE is proposing in this NOPR to extend 
coverage to T5 miniature bipin lamps.
    DOE researched the market and product availability of T5 lamps and 
found they exist in a variety of lengths and wattages. Standard T5 
lamps include wattages ranging from 14W to 80W, and lengths ranging 
from nominally 2 feet to 6 feet. DOE's research indicates that the 
primary driver of T5 market share growth is substitution for currently 
regulated 4-foot MBP lamps. Therefore, DOE proposes to cover only the 
nominally 4-foot lengths of T5 miniature bipin lamps. DOE believes that 
alternate lengths of T5 lamps are not likely to gain significant market 
share as they are not easily substitutable for 4-foot MBP systems which 
represent the majority of the total fluorescent market. In addition, 
interviews with manufacturers and a review of product literature 
indicate that standard-output (approximately 28W) and high-output 
(approximately 54W) lamps are the highest volume T5 miniature bipin 
lamps. In addition to the full-wattage versions of these lamps, DOE has 
found that reduced-wattage versions of the standard- and high-output T5 
lamp (26W and 51W respectively) are available. Therefore, in this NOPR, 
DOE proposes to extend coverage to 4-foot nominal, straight-shaped, T5 
miniature bipin standard output lamps with rated wattages >= 26W and to 
4-foot nominal, straight-shaped, T5 miniature bipin high output lamps 
with rated wattages >= 51W, as they present the greatest potential for 
energy savings. DOE estimates potential energy savings from these lamps 
of up to 2.05 quads over the analysis period (2012 to 2042). Because 
higher-efficacy versions of some of these lamps are already present in 
the market, DOE tentatively concludes that standards for these lamps 
are technologically feasible.
    Based on DOE's LCC and NIA analyses, coverage of the T5 lamps 
discussed above would be economically justified. These analyses show 
that T5 lamp coverage has the potential to achieve on average $47.03 
per standard-output lamp system and $56.60 per high-output lamp system 
in LCC savings. In addition, DOE's NIA indicates that regulating these 
lamps could result in an NPV of up to $6.84 billion to the Nation 
(discounted at 3 percent). See section VI.B.1.a.i and section VI.B.3 of 
this document and chapters 8 and 11 of the TSD for more details on 
these results.
b. Extension of Lamp Wattage Ranges
    Regarding fluorescent lamp coverage, the Joint Comment suggested 
that DOE should extend wattage ranges to cover lower-wattage products. 
(Joint Comment, No. 23 at p. 4) In relevant part, section 123 of EPACT 
1992 amended EPCA to establish standards for 4-foot medium bipin lamps 
of 28W or more. The Joint Comment notes that since that law took 
effect, ``new products continue to be introduced, and there is an 
incentive to circumvent standards by producing lamps just outside of 
the watt range (e.g. the current 25W residential lamp).'' Id. NEMA 
commented that while current standards cover 2-foot U-shaped medium 
bipin lamps greater than or equal to 28W, new products have been 
introduced at 25W. (Public Meeting Transcript, No. 21 at p. 73) To 
prevent this trend from continuing, the Joint Comment recommended 
substantially lowering watt ranges for GSFL product classes to protect 
the energy savings that would be accomplished by this rule. If niche 
products exist in the new range, the Joint Comment expressed a 
preference for using narrowly drawn exemptions rather than limiting the 
covered watt range. (Joint Comment, No. 23 at p. 4)

[[Page 16930]]

    DOE agrees with the Joint Comment regarding the appropriateness of 
extending wattage ranges when commercially-available products exist. As 
discussed in the March 2008 ANOPR, DOE proposed to extend coverage to 
4-foot medium bipin fluorescent lamps with wattages between 25W and 
28W. DOE discovered these lamps were being marketed as substitutes for 
currently regulated lamps subject to the current and amended standards 
(proposed in this NOPR) on 4-foot medium bipin lamps. Therefore, 
consistent with that approach, in this NOPR, DOE proposes to extend 
coverage to 2-foot U-shaped lamps with wattages greater than 25W.
    The Joint Comment expressed concern that substitutable products 
outside the range of covered wattages will emerge in other product 
classes. It suggested a proactive approach of lowering the watt ranges 
even further, although no products may currently exist in that range. 
(Joint Comment, No. 23 at p. 4) While DOE understands the Joint 
Comment's concern, DOE disagrees with this approach. DOE is required to 
consider energy conservation standards that are technologically 
feasible. If a lower wattage lamp does not yet exist, DOE cannot 
confirm that it would be technologically feasible or economically 
justified for such a lamp to meet a set energy conservation standard. 
In addition, lower wattage lamps may provide different lumen outputs, 
and thereby different utility. Therefore, if DOE were to include these 
lamps in its coverage without determining if the set energy 
conservation standard is technologically feasible, DOE could be 
reducing the utility of covered product or precluding its development 
entirely. Further, DOE encourages the introduction of lamps at lower 
wattages. Thus, DOE will only propose to extend wattage ranges for 4-
foot medium bipin lamps and 2-foot medium bipin U-shaped lamps to the 
extent specified in this NOPR.
3. Summary GSFL Lamps to Which DOE Proposes To Extend Coverage
    With the exception of the above-discussed comments, DOE received no 
other input related to coverage of GSFL. In addition, DOE's revised 
analyses indicate that energy conservation standards for the lamps 
which DOE preliminarily decided to extend coverage in the March 2008 
ANOPR are still expected to be technologically feasible, economically 
justified, and would result in significant energy savings. Therefore, 
in summary, DOE is proposing to cover the following additional GSFL:
    <bullet> 2-foot, medium bipin U-shaped lamps with a rated wattage 
>= 25 and less than < 28;
    <bullet> 4-foot, medium bipin lamps with a rated wattage >= 25 and 
less than 28;
    <bullet> 4-foot T5, miniature bipin, straight-shaped, standard 
output lamps with rated wattage >= 26;
    <bullet> 4-foot T5, miniature bipin, straight-shaped, high output 
lamps with rated wattage >= 51;
    <bullet> 8-foot recessed double contact, rapid start, HO lamps 
other than those defined in ANSI Standard C78.1-1991;
    <bullet> 8-foot recessed double contact, rapid start, HO lamps 
(other than 0.800 nominal amperes) defined in ANSI Standard C78.1-1991; 
and
    <bullet> 8-foot single pin instant start slimline lamps, with a 
rated wattage >= 52, not defined in ANSI Standard C78.3-1991.

B. Exempted Incandescent Reflector Lamps

    Section 322(a)(1) of EISA 2007 amended section 321(30)(C)(ii) of 
EPCA to expand the portion of the definition of ``incandescent lamp'' 
applicable to incandescent reflector lamps to include lamps with a 
diameter between 2.25 and 2.75 inches, as well as ER, BR, BPAR, or 
similar bulb shapes. (42 U.S.C. 6291(30)(C)(ii)) Furthermore, section 
322(b) of EISA 2007 incorporates several new exemptions to the IRL 
standards in the new section 325(i)(1)(C) of EPCA. (42 U.S.C. 
6295(i)(1)(C)) These exemptions are as follows: (1) Lamps rated 50 
watts or less that are ER30, BR30, BR40, or ER40; (2) lamps rated 65 
watts that are BR30, BR40, or ER40 lamps; and (3) R20 incandescent 
reflector lamps rated 45 watts or less.
    At the ANOPR stage, DOE concluded that it does not have the 
authority to set standards for these lamps, for the following reasons. 
Although Congress included ER, BR, and small-diameter (less than 2.75 
inches) lamps in the definition of an ``incandescent lamp,'' it 
specifically exempted certain wattages and diameters from the 
prescribed efficacy standards, thereby indicating Congress's intent not 
to set standards for those products. Furthermore, DOE's reading of 42 
U.S.C. 6295(i)(3), which directs DOE to amend the standards in 
paragraph (1), led it to believe that DOE's authority to amend the 
standards does not include the authority to amend the exemptions. 
Specifically, under 42 U.S.C. 6295(i)(1)(C), ``Exemptions,'' the 
statute refers to ``the standards specified in subparagraph (B),'' 
whose title is ``Minimum Standards.'' Therefore, in amending the 
standards in paragraph (1), under 42 U.S.C. 6295(i)(3), DOE reasoned 
that it had the authority to change the efficacy values but not the 
exemptions. Accordingly, DOE conducted its ANOPR analyses under the 
premise that it could not extend coverage to these statutorily-exempted 
products.
    The Joint Comment argued that by covering these products in EISA 
2007, Congress effectively brought them into the Federal standards 
program and, thus, granted DOE the authority to regulate them. The 
Joint Comment recommended extending coverage to 65-watt ER and BR 
lamps. In addition, it encouraged DOE to evaluate standards for ER and 
BR lamps less than 65 watts and for R20 lamps less than 45 watts. The 
Joint Comment further contended that by failing to extend coverage to 
these lamps, DOE is not meeting its obligation to maximize energy 
savings. The Joint Comment argued that the exempted lamps represent a 
large, growing market share and are a substitute for products that DOE 
plans to regulate. The Joint Comment stated that because 65-watt BR 
lamps represent a low-cost, low-efficacy alternative to the more-
efficient products covered by the standards, continued exemptions could 
decrease the potentially significant energy savings associated with the 
present rulemaking. (Joint Comment, No. 23 at p. 12-14)
    Accompanying the Joint Comment were two legal memoranda from the 
National Consumer Law Center (NCLC), maintaining that not only does DOE 
have the authority to regulate ER and BR lamps, but that DOE is 
obligated to regulate them. NCLC pointed out that with the passage of 
EISA 2007, Congress included BR and ER lamps that have a ``rated 
wattage that is 40 watts or higher'' within the definition of 
``incandescent lamp'' [EISA 2007, section 322(a), amending 42 U.S.C. 
6291(30)(C)] and, thus, included these BR and ER lamps as covered 
products under 42 U.S.C. 6291(2) and 6292(a)(14). NCLC further 
contended that the only explanation for Congress adding ER and BR lamps 
to the definition was to include them among the covered products. 
(Joint Comment, No. 23 at p. 27) NCLC cited the rulemaking for 
microwave and electric ovens as an example of a rulemaking in which DOE 
is considering applying standards to products for which no prescriptive 
efficiency standards exist. (Joint Comment, No. 23 at p. 28)
    Through the initial drafting of this NOPR, DOE adhered to its 
earlier conclusion that it lacked authority to consider standards for 
ER, BR, and small-diameter lamps that had been

[[Page 16931]]

specifically exempted by Congress. However, after carefully considering 
the testimony of the February 3, 2009 NOPR public meeting and 
reexamining the ANOPR public comments on this issue, DOE reexamined its 
authority under EPCA to amend standards for ER, BR, and small-diameter 
lamps and has concluded that its earlier view may have been in error. 
DOE is further considering if it has authority to consider energy 
conservation standards for ER, BR, and small-diameter lamps for the 
reasons that follow.
    DOE agrees with the Joint Comment, that prior to enactment of EISA 
2007 on December 19, 2007, ER, BR, and small-diameter lamps were by 
definition excluded from coverage under EPCA; however, once EISA 2007 
amended the definition of ``incandescent lamp,'' ER, BR, and small-
diameter lamps become products by the new definition. (Joint Comment, 
No. 23 at p. 27) Congress proceeded to expressly exempt certain types 
of ER, BR, and small-diameter lamps from the statutorily-set IRL 
standards established by EISA 2007. However, given that these expressly 
exempted lamp types constitute the overwhelming majority of the ER, BR, 
and small-diameter lamps market, DOE's original construction of the 
relevant statutory provisions (as expressed in the ANOPR) would have 
the effect of once again moving most ER, BR, and small-diameter lamps 
beyond the reach of energy conservation standards. Accordingly, DOE is 
reconsidering whether, under 42 U.S.C 6295(i)(3), the directive to 
amend the standards in paragraph (1) encompasses both the statutory 
levels and the exemptions to those standards.
    As a practical matter, if DOE does conclude that it has authority 
to establish standards for ER, BR, and small-diameter lamps, it cannot 
consider such lamps as part of the present rulemaking because it has 
not conducted the requisite analyses to propose appropriate standard 
levels. At the same time, DOE does not wish to delay the present 
rulemaking (and the accompanying energy savings to the Nation) for the 
sole reason of considering this subset of ER, BR, and small-diameter 
lamps. The analyses to consider standards for ER, BR, and small-
diameter lamps are severable from the analyses underlying the present 
rulemaking, so separate treatment would not impact the outcomes for any 
of the lamp types under consideration in this NOPR. Therefore, DOE has 
decided to proceed with setting energy conservation standards for the 
lamps that are the subject of the present rulemaking and to commence a 
separate rulemaking for ER, BR, and small-diameter lamps. DOE believes 
that much of the analytical work for the current rulemaking will 
benefit the ER, BR, and small diameter lamps rulemaking, thereby 
permitting issuance of a new NOPR and final rule on an accelerated 
basis, if it determined that it has the authority to do so.
    For the purposes of the present NOPR, however, DOE notes that the 
balance of this notice (analyses and related discussions) assumes that 
the exempted ER, BR, and small-diameter lamps remain unregulated by 
energy conservation standards. DOE acknowledges that while such an 
assumption has no impact on the engineering and life-cycle cost 
analyses, the regulation of these exempted IRL may affect the future 
shipment of IRL and thereby the national impact and other downstream 
analyses. However, DOE believes that its analysis of multiple shipment 
scenarios (as discussed in section V.E.5) captures the broad range of 
possible impacts were these exempted lamps to be regulated in the 
future. Therefore DOE's assumption does not impact the standards 
proposed in this rulemaking or DOE's reconsideration of its authority, 
nor does it otherwise constrain DOE's ability to conduct further 
analyses in a separate rulemaking.

C. Amended Definitions

    To clarify the scope of EPCA's coverage of GSFL, IRL, and the 
recently adopted standards for GSIL, DOE proposes to revise its 
existing definitions of ``rated wattage'' and ``colored fluorescent 
lamp.'' These definitional changes are discussed below.
1. ``Rated Wattage''
    One element of EPCA's definitions for ``fluorescent lamp'' and 
``incandescent reflector lamp'' is a lamp's rated wattage, which helps 
delineate the lamps for which the statute sets standards. (42 U.S.C. 
6291(30)(A), (C)(ii) and (F), and 6295(i)). In addition, section 
321(a)(3) of EISA 2007 amended EPCA to prescribe energy conservation 
standards for GSIL, requiring lamps of particular lumen outputs to have 
certain maximum rated wattages. (42 U.S.C. 6295(i)) However, EPCA does 
not define the term ``rated wattage.''
    DOE has defined ``rated wattage'' in its regulations, but only for 
4-foot medium bipin T8, T10, and T12 fluorescent lamps. 10 CFR 430.2. 
This definition references ANSI Standard C78.1-1991, ``for Fluorescent 
Lamps--Rapid-Start Types--Dimensional and Electrical Characteristics.'' 
Id. Although EPCA also uses the term ``rated wattage'' to delineate 2-
foot U-shaped lamps (42 U.S.C. 6291(30)(A)(ii)), 8-foot slimline lamps, 
(42 U.S.C. 6291(30)(A)(iv)), and IRL (42 U.S.C. 6291(30)(C)), DOE has 
not defined ``rated wattage'' for these lamps. In the March 2008 ANOPR, 
DOE considered revising and updating the definition of ``rated 
wattage'' to cite the current version of ANSI Standard C78.1-1991, 
clarify and improve the definition, and apply the revised definition to 
those lamps for which rated wattage is a key characteristic but is not 
currently defined by DOE. In response to the March 2008 ANOPR, DOE 
received one comment regarding the definition of ``rated wattage.'' 
NEMA commented that it agrees with DOE's revised definition. (NEMA, No. 
22 at p. 4).
    Therefore, DOE proposes the following definition for ``rated 
wattage'':
    Rated wattage means:
    (1) With respect to fluorescent lamps and general service 
fluorescent lamps:
    (i) If the lamp is listed in ANSI C78.81-2005 or ANSI C78.901-2005, 
the rated wattage of a lamp determined by the lamp designation of 
Clause 11.1 of ANSI C78.81-2005 or ANSI C78.901- 2005;
    (ii) If the lamp is a residential straight-shaped lamp, and not 
listed in ANSI C78.81-2005, the wattage of a lamp when operated on a 
reference ballast for which the lamp is designed; or
    (iii) If the lamp is neither listed in one of the ANSI guides 
referenced in (1)(i) nor a residential straight-shaped lamp, the 
wattage of a lamp when measured according to the test procedures 
outlined in Appendix R to subpart B of this part.
    (2) With respect to general service incandescent lamps and 
incandescent reflector lamps, the wattage measured according to the 
test procedures outlined in Appendix R to subpart B of this part.
2. ``Colored Fluorescent Lamp''
    Colored fluorescent lamps are excluded from EPCA's definition of 
``general service fluorescent lamp.'' (42 U.S.C. 6291 (30)(B)(iii)) 
However, EPCA does not define the term ``colored fluorescent lamp.'' In 
order to fully define the scope of EPCA's definition of GSFL, DOE 
currently defines ``colored fluorescent lamp'' as follows:

    ``Colored fluorescent lamp'' means a fluorescent lamp designated 
and marketed as a colored lamp, and with either of the following 
characteristics: a CRI less than 40, as determined according to the 
method given in CIE Publication 13.2 (10 CFR 430.3), or a correlated 
color temperature less than 2,500K or greater than 6,600K.


[[Page 16932]]


10 CFR 430.2. Because these lamps are not GSFL under EPCA, they are not 
covered by the standards applicable to GSFL.
    The central element of EPCA's definition of ``general service 
fluorescent lamp'' is that they are fluorescent lamps ``which can be 
used to satisfy the majority of lighting applications.'' (42 U.S.C. 
6291(30)(B)) The exclusions, such as the one for colored lamps, are for 
lamps designed and marketed for ``non-general lighting applications.'' 
Id. As detailed in the March 2008 ANOPR, DOE became aware of a lamp on 
the European market that meets the above definition of ``colored 
fluorescent lamp'' and that is intended for general illumination 
applications. 73 FR 13620, 13634 (March 13, 2008). Although DOE is 
unaware of any similar general purpose fluorescent lamps being 
introduced into the U.S. market, the availability of the European lamp 
demonstrates the potential for DOE's definition of ``colored 
fluorescent lamp'' to exclude new products with general service 
applications from the definition of ``general service fluorescent 
lamp,'' and thereby from the coverage of standards applicable to GSFL. 
For this reason, in the March 2008 ANOPR, DOE proposed to revise its 
definition of ``colored fluorescent lamp'' by adding the following 
phrase after the words ``colored lamp'': ``and not designed or marketed 
for general illumination applications.'' Id.
    In submitted written comments on the ANOPR, NEMA agreed with the 
proposed revised definition of ``colored fluorescent lamp,'' while 
noting that DOE will need to give additional consideration to general 
illumination fluorescent lamps with higher color temperatures. NEMA 
cited an example of a lamp with a CCT of 8,000K that could be used for 
both general illumination and specialty applications (NEMA, No. 22 at 
p. 9). NEMA requested a meeting to discuss this matter in greater 
detail, since it was performing research related to this topic. (DOE, 
No. 27) This meeting is subsequently discussed in section II.C.2 of 
this NOPR.
    At the June 2008 NEMA meeting and in its written comments, NEMA 
recommended that the range of GSFL affected by standards should be 
increased to 7,000K from the current coverage, which extends to only 
6,600K. NEMA believes that lamps with a CCT between 4,500K and 7,000K 
are growing in popularity and, therefore, energy conservation standards 
within that range are justifiable (NEMA, No. 26 at pp. 3-4).
    NEMA also stated that an efficacy standard would be inappropriate 
for GSFL with a CCT greater than 7,000K. Because very few GSFL with a 
CCT greater than 7,000K are commercially available, NEMA argued that it 
would be impossible to determine whether there would be an appropriate 
efficacy standard for these lamps that would be technologically 
feasible. (NEMA, No. 26 at pp. 5-6) NEMA also stated that it is 
unlikely that exempting these high CCT lamps would increase their sales 
after a standard, as these lamps are often too ``blue'' for typical 
consumers. Therefore, NEMA urged DOE to exempt all lamps with a CCT 
greater than 7,000K from energy conservation standards (NEMA, No. 26 at 
pp. 3-4).
    DOE considered NEMA's input and agrees that because so few of these 
products with a CCT greater than 7,000K exist in the market, there is 
not enough information to reliably analyze the performance of 
currently-available products or the expected performance of emerging 
products. Manufacturing lamps with CCTs greater than 7,000K would 
likely require the use of new materials not currently utilized in 
commonly sold lamps today. In addition, manufacturers may encounter 
different design trade-offs when developing their products Therefore, 
DOE is unable to determine whether a particular standard level would be 
technologically feasible for these lamps.
    DOE also agrees that it is appropriate to raise the 6,600K limit to 
7,000K in the definition of ``colored fluorescent lamp.'' DOE believes 
that this amendment would further the statutory objective of 
maintaining the coverage of GSFL serving general application purposes 
under DOE's energy conservation standards. Although lamps with CCTs 
greater than 6,600K and less than 7,000K are not prevalent in the 
market, DOE's research\14\ indicates that manufacturers would likely be 
able to produce a lamp at 7,000K using the same materials as a 6,500K 
lamp (a commonly sold lamp). In consideration of the technological 
similarity between 6,500K and 7,000K lamps, DOE believes that it would 
be possible to establish technologically feasible efficacy levels for 
7,000K lamps.
---------------------------------------------------------------------------

    \14\ Ex parte communication with Edward Yandek of General 
Electric Company (Dec. 8, 2008) (DOE, No. 29).
---------------------------------------------------------------------------

    Therefore, DOE proposes to modify the definition of ``colored 
fluorescent lamp'' so as to include lamps with CCT less than or equal 
to 7,000K exclude all lamps with a CCT greater than 7,000K from energy 
conservation standards. However, DOE notes that NEMA has offered to 
track the sales of GSFL with a CCT greater than 7,000K in order to 
determine in the future if energy conservation standards are necessary 
for these products. (NEMA, No. 26 at p. 4) If these lamp sales show 
significant growth, and thus the potential for significant energy 
savings, DOE may consider amending the definition of ``colored 
fluorescent lamp'' to provide for coverage of these lamps and setting 
an appropriate energy conservation standard for them in a future 
rulemaking.
    As discussed in the March 2008 ANOPR, the discovery of a 
fluorescent lamp in the European market with a CCT of 17,000K being 
marketed for general illumination applications prompted DOE to consider 
actions to prevent such lamps from becoming a potential loophole to the 
GSFL energy conservation standard. However, the inherently ``blue'' 
color of these lamps may prevent widespread adoption as substitutes for 
standard CCT lamps (e.g., 4,100K). Therefore, DOE no longer considers 
these lamps to be a potential loophole to standards set forth by this 
rulemaking. For this reason and because DOE is unable to determine a 
technologically feasible standard for these lamps, DOE believes that 
the addition of the phrase ``and not designed or marketed for general 
illumination applications'' with respect lamps with a CCT greater than 
7,000K is no longer necessary.
    After incorporating the changes discussed above, DOE proposes the 
following definition of ``colored fluorescent lamp'' for this notice:

    Colored fluorescent lamp means either: (1) A fluorescent lamp 
designated and marketed as a colored lamp with a CRI less than 40, 
as determined according to the method set forth in CIE Publication 
13.2 (10 CFR 430.3); (2) a fluorescent lamp designed and marketed as 
a colored lamp with a correlated color temperature (CCT) less than 
2,500K; or (3) a fluorescent lamp with a CCT greater than 7,000K.

D. Off Mode and Standby Mode Energy Consumption Standards

    Section 310(3) of EISA 2007 amended EPCA to require future energy 
conservation standards to address standby mode and off mode energy use. 
Specifically, EPCA, as amended, now requires that, when DOE adopts 
standards for a covered product after July 1, 2010, DOE must, if 
justified by the criteria for adoption of standards in 42 U.S.C. 
6295(o), incorporate standby mode and off mode energy use into the 
standard, if feasible, or adopt a separate standard for such energy use 
for that product. (42 U.S.C. 6295(gg)(3)) DOE

[[Page 16933]]

notes that although the final rule in this standards rulemaking is 
scheduled for publication by June 2009 (i.e., before the statutory 
deadline above), DOE nonetheless undertook a preliminary analysis of 
the potential for energy savings associated with the regulation of 
standby mode and off mode in covered lamps. DOE has tentatively 
determined that current technologies for the GSFL and IRL that are the 
subjects of this rulemaking do not use a standby mode or off mode, so a 
determination of the energy consumption of such features is 
inapplicable.
    Given EISA 2007's definitions of ``active mode,'' ``off mode,'' and 
``standby mode'' applicable to both GSFL and IRL, in order to meet the 
definition of ``off-mode'' or ``standby mode,'' the lamp must not be 
providing any active mode function (i.e., emit light). However, to 
reach such a state, the lamp must be entirely disconnected from the 
main power source (i.e., the lamp is switched off), thereby not 
satisfying the requirements of operating in off mode. In addition, DOE 
believes that all covered products that meet the definitions of 
``general service fluorescent lamp'' and ``incandescent reflector 
lamp'' are single-function products and do not offer any secondary 
user-oriented or protective functions. Thus, GSFL and IRL do not 
satisfy the definition for ``standby mode.'' DOE received comments from 
NEMA in response to the March 2008 ANOPR supporting this 
characterization of off mode and standby mode energy consumption for 
these products. (NEMA, No. 22 at p. 1) Therefore, DOE maintains that it 
is not feasible to incorporate off mode or standby mode energy use into 
the energy conservation standards for GSFL and IRL and is not proposing 
amendments to the standard to address lamp operation in such modes. The 
March 2008 ANOPR provides additional details that support this 
conclusion. 73 FR 13620, 13627 (March 13, 2008).

E. Color Rendering Index Standards for General Service Fluorescent 
Lamps

    Existing EPCA standards specify both lumens per watt and CRI levels 
that products must comply with before entering the market. (42 U.S.C. 
6295(i)(1)) At the public meeting and in written comments, NEMA and the 
Joint Comment suggested that it may be necessary to amend the minimum 
CRI requirements to prevent the possible emergence of loopholes in the 
product classes structure and standards levels considered in the March 
2008 ANOPR. (Public Meeting Transcript, No. 21 at pp. 82-84, 92, 94; 
Joint Comment, No. 23 at p. 6; NEMA, No. 22 at p. 4-5)
    However, because CRI is not a measure of energy consumption or 
efficacy, but rather a measure of the color quality of the light, DOE 
has concluded that it does not have the authority to change the CRI 
standard, for the reasons that follow. According to 42 U.S.C. 6291(6), 
``energy conservation standard'' means either: (1) A performance 
standard which prescribes a minimum level of energy efficiency or a 
maximum quantity of energy use; or (2) a design requirement (only for 
specifically enumerated products). Although CRI is a performance 
requirement, it is not an energy performance requirement within the 
meaning of the term ``energy conservation standard.'' Because, in the 
case of GSFL, DOE has the authority to regulate only energy 
conservation standards (i.e., energy performance requirements), DOE is 
not proposing to amend the existing minimum CRI requirements.

IV. General Discussion

A. Test Procedures

    DOE's test procedures for fluorescent and incandescent lamps are 
set forth at 10 CFR part 430, subpart B, appendix R.\15\ These test 
procedures provide detailed instructions for measuring GSFL and IRL 
performance, as well as performance attributes of GSIL, largely by 
incorporating several industry standards. Prompted by an earlier NEMA 
comment (NEMA, No. 12, pp. 2-4) at the Framework stage of the energy 
conservation standards rulemaking, DOE examined these test procedures 
and decided to initiate a rulemaking, in parallel with this standards 
rulemaking, to revise its test procedures for GSFL, IRL, and GSIL (even 
though, as explained above, GSIL are no longer part of this standards 
rulemaking). These revisions consist largely of: (1) Referencing the 
most current versions of several lighting industry standards 
incorporated by reference; (2) adopting certain technical changes and 
clarifications; (3) expanding the test procedures to accommodate new 
classes of lamps subject to extended coverage by either EISA 2007 or 
this energy conservation standards rulemaking; and (4) addressing 
standby mode and off mode energy consumption (which were found not to 
apply to GSFL and IRL), as mandated by EISA 2007.
---------------------------------------------------------------------------

    \15\ ``Uniform Test Method for Measuring Average Lamp Efficiency 
(LE) and Color Rendering Index (CRI) of Electric Lamps.''
---------------------------------------------------------------------------

    To this end, DOE published a NOPR that proposed to update the 
current test procedure's references to industry standards for 
fluorescent and incandescent lamps. 73 FR 13465 (March 13, 2008) (the 
test procedure NOPR). The test procedure NOPR also proposed the 
following: (1) A small number of definitional and procedural 
modifications to the test procedure to accommodate technological 
migrations in the GSFL market and approaches DOE is considering in this 
standards rulemaking (73 FR 13465, 13472-73 (March 13, 2008)); (2) 
revision of the reporting requirements for GSFL, such that all covered 
lamp efficacies would be reported with an accuracy to the tenths 
decimal place (73 FR 13465, 13473 (March 13, 2008)); and (3) adoption 
of a testing and calculation method for measuring the CCT of 
fluorescent and incandescent lamps (73 FR 13465, 13473-74 (March 13, 
2008)). Please see the March 2008 ANOPR (73 FR 13620, 13627-28 (March 
13, 2008)) and the March 2008 test procedure NOPR (73 FR 13465, 13472-
74 (March 13, 2008)) for a detailed discussion of these proposals and 
related matters.
    The public meeting for the March 2008 ANOPR also served as a public 
meeting to present and receive comments on the test procedure NOPR. DOE 
later received written remarks from NEMA responding to the proposals 
contained in the test procedure NOPR. (NEMA, No. 16) \16\ DOE is 
considering these comments, and will be publishing a final rule in the 
near future.
---------------------------------------------------------------------------

    \16\ This written comment was submitted to the docket of the 
test procedure rulemaking (Docket No. EERE-2007-BT-TP-0013; RIN 
number 1904-AB72).
---------------------------------------------------------------------------

B. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis, 
which it bases on information it has gathered on all current technology 
options and prototype designs that could improve the efficiency of the 
product or equipment that is the subject of the rulemaking. DOE 
considers a design option to be ``technologically feasible'' \17\ if it 
is in the marketplace or if research has progressed to the development 
of a working prototype.
---------------------------------------------------------------------------

    \17\ DOE's regulations set forth the following definition of 
``technological feasibility'': ``Technologies incorporated in 
commercially available products or in working prototypes will be 
considered technologically feasible.'' 10 CFR 430, subpart C, 
appendix A, section 4(a)(4)(i).
---------------------------------------------------------------------------

    In consultation with manufacturers, design engineers, and other 
interested parties, DOE develops a list of design options for 
consideration in the rulemaking. In the context of the present 
rulemaking, when determining

[[Page 16934]]

proposed efficacy levels for GSFL, DOE only considered commercially-
available products that can meet or exceed each level. For IRL, trial 
standard levels 2, 3, 4, and 5 are based on commercially-available 
products. Although TSL1 is not based on product currently sold in the 
marketplace, DOE has used a design option (i.e., higher-efficiency gas 
fills) to model the performance of a higher-efficacy lamp that meets 
TSL1. DOE received input from manufacturers during interviews to verify 
that such a design option is technologically feasible. Therefore, DOE 
has concluded that the all design options to achieve the proposed 
efficacy levels are technologically feasible.
    Once DOE has determined that particular design options are 
technologically feasible, it evaluates each design option in light of 
the following criteria: (1) Practicability to manufacture, install, or 
service; (2) adverse impacts on product utility or availability; and 
(3) adverse impacts on health or safety. Chapter 4 of the TSD 
accompanying this notice contains a description of the screening 
analysis for this rulemaking. Also, see section 0 of this notice for a 
discussion of the design options DOE considered.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt or to decline to adopt an amended or new 
standard for a type (or class) of covered product, as part of the 
rulemaking process, DOE must ``determine the maximum improvement in 
energy efficiency or maximum reduction in energy use that is 
technologically feasible'' for the product. (42 U.S.C. 6295(p)(1)) In 
response to the ANOPR, stakeholders commented that 42 U.S.C. 6295(o) 
requires that DOE evaluate the maximum technologically feasible, or 
``max-tech,'' potential standard efficiency levels. They assert that 
because DOE has gathered only technical information based on products 
available on the market today, it may not have considered those 
products that are technically feasible but not yet marketed. If such 
options are available, stakeholders believe DOE should model them as 
the max-tech efficiency levels. (Joint Comment, No. 23 at p. 19)
    DOE researched whether any technologies could improve the efficacy 
of GSFL lamps currently marketed. DOE found that higher efficacy GSFL 
could be achieved but require the use of a higher efficiency fill gas 
composition. More efficient fill gases often include higher molecular 
weight gases (e.g., krypton) to increase ultraviolet light output, and, 
thus, visible light output. However, the use of these heavier gases can 
cause lamp instability, resulting in striations or flickering. Evidence 
of this effect can be seen with reduced-wattage lamps, which generally 
incorporate a mixture of krypton and argon gases, versus full-wattage 
lamps which primarily use only argon. Reduced-wattage lamps are often 
marketed with several application-limiting performance notes. For 
example, NEMA stated reduced-wattage lamps can have performance issues 
in low-temperature applications or when operated on rapid start or 
dimming ballasts. (NEMA, No. 21 at p. 10) Therefore, DOE did not 
consider efficacy levels for GSFL that would require the use of higher-
efficiency fill gases that would result in reduced utility. DOE was 
unable to find any higher-efficacy prototypes or commercially-available 
lamps that provide the same utility and performance required of GSFL. 
Therefore, DOE has concluded that TSL5 was the maximum technologically 
feasible level for GSFL.
    For IRL, DOE determined that the maximum technologically feasible 
efficacy level incorporates the highest technologically feasible 
efficiency reflector, halogen infrared coating, and filament design. 
From its research, DOE believes that the highest efficiency reflector 
employs silver, a technology that DOE understands to be proprietary. 
From discussions with developers of IR coating technology, DOE 
understands that by modifying the coating pattern and materials used, 
varying degrees of IR coating efficiencies can be achieved. Finally, 
altering filament design to obtain the highest temperature filament 
operation, while maintaining a lifetime similar to the baseline lamp 
(3,000 hours), would result in the most efficacious filament. Combining 
all three of these highest efficiency technologies simultaneously 
results in the maximum technologically feasible level; however, this 
level is dependent on the use of a proprietary technology (the silver 
reflector). Because DOE is unaware of any alternate technology pathways 
to achieve this efficacy level, DOE did not consider it in its 
analysis. Instead, DOE based the highest efficacy level analyzed for 
IRL on a commercially-available IRL which employs a silver reflector, 
an improved (but not most efficient) IR coating, and a filament design 
that results in a lifetime of 4,200 hours. Although, this commercially-
available lamp uses silver technology, DOE believes that there are 
alternate pathways to achieve this level. A combination of redesigning 
the filament to achieve higher temperature operation (and thus reducing 
lifetime to 3,000 hours), employing other non-proprietary high-
efficiency reflectors, or applying higher-efficiency IR coatings has 
the potential to result in an IRL that meets an equivalent efficacy 
level. For more information regarding these technologies, see chapter 3 
of the TSD. Therefore, DOE has concluded that TSL5 is the maximum 
technologically feasible level for IRL that is not dependent on the use 
of a proprietary technology.
    Table IV.1 and Table IV.2 list the max-tech levels (TSL5 for GSFL 
and TSL5 for IRL) that DOE determined for this rulemaking.\18\
---------------------------------------------------------------------------

    \18\ As discussed in section V.C, due to scheduling and resource 
constraints, DOE did not analyze all GSFL and IRL product classes. 
Instead, DOE chose representative product classes to directly 
analyze and scaled analytical results to the remaining product 
classes. Table IV.1 and Table IV.2 present max-tech levels for only 
analyzed product classes. Classes not analyzed include the 2-foot U-
shaped and high-CCT product classes (for GSFL) and the modified 
spectrum, >= 125 volts, and <= 2.5 inches diameter product classes 
(for IRL).

                  Table IV.1--Max-Tech Levels for GSFL
------------------------------------------------------------------------
                                                             Max-tech
                Lamp type                       CCT       efficiency lm/
                                                                 W
------------------------------------------------------------------------
4-Foot Medium Bipin.....................       <= 4,500K              94
8-Foot Single Pin Slimline..............       <= 4,500K             100
8-Foot RDC HO...........................       <= 4,500K              95
4-Foot T5 SO............................       <= 4,500K             108
4-Foot T5 HO............................       <= 4,500K              92
------------------------------------------------------------------------


[[Page 16935]]


                                       Table IV.2--Max-Tech Level for IRL
----------------------------------------------------------------------------------------------------------------
                                                                                                     Max-tech
                            Lamp type                                Diameter         Voltage     efficiency lm/
                                                                                                         W
----------------------------------------------------------------------------------------------------------------
Standard Spectrum...............................................    > 2.5 inches           < 125  6.9P\0.27\ \*\
----------------------------------------------------------------------------------------------------------------
* Where P is the rated wattage.

C. Energy Savings

1. Determination of Savings
    DOE used its NIA spreadsheets to estimate energy savings from 
amended standards for the lamps currently covered by standards and from 
new standards for the remaining additional lamps that are the subject 
of this rulemaking. (The NIA spreadsheet models are described in 
section V.E of this notice and in chapter 11 of the TSD.) DOE 
forecasted energy savings over the period of analysis (beginning in 
2012, the year that amended standards would go into effect, and ending 
in 2042) for each TSL. It quantified the energy savings attributable to 
amended and new energy conservation standards (i.e., to each TSL) as 
the difference in energy consumption between the standards case and the 
base case. The base case represents the forecast of energy consumption 
in the absence of amended and new mandatory energy conservation 
standards. The base case considers market demand for more-efficient 
products. For example, for both GSFL and IRL, DOE models a shift in the 
base case from covered GSFL and IRL toward emerging technologies such 
as light emitting diodes (LED). In addition, consistent with current 
GSFL market trends, DOE models a shift from T12 lamps to higher-
efficacy T8 and T5 lamps. For IRL in the commercial sector, the base-
case shipments forecast also considers a migration from halogen IRL to 
higher-efficacy halogen infrared (HIR) lamps. See section 0 of this 
notice and chapter 10 of the TSD for details.
    The NIA spreadsheet models calculate the energy savings in site 
energy expressed in kilowatt-hours (kWh). Site energy is the energy 
directly consumed at building sites by GSFL or IRL. DOE reports 
national energy savings in terms of the source energy savings, which is 
the savings in the energy that is used to generate and transmit the 
energy consumed at the site. To convert site energy to source energy, 
DOE uses annual site-to-source conversion factors based on the version 
of the National Energy Modeling System (NEMS) that corresponds to 
Annual Energy Outlook 2008 (AEO2008). The conversion factors vary over 
time because of projected changes in the nation's portfolio of 
generation sources. DOE estimated that conversion factors remain 
constant at 2030 values throughout the remainder of the forecast. See 
chapter 11 of the TSD for details.
2. Significance of Savings
    Section 325 of EPCA prohibits DOE from adopting a standard for a 
covered product if that standard would not result in ``significant'' 
energy savings. (42 U.S.C. 6295(o)(3)(B)) While the term 
``significant'' is not defined in EPCA, the U.S. Court of Appeals, in 
Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 
(DC Cir. 1985), indicated that Congress intended ``significant'' energy 
savings in this context to be savings that were not ``genuinely 
trivial.'' The energy savings for all of the TSLs considered in this 
rulemaking are nontrivial, and therefore, DOE considers them 
``significant'' within the meaning of section 325 of EPCA.

D. Economic Justification

1. Specific Criteria
    As noted earlier, EPCA provides seven factors to be evaluated in 
determining whether an energy conservation standard is economically 
justified (42 U.S.C. 6295(o)(2)(B)). The following sections discuss how 
DOE has addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    To determine the quantitative impacts of a new or amended standard 
on manufacturers, the economic impact analysis is based on an annual-
cash-flow approach. This includes both a short-term assessment--based 
on the cost and capital requirements during the period between the 
announcement of a regulation and the regulation's effective start 
date--and a long-term assessment. The impacts analyzed include INPV 
(which values the industry on the basis of expected future cash flows), 
cash flows by year, changes in revenue and income, and other 
appropriate measures of impact. Second, DOE analyzes and reports the 
impacts on different types of manufacturers, with particular attention 
to impacts on small manufacturers. Third, DOE considers the impact of 
standards on domestic manufacturer employment, manufacturing capacity, 
plant closures, and loss of capital investment. Finally, DOE takes into 
account cumulative impacts of different DOE and other regulations on 
manufacturers.
    For consumers, measures of economic impact include the changes in 
price, LCC, and payback period for each trial standard level. The LCC 
is one of the seven factors to be considered in determining the 
economic justification for a new or amended standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II))
b. Life-Cycle Costs
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy and 
maintenance expenditures) discounted over the lifetime of the product. 
For each GSFL and IRL product class, DOE calculated both LCC and LCC 
savings for various efficacy levels. The LCC analysis required a 
variety of inputs, such as product prices, installation labor costs, 
electricity prices, annual operating hours, product energy consumption 
rates, and discount rates.
    To characterize variability in electricity pricing, DOE established 
regional differences in electricity prices. To account for uncertainty 
and variability in other inputs, such as annual operating hours and 
discount rates, DOE used a distribution of values with probabilities 
assigned to each value. Then for each consumer, DOE sampled the values 
of these inputs from the probability distributions. The analysis 
produced a range of LCCs. A distinct advantage of this approach is that 
DOE can identify the percentage of consumers achieving LCC savings due 
to an increased energy conservation standard, in addition to the 
average LCC savings. DOE presents only average LCC savings in this 
NOPR; however, additional details showing the distribution of results 
can be found in chapter 8 and appendix 8B of the TSD.
    In the LCC analysis, DOE also considered several events that would 
prompt a consumer to purchase a lamp. For GSFL, DOE calculated LCCs for 
five lamp purchasing events: (1) Lamp failure; (2) standards-induced 
retrofit;

[[Page 16936]]

(3) ballast failure; (4) ballast retrofit; and (5) new construction/
renovation. For IRL, DOE calculated LCCs for the lamp failure and new 
construction/renovation events, as these were the only lamp purchase 
events deemed applicable to this product type. Because each event may 
present the consumer with different lamp (or lamp-and-ballast) options 
and economics, DOE presents the LCC results for several events for each 
product class in this NOPR. DOE assumed that the consumer purchases the 
product in 2012 (the effective start date of the standard). For further 
detail regarding lamp purchasing events and related LCC calculations, 
see section V.D and chapter 8 of the TSD.
c. Energy Savings
    While significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE used 
the NES spreadsheet results in its consideration of total projected 
savings.
d. Lessening of Utility or Performance of Products
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE aimed to 
develop standards for GSFL and IRL that would not lessen the utility or 
performance of these products. None of the considered trial standard 
levels would reduce the utility or performance of the GSFL and IRL 
under consideration in the rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
    Since all standard levels for GSFL use full-wattage lamps, rather 
than requiring a shift to higher-efficacy reduced-wattage lamps (which 
may have application restrictions), no GSFL efficacy levels reduce the 
utility or performance of the covered products. For IRL, for all 
standard levels, there are commercially available IRL with the same 
utility and performance as the baseline lamps. Therefore, DOE believes 
that none of the considered trial standard levels would reduce the 
utility or performance of the IRL under consideration in this 
rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition likely to 
result from standards. It directs the Attorney General to determine the 
impact, if any, of any lessening of competition likely to result from a 
proposed standard and to transmit such determination to the Secretary 
no later than 60 days after the publication of a proposed rule, 
together with an analysis of the nature and extent of such impact. (42 
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) DOE has transmitted a copy of 
today's proposed rule to the Attorney General and has requested that 
the Department of Justice (DOJ) provide its determination on this 
issue. DOE will address the Attorney General's determination in the 
final rule.
f. Need of the Nation To Conserve Energy
    The non-monetary benefits of the proposed standard are likely to be 
reflected in improvements to the security and reliability of the 
Nation's energy system--namely, reductions in the overall demand for 
energy will result in reduced costs for maintaining the Nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the Nation's needed power generation capacity. 
This analysis captures the effects of efficiency improvements on 
electricity consumption by the covered products that are the subject of 
this rulemaking.
    The proposed standard also is likely to result in improvements to 
the environment. In quantifying these improvements, DOE has defined a 
range of primary energy conversion factors and associated emission 
reductions based on the estimated level of power generation displaced 
by energy conservation standards. DOE reports the environmental effects 
from each TSL for this equipment in the environmental assessment in the 
TSD. (42. U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a))
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) 
Under this provision, DOE considered subgroups of consumers that may be 
adversely affected by the standards proposed in this rule. 
Specifically, DOE assessed the impact of standards on low-income 
consumers, institutions of religious worship, historical facilities, 
and institutions that serve low-income populations. In considering 
these subgroups, DOE analyzed variations on electricity prices, 
operating hours, discount rates, and baseline lamps. See section 0 of 
this notice for further detail.
2. Rebuttable Presumption
    As set forth in section 325(o)(2)(B)(iii) of EPCA, there is a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard level is less than three times the 
value of the first-year energy (and, as applicable, water) savings 
resulting from the standard, as calculated under the applicable DOE 
test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 6316(e)(1)) 
DOE's LCC and PBP analyses generate values that calculate the payback 
period for consumers of potential energy conservation standards, which 
includes, but is not limited to, the three-year payback period 
contemplated under the rebuttable presumption test discussed above. 
However, DOE routinely conducts a full economic analysis that considers 
the full range of impacts, including those to the consumer, 
manufacturer, Nation, and environment, as required under 42 U.S.C. 
6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1)). The results of this 
analysis serve as the basis for DOE to definitively evaluate the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). Section 0 of this notice addresses the 
rebuttable-presumption payback calculation.

V. Methodology and Discussion of Comments

A. Product Classes

    In general, in evaluating and establishing energy conservation 
standards, DOE divides covered products into classes by the type of 
energy used, capacity, or other performance-related features that 
affect efficiency, and factors such as the utility of the product to 
users. (42 U.S.C. 6295(q)) DOE normally establishes different energy 
conservation standards for different product classes based on these 
criteria.
1. General Service Fluorescent Lamps
    In the March 2008 ANOPR, DOE proposed to establish product classes 
for GSFL based on the following three attributes that have differential 
utility and affect efficacy: (1) Physical constraints of lamps (i.e., 
lamp shape and length); (2) lumen package (i.e., standard versus high 
output); and (3) correlated color temperature. 73 FR 13620, 13636 
(March 13, 2008). The following sections summarize and address comments 
DOE received in response to the GSFL product classes it considered for 
the March 2008 ANOPR.

[[Page 16937]]

DOE received comments related to product classes on three major topics: 
T12 and T8 lamps, T5 lamps, and correlated color temperature.
a. T12 and T8 Lamps
    The physical constraints of the lamp relate to the shape of the 
lamp (e.g., U-shaped versus linear) and the fact that these lamps could 
not be substitutes for each other, unless the entire fixture is 
changed. The lamp shapes provide unique utility because the shapes of 
these lamps prevent them from being used as replacements, even with a 
ballast replacement, in a given fixture. However, the shape and 
geometry of a lamp also impact its efficacy. In the March 2008 ANOPR, 
DOE acknowledged that a lamp's diameter can affect its efficacy. 
However, because the utility provided to the end-user is a function of 
the light output in lumens (which is comparable between T12 and T8 
lamps) and not diameter of the bulb, DOE decided not to establish 
separate product classes for T12 and T8 lamps.
    At the public meeting and in its written comments, NEMA stated that 
separate product classes might be necessary for T8 and T12 lamps. Both 
NEMA and General Electric (GE) noted that DOE used the 10-percent 
efficacy differential between 8-foot slimline and 8-foot high output 
lamps as one reason for establishing their separate product classes. 
They reasoned that because T8 lamps are at least 10 percent more 
efficient that T12 lamps, DOE should also split T8 and T12 lamps into 
separate classes. (Public Meeting Transcript, No. 21 at pp. 82-86; 
NEMA, No. 22 at p. 5) GE emphasized that because T8 and T12 lamps 
require different ballasts and because a growing number of new T8 
fixtures will not fit T12 lamps, the two are not always suitable 
replacements and should therefore have separate product classes. GE 
also expressed concern that it would be impossible to set a single 
efficacy standard using a lumen-per-watt metric that would be suitable 
for both T8 and T12 lamps. (Public Meeting Transcript, No. 21 at pp. 
88-89)
    Conversely, the Joint Comment strongly supported combining T8 and 
T12 lamps under one product class because the lamps are the same 
length, use the same lamp holders, and provide the same utility (as 
measured by lumen package). At the public meeting, ACEEE emphasized 
that the two lamps compete directly in the marketplace because of their 
similar performance features. ACEEE also expressed concern that setting 
product classes based on efficacy could lead to separate standards for 
any inefficient product. (ACEEE, No. 22 at p. 91) The Joint Comment 
also stated that the fact that the two lamps use different ballasts is 
an economic issue, not a utility issue. The Joint Comment noted that 
large energy savings would be lost if DOE used separate classes because 
consumers would not migrate to the more efficient T8 lamps--a factor 
DOE must consider, given its obligation to set standards at the 
``maximum improvement in energy efficiency'' that is ``technologically 
feasible and economically justified.'' (Joint Comment, No. 23 at pp. 4-
5)
    DOE research shows that T8 lamps are commonly used to replace T12 
lamps; this implies that, in this case, lamp diameter does not 
significantly affect lamp utility. It also illustrates that the lamps 
share performance features and compete directly in the market. While 
DOE recognizes that lamp diameter can affect efficacy, lamp efficacy 
alone is not a criterion DOE uses to establish product classes; to 
warrant a separate product class, a unique utility feature must be 
present. As DOE has not identified a unique utility feature of T12 
lamps, DOE has decided to combine both T8 and T12 lamps into one 
product class for each lamp type. However, in response to GE's comment, 
DOE recognizes that T8 and T12 lamps usually operate on different 
ballasts. Thus, DOE has structured its analytical tools to consider the 
impact of standards on consumers of both lamp types. That is, DOE takes 
the economics of purchasing another ballast into account in its LCC and 
NIA analyses.
b. T5 Lamps
    The Joint Comment stated that T5 lamps (in this rulemaking, 
referred to as 4-foot miniature bipin lamps) should probably be in the 
same product class as T8 and T12 lamps because they compete against 
them in the market. The advocates noted the existence of retrofitting 
kits for installing T5 lamps into T8 and T12 fixtures, but acknowledged 
T5 lamps require different lamp holders and are ``too bright to use in 
direct lighting fixtures.'' The Joint Comment asked DOE to research the 
pros and cons of including T5 lamps with T8 and T12 lamps. (Joint 
Comment, No. 23 at p. 5)
    Based on its research and consideration of the above comments, DOE 
has decided to establish a separate product class for 4-foot miniature 
bipin lamps because their physical constraints prevent them from being 
used as direct replacements for T8 and T12 lamps in many applications. 
For example, applications in which consumers cannot change the lamp 
fixture (from a 4-foot MBP to a 4-foot MiniBP) may not be appropriate 
for retrofitting to the 4-foot MiniBP system type. As the Joint Comment 
noted, these lamps require different lamp holders (due to differences 
in length and base type), and thereby qualify for a separate product 
class under the previously established ``physical constraints of 
lamps'' class-setting criteria.
    In addition, a lamp's lumen package may result in certain 
application constraints. Because 4-foot T5 MiniBP lamps have similar 
total lumen output as 4-foot T8 and T12 MBP lamps over a significantly 
smaller surface area, T5 lamps are often marketed as too bright for use 
in direct lighting fixtures. If 4-foot T5 MiniBP lamps were regulated 
in the same product class as 4-foot MBP lamps, the standard could 
effectively mandate the use of T5 lamps. To prevent eliminating lamps 
appropriate for direct lighting applications, DOE believes that 4-foot 
miniature bipin lamps (T5 lamps) warrant a separate product class from 
4-foot medium bipin lamps (primarily T8 and T12 lamps).
    In researching these lamp types, DOE found that the high output 
lamp is rated to emit more than one and a half times the number of 
lumens as the standard output lamp, also potentially affecting utility. 
In general, lamps that have high lumen output may be installed in 
certain high-ceiling or outdoor installations, where large quantities 
of light are needed. Lamps that have standard levels of light output 
might be installed in lower-ceiling installations such as offices or 
hospitals, where distance between the light source and the illuminated 
surfaces is not as large. DOE also found that this significant lumen 
output differential in standard output and high output T5 lamps is 
accompanied by an efficacy difference. Considering the differences in 
utility (light output and their applicability in direct lighting 
fixtures) and efficacy, and consistent with DOE's approach in the March 
2008 ANOPR, DOE is proposing separate product classes for standard 
output 4-foot miniature bipin lamps and high output 4-foot miniature 
bipin lamps.
c. Correlated Color Temperature
    Correlated color temperature is a measure of the perceived color of 
the white light emitted from a lamp, which DOE believes affects lamp 
utility. Generally, as CCT increases, efficacy of the bulb decreases. 
The measured efficacy of lamps with different CCT is different because 
efficacy is measured in lumens per watt, and light emitted across the 
visible spectrum is not given equal weighting under this metric. Lumens 
are determined using the

[[Page 16938]]

human eye's sensitivity function, and due to the fact that the human 
eye is less responsive to blue light, those fluorescent lamps that 
shift their spectral emission profiles to contain more blue light will 
have lower efficacies. In the March 2008 ANOPR, DOE established two 
product classes for GSFL based on CCT: one for high-color-temperature 
lamps greater than 4,500K, and another for lamps less than 4,500K.
    At the public meeting and in its written comments, NEMA agreed with 
DOE's decision to establish two product classes based on CCT. However, 
at the public meeting NEMA noted additional divisions may be necessary 
at higher CCT levels because these lamps--NEMA specifically noted an 
8,000K lamp--are capturing an increasing market share of general 
service applications. (Public Meeting Transcript, No. 21 at pp. 95-97) 
Industrial Ecology stated that lamps around 6,500K, which were once 
reserved for specialty applications, are increasingly being used in 
general service applications. Industrial Ecology argued that such a 
trend supports the idea of another product class above the 4,500K 
division. (Public Meeting Transcript, No. 21 at pp. 97-98).
    At the June 2008 NEMA meeting and in a written comment, NEMA 
commented that growth in higher CCT lamps would likely come at the 
5,000K level, although they would remain a relatively small portion of 
the general service market for the foreseeable future. Lamps with CCTs 
greater than 7,000K represent a very small portion of the general 
service market because most consumers consider their light to be too 
blue. Given the small market for lamps above 7,000K, NEMA stated it had 
very little practical production data related to efficacies and costs. 
Therefore, NEMA argued, lamps above 7,000K should be exempt from 
standards, especially considering that the current energy savings 
potential from their coverage is very small and unlikely to grow 
anytime soon. (NEMA, No. 26 at pp. 3-4)
    NEMA also commented that an equation using a continuous function 
(without discontinuities) is inappropriate when developing an efficacy 
standard for GSFL based on CCT. According to NEMA, practical lamp 
designs used to develop higher CCT lamps--such as phosphor design, 
weight and coating formulation, and coating adherence--do not provide 
for a general physical equation that yields an optimum lumens-per-watt 
standard. Instead, NEMA stated that successive step function factors 
need to be applied as CCT continues to increase. (NEMA, No. 26 at p. 5) 
The Joint Comment said that DOE should design CCT product class 
divisions carefully to prevent ``gaming.'' The advocates preferred a 
continuous function to multiple product class divisions because the 
latter would encourage products to migrate to the lowest CCT value in 
each product class. If a continuous function were not possible, the 
Joint Comment strongly recommended raising the 4,500K division to 
4,900K. Additionally, the Joint Comment stated, if DOE does set a 
product class aimed at regulating the 8,000K lamps, the boundary should 
be approximately 7,900K. (Joint Comment, No. 23 at pp. 5-6)
    As noted above, DOE believes CCT affects consumer utility. For 
example, a lighting designer would likely consider the bluish color of 
higher color temperature lamps when specifying a luminaire for a 
particular application. In addition, as NEMA stated, higher CCT lamps 
are sometimes used for spectrally-enhanced lighting (SEL).\19\ 
Advocates of spectrally-enhanced lighting believe that lamps with a 
higher CCT can help save energy and may also have health benefits. 
(NEMA, No. 26 at pp. 2-3) However, DOE notes that although spectrally-
enhanced lighting has benefits, higher CCT lamps do emit a different 
color light that may not be appropriate for all applications. Given the 
effect on utility and the fact that lamp efficacy usually decreases 
with higher color temperatures, it is appropriate to establish 
different product classes based on CCT.
---------------------------------------------------------------------------

    \19\ DOE has conducted several studies on SEL examining whether 
a significant amount of energy can be saved by using lamps that have 
less light output, but higher CCT. Lamps with higher CCT appear 
brighter than those with lower CCT, so the actual light output of 
higher-CCT lamps can be decreased, while maintaining equivalent 
perceived brightness and visual acuity. More information on 
spectrally enhanced lighting is available at:  http://www1.eere.energy.gov/buildings/spectrally_enhanced.html.
---------------------------------------------------------------------------

    DOE agrees that a continuous function is not possible because 
increasing the CCT does not lead to proportional reductions in lumens 
per watt. This occurs because design factors that do not have a linear 
relationship with lumens per watt, such as rare earth phosphor mix and 
reformulation, must be employed to maintain efficacy, particularly as 
CCT increases.
    DOE disagrees that a 4,900K division should be used rather than the 
proposed 4,500K division. If DOE were to use a 4,900K division and 
manufacturers introduced a 4,850K lamp to the market, it would be 
subject to standards based on the performance of a 4,100k lamp, which 
might be difficult to meet, as 4,100K lamps are generally more 
efficacious than their higher CCT counterparts. Likewise, if DOE used a 
4,200K division and manufacturers developed a 4,300K lamp for 
commercial use, it would be subject to potentially lower standards 
based on the performance of a 5,000k lamp. This may result in a 
significant loss in potential energy savings. Instead, DOE proposes to 
use a 4,500K division, which effectively represents the midpoint 
between the most common commercially available ``warmer'' and 
``cooler'' lamps at 4,100K and 5,000K, respectively. By establishing 
the product class division at the midpoint, DOE ensures that it is 
establishing a structure that will not subject lamps to inappropriately 
high standards and also not result in the loss of potential energy 
savings.
    DOE also disagrees with the Joint Comment's argument for a third 
product class division around 7,900K aimed at 8,000K lamps. As 
discussed in section III.C.2, DOE is amending its definition of 
``colored fluorescent lamp,'' such that these lamps above 7,000K would 
be excluded from coverage by energy conservation standards. In 
consideration of this exclusion, DOE feels that is unnecessary to 
establish a third product class for lamps with a CCT greater than 
7,900K.
2. Incandescent Reflector Lamps
    In the March 2008 ANOPR, DOE considered product classes for IRL 
based on the standard-spectrum and modified-spectrum of the lamp. DOE 
received numerous comments regarding establishing separate product 
classes for: (1) Modified-spectrum lamps; (2) long-life lamps; (3) lamp 
diameter; and (4) voltage. The following sections summarize and address 
these comments.
a. Modified-Spectrum Lamps
    Modified-spectrum lamps provide a unique performance-related 
feature to consumers, in that they offer a different spectrum of light 
from the typical incandescent lamp, much like two fluorescent lamps 
with different CCT values. These lamps offer the same benefits as 
fluorescent lamps with ``cooler'' CCTs, in that they may ensure better 
color discrimination and often appear more similar to natural daylight, 
possibly resulting in psychological benefits.\20\ In addition to 
providing a unique performance feature, DOE also understands that the 
technologies that modify the spectral emission from these lamps also 
decrease their efficacy because a portion of the light emission

[[Page 16939]]

is absorbed by the coating. NEMA and GE supported establishing separate 
product classes for modified-spectrum lamps. (Public Meeting 
Transcript, No. 21 at p. 105; NEMA, No. 22 at p. 6).
---------------------------------------------------------------------------

    \20\ ``Full Spectrum Q&A,'' National Lighting Product 
Information Program, Vol. 7 Issue 5 (March 2005). Available at: 
http://www.lrc.rpi.edu/programs/nlpip/lightingAnswers/fullSpectrum.
---------------------------------------------------------------------------

    However, the Joint Comment stated that separate product classes are 
unnecessary because modified-spectrum products which meet all efficacy 
levels DOE considered in the ANOPR already exist in the market place. 
The Joint Comment further argued that additive methods, used for some 
non-IRL technologies, boost particular visible wavelengths of light to 
achieve a modified spectrum. These methods represent a more efficient 
way to achieve a modified spectrum than subtractive methods commonly 
used for IRL, which filter particular visible wavelengths of light. 
Therefore, according to the Joint Comment, establishing a separate 
product class could reduce energy savings because modified-spectrum 
technology would be subject to a needlessly lower standard. The Joint 
Comment contended that such a situation would run counter to the 
rulemaking's goals. (Joint Comment, No. 23 at pp. 14-15) At the public 
meeting, ACEEE and PG&E questioned whether consumers receive additional 
utility from modified-spectrum lamps, and, if they do, whether it is 
sufficient to warrant a separate product class. ACEEE and PG&E 
suggested DOE analyze the energy savings that could be lost with a 
separate product class. PG&E further noted that consumers could obtain 
any additional utility that modified-spectrum lamps provide from other 
available light sources. (Public Meeting Transcript, No. 21 at pp. 101-
103) PG&E commented that modified-spectrum lamps occupy significant 
retail shelf space, which suggests they have a significant market 
share, and therefore, present a significant energy savings opportunity. 
(Public Meeting Transcript, No. 21 at p. 104)
    DOE maintains that modified-spectrum lamps provide a unique 
performance-related feature (a different spectrum of light from the 
typical incandescent lamp) that standard spectrum lamps do not provide. 
However, the coatings used for modified-spectrum IRL absorb light 
output, thus reducing the lamps' efficacies. Given the reduction in 
efficacy, DOE believes that some modified-spectrum lamps may not be 
able to meet standards if subjected to the same levels as standard-
spectrum lamps. That, in turn, could cause the unavailability of such 
products, thereby eliminating this performance-related feature from the 
IRL market. DOE notes that the statute directs DOE to maintain 
performance-related features for a covered product type. (42 U.S.C. 
6295(o)(4))
    Regarding the Joint Comment's argument that higher-efficiency, 
additive technologies may be substituted for subtractive technologies 
currently used in modified-spectrum IRL lamps, DOE is unaware of any 
commercially-available IRL or working IRL prototype that employs these 
additive technologies. Although modified-spectrum LED products may be 
available, because DOE has determined that modified-spectrum lamps 
provide a unique performance-related feature, it is unable to subject 
them to standards that would result in the elimination of such IRL 
products from the market. Thus, DOE believes it is appropriate to 
establish a separate product class for modified-spectrum lamps based on 
their unique performance feature and the impact of this performance 
feature on product efficacy.
b. Long-Life Lamps
    DOE received several comments regarding IRL with long lifetimes. At 
the public meeting, NEMA commented that lamp life is a top 
consideration for the lighting industry's customers, particularly large 
retailers. NEMA stated in its written comments that the current long-
life lamps on the market might be jeopardized by the proposed standard 
levels, which could cause manufacturers to reduce lamp life to increase 
efficacy--a scenario not necessarily in the market's interest. (Public 
Meeting Transcript, No. 21 at pp. 177-178; NEMA, No. 22 at p. 17) 
Although NEMA did not explicitly request a separate product class, the 
Joint Comment argued that DOE should not establish a separate product 
class for long-life lamps, noting that other existing lamp types, 
including halogen infrared reflector lamps and CFLs, could adequately 
serve long-life applications. In support of their position, the 
advocates stated further that Congress did not establish a separate 
class for ``long life'' general service incandescent lamps. (Joint 
Comment, No. 23 at p. 15)
    DOE considers lifetime an economic issue rather than a utility 
issue, and accounts for lifetime in its LCC and NPV calculations. 
Lifetime is not considered a utility issue because it does not change 
the light output of the lamp. As such, DOE did not establish a separate 
product class based on lamp lifetime. For more details, see the 
engineering analysis in section V.C.4.b and chapter 5 of the TSD.
c. Lamp Diameter
    In its written comments, NEMA noted that smaller diameter lamps--
specifically, PAR20 lamps--are inherently less efficient than larger 
diameter IRL. Manufacturing PAR20 lamps to be compliant with the same 
efficacy standards as larger lamps would be very difficult. NEMA also 
commented that the technology options available to larger lamps are not 
necessarily applicable to PAR20 lamps. For example, the most efficient 
double-ended infrared halogen burner is difficult to use in PAR20 lamps 
because of mounting considerations. (NEMA, No. 22 at p. 17)
    In response, DOE believes that the IRL diameter provides a distinct 
utility to the consumer (such as the ability of reduced diameter lamps 
to be installed in smaller fixtures) and recognizes that efficacy 
declines with a smaller lamp diameter. A smaller diameter lamp has an 
inherently lower optical efficiency than a larger diameter lamp given a 
similar filament size. Therefore, DOE is proposing to establish 
separate product classes for lamps with a diameter of 2.5 inches or 
less and lamps with a diameter greater than 2.5 inches.
d. Voltage
    In its written comments, NEMA mentioned that DOE's proposed product 
classes and standards do not address how the market actually uses 130 
volt (V) lamps, which represent a sizable portion of standard halogen 
product sales. NEMA stated that customers almost always operate these 
130V lamps at 120V (normal line voltage), which doubles their lifetime 
but reduces their efficacy below standard levels. (NEMA, No. 22 at p. 
16)
    DOE agrees with NEMA and is concerned that the operation of 130V 
lamps at 120V has the potential to significantly affect energy savings. 
When operated under 120V conditions, lamps rated at 130V in compliance 
with existing IRL efficacy standards are generally less efficacious 
than lamps using equivalent technology rated at 120V. Because of this 
inherent difference in efficacy, it may be less costly to manufacture a 
lamp rated at 130V and tested at 130V that complies with a standard 
than a similar 120V lamp complying with the same standard. For example, 
if DOE were to adopt a minimum efficacy requirement that would 
effectively require HIR technology for 120V lamps, due to differences 
in the test procedures for lamps rated at 130V, a 130V lamp may only 
need to employ an improved halogen technology, which would be

[[Page 16940]]

less costly. If DOE does not establish a separate standard for lamps 
rated at 130V, more consumers may purchase 130V lamps because they are 
less expensive. When consumers operate these lamps at 120V, in order to 
obtain sufficient light output, they may use more energy than 
standards-compliant 120V lamps. This practice would increase energy 
consumption and result in lamps operating with a lower efficacy than 
any cost-justified standard level. Therefore, to preserve the energy 
savings intended by these standards, DOE is proposing to establish two 
separate product classes: (1) Lamps with a rated voltage less than 
125V, and (2) lamps with a rated voltage greater than or equal to 125V.
    DOE recognizes that there are other possible approaches for 
addressing this issue of the operational efficacy of 130V lamps. One 
alternative approach would be that DOE could require all IRL to be 
tested at 120V, the most common application voltage in the market. DOE 
requests comment on this issue.

B. Screening Analysis

    DOE uses the following four screening criteria to determine which 
design options are unsuitable for further consideration in the 
rulemaking:
    (1) Technological Feasibility. DOE will consider technologies 
incorporated in commercial products or in working prototypes to be 
technologically feasible.
    (2) Practicability to Manufacture, Install, and Service. If mass 
production and reliable installation and servicing of a technology in 
commercial products could be achieved on the scale necessary to serve 
the relevant market at the time the standard comes into effect, then 
DOE will consider that technology practicable to manufacture, install, 
and service.
    (3) Adverse Impacts on Product Utility or Product Availability. If 
DOE determines a technology would have significant adverse impact on 
the utility of the product to significant subgroups of consumers, or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the United States at the time, it will not 
consider this technology further.
    (4) Adverse Impacts on Health or Safety. If DOE determines that a 
technology will have significant adverse impacts on health or safety, 
it will not consider this technology further.

10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).
    Considering these criteria, DOE compiled a list of design options 
in the March 2008 ANOPR that could be used to increase the efficacy of 
GSFL and IRL lamps (Table V.1). 73 FR 13620, 13644 (March 13, 2008).

                                                         Table V.1--GSFL and IRL Design Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            GSFL design options                                                           IRL design options
--------------------------------------------------------------------------------------------------------------------------------------------------------
Highly emissive electrode coatings                                           Higher temperature operation.
Higher efficiency lamp fill gas composition                                  Thinner filaments.
Higher efficiency phosphors                                                  Efficient filament coiling.
Glass coatings                                                               Efficient filament orientation.
Higher efficiency lamp diameter                                              Higher efficiency inert fill gas.
                                                                             Tungsten-halogen lamps.
                                                                             Higher pressure tungsten-halogen lamps.
                                                                             Infrared glass coatings.
                                                                             Higher efficiency reflector coatings.
                                                                             Efficient filament placement.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE received a number of comments in response to its list of 
proposed design options, as discussed below.
1. General Service Fluorescent Lamps
    NEMA generally agreed with the list of design options, but 
mentioned that for GSFL, further efficacy improvement will likely come 
from improved system (lamp-ballast-luminaire) combinations, and urged 
DOE to aim in future rulemakings to improve overall systems. (NEMA, No. 
22 at p. 9; Public Meeting Transcript, No. 21 at pp. 108-109)
    DOE understands that the fluorescent lamp is only one part of a 
fluorescent lamp system, which also includes ballasts and fixtures. 
However, DOE does not have the authority to regulate a fluorescent lamp 
system. EPCA prescribes energy conservation standards for certain GSFL 
(42 U.S.C. 6295(i)(1)(B)) and fluorescent lamp ballasts. (42 U.S.C. 
6295(g)(7)) EPCA does not contain any standards for fluorescent lamp 
systems. Since EPCA directs DOE to amend only the existing standards 
for GSFL and fluorescent lamp ballasts, DOE has concluded that it does 
not have the authority to set energy conservation standards for 
fluorescent lamp systems. DOE believes other approaches, such as 
building codes, are more appropriate for regulating a fluorescent lamp 
system.
a. Higher-Efficiency Lamp Fill Gas Composition
    NEMA commented that fill gas mixes are already in use in both T12 
and T8 reduced-wattage energy savings lamps. NEMA stated that lamps 
could be manufactured using even higher efficiency fill gas 
compositions; however, the actual achieved lumen levels may be 
unacceptable to the market. NEMA also commented that most manufacturers 
identify several application-limiting issues for both T8 and T12 
reduced-wattage energy saving lamps. (NEMA, No. 22 at pp. 7, 11-12)
    DOE agrees that using fill gas composition in reduced-wattage lamps 
can lead to lamps with limited utility. For example, when marketed, 
many reduced wattage lamps are not recommended to be used under low 
lamp ambient temperatures or in drafty locations and on dimming 
ballasts. These situations could result in lamp starting or 
stabilization problems, striation (alternating light and dark bands), 
pulsing or a reduction in light output. Therefore, although DOE 
incorporates reduced-wattage lamps into the LCC and NIA (as they are 
viable and likely choices for most GSFL applications), DOE does not 
consider any efficacy level that would force consumers to purchase 
these lamps. See section V.C.4.a for details.
b. Higher-Efficiency Phosphors
    NEMA commented that rare earth phosphors are already at nearly 100 
percent quantum efficiency.\21\ While slight improvements in efficacy 
are

[[Page 16941]]

possible with a thicker phosphor coating, NEMA argued that using this 
option will disproportionately increase lamp costs vis-[agrave]-vis the 
performance improvement. NEMA stated that the opportunities for 
performance improvement using phosphors ``lie in tailoring phosphor 
blends and color temperatures to optimize appropriate light sources for 
specific applications.'' (NEMA, No. 22 at p. 7)
---------------------------------------------------------------------------

    \21\ ``Quantum efficiency,'' in this context, is used to 
quantify the percentage of ultraviolet photons absorbed by the 
phosphor that are then reemitted as visible photons.
---------------------------------------------------------------------------

    While DOE agrees that thicker phosphor coats may increase cost, DOE 
does not consider increased costs in the screening analysis. DOE 
considers potential cost increases in its economic analyses. In 
addition, many higher-efficiency GSFL incorporate varying thicknesses 
of rare earth phosphors, or blends of halophosphors and rare earth 
phosphors. These lamps, more efficacious than their pure halophosphor 
counterparts, show that using higher-efficiency phosphors is a valid 
design option that meets all of the screening criteria. Therefore, DOE 
believes there is room for significant efficacy improvement potential 
with this design option and, thus, continued to carry it forward in its 
analyses.
c. Glass Coating
    NEMA commented that higher-efficiency lamps already use glass 
coatings. NEMA also stated that while opportunities exist to improve 
this technology, manufacturers need to balance costs and performance. 
(NEMA, No. 22 at p. 7) DOE recognizes that costs may increase with this 
technology option, but as stated earlier, DOE does not consider the 
impacts of cost in its screening analysis. Therefore, DOE has included 
glass coatings as a design option for GSFL, where prototypes or 
commercially-available products exist.
d. Lamp Diameter
    NEMA commented that lamp diameter is already used to optimize 
luminaire optics and system efficacy, but not to improve lamp efficacy. 
According to NEMA, further improvements in performance can come from 
new luminaire designs based on different diameter lamps, but will be 
limited by lumen packages and the distance between the light source and 
the luminaire surfaces. (NEMA, No. 22 at p. 7)
    In response to this comment, DOE only considered lamp diameter as a 
design option in the migration from T12 to T8 lamps. DOE's research 
indicates that T8 lamps are common replacements for T12 lamps. Although 
the total lumen output of T8 lamps is often lower than that of T12 
lamps, these differences in lumen outputs (on the order of 10 percent) 
do not seem to be significant enough to affect consumer utility. 
Conversely, although the total lumen output of 4-foot T5 MiniBP lamps 
can be similar to 4-foot T8 MBP and 4-foot T12 MBP lamps, the lumen 
output is emitted from a more concentrated light source. DOE's research 
indicates that T5 lamps' higher light concentrations (and therefore 
brightness) may require greater distances between the light source and 
illuminated surfaces. Due to this limitation in utility, DOE did not 
consider migration to a lamp diameter associated with T5 lamps to be a 
design option to improve the efficacy of T8 and T12 lamps.
e. Multi-Photon Phosphors
    NEMA commented that although commercial multi-photon phosphors are 
theoretically possible, they have yet to be developed, despite 30 to 40 
years of research. (NEMA, No. 22 at p. 7) As explained in chapter 3 of 
the TSD, because multi-photon phosphors emit more than one visible 
photon for each incident ultraviolet photon, a lamp would be able to 
emit more light for the same amount of power, thereby increasing 
efficacy. DOE agrees that this technology is not sufficiently mature as 
to warrant further analysis, so DOE has screened out this technology 
option in the March 2008 ANOPR.
2. Incandescent Reflector Lamps
    NEMA does not believe that xenon, a higher-efficiency inert fill 
gas, should be considered a design option because there is a limited 
supply of this gas and prices are increasing rapidly. (NEMA, No. 22 at 
p. 8; Public Meeting Transcript, No. 21 at pp. 108-109)
    Although price is not considered in the screening criteria, DOE did 
conduct an in-depth market assessment of the supply of xenon, and the 
potential impact of xenon supply limitations on IRL standard levels. 
DOE determined that although xenon is a rare gas, its supply is 
sufficiently large to incorporate into all IRL and that the xenon 
supply would not affect IRL product availability. A more detailed 
analysis of xenon and its availability can be found in appendix 3B of 
the TSD.

C. Engineering Analysis

    For each product class, the engineering analysis identifies 
potential, increasing efficacy levels above the level of the baseline 
model. Those technologies not eliminated in the screening analysis 
(design options) are inputs to this process. Design options consist of 
discrete technologies (e.g., infrared reflective coatings, rare-earth 
phosphor mixes). As detailed in the March 2008 ANOPR, to ensure that 
efficacy levels analyzed are technologically feasible, DOE concentrated 
its efforts on developing product efficacy levels associated with 
``lamp designs,'' based upon commercially-available lamps that 
incorporate a range of design options in the engineering analysis. 73 
FR 13620, 13645 (March 13, 2008). However, when necessary, DOE 
supplemented commercially available product information with an 
examination of the improved performance attributable to discrete 
technologies so that a substitute lamp at each efficacy level would be 
available for each baseline lamp.
    In energy conservation standard rulemakings for other products, DOE 
often develops cost-efficiency relationships in the engineering 
analysis. However, for this lamps rulemaking, DOE derived efficacy 
levels in the engineering analysis and end-user prices in the product 
price determination. By combining the results of the engineering 
analysis and the product price determination, DOE derived typical 
inputs for use in the LCC and NIA. See the chapter 7 of the TSD for 
further details on the product price determination.
1. Approach
    For the NOPR, DOE is using the same methodology for the engineering 
analysis that was detailed in the March 2008 ANOPR. 73 FR 13620, 13645-
46 (March 13, 2008). The following is a summary of the steps taken in 
the engineering analysis:

<bullet> Step 1: Select Representative Product Classes
<bullet> Step 2: Select Baseline Lamps
<bullet> Step 3: Identify Lamp or Lamp-and-Ballast Designs
<bullet> Step 4: Develop Efficiency Levels.

A more detailed discussion of the methodology DOE followed to perform 
the engineering analysis can be found in the engineering analysis 
chapter of the TSD (chapter 5).
2. Representative Product Classes
    As discussed in section 0 of this notice, DOE proposes establishing 
several product classes for GSFL and IRL. DOE proposes eight product 
classes across the range of covered GSFL based on utility and 
performance features, such as: (1) Physical constraints of lamps (i.e., 
lamp shape and length); (2) lumen package (i.e., standard versus high 
output); and (3) correlated color temperature. For IRL, DOE proposes 
eight product classes based on spectrum, lamp diameter, and rated

[[Page 16942]]

voltage. As detailed in the March 2008 ANOPR, due to scheduling and 
resource constraints, DOE was not able to analyze each and every 
product class. 73 FR 13620, 13646 (March 13, 2008). Instead, DOE 
carefully selected certain product classes to analyze, and then scaled 
its analytical findings for those representative product classes to 
other product classes that were not analyzed. 73 FR 13620, 13652 (March 
13, 2008). While DOE received several stakeholder comments regarding 
methods of scaling to product classes not analyzed (discussed in 
section V.C.7), DOE did not receive objections to the decision to scale 
to certain product classes and the representative product classes 
chosen in the March 2008 ANOPR.
    For the NOPR, similar to its approach in the March 2008 ANOPR, DOE 
continued to analyze 4-foot medium bipin, 8-foot single pin slimline, 
and 8-foot recessed double-contact high output GSFL product classes 
with CCTs less than or equal to 4,500K. DOE did not explicitly analyze 
U-shaped lamps, but instead scaled the results of the 4-foot medium 
bipin class analysis. In addition, DOE has decided to analyze 4-foot T5 
miniature bipin standard output lamps and 4-foot T5 miniature bipin 
high output lamps with CCTs less than or equal to 4,500K as 
representative product classes.
    As discussed in section A.2, DOE chose to subdivide IRL into eight 
product classes with three subdivisions: (1) High versus low voltage; 
(2) large versus small diameter lamps; and (3) modified spectrum versus 
standard spectrum. As detailed in the March 2008 ANOPR, DOE chose to 
analyze the standard-spectrum incandescent reflector product class 
because standard-spectrum lamps are more common than modified-spectrum 
lamps. 73 FR 13620, 13648 (March 13, 2008). After analyzing catalog 
data and talking to industry experts, DOE found that lamps with a 
diameter greater than 2.5 inches are more common than lamps of smaller 
diameters. Lamps with voltage ratings less than 125V also are more 
common than lamps with higher voltage ratings. Therefore, for the NOPR, 
DOE proposes to analyze the product class characterized by standard 
spectrum, voltage less than 125V, and diameter greater than 2.5 inches. 
For further information on representative product classes, see chapter 
5 of the TSD.
3. Baseline Lamps and Systems
    Once DOE identified the representative product classes for 
analysis, DOE selected the representative units for analysis (i.e., 
baseline lamps) from within each product class. These representative 
units are generally what DOE believes to be the most common, least 
efficacious lamps in their respective product classes. DOE chose 
multiple baseline lamps because DOE found that the market for each 
product class is segmented into multiple submarkets for lamps with 
slightly different consumer utilities. For example, the 40W T12, 34W 
T12, and 32W T8 lamps are the most common lamps in the commercial four-
foot medium bipin product class. The 34W T12 is a reduced wattage lamp 
that is not as versatile as the 40W T12, however, and consumers 
switching from a T12 to a T8 lamp must purchase a new ballast. Thus, 
these lamps are not entirely substitutable, so DOE has chosen to 
analyze them as separate baselines. DOE's selection of baseline lamps 
is discussed in further detail below.
a. General Service Fluorescent Lamps
    As described in the March 2008 ANOPR, DOE took a systems approach 
to its GSFL analysis. 73 FR 13620, 13649 (March 13, 2008). In this 
approach, DOE selected typical ballasts (which provide current to the 
lamps) to pair with each baseline lamp and higher-efficacy lamp. Though 
DOE did not consider the ballast as directly affecting lamp efficacy, 
the ballast selection does affect the overall system efficacy (system 
input power and total lumen output), thereby having a significant 
impact on LCC and NIA results. For this reason, DOE considered a 
variety of ballast types (e.g., electronic and magnetic) and ballast 
factors in its analysis.
    In the March 2008 ANOPR, DOE chose three baseline lamps for 4-foot 
medium bipins less than or equal to 4,500K (installed on T8 electronic 
and T12 magnetic ballasts), three baseline lamps for 8-foot single pin 
slimlines less than or equal to 4,500K (installed on T8 electronic and 
T12 magnetic ballasts), and two baseline lamps for 8-foot recessed 
double-contact HOs less than or equal to 4,500K (installed on T8 
magnetic and T12 magnetic ballasts). 73 FR 13620, 13647 (March 13, 
2008). DOE did not receive any comments on baseline lamps for the 
commercial and industrial sectors and thus has retained all baseline 
lamps from the March 2008 ANOPR. However, as discussed below, DOE did 
receive comments regarding additional sectors to analyze and the 
ballast selected to pair with the 8-foot RDC HO baseline lamps. In 
addition, DOE developed baseline lamp-and-ballast systems for the 4-
foot T5 MiniBP SO and HO product classes.
    Regarding GSFL operating in the residential sector, several 
stakeholders commented that residential T12 ballasts will continue to 
be sold past 2009 and that the residential applications of these 
ballasts represent a large portion of the remaining market for these 
lamps. (NEMA, No. 22 at pp. 20, 25; Public Meeting Transcript, No. 21 
at pp. 276-277) PG&E stated that T12 lamps on magnetic ballasts 
continue to exist in the residential sector in California. (Public 
Meeting Transcript, No. 21 at p. 279) The Joint Comment also stated 
that residential applications need to be factored into the analysis, 
but because the same lamps can be used in all sectors, a separate 
analysis is not needed for the residential sector. (Joint Comment, No. 
23 at p. 10)
    In response, in this NOPR, DOE has analyzed GSFL in the residential 
sector. In interviews with manufacturers and by reviewing manufacturer 
product catalogs, DOE found that a significant portion of T12 4-foot 
medium bipin lamps operate in the residential sector. DOE is 
maintaining the same standards case lamps used in the commercial and 
industrial sectors for 4-foot medium bipins in the residential sector 
because, as the Joint Comment stated, the same lamps can be used in all 
sectors. However, DOE is choosing a separate baseline lamp for the 
residential 4-foot medium bipin analysis. Conversations with industry 
experts and a published study prepared for PG&E \22\ have revealed that 
residential consumers are more likely to buy 40W T12 lamps because 32W 
T8 lamps and 34W T12 lamps are less common. Therefore, in the 
residential sector, DOE is only analyzing the 40W T12 lamp as a 
baseline lamp. In addition, reviewing available catalog information, 
DOE has found that the most common 40W T12 lamp sold in the residential 
sector is different from the 40W T12 baseline lamp presented in the 
March 2008 ANOPR for the commercial and industrial sectors. 73 FR 
13620, 13647 (March 13, 2008). Therefore, in the NOPR, DOE has chosen a 
40W T12 baseline lamp for the residential sector that has a slightly 
lower efficacy (76.8 lm/W) and shorter lifetime (15,000 hours) than the 
typical 40W T12 lamp sold in the commercial sector.
---------------------------------------------------------------------------

    \22\ ``Codes and Standards Enhancement (CASE) Initiative for 
PY2008: Title 20 Standards Development,'' Analysis of Standards 
Options for Linear Fluorescent Fixtures (Prepared for PG&E by ACEEE, 
Lighting Wizards, and Energy Solutions). (Last modified May 14, 
2008) Available at: http://www.energy.ca.gov/appliances/
2008rulemaking/documents/2008-05-15_workshop/other/PGE_CASE_
Study__-Linear_Fluorescent_Fixtures.pdf.

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

[[Page 16943]]

    After reviewing manufacturer literature and the study prepared for 
PG&E on fixtures in the residential sector,\23\ DOE found that the most 
common residential sector ballast is a low-power-factor 2-lamp magnetic 
T12 system with a ballast factor of 0.68. Therefore, for the NOPR, DOE 
paired the baseline lamp with this ballast for the residential sector 
analysis.
---------------------------------------------------------------------------

    \23\ Id.
---------------------------------------------------------------------------

    Because DOE has decided to cover and analyze 4-foot T5 miniature 
bipin standard output and 4-foot T5 miniature bipin high output lamps 
in this rulemaking (section 0 of this notice), DOE established baseline 
lamps for these two product classes. NEMA and the Joint Comment both 
stated that if DOE does not cover T5 lamps, then less efficient, 
halophosphor T5 lamps may enter the market place. (Public Meeting 
Transcript, No. 21 at pp. 71-72; Joint Comment, No. 23 at p. 3) Because 
these less efficient halophosphor T5 lamps are not on the market today, 
DOE developed model T5 halophosphor lamps in its engineering analysis. 
To create these model T5 lamps, DOE used efficacy data from short 
halophosphor fluorescent T5 lamps currently available and developed a 
relationship between length and efficacy. DOE validated this 
relationship by comparing it to previous industry research. DOE then 
used this relationship to determine the efficacies of a halophosphor 4-
foot T5 miniature bipin standard output lamp and a halophosphor 4-foot 
halophosphor T5 miniature bipin HO lamps. Specifically, the baseline 4-
foot miniature bipin standard output lamp is 28W with an efficacy of 86 
lm/W and a lifetime of 20,000 hours. The baseline 4-foot miniature 
bipin high output lamp is 54W with an efficacy of 77 lm/W and a 
lifetime of 20,000 hours. DOE used these lamps as baseline lamps to 
establish the economic impacts of a standard that would eliminate such 
lamps. For more information about these and other baseline lamps, see 
chapter 5 and appendix 5B of the TSD.
    In its review of manufacturer literature, DOE found that a range of 
ballast factors are available for the 4-foot T5 product classes, and 
the most common ballast is a 2-lamp electronic ballast. DOE attempts to 
compare lamp-and-ballast systems with similar light output so that 
consumers switching to more efficient systems will be able to preserve 
lumen output. In order for the halophosphor baseline T5 lamps to 
produce light output similar to the standards-case T5 lamps, they must 
be paired with the highest ballast factor ballasts available on the 
market today. Therefore, in the NOPR, DOE is pairing its baseline 4-
foot T5 SO miniature bipin lamp with a 1.15 ballast factor ballast, and 
its baseline 4-foot T5 miniature bipin HO lamp with a 1.0 ballast 
factor ballast. For further detail on the baseline lamps and ballasts 
selected for the 4-foot T5 product classes, see chapter 5 of the TSD.
    DOE proposed in the March 2008 ANOPR that the most common ballast 
in use for the 8-foot T12 recessed double-contact, high-output product 
class is an electronic rapid-start ballast. (March 2008 ANOPR TSD 
chapter 5). Several stakeholders commented at the public meeting that 
the majority of 8-foot T12 high-output ballasts installed today are 
magnetic. (Public Meeting Transcript, No. 21 at pp. 124-125; Public 
Meeting Transcript, No. 21 at p. 126) NEMA and the Joint Comment also 
commented that magnetic T12 high-output ballasts are allowed under 
current regulations and, therefore, will continue to be sold past 2009. 
(Joint Comment, No. 23 at p. 7; NEMA, No. 22 at p. 25) Because the 
majority of the installed base is magnetic, DOE is revising its 
baseline T12 high-output ballast to be magnetic for the life-cycle cost 
analysis. However, DOE recognizes that historical shipments from the 
2000 rulemaking on GSFL ballasts (hereafter ``2000 Ballast Rule'') (62 
FR 56740 (Sept. 19, 2000)) indicate that T12 electronic high-output 
ballasts are also increasingly being shipped.\24\ Therefore, in the 
national impacts analysis, DOE modeled the installed base on magnetic 
ballasts, and forecasted shipments of T12 high-output lamps operating 
on both electronic and magnetic ballasts in the national impacts 
analysis. For further detail regarding the revised baseline lamps and 
systems for the 8-foot RDC HO product class, see chapter 5 of the TSD.
---------------------------------------------------------------------------

    \24\ U.S. Department of Energy--Energy Efficiency and Renewable 
Energy Office of Building Research and Standards, Technical Support 
Document: Energy Efficiency Standards for Consumer Products: 
Fluorescent Lamp Ballast Proposed Rule (Jan. 2000). Available at: 
http://www1.eere.energy.gov/buildings/appliance_standards/residential/gs_fluorescent_0100_r.html.
---------------------------------------------------------------------------

    DOE reviewed the remaining baseline lamp-and-ballast systems 
discussed in the March 2008 ANOPR and believes they are still 
appropriate, as DOE received no comments concerning these systems. 
Therefore, DOE maintained the same number of lamps per system and 
ballasts discussed in the March 2008 ANOPR for the 4-foot medium bipin 
and 8-foot single pin slimline product classes analyzed in the 
commercial and industrial sectors. 73 FR 13620, 13647 (March 13, 2008).
b. Incandescent Reflector Lamps
    In the March 2008 ANOPR, DOE proposed three baseline lamps for the 
IRL representative product class. 73 FR 13620, 13648 (March 13, 2008). 
These baseline lamps, all parabolic reflector (PAR) halogen baseline 
lamps, are regulated by EPCA and meet the EPCA standard. (42 U.S.C. 
6295(i)(1)) NEMA commented that because BR lamps remain on the market 
due to a Federal exemption and because they are commonly used in 
consumer applications, the BR lamp should be the baseline lamp instead 
of the halogen PAR. (Public Meeting Transcript, No. 21 at p. 162; NEMA, 
No. 22 at pp. 10, 16, and 18) NEMA also contends that because DOE 
selected halogen PAR lamps as the baseline, DOE is losing the 
opportunity to show additional energy savings. (NEMA, No. 22 at p. 16)
    In response, although BR lamps are a common incandescent reflector 
lamp on the market today, DOE believes they should not be selected as 
baseline lamps in the engineering analysis of this rulemaking for the 
reasons that follow. The baseline lamp should be typical of covered 
lamps within a certain product class. The most common BR lamp is the 
65W BR lamp, which remains on the market due to Federal exemptions. 
Because the 65W BR lamp is not covered in this rulemaking, it cannot be 
a baseline lamp. In addition, consumers purchasing the 65W BR lamp 
would not be affected by the amended standards proposed in this NOPR. 
Therefore, DOE would not be able to demonstrate additional energy 
savings for those consumers purchasing the 65W BR lamp even if it were 
able to select that lamp as a baseline lamp.
    Although certain BR lamps are covered in this rulemaking, DOE 
predicts that the most typical lamp sold on the market in 2012 will 
continue to be the halogen PAR lamp. EISA 2007 required that all non-
exempted BR lamps meet EPCA standards by January 1, 2008. Because these 
lamps are similar in efficacy and price to the halogen PAR, the most 
common reflector lamps meeting the EPCA standard in 2007, DOE is 
continuing to choose halogen PAR lamps as the baseline lamp for the 
NOPR.
    NEMA commented that current PAR baseline lamps have higher efficacy 
than the lamps sold in 1992 (when EPACT 1992 prescribed IRL standards), 
due to optical improvements. (NEMA, No. 22 at p. 16) However, because 
DOE prefers that the baseline lamp be typical of lamps sold on the 
market today, DOE is maintaining the same 90W PAR baseline lamp and 75W 
PAR baseline lamp used

[[Page 16944]]

in the March 2008 ANOPR. 73 FR 13620, 13648 (March 13, 2008). DOE now 
believes that the 50W PAR30 baseline lamp with a lifetime of 3,000 
hours and an efficacy of 11.6 lm/W presented in the March 2008 ANOPR is 
not typical of lamps sold on the market today. 73 FR 13620, 13648 
(March 13, 2008). Therefore, for this notice, DOE is choosing a 50W 
PAR30 lamp with an efficacy of 14.2 lm/W and a lifetime of 3,000 hours. 
Based on an examination of manufacturer product catalogs, DOE believes 
that this lamp is a higher-volume product than the baseline lamp 
presented in the March 2008 ANOPR. The lamp choice is consistent with 
advice DOE received from GE to use lamps from major manufacturers in 
the IRL analysis for modified-spectrum lamps. (Public Meeting 
Transcript, No. 21 at p. 170) For further detail on IRL baseline lamps, 
see chapter 5 of the TSD.
4. Lamp and Lamp-and-Ballast Designs
    As described in the March 2008 ANOPR, in the engineering analysis, 
DOE considered only ``design options''--technology options used to 
improve lamp efficacy that were not eliminated in the screening 
analysis. 73 FR 13620, 13644 (March 13, 2008). DOE's selection of 
design options guided its selection of lamp and lamp-and-ballast 
designs and efficacy levels. For example, for GSFL, DOE noted groupings 
around the types of phosphor used and the wall thickness of those 
phosphors. Regarding IRL, DOE identified natural ``technology-based'' 
divisions in the market around the type of incandescent technology 
(i.e., halogen or HIR) used. DOE also identified certain technology 
options and created model lamps to represent the efficacy those 
technology options could achieve.
    As described in the March 2008 ANOPR, DOE also accounted for lumen 
output when DOE established lamp designs for its analyses. 73 FR 13620, 
13648 (March 13, 2008). For the LCC analysis, DOE considered those 
lamps (or lamp-and-ballast systems) that: (1) Emit lumens equal to the 
lumen output of the baseline lamp or lamp-and-ballast system, or below 
that lamp by no more than 10 percent; and (2) result in energy savings. 
DOE took this approach in order to accurately characterize the cost-
effectiveness of a particular efficacy level if a consumer makes an 
informed decision that maintains light output. However, as DOE 
recognizes that all consumers may not make such decisions, lamp or 
lamp-and-ballast designs that under-illuminate, over-illuminate, or do 
not result in energy savings are considered in the NIA.
a. General Service Fluorescent Lamps
    As described in the March 2008 ANOPR, DOE used a systems approach 
for the fluorescent lamp analysis, because DOE recognizes that both 
lamps and ballasts determine a system's energy use and the overall 
system lumen output. 73 FR 13620, 13649 (March 13, 2008). This approach 
allows DOE to select a variety of lamp-and-ballast designs that meet a 
given efficacy level. Generally, DOE chose its potential design options 
by selecting commercially-available fluorescent lamps at higher 
efficacies than the baseline lamps. These higher efficacies are 
achieved through the design options described in the screening 
analysis. After selecting these higher-efficacy lamps, DOE selected 
lamp-and-ballast combinations for the LCC that both save energy and 
maintain comparable lumen output. For instances when the consumer is 
replacing only the lamp, DOE selected a reduced-wattage, higher-
efficacy lamp for use on the existing ballast. For instances when the 
consumer is replacing both the lamp and the ballast, DOE was able to 
obtain energy savings and maintain comparable lumen output using a 
variety of lamp-and-ballast combinations.
    In the March 2008 ANOPR, DOE stated that it was not able to 
identify any application restrictions on using reduced-wattage 
fluorescent lamps, so therefore, DOE included reduced-wattage lamps as 
design options in the ANOPR. 73 FR 13620, 13650 (March 13, 2008). NEMA 
responded that most manufacturers identify several application issues 
for these lamps. For example, NEMA stated that reduced-wattage T8 lamps 
cannot be used with certain rapid-start circuits, at temperatures below 
60 degrees Fahrenheit ([deg]F) (or 70 [deg]F for the 25W lamp), in 
drafty locations, in air-handling fixtures, on low-power-factor 
ballasts, on dimming ballasts, or on an inverter-operated emergency 
lighting system, unless the equipment is specifically listed for use 
with the reduced-wattage lamp in question. (NEMA, No. 22 at p. 10) NEMA 
also stated that reduced-wattage T12 lamps cannot be used at 
temperatures below 60 [deg]F, in drafty locations, on low-power-factor 
ballasts, on reduced-light-output ballasts, on dimming ballasts, or on 
inverter-operated emergency lighting systems unless the equipment is 
specifically listed for use with the reduced-wattage lamp in question. 
(NEMA, No. 22 at p. 11)
    In response, DOE recognizes that reduced-wattage lamps cannot be 
used in certain applications and that consumers should not be subject 
to any decrease in utility and performance due to an amended energy 
conservation standard. However, because consumers have the opportunity 
to purchase at least one full-wattage T12 or T8 lamp at each efficacy 
level, consumer utility will not be reduced by amending the existing 
energy conservation standard.
    There are many applications where reduced-wattage lamps are 
appropriate. Therefore, DOE is modeling reduced-wattage lamps in the 
engineering analysis. In the NIA, DOE did not shift all consumers to 
reduced-wattage lamps in response to an energy conservation standard, 
because reduced-wattage lamps cannot be used in certain applications. 
Specifically, the majority of residential consumers have low-power-
factor ballasts not designed to operate 34W T12 lamps. These 
assumptions are displayed in the NIA market-share matrices described in 
chapter 10 of the TSD.
b. Incandescent Reflector Lamps
    In the March 2008 ANOPR, DOE selected lamp designs and candidate 
standard levels (CSLs) by observing natural efficacy divisions in the 
marketplace that correspond to the use of technologies (e.g., halogen 
capsules, HIR technology, and improved reflector coatings) to increase 
lamp efficacy. 73 FR 13620, 13650 (March 13, 2008). CSL1, as set forth 
in the March 2008 ANOPR, could be met with a halogen lamp using a 
silverized reflector coating. CSL2 could be met with a 3,000-hour 
halogen infrared (IR) lamp. CSL3 could be met with an improved 4,000-
hour halogen infrared lamp. CSL3 could also be achieved by using design 
options like a silverized reflector coating with a halogen infrared 
burner, or improved filament placement and higher efficiency inert fill 
gases in conjunction with a halogen infrared burner.
    At the public meeting and through written comments, NEMA proposed 
several changes to the lamp designs and efficacy levels DOE identified 
for the IRL engineering analysis. NEMA suggested that DOE should 
analyze four efficacy levels, beginning with one slightly above EPCA 
and ending with the max-tech candidate standard level analyzed in the 
March 2008 ANOPR. (NEMA, No. 22 at p. 17) However, the efficacies of 
the baseline lamps chosen in the engineering analysis are above the 
lowest NEMA-proposed efficacy level. Therefore, because NEMA's lowest 
proposed efficacy level would not raise the efficacies of the most 
common

[[Page 16945]]

reflector lamps on the market today, DOE did not consider it in this 
NOPR.
    NEMA commented that DOE should also consider in its NOPR an 
efficacy level that can be met with non-standard halogen or infrared 
halogen lamps. (NEMA, No. 22 at p. 18) This standard level would lie 
between the first efficacy level proposed by NEMA and the first 
candidate standard level (CSL1) proposed by DOE in the March 2008 
ANOPR. 73 FR 13620, 13651 (March 13, 2008). To model the technologies 
that meet this efficacy level, DOE modeled an improved halogen lamp 
that uses xenon, a higher efficiency inert fill gas.
    NEMA commented that DOE should not analyze CSL1 presented in the 
March 2008 ANOPR because that level is based on the silverized 
reflector coating, a patented technology.\25\ (NEMA, No. 22 at pp. 16-
17; Public Meeting Transcript, No. 21 at pp. 157-158) Other 
stakeholders commented that DOE should research when the patent on the 
silver technology expires, because the standard does not go into effect 
until 2012. (Joint Comment, No. 23 at p. 15) The Joint Comment stated 
that DOE should research viable alternatives that can be used to reach 
the first CSL if the silverized reflector coating is indeed patented. 
(Joint Comment, No. 23 at p. 15)
---------------------------------------------------------------------------

    \25\ DOE notes that it would clearly be technologically feasible 
for manufacturers to adopt a product design that surpasses the 
levels specified in CSL1 (e.g., using technologies that meet CSL2) 
and also avoids use of the proprietary technology in question. 
However, if DOE were to adopt CSL1, as presented in the March 2008 
ANOPR, such manufacturers would be at a competitive disadvantage as 
compared to manufacturers who are able to access the patented 
technology.
---------------------------------------------------------------------------

    In response to these stakeholder comments, DOE researched the 
silverized reflector technology and found that the patent for that 
technology expires in December 2019.\26\ Therefore, for the purpose of 
this rulemaking, DOE considers the silverized reflector coating a 
proprietary technology. As discussed during the Framework stage of this 
rulemaking, DOE only considers proprietary designs in its engineering 
analysis if there are other technology pathways to meet that efficacy 
level. DOE researched possible lamp designs for the March 2008 ANOPR's 
first CSL and found that a halogen lamp with a silverized reflector 
coating is the only improved halogen technology that can meet the March 
2008 ANOPR CSL1. However, a slightly lower level can be achieved with 
an HIR lamp that has a 6,000-hour lifetime. Therefore, DOE is 
considering a slightly lower level that can be met by both long-life 
HIR lamp designs and silverized reflector coating lamp designs in the 
NOPR. In its analysis of this level, DOE considers both lamp designs as 
viable consumer options.
---------------------------------------------------------------------------

    \26\ Zhao, Tianji et al., ``Protected Coating for Energy 
Efficient Lamp,'' U.S. Patent 6,773,141 (August 10, 2004).
---------------------------------------------------------------------------

    NEMA commented that DOE should lower CSL2, because longer life 
lamps would be in jeopardy of being eliminated from the marketplace. 
Because longer life products typically have lower efficacies, 
manufacturers may need to reduce lamp life to meet a particular 
efficacy level. (Public Meeting Transcript, No. 21 at pp. 177-178; 
NEMA, No. 22 at p. 16; Joint Comment, No. 23 at p. 15) Although 
increased lifetime reduces a lamp's efficacy, DOE believes that 
lifetime is a consumer economic issue rather than a utility issue. In 
addition, the IRL at each standard level can be manufactured with 
lifetimes equal to or greater than the lifetimes of the baseline lamp. 
Therefore, consumers who are purchasing the baseline lamp will continue 
to be able to purchase a lamp with a similar lifetime in the standards 
case. Finally, DOE has conducted an analysis to assess the impact of 
standards on longer lifetime lamps. Based on this analysis, documented 
in appendix 5D of the TSD, DOE is reasonably certain that even under 
the highest efficacy level analyzed in this NOPR, 6,000 hour lifetime 
lamps are technologically feasible. For all of these reasons, DOE 
maintained the lamp designs and efficacy level for CSL2 described in 
the March 2008 ANOPR.
    Similar to its comments related to CSL1, NEMA commented that CSL3 
is problematic because it is also based on the silverized reflector 
coating, a patented technology. (NEMA, No. 22 at p. 17; Public Meeting 
Transcript, No. 21 at pp. 157-158)
    In its conversations with manufacturers and review of manufacturer 
catalogs, DOE found that CSL3 is achievable using technologies other 
than a silverized reflector coating. For example, other non-patented 
types of improved reflectors and higher-efficiency IR coatings can be 
used to reach this level. In fact, all major manufacturers produce two 
or more lamps that exceed this level, some of which are not dependent 
on the proprietary silverized reflector. Therefore, because there are 
alternate technology pathways to this level, DOE maintained the March 
2008 ANOPR CSL3 as efficacy level 4 in the NOPR. This efficacy level is 
consistent with CSL4 proposed by NEMA in its comment. (NEMA, No. 22 at 
p. 17)
    Finally, DOE conducted additional market research and discovered 
that IRL with efficacies significantly higher than the ANOPR CSL3 (or 
NOPR EL4) are being sold by one major manufacturer. These IRL are 
marketed as halogen infrared lamps with a silverized reflector, 
improved IR coating, and a lifetime of 4,200 hours. Therefore, in order 
to meet the requirement to analyze the highest technologically feasible 
level, for the NOPR, DOE has added a fifth efficacy level (EL5) based 
on these high-efficacy lamps. Although, to DOE's knowledge, there are 
no commercially-available IRL that do not use the patented silverized 
reflector and are equivalent in efficacy, DOE's research indicates that 
that are alternate, non-proprietary technology pathways to meet this 
efficacy level. In particular, DOE has extensively researched one 
particular advanced IR coating technology. Through interviews with 
manufacturers of this technology and through independent testing, DOE 
has preliminarily concluded that by using this advanced IR coating 
technology with a standard aluminum reflector, manufacturers can 
produce an IRL with an efficacy that exceeds EL5. For further detail on 
DOE's research on this technology, see appendix 5D of the TSD.
    In summary, EL1 is based on an improved halogen lamp that uses 
xenon, a higher-efficiency inert fill gas. EL2 is based on a halogen 
infrared lamp with a lifetime of 6,000 hours; a halogen lamp using a 
silverized reflector coating could also meet this EL. EL3 is associated 
with a 3,000-hour halogen infrared lamp; this EL is more efficient than 
EL2 due to higher temperature operation of the filament. EL4 is based 
on a 4,000-hour improved halogen infrared lamp; improvements in the 
halogen infrared lamp could be made by using a double-ended halogen 
infrared burner, higher-efficiency inert fill gases, and efficient 
filament orientation. EL5 is based on a 4,200-hour halogen infrared 
lamps (even further improved); these further improvements include an 
improved reflector, IR coating, or filament design that produces 
higher-temperature operation (and may reduce lifetime to 3,000 hours).
5. Efficiency Levels
a. General Service Fluorescent Lamps
i. Revisions to ANOPR Efficiency Levels
    For the March 2008 ANOPR, DOE developed CSLs for GSFL by dividing 
initial lumen output by the ANSI rated wattages of commercially-
available lamps, resulting in rated lamp efficacies. In response to the 
potential GSFL efficacy levels presented in the March 2008 ANOPR, NEMA 
commented on several reasons why the association

[[Page 16946]]

believes that the efficacy levels need to be revised. NEMA's comments 
regarding the efficacy levels considered in the March 2008 ANOPR can be 
divided into five categories: (1) The appropriateness of using ANSI 
rated wattages in the calculation of lumens per watt; (2) consideration 
of variability in production of GSFL; (3) manufacturing process 
limitations related to specialty products; (4) consideration of 
adjustments to photometry calibrations; and (5) the appropriateness of 
establishing efficacy levels to the nearest tenth of a lumen per watt. 
(NEMA, No. 22 at p. 13-14) In consideration of the above issues, NEMA 
suggested revised efficacy levels that could achieve the same results 
as the efficacy levels considered in the March 2008 ANOPR.
    First, in support of lowering the March 2008 ANOPR efficacy levels, 
NEMA argued that ANSI rated wattages of GSFL are not necessarily 
representative of long-term reference watts. NEMA further stated that 
in many cases the actual lamp reference watts are greater than the ANSI 
designated value. (NEMA, No. 22 at p. 14) Second, NEMA commented on 
production variability and its impact on the resulting measured lamp 
efficacies. NEMA stated that DOE should not use nominal catalog initial 
lumen values when developing efficacy levels, as they do not reflect 
statistical lot-to-lot production variation. It also argued that as 
lamp lumens per watt is not a controlled process element in production 
or a product rating, larger tolerances may be required. NEMA further 
stated that lumens per watt is actually a calculation based on two 
primary process control elements: (1) Watts and (2) lumens. When 
practical production variation in lamp wattage (above ANSI-designated 
values) and lamp lumens (below catalog initial lumens) combine, the 
resulting variation in lumens per watt may be larger than expected. 
NEMA stated that DOE's proposed efficacy levels should be lowered to 
account for these tolerances. (NEMA, No. 22 at p. 14)
    In consultation with the National Institute of Standards and 
Technology (NIST), DOE has investigated this issue thoroughly, and DOE 
agrees with NEMA on several points. By analyzing manufacturer 
compliance reports (submitted to DOE for existing GSFL energy 
conservation standards), DOE found that efficacies of lamps when 
reported for the purpose of compliance often vary from catalog-rated 
values. Specifically, DOE agrees that ANSI designated rated wattages 
may not be appropriate in calculating efficacy. In fact, the test 
procedures for GSFL incorporate a tolerance factor comparing measured 
lamp wattage to ANSI-rated wattage. DOE acknowledges that this 
tolerance factor could in fact significantly alter the measured 
efficacy of the lamps from the rated efficacy. In addition, DOE agrees 
that using rated lamp efficacy does not sufficiently account for lot-
to-lot production variability. For this reason, to establish revised 
GSFL efficacy levels, DOE proposes to use lamp efficacy values 
submitted to DOE over the past 10 years for the purpose of compliance 
with existing energy conservation standards. Using compliance reports 
as a basis for efficacy standards should ensure that DOE is accurately 
characterizing the tested performance of GSFL, accounting for the 
measured wattage effects and wattage and lumen output variability as 
discussed above.
    Further remarking on the effects of production variability, NEMA 
argued that it is inappropriate to use a small number of test samples 
to calculate a lumen-per-watt efficacy level. NEMA stated that its 
suggested levels incorporate a safety factor to take into account 
manufacturer process variations. (NEMA, No. 22 at p. 14) While DOE 
appreciates NEMA's input, it disagrees that the sample size is 
inappropriate. At NEMA's suggestion, a sample size of 21 lamps was 
originally established for reporting requirements in the 1997 test 
procedure rulemaking. 62 FR 29222, 29229 (May 29, 1997). The reported 
efficacy values are obtained by testing at least three lamps 
manufactured each month for at least 7 months out of a 12-month period. 
Upon receiving NEMA's comment, DOE consulted with NIST and has 
tentatively concluded that the minimum of 21 samples is sufficiently 
large sample size, assuming a normal distribution. In addition, by 
using the compliance report efficacies, DOE believes that it is 
accounting for statistical variations due to differences in production. 
The efficacy reported for compliance is related to the lower limit of 
the 95-percent confidence interval. This interval represents variation 
over the whole population of production, not only the sample size. 62 
FR 29222, 29230 (May 29, 1997).
    Third, NEMA commented that the proposed efficacy levels should be 
lowered to account for realistic production and manufacturing process 
limitations. NEMA argued that it may not be possible to apply the 
highest efficacy levels to some specialty products because they do not 
use high-speed production methods. (NEMA, No. 22 at p. 14) DOE is 
unaware of specialty products that meet the definition of GSFL and 
would be unable to meet the proposed standards. Therefore, DOE cannot 
appropriately quantify the reduction in efficacy level necessary if 
such situation in fact exists. DOE requests further comment and detail 
on this topic.
    Fourth, NEMA claims that because the National Voluntary Laboratory 
Accreditation Program (NVLAP) has made adjustments to photometry 
calibrations since 1997, the lumens for some products have actually 
been reduced. These adjustments would thereby merit a reduction in 
DOE's GSFL efficacy levels. (NEMA, No. 22 at p. 14) In response, DOE 
consulted with NIST, which is unaware of any such adjustments in 
photometry calibrations since 1997. The lumen scale has not changed 
more than 0.2 percent as a result of changes to calibration systems. 
Furthermore, the formula used in the compliance reports contains a 2-
percent de-rate factor to allow for testing variations. Therefore, DOE 
disagrees with NEMA's assertion that the efficacy levels should be 
further lowered to account for these adjustments.
    Finally, NEMA maintained that if DOE uses lumens per watt as the 
efficacy level measurement, then the numbers should be rounded to the 
nearest whole number, rather than carried out to the tenths decimal 
place. In the March 2008 ANOPR, DOE considered efficacy levels that 
were specified to the nearest tenths lumen per watt. NEMA asserts that 
lamp testing and production variation does not allow for establishing 
minimum lumens per watt levels to the tenth place. (NEMA, No. 22 at p. 
12) While DOE appreciates NEMA's comment, after consulting with NIST, 
DOE disagrees that lamp production variation would prohibit the 
regulation of GSFL to the nearest tenth decimal place of lumens per 
watt. If DOE were able to set minimum efficacy requirements to the 
nearest tenth of a decimal place, the higher-accuracy measurements and 
compliance could result in increased energy savings. However, in 
consideration of DOE's approach to establish efficacy levels and 
conduct subsequent analyses based on certification and compliance 
reports submitted by manufacturers, DOE now believes that maintaining 
the current rounding procedure (i.e., to the nearest whole lumen per 
watt) is more appropriate. Because manufacturer compliance reports 
round numbers to the nearest lumen per watt, DOE believes that the data 
would not support establishment of an energy conservation standard for 
GSFL to the nearest tenth

[[Page 16947]]

of a lumen per watt. Therefore, in this NOPR, DOE is proposing to 
establish efficacy levels as whole lumen per watt numbers.
    DOE presents revised GSFL efficacy levels in section VI.A.1 of this 
NOPR.
ii. Four-Foot T5 Miniature Bipin Efficiency Levels
    Because DOE proposes to cover 4-foot T5 miniature bipin lamps and 
4-foot T5 miniature bipin HO lamps, DOE developed efficacy levels for 
these two product classes. In its review of manufacturer literature, 
DOE identified the most common 4-foot T5 miniature bipin standard 
output lamps on the market (which based on product catalogs, DOE 
believes accounts for the majority of the 4-foot T5 SO market). The 
first efficacy level for this product class is based on these lamps, 
which use 800-series phosphors and have a rated catalog efficacy 
(initial lamp lumens divided by ANSI rated wattage) of 104 lm/W. In its 
research, DOE also noted higher efficacy 4-foot T5 miniature bipin 
standard output lamps that use improved 800-series phosphors. 
Specifically, there is a reduced-wattage (26W) 4-foot T5 miniature 
bipin lamp (with a rated efficacy of 112 lm/w) and a full-wattage (28W) 
lamp (with a rated efficacy of 110 lm/w). EL2, the second efficacy 
level for this product class, is based on these higher-efficacy lamps. 
Therefore, DOE analyzed two efficacy levels for this product class. The 
first efficacy level prevents the introduction of less-efficacious 
halophosphor lamps on the market, while the second efficacy level 
raises the efficacy of the current highest volume 4-foot T5 miniature 
bipin lamps on the market. In order to account for manufacturer 
variation, DOE used the average reductions in efficacy values due to 
manufacturer variation calculated for the highest efficacy 4-foot T8 
medium bipin lamps, and applied those same reductions to the 4-foot 
miniature bipin rated efficacy values.
    For the 4-foot T5 miniature bipin HO product class, DOE found that 
higher-efficacy full-wattage lamps do not exist on the market today. 
DOE did identify a higher-efficacy reduced-wattage lamp for this 
product class. However, because reduced-wattage lamps have a limited 
utility, DOE is choosing to base its efficacy levels on full-wattage 
lamps. In this way, consumers are not forced to purchase a lamp with 
limited utility under energy conservation standards. Therefore, for 
this product class, DOE is analyzing one efficacy level, which prevents 
the introduction of less-efficacious halophosphor lamps on the market. 
For more information on GSFL efficacy levels, see chapter 5 of the TSD.
b. Incandescent Reflector Lamps
    As wattage increases for incandescent lamps, efficacy generally 
increases. Therefore, so that the efficacy levels reflected the 
performance of these lamps, DOE proposed in the ANOPR that the efficacy 
requirement for IRL vary according to the following equation: 
a*P<SUP>0.27</SUP>, where ``a'' is a constant specifying the technology 
level and ``P'' is the wattage of the lamp. 73 FR 13620, 13645 (March 
13, 2008). At the public meeting, NEMA commented that the smooth form 
of the candidate standard levels for IRL was appropriate. (Public 
Meeting Transcript, No. 21 at pp. 100-101, 156) Several other 
stakeholders also commented that they support the continuous function 
for IRL. These stakeholders noted that continuous functions more 
closely follow theoretical equations predicting the level of efficacy 
possible for any given desired level of light output and thus maximize 
energy savings. (Joint Comment, No. 23 at p. 15) DOE agrees with these 
comments and is proposing to maintain the continuous function for IRL 
in the same equation form proposed in the ANOPR.
    As described in section V.C.4.b, DOE is proposing five efficacy 
levels in this NOPR. EL1 is based on an improved halogen lamp that uses 
xenon, a higher-efficiency inert fill gas. EL2 is based on a halogen 
infrared lamp with a lifetime of 6,000 hours. A halogen lamp using a 
silverized reflector coating also meets this EL. EL3 is based on the 
3,000-hour HIR lamp. EL4 is based on a 4,000-hour improved HIR lamp. 
EL5 is based on a 4,200-hour improved HIR lamp.
6. Engineering Analysis Results
a. General Service Fluorescent Lamps
    In chapter 5 of the March 2008 ANOPR TSD, DOE presented lifetime, 
rated wattage, and rated efficacy results for all lamp-and-ballast 
designs. NEMA commented that the lifetime rating for the reduced-
wattage 30W T8 lamp should be 20,000 hours instead of 18,000 hours. 
(NEMA, No. 22 at p. 18) DOE reviewed catalog data and agrees that 
20,000 hours is the appropriate lifetime for the 30W T8 lamp. DOE also 
reviewed catalog data for other reduced-wattage lamps. DOE found 
several 25W T8 lamps that were introduced on the market after it 
completed the ANOPR GSFL engineering analysis. Therefore, DOE updated 
the 25W T8 reduced-wattage lamp to have a slightly higher lumen output 
and longer lifetime to reflect the more common 25W T8 lamps sold on the 
market today.
    Through interviews with lamp manufacturers, DOE found that several 
of the rated wattages DOE used in its ANOPR for the 4-foot medium bipin 
product class were not accurate. For the NOPR, DOE updated the rated 
wattage of the nominally 40W T12 from 40 to 41 watts. DOE also updated 
the rated wattage of the 30W T8, 28W T8, and 25W T8 lamp from 30 to 
30.4 watts, 28 to 28.4 watts, and 25 to 26.6 watts, respectively. Due 
to these updates (and because the rated wattage affects the rated lamp 
efficacy), two 40W T12 lamps and the 25W T8 lamp have lower 
efficiencies than as they were analyzed in the March 2008 ANOPR. For 
further detail associated with these revisions, see chapter 5 of the 
TSD.
    In addition to updating lamp efficacy, DOE revised the 8-foot T12 
high output engineering analysis to reflect the purchase of a magnetic 
ballast in both the base case and standards case. As discussed in 
section V.C.4.a of this notice, DOE recognizes that a typical 8-foot 
T12 high output system uses a magnetic ballast. In addition, as the 
2000 ballast rule does not require that these systems be electronic, 
consumers will be able to purchase a magnetic 8-foot T12 high output 
system in the future.
    DOE also created a separate residential engineering analysis. In 
this engineering analysis, DOE assumes that the most typical installed 
fluorescent system in a residential household is a 40W T12 magnetic 
system. However, DOE recognizes that T8 systems are gaining in market 
share in the residential market. Therefore, DOE assumes that the 
majority of fluorescent systems installed for new construction and 
renovation in the residential sector are T8 systems. DOE discusses this 
assumption further in section V.D and V.E, as it primarily affects the 
LCC and NIA.
    In the March 2008 ANOPR, DOE considered using two low ballast 
factor (BF) ballasts for 4-foot T8s, a 0.75 BF and a 0.78 BF. ACEEE 
stated that manufacturers are now selling ballasts for 4-foot T8 lamps 
with a ballast factor between 0.68-0.7 and that DOE should consider 
this ballast in the engineering analysis. (Public Meeting Transcript, 
No. 21 at p. 262) After reviewing catalog data for fluorescent lamp 
ballasts, DOE decided to add a ballast with a 0.71 BF in its 
engineering analysis as a system option that attains energy savings 
while maintaining light output. By including this low-BF ballast, DOE 
is able to more thoroughly characterize all consumer purchase options 
in the LCC and NIA.
b. Incandescent Reflector Lamps
    In the March 2008 ANOPR, DOE also presented engineering analysis 
results

[[Page 16948]]

for IRL. NEMA generally agreed with the efficacy values in the table. 
(NEMA, No. 22 at p. 18) Thus, DOE is maintaining this approach with one 
exception. Specifically, DOE is revising the efficacy values it used 
for the 50W PAR30 baseline lamps and is creating several additional 
model lamps for the efficacy levels not analyzed in the March 2008 
ANOPR. Because the revised baseline model exhibits a slightly different 
lumen package than the baseline model analyzed in the March 2008 ANOPR, 
DOE has created several additional model lamps in order to match the 
lumen package of the baseline lamp. For more information on the revised 
baseline model, see section V.C.3.b. For more information about lamp 
designs used in the IRL engineering analysis, see chapter 5 of the TSD.
7. Scaling to Product Classes Not Analyzed
    As discussed above, DOE identified and selected certain product 
classes as ``representative'' product classes where DOE would 
concentrate its analytical effort. DOE chose these representative 
product classes primarily because of their high market volumes. The 
following section discusses how DOE scaled efficacy standards from 
those product classes it analyzed to those it did not.
a. General Service Fluorescent Lamps
    In the engineering analysis for GSFL, DOE decided not to analyze 
the 2-foot U-shaped product class and the product classes with a CCT 
greater than 4,500K, due to the small market share of these classes. 
Instead, DOE is scaling the efficacy standards for the product classes 
analyzed to these product classes. The following sections discuss DOE's 
approaches to scaling to product classes not directly analyzed.
i. Correlated Color Temperature
    Regarding the CCT product class division, DOE found in the March 
2008 ANOPR that the reduction in efficacy between 4,100K and 6,500K 
lamps was between 4 percent and 7 percent. To avoid subjecting certain 
products to inappropriately high standards, DOE considered a single 7-
percent reduction (from the efficacy levels for lamps with CCT less 
than or equal to 4,500K (low CCT)) for product classes greater than 
4,500K (high CCT). 73 FR 13620, 13653 (March 13, 2008).
    NEMA disagreed with DOE's use of a single 7-percent reduction for 
all GSFL lamps with a CCT greater than 4,500K. (NEMA, No. 22 at p. 18) 
NEMA submitted a written comment recommending an individualized 
reduction for each efficacy level and each product class for products 
with a CCT between 4,500K and 7,000K. NEMA's reductions ranged from 2.6 
percent to 7.2 percent, depending on the efficacy level and product 
class. (NEMA, No. 26 at pp. 4, 6-7)
    The Joint Comment also disagreed with the 7-percent reduction DOE 
employed. Looking at catalog data for the greater-than-4,500K product 
classes, the Joint Comment noted that the reduction in efficacy when 
moving from low-CCT to high-CCT lamps or from 4-foot MBP to 2-foot U-
shaped lamps varies by efficacy level. For example, at CSL1 in the 4-
foot medium bipin product class, the Joint Comment found that no 
reduction in the efficacy standard was necessary because high-CCT and 
2-foot U-shaped T8 lamps are able to meet that level. At CSL3, the 
Joint Comment found a 5-percent reduction was appropriate; at CSL4 and 
CSL5, the Joint Comment found a 3-percent reduction was appropriate. 
Based on this data, the Joint Comment stated that the commenters would 
accept a 5-percent reduction for both the 2-foot U-shaped and greater-
than-4,500K product classes. (Joint Comment, No. 23 at pp. 9-10)
    Through an examination of the comments and a further inspection of 
manufacturer catalog data, DOE now recognizes that a single efficacy 
reduction of 7 percent for each efficacy level and each product class 
is not always appropriate when trying to establish efficacy levels for 
lamps with greater than 4,500K CCT. Therefore, for this NOPR, DOE 
proposes to establish a separate scaling factor for each EL and product 
class. DOE's intention in developing scaling factors for this NOPR was 
to establish high-CCT efficacy levels that mimic the same technological 
effects as the low-CCT efficacy levels. For example, if EL3 for the 
low-CCT 4-foot MBP product class eliminates all but the highest-
efficacy, low-CCT T12 lamps, DOE established a high-CCT EL3 that 
attempted to eliminate all but the highest-efficacy, high-CCT, T12 
lamps as well. Because the NEMA technical committee analyzed all 
efficacy levels for all product classes with a similar intention and 
because DOE found that this range is consistent with the range of 
reductions found in manufacturer literature, DOE proposes to adopt the 
percentage reduction for each EL suggested by NEMA. In order to 
establish efficacy levels for high CCT lamps, DOE then applied these 
percentage reductions to the efficacy levels (discussed in 
sectionV.C.5.a) for the representative product classes. For more 
information on the efficacy levels for product classes with a CCT 
greater than 4,500K, see chapter 5 of the TSD.
ii. U-Shaped Lamps
    Regarding the 2-foot U-shaped product classes, in March 2008 ANOPR, 
DOE found that when comparing catalog efficacies of 2-foot U-shaped 
lamps to 4-foot MBP lamps, efficacy scaling factors varied depending on 
whether one was comparing T12 lamps or T8 lamps. Specifically, DOE had 
initially determined that a 3-percent reduction was appropriate for T8 
lamps, and a 6-percent reduction was appropriate for T12 lamps. To 
avoid subjecting certain products to inappropriately high standards, 
DOE stated that it was considering to apply a single 6-percent 
reduction from the five 4-foot medium bipin efficacy levels to obtain 
five 2-foot U-shaped efficacy levels. 73 FR 13620, 13653 (March 13, 
2008).
    In response to the ANOPR, NEMA commented that only three ELs for 
the 2-foot U-shaped product class were appropriate. These ELs 
recommended by NEMA were based on the same technology options for the 
4-foot medium bipin product class: (1) NEMA's EL1 would remove all 
halophosphor T12 lamps; (2) NEMA's EL2 would remove all 700-series T12 
U-lamps; and (3) NEMA's EL3 would remove all T12 U-lamps. (NEMA, No. 22 
at p. 15) Each EL recommended by NEMA represented an approximately 9-
percent to 10-percent reduction from ELs in the 4-foot medium bipin 
product class. As discussed above, the Joint Comment recommended that 
DOE use a single 5-percent reduction when scaling from the 4-foot 
medium bipin product class to the 2-foot U-shaped product class. 
However, the Joint Comment also found that the reduction varied by CSL. 
(Joint Comment, No. 23 at pp. 9-10)
    Similar to its analysis regarding scaling to high-CCT product 
classes, DOE recognizes that a single reduction in efficacy may not be 
appropriate for all efficacy levels for the U-shaped product classes. 
Therefore, similar to NEMA's suggestion, DOE is proposing a separate 
reduction for each efficacy level based on similar technology steps 
seen for the 4-foot medium bipin product class. However, after 
examining commercially-available product DOE believes that five, not 
three, efficacy levels are appropriate for the 2-foot U-shaped product 
class. DOE assessed manufacturer catalogs containing commercially-
available U-shaped lamps to develop standard levels with a similar 
technology impact at each EL as 4-foot linear medium bipin lamps. DOE

[[Page 16949]]

supplemented this analysis with compliance report data for U-shaped 
lamps to verify that the established efficacy levels coincide with the 
technological goals and actual performance of products on the market. 
For specific scaling factors for the proposed 2-foot U-shaped efficacy 
levels and a more detailed discussion of DOE's methodology, see chapter 
5 of the TSD.
b. Incandescent Reflector Lamps
i. Modified-Spectrum IRL
    At the ANOPR public meeting, DOE stated that the average reduction 
in efficacy of modified-spectrum lamps (as compared to standard 
spectrum lamps) was between 2 percent and 25 percent, with an average 
reduction of 15 percent. DOE acknowledged the range of spectrum 
modification and its effects on utility, and aimed to establish a 
standard that would not eliminate modified-spectrum lamps. Therefore, 
in the March 2008 ANOPR, DOE considered a minimum efficacy requirement 
for each modified-spectrum lamp that would be dependent on the testing 
of a equivalent standard-spectrum lamp. More specifically, the efficacy 
requirement for the modified-spectrum lamp would be determined on a 
per-lamp basis by measuring the lumen output of both the modified-
spectrum lamp and the equivalent standard-spectrum reference lamp; 
manufacturers would then multiply the ratio of lumen outputs (i.e., the 
lumen output of the modified-spectrum lamp divided by the lumen output 
of the standard-spectrum reference lamp) by the efficacy requirement 
for the standard-spectrum reference lamp to obtain the efficacy 
requirement for that modified-spectrum lamp. 73 FR 13620,13653 (March 
13, 2008).
    GE commented that this approach may be reasonable as long as DOE 
gave this reduction to true modified-spectrum lamps, rather than lamps 
marketed as having modified spectrums, but which in fact do not meet 
the requirements of that term. (Public Meeting Transcript, No. 21 at p. 
168) NEMA commented that DOE's proposal for establishing an efficacy 
standard for modified-spectrum IRL is complicated, difficult to 
enforce, and non-verifiable. (NEMA, No. 22 at p. 19) In addition, NEMA 
expressed concern that the responsibility of establishing the efficacy 
for the equivalent standard-spectrum lamp would fall on the 
manufacturer. (Public Meeting Transcript, No. 21 at pp. 100-101) Also, 
the Joint Comment disagreed with an approach that would allow modified-
spectrum technologies a variable reduction in efficacy (depending on 
their degree of spectrum modification and the method with which it is 
reached). (Joint Comment, No. 23 at p. 16) In response to those 
comments, DOE recognizes the drawbacks to the approach considered in 
the ANOPR and instead in the NOPR is proposing a single efficacy 
requirement (irrespective of the degree or method of spectrum 
modification) for each modified-spectrum IRL product class.
    GE and NEMA suggested that the 25-percent reduction for A-line 
modified-spectrum lamps enacted by EISA 2007 standards for general 
service incandescent lamps (GSIL) and modified-spectrum GSIL may be 
appropriate for modified-spectrum IRL. (Public Meeting Transcript, No. 
21 at pp. 169-170; NEMA, No. 22 at p. 19) The Joint Comment expressed 
an opposing viewpoint, arguing that the 25-percent reduction specified 
in EISA 2007 was based on a political compromise, not technical 
research. The Joint Comment also mentions that Ecos Consulting, on 
behalf of PG&E, tested a variety of modified-spectrum general service 
incandescent lamps. Their researchers estimated a total light output 
reduction of 11 to 18 percent due to the modified spectrum. (Joint 
Comment, No. 23 at p. 16)
    DOE agrees with the Joint Comment that the reduction in efficacy 
for general service incandescent lamps used in EISA 2007 may not be 
appropriate for IRL. Instead, DOE based its reduction for the modified-
spectrum product classes on independent testing and research of 
commercially-available modified-spectrum and standard-spectrum IRL.
    Several stakeholders commented that the range of lumen reduction (2 
percent to 29 percent) found among commercially-available modified-
spectrum IRL may be attributable to lamps that do not meet the 
statutory definition of ``modified spectrum,'' which would make the 
stated average too high. (NEMA, No. 22 at p. 19; Public Meeting 
Transcript, No. 21 at pp. 164-167) These stakeholders suggested that 
DOE should only use lamps that meet the definition of ``modified 
spectrum'' when determining an appropriate scaling factor. (Public 
Meeting Transcript, No. 21 at p. 167-168) GE suggested that lamps sold 
by major manufacturers will meet the statutory definition of ``modified 
spectrum'' because NEMA manufacturers offered input into the 
legislative process that created this definition. (Public Meeting 
Transcript, No. 21 at p. 171)
    In addition, the Joint Comment noted that when determining the 
modified-spectrum scaling factor, DOE should base its analysis on HIR 
IRL sources rather than conventional incandescent or conventional 
halogen IRL. The Joint Comment further stated that the spectral 
distribution of the HIR sources have reduced output in the red region 
of the spectrum compared to conventional incandescent lamp. The comment 
argued because this red region is the portion of the spectrum modified-
spectrum lamps are often trying to suppress, a lower and more accurate 
scaling factor could be calculated by considering only HIR lamps. 
(Joint Comment, No. 23 at p. 16)
    DOE agrees with stakeholders regarding the need to determine 
appropriate scaling factors and tested several modified-spectrum lamps 
from major manufacturers to determine whether they qualify as modified 
spectrum under the statutory definition. DOE only used the IRL that 
qualify as modified spectrum under the statutory definition to 
determine an appropriate scaling factor. In addition, DOE acknowledges 
that the spectral power distributions of incandescent (non-halogen), 
halogen, and HIR IRL are different over the electromagnetic spectrum. 
However, DOE does not believe that the reduced light output in the red 
region of the spectrum of HIR sources significantly affects the 
resulting scaling factor. This high wavelength red region of the 
spectrum is not weighted heavily when calculating the lumens emitted by 
the lamp. Therefore, any spectral differences in the infrared regions 
between the halogen IRL compared to the halogen infrared IRL would 
produce only minor differences in the reduction in efficacy for 
modified-spectrum lamps. Therefore, DOE tested both HIR and 
conventional halogen lamps in determining an appropriate scaling factor 
for modified spectrum.
    However, as non-halogen (or conventional incandescent) IRL have 
significantly different radiation spectra over wavelengths contributing 
to the calculation of lumens (in general their light outputs are 
shifted toward lower wavelengths), it is likely that the resulting 
scaling factor based on these lamps would be significantly different 
than for halogen sources. Because non-halogen IRL (representing the IRL 
lamp types exempted from standards) are not regulated in this 
rulemaking, DOE believes that it would be inappropriate to include such 
lamps in its scaling factor analysis. Therefore, DOE considered only 
halogen and HIR IRL for the computation of the modified-spectrum IRL 
scaling factor.

[[Page 16950]]

    To determine the scaling factor, DOE tested seven pairs (each pair 
consisting of one standard-spectrum lamp and one lamp marketed as 
modified-spectrum or a similar designation) of halogen IRL and one pair 
of HIR IRL made by major manufacturers. Though many of the lamps did 
not qualify as modified-spectrum under the statutory definition, for 
those that did qualify, DOE determined that the difference in light 
output and efficacy due to the modified-spectrum coating was 19 percent 
for both the halogen and IR halogen lamps. Therefore, DOE proposes to 
use a 19 percent reduction as the scaling factor for modified-spectrum 
IRL. For further details on scaling to modified-spectrum lamps, see 
chapter 5 and appendix 5C of the TSD.
ii. Lamp Diameter
    As discussed in section V.A.2.c, in this NOPR, DOE has established 
separate product classes for IRL with a diameter of 2.5 inches or less 
based on their decreased efficacy associated with the unique utility 
that they provide (e.g., ability of reduced diameter lamps to be 
installed in smaller fixtures). NEMA commented that a percentage 
reduction should be applied to the PAR30/PAR38 CSL so as not to 
eliminate PAR20 lamps (with diameters of 2.5 inches) at the highest 
CSLs set forth in the ANOPR. (Public Meeting Transcript, No. 21 at pp. 
158-159) NEMA explained that the PAR20 lamp optical system is 
inherently less efficient than the PAR30 and PAR38 optical systems. In 
addition, it is difficult to implement the most efficient double-ended 
HIR burner in the PAR20 lamps. Therefore, NEMA suggests a reduction in 
the lumen per watt standards by 12 percent. (NEMA, No. 22 at pp. 17-18) 
In the Joint Comment, stakeholders stated that they were not opposed to 
a reduction in the efficacy standard as long as data supports 
manufacturer claims. (Joint Comment, No. 23 at p. 15-16)
    DOE understands that PAR20 lamps are inherently less efficient than 
PAR30 and PAR38 lamps. To determine an appropriate scaling factor, DOE 
examined the inherent efficacy differences between the PAR20 lamp and 
its PAR30 or PAR38 counterpart by comparing catalog efficacy data of 
each lamp type from several lamp manufacturers. In general, DOE's 
analysis is consistent with NEMA's suggestion. Therefore, DOE proposes 
applying a 12-percent reduction from the efficacy requirement of the 
PAR30/PAR38 product class to determine the efficacy requirement for the 
PAR20 product class. For further details regarding the scaling to 
smaller lamp diameters, see chapter 5 of the TSD.
iii. Voltage
    DOE also conducted an analysis to determine how to scale from the 
less than 125 volt product class to the greater or equal to 125 volt 
product class. NEMA commented that lamps rated at 130V are almost 
always used by customers to achieve ``double life'' by operating them 
at 120V, which results in performance below EPACT 1992 efficacy levels. 
(NEMA, No. 22 at p. 16) In consideration of the different test 
procedures for IRL rated at 130V than those rated at 120V, and by using 
equations from the IESNA Lighting Handbook,\27\ DOE derived an efficacy 
scaling factor which would result in equivalent performance of both 
classes of IRL when operating under the same voltage conditions (as 
NEMA suggests they most often are). DOE determined that a higher 
standard for lamps equal to or greater than 125V would result in 
similar technological requirements and operational efficacies for lamps 
rated at all voltages. Using published manufacturer literature and the 
IESNA Lighting Handbook, DOE determined that there should be a 15-
percent increase in the efficacy standard for lamps rated at 125V or 
greater. See chapter 5 of the TSD for details of the results and 
methodology used in the scaling analysis and other aspects of the 
engineering analysis.
---------------------------------------------------------------------------

    \27\ Rea, M. S., ed., The IESNA Lighting Handbook: Reference and 
Application, 9th Edition. New York: Illuminating Engineering Society 
of North America. IESNA (2000).
---------------------------------------------------------------------------

D. Life-Cycle Cost and Payback Period Analyses

    This section describes the LCC and payback period analyses and the 
spreadsheet model DOE used for analyzing the economic impacts of 
possible standards on individual consumers. Details of the spreadsheet 
model, and of all the inputs to the LCC and PBP analyses, are contained 
in chapter 8 and appendix 8A of the TSD. DOE conducted the LCC and PBP 
analyses using a spreadsheet model developed in Microsoft Excel. When 
combined with Crystal Ball (a commercially-available software program), 
the LCC and PBP model generates a Monte Carlo simulation \28\ to 
perform the analysis by incorporating uncertainty and variability 
considerations.
---------------------------------------------------------------------------

    \28\ Monte Carlo simulations model uncertainty by utilizing 
probability distributions instead of single values for certain 
inputs and variables.
---------------------------------------------------------------------------

    The LCC analysis estimates the impact of a standard on consumers by 
calculating the net cost of a lamp (or lamp-and-ballast system) under a 
base-case scenario (in which no new energy conservation standard is in 
effect) and under a standards-case scenario (in which the proposed 
energy conservation regulation is applied). As detailed in the March 
2008 ANOPR, the life-cycle cost of a particular lamp design is composed 
of the total installed cost (which includes manufacturer selling price, 
sales taxes, distribution chain mark-ups, and any installation cost), 
operating expenses (energy, repair, and maintenance costs), product 
lifetime, and discount rate. 73 FR 13620, 13659 (March 13, 2008). As 
noted in the March 2008 ANOPR, DOE also incorporated a residual value 
calculation to account for any remaining lifetime of lamps (or 
ballasts) at the end of the analysis period. 73 FR 13620, 13659 (March 
13, 2008). The residual value is an estimate of the product's value to 
the consumer at the end of the life-cycle cost analysis period. In 
addition, this residual value must recognize that a lamp system 
continues to function beyond the end of the analysis period. DOE 
calculates the residual value by linearly prorating the product's 
initial cost consistent with the methodology described in the Life-
Cycle Costing Manual for the Federal Energy Management Program.\29\
---------------------------------------------------------------------------

    \29\ Fuller, Sieglinde K. and Stephen R. Peterson, National 
Institute of Standards and Technology Handbook 135 (1996 Edition); 
Life-Cycle Costing Manual for the Federal Energy Management Program 
(Prepared for U. S. Department of Energy, Federal Energy Management 
Program, Office of the Assistant Secretary for Conservation and 
Renewable Energy) (Feb. 1996). Available at: http://fire.nist.gov/fire/firedocs/build96/PDF/b96121.pdf.
---------------------------------------------------------------------------

    The payback period is the change in purchase expense due to an 
increased energy conservation standard, divided by the change in annual 
operating cost that results from the standard. Stated more simply, the 
payback period is the time period it takes to recoup the increased 
purchase cost (including installation) of a more-efficient product 
through energy savings. DOE expresses this period in years.
    The Joint Comment stated that given the inherent uncertainty in the 
LCC methodology, DOE should recognize that LCC results within a certain 
range can be considered essentially equivalent. The Joint Comment 
emphasized that recognizing this uncertainty is especially important if 
other aspects of the analysis (e.g., energy savings) show large 
differences for standard levels with LCC results that, given 
uncertainty in the analysis, are essentially the same. (Joint Comment, 
No. 23 at p. 22) DOE agrees that there are inherent sources of 
uncertainty in

[[Page 16951]]

the results of the LCC analysis due to the need to forecast certain 
inputs (e.g., future electricity prices). In addition, DOE recognizes 
that inputs such as sales tax, operating hours, and discount rates may 
introduce variability in LCC results. However, as explained below, 
DOE's analyses are structured so as to address such uncertainties. As 
stated earlier, to properly characterize the LCC results, DOE performed 
probability analyses via Monte Carlo simulations by utilizing Microsoft 
Excel in combination with Crystal Ball. The Monte Carlo approach 
allowed DOE to determine average LCC savings and payback periods, as 
well as the proportion of lamp installations achieving LCC savings or 
attaining certain payback values. To fully consider the range of LCC 
results that may occur due to a standard, DOE also performed several 
sensitivity analyses on inputs such as operating hours, electricity 
price forecasts, and product prices. Based on these analyses, DOE 
believes that it can characterize the LCC and PBP for these products 
with a reasonable degree of certainty. See the TSD appendix 8B for 
further details, where probable ranges of LCC results are presented.
    Table V.2 summarizes the approach and data that DOE used to derive 
the inputs to the LCC and PBP calculations for the March 2008 ANOPR and 
the changes made for today's proposed rule. The following sections 
discuss these inputs and comments DOE received regarding its 
presentation of the LCC and PBP analyses in the March 2008 ANOPR, as 
well as DOE's responses thereto.

 Table V.2--Summary of Inputs and Key Assumptions Used in the ANOPR and
                            NOPR LCC Analyses
------------------------------------------------------------------------
                                                       Changes for the
           Inputs               March 2008 ANOPR        Proposed Rule
------------------------------------------------------------------------
Consumer Product............  Applied discounts to  Used same
Price.......................   manufacturer          methodology from
                               catalog (``blue-      March 2008 ANOPR to
                               book'') pricing in    derive additional
                               order to represent    prices for new
                               low, medium, and      lamps and ballasts
                               high prices for all   incorporated into
                               lamp categories.      the engineering
                               Discounts were also   analysis.
                               applied to develop
                               a price for
                               ballasts.
Sales Tax...................  Derived weighted-     Updated the sales
                               average tax values    tax using the
                               for each Census       latest information
                               division and large    from the Sales Tax
                               State from data       Clearinghouse.\2\
                               provided by the
                               Sales Tax
                               Clearinghouse.\1\
Installation Cost...........  Derived costs using   IRL and GSFL:
                               the RS Means          Updated lamp
                               Electrical Cost       replacement and
                               Data, 2007 \3\ to     lamp and ballast
                               obtain average        replacement labor
                               labor times for       rates from 2006$ to
                               installation, as      2007$.
                               well as labor rates  GSFL: Added 2.5
                               for electricians      minutes of
                               and helpers based     installation time
                               on wage rates,        to the new
                               benefits, and         construction, major
                               training costs.       retrofit, and
                                                     renovation events
                                                     in the commercial
                                                     and industrial
                                                     sectors to capture
                                                     the time needed to
                                                     install luminaire
                                                     disconnects.
Disposal Cost...............  Not included........  GSFL: Included a
                                                     recycling cost of
                                                     10 cents per linear
                                                     foot in the
                                                     commercial and
                                                     industrial sectors.
                                                    IRL: No change.
Annual Operating Hours......  Determined operating  GSFL: Added
                               hours by              residential GSFL to
                               associating           LCC analysis and
                               building-type-        used methodology
                               specific operating    developed in the
                               hours data with       March 2008 ANOPR to
                               regional              derive residential
                               distributions of      operating hours for
                               various building      GSFL based on data
                               types using the       in the 2002 U.S.
                               2002 U.S. Lighting    Lighting Market
                               Market                Characterization
                               Characterization      and the EIA's 2001
                               \4\ and the Energy    Residential Energy
                               Information           Consumption Survey.
                               Administration's     IRL: Removed
                               (EIA) 2003            industrial sector
                               Commercial Building   analysis due to the
                               Energy Consumption    low prevalence of
                               Survey (CBECS),\5\    IRL in that sector.
                               2001 Residential
                               Energy Consumption
                               Survey,\6\ and 2002
                               Manufacturing
                               Energy Consumption
                               Survey.\7\
Product Energy Consumption    Determined lamp       Updated 4-foot T8
 Rate.                         input power (or       lamp-and-ballast
                               lamp-and-ballast      system input power
                               system input power    based on additional
                               for GSFL) based on    published
                               published             manufacturer
                               manufacturer          literature.
                               literature. Used a    Developed new
                               linear fit of GSFL    system input powers
                               system power on       for 8-foot T12 HO
                               several different     systems, 4-foot T12
                               ballasts with         residential
                               varying ballast       systems, and 4-foot
                               factors in order to   T5 systems.
                               derive GSFL system
                               power for all of
                               the ballasts used
                               in the analysis.
Electricity Prices..........  Price: Based on       Price: Updated using
                               EIA's 2005 Form EIA-  EIA's 2006 Form EIA
                               861 data.             861 data.\8\
                              Variability:          Variability: No
                               Regional energy       change.
                               prices determined
                               for 13 regions.
Electricity Price Trends....  Forecasted with       Updated with EIA's
                               EIA's Annual Energy   AEO2008.\10\
                               Outlook (AEO)
                               2007.\9\
Lifetime....................  Ballast lifetime      Ballasts: No change
                               based on average      in commercial and
                               ballast life of       industrial sector.
                               49,054 from 2000      Developed separate
                               Ballast Rule.\11\     ballast lifetime
                               Lamp lifetime based   estimate for the
                               on published          residential sector.
                               manufacturer         Residential GSFL: 4-
                               literature where      foot medium bipin
                               available. DOE        lamp lifetime is
                               assumed a lamp        dependent on the
                               operating time of 3   fixture lifetime
                               hours per start.      (i.e., the fixture
                               Where manufacturer    reaches end of life
                               literature was not    before the lamp
                               available, DOE        reaches end of
                               derived lamp          life.).
                               lifetimes as part    Commercial and
                               of the engineering    industrial GSFL: No
                               analysis.             change.
                                                    IRL: No change.

[[Page 16952]]

 
Discount Rate...............  Residential:          DOE updated the
                               Approach based on     commercial and
                               the finance cost of   industrial discount
                               raising funds to      rates using the
                               purchase lamps        latest versions of
                               either through the    the sources used in
                               financial cost of     the March 2008
                               any debt incurred     ANOPR.
                               to purchase product
                               or the opportunity
                               cost of any equity
                               used to purchase
                               equipment, based on
                               the Federal
                               Reserve's Survey of
                               Consumer Finances
                               data \12\ for 1989,
                               1992, 1995, 1998,
                               2001, and 2004.
                              Commercial and
                               industrial: Derived
                               discount rates
                               using the cost of
                               capital of publicly-
                               traded firms in the
                               sectors that
                               purchase lamps,
                               based on data in
                               the 2003 CBECS,\13\
                               Damodaran
                               Online,\14\
                               Ibbotson's
                               Associates,\15\ the
                               2007 Value Line
                               Investment
                               survey,\16\ Office
                               of Management and
                               Budget (OMB)
                               Circular No. A-
                               94,\17\ 2008 State
                               and local bond
                               interest rates,\18\
                               and the U.S. Bureau
                               of Economic
                               Analysis.\19\.
Analysis Period.............  Based on the longest  Commercial and
                               baseline lamp life    industrial GSFL: No
                               in a product class    Change.
                               divided by the       Residential GSFL:
                               annual operating      Analysis period is
                               hours of that lamp.   based on the useful
                                                     lifetime of the
                                                     baseline lamp.
                                                    IRL: No Change.
Lamp Purchasing Events......  DOE assessed five     GSFL: DOE assumed
                               events: Lamp          that HO lamps used
                               failure, standards-   magnetic ballasts
                               induced retrofit,     in the base case.
                               ballast failure       DOE added lamp
                               (GSFL only),          failure, ballast
                               ballast retrofit      failure/fixture
                               (GSFL only), and      failure, and new
                               new construction/     construction events
                               renovation.           for 4-foot medium
                                                     bipin systems in
                                                     the residential
                                                     sector, where DOE
                                                     also assumed the
                                                     usage of magnetic
                                                     ballasts in the
                                                     base case.
                                                    IRL: No change.
------------------------------------------------------------------------
\1\ The four large States are New York, California, Texas, and Florida.
\2\ Sales Tax Clearinghouse, Aggregate State Tax Rates (2008)(Last
  accessed May 30, 2008). Available at: http://thestc.com/STrates.stm.
  The May 30, 2008 material from this Web site is available in Docket
  <greek-i> EE-2006-STD-0131. For more information, contact Brenda
  Edwards at (202) 586-2945.
\3\ R. S. Means Company, Inc., 2007 RS Means Electrical Cost Data
  (2007).
\4\ U.S. Department of Energy, Office of Energy Efficiency and Renewable
  Energy, Energy Conservation Program for Consumer Products: Final
  Report: U.S. Lighting Market Characterization, Volume I: National
  Lighting Inventory and Energy Consumption Estimate (2002). Available
  at: http://www.eere.energy.gov/buildings/info/documents/pdfs/lmc_vol1_final.pdf.
\5\ U.S. Department of Energy, Energy Information Administration,
  Commercial Building Energy Consumption Survey: Micro-level data, file
  2 Building Activities, Special Measures of Size, and Multi-building
  Facilities (2003). Available at: http://www.eia.doe.gov/emeu/cbecs/public_use.html.
\6\ U.S. Department of Energy, Energy Information Administration,
  Residential Energy Consumption Survey: File 1: Housing Unit
  Characteristic (2006). Available at: http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html.
\7\ U.S. Department of Energy, Energy Information Administration,
  Manufacturing Energy Consumption Survey, Table 1.4: Number of
  Establishments by First Use of Energy for All Purposes (Fuel and
  Nonfuel) (2002). Available at: http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html.
\8\ U.S. Department of Energy, Energy Information Administration, Form
  EIA-861 for 2006 (2006). Available at: http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
\9\ U.S. Department of Energy, Energy Information Administration, Annual
  Energy Outlook 2007 with Projections to 2030 (Feb. 2007). Available
  at: http://www.eia.doe.gov/oiaf/aeo/index.html.
\10\ U.S. Department of Energy, Energy Information Administration,
  Annual Energy Outlook 2008 with Projections to 2030 (June 2008).
  Available at: http://www.eia.doe.gov/oiaf/aeo/excel/aeotab_3.xls.
\11\ U.S. Department of Energy, Energy Efficiency and Renewable Energy,
  Office of Building Research and Standards, Technical Support Document:
  Energy Efficiency Standards for Consumer Products: Fluorescent Lamps
  Ballast Final Rule (Sept. 2000). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/gs_fluorescent_0100_r.html.
\12\ The Federal Reserve Board, Survey of Consumer Finances. Available
  at: http://www.federalreserve.gov/PUBS/oss/oss2/scfindex.html.
\13\ U.S. Department of Energy, Energy Information Administration,
  Commercial Building Energy Consumption Survey (2003). Available at:
  http://www.eia.doe.gov/emeu/cbecs/.
\14\ Damodaran Online, The Data Page: Historical Returns on Stocks,
  Bonds, and Bills--United States (2006). Available at: http://pages.stern.nyu.edu/adamodar. (Last accessed Sept. 12, 2007.) The
  September 12, 2007 material from this Web site is available in Docket
  <greek-i> EE-2006-STD-0131. For more information, contact Brenda
  Edwards at (202) 586-2945.
\15\ Ibbotson's Associates, Stocks, Bonds, Bills, and Inflation,
  Valuation Edition, 2001 Yearbook (2001).
\16\ Value Line, Value Line Investment Survey (2007). Available at:
  http://www.valueline.com.
\17\ U.S. Office of Management and Budget, Circular No. A-94 Appendix C
  (2008). Available at: http://www.whitehouse.gov/omb/circulars/a094/a94_appx-c.html.
\18\ Federal Reserve Board, Statistics: Releases and Historical Data--
  Selected Interest Rates--State and Local Bonds (2008). Available at:
  http://www.federalreserve.gov/releases/h15/data/Monthly/H15_SL_Y20.txt.
\19\ U.S. Department of Commerce, Bureau of Economic Analysis, Table
  1.1.9 Implicit Price Deflators for Gross Domestic Product (2008).
  Available at: http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=N.

1. Consumer Product Price
    As in the March 2008 ANOPR, DOE used a variety of sources to 
develop consumer equipment prices, including lamp and ballast prices in 
manufacturers' suggested retail price lists (``blue books''), State 
procurement contracts, large electrical supply distributors, hardware 
and home improvement stores, Internet retailers, and other similar 
sources. DOE then developed low, medium, and high prices based on its 
findings.
    For the NOPR, DOE added several new lamps and ballasts to its 
analyses. Accordingly, DOE developed prices for 4-foot medium bipin 
GSFL systems in

[[Page 16953]]

the residential sector, the 8-foot HO magnetic ballast, and 
commercially-available 4-foot T5 miniature bipin standard output and 
high-output lamps and ballasts using the same methodology applied in 
the March 2008 ANOPR. However, not all lamps assessed for this 
rulemaking are commercially available. In particular, DOE developed 
model halophosphor T5 standard-output and high-output lamps as 
baselines for these product classes. To establish prices for these 
baseline lamps, DOE calculated the price differential between a 
halophosphor 4-foot MBP lamp and the highest-efficacy 32W 4-foot MBP 
lamp. DOE then used this relationship to scale prices from the 
commercially-available T5 standard-output and high-output lamps to 
establish the halophosphor lamp prices.
    DOE also developed a model IRL for EL1 based on the incorporation 
of xenon gas into the lamps. To determine the price of these lamps, DOE 
interviewed manufacturers and conducted its own research on the cost of 
xenon \30\ to develop a manufacturer cost increase over the baseline 
lamp in a product class, and then applied a markup to represent 
consumer prices. See the engineering analysis in section V.C.4.b for 
further information on the model IRL lamp.
---------------------------------------------------------------------------

    \30\ DOE used the information in the following article to obtain 
the price of xenon: Betzendahl, Richard, ``The Rare Gets More Rare: 
The Rare Gases Market Update,'' CryoGas International (June 2008) 
26.
---------------------------------------------------------------------------

    DOE also developed a price for the 6,000-hour HIR IRL for the NOPR. 
After reviewing data in manufacturer catalogs and interviewing 
manufacturers, DOE determined that the manufacturing costs for the 
6,000-hour HIR lamp are the same as the manufacturing costs for the 
3,000-hour HIR lamps that meet EL3. Therefore, for the NOPR, the 
commoditized retail prices for the long-life HIR lamps are the same as 
for the IRL that meet EL3.
    Lastly, because DOE did not have manufacturer suggested retail 
price list data for the EL5 (HIR Plus) IRL, DOE used prices offered by 
Internet retailers to establish prices for these lamps. Specifically, 
DOE calculated individual retailers' discounts on blue book prices for 
EL4 (Improved HIR) lamps. DOE applied these same discounts to establish 
average blue book prices for EL5 lamps across all Internet retailers 
found to sell both EL4 and EL5 lamps. Using these approximate blue-book 
prices, DOE then followed the same methodology applied in the March 
2008 ANOPR to establish low, medium and high lamp prices.
2. Sales Tax
    As in the March 2008 ANOPR, DOE obtained State and local sales tax 
data from the Sales Tax Clearinghouse. (March 2008 ANOPR TSD chapter 7) 
The data represented weighted averages that include county and city 
rates. DOE used the data to compute population-weighted average tax 
values for each Census division and four large States (New York, 
California, Texas, and Florida). For the NOPR, DOE retained this 
methodology and used updated sales tax data from the Sales Tax 
Clearinghouse \31\ and updated population estimates from the U.S. 
Census Bureau.\32\
---------------------------------------------------------------------------

    \31\ Sales Tax Clearinghouse, ``Aggregate State Tax Rates'' 
(2007) (Last accessed May 30, 2008). Available at: http://thestc.com/STrates.stm. The May 30, 2008, material from this Web 
site is available in Docket <greek-i>EE-2006-STD-0131. For more 
information, contact Brenda Edwards at (202) 586-2945.
    \32\ U.S. Census Bureau, ``Population Change: April 1, 2000 to 
July 1, 2007'' (July 2007). Available at: http://www.census.gov/popest/states/files/NST-EST2007-popchg2000-2007.csv.
---------------------------------------------------------------------------

3. Installation Costs
    As detailed in the ANOPR, DOE considered the total installed cost 
of a lamp or lamp-and-ballast system to be the consumer product price 
(including sales taxes) plus the installation cost. 73 FR 13620, 13660 
(March 13, 2008). For the commercial and industrial sectors, DOE 
assumed an installation cost that was the product of the average labor 
rate and the time needed to install a lamp or lamp and ballast. In the 
residential sector, DOE assumed that consumers must pay for the 
installation of a lamp and ballast system. Therefore, the installation 
cost assumed was the product of the average labor rate and the time 
needed to install the lamp and ballast system. However, DOE assumed 
that consumers would install their own replacement lamps and, thus, 
would incur no installation cost when replacing their own lamp.
    DOE received multiple comments on the average labor rates DOE used 
in the March 2008 ANOPR: $65.35 per hour for an electrician and $42.40 
per hour for an electrician's helper. (March 2008 ANOPR TSD chapter 8). 
DOE assumed that the lamp-and-ballast hourly labor rate is 50 percent 
of an electrician's rate and 50 percent of the helper's rate, for a 
total labor rate of $53.88 based on ``RS Means Electrical Cost Data, 
2007'' (RS Means).\33\ NEMA commented that $53.88 per hour is 
approximately 10 percent lower than the current labor rate including 
benefits, while the Joint Comment stated that $54 per hour for ballast 
change-outs is reasonable only for residential and small commercial 
customers, and is too high for large commercial customers, who will 
have a full-time electrician or non-electrician maintenance person on 
staff for installations. (NEMA, No. 22 at p. 22; Joint Comment, No. 23 
at p. 10) ACEEE also commented that large companies may have 
electricians on staff and encouraged DOE to research labor rates for 
these workers. (Public Meeting Transcript, No. 21 at pp. 216-217)
---------------------------------------------------------------------------

    \33\ R. S. Means Company, Inc., 2007 RS Means Electrical Cost 
Data (2007).
---------------------------------------------------------------------------

    DOE understands that there may be a range of labor rates in the 
market for installations and also clarifies that the March 2008 ANOPR 
labor rate of $53.88 per hour is for the installation of lamps and 
ballasts, not only ballasts, as stated in the Joint Comment. ACEEE and 
the Joint Comment requested that DOE lower the labor rate, while NEMA 
commented that DOE should raise the labor rate; none of the comments 
provided DOE with supporting references. DOE uses ``RS Means Electrical 
Cost Data, 2007,'' because labor costs in RS Means are based on labor 
union agreements and construction wages, as well as actual working 
conditions in 30 major U.S. cities. Productivity data in RS Means 
represents an extended period of observations. For this reason, DOE 
chose to retain for the NOPR the RS Means methodology used for the 
March 2008 ANOPR. Based on inflation estimates derived from consumer 
price index data from the U.S. Bureau of Labor Statistics, DOE 
estimated that this rate in 2007 dollars is $55.41 per hour. DOE also 
updated the lamp replacement labor rate to be $15.94 per hour in 2007 
dollars.
    In the March 2008 ANOPR, DOE used several installation times for 
lamps and ballasts in the commercial and industrial sector analyses, 
such as the lower bound installation time of 30 minutes for 2-lamp 4-
foot medium bipin fixtures, and the upper bound installation time of 60 
minutes for 2-lamp 8-foot recessed double contact high-output fixtures. 
(March 2008 ANOPR TSD chapter 8) These times were obtained from the 
2000 Ballast Rule TSD.\34\
---------------------------------------------------------------------------

    \34\ U.S. Department of Energy, ``Appendix A: Engineering 
Analysis Support Documentation, 2000 Ballast Rule'' (2000) (Last 
accessed June 20, 2008). Available at: http://www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/appendix_a.pdf.
---------------------------------------------------------------------------

    DOE received several comments addressing these installation times. 
GE commented that the 2005 National Electric Code requirements for 
disconnecting luminaires before they are serviced for lamp or ballast

[[Page 16954]]

replacements and installing luminaire disconnects for new construction 
or major retrofits will necessitate additional labor time. (Public 
Meeting Transcript, No. 21 at pp. 218-219; NEMA, No. 22 at p. 22) NEMA 
recommended that DOE use an installation time of approximately 2 to 3 
minutes for luminaire disconnects. Industrial Ecology commented on 
average installation times during the recent relamping of a school in 
Atlantic City, NJ, in which an electrician changed ballasts and lamps 
for 4-lamp and 2-lamp fixtures at the rate of approximately 3 fixtures 
per hour. (Public Meeting Transcript, No. 21 at p. 220)
    DOE agrees that extra time will be needed when a luminaire 
disconnect must be installed. Because DOE has not received detailed 
data on other installation times apart from the ones used in the 2000 
Ballast Rule, DOE revised the ANOPR installation times specifically to 
address the time added by the installation of luminaire disconnects. 
For the NOPR analysis, DOE added 2.5 minutes to the ANOPR installation 
times for new construction, major retrofits, and renovation, events in 
which DOE assumed that a luminaire disconnect must be installed. 
Additional details on installation costs are available in chapter 8 of 
the NOPR TSD.
4. Disposal Costs
    DOE did not consider disposal costs in the March 2008 ANOPR. 
Industrial Ecology commented that recycling costs should be considered 
in the LCC analysis for GSFL and that such costs range from 5 cents to 
10 cents per foot. (Public Meeting Transcript, No. 21 at p. 212) In 
response, DOE researched recycling costs for GSFL and found an average 
cost of 10 cents per linear foot.\35\ DOE also explored the prevalence 
of recycling in the commercial, industrial, and residential sectors. A 
report released by the Association of Lighting and Mercury Recyclers in 
2004 noted that approximately 30 percent of lamps used by businesses 
and 2 percent of lamps in the residential sector are recycled 
nationwide.\36\ DOE considers the 30 percent commercial and industrial 
recycling rate to be significant and, thus, incorporates recycling 
costs into its main analysis. DOE applied a cost of 10 cents per linear 
foot in the commercial and industrial sectors every time a lamp is 
replaced during the LCC analysis period. Due to discounting, the 
inclusion of recycling costs affects the LCC savings of lamps with 
different lifetimes than the baseline lamps that they are compared to. 
The recycling cost also affects the residual value of lamps that 
operate beyond the end of the analysis period. In the Monte Carlo 
analysis, DOE assumes that commercial and industrial consumers pay 
recycling costs in approximately 30 percent of lamp failures. DOE does 
not expect the 2 percent residential recycling rate to affect the 
residential sector LCC substantially, however, and thus did not apply 
the recycling costs to this sector.
---------------------------------------------------------------------------

    \35\ Environmental Health and Safety Online's fluorescent lights 
and lighting disposal and recycling Web page--Recycling Costs. 
Available at: http://www.ehso.com/fluoresc.php (Last accessed Dec. 
8, 2008).
    \36\ Association of Lighting and Mercury Recyclers, ``National 
Mercury-Lamp Recycling Rate and Availability of Lamp Recycling 
Services in the U.S.'' (Nov. 2004).
---------------------------------------------------------------------------

5. Annual Operating Hours
    DOE developed annual operating hours for IRL and GSFL in the March 
2008 ANOPR by combining building type-specific operating hours data in 
the 2002 U.S. Lighting Market Characterization (LMC) \37\ with data in 
the 2003 Commercial Building Energy Consumption Survey (CBECS),\38\ the 
2001 Residential Energy Consumption Survey (RECS),\39\ and the 2002 
Manufacturing Energy Consumption Survey (MECS),\40\ which describe the 
probability that a particular building type exists in a particular 
region. (March 2008 ANOPR TSD chapter 6) DOE received comments on three 
areas related to the operating hours used for the LCC analysis: (1) 
Sectors analyzed; (2) regional variations; and (3) building types. 
These comments are discussed below. For further details regarding the 
annual operating hours used in the analyses, see chapter 6 of the TSD.
---------------------------------------------------------------------------

    \37\ U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, ``U.S. Lighting Market Characterization. Volume I: 
National Lighting Inventory and Energy Consumption Estimate 
(2002).'' Available at: http://www.netl.doe.gov/ssl/PDFs/lmc_vol1_final.pdf.
    \38\ U.S. Department of Energy, Energy Information Agency, 
``Commercial Building Energy Consumption Survey: Micro-Level Data, 
File 2 Building Activities, Special Measures of Size, and Multi-
building Facilities (2003).'' Available at: http://www.eia.doe.gov/emeu/cbecs/public_use.html.
    \39\ U.S. Department of Energy, Energy Information Agency, 
``Residential Energy Consumption Survey: File 1: Housing Unit 
Characteristic (2006).'' Available at: http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html.
    \40\ U.S. Department of Energy, Energy Information Agency, 
``Manufacturing Energy Consumption Survey, Table 1.4: Number of 
Establishments by First Use of Energy for All Purposes (Fuel and 
Nonfuel) (2002).'' Available at: http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html.
---------------------------------------------------------------------------

a. Sectors Analyzed
    In the March 2008 ANOPR, DOE analyzed GSFL in the commercial and 
industrial sectors; DOE did not analyze the usage of GSFL in the 
residential sector because it believed it was a relatively small 
portion of GSFL sales. The Joint Comment requested that DOE perform an 
LCC analysis of GSFL in the residential sector, because lamps in the 
residential sector are replaced infrequently due to lower operating 
hours compared to the commercial and industrial sectors. (Joint 
Comment, No. 23 at p. 10) Similarly, NEMA commented that DOE should 
assess GSFL in the residential sector, because certain ELs may 
eliminate T12 lamp types, requiring many residential consumers to 
install new lamp fixtures. (NEMA, No. 22 at p. 32)
    In response, DOE assessed the installed stock of lamps using the 
LMC, which stated that approximately 25 percent of linear fluorescent 
lamps exist in the residential sector. DOE considers this proportion to 
be significant and, thus, supports the recommendation to perform a 
residential LCC analysis of GSFL. DOE developed residential operating 
hours for GSFL by using data in the 2002 LMC and the 2001 RECS. 
However, DOE only performed an LCC analysis of 4-foot medium bipin 
lamps in the residential sector, because marketing literature indicates 
that 8-foot single pin slimline lamps and 8-foot recessed double 
contact HO lamps are not prevalent in residential settings.
    In the March 2008 ANOPR, DOE analyzed IRL in the commercial, 
residential, and industrial sectors. (March 2008 ANOPR TSD chapter 6) 
NEMA commented that IRL should be removed from the industrial sector 
LCC analysis because they are rarely used in industrial settings. The 
Joint Comment emphasized the importance of analyzing IRL in the 
residential sector due to lower operating hours and higher electricity 
prices for residences compared to prices in the commercial sector. 
(NEMA, No. 22 at p. 20; Joint Comment, No. 23 at p. 17)
    The LMC indicates that less than 1 percent of IRL were found in the 
industrial sector. Based on this data, DOE agrees with both comments 
and has removed IRL from the industrial sector in terms of its 
analyses. Consistent with the March 2008 ANORP LCC analysis, DOE also 
continued to perform a residential sector LCC analysis of IRL for the 
NOPR.
b. Regional Variation
    At the public meeting for the March 2008 ANOPR, the Alliance to 
Save

[[Page 16955]]

Energy commented that the LMC, which DOE used during the LCC analysis, 
may underestimate energy usage in the residential sector because 
operating hours may vary regionally (e.g., by latitude), even for the 
same building types. (Public Meeting Transcript, No. 21 at pp. 197-198) 
In contrast, the Northwest Power and Conservation Council responded 
that there was a variation of a tenth of an hour per day in operating 
hours between a study completed in Tacoma, Washington, and a study of 
California. Therefore, the Council suggested that differences in 
latitude and weather do not significantly affect operating hours. 
(Public Meeting Transcript, No. 21 at p. 199)
    DOE found no conclusive evidence that would suggest that geographic 
location has a significant impact on operating hours for a given 
building type. However, DOE found evidence of regional differences in 
the proportions of different building types (e.g., number of mobile 
homes versus number of multi-family dwellings) as the probable source 
of regional variation in operating hours.\41\ As detailed in the March 
2008 ANOPR, DOE captured this regional variation by using the RECS, 
CBECS, and MECS to determine the probability that a particular building 
type exists in a particular region. 73 FR 13620, 13654 (March 13, 
2008). For this reason, DOE has not revised its analysis for the NOPR 
to specifically address latitude, weather, or other regional factors 
apart from building type proportions.
---------------------------------------------------------------------------

    \41\ E. Vine, D. Fielding, ``An Evaluation of Residential CFL 
Hours-of-Use Methodologies and Estimates: Recommendations for 
Evaluators and Program Managers,'' Energy and Buildings 38 (2006), 
1388-1394.
---------------------------------------------------------------------------

c. Building Type
    NEMA requested a confirmation that DOE has included retail 
facilities in its consideration of operating hours, because retail 
facilities have more operating hours compared to other commercial 
facilities. (NEMA, No. 22 at p. 20) DOE is aware that different 
commercial building types have different average operating hours and, 
thus, considered a variety of commercial building types, including 
retail facilities, in its analysis. Operating hours were determined 
using the LMC study. DOE assessed the operating hours for retail 
facilities for the March 2008 ANOPR (ANOPR chapter 6 of the TSD) and 
retained the assessment of commercial retail facility operating hours 
for the NOPR analysis.
6. Product Energy Consumption Rate
    As in the March 2008 ANOPR, DOE determined lamp input power (or 
lamp-and-ballast system input power for GSFL) based on published 
manufacturer literature. (March 2008 ANOPR TSD chapter 5) For GSFL, DOE 
assessed a variety of lamp-and-ballast combinations by establishing a 
correlation between ballast factor and system input power. This allowed 
DOE to derive GSFL system power (in watts) for all of the lamp and 
ballast combinations used in the analysis. The rated system power was 
then multiplied by the annual operating hours of the system to 
determine the annual energy consumption. DOE retained this methodology 
for this notice.
    For this NOPR, DOE updated system input power ratings for certain 
lamp-and-ballast combinations, and developed new system-input powers 
for other lamp-and-ballast combinations not considered in the March 
2008 ANOPR. Specifically, DOE obtained additional system power ratings 
for 4-foot T8 ballasts from recently released manufacturer literature 
and updated these system input power ratings for the NOPR. DOE also 
developed new system input power ratings for magnetic residential 4-
foot T12 systems, magnetic 8-foot HO systems, 4-foot T5 miniature bipin 
systems, and 4-foot T5 miniature bipin HO systems.
7. Electricity Prices
    DOE determined energy prices by deriving regional average prices 
for 13 geographic areas consisting of the nine U.S. Census divisions, 
with four large states (New York, Florida, Texas, and California) 
treated separately. The derivation of prices was based on data in EIA's 
Form EIA-861. DOE received three comments on the regional electricity 
prices that it used for the ANOPR LCC. PG&E commented that the 
California residential electricity price of 9.9 cents per kWh (ANOPR 
TSD chapter 8) was lower than what appears to be an average of 14 cents 
per kWh in the State. ACEEE and the Joint Comment recommended that DOE 
use EIA's publication ``Electric Power Monthly''--as a source of recent 
electricity prices instead of Form EIA-861. (Public Meeting Transcript, 
No. 21 at pp. 223-224; Joint Comment, No. 23 at p. 18)
    In response, DOE notes that it uses Form EIA-861 for two reasons. 
First, it allows for the creation of regional average electricity 
prices weighted by the number of customers each electric utility 
serves. DOE prefers to use customer-weighted average electricity prices 
so that prices are not skewed by utilities serving small numbers of 
very large electricity consumers. Electricity sales are not well 
correlated with the number of consumers in the commercial sector, and 
the usage of customer-weighted averages more heavily weights the 
utilities that serve larger numbers of consumers. Second, ``Electric 
Power Monthly'' does not report customer-weighted prices. DOE 
appreciates the comments related to electricity prices, and for the 
NOPR analysis, DOE updated its electricity prices by using the latest 
version of Form EIA-861 (2006).\42\ DOE notes that the latest Form's 
updated residential electricity price for California is 14.7 cents per 
kWh which is consistent with PG&E's assessment that the average 
residential electricity price in California is around 14 cents per kWh.
---------------------------------------------------------------------------

    \42\ Energy Information Administration, Form EIA-861 Final Data 
File for 2006 (2006) (Last accessed June 20, 2008). Available at: 
http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------

8. Electricity Price Trends
    To project electricity prices to the end of the LCC analysis period 
in the March 2008 ANOPR, DOE used the reference, low-economic-growth, 
and high-economic-growth projections in EIA's AEO2007.\43\ 73 FR 13620, 
13660 (March 13, 2008). DOE received several comments on the resulting 
electricity price trends that it used in the LCC calculation. PG&E 
commented that DOE's forecasted electricity prices do not increase in 
real terms in the next 20 years, which the commenter argued is 
unrealistic. ACEEE and the Joint Comment both stated that DOE should 
use the most recent AEO forecasts along with a collection of other 
electricity price forecasts. (Public Meeting Transcript, No. 21 at pp. 
224-225; Joint Comment, No. 23 at p. 18)
---------------------------------------------------------------------------

    \43\ U.S. Department of Energy, Energy Information 
Administration, Annual Energy Outlook 2007 with Projections to 2030 
(Feb. 2007). Available at: http://www.eia.doe.gov/oiaf/archive/aeo07/index.html.
---------------------------------------------------------------------------

    DOE supports the suggestion that it should use the most recent 
electricity price forecasts. DOE uses EIA's AEO because it is publicly 
available and has been widely reviewed. The latest AEO contains a table 
of comparisons to three other electricity forecasts; the only forecast 
that included prices (from Global Insight, Inc.) showed electricity 
prices very similar to the prices in the AEO2008 reference case. Also, 
a conversion of the AEO2008 forecast into real dollars reveals that 
AEO's forecasted electricity prices do increase in real terms. For 
these reasons, DOE chose to continue using the AEO and

[[Page 16956]]

the reference case in AEO2008.\44\ DOE also presents LCC and PBP 
results for the low-economic-growth and high-economic-growth scenarios 
from AEO2008 in appendix 8B of the TSD.
---------------------------------------------------------------------------

    \44\ U.S. Department of Energy, Energy Information 
Administration, Annual Energy Outlook 2008 with Projections to 2030 
(June 2008). Available at: http://www.eia.doe.gov/oiaf/aeo/excel/aeotab_3.xls.
---------------------------------------------------------------------------

9. Lifetime
a. Ballast Lifetime
    In chapter 8 of the March 2008 ANOPR TSD, DOE stated that it used 
49,054 hours as the estimated ballast lifetime based on findings in the 
2000 Ballast Rule. The Joint Comment suggested three reasons why 
ballast lifetimes are actually longer than the lifetime used in the 
2000 Ballast Rule. The Joint Comment stated that, on average, ballasts 
operate below their life rating temperature. In addition, manufacturer 
estimates exceed the DOE lifetime even at rated conditions. The 
commenter also argued that market data of historical shipments of 
ballasts sold to new construction versus retrofit and replacement 
suggest that the average ballast life is longer than suggested. The 
Joint Comment contends that, in addition to considering the above 
points generally, DOE should specifically study these shipments to 
establish ballast lifetime. (Joint Comment, No. 23 at pp. 7-9)
    Based on the Joint Comment's suggestions, DOE investigated several 
different ways of measuring a ballast's useful lifetime in commercial 
and residential buildings. DOE does not believe that using the rated 
temperature of ballasts is an appropriate way to measure a ballast's 
lifetime. For example, a building renovation or a lighting retrofit may 
cause buildings or homeowners to replace a ballast before it fails. DOE 
also believes that examining historical sales data of ballasts sold to 
new construction versus replacement and retrofit to estimate ballast 
lifetime would involve too many assumptions to provide a useful measure 
of lifetime. For example, DOE would need to estimate an appropriate 
distribution of ballast lifetimes in the field because ballasts are 
replaced at various points in their useful life due to different 
operating hours, failure rates, and time periods between initial 
building construction and the first lighting retrofit.
    In its investigation of ballast lifetime, DOE encountered several 
studies that establish the ``measure life'' (i.e., the true service 
life of a ballast in the field) of ballasts in both the commercial and 
residential sectors. One study comparing the results of several 
``measure life'' reports found that the average ballast lifetime after 
a retrofit in the commercial sector is 13 years, and the average 
ballast lifetime after new construction is 15 years.\45\ Using DOE's 
estimate of 49,054 hours and average operating hours for GSFL in the 
commercial sector, the lifetime of an average ballast is approximately 
14.2 years. Because this lifetime is consistent with several measure 
life reports, DOE maintains the same ballast lifetime of 49,054 hours 
in its NOPR analysis. DOE also found in a separate measure life report 
that the average fixture and ballast in the residential sector lasts 
for 15 years. Therefore, in its residential sector analysis for GSFL, 
DOE established 15 years as the average ballast lifetime in the 
residential sector,\46\ and an average annual operating lifetime of 789 
hours. The ballast's average hours of operation over its service 
lifetime is therefore 11,835 hours in the residential sector.
---------------------------------------------------------------------------

    \45\ GDS Associates, Inc., Engineers and Consultants, Measure 
Life Report: Residential and Commercial/Industrial Lighting and HVAC 
Measures (The New England State Program Working Group) (2007).
    \46\ Economic Research Associates, Inc., and Quantec, LLC., 
Revised/Updated EULs Based on Retention and Persistence Studies 
Results (Southern California Edison) (2005).
---------------------------------------------------------------------------

b. Lamp Lifetime
    When possible, DOE used manufacturer literature to measure lamp 
lifetimes, as in the March 2008 ANOPR. 73 FR 13620, 13662 (March 13, 
2008). When published manufacturer literature was not available (as for 
some IRL), DOE derived lamp lifetimes as part of the engineering 
analysis (section V.C.4.b). DOE based its calculations of GSFL lifetime 
for the base and standards cases on lamp operating times of 3 hours per 
start in the March 2008 ANOPR LCC analysis. 73 FR 13620, 13662 (March 
13, 2008). In comments, NEMA supported the 3 hours per start operating 
time for both the base and standards cases, but also argued that while 
lamps are started every 12 hours in commercial and industrial 
applications, the increasing use of occupancy sensors is leading to 
shorter start cycles. (NEMA, No. 22 at p. 23) DOE did not receive any 
other comments about using a GSFL operating time of 3 hours per start. 
Therefore, DOE retained the assumption of 3 hours per start in the NOPR 
LCC analysis for both the base and standards cases. In addition, DOE 
researched the impact of occupancy sensors on start cycle lengths. 
However, DOE was unable to obtain significant information with which it 
could quantify this effect.
    As in the March 2008 ANOPR, DOE also considered in the NOPR 
analysis the impact of group re-lamping practices on GSFL lifetime in 
the commercial and industrial sectors. 73 FR 13620, 13662 (March 13, 
2008). DOE assumed that a lamp subject to group re-lamping operates for 
75 percent of its rated lifetime, an estimate obtained from the 2000 
Ballast Rule.\47\ By considering lamp rated lifetimes and the 
prevalence of group versus spot re-lamping practices, DOE derived an 
average lifetime for a GSFL. This ranged from 91 percent of rated 
lifetime for 8-foot single pin slimline lamps to 94 percent of rated 
lifetime for 4-foot medium bipin lamps. See chapter 8 of the TSD for 
further details.
---------------------------------------------------------------------------

    \47\ U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, ``Energy Conservation Program for Consumer 
Products: Technical Support Document: Energy Efficiency Standards 
for Consumer Products: Fluorescent Lamp Ballast Proposed Rule: 
Appendix A'' (Jan. 2000) A-19.
---------------------------------------------------------------------------

    As stated above, DOE is using 15 years as the estimated fixture and 
ballast lifetime in the residential sector for purposes of its 
analyses. If one calculates the lifetime of the baseline GSFL lamp in 
the residential sector by dividing the life in hours by the average 
operating hours of a GSFL in the residential sector (789 hours), one 
finds that the baseline lamp should live for 19 years. Because the 
lifetime of the baseline lamp is longer than the average lifetime of a 
fixture and ballast, DOE assumes that the ballast or fixture lifetime 
limits the lifetime of an average lamp in the residential sector. DOE 
is aware that there are certain rooms in residential buildings where 
GSFL are operated for much longer than 789 hours per year; in 
particular, GSFL are operated for approximately 1,210 hours per year in 
kitchens of single-family detached households. Therefore, DOE has 
conducted the residential sector analysis under average operating hours 
and high operating hours. Under average operating hours (789 hours per 
year), DOE assumes that lamp lifetime of the baseline-case and 
standards-case lamps is limited to 11,835 hours or 15 years, due to a 
ballast or fixture failure. Thus, in this situation, the lamp failure 
event does not occur; only the ballast failure event occurs. See 
section V.D.14 for a description of lamp purchase events.
    DOE recognizes that although some consumers do not experience a 
lamp failure in the residential sector, consumers whose operating hours 
yield a lamp lifetime that is shorter than that of the fixture or 
ballast do need to replace their lamp occasionally. DOE

[[Page 16957]]

assumes the shortest lifetime of the baseline lamp, using the highest 
operating hours for GSFL in the LMC of 1,210 hours per year (as in 
kitchens), is approximately 12.5 years. When a baseline lamp is 
replaced at 12.5 years, the fixture and ballast have another 2.5 years 
of life remaining. DOE assumes that when fixtures or ballasts are 
discarded, their associated lamps are also discarded at the same time. 
Therefore, for GSFL in the residential sector, the longest useful life 
of the baseline replacement lamp would be 2.5 years or 1,972 hours. At 
the end of this lifetime, the ballast and fixture are replaced. 
Therefore, for the lamp replacement event for a GSFL in the residential 
sector in a high operating hours scenario (1,210 hours per year), the 
lifetime of the baseline lamp is assumed to be 1,972 hours or 2.5 
years, and DOE assumes that the ballast failure event does not occur. 
DOE requests comment on the typical service life of a GSFL in the 
residential sector.
10. Discount Rates
    In the March 2008 ANOPR, DOE derived residential discount rates by 
identifying all possible debt or asset classes that might be used to 
purchase replacement products, including household assets that might be 
affected indirectly. 73 FR 13620, 13663 (March 13, 2008). DOE estimated 
the average shares of the various debt and equity classes in the 
average U.S. household equity and debt portfolios using data from the 
SCFs from 1989 to 2004. DOE used the mean share of each class across 
the six sample years as a basis for estimating the effective financing 
rate for replacement equipment. DOE estimated interest or return rates 
associated with each type of equity and debt using SCF data and other 
sources. The mean real effective rate across the classes of household 
debt and equity, weighted by the shares of each class, is 5.6 percent.
    For the commercial sector and industrial sector, DOE derived the 
discount rate from the cost of capital of publicly-traded firms in the 
sectors that purchase lamps. To obtain an average discount rate value 
for the commercial sector, DOE used data from CBECS 2003, which 
provides market-share data by type of owner. Weighting each ownership 
type by its market share, DOE estimated the average discount rate for 
the commercial sector to be 6.2 percent. Similarly, the industrial 
sector discount rate was derived to be 7.5 percent. 73 FR 13620, 13663 
(March 13, 2008).
    The Joint Comment stated that, in the past, NRDC has argued that a 
2 to 3 percent real discount rate should be used in the LCC. (Joint 
Comment, No. 23 at p. 22) It also stated that ACEEE and others have 
supported the weighted average cost of capital approach. In general, 
the Joint Comment stated that if DOE continues with using the weighted 
cost of capital approach, the agency should make sure its calculations 
are updated, as current economic conditions will influence agency 
estimates for discount rates over the analysis period. (Joint Comment, 
No. 23 at p. 22) In consideration of the above comments (and absent any 
evidence to the contrary), DOE agrees with ACEEE and others in the 
Joint Comment that the weighted average cost of capital approach 
described above is the most accurate way of establishing an appropriate 
consumer discount rate for the LCC analysis. For this NOPR, DOE was not 
able to use the most up-to-date information to update the residential 
discount rate, because the 2007 SCF survey was not available at the 
time of publication. However, because the rates for various forms of 
credit carried by households in these years were established over a 
range of time, DOE believes they are representative of rates that may 
be in effect in 2012. DOE is not aware of any other nationally 
representative data source that provides interest rates from a 
statistically valid sample. Therefore, DOE continued to use the above 
approach and results for today's proposed rule. According to the 
Federal Reserve Board Web site, the 2007 SCF survey may be available in 
the first quarter of 2009.\48\ Contingent on this data's release in a 
timely manner, DOE will attempt to incorporate the 2007 SCF survey in 
the final rule of this rulemaking.
---------------------------------------------------------------------------

    \48\ http://www.federalreserve.gov/PUBS/oss/oss2/2007/scf2007home_modify.html.
---------------------------------------------------------------------------

    Despite the limitations associated with its residential analysis, 
DOE was able to update certain sources used to compute the commercial 
and industrial sector discount rates. Specifically, DOE applied the 
2008 Damodaran Online Data, the 2008 implicit price deflators from the 
U.S. Department of Commerce, the 2007 Value Line Investment Survey 
data, information from the 2008 OMB Circular No. A-94, and 2008 State 
and local bond interest rates. However, DOE continued to use data from 
CBECS 2003, which provides market-share data by type of owner to obtain 
an average discount rate value for the commercial sector. DOE is not 
aware of any other nationally representative data source that provides 
market-share data by type of owner and, therefore, is continuing to use 
this source of data in today's proposed rule. DOE computed the new 
discount rates to be 7.0 percent in the commercial sector and 7.6 
percent in the industrial sector. For further details on discount 
rates, see chapter 8 and appendix 8C of the TSD.
11. Analysis Period
    The analysis period is the span of time over which the LCC is 
calculated. For the March 2008 ANOPR, DOE used the longest baseline 
lamp life in a product class divided by the annual operating hours of 
that lamp as the analysis period. 73 FR 13620, 13663 (March 13, 2008). 
During Monte Carlo simulations for the LCC analysis, DOE selected the 
analysis period based on the longest baseline lamp life divided by the 
annual operating hours chosen by Crystal Ball. For the NOPR analysis, 
DOE retained this methodology for IRL and GSFL in the commercial and 
industrial sectors. However, for GSFL in the residential sector, the 
analysis period is based on the useful life of the baseline lamp for a 
specific event. Specifically, for the lamp replacement event, the 
analysis period is 2.5 years, and for the lamp and ballast replacement 
and new construction event, the analysis period is 15 years. DOE 
requests comment on the analysis period used for the residential sector 
analysis. See section V.D.9.a of this notice for more information on 
the useful life of the baseline lamp in all residential sector purchase 
events.
12. Effective Date
    For purposes of DOE's analyses, the effective date is the date when 
a new standard becomes operative. DOE intends to publish the final rule 
for this rulemaking in June 2009. 73 FR 13620, 13663 (March 13, 2008). 
In accordance with sections 325(i)(3) and (i)(5) of EPCA, the effective 
date of any new or amended energy conservation standard for these lamps 
shall be 3 years after the final rule is published, which would be June 
2012 for this rulemaking. (42 U.S.C. 6295(i)(3) and (i)(5)) DOE 
performed its LCC analysis based upon an assumption that each consumer 
would purchase a new product in the year that the standard takes 
effect.
13. Payback Period Inputs
    The payback period (PBP) is the amount of time a consumer needs to 
recover the assumed additional costs of a more-efficient product 
through lower operating costs. As in the March 2008 ANOPR, DOE used a 
``simple'' PBP for the NOPR, because the PBP does not take into account 
other changes in operating expenses over time or the time value of 
money. 73 FR 13620, 13663

[[Page 16958]]

(March 13, 2008). As inputs to the PBP analysis, DOE used the total 
installed cost of the product to the consumer for each efficacy level, 
as well as the first year annual operating costs for each efficacy 
level. The calculation requires the same inputs as the LCC, except for 
energy price trends and discount rates; only energy prices for the year 
the standard takes effect (2012 in this case) are needed. 73 FR 13620, 
13663 (March 13, 2008).
14. Lamp Purchase Events
    In the March 2008 ANOPR, DOE described five types of events that 
would prompt a consumer to purchase a lamp. 73 FR 13620, 13664 (March 
13, 2008). These events are described below along with changes for the 
NOPR analysis. Of particular note, DOE conducted a number of new 
analyses for the NOPR which assessed lamp failure, ballast failure, and 
new construction events for residential sector GSFL. In addition, 
though described primarily in the context of GSFL, lamp purchase events 
can be applied to IRL as well. However, considering that IRL are 
generally not used with a ballast the only lamp purchase events 
applicable are lamp failure (event I) and new construction and 
renovation (event V).
    <bullet> Lamp Failure (Event I): This event reflects a scenario in 
which a lamp has failed (spot relamping) or is about to fail (group re-
lamping). In the base case, identical lamps are installed as 
replacements. In the standards case, the consumer installs a standards-
compliant lamp that is compatible with the existing ballast. When a 
standards-compliant lamp for that ballast is not available, the 
consumer purchases a new lamp and ballast. For the NOPR, DOE added a 
residential sector GSFL lamp failure event.
    <bullet> Standards-Induced Retrofit (Event II): This event occurs 
when a consumer realizes that its T12 lamp will fail in the near future 
and installs a standards-compliant lamp and ballast. In the base case, 
the consumer would have installed only a new lamp. This event applies 
only to T12 commercial and industrial users because there are certain 
lamp standard levels that a T12 cannot meet. This event does not apply 
to T12 residential users because these users would not proactively 
replace their T12 system before the T12 lamp fails.
    <bullet> Ballast Failure (Event III): In the March 2008 ANOPR, DOE 
assumed that failed ballasts would be replaced with electronic ballasts 
because standards set by the 2000 Ballast Rule and EPACT 2005 ban the 
sale of magnetic 4-foot medium bipin and 8-foot single pin slimline 
ballasts beginning in 2010. 73 FR 13620, 13664 (March 13, 2008). NEMA 
commented that the 2000 Ballast Rule allows the continued sale of 
residential magnetic ballasts as well as magnetic cold-temperature 
ballasts, which operate a large portion of the installed base of T12 
recessed double contact high-output lamps. (NEMA, No. 22 at p. 20) In 
response, DOE has assumed that failed magnetic HO ballasts would be 
replaced with magnetic ballasts in the base case for the NOPR analysis. 
DOE also assumed that magnetic ballasts would be purchased in the event 
of a ballast or fixture failure in the residential sector base case for 
the NOPR analysis because residential systems are commonly T12 magnetic 
systems currently. In addition, standards established in the 2000 
Ballast Rule and the Energy Policy Act of 2005 (EPACT 2005, Pub. L. 
109-58) will allow magnetic ballasts to continue to be sold in the 
residential sector after 2010. See the engineering analysis (section 
V.C) for further details.
    <bullet> Ballast Retrofit (Event IV): This event applies only to 
T12 users because, according to industry experts, the majority of 
ballast retrofits occur for consumers with T12 systems. Consumers 
retrofitting their ballasts commonly do so to save energy, and T8 
systems are generally more efficacious than T12 systems.
    <bullet> New Construction and Renovation (Event V): This event 
encompasses all fixture installations where the lighting design will be 
completely new or can be completely changed. The scenario applies only 
to baseline lamps that are usually used in new construction and 
renovation (4-foot T8 lamps, 4-foot T12 lamps in the residential 
sector, 8-foot single pin slimline T8 lamps, and 8-foot recessed double 
contact HO T12 lamps). For the NOPR analysis, DOE assumed that 4-foot 
T8 lamps with electronic ballasts would be chosen during the new 
construction and renovation event for the 4-foot T12 residential 
baseline.

E. National Impact Analysis--National Energy Savings and Net Present 
Value Analysis

1. General
    DOE's NIA assesses the national energy savings (NES) and the 
national net present value (NPV) of total customer costs and savings 
that would be expected to result from new standards at specific 
efficacy levels.
    DOE uses the NIA spreadsheets to calculate energy savings and NPV 
based on the annual energy consumption and total installed cost data 
employed in the LCC analysis. DOE forecasts the energy savings, energy 
cost savings, equipment costs, and NPV for each product class from 2012 
through 2042. The forecasts provide annual and cumulative values for 
all four output parameters. DOE also examines impact sensitivities by 
analyzing various lamp shipment scenarios (such as Roll-up and Shift).
    DOE develops a base-case forecast for each analyzed lamp type which 
characterizes energy use and consumer costs (lamp purchase and 
operation) in the absence of new or revised energy conservation 
standards. To evaluate the impacts of such standards on these lamps, 
DOE compares the estimated base-case projection with projections 
characterizing the market if DOE did promulgate new or amended 
standards (i.e., the standards case). In characterizing the base and 
standards cases, DOE considers historical shipments, the mix of 
efficacies sold in the absence of any new standards, and how that mix 
might change over time.
    Inputs and issues associated with the NIA are discussed immediately 
below.
a. Overview of NIA Changes in This Notice
    Based on the comments it received on the March 2008 ANOPR, DOE made 
a number of changes to the NIA. Table V.3 summarizes the approach and 
data DOE used to derive the inputs to the NES and NPV analyses for the 
March 2008 ANOPR, as well as the changes it made for this notice. 
Following the table, DOE details those inputs and the changes, and 
summarizes and responds to each of the NIA-related comments it 
received. See TSD chapters 10 and 11 for further details.

 Table V.3--Approach and Data Used To Derive the Inputs to the National
              Energy Savings and Net Present Value Analyses
------------------------------------------------------------------------
                                   2008 ANOPR          Changes for the
           Inputs                  description          proposed rule
------------------------------------------------------------------------
Shipments...................  Annual shipments      See Table V.4 and
                               from shipments        Table V.5.
                               model.

[[Page 16959]]

 
Stock of lamps..............  Established based on  Established based on
                               the projected 2011    2005 lamp stock,
                               lamp stock, the       rather than 2011.
                               service life of       Considered market
                               lamps and/or          penetration of
                               ballasts, and the     emerging
                               annual shipments.     technologies. See
                               The 2011 stock is     Table V.4 and Table
                               based on historical   V.5 for additional
                               shipments and         detail.
                               projected shipments
                               from 2006 to 2011.
                               (See ANOPR TSD
                               chapter 10,
                               shipments
                               analysis.).
Effective date of standard..  2012................  No change.
Analysis period.............  2012 to 2042........  No change.
Unit energy consumption (kWh/ Established in the    No change.
 yr).                          energy-use
                               characterization,
                               ANOPR TSD chapter
                               6, by lamp or lamp-
                               and-ballast design
                               and sector.
Total installed cost........  Established in the    Added costs of
                               product price         retrofit kit and
                               determination,        labor for replacing
                               ANOPR TSD chapter 7   a 8-foot SP
                               and the LCC           slimline system
                               analysis, ANOPR       with two 4-foot MBP
                               chapter 8, by lamp-   systems.
                               and-ballast designs.
Electricity price forecast..  AEO2007 forecasts     Updated for AEO2008.
                               (to 2030) and
                               extrapolation for
                               beyond 2030. (See
                               ANOPR TSD chapter
                               8.).
Energy site-to-source         Conversion varies     Conversion varies
 conversion.                   yearly and is         yearly and is now
                               generated by          generated by DOE/
                               AEO2007 forecasts     EIA's NEMS program
                               (to 2030) of          (a time-series
                               electricity           conversion factor;
                               generation and        includes electric
                               electricity-related   generation,
                               losses. Conversion    transmission, and
                               factors for beyond    distribution
                               2030 are              losses).
                               extrapolated.        Conversion factors
                                                     for beyond 2030 are
                                                     held constant.
HVAC interaction savings....  6.25 percent of       No change.
                               total energy
                               savings in the
                               commercial sector.
Rebound effect..............  1 percent of total    No change.
                               energy savings in
                               the commercial and
                               industrial sectors.
                              8.5 percent of total
                               energy savings in
                               the residential
                               sector.
Discount rate...............  3 and 7 percent real  No change.
Present year................  Future costs and      No change.
                               savings are
                               discounted to 2007.
------------------------------------------------------------------------

2. Shipments Analysis
    Lamp shipments are an important input to the NIA. In the March 2008 
ANOPR, DOE followed a four-step approach to forecast shipments for GSFL 
and IRL. 73 FR 13620, 13668 (March 13, 2008). First, DOE used NEMA's 
historical shipment data from 2001 to 2005 to estimate total historical 
(NEMA members and non-NEMA members) shipments of each analyzed lamp 
type in the commercial, industrial, and residential sectors. Second, 
using these historical shipments, DOE linearly extrapolated shipments 
to 2011. Then, based on average service lifetimes, DOE estimated a 
stock of lamps in 2011 for each lamp type. Next, DOE forecasted lamp 
(and ballast for GSFL) shipments from 2012 to 2042 (the NIA analysis 
period) based on four market events: (1) New construction; (2) ballast 
failure (GSFL only); (3) lamp replacement; and (4) standards-induced 
retrofit (for the standards case). Lastly, because these shipments 
depend on lamp and lamp-system properties (e.g., lifetime and lumen 
output), DOE developed base-case and standards-case market-share 
matrices. These matrices determine the forecasted technology mixes in 
the lamp stock and shipments.
    Table V.4 and Table V.5 summarize the approach and data DOE used 
for GSFL and IRL, respectively, to derive the inputs to the shipments 
analysis for the March 2008 ANOPR, as well as the changes DOE made for 
the NOPR. A discussion of the inputs and the changes follows.

Table V.4--Approach and Data Used to Derive the Inputs to GSFL Shipments
                                Analysis
------------------------------------------------------------------------
                                   2008 ANOPR          Changes for the
           Inputs                  description          proposed rule
------------------------------------------------------------------------
Historical shipments........  2001-2005 shipment    Calibrated 2006-2007
                               data provided         forecasted
                               publicly by NEMA.     shipments based on
                               Assumed NEMA data     confidential
                               represented 90        historical shipment
                               percent of GSFL       data NEMA provided
                               shipments.            for those years.
Lamp inventory..............  Calculated lamp       Did not use linear
                               inventory in 2011     projections;
                               by linearly           calculated stock in
                               projecting NEMA's     2005. Then used
                               2001-2005             growth, emerging
                               historical shipment   technologies, and
                               data. Then used       shipment
                               growth and shipment   assumptions to
                               assumptions to        establish lamp
                               establish lamp        inventory from 2006
                               inventory from 2012   to 2042.
                               to 2042.
Growth......................  Shipment growth       Based commercial and
                               driven by lumen       residential growth
                               demand. Lumen         on AEO2008
                               demand projected      estimates for
                               from historical       future floor space
                               CBECS commercial      growth. For the
                               floor space growth.   residential sector,
                                                     modeled variations
                                                     in number of lamps
                                                     per new home. For
                                                     the industrial
                                                     sector, projected
                                                     floor space growth
                                                     using MECS.
T5 lamps....................  Not included........  Shipments modeled by
                                                     assuming T5 lamps
                                                     used in new
                                                     construction and in
                                                     conversions from 4-
                                                     foot medium bipin,
                                                     8-foot SP slimline,
                                                     and 8-foot RDC HO.

[[Page 16960]]

 
T12 ballasts................  Assumed no T12        Assumed no T12
                               magnetic ballasts     magnetic ballasts
                               shipped after 2009    shipped after 2010
                               for 8-foot SP         for commercial 4-
                               slimline and 4-foot   foot MBP and 8-foot
                               MBP lamps. Did not    SP slimline. Also
                               consider T12          assumed 4-foot MBP
                               electronic ballasts   and 8-foot SP
                               for 8-foot SP         slimline electronic
                               slimline and 4-foot   T12 ballasts
                               MBP lamps.            shipped through
                                                     2042. For 8-foot
                                                     T12 RDC HO and
                                                     residential 4-foot
                                                     T12 MBP, assumed
                                                     magnetic ballasts
                                                     are shipped through
                                                     2042.
Sectors analyzed............  Commercial and        Included residential
                               industrial.           sector in analysis.
Base-case emerging            None included.......  Developed two base-
 technologies.                                       case scenarios, one
                                                     of which modeled
                                                     the market
                                                     penetration of LEDs
                                                     based on projected
                                                     payback period.
Market share matrices.......  Developed product     Revised product
                               distributions based   distributions based
                               on interviews and     on comments,
                               catalog data.         subsequent
                                                     interviews, and
                                                     further catalog
                                                     research.
Standards case scenarios....  Shift and Roll-up     Revised the Shift
                               scenarios analyzed.   and Roll-up
                               Assumed all           scenarios.
                               consumers will        Developed a
                               attempt to maintain   standards-case
                               lumen output by       scenario (Market
                               either moving to      Segment-Based
                               lower ballast         Lighting Expertise
                               factors or reduced-   scenario) to
                               wattage lamps in      characterize
                               the standards case.   consumers who,
                                                     based on lighting
                                                     expertise, will not
                                                     migrate to lower
                                                     ballast factors or
                                                     reduced-wattage
                                                     lamps to maintain
                                                     lumen output.
------------------------------------------------------------------------


 Table V.5--Approach and Data Used to Derive the Inputs to IRL Shipments
                                Analysis
------------------------------------------------------------------------
                                   2008 ANOPR          Changes for the
           Inputs                  description          proposed rule
------------------------------------------------------------------------
Historical shipments........  2001-2005 shipment    Calibrated 2006-2007
                               data provided         projected shipments
                               publicly by NEMA.     based on
                               Assumed NEMA data     confidential
                               represented 85        historical shipment
                               percent of IRL        data NEMA provided
                               shipments.            for those years.
Lamp inventory..............  Calculated stock in   Did not use linear
                               2011 by linearly      projections;
                               projecting NEMA's     calculated stock in
                               2001-2005             2005. Then used
                               historical shipment   growth and emerging
                               data. Then used       technologies
                               growth assumptions    assumptions to
                               to establish lamp     establish lamp
                               inventory from 2012   inventory from 2006
                               to 2042.              to 2042.
Growth......................  Shipment growth       Based growth on
                               driven by socket      AEO2008 estimates
                               growth. Socket        for future
                               growth projected      commercial floor
                               from historical       space and
                               CBECS commercial      residential
                               floor space and       buildings.
                               RECS residential     Also accounted for
                               building growth.      trend of increasing
                                                     sockets per home.
Sectors analyzed............  Commercial and        No change.
                               residential.
Base case reflector compact   Assumed 0 percent     Developed two base-
 fluorescent lamps (R-CFL)     stock penetration     case scenarios
 and emerging technologies.    in 2012 and 50        modeling the market
                               percent stock         penetration of LED,
                               penetration in 2042.  CMH, and R-CFL
                                                     based on projected
                                                     payback period.
Market share matrices.......  Considered mix of     Revised market-share
                               technologies          matrices to reflect
                               consumers select in   its changes in the
                               the base case and     scenarios analyzed
                               standards case, as    and engineering
                               well as each of the   analyses.
                               scenarios analyzed.
Standards-case scenarios....  Modeled the Roll-up   Modeled both Roll-up
                               scenario..            and Shift
                              Analyzed two           scenarios.
                               standards-case       Revised BR lamp
                               sensitivity           sensitivity
                               scenarios: One        scenario, creating
                               modeling consumer     two new standards-
                               movement to           case scenarios also
                               exempted BR lamps     accounting for
                               and another           additional
                               modeling a 10         migration to R-CFL:
                               percent increase in   ``Product
                               lumen output. Did     Substitution'' and
                               not consider          ``No Product
                               additional            Substitution.''
                               migration to R-CFL
                               in the standards
                               case.
------------------------------------------------------------------------

a. Lamp Inventory
    In the March 2008 ANOPR, DOE linearly extrapolated NEMA's 
historical lamp shipments from 2005 to 2011 to establish a 2011 
installed stock of GSFL and IRL using each lamp's average service 
lifetime. In its written comments, NEMA argued that DOE's linear 
extrapolation approach does not account for market dynamics and is 
vulnerable to certain temporal biases inherent in NEMA's historical 
data. For example, if a new product was introduced and rapidly gained 
market share during this historical shipment period, a linear 
extrapolation based on this data could exaggerate the growth rate of 
this product in future years. Likewise, any new products introduced 
would be excluded from the future results. For example, Philips noted 
at the public meeting that because DOE extrapolated shipment data from 
2001 to 2005 to establish its lamp stocks, it may have discounted 
migration to T5 lamps, which have only started to grow in the last 
couple of years. Thus, the commenter argued that DOE may have 
overstated the 2011 stock of some types of lamps (e.g., T8 lamps), 
while understating others (e.g., T5 lamps). (NEMA, No. 22 at pp. 23-25, 
31; Public Meeting Transcript, No. 21 at p. 246)
    On the other hand, NEMA suggested that a linear extrapolation is 
sometimes appropriate for lamps with small and stable market shares, 
such as 8-foot T8 recessed double contact HO lamps. However, for large 
and variable product classes, NEMA urged DOE to model lamp types 
against specific economic factors and technical relationships. (NEMA, 
No. 22 at p. 24)
    DOE agrees that a linear extrapolation may generally be too limited 
in its application, and that lamp shipment forecasts from 2006 to 2011 
should incorporate both market dynamics and macroeconomic factors. 
Therefore, DOE is no longer using a linear extrapolation

[[Page 16961]]

from historical data. Instead, for this NOPR, DOE calculated an 
installed stock of lamps in 2005 and applied growth, replacement rate, 
and emerging technologies assumptions to develop shipments estimates 
from 2006 to 2042. In addition, DOE received confidential shipment 
information from NEMA for 2006 and 2007, and, when possible, calibrated 
the shipments model to match that information. The assumptions used to 
develop shipment forecasts are discussed in the following sections.
b. Shipments Growth
    To develop the shipments models for both GSFL and IRL, DOE applied 
several growth rate assumptions. In the March 2008 ANOPR, DOE modeled 
GSFL shipments from 2012 to 2042 by projecting lumen growth based on 
lumen demand serviced by each lamp type in the commercial and 
industrial sectors. For IRL, DOE projected shipments through 2042 based 
on growth in the number of sockets using IRL in the commercial and 
residential sectors. DOE based forecasted lumen and socket growth for 
GSFL and IRL on historical residential building growth from RECS and 
historical commercial and industrial floor space growth from CBECS and 
MECS.
    DOE received a number of comments in response to its growth rate 
methodology. The majority of these comments fell into three categories: 
(1) The limits of basing lamp stock growth on historical floor space 
growth; (2) the increasing number of lamps per household; and (3) the 
wider spacing of more-efficient light fixtures. Below is a discussion 
of those comments. For further details regarding GSFL and IRL growth 
rate assumptions, see TSD chapter 10.
i. Floor Space and Building Growth
    NEMA stated that the commercial and residential growth rates DOE 
used in the March 2008 ANOPR (based on total floor space from CBECS in 
RECS) have likely led to an overstatement of lamp shipments and stock, 
given the deteriorating economy. (NEMA, No. 22 at pp. 23-24) DOE 
understands NEMA's concerns and no longer establishes its commercial 
and residential growth from historical floor space growth. Instead, for 
this NOPR, DOE modeled commercial floor space and residential buildings 
growth based on AEO2008, which estimates year-to-year commercial floor 
space and residential building growth. Because AEO2008 takes into 
account future trends in economic growth, DOE was able to incorporate 
forecasts of macroeconomic conditions in its growth forecast. However, 
because AEO does not provide industrial floor space forecasts, DOE used 
historical MECS floor space values to establish a growth rate for the 
industrial sector.
ii. Lamps per Household
    The Joint Comment stated that DOE's growth forecasts omitted an 
important factor driving IRL sales: a trend toward an increasing number 
of recessed fixtures per home in new construction and existing home 
renovation. Because this trend is excluded from DOE's analysis, which 
assumed growth based on floor space growth, the Joint Comment argued 
that IRL shipments are likely understated. NEMA also stated that it has 
seen a trend toward increasing light points per home. To address this 
development, the Joint Comment recommended DOE obtain additional data 
on sales trends of these lamps and not assume recessed socket growth 
was directly proportional to floor space growth. The Joint Comment, 
PG&E, and ACEEE cited several studies supporting this claim. (Joint 
Comment, No. 23 at p. 17; Public Meeting Transcript, No. 21 at pp. 287-
288; NEMA, No. 22 at p. 31)
    DOE agrees with the Joint Comment that the increasing popularity of 
recessed fixtures in new homes will drive IRL sales growth faster in 
the residential sector. New homes are likely to install more IRL than 
those installed in older homes, and older homes may be renovated to 
include more recessed cans and, thus, more reflector lamps. Therefore, 
DOE conducted an analysis that estimated the average number of recessed 
cans in homes between 2005 and 2042. Using California data \49\ on 
recessed cans per home broken out by home age, DOE assumed new homes 
constructed after 2005 would install the same number of recessed cans 
as homes constructed between 2001 and 2005. DOE also assumed that half 
of the homes constructed before 2001 would be renovated by 2042 to have 
an equal number of recessed cans as newly constructed homes. DOE 
estimated the distribution of homes by age using U.S. Census data \50\ 
on new building starts in the residential sector. DOE estimated new 
construction and the number of future homes constructed in each year 
from AEO2008. Using this data, DOE estimated that the average number of 
recessed cans per home in 2005 was 4.82, and the average number of 
recessed cans per home in 2042 will be 8.52. As noted above, DOE also 
agrees with NEMA that growth rates should include forecasts of economic 
conditions. Therefore, to estimate the growth rate in each year, DOE 
multiplied the number of recessed cans in homes by the projected stock 
of homes according to AEO2008. Combining these two sources, DOE 
predicts an average growth rate of sockets of 2.6 percent between 2006 
and 2042, compared to the 1.6 percent DOE estimated in the March 2008 
ANOPR.
---------------------------------------------------------------------------

    \49\ RLW Analytics, Inc., ``California Statewide Residential 
Lighting and Appliance Efficiency Saturation Survey'' (August 2005) 
(Last accessed on Sept. 29, 2008). Available at: http://www.calresest.com/docs/2005CLASSREPORT.pdf.
    \50\ U.S. Census Bureau, Manufacturing and Construction 
Division, ``New Privately Owned Housing Unit Starts'' (2008) (Last 
accessed on Sept. 29, 2008). Available at: http://www.census.gov/const/startsan.pdf.
---------------------------------------------------------------------------

    DOE estimated the GSFL growth rate in the residential sector using 
a methodology similar to that which it employed for IRL in the 
residential sector. Instead of using the number of recessed cans per 
home by home age, DOE used the number of T8 and T12 lamps by home age. 
Again, DOE assumed that the same number of T8 and T12 lamps per home 
would be installed in new homes as those installed between 2001 and 
2005, and that half of homes built before 2001 would be renovated by 
2042 to have the same number of T8 and T12 lamps as newly constructed 
homes. DOE estimated that the average number of T8 and T12 lamps per 
home in 2005 was 4.5, and the average number in 2042 will be 4.7. 
Combining this growth estimate with AEO2008's projected growth in the 
residential home stock yields an average growth rate of 1 percent 
between 2006 and 2042 for GSFL in the residential sector. Compared to 
IRL, the lower GSFL growth rate reflects the lower growth rate of T8 
and T12 lamps per home versus recessed cans. (In the March 2008 ANOPR, 
DOE did not consider the residential sector for GSFL.)
iii. Wider Spacing of More-Efficient Fixtures
    In its written comments, NEMA suggested that DOE should assume a 
slower growth rate in the commercial building IRL socket base to 
account for wider spacing of lighting fixtures and/or greater use of 
high-output systems. (NEMA, No. 22 at p. 31) While DOE appreciates 
NEMA's comment, it was unable to find (and the commenter did not 
provide) any information related to wider spacing between fixtures, 
and, therefore, DOE did not change growth estimates to account for this 
potential effect.

[[Page 16962]]

c. Base-Case Scenarios: Emerging Technologies and Existing Technologies
    In the March 2008 ANOPR, DOE estimated that by 2042 R-CFL and 
emerging technologies, (e.g., such as LED lamps, and ceramic metal 
halide (CMH) lamps) would compose 50 percent of IRL sockets in the 
installed base. 73 FR 13620, 13670 (March 13, 2008). For IRL, DOE 
accounted for the impact of emerging technologies by deducting their 
market share in each year over the analysis period from the installed 
base of lamps, effectively reducing the size of the market affected by 
the standards proposed in this rulemaking. In the March 2008 ANOPR, DOE 
did not account for any penetration of emerging technologies into the 
GSFL market, and requested comment on if and how it should incorporate 
their effects into its analyses.
    DOE received several comments on its consideration of emerging 
technologies. NEMA argued that the performance improvements of CMH will 
drive the technology's market penetration into the GSFL market. NEMA 
also asserted that LED lamps could displace GSFL shipments to some 
extent by 2042. (NEMA, No. 22 at pp. 24-26) As for emerging 
technologies in the IRL market, NEMA commented that LED lamps could 
also displace shipments of IRL to some extent by 2042, particularly in 
the residential sector. NEMA stated that the shift from halogen IRL to 
CMH is already occurring in the retail market. Industrial Ecology 
stated that an integrated PAR CMH lamp would be expected to replace 
other IRL PAR lamps in the commercial retail market. (NEMA, No. 22 at 
pp. 24-26; Public Meeting Transcript, No. 21 at pp. 307-309) NEMA 
argued that these emerging technologies will significantly affect 
future lamp shipments and reduce the NPV results of standards for both 
GSFL and IRL. To more accurately forecast the impact of emerging 
technologies, NEMA suggested that DOE should examine historical price 
and performance points of R-CFL, as well as product cycles for other 
advanced technology equipment. (NEMA, No. 22 at pp. 24-26) Industrial 
Ecology suggested that DOE should use semiconductor industry data to 
assess the manufacturing capacity for solid state lamps. (Public 
Meeting Transcript, No. 21 at p. 311-312)
    DOE agrees that emerging technologies could penetrate GSFL and IRL 
markets and significantly affect shipment forecasts and NIA results. 
Therefore, for the NOPR, DOE has revised its analysis of emerging 
technologies within the IRL market and now accounts for emerging 
technologies within the GSFL market as well. These emerging 
technologies already are, or eventually will likely be, significantly 
more efficacious and longer lasting than the lamps they replace. 
However, to calculate the energy savings and NPV benefits due to the 
penetration of an emerging technology, DOE must accurately forecast the 
anticipated price and performance points of the individual 
technologies--a difficult and highly speculative task. Forecasts 
related to emerging technologies are inherently uncertain because they 
depend upon assumptions about future price, efficacy, and utility, none 
of which can be verified. Therefore, for the NOPR, DOE has chosen to 
analyze two base-case scenarios for both GSFL and IRL: (1) Existing 
Technologies, and (2) Emerging Technologies. DOE believes evaluating 
two base-case scenarios more completely characterizes the inherent 
uncertainty of the market penetration of the technologies and the 
consequent impact on NPV and NES. Incorporating emerging technologies 
in the base case does not affect the relative benefits of each TSL and 
prevents uncertain projections of market share, price, or performance 
from obscuring the benefits derived from more-efficient GSFL and IRL 
alone.
    For these base-case scenarios, DOE estimated the market penetration 
of three specific technologies into the projected installed stock: (1) 
LED lamps; (2) CMH lamps; and (3) reflector CFL. In general, the 
Existing Technologies scenario only considers the market penetration of 
technologies that are currently readily available and have reached 
maturation in terms of price and efficacy. Specifically, DOE considers 
R-CFL in the Existing Technologies scenario within the IRL market. For 
GSFL, no technologies other than those covered by this rulemaking were 
analyzed in the Existing Technologies scenario. (DOE considers the 
migration to T5 lamps, a covered product, separately, as discussed in 
section V.E.2.d.)
    In the Emerging Technologies scenario, DOE attempts to forecast the 
market penetration of mature technologies and those technologies that 
are still undergoing significant changes in price and efficacy. 
Specifically, DOE considered the market penetration of R-CFL, LED 
lamps, and CMH lamps in the Emerging Technologies scenario.
    DOE generally followed a 5-step process for each scenario to 
estimate the market penetration of the analyzed technologies and 
account for their impact on NES and NPV. (Sector- and technology-
specific aspects of DOE's methodology are described below and in TSD 
chapter 10.)
    First, DOE developed price, performance, and efficacy forecasts for 
each of the analyzed technologies. DOE's methodology in generating 
these forecasts for each analyzed technology is described below. 
Second, using those estimates, DOE calculated the payback period (PBP) 
of each technology in the relevant sector using the difference between 
its purchase price, annual electricity cost, and annual lamp 
replacement cost relative to the lamp it replaces. (See TSD chapter 10 
for further details.) Third, DOE used a relationship between PBP and 
market penetration to predict the market penetration of each technology 
in the relevant sector in every year from 2006 to 2042. Generally, 
lower PBP of a given lamp technology results in a greater predicted 
market penetration of that technology. DOE used a 5-year average of the 
market penetrations predicted by the relationship as its final market 
penetration. The 5-year average represents the time DOE assumed it 
takes products with lower PBPs to penetrate the market. Fourth, when 
necessary, DOE applied a scaling factor to the predicted market 
penetration to account for observed market trends. Fifth, DOE reduced 
the projected installed stock of covered products in each year by the 
value that corresponded to the highest level of market penetration 
achieved in each year by one of the analyzed technologies. Thus, the 
inclusion of R-CFL and other lamps using emerging technologies in the 
base case have the effect of lowering the energy savings of a potential 
new standard. For those covered lamps remaining, the cost-effectiveness 
of LCC savings and, thus, the relative cost effectiveness of each TSL 
is not affected.
    Because the lamps employing emerging technologies are beyond the 
scope of the rulemaking, they are not considered design options to 
improving IRL or GSFL efficacy, but rather they may substitutes for the 
lamps covered in this rulemaking. In the Emerging Technologies base 
case, DOE uses its prices projections effectively as inputs into its 
shipments forecasts of its covered products, rather than forecasts of 
shipments of lamps employing the emerging technologies themselves. In 
this way, the price projections of the analyzed lamps using emerging 
technologies indirectly affect the NPV of the present rulemaking, 
despite not being a direct input into equipment prices. As stated 
previously, to acknowledge the uncertainty of price forecasts for lamps 
using emerging

[[Page 16963]]

technologies, DOE models two base-case scenarios.
i. General Service Fluorescent Lamps
    For the Existing Technologies scenario, DOE believes that no mature 
technologies in the current market show the potential to significantly 
penetrate the GSFL market. (T5 lamps, previously considered an emerging 
technology, are now a covered product class.) Therefore, for the 
Existing Technologies scenario, DOE considered only the fluorescent 
technologies already covered by this rulemaking. Thus, except for the 
addition of T5 lamps, the Existing Technologies base case in this NOPR 
is the same as the base case in the March 2008 ANOPR.
    In the GSFL Emerging Technology scenario, however, DOE separately 
considered the potential market penetration of two technologies: (1) 
LEDs (into the commercial, residential, and industrial sectors); and 
(2) CMH (into the commercial and industrial sectors).
    For its analysis of LED market penetration, DOE found a 
commercially-available retrofit kit that included a LED replacement for 
a 4-foot medium bipin system. DOE used the retrofit kit as a current 
baseline from which to project future cost, efficacy, and price points. 
DOE interviewed an integrated circuit manufacturer to develop cost 
estimates for LED driver circuits. For cost estimates of other 
components, DOE used prices of existing LED products already on the 
market, which it modified in accordance with cost data and efficacy 
projections from DOE's Solid State Lighting Multi-Year Program 
Plan.\51\ Lastly, using markup based on currently-available LED lamps, 
DOE was able to develop price and efficacy projections for the LED 
luminaire in the retrofit kit.\52\ Following the 5-step process 
described above, DOE calculated a 41 percent market penetration rate of 
LED lamps into the 4-foot GSFL commercial sector by 2042. DOE assumed 
LED lamps penetrated only the new construction, renovation, and fixture 
replacement markets because these lamps would require their own 
specific fixtures. In the residential sector, the LED option did not 
have a low enough payback period to result in any market penetration.
---------------------------------------------------------------------------

    \51\ Multi-Year Program Plan FY'09 to FY'14: Solid-State 
Lighting Research and Development (March 2008). Available at: http://www.netl.doe.gov/ssl/PDFs/SSLMYPP2008_web.pdf.
    \52\ Because they are based on an existing LED retrofit kit, 
DOE's projections did not consider innovations in form factor on 
OLED tyechnology which could improve the possible payback period for 
solid-state lighting technologies.
---------------------------------------------------------------------------

    DOE also analyzed the potential penetration of CMH into the GSFL 
market. DOE first estimated current CMH prices using a methodology 
similar to the methodology it used to estimate GSFL and IRL prices, as 
described in the product price determination. (See TSD chapter 7.) 
Industry experts informed DOE that CMH efficacies and lifetimes would 
increase over the next several years while prices would remain 
constant. Applying these lifetime and efficacy projections DOE compared 
CMH replacements to GSFL systems. As a result, DOE assumed no market 
penetration of CMH because it found that T5 lamp systems (standard 
output and high output) would always be less costly and more 
efficacious than projected CMH replacements. Given this information, 
DOE believes that it is likely that migration to CMH (from the GSFL 
market) will be dominated by the migration to standard-output and high-
output T5 lamps.
ii. Incandescent Reflector Lamps
    As with GSFL, DOE considered two base case scenarios for IRL: 
Existing Technologies and Emerging Technologies. Because DOE believes 
that R-CFL is a mature technology with relatively stable price points 
and efficacies, DOE considered R-CFL penetration into the residential 
market in the Existing Technologies scenario. In contrast, for the 
Emerging Technologies scenario, DOE considered the market penetration 
of R-CFL, LED, and CMH lamps in both the residential and commercial 
sectors. DOE separately calculated the penetration of each technology 
into the IRL stock by using the 5-step process described above.
    For R-CFL, DOE developed price forecasts based on historical 
pricing trends of CFL and R-CFL, using a methodology similar to the 
methodology DOE used to estimate GSFL and IRL prices, as described in 
the product price determination. (See TSD chapter 7.) DOE assumed no 
future change in efficacy. Using this data, DOE found the market 
penetration predicted by the PBP relationship. However, PG&E argued 
that R-CFL are not always suitable substitutes for IRL because they 
lack dimming capabilities and their beam width is too broad. (Public 
Meeting Transcript, No. 21 at pp. 289, 321) Industrial Ecology 
commented that dimmable R-CFL do in fact exist, while PG&E noted that 
these lamps have little market share. (Public Meeting Transcript, No. 
21 at pp. 291, 321) DOE agrees that R-CFL may not always be appropriate 
substitutes for IRL, due to differences in form factor, beam spread, 
color quality, size and dimming capability. DOE observed that the 
actual market penetration of CFL replacements for A-line incandescent 
lamps thus far has been approximately 40 percent of the penetration 
predicted by the PBP-penetration relationship. Therefore, DOE applied 
these same scaling-factor reductions of 40 percent and 36 percent in 
calculating the market penetration of R-CFL into the IRL market for the 
residential and commercial sectors, respectively.
    For LED and CMH lamps in the IRL market, DOE developed price and 
efficacy forecasts using a methodology similar to the one described 
above for GSFL. DOE did not apply the scaling factor reduction to the 
predicted LED and CMH market penetration rates that it used for the R-
CFL analysis. DOE believes the substitutability problems that arise 
when R-CFL replace IRL do not apply when LED and CMH replace IRL.
    By the methodology described, DOE arrived at market penetration 
values (and market size reductions) for each base-case scenario. For 
the Existing Technology scenario, 2042 R-CFL penetration reached 38 
percent in the residential sector and 20 percent in the commercial 
sector. (This was the highest market penetration because it was the 
only technology analyzed for the scenario.) For the Emerging Technology 
scenario, LED reached the highest market penetration of any analyzed 
technology in both the residential sector and the commercial sector. 
DOE's analysis found LED lamps could penetrate 40 percent and 82 
percent of the IRL installed stock by 2042 in the residential and 
commercial sector, respectively. DOE's results support a comment by 
Industrial Ecology stating that emerging technologies will enter the 
commercial market first. (Public Meeting Transcript, No. 21 at p. 308) 
This effect occurs because there are higher installation and operating 
costs in the commercial sector relative to the residential sector, 
resulting in lower PBPs and faster migration to emerging technologies. 
Again, DOE used these results to effectively reduce the size of the IRL 
market for its analysis.
d. Fluorescent Market Sectors Analyzed
    In the March 2008 ANOPR, DOE modeled both the commercial and 
industrial market sectors to generate GSFL shipments forecasts. DOE 
received several comments on its decision not to model the residential 
sector.

[[Page 16964]]

    GE commented that DOE should model the residential sector because 
it makes substantial use of less-efficacious T12 lamps, which could be 
effectively eliminated by new standards. GE estimated that by 2012, 
roughly 20 percent of GSFL shipments will be T12 lamps, and more than 
half of those will go to residential consumers. PG&E stated that 
California codes only recently required higher-efficacy lamps in new 
construction; therefore, 4-foot T12 lamps with magnetic ballasts remain 
a large part of the residential installed stock. (Public Meeting 
Transcript, No. 21 at pp. 276-279)
    The Joint Comment asserted that a separate analysis for the 
residential sector is unnecessary; however, the Joint Comment 
recommended that residential applications should be accounted for in 
DOE's LCC analysis based on the proportion of lamp sales, operating 
hours, and electric rates. The Joint Comment stated DOE should use 
caution in apportioning all sales through do-it-yourself (DIY) stores, 
such as Home Depot and Lowe's, to the residential sector. (Joint 
Comment, No. 23 at p. 10) PG&E and NEMA commented that approximately 20 
percent of DIY business is commercial. (NEMA, No. 22 at p. 30; Public 
Meeting Transcript, No. 21 at p. 290)
    DOE agrees that it should model the residential sector to more 
accurately capture overall consumer behavior and the market impact of 
standards. DOE calculated the initial residential stock of 4-foot 
medium bipin T12 lamps using the lamps sold through the DIY 
distribution chain, which accounted for approximately 25 percent of 
NEMA's historical shipments. Next, DOE assumed 20 percent of those DIY 
sales went to small commercial consumers, with the remaining 80 percent 
apportioned to the residential sector. As a result, DOE assumed 20 
percent of all 4-foot medium bipin shipments went to the residential 
sector and all of those were T12 lamps.
    From those shipments, DOE calculated the residential installed 
stock and then modeled new construction, renovation, and fixture/
ballast replacement in the same manner described in section 0. DOE 
assumed that in the base case, a portion of consumers will continue to 
purchase 4-foot T12 magnetic systems, while the remaining consumers 
will choose to purchase higher-efficacy 4-foot T8 and 4-foot T12 
electronic systems. Overall, the number of 4-foot T12 systems installed 
in the residential sectors is relatively constant over the analysis 
period. For more details regarding DOE's assumptions in the residential 
sector, please see chapter 10 of the TSD.
e. GSFL Product Migration
    DOE received many comments on its assumptions characterizing how 
consumers will migrate among different GSFL products. These comments 
were primarily focused on the movement away from T12 systems and the 
migration toward T5 systems, topics discussed in detail below.
i. Ballast Rule Effective Start Date
    NEMA commented that the 2000 Ballast Rule does not ban T12 magnetic 
ballasts in the commercial sector until June 2010. This means these 
ballasts will be available through the end of 2010, and not 2009 as 
DOE's model had assumed, because some T12s will remain in the 
distribution chain for a period of months after the rule takes effect. 
Therefore, NEMA argued, DOE should expect T12 lamps to continue to be 
shipped beyond 2022, the year DOE projected the lamps will phase out. 
(NEMA, No. 22 at p. 25, 28) DOE agrees with NEMA that commercial sector 
magnetic ballasts will continue to be available through 2010 and has 
revised its model accordingly to better reflect the timing of the 2000 
Ballast Rule's effective start date of amended standards. According to 
the revised model, DOE estimates that the majority of banned magnetic 
T12 ballasts will be eliminated from the installed stock by 2025. 
However, as discussed below, the inclusion of T12 electronic ballasts 
results in T12 lamps being shipped throughout the analysis period.
ii. Four-Foot Medium Bipin T12 Lamp Replacements
    In the March 2008 ANOPR, DOE assumed that 100 percent of 4-foot T12 
systems would be replaced by 4-foot T8 systems upon ballast failure. 
This assumption was made in consideration of the 2000 Ballast Rule, 
which effectively banned most 4-foot T12 medium bipin magnetic 
ballasts. 10 CFR part 430.32(m)(5) DOE received several comments 
related to this assumption and the implications for DOE's GSFL 
shipments analysis.
    Stakeholders generally agreed that DOE's base-case assumption was 
too optimistic in terms of the migration from 4-foot T12 to 4-foot T8 
systems. The comments provided two reasons why consumers would be 
expected to maintain T12 electronic ballasts and not migrate to T8 
lamps. First, because the installed stock is dominated by T12 lamps, it 
is unlikely all consumers would switch to T8 lamps upon repurchase, 
especially when spot re-ballasting. Some commercial sector consumers 
would be expected to use another T12 lamp and ballast to maintain 
visual consistency with other lamps in a room. Second, the Joint 
Comment noted that residential low-power-factor ballasts are not 
subject to the 2000 Ballast Rule, meaning legal ballasts compatible 
with T12 lamps will continue to exist. 10 CFR part 430.32(m)(7)(iii). 
Similarly, Osram Sylvania made the same point and commented that 4-foot 
T12 medium bipin magnetic ballast systems are common in the residential 
sector. Osram Sylvania added that some fixtures include electronic 
ballasts and are marketed as being capable of operating T12 lamps, 
which could perpetuate T12 usage. NEMA added that cold temperature 
ballasts for 8-foot T12 RDC high output lamps are still allowed under 
the rule as well. (Public Meeting Transcript, No. 21 at pp. 248-251, 
276, 281; NEMA, No. at pp. 25, 28; Joint Comment, No. 23 at p. 7)
    The stakeholders did differ slightly on the appropriate replacement 
rates that DOE should assume. The Joint Comment recommended DOE assume 
5 to 10 percent of the commercial market and a higher proportion of the 
residential market will purchase T12 lamp and ballast systems upon 
ballast failure, with the remainder migrating to T8 systems. (Joint 
Comment, No. 23 at p. 7) GE estimated that about 20 percent of the 
currently installed base of T12 lamps will be replaced by T12 lamps, 
while the other 80 percent will migrate to T8 lamps. (Public Meeting 
Transcript, No. 21 at pp. 250-252) NEMA suggested that DOE should 
assume that in 2022, T12 lamps will compose at least 10 percent of the 
4-foot lamp market, 40 percent of the 8-foot single pin slimline 
market, and over 90 percent of the RDC HO market. (NEMA, No. 22 at p. 
28)
    After careful consideration of these comments, DOE has decided to 
modify its assumption regarding the rate of migration from T12 to T8 
lamps. Accordingly, DOE is using NEMA's estimates to recalibrate its 
shipment forecasts. DOE now agrees that not all 4-foot T12 lamps would 
be replaced by T8 systems upon ballast failure. Thus, for this NOPR, 
DOE assumed 90 percent (down from 100 percent) of 4-foot T12 systems 
will be replaced with T8 systems and 10 percent with T12 systems. 
According to DOE's estimates in 2022, T12 lamps will comprise nearly 20 
percent of the 4-foot medium bipin market, 25 percent of the 8-foot 
single pin slimline market, and 93 percent of the 8-foot recessed 
double contact HO market. (See TSD chapter 10.) DOE notes that these 
estimates do not exactly

[[Page 16965]]

align with NEMA's suggestions, because they incorporate several other 
phenomena in addition to the migration to T12 electronic systems (e.g., 
growth rate, emerging technologies, T5 penetration, 8-foot SP slimline 
to 4-foot MBP conversions).
iii. Eight-Foot Single Pin Slimline T12 Lamp Replacements
    For its shipments forecasts in the March 2008 ANOPR, DOE assumed 
that 90 percent of the 8-foot T12 single pin systems would be replaced 
with two 4-foot T8 systems, and 10 percent would be replaced by 8-foot 
single pin T8 systems. In its written comments, NEMA generally agreed 
with DOE's assumption but provided slightly different replacement rate: 
NEMA suggested that DOE should assume 80 percent of the 8-foot T12 
single pin lamps would be replaced by two 4-foot T8 lamps and 20 
percent by 8-foot T8 lamps. (NEMA, No. 22 at p. 28) ACEEE and the Joint 
Comment argued that DOE's assumption that 90 percent of the 8-foot 
market would switch to 4-foot lamps is much too high, particularly 
because the current stock is dominated by T12. The Joint Comment also 
stated that DOE should include some electronic T12 system ballast 
purchases, as in the case of 4-foot T12 lamps. (Public Meeting 
Transcript, No. 21 at pp. 254-255; Joint Comment, No. 23 at p. 7)
    Based on its consideration of the above comments, DOE revised its 
estimated conversion rates for 8-foot single pin slimline systems in 
this NOPR. In line with the Joint Comment and NEMA's recommendations, 
DOE lowered its conversion rates to 4-foot MBP systems. In addition, 
consistent with NEMA's suggestion, DOE has included a conversion to 
electronic 8-foot T12 SP slimline systems. DOE now assumes 80 percent 
of the 8-foot T12 single pin lamps would be replaced by two 4-foot MBP 
T8 systems, with the remaining 20 percent split evenly between 8-foot 
T8 and electronic 8-foot T12 SP slimline systems.
iv. Four-Foot T5 Lamps
    In the March 2008 ANOPR, DOE did not analyze 4-foot miniature bipin 
T5 standard output (SO) and high output (HO) lamps as covered product 
classes. As discussed in section A.1.b above, for this NOPR, DOE is 
proposing to cover both T5 SO and T5 HO lamps as additional, distinct 
product classes. The following describes the methodology DOE used to 
generate shipments of these lamps.
    To establish the 2005 installed stock of T5 lamps, DOE first 
estimated 2001-to-2005 shipments based on assumptions derived from its 
market research and supported by manufacturer interviews. Market 
literature indicated that T5 lamps represented 2 percent of the 2004 
GSFL market, a figure DOE assumed for its analysis. DOE's research also 
indicated that the combined market share of T5 SO and HO lamps was 
growing as a percentage of the overall GSFL market. Additionally, in 
interviews, manufacturers provided insight on the proportions of T5 
lamp sales that are standard output and high output. Using these 
assumptions, DOE generated historical shipment estimates for 2001 to 
2005, which it used to calculate the initial stock of SO and HO lamps 
in the same manner it does for all other GSFL product classes. Finally, 
DOE received confidential aggregated (both SO and HO) T5 lamp shipment 
data from NEMA for 2001 to 2007. DOE used this data to validate its 
installed stock estimates.
    In general, after establishing the 2005 T5 SO and HO installed 
stocks, DOE modeled shipment growth based on a migration from other 
product classes. For T5 SO lamps specifically, DOE's research indicated 
that shipment growth of these lamps is primarily driven by a migration 
from the 4-foot MBP market. In addition, because 4-foot T5 MiniBP SO 
systems require a different fixture than 4-foot MBP systems, T5 systems 
would be unlikely to penetrate the ballast-only replacement market. 
Therefore, to establish T5 standard output shipments, DOE allotted a 
portion of the 4-foot MBP fixture replacement, renovation, and new 
construction markets to 4-foot T5 MiniBP systems. To do this, DOE first 
calculated the size of this potential market for new T5 SO systems in 
each year. DOE then determined the portion of this market that would 
actually be serviced by T5 SO lamps by calculating the share that 
resulted in T5 shipments consistent with 2006 and 2007 historical data. 
DOE held the resulting percentage (approximately 12.5 percent) constant 
throughout the analysis period. As a result of the inclusion of 4-foot 
T5 MiniBP lamps eroding part of the 4-foot MBP market, estimates of 
total 4-foot MBP lamp shipments are lower in the NOPR than in the 
ANOPR. Using this methodology, in the base case Emerging Technologies 
scenario, DOE forecasts T5 SO shipments of 15.0 million in 2008, 24.2 
million in 2012, and 47.4 million in 2025 (56.2 million in 2025 in the 
base-case Existing Technologies scenario).\53\
---------------------------------------------------------------------------

    \53\ As discussed earlier, DOE models two base-case shipment 
scenarios: Existing Technologies and Emerging Technologies. Because 
the Emerging Technologies scenario models the potential substitution 
of GSFL systems with lamps that incorporate emerging technologies 
(such as LED), the Emerging Technologies scenario generally results 
in fewer shipments of GSFL. However, based on price and technology 
advancement projections, DOE estimated that these emerging 
technologies will not likely significantly penetrate the GSFL market 
until after 2012.
---------------------------------------------------------------------------

    For T5 HO lamps, after establishing the installed stock in 2005 in 
the same manner as with T5 SO lamps, DOE developed 4-foot T5 MiniBP HO 
lamp shipments by modeling a migration from two different lighting 
markets. Marketing literature indicated, similar to 8-foot RDC HO 
systems, a large portion of 4-foot MiniBP T5 HO systems serve high-bay 
(ceilings higher than 20-feet high) applications due to their highly-
concentrated light output. Historical shipment data for 8-foot RDC HO 
lamps showed substantial declines in 2006 and 2007, indicating T5 HO 
lamps may be rapidly displacing them. In addition, DOE's research 
indicated that a significant portion of 4-foot T5 HO growth can be 
attributed to a penetration into the high intensity discharge (HID) 
lamp high-bay and low-bay markets. Therefore, to calculate the growth 
in 4-foot MiniBP T5 HO lamp shipments, DOE assumed that these systems 
were penetrating both the 8-foot RDC HO and HID markets. Similar to its 
analysis for T5 SO systems, DOE established that the fixture 
replacement, renovation, and new construction market segments represent 
the available market for T5 HO systems. DOE obtained HID shipment data 
from the 2004 HID determination,\54\ from which DOE calculated the 
total lumens servicing low-bay and high-bay applications. Then, 
consistent with historical T5 and 8-foot RDC HO shipments, DOE assumed 
T5 HO would fully penetrate the 8-foot RDC HO new construction, 
renovation, and fixture replacement markets, as well as the HID new 
construction and renovation market. Using this methodology, DOE 
forecasts T5 HO shipments of 14.0 million in 2008, 23.6 million in 
2012, and 46.1 million in 2025.
---------------------------------------------------------------------------

    \54\ U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, ``Energy Conservation Program for Commercial and 
Industrial Equipment: High-Intensity Discharge Lamps Analysis of 
Potential Energy Savings'' (Dec. 2004). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/hid_energy_savings_report.pdf.
---------------------------------------------------------------------------

    For further details on shipment forecasts of 4-foot T5 lamps, see 
chapter 10 of the TSD. DOE seeks public comment on its analysis of the 
4-foot T5 SO and HO markets, as well as its shipment results.

[[Page 16966]]

3. Base-Case Market-Share Matrices
    DOE's market-share matrices are another important input into the 
shipments analysis and NIA. Within each product class, DOE considers 
the mix of technologies from which consumers can choose. These choices 
are represented in market-share matrices, which apportion market share 
for lamp stocks (in 2012) or lamp shipments (after 2012). Because 
shipments depend on lamp lifetime and system lumen output assumptions, 
among other inputs, DOE allocated market shares to each of the lamp 
technologies for the base case and standards case. The matrices enable 
the shipment model to capture a migration to different lamps, or, for 
GSFL, lamp-and-ballast designs, over time in both the base and 
standards cases. Issues related to these market-share matrices are 
discussed below.
a. General Service Fluorescent Lamps
    A ballast factor measures the actual lumen output of a lamp-and-
ballast system relative to a reference system. A lower ballast factor 
will, all else equal, lead to lower lumen output, and proportionally 
less energy consumption than the reference system. ACEEE commented that 
the ballast factor of 0.75 that DOE used in the market matrices is 
fairly uncommon and that manufacturers are now marketing lower ballast 
factors, including 0.7, 0.69, and 0.68. Therefore, ACEEE expects a 
bigger jump from normal to low ballast factor than the 0.78-0.75 jump 
that DOE assumes in its market-share matrices presented in the ANOPR. 
The Joint Comment noted that 0.71 represents the mid-point of very low 
ballast factors on the market. (Public Meeting Transcript, No. 21 at 
pp. 262-263; Joint Comment, No. 21 at p. 10) Consistent with changes 
incorporated in the engineering analysis, DOE incorporated a 0.71 
ballast factor ballast option in the NIA. In sum, DOE attempts to match 
as closely as possible the lumen output of the retiring system and the 
replacement system. To the extent that a lower ballast factor can 
achieve the appropriate lumen output, it is incorporated into the 
technology choices facing consumers.
    Regarding the base-case 4-foot T8 medium bipin market-share matrix, 
Industrial Ecology commented that DOE was incorrect to assume 0 percent 
market share for the 25W lamp in 2012. Because thousands of these lamps 
are being sold in 2008, that estimate should be much greater than zero. 
(Public Meeting Transcript, No. 21 at p. 261) The Joint Comment stated 
that 30W lamps are being displaced by 25W and 28W options. Therefore, 
DOE's 30W market share assumptions--4 percent in 2012 and 15 percent in 
2042--are too large. The Joint Comment suggested that DOE should 
substantially reduce the market share of 30W lamps and split those 
sales between 25W and 28W lamps. (Joint Comment, No. 23 at p. 10)
    NEMA commented on the same market-share matrix, stating that the 
market share for T8 lamps in the 2042 base case should be less than 30 
percent for 32W lamps and greater than 30 percent for 25W lamps, with 
the rest of the market composed of 28W and 30W lamps. (NEMA, No. 22 at 
p. 28)
    DOE considered the submitted comments and modified its base-case 4-
foot T8 medium bipin market-share matrix accordingly. Based on a 
confidential NEMA survey of market shares of 4-foot medium bipin lamps, 
in 2012, DOE allocated 4 percent, 4 percent, and 2 percent of the 4-
foot T8 market share to 25W, 28W, and 30W lamps, respectively, for the 
revised NOPR base-case market-share matrices. In 2042, DOE allocated 32 
percent, 27 percent, and 14 percent market to 25W, 28W, and 30W lamps, 
respectively. See chapter 10 of the NOPR TSD for the full market-share 
matrices in 2012 and 2042.
b. Incandescent Reflector Lamps
    In the March 2008 ANOPR, DOE presented market-share matrices for 
both residential and commercial IRL. For the commercial sector, the 
base-case IRL market-share matrix apportioned market share of the stock 
to only halogen and the standard HIR (currently EL2) lamps. Although 
DOE received no comments from stakeholders, DOE modified these matrices 
for the NOPR to reflect changes made in the engineering analysis. For 
the NOPR, the base case market-share matrix for commercial IRL now 
allocates market share to all currently commercially-available lamp 
technologies, including improved halogen, long-life HIR, and the 
silverized reflector technology. DOE believes this revised distribution 
better reflects product availability and consumer purchasing trends 
because they include all covered lamp technologies currently being 
sold.
4. GSFL Standards-Case Shipment Scenarios and Forecasts
    In the March 2008 ANOPR, DOE modified its base-case market-share 
matrices to account for two standards-case scenarios and to generate 
shipment forecasts. DOE considered a Roll-up scenario and a Shift 
scenario, described below. DOE also introduced voluntary standards-
induced retrofits in the standards case. DOE received several comments 
on the scenarios it analyzed and its rate of voluntary retrofits. In 
response to those and related comments, DOE is modifying its Shift and 
Roll-up scenarios and introducing new standards-case scenarios. These 
scenarios are discussed in detail below and in TSD chapter 10.
a. Shift/Roll-Up Scenarios
    In the March 2008 ANOPR, DOE modeled lower-bound and upper-bound 
energy conservation scenarios for the GSFL standards-case NIA to 
characterize the range of energy savings that may result from 
standards. 73 FR 13620, 13671 (March 13, 2008). In the standards-case 
NIA for GSFL and commercial IRL, DOE first modeled a lower-bound energy 
conservation scenario called the Roll-up scenario. 73 FR 13620, 13671 
(March 13, 2008). This scenario assumes that consumers owning lamps or 
systems that do not meet the new standards will ``roll up'' to the 
lowest first-cost option available (preserving lumen output if 
possible) when purchasing standards-compliant lamps. (March 2008 ANOPR 
TSD chapter 9) The Roll-up scenario also assumes that consumers already 
owning standards-compliant lamps or systems will continue to purchase 
those lamps or systems.
    DOE also modeled a Shift scenario in the March 2008 ANOPR for the 
GSFL NIA, in which DOE assumed that consumers are driven by both lamps 
cost and energy savings. In this case, consumers may purchase a variety 
of lamps or systems that are more efficacious than their base case 
systems. (73 FR 13620, 13671 (March 13, 2008); March 2008 ANOPR TSD 
chapter 9) Specifically, consumers who purchase products in the base 
case at above-minimum standard levels will ``shift up'' to even higher 
efficacy standard levels in the Shift scenario. DOE used this scenario 
to illustrate upper-bound energy savings.
    The Joint Comment argued that both the Roll-up and Shift scenarios 
understate standards-case energy savings, but the Roll-up scenario is 
more unrealistic because standards change the relative economics of 
more-efficient products. (Joint Comment, No. 23 at p. 11) In other 
words, standards would eliminate the least-efficacious lamps (which 
usually have the lowest first costs), thereby reducing the cost premium 
of high-efficacy lamps relative to the lowest first-cost available 
lamp. According to the commenter, that would encourage some consumers 
to purchase lamps above the standards. The Joint Comment also argued 
that new

[[Page 16967]]

standards would encourage manufacturers to promote more efficacious 
products, a market dynamic not sufficiently captured by either 
scenario. (Joint Comment, No. 23 at p. 11)
    The Joint Comment further stated that the Shift scenario reflects a 
more realistic consumer response to standards than the Roll-up 
scenario. Historically, for example, some consumers have purchased 
systems that are more efficacious than minimum standards. Still, the 
Joint Comment argued, the Shift scenario does not fully capture the 
spread of efficiencies in a standards-compliant market and fails to 
characterize manufacturer efforts to hasten development of more-
efficient lamps and systems. The Joint Comment argued that DOE's 
scenarios should anticipate voluntary programs and manufacturer 
interest in establishing more-efficient product lines in the standards 
case. (Joint Comment, No. 23 at pp. 11, 22)
    Regarding the comment about the relative economics of lamp 
purchases, DOE agrees that the relative first-costs change in the 
standards case (i.e., the up-front cost differential between the least-
cost, standards-compliant lamp and a more-efficient lamp) is less than 
in the base case. This effect is one of the reasons DOE models a Shift 
scenario. Still, DOE does not believe that this effect implies that the 
Shift scenario is necessarily more viable than the Roll-up scenario. 
Although the relative up-front economics change between cost and 
efficacy, they may not change between cost and income, meaning some 
consumers--particularly those not concerned about energy savings--may 
focus on the absolute costs at the time of purchase. A consumer's 
lighting budget, for example, will not necessarily increase simply 
because there is a smaller cost premium for a more-efficacious lamp. In 
sum, DOE cannot be certain which scenario is more likely, and, thus, 
continues to model both scenarios.
    However, DOE agrees that revisions to the Shift scenario may better 
capture the spread of efficiencies in the market. Therefore, DOE 
revised its Shift scenario for the NOPR to more closely retain the 
existing (baseline) efficacy distribution in the standards case. (See 
TSD chapter 11 for the revised Shift scenario efficacy distribution 
results.) However, as the standard becomes more stringent, DOE has 
maintained its approach of incrementally accumulating market share of 
the lamp stock at TSL5 and not projecting some to move beyond what now 
characterizes the maximum technologically feasible standard level 
(``max-tech''). It is not possible for DOE to model a spread of 
efficiencies above max-tech levels. DOE has interviewed manufacturers 
and concluded it cannot reasonably predict future price and performance 
points of technologies yet to be developed for the market. DOE seeks 
comment and supporting data on whether the Roll-up or Shift scenario is 
more appropriate.
b. Lighting Expertise Scenarios
    In its written comments, NEMA stated that it considers the Shift 
scenario implausible because the scenario assumes consumers will 
``aggressively'' migrate to lower-ballast-factor ballasts. NEMA 
strongly disagreed with DOE's assumption that more-stringent efficacy 
standards are significantly correlated with lower GSFL ballast factors 
(particularly at CSLs 3, 4, and 5), and NEMA argued that it had seen no 
direct and demonstrated causal relationship between them in its 
experience. Further, NEMA argued that there is no proven correlation 
between new potential GSFL standards and the future mix of ballast 
factor values that will occur; therefore, NEMA reasoned that DOE should 
not apply such a correlation in its standards-case market-share 
matrices. NEMA also commented that new standards-compliant GSFL and 
their ballasts would have to be interoperable across manufacturers and 
with a wide range of existing ballasts and luminaires. Therefore, more-
stringent efficacy standards would mostly yield greater lumen output, 
rather than decreasing lamp wattage. As such, NEMA argued, DOE has 
overreached in building a case for standards set at higher efficacy 
levels by inappropriately and arbitrarily assuming a strong correlation 
between increasing efficacy and decreasing ballast factor views. (NEMA, 
No. 22 at p. 26, 27)
    NEMA also commented that the most direct way to use the efficacy 
improvements imposed by the standards is to use fewer luminaires to 
attain the same delivered light level on the work surface while 
reducing the total wattage. However, NEMA maintains that this is not a 
practical possibility because, even for new construction or major 
renovation projects, the spacing of luminaires is dictated by a 
building and ceiling system grid. Thus, there is no opportunity to take 
advantage of additional lumens that might result from standards by re-
spacing existing luminaires, which must continue to operate on high-
volume ballast designs. (NEMA, No. 22 at p. 26) Based on these 
arguments, NEMA strongly asserted that moving beyond CSL1 and CSL2 for 
a lamp-only rulemaking is ill-advised. (NEMA, No. 22 at p. 26, 27)
    DOE has carefully considered NEMA's comments on DOE's assumption of 
a general trend toward lower-BF ballasts over the analysis period. In 
response, DOE undertook an extensive literature review and analysis--
discussed below--to better characterize the likelihood of consumers 
migrating to lower-BF ballast systems if higher efficacy standards are 
required. DOE assessed the lighting expertise of groups of consumers, 
described below, who make lighting purchase decisions. DOE assumes that 
consumers with ``high'' lighting expertise will be sufficiently 
educated about ballast factors and lamp efficacy to migrate to lower-
ballast-factor ballasts when lower wattage lamps are not available in 
the standards case. That is, these consumers will seek to maintain 
light output in the replacement purchase.
    To analyze this issue, DOE first characterized the lighting market 
supply chain in the commercial and residential sectors and identified 
the decision makers within each one (e.g., contractors, homeowners). 
DOE broke down each sector by the principal events that prompt lamp 
purchases: (1) Ballast failure; (2) retrofit; (3) fixture replacement; 
(4) renovation; and (5) new construction. DOE assigned probabilities 
reflecting each decision maker's likelihood of making the lighting 
purchase decision given the purchase event. For example, in purchase 
events driven by new construction, DOE assumed lighting designers, 
architects, and electrical engineers make 70 percent of the decisions, 
owners make 20 percent, and electrical contractors make the remaining 
10 percent. DOE then analyzed the likelihood of each decision maker 
choosing to run a lamp on a lower BF ballast if forced by standards to 
purchase a more-efficacious lamp. DOE described that likelihood with a 
probability that was based on the technical expertise and motivation of 
the decision maker. Within each purchase event, DOE multiplied the 
likelihood of each market actor making the decision by the likelihood 
of that actor choosing a lower-BF ballast. In this way, DOE derived an 
estimate for the likelihood of a lower-BF ballast being selected for 
each event in each sector in the standards case.
    DOE assumed the commercial and industrial sectors behave similarly 
with respect to ballast factor choices, and no distinction was made 
between them in this analysis. Additionally, decision makers in the 
large-commercial sector can be different agents making different

[[Page 16968]]

decisions than those in the small-commercial sector. In the market 
segments (purchase events) where DOE found consumer behavior to be 
substantially different between these subsectors, DOE weighted the 
relative impact of each subsector when characterizing the overall 
commercial market. Table V.6 presents the results of DOE's analysis for 
the commercial and residential sectors. The values depict the 
probability that lamps purchased in each event will be matched with 
lower-ballast-factor ballasts, if necessary, to maintain lumen output. 
For example, 78 percent of lamps purchased in new construction in the 
commercial sector will be paired with lower-ballast-factor ballasts, if 
no reduced-wattage lamps are available in the standards case,

  Table V.6--Market Segment-Based Likelihood of High Lighting Expertise
------------------------------------------------------------------------
                                                    Probability
                                         -------------------------------
           Lamp purchase event            Commercial (in    Residential
                                             percent)      (in percent)
------------------------------------------------------------------------
Renovation..............................              69              48
New Construction........................              78              61
Retrofit................................              92               0
Ballast Replacement.....................               8               0
Fixture Replacement.....................              34               0
------------------------------------------------------------------------

    In light of NEMA's comments and DOE's analysis, DOE used these 
results to add a second set of standards-case scenarios to characterize 
ballast factor migration in the GSFL NIA. DOE now also analyzes a High 
Lighting Expertise scenario and a Market Segment-Based Lighting 
Expertise scenario. These scenarios characterize consumers' decisions 
(or lack thereof) when purchasing a more-efficient lamp to either 
maintain previous lumen output or accept higher lighting levels. For 
its part, the High Lighting Expertise scenario uses the same 
methodology as DOE used in the ANOPR. The High Lighting Expertise 
scenario generally characterizes more sophisticated lighting decisions 
in which consistent lighting levels and/or energy savings play a 
determining role in consumer behavior. In this scenario, consumers are 
more likely to choose a lower-ballast-factor ballast to pair with 
higher-efficacy lamps. Conversely, in the Market Segment-Based 
scenario, DOE assumed consumers often accept higher lighting levels as 
a consequence of higher-efficacy lamps. As a consequence, these 
consumers do not achieve the same energy savings as would be possible 
by migrating to lower-ballast-factor ballasts. DOE used this analysis, 
and the results shown in Table V.6, to characterize the Market Segment-
Based expertise scenario. On the other hand, in the High Lighting 
Expertise scenario, DOE assumes all consumers (100 percent) migrate to 
lower-ballast-factor ballasts when appropriate. Please see TSD appendix 
10B for more details.
c. Voluntary Retrofits
    In the March 2008 ANOPR, DOE assumed that more-stringent efficacy 
standards would lead to higher T12 lamp prices, and, in turn, higher 
rates of voluntary retrofits from T12 to more-efficacious T8 lamps. For 
example, DOE assumed that CSL1 would drive an additional 10 percent of 
the T12 market to voluntarily migrate to T8 lamps, that CSL2 would 
drive an additional 20 percent, that CSL3 would drive an additional 30 
percent, and so on. These commercial standards-induced retrofits 
involve consumers voluntarily discarding their functioning T12 
ballasts, and purchasing new T8 ballasts in the standards case. In 
contrast, in the base case, these consumers would have utilized the 
entirety of their T12 ballast lifetime.
    At the public meeting, ACEEE agreed with DOE's assumption that 
standards will accelerate voluntary retrofits, but argued that DOE's 
retrofit rate was too aggressive. ACEEE specifically stated that the 
50-percent retrofit rate per year at CSL5 was too high and suggested a 
rate of roughly half that level. (Public Meeting Transcript, No. 21 at 
p. 282) GE agreed that DOE's retrofit rates were too high, suggesting 
that 10 percent at CSL1 is an appropriate starting point, but 25 
percent should probably be the maximum assumed retrofit rate at CSL5. 
Using those rates as the minimum and maximum, GE said DOE could scale 
the rate for the other CSLs. (Public Meeting Transcript, No. 21 at pp. 
282-283) In its written comments, NEMA similarly stated that DOE's 
conversion rate for consumers voluntarily retrofitting from T12 to T8 
systems is likely overstated. NEMA suggested that DOE should use a 
voluntary retrofit rate of 20 to 25 percent for CSL5 and recommended 
that other rates be adjusted based on that percentage. (NEMA, No. 22 at 
p. 28)
    At the public meeting, Philips also commented that it would expect 
utilities to be more aggressive with their rebate programs in the 
standards case than they would be in the base case. PG&E stated that 
voluntary retrofits are driven by many factors, including attention to 
global climate change, increased product availability, and other 
factors, not necessarily utility rebate programs. (Public Meeting 
Transcript, No. 21 at pp. 273-275)
    DOE considered these comments and maintains that these standards-
induced retrofits are a likely phenomenon and important to model in the 
NIA. DOE agrees that its initial retrofit assumptions were likely too 
high, particularly for the higher efficacy levels. For the NOPR, 
consistent with comments received, in the commercial sector DOE 
continued to assume that EL1 would drive an additional 10 percent of 
the T12 market per year to voluntary retrofit to T8 lamps. DOE also 
assumed a 25-percent retrofit rate at EL4 and EL5, levels at which all 
T12 lamps are effectively eliminated from the market. For TSL1, TSL2, 
and TSL3, DOE changed the standards-induced retrofit rates to 10 
percent, 15 percent, and 20 percent, respectively.
    Similar to DOE's approach in the commercial sector, DOE also 
included increased migration of residential consumers from 4-foot 
medium bipin T12 systems to T8 systems. As discussed in chapter 10 of 
TSD, DOE assumed in the base case that residential consumers replacing 
their T12 fixture (either due to fixture failure or ballast failure) 
would purchase another T12 system. In contrast, in the commercial 
sector, DOE assumes 90 percent of 4-foot MBP consumer replace their T12 
ballasts with T8 ballast upon fixture or ballast failure in the base 
case. In addition, while in the commercial sector DOE assumed, under 
amended energy conservation standards, some consumers would retrofit 
their working T12 ballast systems before end of ballast life, DOE 
assumed residential

[[Page 16969]]

consumers never do so. Instead, in the residential sector, DOE 
incorporated an additional migration to T8 lamps only when the consumer 
is confronted with a ballast or fixture failure. In such situations DOE 
assumed that a certain percentage residential consumers, who in the 
base case would purchase a new T12 system, would instead, in the 
standards case, elect to purchase a T8 system--despite the availability 
of T12 options. Specifically, based on manufacturer interviews, DOE 
shifts 25 percent, 35 percent, and 65 percent of these consumers to T8 
systems at TSL1, TSL2, and TSL3, respectively (thereby reflecting 
increased cost of T12 lamps). At TSL4 and TSL5, all residential 
consumers migrate to T8 systems because T12 lamps would be effectively 
eliminated from the market.
5. IRL--Standards-Case Shipment Scenarios and Forecasts
    In the March 2008 ANOPR, DOE modified its market-share matrices to 
account for standards-case scenarios and generate shipment forecasts 
for IRL. DOE created one main shipment scenario and two sensitivity 
scenarios to characterize how IRL consumers would be expected to react 
to standards in the commercial and residential sectors. The sensitivity 
scenarios were called the ``65W BR Lamp Substitution'' scenario and the 
``10-Percent Lumen Increase'' scenario. For all three standards-case 
scenarios in these sectors, DOE assumed that consumers whose base-case 
lamp purchase has an efficacy lower than that of the standard would 
roll up to the least efficacious lamp design available. Any IRL 
consumer whose base-case lamp purchase meets the efficacy standard 
would remain unaffected.
    In the main shipment scenario, DOE made two assumptions: (1) 
Consumers who purchase covered IRL technology in the base case continue 
to purchase covered IRL technology in the standards case (i.e., the 
total number of installed covered IRL in the base case is the same as 
that in the standards case throughout the analysis period); and (2) in 
the standards case, consumers purchase higher-efficacy lamp designs 
with equivalent lumen output as their base-case lamps.
    The remaining sensitivity scenarios modeled two situations--one in 
which consumers may migrate from regulated IRL toward the exempt 65W BR 
lamps in the standards case (termed ``65 Watt BR lamp substitution''), 
and another in which a portion of residential consumers of IRL buy a 
more-efficacious lamp at the same wattage as in the base case (termed 
``10-percent lumen increase''). This sensitivity scenario assumed 
consumers would, on average, purchase 10 percent more lumens in the 
standards case. As explained below, DOE received several comments on 
the March 2008 ANOPR standards-case IRL shipments. In response to those 
and related comments, DOE is modifying and introducing new standards-
case scenarios, discussed in detail below and in TSD chapter 10.
i. Shift/Roll-Up Scenarios
    For commercial sector IRL, DOE chose to model a Roll-up scenario in 
the March 2008 ANOPR. The Joint Comment encouraged DOE to also model a 
Shift scenario for commercial IRL because of the variety of existing 
and emerging efficiency options available. The Joint Comment argued a 
Shift scenario would better capture both the improved cost 
competitiveness of higher-efficacy options and greater manufacturer 
investment in developing higher-efficacy products. (Joint Comment, No. 
23 at p. 18)
    DOE agrees that some commercial consumers may continue to purchase 
products above the minimum standard level. Therefore, similar to the 
Shift scenario in GSFL, DOE created a Shift scenario for IRL that 
captures the same spread of efficiencies in the standards case as in 
the base case. To model this, DOE compiled a distribution of IRL in the 
commercial sector with different efficacies using the revised efficacy 
standard levels for this notice. Based on this distribution, DOE then 
created a Shift scenario for the NOPR IRL national impact analysis.
    In the March 2008 ANOPR, DOE's residential standards-case market-
share matrix assumed that the entire residential market purchases the 
least-cost standards-compliant lamp at each efficacy level. Because all 
residential consumers purchase baseline lamps, the Shift and Roll-up 
scenarios lead to equivalent results. For example, at CSL1, DOE assumed 
the entire residential market would choose improved halogen lamps; at 
CSL3, the market would choose improved HIR.
    NEMA commented that residential consumers do not necessarily 
purchase lamps that meet only one efficacy level. (NEMA, No. 22 at p. 
31) NEMA contended that consumers could opt to buy lamps that meet a 
higher CSL than the one imposed by DOE.
    Based on NEMA's comment, DOE reconsidered its assumption that 
consumers in the residential market purchase lamps at only the lowest 
efficacy level. However, DOE believes that its assumption that 
consumers buy lamps at the lowest first-cost standards-compliant 
efficacy level correctly characterizes residential consumer behavior in 
general. For example, although lamps using HIR technology are available 
today, consumers generally do not buy them because of their high 
initial cost. DOE does not believe current market behavior will 
radically change under new or amended standards. Without data 
suggesting otherwise, DOE believes the most appropriate forecasting 
assumption should generally reflect the predominant, current consumer 
behavior. Therefore, DOE maintains its assumption for the NOPR that 
residential consumers would continue to purchase the lowest-first-cost, 
standards-compliant lamps. For further detail regarding the Shift and 
Roll-up scenarios, see chapter 10 of the TSD.
ii. Product-Substitution Scenarios
    At the public meeting, ACEEE commented that the deployment of non-
IRL emerging technologies will be affected by the efficacy level that 
DOE selects for this rule. (Public Meeting Transcript, No. 21 at p. 
291) While DOE considered the comment, it ultimately did not model 
additional movement to LED or CMH lamps in response to standards 
because the efficacy and price projections for such lamps have a 
significant degree of uncertainty. DOE does not wish to incorporate 
that level of conjecture into the NPV calculation for this rule.
    However, because DOE assumed R-CFL technology was mature, DOE did 
assess additional movement from IRL to R-CFL in response to standards. 
For the residential sector, DOE calculated simple payback periods 
comparing R-CFL to the baseline halogen and R-CFL to the higher-
efficacy lamp designs. Using incremental market penetrations based on 
the payback period calculations, DOE incorporated additional movement 
to R-CFL in the residential sector standards case. In the commercial 
sector, DOE assumed that all institutions wishing to convert to R-CFL, 
despite its shortcomings (such as lower color quality), do so before 
2012. Therefore, there is no additional movement to R-CFL in response 
to standards.
    DOE excluded certain IRL (particularly some BR and ER lamps, such 
as 65W BR30 and ER40 lamps) from the base-case NIA in the March 2008 
ANOPR because these IRL were exempted from standards by EISA 2007. 
(EISA 2007 section 322(b); 42 U.S.C. 6295(i)(1)(C)) In the standards-
case sensitivity scenario, DOE modeled the movements to exempted IRL as 
a reduction in the market size of covered IRL as consumers move from 
covered to

[[Page 16970]]

non-covered lamps. DOE received a number of comments on its choice to 
exclude exempted IRL from the base case and standards case in the NIA.
    Several comments recommended that DOE should model movements to 
exempt IRL in the main base-case and standards-case NIA scenarios 
instead of only modeling such movements in a sensitivity scenario. 
ACEEE commented that DOE needs to account for BR lamps in its analysis; 
by excluding BR lamps from the base case, ACEEE argued DOE was 
essentially ignoring their presence in the market. The Joint Comment 
argues that 65W BR lamps should be included in the base case because 
they represent a potential loophole to standards. (Public Meeting 
Transcript, No. 21 at pp. 293-294, 313-314; Joint Comment, No. 23 at p. 
17)
    As stated above, DOE only includes products being regulated in this 
rulemaking in the base-case shipment forecasts. Since this rulemaking 
does not cover 65W BR lamps, DOE cannot include them in the base-case 
NIA. Accordingly, DOE removed exempted IRL from the shipment data used 
as inputs to the base-case NIA in the ANOPR. (March 2008 ANOPR TSD 
chapter 9) For the standards-case NIA, DOE created a ``65 Watt BR lamp 
substitution'' sensitivity scenario to model movements to exempted 65W 
BR lamps due to the various CSLs. (March 2008 ANOPR TSD appendix 9A) 
DOE included 65W BR lamps in the standards case because covered 
products shift to this lamp.
    DOE received a number of comments on how it modeled the shift to BR 
lamps in the standards case. NEMA stressed its significance and agreed 
that consumers will shift from covered to exempted BR lamps, with the 
shift increasing as more-stringent standards raise product costs. 
(NEMA, No. 22 at p. 27) The Joint Comment maintained that 65W BR lamps 
should be included in the standards case. (Joint Comment, No. 23 at p. 
17) However, some attendees of the public meeting suggested that the 
shift to the 65W BR might be inappropriate because they believed that 
consumers already purchase exempted BR lamps in most applications where 
consumers have the option of installing either the exempted BR lamps or 
higher-efficacy PAR lamps. For example, PG&E commented that the vast 
majority of IRL in recessed cans are already exempted BR lamps, so it 
is unlikely that consumers will switch from existing PAR lamps (which 
are included in coverage) to new BR lamps in those applications. In 
addition, Industrial Ecology stated that some household recessed can 
fixtures are not strong enough to hold PAR lamps, which are heavier 
than BR lamps. Thus, BR lamps would likely maintain their indoor 
recessed can market share relative to PAR lamps. Regarding outdoor 
applications in which PAR lamps are often used, Industrial Ecology also 
commented that BR lamps are generally incompatible with these 
application, meaning consumers would likely not migrate from PAR lamps 
to exempted BR lamps for outdoor applications in response to standards. 
(Public Meeting Transcript, No. 21 at pp. 319, 321)
    DOE considered these comments, and agrees that PAR lamps may be 
more suitable for outdoor applications than the exempted BR lamps. 
However, based on residential estimates that 40 percent of all 
residential IRL are PAR lamps,\55\ DOE believes that a considerable 
portion of residential PAR lamps are used in non-outdoor applications 
which are compatible with both PAR and the exempted BR lamps. Thus, DOE 
maintains that some residential consumers would likely move to exempted 
IRL under standards. For the NOPR, DOE revised its estimates of the 
number of consumers that will shift to exempted IRL by calculating 
incremental market penetrations for each standard level.
---------------------------------------------------------------------------

    \55\ New York State Energy Research and Development Authority, 
Incandescent Reflector Lamps Study of Proposed Energy Efficiency 
Standards for New York State (2006). Available at: http://www.nyserda.org/publications/Report%2006-07-Complete%20report-web.pdf (Last accessed Oct. 7, 2006).
---------------------------------------------------------------------------

    To better account for migration to exempted lamps, DOE has decided 
to analyze a second set of standards-case scenarios for IRL in this 
NOPR. DOE now analyzes scenarios called the Product Substitution and No 
Product Substitution scenarios. The Product Substitution scenario 
models a shift to both exempted BR lamps and to R-CFL in the standards 
case. The No Product Substitution scenario does not model any 
additional shift in the standards case to non-regulated reflector 
technologies. For more information about the product substitution 
standards case scenario, see chapter 10 of the TSD.
    DOE maintains the 10-percent lumen increase sensitivity scenario 
from the ANOPR, a scenario in which a portion of consumers purchase the 
same wattage higher efficacy lamp in the standards case and do not save 
energy. See appendix 11A for more detail on this sensitivity scenario.
6. Other Inputs
a. Analysis Period
    In its written comments, NEMA stated that any market forecast, even 
over a short period of time, will contain errors. NEMA argued that 
forecasting market relationships over 30 years will compound any 
inherent errors to the point where the estimate may no longer be 
useful. For example, NEMA argued that overstating growth of lamps 
covered by this standard would overstate the discounted value of 
potential benefits associated with amended standards. (NEMA, No. 22 at 
p. 24) DOE recognizes that forecasting over long periods of time can 
lead to inaccuracies. However, due to the long lifetime of ballasts and 
lamps in some sectors, the stock of these products can take decades to 
turn over. Thus, DOE believes the standards impact on energy 
consumption and energy savings is best quantified and evaluated over a 
long period of time. Therefore, DOE has decided to maintain an analysis 
period from 2012 to 2042, consistent with the shipment and national 
impact analyses of other rulemakings. However, to account for the 
uncertainties involved in forecasting energy savings and NPV in 
general, and over long periods of time, DOE has created several base-
case and standards-case scenarios. Based on these scenarios, previously 
discussed in sections V.E.2.c, V.E.4, and V.E.5, DOE believes that it 
can characterize the NIA results for these products with a sufficient 
degree of certainty.
b. Total Installed Cost
    The total annual installed cost increase is equal to the annual 
change in the per-unit total installed cost (i.e., the difference 
between base case and standards case) multiplied by the shipments 
forecasted in the standards case.
    On this topic, GE commented that the cost of migrating from an 8-
foot lamp to a 4-foot lamp includes not only the lamp and ballast 
costs, but also the cost of the retrofit kit and labor, which was not 
included in DOE's ANOPR NIA. NEMA commented that the retrofits kits 
would cost $45-$50, not including labor, which would take 20-25 
minutes. (NEMA, No. 22 at p. 28; Public Meeting Transcript, No. 21 at 
pp. 255-256) DOE agrees that the retrofit kit costs should be included 
in the NIA. Therefore, DOE is including in the NIA the retrofit kit 
cost of $50 per 8-foot single pin lamp that is replaced by two 4-foot 
lamps. DOE is also including a total installation time of 25 minutes. 
See TSD chapter 11 for further detail on retrofit kit costs.
c. Electricity Price Forecast
    In the March 2008 ANOPR, DOE projected electricity prices using 
EIA's AEO2007 estimates and extrapolated prices beyond 2030. In this 
notice, DOE

[[Page 16971]]

updated those projections based upon AEO2008. DOE received a comment on 
using electricity price forecasts other than those of AEO as 
sensitivities. See section 0 above for more detail on this comment and 
DOE's response.
d. Energy Site-to-Source Conversion
    The site-to-source conversion factor is the multiplicative factor 
DOE uses for converting site energy consumption into primary or source 
energy consumption. In the March 2008 ANOPR, DOE used EIA's AEO2007 
forecasts (to 2030) of electricity generation and electricity-related 
losses. DOE extrapolated conversion factors beyond 2030. In this 
notice, however, DOE uses annual site-to-source conversion factors 
based on the version of the National Energy Modeling System (NEMS) that 
corresponds to AEO2008. The conversion factors vary over time because 
of projected changes in the Nation's portfolio of generation sources. 
DOE estimated that conversion factors remain constant at 2030 values 
throughout the remainder of the forecast.
e. HVAC Interaction Factor
    In the March 2008 ANOPR, DOE assumed a 6.25 percent HVAC 
interaction factor. The HVAC interaction factor measures the reduced 
cooling loads and increased heating loads that result from their 
interaction with more-efficacious lighting systems. For example, a 6.25 
percent HVAC interaction factor means that one quad of energy savings 
due to lamps standards results in 1.0625 quads of total energy savings 
after the interaction with heating, ventilation, and air conditioning 
systems is taken into account. At the public meeting, PG&E stated that 
DOE's assumed level for this factor was too low. PG&E argued that if 
the heat from these products goes directly into the building and it 
takes one unit of electric energy to remove three units of heat, 6.25 
percent was a very conservative number. (Public Meeting Transcript, No. 
21 at pp. 333-334) Industrial Ecology agreed that 6.25 percent was on 
the low end of most estimates and cited the following rule of thumb 
used in the service industry: One saves a quarter of a watt in HVAC 
operation for every watt one saves ceiling lighting systems. Industrial 
Ecology suggested that DOE should look into other studies for more 
information on the HVAC interaction factor. (Public Meeting Transcript, 
No. 21 at pp. 333-334)
    DOE is unaware of any other national-level studies that may be 
useful in estimating the HVAC factor specific to lighting over the 
entire calendar year. Therefore, DOE continues to use the study \56\ 
that originated from the 2000 Ballast Rule. DOE notes that it has 
updated the study since its original publication and that it is a 
national-level analysis covering many building types across several 
climate zones.
---------------------------------------------------------------------------

    \56\ U.S. Department of Energy--Energy Efficiency and Renewable 
Energy Office of Building Research and Standards. Technical Support 
Document: Energy Efficiency Standards for Consumer Products: 
Fluorescent Lamp Ballast Proposed Rule: Appendix B. Marginal Energy 
Prices and National Energy Savings. January 2000. Washington, DC. 
http://www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/appendix_b.pdf.
---------------------------------------------------------------------------

f. Rebound Effect
    In its analyses, DOE accounted for an anticipated ``rebound 
effect'' \57\ that may occur after the installation of energy efficient 
lighting equipment. After consulting the literature \58\ reporting on 
this effect, DOE used in the March 2008 ANOPR an 8.5-percent rebound 
effect for the residential sector and a 1-percent effect in the 
commercial sector, with every 100 percent increase in energy 
efficiency. NEMA agreed with DOE's inclusion of the rebound effect, but 
commented that more research needs to be done to characterize its 
magnitude. (NEMA, No. 22 at p. 30) DOE is unaware of other data that 
would affect its current rebound effect assumptions. DOE invites 
additional comments on this issue and will consider incorporating any 
relevant data provided.
---------------------------------------------------------------------------

    \57\ Under economic theory, ``rebound effect'' refers to the 
tendency of a consumer to respond to the cost savings associated 
with more-efficient equipment in a manner that actually leads to 
marginally greater product usage, thereby diminishing some portion 
of anticipated energy savings related to improved efficiency.
    \58\ Greening, L.A., D.L. Greene, and C. Difiglio, ``Energy 
efficiency and consumption--the rebound effect--a survey,'' 28 
Energy Policy (2000), pp. 389-401.
---------------------------------------------------------------------------

g. Discount Rates
    In its analyses, DOE multiplies monetary values in future years by 
a discount factor in order to determine their present value. DOE 
estimated national impacts using both a 3-percent and a 7-percent real 
discount rate as the average real rate of return on private investment 
in the U.S. economy. The Joint Comment argued that DOE should use a 2-
percent to 3-percent real discount rate, noting other rulemakings and 
extensive academic research supporting a real societal discount rate in 
that range. (Joint Comment, No. 23 at p. 22) While DOE acknowledges the 
comment, the Department notes that it is required to follow guidelines 
on discount factors set forth by the Office of Management and Budget 
(OMB). Specifically, DOE uses these discount rates in accordance with 
guidance that OMB provides to Federal agencies on the development of 
regulatory analysis (OMB Circular A-4 (Sept.17, 2003), particularly 
section E, ``Identifying and Measuring Benefits and Costs''). 
Accordingly, DOE is continuing to use 3-percent and 7-percent real 
discount rates for the relevant calculations in this NOPR.

F. Consumer Subgroup Analysis

    In analyzing the potential impacts of new or amended standards, DOE 
evaluates the impacts on identifiable subgroups of consumers (e.g., 
low-income households or small businesses) that may be 
disproportionately affected by a national standard. In the March 2008 
ANOPR, DOE requested comments on subgroups that should be considered 
for the NOPR analysis. 73 FR 13620, 13682 (March 13, 2008). NEMA 
commented that DOE should assess the impacts of standards on low-income 
consumers, as well as houses of worship, historical facilities, and 
institutions that serve low-income populations. (NEMA, No. 22 at p. 32)
    DOE researched the suggested subgroups using the 2001 RECS and 2003 
CBECS databases and the 2002 U.S. Lighting Market Characterization. The 
Residential Furnaces and Boilers NOPR,\59\ Central Air Conditioners 
Supplemental Notice of Proposed Rulemaking,\60\ and Clothes Washers 
Final Rule \61\ defined ``low-income consumers'' as residential 
consumers with incomes at or below the poverty line, as defined by the 
U.S. Census Bureau. DOE has defined ``low-income consumers'' in the 
same way for this

[[Page 16972]]

rule. DOE discovered that in 2001, residential low-income consumers 
faced electricity prices that were 0.1 cents per kWh lower than the 
prices faced by consumers above the poverty line. Using this 
information, DOE performed a subgroup analysis of low-income consumers 
for the NOPR, the key findings of which are presented below and 
addressed in section VI.B.1.b.
---------------------------------------------------------------------------

    \59\ U.S. Department of Energy--Office of Energy Efficiency and 
Renewable Energy, Technical Support Document: Energy Conservation 
Program for Consumer Products: Energy Conservation Standards for 
Residential Furnaces and Boilers Proposed Rule: Chapter 11 (2006). 
Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/furnaces_boilers/fb_tsd_chapt11_0906.pdf (Last accessed Dec. 8, 2008).
    \60\ U.S. Department of Energy--Office of Energy Efficiency and 
Renewable Energy, Technical Support Document: Energy Conservation 
Program for Consumer Products: Central Air Conditioners and Heat 
Pumps Energy Conservation Standards Proposed Rule: Chapter 10 
(2001). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chap10_sub-grp.pdf (Last 
accessed Dec. 8, 2008).
    \61\ U.S. Department of Energy--Office of Energy Efficiency and 
Renewable Energy, Technical Support Document: Energy Conservation 
Program for Consumer Products: Clothes Washer Energy Conservation 
Standards Final Rule: Chapter 18 (2001). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chapter_8_consumer_analysis.pdf. (Last accessed Dec. 8, 
2008).
---------------------------------------------------------------------------

    DOE found that houses of worship used their lamps for fewer hours 
per year than any other building type in the non-mall commercial 
building sector, according to the 2003 CBECS and LMC. DOE analyzed 
houses of worship using 1,705 operating hours per year for GSFL (rather 
than 3,435 hours per year for an average commercial facility) and 1,609 
operating hours per year for IRL (rather than 3,450 hours per year for 
an average commercial facility).
    DOE also found that a wide range of sites (from single buildings to 
entire districts) are classified as ``historical facilities.'' Because 
historical facilities serve a range of functions, DOE assumed that such 
facilities also feature the same variety of operating hours, 
electricity prices, and discount rates as a typical consumer. However, 
DOE did find that these buildings, on average, have more T12 lamps than 
the typical commercial or residential building. Therefore, in its 
subgroup analysis for historical facilities, DOE concentrated on the 
LCC analysis and results for those consumers with T12 fluorescent 
lamps.
    DOE also found a wide array of nonprofit and for-profit 
organizations that serve low-income populations. Because of the large 
diversity of organizations in this sector, DOE does not expect to see 
operating hours, lamp types, or event response behaviors that vary 
significantly from the commercial sector as a whole. However, DOE 
believes that the majority of organizations serving low-income 
populations are small nonprofits. For this reason, DOE chose a subgroup 
scenario with a discount rate that is 3.8 percent higher than the 
average discount rate for the commercial sector (for a discount rate of 
10.8 percent), based on the sources used to develop the discount rate 
for small business subgroups in the Ovens and Commercial Clothes 
Washers NOPR analysis.\62\
---------------------------------------------------------------------------

    \62\ U.S. Department of Energy--Office of Energy Efficiency and 
Renewable Energy, Technical Support Document: Energy Conservation 
Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, 
Electric and Gas Kitchen Ranges and Ovens, and Microwave Ovens) and 
for Certain Commercial and Industrial Equipment (Commercial Clothes 
Washers): Chapter 12 (2008). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/home_appliances_tsd/chapter_12.pdf. (Last accessed Dec. 8, 
2008).
---------------------------------------------------------------------------

    Although NEMA did not request that DOE analyze consumers of T12 
electronic systems, DOE decided to analyze this subgroup as well, 
because consumers that already have a T12 electronic system could 
potentially benefit less from standards than those consumers with 
magnetic systems. Specifically, consumers that own a T12 electronic 
system in the base case would need to purchase a T8 electronic system 
in the case of an energy conservation standard at EL4 or EL5. Because 
the T12 electronic system is more efficient than T12 magnetic systems, 
consumers with electronic systems would experience lower operating cost 
savings than those consumers with magnetic systems. In order to analyze 
the affect on consumers of T12 electronic systems, DOE established a 
new baseline electronic T12 system and modified standards-case systems 
so that both light output is maintained in the case of a standard and 
energy is saved. For this subgroup, DOE only analyzed the event where a 
consumer purchases a T12 lamp in the baseline and a T8 lamp and ballast 
system in the case of a standard at EL4 and EL5, as T12 lamps are no 
longer available. All other factors of the LCC subgroup analysis 
remained the same as in the primary analysis. See the NOPR TSD chapter 
12 for further information on the LCC analyses for all subgroups.

G. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impact of higher 
energy conservation standards on GSFL and IRL manufacturers, and to 
calculate the impact of such standards on domestic manufacturing 
employment and capacity. The MIA has both quantitative and qualitative 
aspects. The quantitative part of the MIA primarily relies on two 
separate Government Regulatory Impact Models (GRIMs)--industry-cash-
flow models customized for this rulemaking. The GRIM inputs are data 
characterizing the industry cost structure, shipments, and revenues. 
The key output is the industry net present value. Different sets of 
assumptions (scenarios) will produce different results. The qualitative 
part of the MIA addresses factors such as product characteristics, 
characteristics of particular firms, and market and product trends, and 
it also includes an assessment of the impacts of standards on subgroups 
of manufacturers. The complete MIA is outlined in chapter 13 of the 
TSD.
    DOE conducted the MIA in three phases. Phase 1, ``Industry 
Profile,'' consisted of the preparation of an industry 
characterization. Phase 2, ``Industry Cash Flow,'' focused on the 
industry as a whole. In this phase, DOE used two separate GRIMs (one 
for the GSFL industry and one for IRL industry) to prepare an industry 
cash-flow analysis. DOE used publicly-available information developed 
in Phase 1 to adapt each GRIM structure to facilitate the analysis of 
amended GSFL and IRL standards. In Phase 3, ``Subgroup Impact 
Analysis,'' DOE conducted interviews with manufacturers representing 
the majority of domestic GSFL and IRL sales. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics specific to each company, and also obtained each manufacturer's 
view of the industry as a whole. The interviews provided valuable 
information DOE used to evaluate the impacts of amended energy 
conservation standards on manufacturer cash flows, manufacturing 
capacities, and employment levels.
a. Phase 1, Industry Profile
    In Phase 1 of the MIA, DOE prepared a profile of the GSFL and IRL 
industries based on the market and technology assessment prepared for 
this rulemaking. Before initiating the detailed impact studies, DOE 
collected information on the present and past structure and market 
characteristics of the GSFL and IRL industries. The information DOE 
collected included market share, product shipments, markups, and cost 
structure for various manufacturers. The industry profile includes 
further detail on the overall market, product characteristics, 
estimated manufacturer market shares, the financial situation of 
manufacturers, and trends in the number of firms in the lamp industry.
    The industry profiles included a top-down cost analysis of GSFL and 
IRL manufacturers that DOE used to derive product costs and preliminary 
financial inputs for the GRIM (e.g., revenues; material, labor, 
overhead, and depreciation expenses; selling, general, and 
administrative expenses (SG&A); and research and development (R&D) 
expenses). DOE also used public information to further calibrate its 
initial characterization of the industry, including Securities and 
Exchange Commission (SEC) 10-K and 20-F reports, Standard & Poor's 
(S&P) stock reports, and corporate annual reports.

[[Page 16973]]

b. Phase 2, Industry Cash-Flow Analysis
    Phase 2 of the MIA focused on the financial impacts of potential 
amended energy conservation standards on the industries as a whole. DOE 
used the GRIMs to calculate the financial impacts of standards on 
manufacturers. DOE used two separate GRIMs, one for each industry 
analyzed (GSFL and IRL). In Phase 2, DOE used each GRIM to perform a 
preliminary industry cash-flow analysis. In performing this analysis, 
DOE used the financial values determined during Phase 1 and the 
shipment scenarios used in the NIA analysis.
c. Phase 3, Subgroup Impact Analysis
    Using average cost assumptions to develop an industry-cash-flow 
estimate does not adequately assess differential impacts among 
manufacturer subgroups. For example, small manufacturers, niche 
players, or manufacturers exhibiting a cost structure that largely 
differs from the industry average could be more negatively affected. 
DOE used the results of the industry characterization analysis (in 
Phase 1) to group manufacturers that exhibit similar characteristics.
    During the ANOPR public meeting, Industrial Ecology commented that 
small lamp manufacturers may be disproportionately affected by IRL and 
GSFL standards. (Public Transcript, No. 21 at pp. 354-356) DOE 
established two subgroups for the MIA corresponding to large and small 
business manufacturers of GSFL and IRL products. For the GSFL and IRL 
manufacturing industries, small businesses, as defined by the Small 
Business Administration (SBA), are manufacturing enterprises with 1,000 
or fewer employees. Based on identification of these two subgroups, DOE 
prepared one interview guide with questions related to both GSFL and 
IRL manufacturing for large and small manufacturers. DOE used the 
interview guide to tailor the GRIMs to address unique financial 
characteristics of manufacturers of each industry. DOE interviewed 
companies from each subgroup, including subsidiaries and independent 
firms and public and private corporations. The purpose of the meetings 
was to develop an understanding of how manufacturer impacts vary by 
TSL. During the course of the MIA, DOE interviewed manufacturers 
representing the vast majority of domestic GSFL and IRL sales. Many of 
these same companies also participated in interviews for the 
engineering analysis. However, the MIA interviews broadened the 
discussion from primarily technology-related issues to include 
business-related topics. One objective was to obtain feedback from 
industry on the assumptions used in the GRIM and to isolate key issues 
and concerns. See chapter 13 of the TSD for details.
2. Discussion of Comments
    In response to DOE's March 2008 ANOPR presentation of the steps DOE 
would take during the MIA for the NOPR, DOE received several comments 
related to the high price and limited availability of xenon. NEMA 
commented that xenon gas was the only viable option for higher-
efficiency fill gas and cited manufacturer concerns about its limited 
supply and quickly escalating prices. (NEMA, No. 22 at p. 8) NEMA also 
stated that assumptions DOE uses in its analysis can become invalid 
quickly, citing the price of xenon as an example of an assumption that 
could seriously affect their business. (NEMA, No. 21 at p. 108-109) 
During the manufacturer interviews, manufacturers contended that the 
global supply of xenon was fixed and that competition with other 
applications (i.e., anesthesia) has caused the price of xenon to 
increase ten-fold over the last year. After receiving these comments, 
DOE conducted its own research to determine if market conditions for 
xenon could affect its use as a higher-efficiency fill gas.
    According to DOE's research, xenon is one of three rare gases 
(along with neon and krypton) produced by cryogenic air separation. 
Given the low concentration of the rare gases in the air (neon 0.002 
percent, krypton 0.0001 percent, and xenon 0.00001 percent),\63\ the 
only cost-effective recovery options are large air-separation units. 
Most worldwide supply is met by the three largest industrial gas 
companies (Air Liquide, Praxair, and Linde); another major supplier is 
Iceblick, a former State-controlled enterprise of the Soviet Union.
---------------------------------------------------------------------------

    \63\ See http://www.airliquide.com/file/otherelement/pj/airliquide2007gb_bd_ok12439.pdf, p. 110.
---------------------------------------------------------------------------

    Major applications for xenon include lighting, television flat 
panel displays, the space industry (for ion engines and satellite 
repositioning), medical imaging and anesthesia, and electronic chip 
manufacturing. All applications are growing rapidly. Demand from the 
semiconductor industry alone increased from less than 1 million liters 
per year in June 2007 to almost 3 million liters per year in June 2008. 
Demand for xenon has also grown significantly in the last 18 months, 
greatly outpacing the 12 million liters of worldwide xenon 
production.\64\ While there remain essentially inexhaustible supplies 
of xenon in the atmosphere, considerable investment would be required 
to expand global production substantially. Since it is impossible to 
immediately increase supply to meet demand, spot prices have increased 
from $3-$4 per liter to $28-$35 per liter for large cylinders.\65\ 
These higher prices are likely to be sustained in the near-term until 
supply can meet the growing demand.
---------------------------------------------------------------------------

    \64\ Betzendahl, Richard, ``The Rare Gets More Rare: The Rare 
Gases Market Update'' (CryoGas International) (June 2008) 26.
    \65\ Id.
---------------------------------------------------------------------------

    DOE estimates that the increased demand for xenon as a result of 
this rulemaking would range from 3.2 percent to 12.8 percent of current 
worldwide production in the first year the rulemaking takes effect. 
Over the 30-year analysis period, the increased demand for xenon could 
range from 0.5 percent to 18 percent of current worldwide production, 
depending on the scenario analyzed. This increased demand is expected 
to have little long-term effect on the price or availability of xenon, 
considering the other contributing factors. Rapid growth or decline of 
existing markets or the discovery of a new application could 
significantly affect the total demand for xenon, perhaps even more than 
this rulemaking. Furthermore, the above numbers are based on the 
current worldwide production (12 million liters) and assume no increase 
in production over the analysis period. This is highly unlikely, given 
that current demand substantially exceeds supply. Any future increase 
in xenon production would decrease the percentages mentioned above. 
Thus, DOE has tentatively concluded that the amount of xenon required 
by lamp manufacturers to produce lamps that meet the proposed standards 
would not significantly affect the price or availability of xenon. DOE 
also conducted an LCC sensitivity analysis to determine the impact of 
higher xenon prices on the consumer. For more information on the xenon 
market analysis and the consumer impacts of higher xenon prices, see 
appendix 3B of the TSD.
    In the GSFL industry, manufacturers stated that the ``rare earth 
phosphors'' are a key component of GSFL performance. During the comment 
period, some manufacturers expressed concern that higher CSLs would 
necessitate increasing mixes of the costly rare earth phosphors in the 
lamp coating. These manufacturers stated that more stringent standards 
would drive

[[Page 16974]]

up demand for (and the price of) rare earth phosphors, which already 
face significant supply constraints. These manufacturers added that 
continued growth in the CFL market will also capture an increasing 
share of available phosphor supply in the future, potentially 
increasing prices and jeopardizing the cost-effectiveness of the 
standards. Depending on the lamp type, rare earth phosphors can be the 
highest input cost of a GSFL.
    Manufacturers also noted that higher standards could drive 
manufacturing processes to China, where the vast majority of rare earth 
phosphors are mined. Coupled with cheaper labor and high export 
tariffs, the incentive to move production of lamps to China might prove 
too great to resist. To address these concerns, DOE analyzed the rare 
earth phosphor market to understand the potential impact of the 
standards on supply and demand, pricing, growth, and innovation. DOE 
also analyzed the impact on employment for domestic manufacturers.
    Because the UV radiation emitted within the lamp by the reaction of 
the electrons and mercury vapor is invisible, manufacturers must coat 
the inside of the lamp's glass with powered phosphors. The phosphors 
fluoresce when struck by the UV radiation and convert it into visible 
light. Less-efficient, low-cost lamps only use ``halophosphors'' to 
coat the lamp. Halophosphors are more abundant and much less costly 
than rare earth phosphors, but are also less efficient and produce a 
lower quality light. Coating a lamp with a layer of rare earth 
phosphors in addition to, or in place of, halophosphors can increase 
efficacy, while dramatically improving color quality and lumen 
maintenance. The coating's blend of phosphors determines, in part, the 
CCT and CRI of the lamp. The lamp coating of high-performance GSFL, 
often called a ``triband'' or ``triphosphor'' blend, commonly includes 
three key elements--terbium, europium, and yttrium. Terbium and 
europium are the rarest and reflect the greatest portion of the 
coating's cost.
    DOE evaluated the impact of standards on the phosphor markets and 
concluded that mandating TSL5 would increase the global demand and 
prices of these phosphors. DOE expects 2012 terbium demand to be 31 
percent greater at TSL5 in the Shift-High Consumer Expertise scenario 
than it would be in the Existing Technologies base case. DOE estimates 
europium demand would increase by 10 percent, while Yttrium demand 
would increase marginally. These estimates reflect the upper bound of 
demand increases.
    Given the historically volatile prices of these phosphors and the 
unpredictable future determinants of supply and demand (such as Chinese 
policy, additional mining operations, and future technological 
changes), DOE has not developed supply and demand curves in order to 
estimate future phosphor prices. However, DOE recognizes significant 
price increases are possible given the expected surge in demand, 
particularly for terbium and europium. Therefore, to analyze the impact 
of higher phosphor prices, DOE also conducted a sensitivity analysis to 
address the potential increases in lamp prices attributable to greater 
phosphor costs on the consumer. That is, DOE compares LCC savings with 
current phosphor costs to LCC savings under a scenario with higher 
phosphor prices. Appendix 3C shows the results of this sensitivity 
analysis and the rare earth phosphor market analysis.
    Additionally, DOE found several rare earth mining projects in 
development around the world that have the capacity to increase rare 
earth supply. If prices continue to climb, DOE expects the economics of 
mining rare earths to encourage more projects, and make less-
concentrated rare earth deposits economically viable, which will 
increase supply. For these reasons, DOE does not believe standards, and 
their potential impact on phosphor prices, will affect product 
availability.
3. Government Regulatory Impact Model Analysis
    The GRIM analysis uses a standard, annual cash-flow analysis that 
incorporates manufacturer prices, manufacturing costs, shipments, and 
industry financial information as inputs and models changes in costs, 
distribution of shipments, investments, and associated margins that 
would result from new or amended regulatory conditions (in this case, 
standard levels). The GRIM spreadsheet uses a number of inputs to 
arrive at a series of annual cash flows, beginning with the base year 
of the analysis (2007) and continuing to 2042. DOE calculated INPVs by 
summing the stream of annual discounted cash flows during this period.
    DOE used the GRIM to calculate cash flows using standard accounting 
principles and to compare changes in INPV between a base case and 
various TSLs (the standards cases). Essentially, the difference in INPV 
between the base case and a standards case represents the financial 
impact of the amended energy conservation standards on manufacturers. 
DOE collected this information from a number of sources, including 
publicly-available data and interviews with manufacturers. See chapter 
13 of the TSD for details.
4. Manufacturer Interviews
    As part of the MIA, DOE discussed potential impacts of amended 
energy conservation standards with manufacturers responsible for the 
vast majority of domestic GSFL and IRL sales. The manufacturers 
interviewed produce approximately 90 percent of GSFL for sale and 85 
percent of IRL for sale. These interviews were in addition to those DOE 
conducted as part of the engineering analysis. The interviews provided 
valuable information that DOE used to evaluate the impacts of amended 
energy conservation standards on manufacturer cash flows, manufacturing 
capacities, and employment levels.
a. Key Issues
i. GSFL
    Rare earth phosphor availability and price--All of the GSFL 
manufacturers DOE interviewed are concerned about the availability and 
price of rare earth phosphors. Due to the importation of rare earth 
phosphors, any increases in duties paid to producing countries, such as 
China, could have significant impacts on lamp manufacturing costs. Any 
increase in lamp material costs directly affects manufacturer 
profitability. According to manufacturers, meeting higher energy 
conservation standards for GSFL would require an increase in rare earth 
phosphor content in lamp coatings. These manufacturers stated that 
higher energy conservation standards would drive up demand for and 
prices of rare earth phosphors, which are already in short supply. In 
addition, manufacturers stated that the continued growth in the CFL 
market will erode future supply, jeopardizing the cost-effectiveness of 
the standards. Depending on the lamp type, rare earth phosphors can be 
the highest input cost of a GSFL. Some manufacturers also noted that 
higher standards could drive manufacturing processes to China, where 
the vast majority of rare earth phosphors are mined. Issues with rare 
earth phosphors are specifically addressed in appendix 3C of the TSD.
    Reduction in product portfolio--Some manufacturers are concerned 
that energy conservation standards will force manufacturers to 
eliminate some product lines, shrinking their overall marketability. 
According to manufacturers, the ability to survive in the industry is 
related to the companies'

[[Page 16975]]

diverse product portfolios. Companies benefit from a wide range of 
products and efficiencies. Depending on the characteristics of the 
product, manufacturers can up-sell to products that reap higher 
profits. Manufacturers are concerned that reducing the product 
portfolio will reduce options for customers and, ultimately, 
profitability.
    Profit margin impact--All manufacturers stated that energy 
conservation standards have the potential to greatly harm their 
profitability. Manufacturers enjoy a higher profit margin on higher-
efficacy or premium products than lower-end or baseline products. Since 
higher-efficacy or premium products tend to incorporate design options 
that increase energy efficiency, a high-efficiency standard would 
commoditize such products and subsequently lower the overall 
manufacturer markup on shipments. Several manufacturers stated it is 
very difficult to pass along cost increases to customers because of the 
competitive nature of the industry. Therefore, they believe any cost 
increase due to standards set by DOE would automatically lower profit 
margins.
ii. IRL
    Product performance issues--All manufacturers stated that 
implementation of design options to meet the proposed energy 
conservation standards could cause a reduction in product lifetime. 
Manufacturers stated that all standard levels could be met by lamps 
that combine improved technology with shorter life. In addition to this 
broad possibility, manufacturers indicated that the product lifetime of 
infrared lamps that meet efficacy levels prescribed by TSL3, TSL4, and 
TSL5 could be lowered due to the ``hot shock'' application problem. If 
infrared lamps are installed in a live fixture, sections of the lamp's 
filament can fuse together, possibly decreasing the lifetime by 25 to 
30 percent. Manufacturers are concerned that both the performance 
issues of hot shock and shorter life could impact consumers' acceptance 
of covered IRL products. Any dissatisfaction resulting lower lifetimes 
of standards-compliant lamps could hasten the shift to competing 
technologies, which have much longer lifetimes.
    Xenon gas availability and price--According to several 
manufacturers, most higher-efficacy model lamps at each TSL use xenon 
to increase efficacy. While using a different fill gas does not require 
significant capital investments, manufacturers stated that xenon prices 
have increased as much as ten-fold in the past few years. In the short 
term, global supplies of xenon are limited by existing production 
capacity, so the IRL industry has to compete with other industries, 
such as medical applications, that are better able to support higher 
prices. For more information on DOE's analysis of this issue, see 
appendix 3B of the TSD and section V.G.2 of today's notice.
    Elimination of product types in the manufacturers' product 
portfolio--Manufacturers are concerned that at higher efficacy levels, 
all lamps will need to switch to all infrared technology, which would 
significantly reduce product offerings.
    Elimination of small-diameter lamps--Manufacturers are concerned 
that energy conservation standards could eliminate smaller-diameter 
lamps. Because of the small size, all manufacturers use a single-ended 
quartz burner in lamps smaller than PAR30, limiting potential efficacy 
improvements. Although DOE scales its standard to smaller-diameter 
lamps and there are existing PAR20 lamps at all TSLs, manufacturers are 
concerned that the improvements for small-diameter lamps at high TSLs 
could be impossible or cost prohibitive. DOE addresses the issues of 
small-diameter lamps in section V.C.7.b.ii of today's notice.
    Competition--Manufacturers stated that some TSLs could affect 
competition within the industry. For example, one manufacturer has a 
patent on silverized reflectors. While DOE did not set TSLs around this 
technology, this manufacturer could meet TSL2 with cheaper lamps than 
its competitors. One manufacturer has a cross license on the 
technology, but has not made silverized lamps recently and would incur 
substantial capital and conversion costs to produce them. There are 
competitive concerns at TSL4 and TSL5 as well. Two manufacturers have a 
full line of products that currently meet TSL4. The third manufacturer 
has some products at this level, but is concerned that it would have to 
incur significantly larger capital costs at TSL4 to redesign and 
manufacture different burners, which could put it at a competitive 
disadvantage. Only one manufacturer currently has a full line of 
products at TSL5. At TSL4 and TSL5, standards-compliant lamps could 
combine HIR technology with an improved reflector, potentially putting 
the company that does not have access to silverized reflectors at a 
disadvantage.
    Market erosion--Manufacturers stated that emerging technology is 
already starting to penetrate the IRL market. A standard on IRL would 
be unique because it would force investments in a market that would 
shrink over the entire lifetime of the investment. Depending on market 
penetration of emerging technology, these investments might never be 
recouped. Also, manufacturers are concerned that a standard on IRL 
could hasten the switch to emerging technology by lowering the 
difference in their first cost price. If the standard did increase the 
natural migration toward new technology, it would be less likely that 
manufacturers would make the substantial investments to modify IRL 
production equipment. Finally, manufacturers are concerned that the BR 
exemptions in EISA 2007 could also erode the market: The higher the IRL 
standard, the lower the relative cost of the exempted incandescent 
lamps. If a lower relative cost causes a large shift to exempted 
incandescent lamps, it is less likely that investments in improved 
halogen lamps could be justified. To address emerging technologies and 
BR exemptions issues discussed by manufacturers, DOE included several 
shipment scenarios in both the NIA and the GRIM. See chapter 10 and 
chapter 13 of the TSD for a discussion of the shipment scenarios used 
in the respective analysis.
b. Government Regulatory Impact Model Scenarios and Key Inputs
i. GSFL Base-Case Shipment Forecast
    In the GSFL GRIM, DOE estimated manufacturer revenues, based on 
unit shipment forecasts and distribution by product class and efficacy. 
Changes in the product mix at each standard level are a key driver of 
manufacturer finances. For this analysis, the GSFL GRIM incorporated 
the two base-case shipment scenarios from the NIA. In the Existing 
Technologies base case shipment scenario, DOE assumed that in the base 
case customers would not migrate to emerging technologies. DOE also 
modeled an Emerging Technologies base-case shipment scenario. In this 
scenario, GSFL shipments are eroded in the base case as more customers 
purchase emerging technology rather than covered GSFL. Table V.7 and 
Table V.8 show total shipments forecasted by the NIA for the 2012 and 
2042 GSFL base cases. For further information on the GSFL base-case 
shipment forecast, see chapter 10 of the TSD.

[[Page 16976]]



  Table V.7--GSFL Emerging Technologies Base Case Total NIA-Forecasted
                       Shipments in 2012 and 2042
------------------------------------------------------------------------
                                          Total industry  Total industry
              Product class                shipments for   shipments for
                                               2012*           2042*
------------------------------------------------------------------------
4-Foot MBP..............................     479,177,000     490,528,000
8-Foot SP Slimline......................      22,448,000       6,873,000
8-Foot RDC HO...........................      17,654,000       2,320,000
4-Foot T5...............................      24,225,000      79,906,000
4-Foot T5 HO............................      23,610,000      67,857,000
------------------------------------------------------------------------
* Figures rounded to the nearest thousand.


  Table V.8--GSFL Existing Technologies Base Case Total NIA-Forecasted
                       Shipments in 2012 and 2042
------------------------------------------------------------------------
                                          Total industry  Total industry
              Product class                shipments for   shipments for
                                               2012*           2042*
------------------------------------------------------------------------
4-Foot MBP..............................     479,177,000     645,323,000
8-Foot SP Slimline......................      22,448,000       6,873,000
8-Foot RDC HO...........................      17,654,000       2,320,000
4-Foot T5...............................      24,225,000     105,863,000
4-Foot T5 HO............................      23,610,000      67,857,000
------------------------------------------------------------------------
* Figures rounded to the nearest thousand.

ii. IRL Base Case Shipments Forecast
    As with the GSFL GRIM, the IRL GRIM incorporated the two base-case 
shipment scenarios from the NIA for the period of 2007 to 2042 
(Existing and Emerging Technologies base cases). Table V.9 and Table 
V.10 show total shipments forecasted by the NIA for the 2012 and 2042 
IRL for both base cases. The tables include the base-case shipments in 
2020 because the impacts under the Emerging Technologies base case are 
most apparent in the years after the standard becomes effective and the 
differences between the base cases are easily demonstrated in 2020. For 
further information on IRL base case shipment forecast, see chapter 10 
of the TSD.

         Table V.9--IRL Existing Technologies Base Case Total NIA-Forecasted Shipments in 2012 and 2042
----------------------------------------------------------------------------------------------------------------
                                                                  Total industry  Total industry  Total industry
                          Product class                            shipments in    shipments in    shipments in
                                                                       2012*           2020*           2042*
----------------------------------------------------------------------------------------------------------------
PAR38 90W.......................................................      56,459,000      62,990,000      88,566,000
PAR38 75W.......................................................      44,065,000      49,163,000      69,124,000
PAR30 50W.......................................................      30,738,000      35,759,000      51,180,000
----------------------------------------------------------------------------------------------------------------
* Figures rounded to the nearest thousand.


         Table V.10--IRL Emerging Technologies Base Case Total NIA-Forecasted Shipments in 2012 and 2042
----------------------------------------------------------------------------------------------------------------
                                                                  Total industry  Total industry  Total industry
                          Product class                            shipments in    shipments in    shipments in
                                                                       2012*           2020*           2042*
----------------------------------------------------------------------------------------------------------------
PAR38 90W.......................................................      52,393,000      31,654,642      52,978,000
PAR38 75W.......................................................      40,892,000      24,706,062      41,349,000
PAR30 50W.......................................................      28,417,000      17,318,155      30,058,000
----------------------------------------------------------------------------------------------------------------
* Figures rounded to the nearest thousand.

iii. GSFL Standards Case Shipments Forecast
    All shipment forecasts in the GSFL GRIM are obtained from the GSFL 
NIA. Consequently, the GSFL GRIM included two efficacy distribution 
scenarios (shift and roll-up), and two lighting expertise scenarios 
(high- and market segment-based lighting expertise). For additional 
details on the various shipment scenarios, see TSD chapter 10.
iv. IRL Standards-Case Shipments Forecast
    To characterize consumer behavior in the IRL standards-case GRIM, 
DOE considered the four shipment scenarios found in the NIA. The IRL 
GRIM considered two efficacy distributions scenarios (shift and roll-
up) and two product substitution scenarios (product substitution and no 
product substitution). See chapter 10 of the TSD for additional details 
on the IRL standards-case shipment scenarios.
v. Manufacturing Production Costs
    DOE derived manufacturing production costs by using end-user prices 
found in the NIA and discounting them using typical markups along the 
retail distribution chain. To calculate manufacturer selling prices 
from these end-user prices, DOE divided the medium end-user prices in 
the NIA by a typical markup for retail locations that sell the covered 
products. DOE calculated the markup for retail locations using the 
revenues and cost of

[[Page 16977]]

goods sold from the annual reports of publicly-traded companies. To 
determine manufacturer production costs from manufacturing selling 
price, DOE divided manufacturing selling prices by the manufacturer 
markup. The manufacturer markup was calculated with the same publicly-
available information used to calculate other GRIM financial inputs 
(e.g., industry-wide tax rate and working capital). Further discussion 
of how DOE calculated other GRIM financial inputs from publicly-
available information is found in chapter 13 of the TSD.
vi. Amended Energy Conservation Standards Markup Scenarios
    In both the IRL and GSFL GRIM, DOE modeled a flat markup scenario. 
This scenario assumed that the cost of goods sold for each lamp is 
marked up by a flat percentage to cover standard SG&A expenses, R&D 
expenses, and profit. To derive this percentage, DOE evaluated 
publicly-available financial information for manufacturers of lighting 
equipment.
    For GSFL only, DOE also modeled a four-tier markup scenario. In 
this scenario, DOE assumed that the markup on lamps varies by efficacy 
in both the base case and the standards case. DOE learned from 
manufacturers that pricing for GSFL is typically determined on the 
basis of four product tiers, corresponding to different phosphor 
series. During the MIA interviews, manufacturers provided information 
on the range of typical efficacy levels in these four tiers and the 
change in profitability for each level. DOE used this information, 
retail prices derived in its product price determination, and industry 
average gross margins to estimate markups for GSFL under a four-tier 
pricing strategy in the base case. In the standards case, DOE modeled 
the situation in which portfolio reduction squeezes the margin of 
higher-efficacy products as they are ``demoted'' to lower-relative-
efficacy-tier products. This scenario is in line with information 
submitted during manufacturing interviews, which responds to 
manufacturers' concern that DOE standards could severely disrupt 
profitability.
    The four-tier markup scenario was not modeled for IRL because 
markups do not increase as a function of efficacy as is the case for 
GSFL. Thus, this scenario is not representative of the IRL industry.
vii. Product and Capital Conversion Costs
    Energy conservation standards typically cause manufacturers to 
incur one-time conversion costs to bring their production facilities 
and product designs into compliance with the amended standards. For the 
purpose of the MIA, DOE classified these conversion costs into two 
major groups: (1) Product conversion costs; and (2) capital conversion 
costs. Product conversion expenses are one-time investments in 
research, development, testing, and marketing, focused on making 
product designs comply with the new energy conservation standard. 
Capital conversion expenditures are one-time investments in property, 
plant, and equipment to adapt or change existing production facilities 
so that new product designs can be fabricated and assembled.
    DOE assessed the R&D expenditures manufacturers would be required 
to make at each TSL. DOE obtained financial information through 
manufacturer interviews and aggregated the results to mask any 
proprietary or confidential information from any one manufacturer. DOE 
considered a number of manufacturer responses for GSFL and IRL at each 
TSL. DOE estimated the total product conversion expenses by gathering 
manufacturer responses, then weighted these data by market share.
    DOE also evaluated the level of capital conversion expenditures 
manufacturers would incur to comply with amended energy conservation 
standards. DOE used the manufacturer interviews to gather data on the 
level of capital investment required at each TSL. Manufacturers 
explained how different TSLs affected their ability to use existing 
plants, tooling, and equipment. From the interviews, DOE was able to 
estimate what portion of existing manufacturing assets would need to be 
replaced and/or reconfigured, and what additional manufacturing assets 
would be required to manufacture the higher-efficacy products. In most 
cases, DOE projected that the proportion of existing assets that 
manufacturers would have to replace would increase as standard levels 
for GSFL and IRL increase. For GSFL, DOE included capital costs for the 
natural market shift from T12 to T8 lamps in the base case. For IRL, 
the capital conversion expenses manufacturers provided during 
interviews were based on converting their manufacturing equipment to 
meet the current volume of shipments. Since the shipments projected in 
the NIA decrease in the base cases, DOE scaled the conversion capital 
investments to account for the decline in shipments from 2008 to the 
year the standard becomes effective. DOE also consulted an independent 
supplier of IRL coaters to identify additional costs above TSL4 that 
would be needed for manufacturers to meet TSL5.
    The investment figures used in the GRIM can be found in section 
VI.B.2.a of today's notice. For additional information on the estimated 
product conversion and capital conversion costs, see chapter 13 of the 
TSD.

H. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts include 
direct and indirect impacts. Direct employment impacts are any changes 
in the number of employees for manufacturers of the appliance products 
that are the subject of this rulemaking, their suppliers, and related 
service firms. Indirect employment impacts are employment changes in 
the larger economy that occur due to the shift in expenditures and 
capital investment caused by the purchase and operation of more-
efficient appliances. The MIA addresses the portion of direct 
employment impacts that concern manufacturers of GSFL and IRL (see 
section V.G); this section addresses indirect impacts.
    Indirect employment impacts from standards consist of the net jobs 
created or eliminated in the national economy, other than in the 
manufacturing sector being regulated, due to: (1) Reduced spending by 
end users on energy (i.e., electricity); (2) reduced spending on new 
energy supply by the utility industry; (3) increased spending on the 
purchase price of new products; and (4) the effects of those three 
factors throughout the economy. DOE expects the net monetary savings 
from standards to be redirected to other forms of economic activity. 
DOE also expects these shifts in spending and economic activity to 
affect the demand for labor in the short term, as explained below.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sectoral 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (BLS).\66\ BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility

[[Page 16978]]

sector generally create fewer jobs (both directly and indirectly) than 
expenditures in other sectors of the economy. There are many reasons 
for these differences, including differences in wages and the fact that 
the utility sector is more capital intensive and less labor intensive 
than other sectors. See Bureau of Economic Analysis, ``A User Handbook 
for the Regional Input-Output Modeling System (RIMS II), '' Third 
Edition, Washington, DC, U.S. Department of Commerce, March 1997.\67\
---------------------------------------------------------------------------

    \66\ Data on industry employment, hours, labor compensation, 
value of production, and the implicit price deflator for output for 
these industries are available upon request by calling the Division 
of Industry Productivity Studies (202-691-5618) or by sending a 
request by e-mail to <a href="/cdn-cgi/l/email-protection#4e2a273e3d392b2c0e2c223d60292138"><span class="__cf_email__" data-cfemail="22464b525155474062404e510c454d54">[email protected]</span></a>. Available at: http://www.bls.gov/news.release/prin1.nr0.htm.
    \67\ Available at: http://www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf.
---------------------------------------------------------------------------

    Efficiency standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficacy standards is to shift economic activity from a less 
labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and manufacturing sectors). Thus, 
based on the BLS data alone, DOE believes net national employment will 
increase due to shifts in economic activity resulting from standards 
for GSFL and IRL.
    In developing this proposed rule, DOE estimated indirect national 
employment impacts using an input/output model of the U.S. economy 
called ``Impact of Sector Energy Technologies'' (ImSET); ImSET is a 
spreadsheet model of the U.S. economy that focuses on 188 sectors most 
relevant to industrial, commercial, and residential building energy 
use.\68\\\ 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 deployed by DOE's Office of Energy Efficiency and 
Renewable Energy. Compared with 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 U.S. benchmark table (Lawson, et al., 2002),\69\ specially 
aggregated to 188 sectors. DOE estimated changes in expenditures using 
the NIA spreadsheet. Using ImSET, DOE then estimated the net national 
indirect-employment impacts on employment in the manufacturing and 
energy industries of the new efficacy standards on employment by 
sector.
---------------------------------------------------------------------------

    \68\ Roop, J. M., M. J. Scott, and R. W. Schultz. ImSET: Impact 
of Sector Energy Technologies, PNNL-15273 (Pacific Northwest 
National Laboratory) (2005).
    \69\ Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and 
Jiemin Guo, ``Benchmark Input-Output Accounts of the U.S. Economy, 
1997,'' Survey of Current Business (Dec. 2002) 19-117.
---------------------------------------------------------------------------

    While both ImSET and the direct use of BLS employment data suggest 
the proposed standards could increase the net demand for labor in the 
economy, the gains would most likely be very small relative to total 
national employment. Therefore, DOE concludes only that the proposed 
standards are likely to produce employment benefits that are sufficient 
to fully offset, any adverse impacts on employment in the manufacturing 
or energy industries related to GSFL and IRL. See the TSD chapter 15.
    NEMA agreed that ImSET would be the most appropriate tool to 
analyze employment impacts on a national scale. NEMA also suggested 
that DOE should be mindful of changes in production technologies and 
the associated flows of labor and capital across industries that could 
be needed under more-stringent efficacy standards, which would not 
necessarily be reflected in the ImSET I-O analysis. (NEMA, No. 22, p. 
34)
    In response, DOE believes that the fixed I-O matrix is generally 
adequate in predicting the range of magnitude of lighting savings. 
Changes in production technologies and the associated economic flows 
with direct employment implications are addressed in the MIA chapter 
(chapter 13) of the TSD. DOE uses the ImSET model to address indirect 
employment effects of the standards. For more details on the employment 
impact analysis, see TSD chapter 15.

I. Utility Impact Analysis

    The utility impact analysis estimates the change in the forecasted 
power generation capacity of the Nation which would be expected to 
result from the adoption of new efficacy standards. This section 
discusses the methodology used, the results of which can be found in 
section 0. DOE used a version of EIA's National Energy Modeling System 
(NEMS) for this utility impact analysis. NEMS, which is available in 
the public domain, is a large, multisectoral, partial-equilibrium model 
of the U.S. energy sector. EIA uses NEMS to produce its AEO, a widely-
recognized baseline energy forecast for the United States. The version 
of NEMS used for appliance standards analysis is called NEMS-BT and is 
primarily based on the AEO 2008 with minor modifications.\70\ The NEMS-
BT offers a sophisticated picture of the effect of standards, since it 
accounts for the interactions between the various energy supply and 
demand sectors and the economy as a whole.
---------------------------------------------------------------------------

    \70\ The EIA approves the use of the name ``NEMS'' to describe 
only an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the 
model as used here. (``BT'' stands for DOE's Building Technologies 
Program.) For more information on NEMS, refer to The National Energy 
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb. 1998) 
(available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf).
---------------------------------------------------------------------------

    Specifically, NEMS-BT models certain policy scenarios, such as the 
effect of reduced electricity consumption, for each trial standard 
level. The analysis output provides a forecast for the needed 
generation capacities at each TSL. The estimated net benefit of the 
standard is the difference between the forecasted generation capacities 
by NEMS-BT and the AEO2008 Reference Case.
    DOE obtained the energy savings inputs for the utility impact 
analysis from the NIA's electricity consumption savings. These inputs 
reflect the effects on electricity of efficiency improvements due to 
the deployment of GSFL and IRL. Chapter 14 of the TSD accompanying this 
notice presents results of the utility impact analysis.
    DOE received comments requesting that DOE report gas and 
electricity price impacts, and the economic benefits of reduced need 
for new electric power plants and infrastructure. The expectation is 
that lower electricity demand will lead to lower prices for both 
electricity and natural gas that would benefit consumers. The Joint 
Comment also stated that the benefits of reduced power plant and 
infrastructure costs may not be fully reflected in prices because 
consumers generally pay retail rates for electricity that are based on 
the average embedded cost of all the facilities used to serve them, 
rather than on marginal costs. (Joint Comment, No. 23 at pp. 20-22)
    DOE considered reporting gas and electricity price impacts but 
found that the uncertainty of price projections, together with the 
fairly small impact of the standards relative to total electricity 
demand, makes these price changes highly uncertain. As a result, DOE 
believes that they should not be weighed heavily in the decision 
concerning the standard level. Given the current complexity of utility 
regulation

[[Page 16979]]

in the United States (with significant variances among States), it does 
not seem appropriate to attempt to measure impacts on infrastructure 
costs and prices where there is likely to be significant overlap.

J. Environmental Analysis

    DOE has prepared a draft environmental assessment (EA) pursuant to 
the National Environmental Policy Act and the requirements of 42 U.S.C. 
6295(o)(2)(B)(i)(VI) and 6316(a), to determine the environmental 
impacts of the proposed amended standards. Specifically, DOE estimated 
the reduction in power sector emissions of carbon dioxide 
(CO<INF>2</INF>) using the NEMS-BT computer model. DOE calculated a 
range of estimates for reduction in oxides of nitrogen (NO<INF>X</INF>) 
emissions and mercury (Hg) emissions using current power sector 
emission rates. However, the Environmental Assessment (see the 
Environmental Assessment report of the TSD accompanying this notice) 
does not include the estimated reduction in power sector impacts of 
sulfur dioxide (SO<INF>2</INF>), because DOE has determined that due to 
the presence of nationals caps on SO<INF>2</INF> emissions as addressed 
below, any such reduction resulting from an energy conservation 
standard would not affect the overall level of SO<INF>2</INF> emissions 
in the United States.
    The NEMS-BT is run similarly to the AEO2008 NEMS, except the energy 
use is reduced by the amount of energy saved due to the TSLs. DOE 
obtained the inputs of national energy savings from the NIA spreadsheet 
model. For the Environmental Assessment, the output is the forecasted 
physical emissions. The net benefit of the standard is the difference 
between emissions estimated by NEMS-BT and the AEO2008 Reference Case. 
The NEMS-BT tracks CO<INF>2</INF> emissions using a detailed module 
that provides results with a broad coverage of all sectors and 
inclusion of interactive effects.
    The Clean Air Act Amendments of 1990 set an emissions cap on 
SO<INF>2</INF> for all power generation. The attainment of this target, 
however, is flexible among generators and is enforced through the use 
of emissions allowances and tradable permits. Because SO<INF>2</INF> 
emissions allowances have value, they will almost certainly be used by 
generators, although not necessarily immediately or in the same year 
with and without a standard in place. In other words, with or without a 
standard, total cumulative SO<INF>2</INF> emissions will always be at 
or near the ceiling, while there may be some timing differences between 
year-by-year forecast. Thus, it is unlikely that there will be an 
SO<INF>2</INF> environmental benefit from electricity savings as long 
as there is enforcement of the emissions ceilings.
    Although there may not be an actual reduction in SO<INF>2</INF> 
emissions from electricity savings, there still may be an economic 
benefit from reduced demand for SO<INF>2</INF> emission allowances. 
Electricity savings decrease the generation of SO<INF>2</INF> emissions 
from power production, which can decrease the need to purchase or 
generate SO<INF>2</INF> emissions allowance credits, and decrease the 
costs of complying with regulatory caps on emissions.
    Like SO<INF>2</INF>, future emissions of NO<INF>X</INF> and Hg 
would have been subject to emissions caps under the Clean Air 
Interstate Act (CAIR) and Clean Air Mercury Rule (CAMR). As discussed 
later in section VI.B.6, these rules have been vacated by a Federal 
court. But the NEMS-BT model used for today's final rule assumed that 
both NO<INF>X</INF> and Hg emissions would be subject to CAIR and CAMR 
emissions caps. In the case of NO<INF>X</INF> emissions, CAIR would 
have permanently capped emissions in 28 eastern States and the District 
of Columbia. Because the NEMS-BT modeling assumed NO<INF>X</INF> 
emissions would be subject to CAIR, DOE established a range of 
NO<INF>X</INF> reductions based on the use of a NO<INF>X</INF> low and 
high emissions rates (in metric kilotons (kt) of NO<INF>X</INF> emitted 
per terawatt-hours (TWh) of electricity generated) derived from the 
AEO2008. To estimate the reduction in NO<INF>X</INF> emissions, DOE 
multiplied these emission rates by the reduction in electricity 
generation due to the standards considered. For mercury, because the 
emissions caps specified by CAMR would have applied to the entire 
country, DOE was unable to use NEMS-BT model to estimate the physical 
quantity changes in mercury emissions due to energy conservation 
standards. To estimate mercury emission reductions due to standards, 
DOE used an Hg emission rate (in metric tons of Hg per energy produced) 
based on AEO2008. Because virtually all mercury emitted from 
electricity generation is from coal-fired power plants, DOE based the 
emission rate on the metric tons of mercury emitted per TWh of coal-
generated electricity. To estimate the reduction in mercury emissions, 
DOE multiplied the emission rate by the reduction in coal-generated 
electricity associated with standards considered.
    DOE received comments from stakeholders on the valuation of 
CO<INF>2</INF> emissions savings that result from standards. The Joint 
Comment stated that by not placing an economic value on the benefits 
from reduced CO<INF>2</INF> emissions, DOE makes it difficult to weigh 
these benefits in comparison to other benefits and costs resulting from 
a given standard level. Implicitly, the Joint Comment argued that DOE 
is arbitrarily valuing pollution reductions at $0. The best way to 
avoid this mistake would be to estimate an economic value for pollutant 
reductions. According to the Joint Comment, voluminous work, both from 
academia and the business world, exists on the range of potential 
carbon prices under various regulatory scenarios. (Joint Comment, No. 
23 at pp. 19-20). NEMA also suggested a CBO report as a potential 
starting point. (NEMA, No. 22 at p. 34) DOE has made several additions 
to its monetization of environmental emissions reductions in today's 
proposed rule, which are discussed in section 0, but has chosen to 
continue to report these benefits separately from the net benefits of 
energy savings. Nothing in EPCA, nor in the National Environmental 
Policy Act, requires that the economic value of emissions reduction be 
incorporated in the net present value analysis of the value of energy 
savings. Unlike energy savings, the economic value of emissions 
reduction is not priced in the marketplace.

VI. Analytical Results

A. Trial Standard Levels

    DOE analyzed the costs and benefits of many TSLs for the GSFL and 
IRL covered in today's proposed rule. Table VI.2 and Table VI.4 present 
the TSLs and the corresponding product class efficiencies for GSFL and 
IRL. See the engineering analysis in section V.C of this NOPR for a 
more detailed discussion of the efficacy levels.
    In this section, DOE is only presenting the analytical results for 
the TSLs of the product classes that DOE analyzed directly (the 
``representative product classes''). DOE scaled the standards for these 
representative product classes to create standards for other product 
classes that were not directly analyzed (such as modified-spectrum 
lamps), as set forth in chapter 5 of the TSD.
    The Joint Comment stated that DOE should use separate TSLs for GSFL 
and IRL. The Joint Comment also stated that the sets of CSLs in the 
ANOPR should be made into a single set of TSLs, without further 
regrouping. (Joint Comment, No. 23 at p. 18) In the NOPR, DOE has 
generally followed the methodology suggested by the Joint Comment. In 
this notice, DOE did not group GSFL with IRL. For example, each GSFL 
TSL reflects a set of efficacy levels across all products classes only 
within GSFL. DOE believes that this approach is appropriate because 
GSFL

[[Page 16980]]

and IRL, though often produced by the same manufacturers, frequently 
serve different lighting applications, so energy conservation standards 
for one lamp type are not likely to affect the market or energy 
consumption of the other lamp type. The following sections describe the 
TSLs and corresponding efficacy levels.
1. General Service Fluorescent Lamps
    DOE developed product classes for GSFL based on the utility of the 
covered lamps and how they are used in the market. DOE observed that 4-
foot medium bipin lamps constitute the vast majority of GSFL sales. 
These lamps are followed in order of unit sales by 8-foot single pin 
slimline lamps and 8-foot recessed double contact high output lamps. 
Because 4-foot medium bipin, 8-foot single pin slimline, and 8-foot 
recessed double contact HO lamps are the most common GSFL, DOE selected 
them as representative lamps for its analysis. Lamps with a CCT greater 
than 4,500K comprise a small share of the GSFL market. Therefore, DOE 
chose to analyze lamps with a CCT less than or equal to 4,500K. For the 
NOPR, DOE also chose to analyze 4-foot miniature bipin T5 standard 
output (SO) and HO lamps with a CCT less than or equal to 4,500K. (DOE 
did not analyze T5 lamps in the March 2008 ANOPR.)
    The following lamps with a CCT less than 4,500K compose the five 
representative product classes: (1) 4-foot medium bipin; (2) 8-foot 
single pin slimline; (3) 8-foot recessed double contact HO lamps; (4) 
4-foot miniature bipin T5 SO; and (5) 4-foot miniature bipin T5 HO 
lamps. Standards for other product classes were established by scaling 
the standards developed for these representative product classes. All 
12 GSFL classes are shown in Table VI.1.

                    Table VI.1--GSFL Product Classes
------------------------------------------------------------------------
          GSFL lamp type                            CCT
------------------------------------------------------------------------
4-Foot Medium Bipin..............  <= 4,500K (representative).
                                   > 4,500K.
2-Foot U-Shaped..................  <= 4,500K.
                                   > 4,500K.
8-Foot Single Pin Slimline.......  <= 4,500K (representative).
                                   > 4,500K.
8-Foot RDC HO....................  <= 4,500K (representative).
                                   > 4,500K.
4-Foot T5 SO.....................  <= 4,500K (representative).
                                   > 4,500K.
4-Foot T5 HO.....................  <= 4,500K (representative).
                                   > 4,500K.
------------------------------------------------------------------------

    DOE developed TSLs that generally follow a trend of increasing 
efficacy by using higher-quality phosphors. The TSLs also represent a 
general move from higher-wattage technologies to lower-wattage, lower-
diameter lamps with higher efficacies. Table VI.2 shows the TSLs for 
GSFL. Each TSL is generally composed of the efficacy level of the same 
number across all product classes. That is, TSL1 is composed of EL1 for 
all classes, TSL2 is composed of EL2, etc. For T5 standard output 
lamps, however, DOE selected EL1 for all TSLs except TSL5, to which DOE 
assigned EL2 (the maximum technologically feasible efficacy level for 
T5 SO lamps). For T5 high output lamps, DOE selected EL1 for all TSLs 
because it is the maximum efficacy for this lamp type. With the 
methodology, TSL5 represents all maximum technologically feasible GSFL 
efficacy levels for this NOPR.
    The efficacy levels for the five representative product classes are 
shown in Table VI.2; Efficiency levels for all product classes in the 
TSLs can be found in the NOPR TSD chapter 5. DOE analyzes systems that 
meet each efficacy level in the TSLs by pairing standard and reduced-
wattage lamps featuring a variety of design options with appropriate 
magnetic or electronic ballasts. As discussed in the screening analysis 
(NOPR TSD chapter 4), DOE uses design options with highly emissive 
electrode coatings, higher efficiency lamp fill gas composition, higher 
efficiency phosphors, glass coatings, or lamp diameter to achieve 
higher efficacy levels.

 Table VI.2--Trial Standard Levels for GSFL--Efficiency Levels for the Five Representative GSFL Product Classes
----------------------------------------------------------------------------------------------------------------
                                                             Trial standard level (lm/w)
                                   -----------------------------------------------------------------------------
   Representative product class         EPCA
                                     standard *      TSL1         TSL2         TSL3         TSL4         TSL5
----------------------------------------------------------------------------------------------------------------
4-Foot Medium Bipin, CCT <= 4,500K         75.0           78           81           84           89           94
8-Foot Single Pin Slimline, CCT <=         80.0           89           93           95           97          100
 4,500K...........................
8-Foot RDC HO, CCT <= 4,500K......         80.0           83           87           88           92           95
4-Foot Miniature Bipin T5 SO, CCT        [None]          103          103          103          103          108
 <= 4,500K........................
4-Foot Miniature Bipin T5 HO, CCT        [None]           89           89           89           89           89
 <= 4,500K........................
----------------------------------------------------------------------------------------------------------------
* 42 U.S.C. 6295(i)(1)(B). Applies to GSFL as defined by EPCA.

    TSL1, which would set energy conservation standards for GSFL to EL1 
for all product classes, would eliminate the 4-foot medium bipin T12 
baselines, the 95W T12 8-foot recessed double contact HO baseline, and 
the 75W T12 8-foot single pin slimline baseline from the market. In the 
4-foot medium bipin product class, this TSL could be met either with a 
40W T12 lamp using improved 700-series or 800-series phosphors, or with 
a 34W T12 lamp using a 700-series phosphor. At this TSL, 4-foot medium 
bipin lamps using only halophosphors would not be able to meet this 
TSL. The 75W 8-foot single pin slimline T12 and 110W recessed double 
contact HO lamps would need to use an 800-series rare earth phosphor to 
meet TSL1. TSL1 also represents a level which would likely prevent the 
commercialization of T5 lamps with halophosphor coatings while allowing 
for 800-series 4-foot T5 miniature bipin and 4-foot T5 miniature bipin 
HO lamps that are currently commercially available to remain on the 
market.
    TSL2 would set energy conservation standards for GSFL at EL2 for 4-
foot MBP, 8-foot SP slimline, and 8-foot RDC HO lamps. The 34W T12 4-
foot medium bipin lamps would likely be required to use 800-series rare 
earth phosphors to meet TSL2. For 40W T12 lamps, TSL2 is expected to 
require a premium 800-series rare earth phosphor and is the maximum TSL 
that a 40W T12 would be able meet. In the 8-foot single pin slimline 
product class, TSL2 is expected to require a premium 800-series rare 
earth phosphor for the 75W T12 and is the maximum TSL that 75W T12 
would likely be able to meet. This standard level would eliminate the 
60W T12 baseline and require a 700-series phosphor for this lamp. In 
the 8-foot recessed double contact HO product class, TSL2 would 
eliminate 110W T12

[[Page 16981]]

lamps and the 95W T12 baseline and would require rare earth 700-series 
phosphors for 95W T12 lamps. For T5s, TSL2 still represents the first 
efficacy level, which would allow for 800-series 4-foot T5 miniature 
bipin and 4-foot T5 miniature bipin HO lamps to remain on the market.
    TSL3 would set energy conservation standards for GSFL at EL3 for 4-
foot MBP, 8-foot SP slimline, and 8-foot RDC HO lamps. In this product 
class, the 32W T8 baseline would be eliminated from the market, and to 
produce a TSL3-compliant 32W T8 lamp, manufacturers would need to use 
an 800-series rare earth phosphor. The 34W T12 lamps would likely 
require an improved 800-series rare earth phosphor mixture and possibly 
other design options, such as a different gas fill or increased 
thickness of the bulb-wall phosphor. Only reduced-wattage (34W) 4-foot 
medium bipin T12 lamps are expected to meet this TSL. In the 8-foot 
single pin slimline product class, TSL3 would require the use of an 
800-series 60W T12 lamp. This standard level is expected to eliminate 
all 75W T12 lamps and to require an improved 700-series phosphor for 
the 60W T12. In the 8-foot recessed double contact HO class, TSL3 
requires 95W T12 lamps to shift to 800-series rare earth phosphors. 
TSL3 also represents the first efficacy level for 4-foot T5 miniature 
bipin and 4-foot T5 miniature bipin HO lamps, retaining 800-series 
versions of those lamps on the market.
    TSL4, which would set energy conservation standards for GSFL at EL4 
for 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO, would be 
expected to eliminate 4,100K T12 lamps from the marketplace. TSL4 would 
also be expected to raise the efficacy of all full-wattage T8 lamps 
above the baselines for the aforementioned product classes. In the 4-
foot medium bipin product class, TSL4 could be met by improved 800-
series full-wattage T8 lamps, or by 800-series 30W and 25W T8 lamps. 
For the 8-foot SP slimline product class, 59W T8 lamps would likely 
need to use an 800-series rare earth phosphor to meet TSL4. TSL4, while 
expected to eliminate 8-foot T12 RDC HO lamps from the market, would 
require an improved 700-series mixture to be used in T8 lamps for this 
product class. TSL4 also represents the first efficacy level for 4-foot 
T5 miniature bipin and 4-foot T5 miniature bipin HO lamps, retaining 
800-series T5 lamps on the market.
    TSL5 represents the max-tech EL for all GSFL product classes. T12 
lamps and 700-series T8 lamps are expected to not be able to meet this 
level. In the 4-foot medium bipin and 8-foot single pin slimline 
product class, T8 lamps would need to have a premium 800-series rare 
earth phosphor coating to meet TSL5. TSL5 could also be met by the 28W 
reduced-wattage 4-foot medium bipin T8 lamp and the 57W and 55W 
reduced-wattage 8-foot single pin slimline T8 lamps. TSL5 would require 
movement 800-series T8 lamps in the 8-foot recessed double contact HO 
product class. For the 4-foot T5 MiniBP SO product class, a standard-
wattage (28W) and reduced-wattage (26W) T5 with an improved 800-series 
phosphor would need to be used in order to meet TSL5. Because DOE 
created only one efficacy level for the 4-foot T5 miniature bipin HO 
lamps, TSL5 would set energy conservation standards for 4-foot T5 
MiniBP HO lamps at EL1 and allow 800-series T5 HO lamps to remain on 
the market. For more information on the TSLs for GSFL, see chapter 9 of 
the TSD.
2. Incandescent Reflector Lamps
    As discussed in section V.C, for IRL, DOE has established five 
efficacy levels based on an equation relating efficacy (in lumens per 
watt) to lamp wattage. Also discussed in section V.C, DOE has analyzed 
only one representative product class and intends to scale minimum 
efficacy requirements to other product classes. All IRL classes are 
listed in Table VI.3. As seen in the table, DOE only directly analyzed 
the standard-spectrum IRL with a diameter greater than 2.5 inches and 
voltage less than 125 volts.

                                         Table VI.3--IRL Product Classes
----------------------------------------------------------------------------------------------------------------
               Lamp type                          Diameter                             Voltage
----------------------------------------------------------------------------------------------------------------
Standard Spectrum......................  > 2.5 inches..............  >= 125
                                                                     > 125 (representative).
                                         <= 2.5 inches.............  >= 125.
                                                                     < 125.
Modified Spectrum......................  > 2.5 inches..............  >= 125.
                                                                     < 125.
                                         <= 2.5 inches.............  >= 125.
                                                                     < 125.
----------------------------------------------------------------------------------------------------------------

    In establishing TSLs for IRL, in this NOPR, DOE analyzes five TSLs, 
each one corresponding to one efficacy level. For example, TSL1 
corresponds to EL1 and TSL5 corresponds to EL5. TSL1 could be achieved 
with an improved halogen lamp that uses xenon, a higher-efficiency 
inert fill gas. TSL2 could be achieved with a standard halogen infrared 
lamp with a lifetime of 6,000 hours or a halogen lamp with an improved 
reflector, such as silver. TSL3 could be met with a 3,000-hour-lifetime 
standard halogen infrared lamp. TSL4 could be met with a 4,000-hour-
lifetime improved halogen infrared lamp. Improvements in the halogen 
infrared lamp may include the use of a double-ended halogen infrared 
burner, higher-efficiency inert fill gas, or more-efficient filament 
orientation. Finally, TSL5 could be achieved with a 4,200-hour-lifetime 
halogen infrared lamp (even further improved). These further 
improvements include an improved reflector, improved IR coating, or 
filament design that produces higher temperature operation (and may 
reduce lifetime to 3,000 hours).
    The efficacy levels for the representative analyzed product class 
are shown in Table VI.4 for the TSLs to which they correspond. The 
efficacy levels for this representative product class were then scaled 
to create the efficacy levels for the seven other IRL product classes 
as described in section V.C.7.b of this notice. For more information on 
efficacy standard levels for the other seven product classes, see 
chapter 5 of the TSD.

[[Page 16982]]



 Table VI.4--Trial Standard Levels for IRL--Efficiency Levels for the Standard Spectrum, Diameter > 2.5 Inches,
                                         Voltage < 125 IRL Product Class
----------------------------------------------------------------------------------------------------------------
                                          Trial standard level (lm/W)*
-----------------------------------------------------------------------------------------------------------------
                   EPCA standard**                       TSL1        TSL2        TSL3        TSL4        TSL5
----------------------------------------------------------------------------------------------------------------
10.5 (40-50 Watts)
11.0 (51-66 Watts)
12.5 (67-85 Watts)                                    4.6P\0.27\  4.8P\0.27\  5.5P\0.27\  6.2P\0.27\  6.9P\0.27\
14.0 (86-115 Watts)
14.5 (116-155 Watts)
15.0 (156-205 Watts)
----------------------------------------------------------------------------------------------------------------
* P is the rated wattage of the lamp.
** 42 U.S.C. 6295(i)(1)(B). Applies to IRL as defined by EPCA.

B. Economic Justification and Energy Savings

    The following section discusses the results of the analyses 
discussed in section 0. Section VI.C contains further discussion 
regarding DOE's consideration of these results in the selection of 
proposed standards levels.
1. Economic Impacts on Consumers
a. Life-Cycle Cost and Payback Period
    DOE calculated the average LCC savings relative to the baseline for 
each product class, as in the March 2008 ANOPR. 73 FR 13620, 13665 
(March 13, 2008). A new standard would affect different lamp consumers 
differently, depending on the market segment to which they belong. DOE 
designs the LCC analysis around lamp purchasing events, in order to 
characterize the circumstances under which consumers need to replace a 
lamp. The LCC spreadsheet calculates the LCC impacts for each lamp 
replacement event separately. Examining the impacts on each event 
separately allows DOE to view the results of many subgroup populations 
in the LCC analyses.
    For the NOPR, as in the March 2008 ANOPR, DOE decided not to 
aggregate the results of the various event scenarios together into a 
single LCC at each efficacy level. 73 FR 13620, 13655 (March 13, 2008). 
To do so would have required too many assumptions, such as the relative 
occurrence of each event over time, and the market share of each lamp 
in the base case and each standards case. DOE believes it is more 
appropriate to incorporate assumptions about consumer decisions and 
long-term market trends in the NIA, and leave the LCC as a direct head-
to-head comparison between lamp and lamp-and-ballast designs under 
different events. Further, the LCC savings results help DOE estimate 
consumer behavior decisions for the NIA.
    DOE recognizes that the large number of LCC and PBP results can 
make it difficult to draw conclusions about the cost-effectiveness of 
efficacy standards. The following discussion presents salient results 
from the LCC analysis. The LCC results are presented according to the 
lamp purchasing events that culminate in purchase of lamp-and-ballast 
designs. These results reflect a subset of all of the possible events, 
although they represent the most prevalent purchasing events.\71\ The 
analysis provides a range of LCC savings for each efficacy level. The 
range reflects the results of multiple systems (i.e., multiple lamp-
ballast pairings) that consumers could purchase to meet an efficacy 
level.
---------------------------------------------------------------------------

    \71\ In many cases, DOE omitted events I(b) and IV in this 
notice, because DOE believes these lamp purchase events to be 
relatively less frequent. However, DOE did present all analyzed 
events in chapter 8 of the TSD.
---------------------------------------------------------------------------

    In addition, DOE has chosen not to present detailed PBP results by 
efficacy level in this NOPR because DOE believes that LCC results are a 
better measure of cost-effectiveness. However, a full set of both LCC 
and PBP results for the systems DOE analyzed are available in chapter 8 
and appendix 8B of the TSD. All the LCC results shown here were 
generated using AEO2008 reference case electricity prices and medium-
range lamp and ballast prices.
i. General Service Fluorescent Lamps
    Table VI.5 through Table VI.11 present the results for the baseline 
lamps in each of the four product classes DOE analyzed (i.e., 4-foot 
medium bipin, 4-foot miniature bipin SO, 4-foot miniature bipin HO, 8-
foot single pin slimline, and 8-foot recessed double contact HO). When 
a standard results in ``positive LCC savings,'' the life cycle cost of 
the standards-compliant lamp is less than the life cycle cost of the 
baseline lamp, and the consumer benefits. When a standard results in 
``negative LCC savings,'' the life cycle cost of the standards-
compliant lamp is higher than the life cycle cost of the baseline lamp, 
and the consumer is adversely affected. The range of values represents 
the multiple ways a consumer can meet a certain efficacy standard under 
each lamp purchasing event. For example, at EL3, a consumer 
retrofitting a 4-foot 34W T12 medium bipin baseline system can either 
purchase a high-efficacy T12 lamp on an electronic ballast or a high-
efficacy T8 lamp on an electronic ballast. While consumers have both 
choices, selecting a T8 system offers positive LCC savings.
    Not all baselines have suitable replacement options for every lamp 
purchasing event at every efficacy level. For instance, because DOE 
assumed that consumers wish to purchase systems or lamp replacements 
with a lumen output within 10 percent of their baseline system output, 
in some cases, the only available replacement options produce less 
light than this. Thus, the replacement options are considered 
unsuitable substitutions. These cases are marked with ``LL'' (less 
light) in the LCC results tables below. In some cases, when consumers 
who currently own a T12 system need to replace their lamps, no T12 
energy saving lamp replacements are available. In these cases, in order 
to save energy, the consumers must switch to other options, such as a 
T8 lamp and appropriate ballast. These cases are marked with ``NER'' 
(no energy-saving replacement) in tables.
    Because some baseline lamps already meet higher efficacy levels 
(e.g., the baseline 32W 4-foot T8 MBP lamp achieves EL2), LCC savings 
at the levels below the baseline are zero. In these cases, ``BAE'' 
(baseline above efficacy level) is listed in the tables to indicate 
that the consumer makes the same purchase decision in the standards-
case as they do in the base-case. Also, not all lamp purchase events 
apply for all baseline lamps or efficacy levels. For example, DOE 
assumed that the standards-induced retrofit event does not apply to the 
32W T8 system, because it is already the most

[[Page 16983]]

efficacious 4-foot medium bipin GSFL system. For these events, an ``EN/
A'' (event not applicable) exists in the table. Finally, because LCC 
savings are not relevant when no energy conservation standard is 
established, ``N/A'' (not applicable) exists in the LCC savings column 
for the baseline system.
    DOE is also presenting the installed prices of the lamp-and-ballast 
systems in order to compare the up-front costs that consumers must bear 
when purchasing baseline or standards-case systems. The installed price 
results for a lamp replacement in response to a lamp failure event 
(Event IA) only include the lamp purchase price and lamps installation 
costs. For 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO, at EL1 
through EL3, consumers with T12 systems would have the option of 
purchasing a T12 lamp in the face of a lamp failure. At EL4 and EL5, 
because no T12 lamps are standard-compliant, consumers would not be 
able to proceed with a lamp replacement; therefore, no installed price 
increases are shown.
    Instead, at EL4 and EL5, consumers with T12 lamps that either fail 
at the beginning of the analysis period (Event IB: Lamp Failure, Lamp 
and Ballast Replacement) or fail in the middle of the analysis period 
(Event II: Standards-Induced Retrofit) would need to purchase a new 
lamp-and-ballast T8 system. In these situations, the installed price in 
the baseline includes the cost of purchasing replacement lamps, whereas 
the installed price at EL4 and EL5 is much greater, because the 
consumer would need to purchase and install a T8 lamp-and-ballast 
system.
    The ballast failure event (Event III) and the new construction/
renovation event (Event IV) include the purchase and installation costs 
for lamps and a ballast for the baseline and standards-case systems. 
This is because the occurrences of these events require the purchase of 
new lamps and ballasts in all cases. Although in most cases standards-
case lamp-and-ballast systems are generally more expensive than 
baseline lamp-and-ballast systems, in some cases (primarily for owners 
of the T12 baseline systems purchasing a T8 system instead), the 
standards-case lamp-and-ballast systems are less expensive than the 
baseline systems.
    Table VI.5 presents the findings of an LCC analysis on various 3-
lamp 4-foot medium bipin GSFL systems operating in the commercial 
sector. The analysis period (based on the longest-lived baseline lamp's 
lifetime) for this product class in the commercial sector is 5.5 years. 
As seen in the table, DOE analyzes three baseline lamps: (1) 40W T12; 
(2) 34W T12; and (3) 32W T8.
    For the 40W T12 baseline, when commercial consumers are confronted 
with a lamp failure in the base case, they purchase the 40W T12 
baseline lamp as a lamp replacement on their magnetic T12 ballast. In 
general, the only energy-saving lamp replacement option for this system 
is a 34W T12 lamp. However, as seen in Table VI.5, the EL1 and EL2 34W 
T12 lamps do not produce sufficient light compared to the baseline 
lumen output. Therefore, for the purposes of the LCC analysis, DOE 
assumes that at these ELs, 40W T12 consumers would purchase the EL3 34W 
T12 lamp (which has sufficient lumen output) in response to a lamp 
failure, and achieve positive LCC savings. Because no T12 lamps would 
be standards-compliant at EL4 and EL5, consumers with T12 ballasts who 
are confronted with a lamp failure beyond EL3 would be forced to 
retrofit their ballasts and instead purchase a T8 system. The LCC 
savings and incremental costs related to this action can be seen in 
Table VI.5 under the standards induced retrofit event. At EL4 and EL5, 
consumers who are forced to retrofit their ballast would achieve 
positive LCC savings; however, they would also incur an incremental 
installed price (baseline installed price minus standards-case 
installed price) greater than $49.30 per system. In particular, 40W T12 
consumers who retrofit would obtain the greatest LCC savings at EL4 and 
EL5 by retrofitting to an electronically-ballasted 32W T8 system.
    For the 40W T12 baseline, when commercial consumers are confronted 
with a ballast failure in the base case, they purchase the 40W T12 
baseline lamps and a 0.88 ballast factor electronic ballast. In order 
to save energy with similar lumen output at EL1 and EL2, consumers 
would purchase a higher-efficacy 40W T12 with a lower-BF ballast. As 
seen in Table VI.5, these choices result in negative LCC savings. 
However, under such a standard, 40W T12 consumers would be able to 
achieve positive LCC savings under a ballast failure scenario by 
purchasing systems at EL4 and EL5. Similar to the standards-induced 
retrofit, at EL4 and EL5 consumers are forced to purchase T8 systems. 
Those who purchase a 32W T8 lamp generally achieve the highest LCC 
savings.
    For the 34W T12 baseline, when commercial consumers are confronted 
with a lamp failure in the base case, they purchase the 34W T12 
baseline lamp as a lamp replacement on their magnetic T12 ballast. As 
this is the lowest-wattage commercially-available T12 lamp, there are 
no energy-saving lamp replacement options for this system. However, as 
seen in Table VI.5 in the Event IA installed price column, consumers do 
have the option to purchase a higher-efficacy 34W T12 lamps, resulting 
in no energy-savings and an installed price increase ranging from $3.69 
to $13.91. For the purposes of the LCC analysis, at EL1, EL2, and EL3, 
DOE analyzes the economics of standards-retrofit, an energy-saving 
response available to the 34W T12 consumer under a lamp failure 
scenario. As seen in the table, some LCC savings results at EL1, EL2, 
and EL3 are negative, representing consumers retrofitting to a 34W T12 
lamp on an electronic T12 ballast or the baseline 32W T8 lamp on an 
electronic T8 ballast. However, under such a standard, consumers would 
also be able to achieve positive savings by purchasing EL3, EL4, and 
EL5 T8 systems with either a higher-efficacy 32W T8 lamp or other 
reduced-wattage lamps. Because no T12 lamps would be standards-
compliant at EL4 and EL5, consumers with T12 ballasts who are 
confronted with a lamp failure at these levels would be forced to 
retrofit their ballasts and instead purchase a T8 system. The 
incremental installed prices associated with this forced retrofit are 
greater than $51.62 per system.
    For the 34W T12 baseline, when commercial consumers are confronted 
with a ballast failure in the base case, they purchase the 34W T12 
baseline lamps and a 0.88 ballast factor electronic ballast. In order 
to save energy with similar lumen output at EL1 and EL2, consumers 
would purchase a higher-efficacy 34W T12 with a lower-BF ballast. In 
addition, at EL3, consumers may purchase a 34W T12 lamp with a lower-BF 
ballast as well. As seen in Table VI.5, these choices result in 
negative LCC savings. However, under such a standard, 34W T12 consumers 
can achieve positive LCC savings under a ballast failure scenario by 
purchasing systems at EL4 and EL5. Similar to the standards-induced 
retrofit, at EL4 and EL5, consumers would be forced to purchase T8 
systems. Those who purchase the reduced-wattage 25W and 28W T8 lamps 
achieve the highest LCC savings.
    For the 32W T8 baseline, commercial consumers purchase either the 
32W T8 baseline lamp (under lamp failure) or the 32W T8 baseline lamp 
and an electronic 0.88 BF ballast (under ballast failure). As the 
efficacy of this baseline lamp exceeds EL2, no LCC results or installed 
prices are presented for EL1 and EL2. In order to save energy by only 
replacing the lamp, the consumer must purchase reduced wattage lamps 
(these

[[Page 16984]]

only lie at EL4 and EL5). Therefore, although there are no EL3 energy-
saving lamp replacements, consumers may purchase EL4 and EL5 lamps at 
this standard level. At EL4, consumers who purchase 30W T8 lamps 
achieve lower LCC savings than those who purchase 25W T8 lamps. At EL5, 
the only reduced-wattage lamp replacement option (the 28W T8) achieves 
positive LCC savings.
    When confronted with a ballast failure, consumers who would have 
purchased the 32W T8 baseline system, would achieve positive LCC 
savings at EL3 by purchasing higher-efficacy 32W T8 lamps on a lower-BF 
ballast. At EL4, these consumers could obtain the greater LCC savings 
by purchasing an electronically-ballasted 25W T8 system on a 0.88 BF 
ballast. At EL5, they achieve highest savings by purchasing the 32W T8 
lamp on a lower-BF ballast.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP13AP09.000

BILLING CODE 6450-01-C

[[Page 16985]]

    As discussed in section V.D, DOE performed research on the usage of 
GSFL in the residential sector and found a number of variations from 
the commercial sector. In particular, DOE uses separate electricity 
prices (higher than commercial), operating hours (lower than 
commercial), discount rates (higher than commercial), and lamp 
lifetimes (higher than commercial). DOE also assumes that residential 
consumers of GSFL generally install their own lamps; thus, labor costs 
were modeled only for ballast replacements. DOE also uses a 40W T12 
baseline lamp that has a lower efficacy, lower price, and shorter 
lifetime (in hours). DOE found that the most common ballast in the 
residential sector is a low-power-factor, 2-lamp magnetic rapid-start 
T12 ballast with a ballast factor of 0.68. Therefore, DOE uses the 
combination of the magnetic T12 ballast and two 40W T12 lamps as the 
residential sector GSFL baseline lamp-and-ballast system.
    Based on DOE's analysis, the average operating hours for GSFL in 
the residential sector are 789 hours per year, which is lower than the 
commercial sector average of 3,435 annual operating hours. This would 
suggest a 19-year service life for the baseline lamp, which has a 
lifetime of 15,000 hours. Based on measured-life reports, DOE uses a 
15-year average ballast and fixture lifetime in the residential sector. 
Under these assumptions, lamps used under average residential operating 
hours would not fail before the fixture reached the end of its life; 
thus, there would be no lamp-only replacements, but there would be 
lamp-and-ballast replacements in the residential sector. However, with 
higher operating hours, lamp service life does decrease below 15 years, 
resulting in a lamp failure event prior to ballast or fixture 
replacement. Because DOE believes that the lamp failure event is an 
important event to analyze, DOE has presented the residential sector 
LCC analysis under both average operating hours (789 hours per year) 
and high operating hours (1,210 hours per year). The high operating 
hours are typical of kitchens, living rooms, dining rooms, and outdoor 
spaces.
    Table VI.7 presents the LCC results for a 4-foot medium bipin 
system operating in the residential sector under average operating 
hours. As discussed earlier, under average operating hours, only the 
ballast failure event (Event III) applies because the ballast and 
fixture reach the end of their 15 year life before the baseline lamp 
(which would otherwise have a lifetime of 19 years when operated for 
789 hours per year) fails. DOE uses a 15-year analysis period, based on 
the effective service life of the lamp (limited by the fixture or 
ballast life). Because DOE assumes that the residential consumer 
discards the lamp when replacing a ballast or fixture, DOE does not 
assign any residual value to the remaining life of the lamp at the end 
of the analysis period. In this event, residential consumers purchase 
the 40W T12 baseline lamp with a magnetic T12 system in the base case, 
and an electronic or magnetic T12 system or electronic T8 system in the 
standards case.
    At EL1 and EL2, although consumers may purchase an EL1 or EL2 T12 
lamp with a magnetic ballast, none of these systems are both energy 
saving and produce similar lumen output at the baseline system. 
Therefore at EL1 and EL2, the only T12 systems analyzed are those 
purchased with electronic T12 ballasts. At EL1, as seen in Table VI.6, 
higher LCC savings occur for consumers purchasing 34W T12 lamps than 
those purchasing 40W T12 lamps. When purchasing at EL2, consumers have 
the option of either purchasing an electronically-ballasted T12 system 
or a T8 system with the lowest efficacy 32W T8 lamp. LCC savings are 
the least when a consumer purchases a higher-efficacy 40W T12 lamp with 
an electronic T12 ballast. Consumers purchasing 32W T8 lamps on an 
electronic ballast would obtain the greatest savings at EL2. At EL3, in 
addition to the T8 and electronically-ballasted T12 purchase options, 
consumers also can obtain energy savings and similar lumen output by 
purchasing 34W T12 lamps on magnetic T12 ballasts. However, as seen in 
the Table VI.6, this option results in the least savings of all ELs. 
Consumers achieve higher LCC savings by purchasing EL3 32W T8 lamps 
with electronic ballasts. As discussed in relation to the commercial 
sector, EL4 and EL5 eliminate T12 lamps from the market and require the 
purchasing of a T8 system. Those consumers who select a 32W T8 lamp on 
an electronic ballast obtain the least LCC savings at EL4, while LCC 
savings are greatest of all ELs when a consumer purchases an 
electronically-ballasted 25W T8 system. At EL5, consumers choosing a 
32W T8 system obtain lower LCC savings than those purchasing a 28W T8 
system.

Table VI.6--LCC Results for a 2-Lamp Four-Foot Medium Bipin GSFL System Operating in the Residential Sector With
                                             Average Operating Hours
----------------------------------------------------------------------------------------------------------------
                                                              LCC savings 2007$          Installed price 2007$
             Baseline                Efficiency level   --------------------------------------------------------
                                                         Event III: Ballast failure*  Event III: Ballast failure
----------------------------------------------------------------------------------------------------------------
                                   Baseline............  N/A........................  49.47.
                                   EL1.................  5.87 to 9.24...............  47.22 to 54.10.
40 Watt T12                        EL2.................  5.67 to 16.88..............  48.64 to 54.29.
                                   EL3.................  0.27 to 16.63..............  50.71 to 57.95.
                                   EL4.................  16.34 to 21.24.............  50.99 to 54.07.
                                   EL5.................  17.72 to 19.66.............  51.16 to 52.03.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 15 years.
N/A: Not Applicable.

    In addition to conducting the LCC analysis under average operating 
hours, DOE also computed residential LCC results under high operating 
hours (1,210 hours per year) in order to analyze the economic impacts 
of the lamp failure event (Event I). Table VI.7 presents these LCC and 
installed-price results for a 2-lamp four-foot medium bipin GSFL system 
under the lamp failure event and high operating hours.
    As seen in Table VI.7, DOE divides the residential GSFL lamp 
failure event into Events IA (Lamp Failure: Lamp Replacement) and IB 
(Lamp Failure: Lamp and Ballast Replacement). Event IA, presented also 
in the commercial sector analysis, models solely a lamp purchase (in 
response to lamp failure) in both the base case and standards case.

[[Page 16986]]

    With high operating hours, DOE calculates that the baseline lamp 
initially purchased with a ballast fails after 12.5 years. Therefore, a 
replacement lamp will operate for only 2.5 additional years before the 
entire lamp-and-ballast system is discarded (due to either ballast 
failure or fixture replacement). Therefore, for this high operating 
hour scenario's lamp failure event calculation, DOE uses a 2.5 year 
analysis period. Similar to the average operating hour analysis, when a 
lamp-and-ballast system is discarded, DOE does not attribute any 
residual value to the remaining life of the lamp.
    Similar to the commercial analysis, the only viable energy-saving 
lamp replacement option for the 40W T12 residential system is the 34W 
T12 lamp at EL3. Thus, under a standard at either EL1 and EL2, DOE 
assumes, for the purpose of the LCC analysis, that consumers would 
purchase the 34W T12 lamp at EL3. DOE recognizes that not all consumers 
can use a 34W T12 lamp on a residential magnetic low-power-factor 
ballast because not all ballasts are designated to operate this lamp. 
However, in its review of manufacturer literature, DOE identified 
several low-power-factor residential magnetic ballasts designated to 
operate the 34W T12 lamp. Therefore, DOE considers this to be a viable 
option for some residential consumers.
    However, as seen in Table VI.7, these consumers who purchase the 
EL3 34W T12 lamp would encounter negative LCC savings. Although more 
efficacious than the baseline, the reduced-wattage 34W T12 lamp that 
meets this EL does not save sufficient energy to offset its increased 
purchase price within the 2.5-year analysis period. The replacement 
lamp would need to be in service for exactly 8 years or greater in 
order for the energy cost savings to offset the increased purchase 
price of the higher-efficacy 34W lamp.
    Because no T12 lamps would be standards-compliant at EL4 and EL5, 
consumers with T12 ballasts who are confronted with a lamp failure at 
these levels are forced to retrofit their ballasts and instead purchase 
a T8 system. The LCC savings and incremental costs related to this 
action can be seen in Table VI.7 under the lamp and ballast replacement 
event (Event IB). In the commercial sector, DOE presented the 
standards-induced retrofit event (Event II), where consumers 
proactively (before their lamp fails) retrofit their lamp and ballast 
in anticipation of the inability to purchase a standards-compliant, 
equal-lumen T12 replacement lamp due to standards. In contrast, for the 
residential sector, DOE believes that consumers would replace their 
systems only when forced by a lamp failure. Thus, instead of presenting 
the standards-induced retrofit event (Event II), for the residential 
sector, DOE models Event IB, where a consumer replaces a lamp-and-
ballast system in direct response to a lamp failure. At EL4 and EL5, 
the available T8 system options do not save sufficient energy savings 
to offset the increased purchase price of the lamp and ballast in 2.5 
years, leading to negative LCC savings. In addition consumers who would 
be forced to retrofit their ballast would incur an installed price 
increase greater than $47.01 per system. DOE requests comment on all 
inputs used in the LCC analysis for GSFL operating in the residential 
sector.

          Table VI.7--LCC Results for a 2-Lamp Four-Foot Medium Bipin GSFL System Operating in the Residential Sector With High Operating Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           LCC savings 2007$                            Installed price 2007$
                                                            --------------------------------------------------------------------------------------------
              Baseline                  Efficiency level         Event IA: Lamp        Event IB: Lamp and       Event IA: Lamp       Event IB: Lamp and
                                                                  replacement*        ballast replacement*       replacement        ballast replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  3.98.................  3.98.
                                     EL1...................  LL....................  EN/A.................  LL...................  EN/A.
40 Watt T12                          EL2...................  LL....................  EN/A.................  LL...................  EN/A.
                                     EL3...................  -5.42.................  EN/A.................  12.46................  EN/A.
                                     EL4...................  NR....................  -4.67 to -2.78.......  NR...................  50.99 to 54.07.
                                     EL5...................  NR....................  -4.13 to -3.50.......  NR...................  51.16 to 52.03.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 2.5 years.
N/A: Not Applicable; LL: Available Options Produce Less Light; EN/A: Event Not Applicable; NR: No Replacement

    Table VI.8 presents the results for an electronically-ballasted 4-
foot T5 miniature bipin standard-output, baseline system operating in 
the commercial sector. Table VI.9 presents the results for an 
electronically-ballasted 4-foot T5 miniature bipin high-output baseline 
system operating in the industrial sector. For the standard-output 
baseline, the analysis period is 5.5 years. For the high-output 
baseline, the analysis period is 3.9 years. In general, positive LCC 
savings exist at all of the efficacy levels analyzed. However, negative 
LCC savings exist for Event I (Lamp Replacement) in the 4-foot T5 
miniature bipin HO product class. Yet for the 4-foot T5 miniature bipin 
standard-output product class, consumers selecting a reduced-wattage T5 
achieve positive LCC savings. Event II (Standards Induced Retrofit) is 
not shown because the 4-foot miniature bipin product class is composed 
entirely of T5 lamps. For Event V, consumers can change the physical 
layout of their system to match the mean lumen output of the baseline 
system. Because the T5 baseline halophosphors have such poor lumen 
maintenance compared to the 800-series T5 lamps, LCC savings for the 
new construction event are high.

[[Page 16987]]



              Table VI.8--LCC Results for a 2-Lamp Four-Foot Miniature Bipin Standard Output GSFL System Operating in the Commercial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           LCC savings 2007$                            Installed price 2007$
                                                            --------------------------------------------------------------------------------------------
              Baseline                  Efficiency level                                  Event V: New                                  Event V: New
                                                                 Event IA: Lamp          construction/          Event IA: Lamp         construction/
                                                                  replacement*            renovation*            replacement             renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  9.39.................  69.20.
28 Watt T5                           EL1...................  NER...................  42.84................  13.15................  72.96.
                                     EL2...................  1.22..................  45.27 to 47.03.......  14.86................  74.67 to 75.16.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 5.5 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.


                Table VI.9--LCC Results for a 2-Lamp Four-Foot Miniature Bipin High Output GSFL System Operating in the Industrial Sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           LCC savings 2007$                            Installed price 2007$
                                                            --------------------------------------------------------------------------------------------
              Baseline                  Efficiency level                                  Event V: New                                  Event V: New
                                                                 Event IA: Lamp          construction/          Event IA: Lamp         construction/
                                                                  replacement*            renovation*            replacement             renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
54 Watt T5                           Baseline..............  N/A...................  N/A..................  10.44................  71.33.
                                     EL1...................  -3.42.................  55.60 to 56.60.......  19.85................  76.36 to 80.74.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 3.9 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.

    Table VI.10 presents the results for an 8-foot single-pin slimline 
GSFL system operating in the commercial sector. The analysis period is 
4 years. For this product class, DOE analyzes three baseline lamps: (1) 
75W T12; (2) 60W T12; and (3) 59W T8.
    For the 75W T12 baseline, consumers confronted with a lamp failure 
purchase the baseline 75W T12 for their magnetic T12 ballast in the 
base case. In the face of standards, consumers could save energy by 
purchasing reduced-wattage (60W) T12 lamps as replacements. The only 
60W T12 lamp that produces sufficient light on the baseline ballast, 
however, exists at EL3. For the purposes of the LCC analysis, DOE 
assumes that at standard levels EL1 and EL2, 75W T12 consumers 
confronted with a lamp failure would purchase the EL3 replacement lamp. 
These consumers would achieve positive LCC savings. Note that any 
standard level beyond EL3 would likely require consumers to replace 
their T12 lamps and ballasts with T8 systems, since no T12 lamp 
currently meets the efficacy requirements of EL4 and EL5. The LCC 
savings and installed costs associated with this action are shown in 
the standards induced retrofit event in Table VI.10. The EL4 lamp 
available in this event does not produce sufficient light output, so 
DOE assumes that at standard level EL4, 75W T12 consumers would 
retrofit to the EL5 59W T8 and 0.88 ballast factor ballast. At EL4 and 
EL5, 75W T12 consumers who retrofit to the EL5 T8 system achieve 
positive LCC savings while incurring an incremental installed price of 
$78.96 per system.
    In response to a ballast failure, 75W T12 consumers can purchase 
more-efficacious 75W T12 lamps and lower-ballast-factor ballasts at EL1 
and EL2. These systems do not save enough energy over their lifetimes 
to offset their increased installed prices, however, resulting in 
negative LCC savings for consumers. The systems at EL3 and EL4 do not 
produce sufficient lumen output in comparison to the baseline system, 
so DOE assumes that 75W T12 consumers encountering ballast failures 
would purchase the EL5 59W T8 and 0.88 ballast factor ballast at 
standard levels EL3 and EL4. At standard levels EL4 and EL5, only T8 
systems are available. It is possible, however, for 75W T12 consumers 
to achieve positive LCC savings by purchasing the EL5 T8 system.
    In response to a lamp failure, consumers of 60W T12 lamps do not 
have access to any energy-saving T12 replacement lamps. At EL1, 
consumers could still purchase the 60W T12 baseline lamp for their 
magnetic ballast. T12 lamps that do not save energy are also available 
at standard levels EL2 and EL3, with installed price increases ranging 
from $4.88 to $8.30. To save energy at EL2 and EL3, consumers of 60W 
T12 lamps can instead choose to retrofit to T12 or T8 systems with 
electronic ballasts. 60W T12 consumers would not be able to achieve 
positive LCC savings with any of the systems available for a standards-
induced retrofit at any EL, although they would save energy. Standard 
levels EL4 and EL5 also force T12 lamps from the market, requiring 
consumers to retrofit to T8 systems and incur installed price increases 
of at least $82.08.
    In response to a ballast failure, DOE assumes that 60W T12 
consumers would purchase 60W T12 lamps and 0.88 ballast factor 
electronic ballasts in the base case. Consumers can also purchase this 
system at standard level EL1. At standard levels EL2 and EL3, consumers 
could purchase more-efficacious 60W T12 lamps and lower-ballast-factor 
electronic ballasts when faced with a ballast failure. Consumers cannot 
save enough energy with these systems to achieve positive LCC savings, 
however. Instead, they can purchase the T8 systems on electronic 
ballasts available at EL4 and EL5 and achieve positive LCC savings. In 
the face of standard levels EL4 and EL5, T12 systems would be 
eliminated from the market. Consumers can achieve the greatest positive 
LCC savings with a 57W T8 on a 0.78 ballast factor electronic ballast 
at EL5, while consumers purchasing the 59W T8 on a 0.78 ballast factor 
electronic ballast at EL4 achieve the least positive LCC savings.
    Consumers of 59W T8 lamps can purchase the baseline 59W T8 to 
install on an electronic ballast at standard levels EL1 through EL3 
when faced with a lamp failure. At EL4, there are no energy-saving lamp 
replacement options, so DOE assumes that

[[Page 16988]]

consumers of 59W T8 lamps would instead purchase the 57W or 55W T8 
lamps that comply with EL5. Consumers purchasing these lamps achieve 
positive LCC savings and incur installed price increases ranging from 
$3.94 to $4.76. Those purchasing the 55W T8 achieve the greatest 
positive LCC savings.
    In response to a ballast failure, consumers of 59W T8 lamps can 
purchase the baseline 59W T8 system at EL1 through EL3. The available 
system at EL4 is a 59W T8 lamp on a 0.85 ballast factor electronic 
ballast, and consumers purchasing this system would achieve negative 
LCC savings. At EL5, 59W T8 consumers could purchase 59W, 57W, or 55W 
T8 systems on electronic ballasts and achieve positive LCC savings. 
Those purchasing the 55W T8 system would achieve the greatest positive 
LCC savings, while those purchasing the 57W T8 system would achieve the 
least positive LCC savings.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP13AP09.001

    Table VI.11 shows LCC results for an 8-foot recessed double-contact 
GSFL system operating in the industrial sector. The analysis period for 
this product class is 2.3 years. DOE analyzes 110W T12 and 95W T12 
baseline lamps on magnetic ballasts.
    Consumers who own 110W T12 lamps and are faced with a lamp failure 
would be expected to purchase 110W T12 baseline lamps for their 
magnetic ballast in the base case. The available replacement lamps at 
EL1 and EL2 do not produce sufficient light output in comparison to the 
baseline system, so DOE assumes that 110W T12 consumers would purchase 
the reduced-wattage

[[Page 16989]]

(95W) T12 lamp options at EL3 when faced with standard levels EL1 and 
EL2. Consumers could achieve positive LCC savings with these lamps 
while incurring installed price increases of $12.64 or $13.27. Standard 
levels EL4 and EL5 eliminate T12 lamps from the market, requiring 
consumers to retrofit their systems to T8 systems in the face of a lamp 
failure. The available T8 system at EL4 does not produce sufficient 
light in comparison with the baseline system, so DOE assumes that at 
EL4, consumers would instead purchase the 86W T8 system and 0.88 
ballast factor electronic ballast at EL5. 110W T12 consumers purchasing 
this system could achieve positive LCC savings while incurring an 
installed price increase of $106.75.
    In the face of a ballast failure, 110W T12 consumers would be 
expected to purchase the 110W T12 baseline lamp and a 0.95 ballast 
factor magnetic ballast in the base case. Consumers who own 110W T12 
systems can purchase replacement systems that comply with EL1, EL3, or 
EL5 and achieve positive LCC savings. The available systems at EL2 and 
EL4 do not produce sufficient light, so DOE assumes that in the face of 
standard levels EL2 or EL4, consumers would purchase systems meeting 
higher standard levels. At EL1, 110W T12 consumers could purchase a 
110W T12 lamp on an electronic ballast but would achieve the least 
positive LCC savings. At EL3, consumers could purchase reduced-wattage 
(95W) T12 lamps on a magnetic ballast or on an electronic ballast. 
Consumers could achieve the most positive LCC savings of any EL by 
purchasing the 86W T8 system available at EL5. Standard levels EL4 and 
EL5 would eliminate T12 systems from the market, making the 86W T8 
system the only available option.
    When faced with a lamp failure, consumers of the 95W T12 baseline 
lamp would be expected to purchase the 95W T12 baseline for their 
magnetic ballast in the base case. This lamp also complies with EL1. 
None of the lamps available at EL1 through EL3, when in combination 
with the magnetic ballast save energy as compared to the baseline 
system. However, consumers can purchase these lamps and incur installed 
price increases ranging from $6.14 to $19.09. Consumers of the 95W T12 
baseline lamp could instead retrofit their systems to save energy. The 
EL1 system available for retrofit does not produce sufficient light 
output, and consumers could not achieve positive LCC savings with any 
of the system options available for retrofit at EL2 through EL5. 
Furthermore, standard levels EL4 and EL5 would eliminate T12 lamps from 
the market, thereby forcing consumers of the 95W T12 baseline lamp to 
retrofit to T8 systems when faced with a lamp failure and incur 
installed price increases ranging from $109.35 to $112.57.
    When faced with a ballast failure, consumers of 95W T12 lamps could 
purchase a 95W T12 baseline lamp on a magnetic ballast in the base 
case. Consumers purchasing a higher efficacy 95WT12 at EL2 on an 
electronic ballast achieve positive LCC savings. However, consumers 
purchasing these systems at EL3, would not achieve positive LCC 
savings. EL4 and EL5 would likely eliminate T12 systems from the 
market, making the EL4 and EL5 86W T8 system the only available option 
for consumers faced with a ballast failure. Those who purchase the 86W 
T8 system at EL4 or EL5 can achieve positive LCC savings.

[[Page 16990]]

[GRAPHIC] [TIFF OMITTED] TP13AP09.002

ii. Incandescent Reflector Lamps
    Table VI.12 shows the commercial and residential sector LCC results 
for IRL. The results are based on the reference case AEO2008 
electricity price forecast and medium-range lamp prices. The analysis 
period is 3.4 years for the residential sector and 0.9 years for the 
commercial sector. DOE assessed three efficacy levels for the March 
2008 ANOPR. 73 FR 13620, 13666-13667 (March 13, 2008). For the NOPR, 
DOE added two additional efficacy levels--one below the lowest EL 
considered in the March 2008 ANOPR, and one above the highest EL 
considered in the March 2008 ANOPR See the engineering analysis in 
chapter 5 of the TSD or section V.C.4.b of this notice for details.
    The majority of efficacy levels result in positive LCC savings in 
spite of the higher installed prices of the standards-case lamps in 
comparison with the baseline lamps. In general, the higher lumen 
package lamps (i.e., those replacing the 90W baseline lamp) achieve 
higher LCC savings that the lower lumen package lamps (i.e., those 
replacing the 75W and 50W baselines). This is due to the larger energy 
savings, and, thus, operating cost savings associated with higher-
wattage lamps. At EL1, in all but the residential 90W PAR38 baseline, 
consumers would achieve negative LCC savings when purchasing the 
improved halogen lamp. The improved halogen lamp at this efficacy level 
would not save enough energy to recover its increased initial cost from 
the baseline lamp. Maximum LCC savings would be achieved at EL5 for the 
90W and 75W baselines when a consumer purchases an improved HIR lamp. 
For the 50W baseline, both the EL4 and EL5 replacement lamps are 40W, 
as this is the lowest-wattage IRL covered by standards. Therefore, EL4, 
consuming the same amount of energy and with a lower lamp price, would 
have higher LCC savings than EL5. In general, the lamps with the 
highest LCC savings are more efficacious and have longer lifetimes than 
the baseline lamps.

[[Page 16991]]



                                                Table VI.12--LCC Results for Incandescent Reflector Lamps
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Event I: Lamp replacement/Event V: New construction and renovation
                                                            --------------------------------------------------------------------------------------------
              Baseline                  Efficiency level                   LCC savings 2007$                            Installed price 2007$
                                                            --------------------------------------------------------------------------------------------
                                                                  Commercial *          Residential * *           Commercial            Residential
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  6.20.................  5.13.
                                     EL1...................  -0.03.................  0.12.................  7.14.................  6.07.
90 Watt PAR38                        EL2...................  3.81 to 6.04..........  3.06 to 4.68.........  7.58 to 7.76.........  6.52 to 6.70.
                                     EL3...................  6.19..................  5.55.................  7.76.................  6.70.
                                     EL4...................  8.14..................  7.09.................  9.08.................  8.02.
                                     EL5...................  9.41..................  8.76.................  9.65.................  8.59.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  6.20.................  5.13.
                                     EL1...................  -0.31.................  -0.18................  7.14.................  6.07.
75 Watt PAR38                        EL2...................  3.24 to 5.67..........  2.46 to 4.30.........  7.58 to 7.76.........  6.52 to 6.70.
                                     EL3...................  4.77..................  4.07.................  7.76.................  6.70.
                                     EL4...................  7.00..................  5.90.................  9.08.................  8.02.
                                     EL5...................  7.50..................  6.77.................  9.65.................  8.59.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  5.59.................  4.53.
                                     EL1...................  -0.31.................  -0.28................  6.53.................  5.46.
50 Watt PAR30                        EL2...................  0.04 to 2.72..........  0.10 to 2.21.........  6.98 to 7.15.........  5.92 to 6.09.
                                     EL3...................  0.77..................  0.87.................  7.15.................  6.09.
                                     EL4...................  1.95..................  1.62.................  8.47.................  7.41.
                                     EL5...................  1.51..................  1.49.................  9.04.................  7.98.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Analysis period is 0.9 years.
**Analysis period is 3.4 years.

b. Consumer Subgroup Analysis
    Certain consumer subgroups may be disproportionately affected by 
standards. In the March 2008 ANOPR, DOE requested comment on which 
consumer subgroups should be considered as well as methods of analyzing 
those subgroups. 73 FR 13620, 13682 (March 13, 2008). In response to 
comments it received, DOE performed LCC subgroup analyses in this NOPR 
for low-income consumers, institutions of religious worship, and 
institutions that serve low-income populations. See section 0 of this 
NOPR for a review of the inputs to the LCC analysis. The following 
discussion presents the most significant results from the LCC subgroup 
analysis.
    All of the LCC results shown here were generated using AEO2008 
reference case electricity prices. In addition, DOE presents subgroup 
results using medium-range lamp and ballast prices, as DOE believes 
that these prices represent average prices for the consumer subgroups 
as well. As in the primary LCC analysis, not all baselines and lamp 
purchase events have suitable replacement options at every efficacy 
level. See the primary LCC analysis results in section VI.B.1.a of this 
NOPR for more details on this analysis, as well as the TSD chapter 12 
for a full set of LCC and PBP results for the subgroup analysis.
i. Low-Income Households
    DOE conducted the low-income consumer subgroup analysis based on 
the 4-foot MBP 40W baseline operating in the residential sector and IRL 
operating in the residential sector. The low-income consumer subgroup 
analysis is identical to the residential average consumer LCC analysis, 
except that it includes slightly lower electricity prices, which DOE 
determined using data in the 2001 RECS. In comparing this subgroup's 
LCC results to the primary results presented in Table VI.5, Table VI.6, 
and Table VI.12, positive primary LCC savings results remained positive 
and negative primary LCC savings results remained negative. In general, 
LCC savings for GSFL and IRL are approximately 1 to 2 percent lower for 
low-income residential consumers than they are for the average consumer 
in the residential sector.
ii. Institutions of Religious Worship
    DOE found that institutions of religious worship have the lowest 
operating hours of any non-mall commercial building. Specifically, 
operating hours were 1,705 hours per year for GSFL (vs. the commercial 
sector average of 3,435 hours per year) and 1,609 hours per year for 
IRL (vs. the commercial sector average of 3,450 hours per year). The 
LCC analysis for this subgroup is identical to the main commercial 
sector LCC analysis except for the lower operating hours, resulting in 
an analysis period of 11 years for 4-foot GSFL, 8 years for 8-foot 
GSFL, and 1.9 years for IRL. Results are shown in Table VI.13 through 
Table VI.16 of this notice.
    Institutions of religious worship experience lower LCC savings than 
the rest of the commercial sector, particularly for standards-induced 
retrofit events. This is because the longer analysis period (due to 
lower operating hours) causes operating cost savings and residual 
values to be discounted more heavily than in the primary commercial LCC 
analysis. In general, LCC savings that were positive for the 4-foot 
medium bipin product class in the primary commercial sector analysis 
remain positive for institutions of religious worship. For example, in 
Event II, LCC savings for institutions of religious worship are 
approximately $17 lower than savings for the rest of the commercial 
sector for the 40W T12 baseline. However, LCC savings for the 
standards-induced retrofit event for the 34W T12 baseline lamp and 40W 
T12 baseline lamp are negative for certain T8 systems at EL4 and EL5.
    In the 4-foot T5 miniature bipin product class, LCC savings for 
institutions of religious worship are several dollars lower than 
savings for the rest of the commercial sector. This is also true for 
the 8-foot single-pin slimline product class except for the standards-
induced retrofit event, where LCC savings for such institutions are 
approximately $20 lower than savings

[[Page 16992]]

for the rest of the commercial sector. DOE notes that the standards-
induced retrofit of a 75W T12 system at EL5 is not cost-effective for 
religious institutions.
    For IRL, LCC savings for institutions of religious worship are 
generally lower by several cents compared to the rest of the commercial 
sector due to the longer analysis period. LCC savings are slightly 
higher, however, at EL1 for the 90W and 75W PAR38 baselines.
     
    [GRAPHIC] [TIFF OMITTED] TP13AP09.003
    

[[Page 16993]]



         Table VI.14--LCC Subgroup Results for a 2-Lamp Four-Foot T5 Miniature Bipin GSFL System Operating in Institutions of Religious Worship
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           LCC savings 2007$                            Installed price 2007$
                                                            --------------------------------------------------------------------------------------------
              Baseline                  Efficiency level                                  Event V: New                                  Event V: New
                                                                 Event IA: Lamp          construction/          Event IA: Lamp         construction/
                                                                  replacement*            renovation*            replacement             renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  9.39.................  69.20.
28 Watt T5                           EL1...................  NER...................  38.73................  13.15................  72.96.
                                     EL2...................  -0.08.................  39.74 to 42.31.......  14.86................  74.67 to 75.16.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Analysis period is 11 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.

[GRAPHIC] [TIFF OMITTED] TP13AP09.004


[[Page 16994]]


    Table VI.16--LCC Subgroup Results for Incandescent Reflector Lamps Operating in Institutions of Religious
                                                     Worship
----------------------------------------------------------------------------------------------------------------
                                                                     Event I: Lamp replacement/Event V: New
                                                                          construction and renovation *
               Baseline                    Efficiency level    -------------------------------------------------
                                                                   LCC savings 2007$      Installed price 2007$
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  6.20.
                                       EL1....................  0.00...................  7.14.
90 Watt PAR38                          EL2....................  2.97 to 5.14...........  7.58 to 7.76.
                                       EL3....................  5.21...................  7.76.
                                       EL4....................  6.87...................  9.08.
                                       EL5....................  8.28...................  9.65.
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  6.20.
                                       EL1....................  -0.26..................  7.14.
75 Watt PAR38                          EL2....................  2.43 to 4.79...........  7.58 to 7.76.
                                       EL3....................  3.87...................  7.76.
                                       EL4....................  5.80...................  9.08.
                                       EL5....................  6.48...................  9.65.
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  5.59.
                                       EL1....................  -0.35..................  6.53.
50 Watt PAR30                          EL2....................  -0.04 to 2.55..........  6.98 to 7.15.
                                       EL3....................  0.64...................  7.15.
                                       EL4....................  1.58...................  8.47.
                                       EL5....................  1.37...................  9.04.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 1.9 years.

iii. Institutions That Serve Low-Income Populations
    Table VI.17 through Table VI.20 show the LCC subgroup results for 
institutions that serve low-income populations. DOE assumed that the 
majority of these institutions are small nonprofits; thus, DOE used a 
higher discount rate of 10.8 percent (versus the 7.0-percent discount 
rate for the primary commercial sector analysis). All other factors of 
the LCC subgroup analysis remained the same as in the primary 
commercial sector analysis. As a result of the higher discount rate, 
LCC savings are lower for institutions that serve low-income 
populations than for the rest of the commercial sector. For Events I 
and III for all analyzed GSFL product classes, savings are several 
dollars lower than for the rest of the commercial sector. For Event II 
for GSFL, LCC savings are approximately $10 lower than for the rest of 
the commercial sector. For IRL, LCC savings are several cents lower 
than for the rest of the commercial sector. Although LCC savings are 
lower, positive primary LCC results remained positive for this 
subgroup, while negative primary LCC results remained negative.

[[Page 16995]]

[GRAPHIC] [TIFF OMITTED] TP13AP09.005


[[Page 16996]]



    Table VI.18--LCC Subgroup Results for a 2-Lamp Four-Foot Miniature Bipin GSFL System Operating in Institutions That Serve Low-Income Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           LCC savings 2007$                            Installed price 2007$
                                                            --------------------------------------------------------------------------------------------
              Baseline                  Efficiency level                                 Events V: New                                 Events V: New
                                                                 Event IA: Lamp          construction/          Event IA: Lamp         construction/
                                                                  replacement*            renovation*            replacement             renovation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Baseline..............  N/A...................  N/A..................  9.39.................  69.20.
28 Watt T5                           EL1...................  NER...................  40.41................  13.15................  72.96.
                                     EL2...................  0.37..................  41.91 to 44.24.......  14.86................  74.67 to 75.16.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Analysis period is 5.5 years.
N/A: Not Applicable; NER: No Energy-Saving Replacement.

[GRAPHIC] [TIFF OMITTED] TP13AP09.006


[[Page 16997]]


  Table VI.20--LCC Subgroup Results for Incandescent Reflector Lamps Operating in Institutions That Serve Low-
                                               Income Populations
----------------------------------------------------------------------------------------------------------------
                                                                     Event I: Lamp replacement/Event V: New
                                                                          construction and renovation *
               Baseline                    Efficiency level    -------------------------------------------------
                                                                   LCC savings 2007$      Installed price 2007$
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  6.20.
                                       EL1....................  -0.09..................  7.14.
90 Watt PAR38                          EL2....................  3.84 to 6.00...........  7.58 to 7.76.
                                       EL3....................  6.14...................  7.76.
                                       EL4....................  7.97...................  9.08.
                                       EL5....................  9.18...................  9.65.
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  6.20.
                                       EL1....................  -0.37..................  7.14.
75 Watt PAR38                          EL2....................  3.29 to 5.64...........  7.58 to 7.76.
                                       EL3....................  4.76...................  7.76.
                                       EL4....................  6.87...................  9.08
                                       EL5....................  7.34...................  9.65.
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  5.59.
                                       EL1....................  -0.33..................  6.53.
50 Watt PAR30                          EL2....................  -0.01 to 2.57..........  6.98 to 7.15.
                                       EL3....................  0.69...................  7.15.
                                       EL4....................  1.78...................  8.47.
                                       EL5....................  1.34...................  9.04.
----------------------------------------------------------------------------------------------------------------
*Analysis period is 0.9 years.

iv. Historical Facilities
    DOE found that historical facilities have similar operating hours, 
discount rates, and electricity prices as the typical consumer, 
although they do own more T12 systems. Accordingly, for this subgroup, 
no separate findings are warranted. See section VI.B.1.a.i of this 
notice to view the impacts on those consumers with T12 lamps.
v. Consumers of T12 Electronic Ballasts
    Table VI.21 through Table VI.24 show the LCC subgroup results for 
consumers of T12 electronic ballasts. Specifically, DOE analyzed the 
LCC savings of a consumer that owns a T12 electronic system in the base 
case. In the case of an energy conservation standard at EL4 or EL5, 
this consumer would need to purchase a T8 electronic system, as T12 
lamps would no longer available. DOE established a new baseline 
electronic T12 system and modified standards case systems so that both 
of the following conditions are met: (1) Light output is maintained in 
the case of a standard; and (2) energy is saved. All other factors of 
the LCC subgroup analysis remained the same as in the primary analysis. 
Because electronic T12 systems are much more efficient than magnetic 
T12 systems, the LCC savings for this subgroup are lower than the LCC 
savings for systems in the primary analysis. For 4-foot medium bipin 
lamps operating in the commercial sector, LCC savings are reduced by 
approximately $20 to $30, going from positive LCC savings in the 
primary analysis to negative LCC savings for this subgroup. The source 
of this reduction is primarily due to the increased efficacy of the 
baseline system.

  Table VI.21--LCC Subgroup Results for a 3-Lamp Four-Foot Electronic Medium Bipin GSFL System Operating in the
                                                Commercial Sector
----------------------------------------------------------------------------------------------------------------
                                                                  Event II: Standards-induced retrofit (lamp &
                                                                              ballast replacement)
               Baseline                    Efficiency level    -------------------------------------------------
                                                                  LCC savings * 2007$     Installed price 2007$
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  13.96.
                                       EL1....................  EN/A...................  EN/A.
40 Watt T12                            EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  -16.72 to -4.37........  63.26 to 75.56.
                                       EL5....................  -9.98 to -5.76.........  64.83 to 71.19.
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  11.22.
                                       EL1....................  EN/A...................  EN/A.
34 Watt T12                            EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  -12.38 to -1.43........  63.26 to 67.88.
                                       EL5....................  -8.63 to -5.53.........  63.51 to 64.83.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 5.5 years.
EN/A: Event Not Applicable; N/A: Not Applicable.


[[Page 16998]]

    For 4-foot medium bipin lamps operating in the residential sector, 
LCC savings, already negative in the primary analysis, become slightly 
more negative for this subgroup. The change in the savings is not as 
large in the residential sector as in the commercial sector because 
consumers for this event have a shortened analysis period.

  Table VI.22--LCC Subgroup Results for a 2-Lamp Four-Foot Electronic Medium Bipin GSFL System Operating in the
                                  Residential Sector Using High Operating Hours
----------------------------------------------------------------------------------------------------------------
                                                                      Event IB: Lamp & ballast replacement
               Baseline                    Efficiency level    -------------------------------------------------
                                                                   LCC savings 2007$      Installed price 2007$
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  3.98.
                                       EL1....................  EN/A...................  EN/A.
40 Watt T12                            EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  -8.35 to -6.45.........  50.99 to 54.07.
                                       EL5....................  -7.80 to -7.18.........  51.16 to 52.03.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 2.5 years.
EN/A: Event Not Applicable; N/A: Not Applicable.

    For 8-foot single pin slimline lamps, LCC savings are reduced by 
approximately $18 to $25. For the 75W T12 baseline, consumers 
experience negative LCC savings for this subgroup as opposed to the 
positive LCC savings experienced by consumers in the primary analysis. 
For the 60W T12 baseline, LCC savings, already negative in the primary 
analysis, become more negative for this subgroup. The source of this 
reduction is primarily due to the increased efficacy of the baseline 
system.

 Table VI.23--LCC Subgroup Results for a 2-Lamp Eight-Foot Electronic Single-Pin Slimline GSFL System Operating
                                            in the Commercial Sector
----------------------------------------------------------------------------------------------------------------
                                                                  Event II: Standards-induced retrofit (lamp &
                                                                              ballast replacement)
               Baseline                    Efficiency level    -------------------------------------------------
                                                                   LCC savings* 2007$     Installed price 2007$
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  16.16.
                                       EL1....................  EN/A...................  EN/A.
75 Watt T12                            EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  LL.....................  93.41.
                                       EL5....................  -14.18.................  95.12.
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  11.33.
                                       EL1....................  EN/A...................  EN/A.
60 Watt T12                            EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  -32.74.................  93.41.
                                       EL5....................  -31.86 to -30.09.......  93.79 to 95.12.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 4.0 years.
EN/A: Event Not Applicable; N/A: Not Applicable.

    For 8-foot recessed double contact high output lamps, LCC savings 
are reduced by approximately $10 to $15. For the 110W T12 baseline, 
consumers experience negative LCC savings for this subgroup as opposed 
to the positive LCC savings experienced by consumers in the primary 
analysis. For the 95W T12 baseline, LCC savings, already negative in 
the primary analysis, become more negative. The source of this 
reduction is again primarily due to the increased efficacy of the 
baseline system.

  Table VI.24--LCC Subgroup Results for a 2-Lamp Eight-Foot Electronic Recessed Double-Contact High Output GSFL
                                    System Operating in the Industrial Sector
----------------------------------------------------------------------------------------------------------------
                                                                  Event II: Standards-induced retrofit (lamp &
                                                                              ballast replacement)
               Baseline                    Efficiency level    -------------------------------------------------
                                                                   LCC savings 2007$      Installed price 2007$
----------------------------------------------------------------------------------------------------------------
                                       Baseline...............  N/A....................  19.74.
                                       EL1....................  EN/A...................  EN/A.
110 Watt T12                           EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  LL.....................  123.27 to 123.60.
                                       EL5....................  -10.09.................  126.49.
----------------------------------------------------------------------------------------------------------------

[[Page 16999]]

 
                                       Baseline...............  N/A....................  13.92.
                                       EL1....................  EN/A...................  EN/A.
95 Watt T12                            EL2....................  EN/A...................  EN/A.
                                       EL3....................  EN/A...................  EN/A.
                                       EL4....................  -26.41 to -23.25.......  123.27 to 123.60.
                                       EL5....................  -23.07.................  126.49.
----------------------------------------------------------------------------------------------------------------
* Analysis period is 2.3 years.
EN/A: Event Not Applicable; N/A: Not Applicable.

2. Economic Impacts on Manufacturers
    DOE used the INPV in the MIA to compare the financial impacts of 
different TSLs on GSFL and IRL manufacturers. The INPV is the sum of 
all net cash flows discounted by the industry's cost of capital 
(discount rate). DOE used the GRIMs to compare the INPV of the base 
case (no amended energy conservation standards) to that of each TSL for 
the GSFL and IRL industries. To evaluate the range of cash-flow impacts 
on the industries, DOE constructed different scenarios for each 
industry using different assumptions for markups and shipments that 
correspond to the range of anticipated market responses. Each scenario 
results in a unique set of cash flows and corresponding industry value 
at each TSL. These steps allowed DOE to compare the potential impacts 
on industries as a function of TSLs in the GRIMs. The difference in 
INPV between the base case and the standards case is an estimate of the 
economic impacts that implementing that standard level would have on 
the entire industry.
a. Industry Cash-Flow Analysis Results
i. General Service Fluorescent Lamps
    To assess the lower end of the range of potential impacts for the 
GSFL industry, DOE considered the flat markup scenario under the 
Existing Technologies base case, shipments with high lighting 
expertise, and a shift in efficacy distributions. Besides the impact of 
shipments on the INPV, this case assumed that manufacturers would be 
able to maintain gross margins as a percentage of revenues as 
production cost increases with efficacy. To assess the higher end of 
the range of potential impacts for the GSFL industry, DOE considered 
the scenario reflecting the four-tier markup scenario under the 
Emerging Technologies base case, shipments with market-based lighting 
expertise, and a rollup in efficacy distributions. Besides the impact 
of shipments on the INPV, this case assumed standards would reduce 
manufacturers' portfolio, thereby squeezing the margin of higher-
efficacy products as they are ``demoted'' to lower-relative-efficacy 
tier products. Table VI.25 and Table VI.26 show the low end and high 
end of the range of MIA results, respectively, for each TSL using the 
cases described above.

Table VI.25--Manufacturer Impact Analysis for GSFL With the Flat Markup Scenario Under the Existing Technologies
                      Base Case--High Lighting Expertise--Shift in Efficiency Distributions
----------------------------------------------------------------------------------------------------------------
                                                                            Trial standard level
                                    Units       Base case ------------------------------------------------------
                                                               1          2          3          4          5
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2007$                 602        652        653        673        594        616
                                millions).
Change in INPV...............  (2007$           .........         49         50         71         -9         13
                                millions).
                               (%)............  .........      8.18%      8.31%     11.78%     -1.48%      2.21%
Amended Energy Conservation    (2007$           .........        3.3        8.8        8.8       11.6       29.6
 Standards Product Conversion   millions).
 Expenses.
Amended Energy Conservation    (2007$           .........       38.5       60.5      104.5      181.5      181.5
 Standards Capital Conversion   millions).
 Expenses.
Total Investment Required....  (2007$           .........       41.8       69.3      113.3      193.1      211.1
                                millions).
----------------------------------------------------------------------------------------------------------------


Table VI.26--Manufacturer Impact Analysis for GSFL With the Four-Tier Markup Scenario Under the Emerging Technologies Base Case--Market Segment Lighting
                                                      Expertise--Rollup in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Trial standard level
                                                              Units                Base case -----------------------------------------------------------
                                                                                                   1           2           3           4           5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................................  (2007$ millions)................         575         668         638         436         380         312
Change in INPV................................  (2007$ millions)................  ..........          93          63        -139        -195        -263
                                                (%).............................  ..........      16.09%      11.02%     -24.15%     -33.96%     -45.80%
Amended Energy Conservation Standards Product   (2007$ millions)................  ..........         3.3         8.8         8.8        11.6        29.6
 Conversion Expenses.
Amended Energy Conservation Standards Capital   (2007$ millions)................  ..........        38.5        60.5       104.5       181.5       181.5
 Conversion Expenses.
Total Investment Required.....................  (2007$ millions)................  ..........        41.8        69.3       113.3       193.1       211.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 17000]]

    For the GSFL MIA, margin impacts are the most significant driver of 
INPV. The potential margin impacts on manufacturers are based on their 
ability to maintain higher margins as standards remove efficacy as a 
differentiator of premium products. The potential for standards to 
disrupt the premium margins for efficacy is captured in the higher-
bound and lower-bound scenarios DOE presents. The lower-bound scenario 
represents the situation where manufacturers maintain their current 
``good, better, best'' marketing strategy by basing higher margins on 
features other than efficacy or coming up with more-efficient products. 
The large impacts on industry value in the upper-bound scenario are 
caused by higher standards disrupting manufacturers' current marketing 
strategy. In this scenario, manufacturers cannot maintain higher 
margins when efficacy is lost as a differentiator and higher standards 
lower profitability. Other drivers of INPV are less significant 
because: (1) The capital costs required at each TSL are relatively 
small compared to the industry revenue; and (2) shipments do not 
substantially change regardless of the scenario.
    DOE estimated the impacts on INPV at TSL1 to range from $49 million 
to $93 million, equal to a 8.2 percent to 16.1 percent increase. At 
this level, the highest impact on cash flow in the year leading up to 
the standards occurs under the Emerging Technologies base case. Under 
this scenario, industry cash flow decreases by approximately 37 
percent, to $32 million, compared to the base-case value of $50 million 
in the year leading up to the standards. Product conversion costs are 
low at TSL1 because manufacturers have existing products that meet the 
efficacy levels. Capital conversion costs are also low at this TSL 
because a minimal amount of T12 machinery needs to be converted to meet 
the growing volume of T8 production induced by standards. The necessary 
conversion costs to meet TSL1 are low relative to the conversion costs 
for the natural market migration from T12 to T8 lamps in the base case, 
which helps to mitigate the impact of the standards-induced conversion 
costs. The positive INPV predicted in the flat markup scenario is 
indicative that product conversion and capital conversion outlays are 
also low relative to the increase in variable production costs. Whereas 
GSFL production is capital intensive, the capital requirements are a 
function primarily of the tube diameter. Efficiency standards which do 
not require a change in diameter will typically require a change in 
phosphors which is not capital intensive. Under the tiered markup 
scenario, manufacturers are left with a range of products after 
standards, so they still earn higher markups on a wide variety of 
premium products. In fact, the products eliminated at TSL1 are 
commodity products which have a lower-than-average profit margin. Thus, 
industry revenues and cash flows are not negatively affected, and 
manufacturers actually benefit from the higher prices of remaining 
products.
    At TSL2, DOE estimated the impacts in INPV at TSL2 to range from 
$50 million to $63 million, equal to a 8.3 percent to 11.0 percent 
increase. At this level, the highest impact on cash flow in the year 
leading up to the standards occurs under the Emerging Technologies base 
case. Under this scenario, industry cash flow decreases by 
approximately 60 percent, to $20 million, compared to the base-case 
value of $50 million in the year leading up to the standards. Product 
conversion costs are still relatively low at TSL2, because few 
manufacturers will have to modify exiting products to meet this 
standard level. Capital conversion costs are also low at this TSL, but 
the investments required to meet TSL2 are larger than TSL1, because 
more T12 machinery needs to be converted to meet the growing volume of 
T8 production induced by standards. INPV is less positive at TSL2 than 
at TSL1, because the higher conversion costs necessary to meet TSL2 
lower the mitigating impact of the conversion costs for the natural 
market migration from T12 to T8 lamps included in the base case. At 
TSL2, more of the most-efficient, higher-priced T12 lamps are shifting 
to less-expensive T8 lamps. INPV in the four-tier markup scenario is 
also not as positive, because manufacturers have fewer premium products 
and the profit margins on some more-efficient T12 products begin to 
shrink. While TSL2 eliminates some of the premium T12 lamps, the T8 
lamps to which consumers must migrate still earn a higher markup.
    At TSL3, the impact on INPV and cash flow depends heavily on the 
ability of manufacturers to differentiate products and maintain higher 
margins as standards move consumers to previously premium products. DOE 
estimated that the impacts on INPV at TSL3 range from approximately $71 
million to -$139 million, equal to a 11.8 percent to -24.2 percent 
change. At this level, the highest impact on cash flow in the year 
leading up to the standards occurs under the Emerging Technologies base 
case. Under this scenario, industry cash flow decreases by 
approximately 100 percent, to $0 million, compared to the base-case 
value of $50 million in the year leading up to the standards. At TSL3, 
most manufacturers expressed concerns about the ability to maintain 
production volumes of T12 and T8 lamps, because all but the most 
efficient T12 lamps are eliminated. Because a large portion of existing 
T12 shipments migrate to T8, manufacturers have to convert or replace a 
significant portion of their T12 production lines to T8, making capital 
conversion costs higher at TSL3 than at TSL1 or TSL2. Conversion costs 
are also higher at TSL3, because manufacturers have to make more R&D 
expenditures to offer a full line of T12 and T8 products that meet the 
standard. Because TSL3 greatly accelerates the migration of T12 to T8 
products, the conversion costs in the base case have a minimal effect 
on offsetting INPV impacts from high standards-induced conversion costs 
at TSL3 and all higher TSLs. If manufacturers can pass along the 
increased production costs of more-efficient products by 
differentiating the products with features such as low mercury content 
and longer life, they can recoup margins, thereby mitigating some of 
the impacts. If manufacturers can fully differentiate their products 
and earn the same profit margins as in the base case (the lower range 
of impacts), they will benefit from higher prices and INPV will be 
positive at this TSL. However, if manufacturers cannot differentiate 
their products and the margins on previously premium products begin to 
erode with commoditization, DOE expects manufacturer margins to be 
negative and the higher end of the range of negative INPV will be 
reached.
    At TSL4, DOE estimated the impacts on INPV range from approximately 
-$9 million to -$195 million, equal to a -1.5 percent to -34.0 percent 
change. At this level, the highest impact on cash flow in the year 
leading up to the standards occurs under the Emerging Technologies base 
case. Under this scenario, industry cash flow decreases by 
approximately 171 percent, to -$36 million, compared to the base-case 
value of $50 million in the year leading up to the standards. At TSL4, 
there are significant conversion capital expenditures because all T12 
production lines need to be converted to T8 lines; the capital 
requirement for this conversion is nearly double the amount needed at 
TSL3. The large capital costs make INPV negative even if manufacturers 
maintain the margin on all lamps, as in the base case. Also, 
manufacturers expressed concern that

[[Page 17001]]

the highest-grade phosphor mixtures would be necessary on most lamps to 
meet efficiencies prescribed by TSL4. The more-efficient phosphor 
blends substantially increase lamp costs, decreasing profitability if 
the cost increases cannot be passed on to consumers. That is, at TSL4, 
more T8 lamps that previously earned a premium are commoditized because 
the standard eliminates all T12 lamps from the market, thereby 
squeezing margins on all lamps and causing more negative impacts in the 
four-tier markup scenario.
    At TSL5, DOE estimated that the impacts on INPV range from 
approximately $13 million to -$263 million, equal to a 2.2 percent to -
45.8 percent change. At this level, the highest impact on cash flow in 
the year leading up to the standards occurs under the Emerging 
Technologies base case. Under this scenario, industry cash flow 
decreases by approximately 183 percent, to -$42 million, compared to 
the base-case value of $50 million in the year leading up to the 
standards. At TSL5, the necessary conversion capital is identical to 
TSL4 because this TSL also requires manufacturers to convert all 
existing T12 production to T8 production. These large costs make INPV 
negative even if manufacturers pass along all production cost increases 
to the consumer. At TSL5, all products are commoditized because all 
lamps must use the most efficient phosphor coatings. There are few 
options available for manufacturers to differentiate lamps at TSL5, 
thereby making it more likely that manufacturers will be negatively 
affected.
    Based on interviews with manufacturers, DOE understands that 
manufacturers are constantly forced to revise their marketing 
strategies as new products are introduced and older products become 
commoditized. DOE also understands that higher efficacy is not the only 
feature available to differentiate premium products. Lifetime, lower 
mercury content, and removing lead are all features that also 
differentiate products. Therefore, DOE believes that after significant 
early disruptions in pricing, over time the industry will recover the 
profitability levels that existed prior to standards as manufacturers 
rebalance their product mix. The net effect on INPV is uncertain but 
should tend toward the midpoint of the two GRIM scenarios. DOE seeks 
comment on the ability of manufacturers to maintain these margins 
through the differentiation of products by other means. DOE also seeks 
comment on how the ability to differentiate products might vary over 
time.
ii. Incandescent Reflector Lamps
    During the manufacturer interviews DOE learned that for IRL lamps, 
markups do not increase as a function of efficacy (in contrast to 
GSFL). Instead, manufacturers indicated that the range of potential 
impacts would depend on the magnitude of the capital investments 
required and the expected reduction in product sales. Thus, DOE modeled 
manufacturing impacts using all IRL shipments scenarios described in 
sections V.G.4.b.ii and V.G.4.b.iv. To assess the lower end of the 
range of potential impacts for the IRL industry, DOE considered the 
Existing Technologies base case reflecting the no product substitution 
scenario with a shift in efficacy distributions. In this scenario: (1) 
Manufacturers benefit from higher prices from consumers switching to 
more-efficient products on their own (the shift scenario); (2) IRL 
base-case shipments are not eroded due to emerging technologies; and 
(3) standards-case shipments do not decrease due to substitutions of R-
CFL and exempted BR lamps for IRL. To assess the higher end of the 
range of potential impacts for the IRL industry, DOE considered the 
Emerging Technologies base case reflecting the product substitution 
scenario with a rollup in efficacy distributions. In this scenario: (1) 
IRL base-case shipments are eroded due to emerging technologies; and 
(2) standards-case shipments decrease due to substitutions of R-CFL and 
exempted BR lamps for IRL. Table VI.27 and Table VI.28 show the MIA 
results for each TSL for IRL under the shipment scenarios which result 
in the highest and lowest INPV impacts.

   Table VI.27--Manufacturer Impact Analysis for IRL Under the Existing Technologies Base Case--No Product Substitution Scenario--Shift in Efficiency
                                                                      Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Trial standard level
                                                              Units                Base case -----------------------------------------------------------
                                                                                                   1           2           3           4           5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................................  (2007$ millions)................         267         263         215         205         190         185
Change in INPV................................  (2007$ millions)................  ..........         (4)        (52)        (62)        (77)        (82)
                                                (%).............................  ..........      -1.55%     -19.36%     -23.06%     -28.85%     -30.85%
Amended Energy Conservation Standards Product   (2007$ millions)................  ..........          $3          $3          $2          $3          $7
 Conversion Expenses.
Amended Energy Conservation Standards Capital   (2007$ millions)................  ..........         $31         $83        $134        $166        $185
 Conversion Expenses.
Total Investment Required.....................  (2007$ millions)................  ..........         $35         $87        $136        $170        $192
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table VI.28--Manufacturer Impact Analysis for IRL Under the Emerging Technologies Base Case--Product Substitution--Roll-Up in Efficiency Distributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Trial standard level
                                                              Units                Base case -----------------------------------------------------------
                                                                                                   1           2           3           4           5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................................  (2007$ millions)................         207         191         149         131         112         104
Change in INPV................................  (2007$ millions)................  ..........        (16)        (58)        (76)        (94)       (103)
                                                (%).............................  ..........      -7.69%     -27.87%     -36.85%     -45.60%     -49.60%
Amended Energy Conservation Standards Product   (2007$ millions)................  ..........          $3          $3          $2          $3          $7
 Conversion Expenses.
Amended Energy Conservation Standards Capital   (2007$ millions)................  ..........         $31         $83        $134        $166        $185
 Conversion Expenses.

[[Page 17002]]

 
Total Investment Required.....................  (2007$ millions)................  ..........         $35         $87        $136        $170        $192
--------------------------------------------------------------------------------------------------------------------------------------------------------

    To meet TSL1, manufacturers must replace less-efficient fill gases 
in the capsule with xenon. At TSL1, DOE estimated the impacts on INPV 
to be between -$4 million and -$16 million, or a change in INPV of 
between -1.6 percent and -7.7 percent. At this level, the highest 
impact on cash flow in the year leading up to the standards occurs 
under the Emerging Technologies base case. Under this scenario, the 
industry cash flow decreases by approximately 68 percent, to $7.1 
million, compared to the base case value of $22.5 million in the year 
leading up to the standards. All manufacturers have a full range of 
products that meet this TSL. Conversion expenses are relatively low at 
this level because using xenon does not require substantial changes to 
the manufacturing process. Because the lifetimes of standards-compliant 
lamps do not change at TSL1, shipments in the standards cases are not 
further impacted by lower shipments due to higher lamp lifetimes. In 
fact, at this TSL, manufacturers benefit from the increased prices of 
standards-compliant lamps. However, this positive impact on revenues is 
not enough to overcome the product and capital conversion expenses, 
making overall INPV negative. The greater impact on shipments in the 
Emerging Technologies base case with product substitution drives INPV 
more negative.
    TSL2 is based on a 6,000 hour HIR lamp, but this level may also be 
achieved using an improved reflector. At TSL2, the impact on INPV and 
cash flow depends on a manufacturer's ability to recoup the conversion 
capital and product conversion expenses and the extent to which 
shipments are reduced in the base case due to emerging technologies and 
in the standards case due to changes in the product mix (including lamp 
lifetime). DOE estimated the impacts in INPV at TSL2 to be between -$52 
million and -$58 million or a change in INPV of -19.4 percent and -27.9 
percent. At this level, the highest impact on cash flow in the year 
leading up to the standards occurs under the Emerging Technologies base 
case. Under this scenario, the industry cash flow decreases by 
approximately 172 percent, to -$16.2 million, compared to the base-case 
value of $22.5 million in the year leading up to the standards. At 
TSL2, there are negative impacts on manufacturers due to decreased 
shipments and significant product conversion expenses. At this TSL, 
conversion expenses vary greatly among manufacturers but are 
significant in the aggregate due to the need to increase production of 
HIR lamps or invest in improved reflector technology. Two manufacturers 
have a complete line of standards-compliant lamps but must spend a 
considerable amount of resources to expand production of a low-volume, 
premium product for mass production. Another manufacturer must spend a 
significant amount of capital to purchase the machinery to meet demand 
with exclusively higher technology (infrared) lamps in addition to 
replacing krypton with xenon as fill gas in the capsule. The shipment 
scenarios chosen account for the range in INPV. Shipments have a 
significant impact on INPV at this TSL in all cases because the 
products that meet this standard have the longest lifetimes in the 
standards cases, further decreasing shipments relative to the base 
cases. Some manufacturers have expressed concerns about competitive 
impacts at this TSL. One manufacturer has a patent on silverized 
reflectors. Another manufacturer is believed to have a cross license on 
the technology. Despite the large capital expense to expand this 
reflector technology for all baseline lamps to meet this TSL, both 
these manufacturers could capture market share by selling less-
expensive lamps based on improved reflector coating instead of HIR 
technology. The other manufacturer without access to the enhanced 
reflectors would have to make large expenditures on capital and product 
conversion to produce lamps with a comparable efficacy, but at higher 
costs.
    TSL3 is based on 3,000-hour HIR technology. DOE estimated the 
impacts on INPV at TSL3 to be between -$62 million and -$76 million, or 
a change in INPV of between -23.1 percent and -36.9 percent. At this 
level, the highest impact on cash flow in the year leading up to the 
standards occurs under the Emerging Technologies base case. Under this 
scenario, the industry cash flow decreases by approximately 272 
percent, to-$38.6 million, compared to the base-case value of $22.5 
million in the year leading up to the standards. There are significant 
capital conversion costs at this TSL that make INPV negative. 
Manufacturers must purchase additional infrared coaters to increase the 
production of these low-volume lamps. Since current HIR production is 
very small relative to standard halogen IRL, all manufacturers voiced 
their concerns about meeting demand at this level. Also, since all 
existing HIR capsules use xenon as the fill gas, manufactures are 
concerned about the high material costs for this gas and the potential 
for the price to increase over time. The high costs to convert all 
lamps to HIR technology drive INPV negative and strand existing 
equipment for standard halogen capsules. The range of INPV arises from 
the shipment scenarios that account for different market erosion due to 
emerging technology and standards inducing a switch to exempted BR 
lamps and R-CFL. If manufacturer concerns about consumers switching to 
exempted BR and R-CFL are realized in addition to emerging technology 
eroding the IRL market, then the higher end of the range of negative 
INPV will be reached.
    TSL4 requires the production of an improved HIR lamp. At TSL4, DOE 
estimated the impacts in INPV to be between -$77 million and -$94 
million, or a change in INPV of -28.9 percent and -45.6 percent. At 
this level, the highest impact on cash flow in the year leading up to 
the standards occurs under the Emerging Technologies base case. Under 
this scenario, the industry cash flow decreases by approximately 338 
percent, to -$53.6 million, compared to the base-case value of $22.5 
million in the year leading up to the standards. The significant 
capital and product conversion expenses at this TSL make INPV negative. 
At this TSL, all manufacturers must expand production of the more-
efficient HIR technology to meet demand of the entire market. Since 
current HIR production is relatively low, these substantial costs make 
INPV negative. The capital conversion expenses are large because, in 
addition

[[Page 17003]]

to HIR technology, manufacturers must also use enhanced reflectors or 
the most efficient burners and add xenon. Also, since all existing HIR 
capsules use xenon as the fill gas, manufactures are concerned about 
the high material costs for this gas and the potential for the price to 
increase over time. The lifetimes of products that meet this TSL are 
longer than the baseline, creating a negative impact on INPV from 
shipments regardless of the shipment scenario selected. Manufacturers 
also voiced concerns about competition at TSL4. Because lamps can use 
an enhanced reflector with HIR to meet TSL4, manufacturers have the 
same competitive concerns as at TSL2. Finally, two manufacturers 
currently have a full line of lamps that meet TSL4. A third 
manufacturer has some products, but would have to undertake a costly 
redesign of its burners in order to sell a full line of those lamps.
    TSL5 requires the production of lamps with an improved HIR coating 
and an additional improvement. At TSL5, DOE estimated the impacts in 
INPV to be between -$82 million and -$103 million, or a change in INPV 
of between -30.9 percent and -49.6 percent. At this level, the highest 
impact on cash flow in the year leading up to the standards occurs 
under the Emerging Technologies base case. Under this scenario, the 
industry cash flow decreases by approximately 381 percent, to -$63.1 
million, compared to the base-case value of $22.5 million in the year 
leading up to the standards. The impacts at TSL5 are the most severe 
for manufacturers, because the capital and product conversion expenses 
are greatest at this TSL. At this TSL, all manufacturers must expand 
production of a lamp with multiple improvements over standard HIR 
lamps. Manufacturers must use HIR technology with an improved coating 
and with either enhanced reflectors or more-efficient burners. Since 
even standard HIR production is currently low compared to standard 
halogen, expanding the production of the most-efficient HIR technology 
to meet demand of the entire market is very costly. Due to the large 
conversion costs, INPV is greatly negative even if the market is not 
eroded by emerging technology and customers do not substitute R-CFL and 
exempted BR lamps for IRL. If manufacturers concerns about emerging 
technology and substitutions for IRL are realized, DOE expects the 
higher range of negative impacts to be reached (a 49.6 percent decrease 
in INPV).
b. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, DOE understands the combined effects of several existing 
and impending regulations may have serious consequences for some 
manufacturers, groups of manufacturers, or an entire industry. 
Assessing the impact of a single regulation may overlook this 
cumulative regulatory burden. For this reason, DOE conducts an analysis 
of cumulative regulatory burden as part of its rulemakings pertaining 
to appliance efficiency.
    In its written comment, NEMA submitted a list of regulatory 
requirements that included numerous reporting requirements, the 
Restriction on Hazardous Substances directive (RoHS), and 
legislatively-prescribed minimum performance requirements that 
contribute to the industries' cumulative regulatory burden (NEMA, No. 
22 at p 34). DOE discusses the suggested regulatory provisions 
submitted by NEMA in chapter 13 of the TSD.
    In addition to the energy conservation standards on GSFL and IRL 
products, other regulations can significantly affect manufacturers' 
financial operations. Multiple regulations affecting the same 
manufacturer can quickly strain profits and possibly cause an exit from 
the market. Besides the list of suggested regulatory provisions that 
NEMA submitted, DOE also identified other regulations these 
manufacturers are facing for other products and equipment they 
manufacture within three years prior to and three years after the 
effective date of the amended energy conservation standards for GSFL 
and IRL.
    DOE believes that the EISA 2007 requirements for GSIL could have 
the greatest cumulative burden on manufacturers of GSFL and IRL. DOE 
understands that manufacturers of GSFL and IRL will also incur large 
capital and product conversion investments to comply with the GSIL 
minimum efficacy standards. The GSIL investments will compete with IRL 
and GSFL for company resources. For example, GSFL, IRL, and GSIL all 
share many of the same limited engineering resources. In addition, the 
capital costs to comply with EISA 2007 could potentially limit the 
funding available for GSFL and IRL conversions because these 
investments will compete for the same sources of capital. DOE 
understands that these are important but surmountable challenges for 
GSFL and IRL manufacturers.
c. Impacts on Employment
    To assess the impacts of energy conservation standards on GSFL and 
IRL direct manufacturing employment, DOE used the GRIM to estimate 
domestic labor expenditures and employment levels. DOE used statistical 
data from the U.S. Census Bureau's 2006 Annual Survey of Manufacturers 
(2006 ASM), results from other analyses, and interviews with 
manufacturers to estimate the inputs necessary to calculate industry-
wide labor expenditures and employment levels. In the GRIM, total labor 
expenditures are a function of the labor content, the sales volume, and 
the wage rate which remains fixed in real terms over time. The total 
employment figures presented for the GSFL and IRL industries include 
both production and non-production workers.
    DOE does not believe that standards will alter the domestic 
employment levels of the GSFL industry. During interviews with 
manufacturers, DOE learned that GSFL are produced on high-speed, fully-
automated lines. Production workers are not involved in the physical 
assembly of the final product (e.g., in inserting components, 
transferring partly assembled lamps, soldering lamp bases). The 
production workers counted in DOE's figure include plant workers 
involved in clearing glass, overseeing a portion of the assembly line, 
monitoring quality control, mixing phosphors, and moving finished 
products to loading. The employment levels required for these tasks are 
a function of the total volume of the facility, not the labor content 
of the product mix produced by the plant. Since higher TSLs involve 
using more-efficient phosphors, employment will not be impacted because 
standards will not change the overall scale of the facility. DOE 
estimates that there are approximately 1,806 U.S. production and non-
production workers in the GSFL industry.
    Table VI.29 and Table VI.30 show the domestic employment impacts 
calculated in the GRIM for the two cash flow scenarios used to bound 
the range of INPV impacts. The total employment figures include both 
production and non-production workers.

[[Page 17004]]



 Table VI.29--Change in Average Number of Domestic Employees in the IRL Industry Under the Existing Technologies
                  Base Case--No Product Substitution Scenario--Shift in Efficiency Distribution
----------------------------------------------------------------------------------------------------------------
                                                 Baseline     TSL1       TSL2       TSL3       TSL4       TSL5
----------------------------------------------------------------------------------------------------------------
Average Number of Domestic IRL Employees from       1,319      1,518      1,303      1,492      1,396      1,426
 2012-2042....................................
Change in the Average Number of Domestic IRL    .........        199        -16        173         77        107
 Employees from 2012-2042.....................
----------------------------------------------------------------------------------------------------------------


 Table VI.30--Change in Average Number of Domestic Employees in the IRL Industry Under the Emerging Technologies
                  Base Case--Product Substitution Scenario--Roll-Up in Efficiency Distribution
----------------------------------------------------------------------------------------------------------------
                                                 Baseline     TSL1       TSL2       TSL3       TSL4       TSL5
----------------------------------------------------------------------------------------------------------------
Average Number of Domestic IRL Employees from         699        783        623        724        617        621
 2012-2042....................................
Change in the Average Number of Domestic IRL    .........         84        -77         24        -82        -78
 Employees from 2012-2042.....................
----------------------------------------------------------------------------------------------------------------

    DOE believes that amended energy conservation standards will not 
significantly impact IRL direct employment. The impact that new 
standards will have on employment is far less significant than the 
potential impact from emerging technologies. Both scenarios show that 
the absolute magnitudes of employment impacts due to standards are 
small. Whether standards have a positive or negative impact on 
employment is largely determined by the extent to which consumers elect 
to substitute IRL with other lamp technologies (such as R-CFL or 
exempted IRL) in the standards case.
    The employment impacts calculated by DOE are independent of the 
employment impacts from the broader U.S. economy, which are documented 
in chapter 15 of the TSD accompanying this notice. The employment 
conclusions also do not account for the possible relocation of domestic 
jobs to lower-labor-cost countries because the potential relocation of 
U.S. jobs is uncertain and highly speculative. During interviews, 
manufacturers did not emphasize the risk of shifting production 
facilities abroad.
d. Impacts on Manufacturing Capacity
    DOE anticipates that amended energy conservation standards would 
not significantly affect the production capacity of GSFL manufacturers. 
For GSFL manufacturers, any necessary redesign of GSFL would not change 
the fundamental assembly of the equipment because higher TSLs require 
the use of more-efficient phosphor coatings, which are largely a 
materials issue. Therefore, in the long-term there should be no 
capacity constraints. However, higher standards would also be expected 
to expedite a natural conversion of T12 shipments to T8 shipments. 
Because most production lines are specific to lamp diameter, shifting 
production from T12 to T8 lamps requires shutting down the line and 
retooling. Based on the duration of line changes described by 
manufactures, DOE believes that the conversion of machinery to T8 lamp 
production could occur between the announcement date and the effective 
date of the standards. In addition, manufacturers indicated it is 
possible to ramp up production before shutting down a line to maintain 
a constant supply of shipments during retooling.
    Manufacturers are concerned that IRL standards could cause capacity 
constraints if amended standards were to alter the assembly of standard 
halogen burners. In particular, IRL manufacturers are concerned about 
the ability to convert their equipment in time to meet an exclusively 
HIR standard (TSL3, TSL4, and TSL5). Although all manufacturers DOE 
interviewed produce lamps with infrared burners, the current volume of 
these lamps is many times lower than the volume of standard halogen 
lamps. In addition, the production of infrared capsules is much more 
time consuming, requiring additional time for the coating process and 
quality control due to the precision necessary for the technology to 
increase efficacy. In general, the large lamp manufacturers are 
concerned about their ability to increase the production volume of HIR 
capsules in time to meet the standard. However, interviews with 
suppliers of HIR capsules and coating decks suggest that the capacity 
could be met under an HIR standard. Based on discussions with suppliers 
of infrared coaters, DOE also believes that lamp manufacturers will 
have enough time in between the announcement date and the effective 
date of the standards to purchase and install the necessary coaters to 
meet TSL3 and higher and produce all burners in their own facilities. 
Independent of manufacturers' ability to install coaters to produce all 
infrared burners in-house, independent suppliers of infrared capsules 
suggested that they have the ability to supply a significant portion of 
the market. Because manufacturers could install additional coaters, 
purchase infrared burners from a supplier, and use existing excess 
capacity, DOE believes IRL manufacturers will be able to maintain 
production capacity levels and continue to meet market demand for all 
IRL standard levels.
e. Impacts on Manufacturer Subgroups
    As discussed above, using average cost assumptions to develop an 
industry cash-flow estimate is inadequate for assessing differential 
impacts among manufacturer subgroups. Small manufacturers, niche 
players, and manufacturers exhibiting a cost structure that differs 
largely from the industry average could be affected differently. DOE 
used the results of the industry characterization to group 
manufacturers exhibiting similar characteristics.
    During its interviews, DOE did not identify any small manufacturers 
of covered IRL, but DOE did identify one small manufacturer that 
produces covered GSFL.\72\ This manufacturer suggested that it could be 
less impacted by amended energy conservation standards on GSFL than the 
large manufacturers. Unlike its larger competitors, the small 
manufacturer focuses on specialty products not covered by this 
rulemaking and has had

[[Page 17005]]

a better ability to pass along product cost increases. For a discussion 
of the impacts on the small manufacturer, see chapter 13 of the TSD and 
section 0 of today's notice.
---------------------------------------------------------------------------

    \72\ DOE identified and contacted 12 businesses that could 
potentially be classified as small business manufacturers of the 
products that are the subject of this rulemaking. Four of those 
businesses agreed to be interviewed. Of these, DOE verified that 
only one of those businesses met all the criteria to be classified 
as a small manufacturer of covered GSFL or IRL. For further detail 
on DOE's inquiry regarding small manufacturers, please see section 
VII.B on the review under the Regulatory Flexibility Act.
---------------------------------------------------------------------------

3. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings through 2042 due to amended energy 
conservation standards, DOE compared the energy consumption of the 
lamps under the base case to the energy consumption of these products 
under the trial standard levels. Table VI.31 and Table VI.32 show the 
forecasted national energy savings (including rebound effect and HVAC 
interactions where applicable) in quads (quadrillion BTU) at each TSL 
for GSFL and IRL. As discussed in section V.E, DOE models two base-case 
shipment scenarios and several standards-case shipment scenarios. For 
each lamp type, these scenarios combined produce eight possible sets of 
NES results. The tables below present the results of the two scenarios 
that represent the maximum and minimum energy savings resulting from 
all the scenarios analyzed.
    For GSFL, DOE presents ``Existing Technologies, High Lighting 
Expertise, Shift'' and ``Emerging Technologies, Market Segment-Based 
Lighting Expertise, Roll-Up'' in Table VI.31 as the scenarios that 
produce the maximum and minimum energy savings, respectively. Due to a 
larger reduction in the installed stock of lamps affected by standards, 
the Emerging Technologies base-case forecast results in lower energy 
savings than the Existing Technologies base-case forecast. In addition, 
due to a portion of consumers purchasing non-energy-saving, higher-
lumen-output systems, the Market Segment-Based Lighting Expertise 
scenario results in lower energy savings than the High Lighting 
Expertise scenario. Finally, because in the Shift scenario more 
consumers move to higher-efficacy lamps than in the Roll-Up scenario, 
the Shift scenario results in higher energy savings than the Roll-Up 
scenario.
    Table VI.31 presents total national energy savings for each TSL 
(labeled as ``Total'' savings). The table also reports national energy 
savings due to individually regulating each type of GSFL (presented 
next to the lamp type names), assuming no amended standard on all other 
lamp types. However, it is important to note that individual lamp type 
energy savings (due to separate regulation) do not sum to equal total 
energy savings achieved at the trial standard levels due to standards-
induced substitution effects between lamp types. Instead, these savings 
are provided merely to illustrate the approximate relative energy 
savings of each lamp type under a TSL. As discussed in the March 2008 
ANOPR, due to their relatively small shipments-based market share, DOE 
did not directly model the national impacts of 2-foot U-shaped lamps. 
In the ANOPR, DOE stated that in order to develop NES and NPV for this 
lamps type, it intended to scale the NIA results from other analyzed 
product classes. Given the similarities in historical shipment trends 
(showing a decrease in T12 lamps and an increase in T8 lamps) and in 
system input power, in this NOPR, DOE has decided to scale results from 
the 4-foot medium bipin product classes to approximate NES and NPV of 
2-foot U-Shaped product classes. As historical shipments 4-foot medium 
bipin lamps were 22 times that of 2-foot U-shaped lamp shipments, DOE 
used this scaling factor to approximate the energy savings of 2-foot U-
shaped lamps.
    As seen in the tables below, the highest energy savings result from 
TSL 5 and from EL5 for all lamp types. In addition, DOE notes that at 
EL 1 and EL 2 for 4-foot medium bipin and at EL 1, EL 2, and EL 3 for 
8-foot single pin slimline and 8-foot RDC HO lamps, all energy savings 
originate from shifts to higher-efficacy T12 lamps and voluntary early 
retrofits to the more-efficacious T8 systems (not applicable to 8-foot 
RDC HO). At these ELs, all T8 lamps are compliant and, therefore, 
unaffected by standards. At TSL 3, a large increase in total energy 
savings of GSFL can be observed, stemming from the conversion of all 
40W, 4-foot MBP T12 lamps to 34W T12 lamps and also from 4-foot T8 
lamps (the majority of the GSFL stock) being affected by the 
regulations. It is also important to note that at TSL 4 and TSL 5, all 
4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO T12 lamp systems 
would be automatically retrofitted to T8 lamp systems, because no T12 
standards-compliant lamps would be available.

   Table VI.31--Summary of Cumulative National Energy Savings for GSFL
------------------------------------------------------------------------
                                      National energy savings (quad)
                                 ---------------------------------------
                                                           Emerging
    TSL/EL          Lamp type          Existing          technologies,
                                  technologies, high    market segment-
                                       lighting         based lighting
                                   expertise, shift   expertise, roll-up
------------------------------------------------------------------------
1.............  4-foot MBP......                1.52                0.43
                8-foot SP                       0.10                0.08
                 Slimline.
                8-foot RDC HO...                0.18                0.02
                4-foot MiniBP SO                0.76                0.12
                4-foot MiniBP HO                1.14                0.65
                2-foot U-Shaped.                0.07                0.02
                                 ---------------------------------------
                  Total                         3.77                1.32
                                 =======================================
2.............  4-foot MBP......                1.57                0.60
                8-foot SP                       0.13                0.11
                 Slimline.
                8-foot RDC HO...                0.24                0.20
                4-foot MiniBP SO                0.76                0.12
                4-foot MiniBP HO                1.14                0.65
                2-foot U-Shaped.                0.07                0.03
                                 ---------------------------------------
                  Total                         3.90                1.70
                                 =======================================
3.............  4-foot MBP......                4.76                1.99

[[Page 17006]]

 
                8-foot SP                       0.18                0.17
                 Slimline.
                8-foot RDC HO...                0.25                0.20
                4-foot MiniBP SO                0.76                0.12
                4-foot MiniBP HO                1.14                0.65
                2-foot U-Shaped.                0.22                0.09
                                 ---------------------------------------
                  Total                         7.33                3.24
                                 =======================================
4.............  4-foot MBP......                8.23                2.70
                8-foot SP                       0.38                0.23
                 Slimline.
                8-foot RDC HO...                0.66                0.66
                4-foot MiniBP SO                0.76                0.12
                4-foot MiniBP HO                1.14                0.65
                2-foot U-Shaped.                0.37                0.12
                                 ---------------------------------------
                  Total                        11.64                4.49
                                 =======================================
5.............  4-foot MBP......                9.53                3.72
                8-foot SP                       0.38                0.25
                 Slimline.
                8-foot RDC HO...                0.72                0.67
                4-foot MiniBP SO                0.91                0.29
                4-foot MiniBP HO                1.14                0.65
                2-foot U-Shaped.                0.43                0.17
                                 ---------------------------------------
                  Total                        13.17                5.75
------------------------------------------------------------------------

    For IRL, DOE presents ``Existing Technologies, Product 
Substitution, Shift'' and ``Emerging Technologies, No Product 
Substitution, Roll-Up'' in Table VI.32 as the scenarios that produce 
the maximum and minimum energy savings, respectively. Similar to GSFL, 
the Existing Technologies base-case forecast results in higher energy 
savings than the Emerging Technologies base-case forecast due to the 
greater installed stock of IRL affected by standards. Also, although a 
relatively small difference, the Product Substitution scenario 
(including migration to both higher-efficacy R-CFL and lower-efficacy, 
exempted BR lamps) results in marginally higher energy savings than the 
No Product Substitution scenario. In addition, while the effect is 
greater for GSFL than for IRL, the Shift scenario (only affecting 
commercial consumers) also represents higher energy savings than the 
Roll-Up scenario for IRL. As seen in the table below, TSL 5 achieves 
maximum energy savings for both scenarios.

     Table VI.32--Summary of Cumulative National Energy Savings for
                      Incandescent Reflector Lamps
------------------------------------------------------------------------
                                        National energy savings (quads)
                                     -----------------------------------
                                          Existing          Emerging
                 TSL                    technologies,   technologies, no
                                           product           product
                                        substitution,     substitution,
                                            shift            roll-up
------------------------------------------------------------------------
1...................................              0.37              0.22
2...................................              1.06              0.52
3...................................              1.89              1.00
4...................................              2.32              1.25
5...................................              2.60              1.48
------------------------------------------------------------------------

b. Net Present Value
    The NPV analysis is a measure of the cumulative benefit or cost of 
standards to the Nation. In accordance with the OMB's guidelines on 
regulatory analysis,\73\ DOE calculated NPV using both a 7-percent and 
a 3-percent real discount rate. The 7-percent rate is an estimate of 
the average before-tax rate of return to private capital in the U.S. 
economy, and reflects the returns to real estate and small business 
capital, as well as corporate capital. DOE used this discount rate to 
approximate the opportunity cost of capital in the private sector, 
because recent OMB analysis has found the average rate of return to 
capital to be near this rate. DOE also used the 3-percent rate to 
capture the potential effects of standards on private consumption 
(e.g., through higher prices for equipment and the purchase of reduced 
amounts of energy). This rate represents the rate at which society 
discounts future consumption flows to

[[Page 17007]]

their present value. This rate can be approximated by the real rate of 
return on long-term government debt (i.e., yield on Treasury notes 
minus annual rate of change in the Consumer Price Index), which has 
averaged about 3 percent on a pre-tax basis for the last 30 years.
---------------------------------------------------------------------------

    \73\ OMB Circular A-4, section E (Sept. 17, 2003).
---------------------------------------------------------------------------

    The table below shows the forecasted net present value at each 
trial standard level for GSFL and IRL. Similar to the results presented 
for NES, Table VI.33 DOE presents the ``Existing Technologies, High 
Lighting Expertise, Shift'' scenario and the ``Emerging Technologies, 
Market Segment-Based Lighting Expertise, Roll Up'' scenario as the 
maximum and minimum NPVs for GSFL, respectively. In general, the NPV 
results at each trial standard level are a reflection of the life-cycle 
cost savings at the corresponding efficacy levels. As seen in section 
VI.B.1.a.i for most lamp purchasing events and most baseline lamps, 
increasing efficacy levels generally result in increased LCC savings. 
Due to this general cost-effectiveness of higher-efficacy GSFL, the 
Existing Technologies base-case forecast (which increases the affected 
stock and shipments) and the Shift scenario (which results in the 
shipment of more high-efficacy lamps) represent the high-range scenario 
for NPV. The Market Segment-Based Lighting Expertise scenario models 
consumers who purchase higher-first-cost lamps, but may not achieve 
energy savings. As these consumers generally have overall lower NPV 
(and often negative NPV) than their energy-saving counterparts, the 
Market Segment-Based Lighting Expertise scenario results in lower NPV 
than the High Lighting Expertise scenario.
    As seen in Table VI.33, NPV generally increases with increasing 
trial standard levels, consistent with the same trend in the LCC 
results. For the Market Segment-Based Lighting Expertise scenario, due 
to a large lack of lighting expertise in the residential sector (DOE 
assumes 0 percent consumers conducting T12 fixture replacements have 
high lighting expertise), the NPV from 4-foot medium bipin lamps is 
negative at EL1 and EL2. At efficacy levels above EL2, 4-foot medium 
bipin lamps achieve positive NPV due to the integration of more-
efficacious T8 lamps into both commercial stocks (where lighting 
sophistication is higher) and residential stocks. In addition, the 
Emerging Technologies, Market Segment-Based Lighting Expertise, Roll-Up 
scenario shows decreased NPV from TSL4 to TSL5. This is primarily due 
to the portion of consumers (without lighting expertise) that are 
forced to purchase much higher cost lamps, but do not take advantage of 
the energy savings they provide.

                          Table VI.33--Summary of Cumulative Net Present Value for GSFL
----------------------------------------------------------------------------------------------------------------
                                                                NPV (billion 2007$)
                                 -------------------------------------------------------------------------------
                                   Existing technologies, high lighting   Emerging technologies, market segment-
    TSL/EL        Product class              expertise, shift                based lighting expertise, roll-up
                                 -------------------------------------------------------------------------------
                                      7% Discount         3% Discount         7% Discount         3% Discount
----------------------------------------------------------------------------------------------------------------
1.............  4-foot MBP......                3.93                9.04               -0.01                0.73
                8-foot SP                       0.10                0.34                0.03                0.21
                 Slimline.
                8-foot RDC HO...                0.35                0.60               -0.17               -0.24
                4-foot MiniBP SO                1.11                2.70                0.05                0.19
                4-foot MiniBP HO                1.46                3.38                0.81                1.91
                2-foot U-Shaped.                0.18                0.41                0.00                0.03
                                 -------------------------------------------------------------------------------
                  Total                         7.12               16.46                0.71                2.82
                                 ===============================================================================
2.............  4-foot MBP......                3.14                7.78               -0.35                0.52
                8-foot SP                       0.15                0.45                0.09                0.35
                 Slimline.
                8-foot RDC HO...                0.43                0.73                0.53                0.87
                4-foot MiniBP SO                1.11                2.70                0.05                0.19
                4-foot MiniBP HO                1.46                3.38                0.81                1.91
                2-foot U-Shaped.                0.14                0.35               -0.02                0.02
                                 -------------------------------------------------------------------------------
                  Total                         6.43               15.39                1.11                3.85
                                 ===============================================================================
3.............  4-foot MBP......                7.56               17.53                1.79                5.58
                8-foot SP                       0.37                0.81                0.37                0.80
                 Slimline.
                8-foot RDC HO...                0.12                0.26                0.06                0.14
                4-foot MiniBP SO                1.11                2.70                0.05                0.19
                4-foot MiniBP HO                1.46                3.38                0.81                1.91
                2-foot U-Shaped.                0.34                0.80                0.08                0.25
                                 -------------------------------------------------------------------------------
                  Total                        11.09               25.67                3.23                8.98
                                 ===============================================================================
4.............  4-foot MBP......               17.47               35.93                5.97               13.34
                8-foot SP                       0.87                1.89                0.38                0.97
                 Slimline.
                8-foot RDC HO...                1.33                2.53                1.33                2.53
                4-foot MiniBP SO                1.11                2.70                0.05                0.19
                4-foot MiniBP HO                1.46                3.38                0.81                1.91
                2-foot U-Shaped.                0.79                1.63                0.27                0.61
                                 -------------------------------------------------------------------------------
                  Total                        23.37               48.61                8.85               19.59
                                 ===============================================================================
5.............  4-foot MBP......               18.37               38.56                5.53               12.80
                8-foot SP                       0.87                1.89                0.45                1.11
                 Slimline.
                8-foot RDC HO...                1.38                2.62                1.28                2.46
                4-foot MiniBP SO                1.45                3.46                0.23                0.69

[[Page 17008]]

 
                4-foot MiniBP HO                1.46                3.38                0.81                1.91
                2-foot U-Shaped.                0.83                1.75                0.25                0.58
                                 -------------------------------------------------------------------------------
                  Total                        24.49               51.90                8.54               19.53
----------------------------------------------------------------------------------------------------------------

    For IRL, DOE presents the ``Existing Technologies, Product 
Substitution, Shift'' and ``Emerging Technologies, No Product 
Substitution, Roll-Up'' scenarios as the maximum and minimum NPVs, 
respectively. As seen in Table VI.34, NPV increases with TSL, 
consistent with LCC savings generally increasing with efficacy level. 
In particular, for the No Product Substitution scenario, the negative 
NPV at TSL1 results because the life-cycle cost savings at EL1 (the 
associated EL) are primarily negative. However, as seen in the Product 
Substitution scenario, TSL1 achieves positive NPV due to primarily the 
increased movement to highly cost-effective R-CFLs. NPV results are the 
most positive at TSL5, because the most cost-effective IRL lamp is 
purchased at this TSL.

              Table VI.34--Summary of Cumulative Net Present Value for Incandescent Reflector Lamps
----------------------------------------------------------------------------------------------------------------
                                                                      NPV (billion 2007$)
                                             -------------------------------------------------------------------
                                               Existing technologies, product       Emerging technologies, no
                     TSL                             substitution, shift          product substitution, roll-up
                                             -------------------------------------------------------------------
                                                7% Discount      3% Discount      7% Discount      3% Discount
                                                    rate             rate             rate             rate
----------------------------------------------------------------------------------------------------------------
1...........................................             0.19             0.55            -0.06             0.00
2...........................................             3.47             7.11             1.82             3.71
3...........................................             4.75             9.85             2.58             5.30
4...........................................             6.75            13.97             3.72             7.68
5...........................................             7.52            15.55             4.34             8.99
----------------------------------------------------------------------------------------------------------------

c. Impacts on Employment
    In addition to considering the direct employment impacts for the 
manufacturers of products covered in this rulemaking (discussed above), 
DOE also develops estimates of the indirect employment impacts of 
proposed standards on the economy in general. As noted previously, DOE 
expects energy conservation standards for the GSFL and IRL covered by 
these standards to reduce energy bills for consumers, with the 
resulting net savings being redirected to other forms of economic 
activity. DOE also realizes that these shifts in spending and economic 
activity could affect the demand for labor. To estimate these effects, 
DOE used an input/output model of the U.S. economy using BLS data (see 
section V.H). See chapter 15 of the TSD accompanying this notice for 
details.
    This input/output model suggests the proposed standards are likely 
to slightly increase the net demand for labor in the economy. Neither 
the BLS data nor the input/output model DOE uses includes the quality 
or wage level of the jobs. As Table VI.35 and Table VI.36 show, the net 
increase in jobs due to standards for GSFL and IRL, respectively, is so 
small that it would likely be imperceptible in national labor 
statistics and might be offset by other, unanticipated effects on 
employment.

 Table VI.35--Net National Change in Indirect Employment for GSFL, Jobs
                                 in 2042
------------------------------------------------------------------------
                                          Net national change in jobs
                                                  (thousands)
                                     -----------------------------------
                                                            Emerging
        Trial standard level              Existing        technologies,
                                        technologies,    roll up, market
                                         shift, high      segment based
                                          lighting          lighting
                                          expertise         expertise
------------------------------------------------------------------------
1...................................              15.4               5.2
2...................................              15.2               5.7
3...................................              21.6              10.1
4...................................              27.6              13.3
5...................................              32.4              15.2
------------------------------------------------------------------------


[[Page 17009]]


Table VI.36--Net National Change in Indirect Employment for IRL, Jobs in
                                  2042
------------------------------------------------------------------------
                                          Net national change in jobs
                                                  (thousands)
                                     -----------------------------------
                                          Existing          Emerging
        Trial standard level            technologies,   technologies, no
                                           product           product
                                        substitution,     substitution,
                                            shift            roll up
------------------------------------------------------------------------
1...................................               1.4               0.9
2...................................               3.5               2.9
3...................................               5.8               5.2
4...................................               7.5               6.9
5...................................               8.2               7.8
------------------------------------------------------------------------

4. Impact on Utility or Performance of Products
    As discussed in section IV.D.1.d of this notice, DOE concluded that 
none of the efficacy levels considered in this notice would reduce the 
utility or performance of the GSFL and IRL under consideration in this 
rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV)). Furthermore, 
manufacturers of these products currently offer GSFL and IRL that meet 
or exceed the proposed standards.
5. Impact of Any Lessening of Competition
    DOE considers any lessening of competition likely to result from 
standards. The Attorney General determines the impact, if any, of any 
lessening of competition likely to result from a proposed standard, and 
transmits such determination to the Secretary, together with an 
analysis of the nature and extent of such impact. (42 U.S.C. 
6295(o)(2)(B)(i)(V) and (B)(ii)).
    To assist the Attorney General in making such a determination, DOE 
has provided DOJ with copies of this notice and the TSD for review. DOE 
will consider DOJ's comments on the proposed rule in preparing the 
final rule. In the final rule, DOE will publish the Attorney General's 
written determination and respond accordingly.
6. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of GSFL and IRL is likely 
to improve the security of the Nation's energy system by reducing 
overall demand for energy, thereby reducing the Nation's reliance on 
foreign sources of energy. Reduced demand could improve the reliability 
of the electricity system, particularly in the short run during peak-
load periods. As a measure of this reduced demand, DOE expects the 
energy savings from the proposed standards to eliminate the need for 
approximately 1100 to 3400 megawatts (MW) of generating capacity for 
GFSL and up to 450 MW for IRL by 2042.
    Enhanced energy efficiency also produces environmental benefits. 
The expected energy savings from higher standards would reduce the 
emissions of air pollutants and greenhouse gases associated with 
electric energy production and may reduce the cost of maintaining 
nationwide emissions standards and constraints. Table VI.37 and Table 
VI.38 show cumulative CO<INF>2</INF>, NO<INF>X</INF>, and Hg emissions 
reductions for GSFL and IRL by TSL over the rulemaking period.

                              Table VI.37--Summary of Emissions Reductions for GSFL
                           [Cumulative reductions for products sold from 2012 to 2042]
----------------------------------------------------------------------------------------------------------------
                                                         TSL1        TSL2        TSL3        TSL4        TSL5
----------------------------------------------------------------------------------------------------------------
                              Existing Technologies, Shift, High Lighting Expertise
----------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................  ..................       236.4       233.7       395.2       597.7       679.7
NOX (kt)........................  low...............          14          15          25          39          43
NOX (kt)........................  high..............         347         361         623         951       1,072
Hg (t)..........................  low...............         0.0         0.0         0.0         0.0         0.0
Hg (t)..........................  high..............         4.2         3.8         6.9         7.9         9.1
----------------------------------------------------------------------------------------------------------------
                     Emerging Technologies, Roll Up, Market Segment Based Lighting Expertise
----------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................  ..................        85.7       103.5       184.3       239.7       312.8
NOX (kt)........................  low...............           5           7          12          17          20
NOX (kt)........................  high..............         127         167         289         407         503
Hg (t)..........................  low...............         0.0         0.0         0.0         0.0         0.0
Hg (t)..........................  high..............         1.5         1.5         2.9         3.2         4.4
----------------------------------------------------------------------------------------------------------------


                              Table VI.38--Summary of Emissions Reductions for IRL
                           [Cumulative reductions for products sold from 2012 to 2042]
----------------------------------------------------------------------------------------------------------------
                                                         TSL1        TSL2        TSL3        TSL4        TSL5
----------------------------------------------------------------------------------------------------------------
                               Existing Technologies, Product Substitution, Shift
----------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................  ..................        17.7        44.8        88.1       114.4       118.8
NOX (kt)........................  low...............           1           3           6           7           8
NOX (kt)........................  high..............          29          78         141         181         193

[[Page 17010]]

 
Hg (t)..........................  low...............         0.0         0.0         0.0         0.0         0.0
Hg (t)..........................  high..............         0.2         0.6         1.3         1.7         1.7
----------------------------------------------------------------------------------------------------------------
                             Emerging Technologies, No Product Substitution, Roll Up
----------------------------------------------------------------------------------------------------------------
CO2 (MMt).......................  ..................        10.3        25.1        46.2        58.6        79.3
NOX (kt)........................  low...............           1           2           3           4           1
NOX (kt)........................  high..............          17          39          75          94          17
Hg (t)..........................  low...............         0.0         0.0         0.0         0.0         0.0
Hg (t)..........................  high..............         0.1         0.3         0.6         0.8         1.3
----------------------------------------------------------------------------------------------------------------
MMt = million metric tons.
kt = thousand metric tons.
t = metric tons.
Note: The derivation for the emission ranges are described below.

    The estimated cumulative CO<INF>2</INF>, NO<INF>X</INF>, and Hg 
emissions reductions for the proposed amended energy conservation 
standards range up to a maximum of 680 MMt for CO<INF>2</INF>, 1072 kt 
for NO<INF>X</INF>, and 9.1 metric tons for Hg for GSFL and 119 MMt for 
CO<INF>2</INF>, 193 kt for NO<INF>X</INF> and 1.7 tons for Hg for IRL 
over the period from 2012 to 2042. In the Environmental Assessment (see 
the Environmental Assessment report of the TSD), DOE reports estimated 
annual changes in CO<INF>2</INF>, NO<INF>X</INF>, and Hg emissions 
attributable to each TSL. As discussion in section V.J of this NOPR, 
DOE does not report SO<INF>2</INF> emissions reduction from power 
plants because reductions from an energy conservation standard would 
not affect the overall level of SO<INF>2</INF> emissions in the United 
States due to the emissions caps for SO<INF>2</INF>.
    The NEMS-BT modeling assumed that NO<INF>X</INF> would be subject 
to the Clean Air Interstate Rule (CAIR) issued by the U.S. 
Environmental Protection Agency on March 10, 2005.\74\ 70 FR 25162 (May 
12, 2005). On July 11, 2008, the U.S. Court of Appeals for the District 
of Columbia Circuit (DC Circuit) issued its decision in North Carolina 
v. Environmental Protection Agency,\75\ in which the court vacated the 
CAIR. If left in place, the CAIR would have permanently capped 
emissions of NO<INF>X</INF> in 28 eastern States and the District of 
Columbia. As with the SO<INF>2</INF> emissions cap, a cap on 
NO<INF>X</INF> emissions would have meant that energy conservation 
standards are not likely to have a physical effect on NO<INF>X</INF> 
emissions in States covered by the CAIR caps. While the caps would have 
meant that physical emissions reductions in those States would not have 
resulted from the energy conservation standards that DOE is proposing 
today, the standards might have produced an environmental-related 
economic impact in the form of lower prices for emissions allowance 
credits, if large enough. DOE notes that the estimated total reduction 
in NO<INF>X</INF> emissions, including projected emissions or 
corresponding allowance credits in States covered by the CAIR cap was 
insignificant and too small to affect allowance prices for 
NO<INF>X</INF> under the CAIR.
---------------------------------------------------------------------------

    \74\ On December 23, 2008, the D.C. Circuit decided 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 (DC Cir. Dec. 23, 2008). Neither the July 11, 
2008 nor the December 23, 2008 decisions of the D.C. Circuit change 
the standard-setting proposals reached in this rule. See http://www.epa.gov/cleanairinterstaterule.
    \75\ 531 F.3d 896 (D.C. Cir. 2008).
---------------------------------------------------------------------------

    Even though the DC Circuit vacated the CAIR, DOE notes that the DC 
Circuit left intact EPA's 1998 NO<INF>X</INF> SIP Call rule, which 
capped seasonal (summer) NO<INF>X</INF> emissions from electric 
generating units and other sources in 23 jurisdictions and gave those 
jurisdictions the option to participate in a cap and trade program for 
those<INF></INF> emissions. 63 FR 57356, 57359 (Oct. 27, 1998).\76\ DOE 
notes that the SIP Call rule may provide a similar, although smaller in 
extent, regional cap and may limit actual reduction in NO<INF>X</INF> 
emissions from revised standards occurring in States participating in 
the SIP Call rule. However, the possibility that the SIP Call rule may 
have the same effect as CAIR is highly uncertain. Therefore, DOE 
established a range of NO<INF>X</INF> reductions due to the standards 
being considered in today's proposed rule. DOE's low estimate was based 
on the emission rate of the cleanest new natural gas combined-cycle 
power plant available for electricity generated based on the assumption 
that efficiency standards would result in only the cleanest available 
fossil-fueled generation being displaced. DOE used the emission rate, 
specified in 0.0310 kilotons (0.0341 thousand short tons) of 
NO<INF>X</INF> emitted per TWh of electricity generated, associated 
with an advanced natural gas combined-cycle power plant, as specified 
by NEMS-BT. To estimate the reduction in NO<INF>X</INF> emissions, DOE 
multiplied this emission rate by the reduction in electricity 
generation due to the amended energy conservation standards considered. 
DOE's high estimate of 0.764 kilotons (0.843 thousand short tons) of 
NO<INF>X</INF> per TWh was based on the use of a nationwide 
NO<INF>X</INF> emission rate for all electrical generation. Use of such 
an emission rate assumes that future efficiency standards would result 
in displaced electrical generation mix that is equivalent to today's 
mix of power plants (i.e., future power plants displaced are no cleaner 
than what are being used currently to generate electricity). In 
addition, under the high estimate assumption, energy conservation 
standards would have little to no effect on the generation mix.

[[Page 17011]]

Based on AEO2008 for a recent year (2006) in which no regulatory or 
non-regulatory measures were in effect to limit NO<INF>X</INF> 
emissions, DOE multiplied this emission rate by the reduction in 
electricity generation due to the standards considered. DOE is 
considering whether changes are needed to its plan for addressing the 
issue of NO<INF>X</INF> reduction. DOE invites public comment on how 
the agency should address this issue, including how it might value 
NO<INF>X</INF> emissions for States now that the CAIR has been 
vacated.\77\
---------------------------------------------------------------------------

    \76\ In the NO<INF>X</INF> SIP Call rule, EPA found that sources 
in the District of Columbia and 22 ``upwind'' States (States) were 
emitting NO<INF>X</INF> (an ozone precursor) at levels that 
significantly contributed to ``downwind'' States not attaining the 
ozone NAAQS or at levels that interfered with States in attainment 
maintaining the ozone NAAQS. In an effort to ensure that 
``downwind'' States attain or continue to attain the ozone NAAQS, 
EPA established a region-wide cap for NO<INF>X</INF> emissions from 
certain large combustion sources and set a NO<INF>X</INF> emissions 
budget for each State. Unlike the cap that CAIR would have 
established, the NO<INF>X</INF> SIP Call Rule's cap only constrains 
seasonal (summer time) emissions. In order to comply with the 
NO<INF>X</INF> SIP Call Rule, States could elect to participate in 
the NO<INF>X</INF> Budget Trading Program. Under the NO<INF>X</INF> 
Budget Trading Program, each emission source is required to have one 
allowance for each ton of NO<INF>X</INF> emitted during the ozone 
season. States have flexibility in how they allocate allowances 
through their State Implementation Plans but States must remain 
within the EPA-established budget. Emission sources are allowed to 
buy, sell, and bank NO<INF>X</INF> allowances as appropriate. It 
should be noted that, on April 16, 2008, EPA determined that Georgia 
is no longer subject to the NO<INF>X</INF> SIP Call rule. 73 FR 
21528 (April 22, 2008).
    \77\ In anticipation of CAIR replacing the NO<INF>X</INF> SIP 
Call Rule, many States adopted sunset provisions for their plans 
implementing the NO<INF>X</INF> SIP Call Rule. The impact of the 
NO<INF>X</INF> SIP Call Rule on NO<INF>X</INF> emissions will 
depend, in part, on whether these implementation plans are 
reinstated.
---------------------------------------------------------------------------

    The range in NO<INF>X</INF> emission changes calculated under using 
the low- and high-estimate scenarios are shown in Table VI.37 and Table 
VI.38 by TSL. The range of total cumulative NO<INF>X</INF> emission 
reductions is from 5 to 1071 kt for GSFL and 1 to 193 kt for IRL for 
the range of TSLs considered. These changes in NO<INF>X</INF> emissions 
are extremely small, at less than 0.1 percent of the national base-case 
emissions forecast by NEMS-BT, depending on the TSL.
    As noted above in section V.J, with regard to Hg emissions, DOE is 
able to report an estimate of the physical quantity changes in these 
emissions associated with an energy conservation standard. As opposed 
to using the NEMS-BT model, DOE established a range of Hg rates to 
estimate the Hg emissions that could be reduced from standards. DOE's 
low estimate was based on the assumption that future standards could 
displace electrical generation from natural gas-fired power plants as 
the cleanest possible fossil-fueled generation displacement consistent 
with the low end of range established for NO<INF>X</INF> emissions, 
thereby resulting in an effective emission rate of zero. The low-end 
emission rate is zero because virtually all Hg emitted from electricity 
generation is from coal-fired power plants. Based on an emission rate 
of zero, no emissions would be reduced from energy conservation 
standards. DOE's high estimate was based on the use of a nationwide 
mercury emission rate from AEO2008. Because power plant emission rates 
are a function of local regulation, scrubbers, and the mercury content 
of coal, it is extremely difficult to come up with a precise high-end 
emission rate. Therefore, DOE believes that the most reasonable 
estimate is based on the assumption that all displaced coal generation 
would have been emitting at the average emission rate for coal 
generation as specified by AEO2008. As noted previously, because 
virtually all mercury emitted from electricity generation is from coal-
fired power plants, DOE based the emission rate on the tons of mercury 
emitted per TWh of coal-generated electricity. Based on the emission 
rate for a recent year (2006), DOE derived a high-end emission rate of 
0.023 metric tons (0.0255 short tons) per TWh. To estimate the 
reduction in mercury emissions, DOE multiplied the emission rate by the 
reduction in coal-generated electricity due to the standards considered 
as determined in the utility impact analysis. The estimated changes in 
Hg emissions are shown in Table VI.37 for both GSFL and IRL from 2012 
to 2042. The range of total Hg emission reductions is from 0 to 9.1 
tons for GSFL and 0 to 1.7 tons for IRL for the range of TSLs 
considered. These changes in Hg emissions are extremely small, 
generally being less than 0.1 percent of the national base-case 
emissions forecast by NEMS-BT, depending on the TSL.
    The NEMS-BT model used for today's rulemaking could not be used to 
estimate Hg emission reductions due to standards, as it assumed that Hg 
emissions would be subject to EPA's Clean Air Mercury Rule \78\ (CAMR), 
which would have permanently capped emissions of mercury for new and 
existing coal-fired plants in all States by 2010. Similar to 
SO<INF>2</INF> and NO<INF>X</INF>, DOE assumed that under such a 
system, energy conservation standards would have resulted in no 
physical effect on these emissions, but might have resulted in an 
environmental-related economic benefit in the form of a lower price for 
emissions allowance credits, if large enough. DOE estimated that the 
change in the Hg emissions from energy conservation standards would not 
be large enough to influence allowance prices under CAMR.
---------------------------------------------------------------------------

    \78\ 70 FR 28606 (May 18, 2005).
---------------------------------------------------------------------------

    On February 8, 2008, the DC Circuit issued its decision in New 
Jersey v. Environmental Protection Agency,\79\ in which the DC Circuit, 
among other actions, vacated the CAMR referenced above. Accordingly, 
DOE is considering whether changes are needed to its plan for 
addressing the issue of mercury emissions in light of the DC Circuit's 
decision. DOE invites public comment on addressing mercury emissions in 
this rulemaking.
---------------------------------------------------------------------------

    \79\ 517 F.3d 574 (D.C. Cir. 2008).
---------------------------------------------------------------------------

    In today's proposed rule, DOE is taking into account a monetary 
benefit of CO<INF>2</INF> emission reductions associated with this 
rulemaking. To put the potential monetary benefits from reduced 
CO<INF>2</INF> emissions into a form that is likely to be most useful 
to decision-makers and stakeholders, DOE used the same methods used to 
calculate the net present value of consumer cost savings: the estimated 
year-by-year reductions in CO<INF>2</INF> emissions were converted into 
monetary values and these resulting annual values were then discounted 
over the life of the affected appliances to the present using both 3 
percent and 7 percent discount rates.
    These estimates discussed below are based on a previous analysis 
that used a range of no benefit to an average benefit value reported by 
the IPCC.\80\ It is important to note that the IPCC estimate used as 
the upper bound value was derived from an estimate of the mean value of 
worldwide impacts from potential climate impacts caused by 
CO<INF>2</INF> emissions, and not just the effects likely to occur 
within the United States. This previous analysis assumed that the 
appropriate value should be restricted to a representation of those 
costs/benefits likely to be experienced in the United States. DOE 
expects that such domestic values would be lower than comparable global 
values; however, there currently are no consensus estimates for the 
U.S. benefits likely to result from CO<INF>2</INF> emission reductions. 
Because U.S.-specific estimates were not available, and DOE did not 
receive any additional information that would help serve to narrow the 
proposed range as a representative range for domestic U.S. benefits, 
DOE believes it is appropriate to propose the global mean value as an 
appropriate upper bound U.S. value for purposes of the sensitivity 
analysis.
---------------------------------------------------------------------------

    \80\ During the preparation of its most recent review of the 
state of climate science, the Intergovernmental Panel on Climate 
Change (IPCC) identified various estimates of the present value of 
reducing carbon-dioxide emissions by one ton over the life that 
these emissions would remain in the atmosphere. The estimates 
reviewed by the IPCC spanned a range of values. In the absence of a 
consensus on any single estimate of the monetary value of 
CO<INF>2</INF> emissions, DOE used the estimates identified by the 
study cited in Summary for Policymakers prepared by Working Group II 
of the IPCC's Fourth Assessment Report to estimate the potential 
monetary value of CO<INF>2</INF> reductions likely to result from 
standards finalized in this rulemaking. According to IPCC, the mean 
social cost of carbon (SCC) reported in studies published in peer-
reviewed journals was $43 per ton of carbon. This translates into 
about $12 per ton of carbon dioxide. The literature review (Tol 
2005) from which this mean was derived did not report the year in 
which these dollars were denominated. However, we understand this 
estimate was denominated in 1995 dollars. Updating that estimate to 
2007 dollars yields a SCC of $15 per ton of carbon dioxide.
---------------------------------------------------------------------------

    As already discussed in section V.J, DOE received a comment on the 
March 2008 ANOPR in the present rulemaking for estimating the value of 
CO<INF>2</INF> emissions reductions. The Joint

[[Page 17012]]

Comment argued for assigning an economic value to CO<INF>2</INF> 
emissions. DOE's approach for assigning a range to the dollars per ton 
of CO<INF>2</INF> emissions recognizes and addresses the concerns of 
the Joint Comment.
    The Department of Energy, together with other Federal agencies, is 
currently reviewing various methodologies for estimating the monetary 
value of reductions in CO<INF>2</INF> and other greenhouse gas 
emissions. This review will consider the comments on this subject that 
are part of the public record for this and other rulemakings, as well 
as other methodological assumptions and issues, such as whether the 
appropriate values should represent domestic U.S. or global benefits 
(and costs). Given the complexity of the many issues involved, this 
review is ongoing. However, consistent with DOE's legal obligations, 
and taking into account the uncertainty involved with this particular 
issue, DOE has included in this rulemaking the values and analyses 
previously conducted.
    Given the uncertainty surrounding estimates of the societal cost of 
carbon (SCC), DOE previously concluded that relying on any single study 
may be inadvisable since its estimate of the SCC will depend on many 
assumptions made by its authors. The Working Group II's contribution to 
the Fourth Assessment Report of the IPCC notes that:

    The large ranges of SCC are due in the large part to differences 
in assumptions regarding climate sensitivity, response lags, the 
treatment of risk and equity, economic and non-economic impacts, the 
inclusion of potentially catastrophic losses, and discount 
rates.\81\

    \81\ Climate Change 2007--Impacts, Adaptation and Vulnerability. 
Contribution of Working Group II to the Fourth Assessment Report of 
the IPCC, 17. Available at http://www.ipcc-wg2.org (last accessed 
Aug. 7, 2008).
---------------------------------------------------------------------------

    Because of this uncertainty, DOE previously relied on Tol (2005), 
which was presented in the IPCC's Fourth Assessment Report, and was a 
comprehensive meta-analysis of estimates for the value of SCC. As a 
result, DOE previously decided to rely on the Tol study reported by the 
IPCC as the basis for its analysis.
    DOE continues to believe that the most appropriate monetary values 
for consideration in the development of efficiency standards are those 
drawn from studies that attempt to estimate the present value of the 
marginal economic benefits likely to result from reducing greenhouse 
gas emissions, rather than estimates that are based on the market value 
of emission allowances under existing cap and trade programs or 
estimates that are based on the cost of reducing emissions--both of 
which are largely determined by policy decisions that set the timing 
and extent of emission reductions and do not necessarily reflect the 
benefit of reductions. DOE also believes that the studies it relies 
upon generally should be studies that were the subject of a peer review 
process and were published in reputable journals.
    In today's NOPR, DOE is essentially proposing to continue to use 
the range of values based on the values presented in Tol (2005). 
Additionally, DOE has applied an annual growth rate of 2.4% to the 
value of SCC, as suggested by the IPCC Working Group II (2007, p. 822), 
based on estimated increases in damages from future emissions reported 
in published studies. Because the values in Tol (2005) were presented 
in 1995 dollars, DOE is assigning a range for the SCC of $0 to $20 
($2007) per ton of CO<INF>2</INF> emissions.
    DOE is proposing to use the median estimated social cost of 
CO<INF>2</INF> as an upper bound of the range. This value is based on 
Tol (2005), which reviewed 103 estimates of the SCC from 28 published 
studies, and concluded that when only peer-reviewed studies published 
in recognized journals are considered, ``that climate change impacts 
may be very uncertain but [it] is unlikely that the marginal damage 
costs of carbon dioxide emissions exceed $50 per ton carbon [comparable 
to a 2007 value of $20 per ton carbon dioxide when expressed in 2007 
U.S. dollars with a 2.4% growth rate].''
    In proposing a lower bound of $0 for the estimated range, DOE's 
previous analysis agreed with the IPCC Working Group II (2007) report 
that ``significant warming across the globe and the locations of 
significant observed changes in many systems consistent with warming is 
very unlikely to be due solely to natural variability of temperatures 
or natural variability of the systems'' (pp. 9), and, thus, tentatively 
concluded that a global value of zero for reducing emissions cannot be 
justified. However, DOE previously tentatively concluded that it is 
reasonable to allow for the possibility that the U.S. portion of the 
global cost of carbon dioxide emissions may be quite low. In fact, some 
of the studies looked at in Tol (2005) reported negative values for the 
SCC. DOE assumed that it would be most appropriate to use U.S. benefit 
values, and not world benefit values, in its analysis, and, further, 
that U.S. domestic values will be lower than the global values. As 
indicated above, DOE, together with other Federal agencies, is now 
reviewing whether this previous analysis should be modified.
    The resulting estimates of the potential range of net present value 
benefits associated with the reduction of CO<INF>2</INF> emissions are 
reflected in Table VI.39 and Table VI.40.

              Table VI.39--Preliminary Estimates of Savings From CO2 Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
                                                                 Value of estimated CO2   Value of estimated CO2
                                         Estimated cumulative     emission reductions      emission reductions
                 TSL                      CO2 (MMt) emission     (billion 2007$) at 7%    (billion 2007$) at 3%
                                              reductions             discount rate            discount rate
----------------------------------------------------------------------------------------------------------------
1....................................  85.7 to 236.4..........  $0 to $1.2.............  $0 to $2.5
2....................................  103.5 to 233.7.........  $0 to $1.2.............  $0 to $2.5.
3....................................  184.3 to 395.2.........  $0 to $2.1.............  $0 to $4.3.
4....................................  239.7 to 597.7.........  $0 to $3.5.............  $0 to $6.8.
5....................................  312.8 to 679.7.........  $0 to $4.0.............  $0 to $7.7.
----------------------------------------------------------------------------------------------------------------


               Table VI.40--Preliminary Estimates of Savings From CO2 Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
                                                                 Value of estimated CO2   Value of estimated CO2
                                         Estimated cumulative     emission reductions      emission reductions
                 TSL                      CO2 (MMt) emission     (billion 2007$) at 7%    (billion 2007$) at 3%
                                              reductions             discount rate            discount rate
----------------------------------------------------------------------------------------------------------------
1....................................  10.3 to 17.7...........  $0 to $0.1.............  $0 to $0.2.
2....................................  25.1 to 44.8...........  $0 to $0.3.............  $0 to $0.5.

[[Page 17013]]

 
3....................................  46.2 to 88.1...........  $0 to $0.5.............  $0 to $1.0.
4....................................  58.6 to 114.4..........  $0 to $0.6.............  $0 to $1.3.
5....................................  79.3 to 118.8..........  $0 to $0.7.............  $0 to $1.3.
----------------------------------------------------------------------------------------------------------------

    DOE also investigated the potential monetary impact resulting from 
the impact of today's energy conservation standards on SO<INF>2</INF>, 
NO<INF>X</INF>, and Hg emissions. As previously stated, DOE's initial 
analysis assumed the presence of nationwide emission caps on 
SO<INF>2</INF> and Hg, and caps on NO<INF>X</INF> emissions in the 28 
States covered by the CAIR caps. In the presence of these emissions 
caps, DOE concluded that no physical reductions in power sector 
emissions would likely occur; however, the lower generation 
requirements associated with energy conservation standards could 
potentially put downward pressure on the prices of emissions allowances 
in cap-and-trade markets. Estimating this effect is very difficult 
because of factors such as credit banking, which can change the 
trajectory of prices. DOE has further concluded that the effect from 
energy conservation standards on SO<INF>2</INF> allowance prices is 
likely to be negligible, based upon runs of the NEMS-BT model. See 
Environmental Assessment report of the TSD for further details 
regarding SO<INF>2</INF> allowance price impacts.
    As discussed earlier, with respect to NO<INF>X</INF>, the CAIR rule 
had been vacated by the courts, so projected annual NO<INF>X</INF> 
allowances from NEMS-BT were no longer relevant. In DOE's subsequent 
analysis, NO<INF>X</INF> emissions were not controlled by a nationwide 
regulatory system. For the range of NO<INF>X</INF> reduction estimates 
(and Hg reduction estimates), DOE estimated the national monetized 
benefits of emissions reductions from today's proposed rule based on 
environmental damage estimates from the literature. Available estimates 
suggest a very wide range of monetary values for NO<INF>X</INF> 
emissions, ranging from $370 per ton to $3,800 per ton of 
NO<INF>X</INF> from stationary sources, measured in 2001 dollars \82\ 
or a range of $432 per ton to $4,441 per ton in 2007 dollars. As 
discussed above, DOE is considering how it should address the issue of 
NO<INF>X</INF> reduction and corresponding monetary valuation. DOE 
invites public comment on how the agency should address this issue.
---------------------------------------------------------------------------

    \82\ Office of Management and Budget Office of Information and 
Regulatory Affairs, ``2006 Report to Congress on the Costs and 
Benefits of Federal Regulations and Unfunded Mandates on State, 
Local, and Tribal Entities'' (2006).
---------------------------------------------------------------------------

    DOE has already conducted research for today's NOPR and determined 
that the basic science linking mercury emissions from power plants to 
impacts on humans is considered highly uncertain. However, DOE 
identified two estimates of the environmental damages of mercury based 
on two estimates of the adverse impact of childhood exposure to methyl 
mercury on IQ for American children, and subsequent loss of lifetime 
economic productivity resulting from these IQ losses. The high-end 
estimate is based on an estimate of the current aggregate cost of the 
loss of IQ in American children that results from exposure to mercury 
of U.S. power plant origin ($1.3 billion per year in year 2000$), which 
works out to $32.6 million per ton emitted per year (2007$).\83\ The 
low-end estimate was $664,000 per ton emitted in 2004$ or $729,000 per 
ton in 2007$, which DOE derived from a published evaluation of mercury 
control using different methods and assumptions from the first study, 
but also based on the present value of the lifetime earnings of 
children exposed.\84\ DOE invites public comment on how the agency 
should address this issue, including how to value mercury emissions in 
the absence of the CAMR. The resulting estimates of the potential range 
of the present value benefits associated with the national reduction of 
NO<INF>X</INF> and national reductions in Hg emissions are reflected in 
Table VI.41 through Table VI.44.
---------------------------------------------------------------------------

    \83\ Trasande, L., et al., ``Applying Cost Analyses to Drive 
Policy that Protects Children,'' 1076 ANN. N.Y. ACAD. SCI. 911 
(2006).
    \84\ Ted Gayer and Robert Hahn, Designing Environmental Policy: 
Lessons from the Regulation of Mercury Emissions, Regulatory 
Analysis 05-01 (AEI-Brookings Joint Center for Regulatory Studies) 
p. 31 (2004). A version of this paper was published in the Journal 
of Regulatory Economics in 2006. The estimate was derived by back-
calculating the annual benefits per ton from the net present value 
of benefits reported in the study.

              Table VI.41--Preliminary Estimates of Savings From NOX Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
                                                                 Value of estimated NOX   Value of estimated NOX
                                         Estimated cumulative     emission reductions      emission reductions
                 TSL                      NOX (kt) emission      (billion 2007$) at 7%    (billion 2007$) at 3%
                                              reductions             discount rate            discount rate
----------------------------------------------------------------------------------------------------------------
1....................................  5.1 to 347.4...........  $0.0 to $0.5...........  $0.0 to $0.9.
2....................................  6.8 to 361.1...........  $0.0 to $0.5...........  $0.0 to $0.9.
3....................................  11.7 to 623.0..........  $0.0 to $0.8...........  $0.0 to $1.6.
4....................................  16.5 to 950.7..........  $0.0 to $1.3...........  $0.0 to $2.6.
5....................................  20.3 to 1071.6.........  $0.0 to $1.4...........  $0. to $2.8.
----------------------------------------------------------------------------------------------------------------


[[Page 17014]]


               Table VI.42--Preliminary Estimates of Savings From NOX Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
                                                                 Value of estimated NOX   Value of estimated NOX
                                         Estimated cumulative     emission reductions      emission reductions
                 TSL                      NOX (kt) emission      (billion 2007$) at 7%    (billion 2007$) at 3%
                                              reductions             discount rate            discount rate
----------------------------------------------------------------------------------------------------------------
1....................................  0.7 to 29.0............  $0 to $0.0.............  $0 to $0.1.
2....................................  1.6 to 77.6............  $0 to $0.1.............  $0 to $0.2.
3....................................  3.0 to 140.6...........  $0 to $0.2.............  $0 to $0.4.
4....................................  3.8 to 180.7...........  $0 to $0.2.............  $0 to $0.5.
5....................................  4.5 to 193.1...........  $0 to $0.2.............  $0 to $0.5.
----------------------------------------------------------------------------------------------------------------


               Table VI.43--Preliminary Estimates of Savings From Hg Emissions Reductions for GSFL
----------------------------------------------------------------------------------------------------------------
                                                                 Value of estimated Hg    Value of estimated Hg
                                       Estimated cumulative Hg    emission reductions      emission reductions
                 TSL                       (Tons) emission       (million 2007$) at 7%    (million 2007$) at 3%
                                              reductions             discount rate            discount rate
----------------------------------------------------------------------------------------------------------------
1....................................  0 to 4.2...............  $0 to $38..............  $0 to $80.
2....................................  0 to 3.8...............  $0 to $35..............  $0 to $73.
3....................................  0 to 6.9...............  $0 to $65..............  $0 to $134.
4....................................  0 to 7.9...............  $0 to $88..............  $0 to $166.
5....................................  0 to 9.1...............  $0 to $102.............  $0 to $192.
----------------------------------------------------------------------------------------------------------------


               Table VI.44--Preliminary Estimates of Savings From Hg Emissions Reductions for IRL
----------------------------------------------------------------------------------------------------------------
                                                                 Value of estimated Hg    Value of estimated Hg
                                       Estimated cumulative Hg    emission reductions      emission reductions
                 TSL                       (tons) emission       (million 2007$) at 7%    (million 2007$) at 3%
                                              reductions             discount rate            discount rate
----------------------------------------------------------------------------------------------------------------
1....................................  0 to 0.2...............  $0 to $2...............  $0 to $5.
2....................................  0 to 0.6...............  $0 to $7...............  $0 to $13.
3....................................  0 to 1.3...............  $0 to $13..............  $0 to $26.
4....................................  0 to 1.7...............  $0 to $16..............  $0 to $33.
5....................................  0 to 1.7...............  $0 to $16..............  $0 to $33.
----------------------------------------------------------------------------------------------------------------

C. Proposed Standard

1. Overview
    Under 42 U.S.C. 6295(o)(2)(A), EPCA requires that any new or 
amended energy conservation standard for any type (or class) of covered 
product shall be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. In determining whether a standard is 
economically justified, the Secretary must determine whether the 
benefits of the standard exceed its burdens to the greatest extent 
practicable, in light of the following seven factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products or equipment subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products or equipment in the type (or class) 
compared to any increase in the price, initial charges, or maintenance 
expenses for the covered products that are likely to result from the 
imposition of the standard;
    (3) The total projected amount of energy (or, as applicable, water) 
savings likely to result directly from the imposition of the standard;
    (4) Any lessening of the utility or the performance of the covered 
products or equipment likely to result from the imposition of the 
standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary considers relevant. (42 U.S.C. 
6295(o)(2)(B)(i))
    The new or amended standard also must ``result in significant 
conservation of energy.'' (42 U.S.C. 6295(o)(3)(B))
    As discussed in section 0, DOE established a separate set of TSLs 
for GSFL and IRL. Therefore, DOE analyzed each lamp type (GSFL or IRL) 
separately while establishing the proposed standards.
    During the screening phase of this rulemaking, DOE eliminated the 
maximum technologically feasible levels for GSFL that would incorporate 
the use of a higher-efficiency gas fill composition than what is 
currently available on the market today. DOE's research had indicated 
that further usage of heavier gas fills to increase lamp efficacy 
beyond GSFL TSL5 would likely result in decreased utility of the 
product. Thus, DOE screened out the maximum technologically feasible 
levels that would be based on these reduced-utility GSFLs. TSL5 
represents the most efficient level analyzed for GSFL.
    For IRL, in the engineering analysis, DOE eliminated the maximum 
technologically feasible level that would require the use of a silver 
reflector, which DOE understands to be a proprietary technology. DOE 
does not believe there are any alternate technology pathways to this 
efficacy level. Therefore, TSL5 represents the most efficient level 
analyzed for IRL which does not require installation of the proprietary 
silver reflector. See sections IV.B.2 and VI.A.2 of this notice for 
more information on maximum technologically feasible levels and other 
efficacy levels DOE analyzed.
    DOE then considered the impacts of standards at each trial standard 
level, beginning with the most efficient level, to determine whether 
the given level was economically justified. DOE then considered less 
efficient levels until it reached the highest level that is 
technologically feasible and

[[Page 17015]]

economically justified and saves a significant amount of energy.
    DOE discusses the benefits and/or burdens of each trial standard 
level in the following sections. DOE bases its discussion on 
quantitative analytical results for each trial standard level 
(presented in section VI) such as national energy savings, net present 
value (discounted at 7 percent and 3 percent), emissions reductions, 
industry net present value, life-cycle cost, and consumers installed 
price increases. In addition to providing a summary of results, DOE 
discusses below the life-cycle cost and consumer installed price 
increase results for each product class and baseline where appropriate. 
Beyond the quantitative results, DOE also considers other burdens and 
benefits that affect economic justification, including how impacts on 
competition, supply constraints, and lamp input prices may affect the 
economic results presented.
2. General Service Fluorescent Lamps Conclusion
a. Trial Standard Level 5
    For GSFL, DOE first considered the most efficient level, TSL5, 
which would save an estimated total of 5.8 to 13.2 quads of energy 
through 2042--a significant amount of energy. For the Nation as a 
whole, TSL5 would have a net savings of $8.5 billion to $24.5 billion 
at a 7-percent discount rate. The emissions reductions at TSL5 are 
estimated at 313 to 680 MMt of CO<INF>2</INF>, 20 to 1072 kt of 
NO<INF>X,</INF>, up to 9 metric tons of Hg. Total generating capacity 
in 2042 is estimated to decrease compared to the reference case by 1.8 
to 5.4 GW under TSL5.
    The impacts on manufacturers would be very significant, because 
TSL5 would commoditize high-efficacy lamps and require a complete 
conversion of all T12 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO 
lines to T8 lines, requiring a capital investment of $181.5 million. 
The projected change in industry value ranges from a decrease of $263 
million to an increase of $13 million. The extent of the industry 
impacts is driven primarily by the ability to maintain current gross 
margins as efficient products become commoditized. Currently, 
manufacturers obtain higher margins for more-efficient products so to 
avoid the higher end of the anticipated impacts, they must find new 
ways to differentiate GSFL to maintain full product lines. At TSL5, DOE 
recognizes the risk of very large negative impacts if the high end of 
the range of impacts is reached, resulting in a net loss of 46 percent 
in INPV.
    At TSL5, DOE projects that most GSFL consumers would experience 
life-cycle cost savings. The following discussion outlines specific 
impacts on the separate product classes and baseline lamps.
    Table VI.5 presents the findings of an LCC analysis on various 
three-lamp, 4-foot medium bipin GSFL systems operating in the 
commercial sector. Regardless of the baseline lamp currently employed, 
consumers have available lamp designs which result in positive LCC 
savings at TSL5. At this standard level, users of 40W or 34W 4-foot MBP 
T12 baseline lamps installed on a magnetic ballast who need to replace 
their lamp would incur the cost of a lamp and ballast replacement 
($63.51 to $71.19) because no T12 lamp currently meets the efficacy 
requirements of TSL5. Comparing this cost of lamp-and-ballast 
replacements to the cost of only baseline lamp replacements ($11.22 to 
$13.96) results in installed price increases of $50.87 to $57.23. These 
ranges in prices depend on the specific baseline lamps previously owned 
by consumers and the specific combinations of lamps and ballasts they 
select in the standards case. However, over the life of the lamp, these 
consumers would save $15.13 to $25.26.
    Table VI.6 presents LCC results for a two-lamp 4-foot MBP system 
operating in the residential sector under average operating hours. The 
results are presented for a system operating 40W T12 lamps with a 
magnetic ballast, as this configuration is typical of the installed 
base of residential GSFL systems. As discussed in section V.D, DOE 
believes that the vast majority of lamps sold in the residential market 
are sold with new ballasts or luminaires. At TSL5, residential 
consumers are expected to purchase T8 lamps with electronic ballasts in 
lieu of the T12 lamps with magnetic ballasts that they would purchase 
absent standards. These consumers would see LCC savings of $17.72 to 
$19.66. DOE recognizes that not all residential GSFL lamps would be 
sold in conjunction with a new ballast or luminaire in the base case. 
In particular, consumers with higher operating hours may need to 
replace their lamp on an existing system. However, at TSL5, there are 
no standards-compliant T12 replacement lamps available. As seen in 
Table VI.7, the consumer economics of retrofitting a typical high-use 
residential 4-foot MBP system are negative, with life-cycle cost 
savings of -$3.50 to -$4.13.
    With regard to 4-foot MBP consumer subgroups, all consumer 
subgroups analyzed achieve similar LCC savings to the average consumer 
with the exception of commercial consumers who own 40W or 34W 4-foot 
MBP T12 lamps installed on electronic ballasts. These consumers, upon 
lamp failure, are forced to retrofit their existing ballasts, resulting 
in negative LCC savings of -$11.53 to -$5.53 (seen in Table VI.21). 
Overall, based on the NIA model, DOE estimates that at TSL5 in 2012, 
approximately 2 percent of 4-foot MBP shipments result in negative LCC 
savings, and 9 percent of shipments are associated with the high 
installed price increases due to forced retrofits.
    Table VI.10 presents the findings of an LCC analysis on various 
two-lamp, 8-foot SP slimline GSFL systems operating in the commercial 
sector. Except for consumers who purchase reduced-wattage 60W T12 lamps 
absent standards (and experience a lamp failure), all other consumers 
have available lamp designs that result in positive LCC savings at 
TSL5. At this standard level, users of 75W or 60W 8-foot SP slimline 
T12 baseline lamps installed on a magnetic ballast who need to replace 
their lamp would incur the cost of a lamp and ballast replacement 
($93.79 to $95.12) because no T12 lamp currently meets the efficacy 
requirements of TSL5. Comparing the cost of a lamp-and-ballast 
replacement to the cost of only baseline lamp replacement ($11.33 to 
$16.16) results in an installed price increase of $78.96 to $83.99. In 
addition, users of 60W T12 lamps who need to replace their lamp 
experience negative LCC savings of -$14.02 to -$12.26. On the other 
hand, over the life of the lamp, users of 75W T12 lamps who require a 
lamp replacement would save $11.45.
    With regard to 8-foot SP slimline consumer subgroups, all consumer 
subgroups analyzed achieve similar LCC savings to the average consumer 
with the exception of consumers of T12 lamps operating in religious 
institutions or users of T12 lamps installed on electronic ballasts. 
These consumers, upon lamp failure, are forced to retrofit their 
existing ballasts, resulting in negative LCC savings. In particular, as 
seen in Table VI.15, these consumers in institutions of religious 
worship (with low operating hours) experience increases in life-cycle 
costs of $6.68 to $28.95. As seen in Table VI.23, consumers with T12 
lamps installed on electronic ballasts experience increases in life-
cycle costs of $14.18 to $31.86. Overall, based on the NIA model, DOE 
estimates that at TSL5 in 2012, approximately 24 percent of 8-foot SP 
slimline shipments would result in negative LCC savings, and 65 percent 
of

[[Page 17016]]

shipments would be associated with the high installed price increases 
due to forced retrofits.
    Table VI.11 presents the findings of an LCC analysis on various 
two-lamp, 8-foot RDC HO GSFL systems operating in the industrial 
sector. With the exception to consumers who purchase reduced-wattage 
95W T12 lamps absent standards (and purchase a lamp in response to a 
lamp failure), all other consumers have available lamp designs that 
result in positive LCC savings at TSL5. At this standard level, users 
of 110W or 95W 8-foot RDC HO T12 baseline lamps installed on a magnetic 
ballast who need to replace their lamp would incur the cost of a lamp 
and ballast replacement ($126.49), because no T12 lamp currently meets 
the efficacy requirements of TSL5. Comparing the cost of a lamp-and-
ballast replacement to the cost of only baseline lamp replacement 
($13.92 to $19.74) results in an installed price increase of $106.75 to 
$112.57. In addition, users of 95W T12 lamps who need to replace their 
lamp experience negative LCC savings of -$12.70. On the other hand, 
over the life of the lamp, users of 110W T12 lamps who require a lamp 
replacement would save $5.13.
    With regard to 8-foot RDC HO consumer subgroups, all consumer 
subgroups analyzed achieve similar LCC savings to the average consumer 
except consumers who own T12 lamps installed on electronic ballasts. 
These consumers, upon lamp failure, are forced to retrofit their 
existing ballasts, resulting in negative LCC savings of -$10.09 to -
$23.07 (seen in Table VI.24). Overall, based on the NIA model, DOE 
estimates that at TSL5 in 2012, approximately 33 percent of 8-foot RDC 
HO shipments would result in negative LCC savings, and 86 percent of 
shipments would be associated with the high installed price increases 
due to forced retrofits.
    Table VI.8 and Table VI.9 present the LCC analyses on two-lamp 4-
foot MiniBP T5 standard-output and high-output systems, respectively. 
The standard-output system is modeled as operating in the commercial 
sector, and the high-output system is modeled as operating in the 
industrial sector. The baseline lamps for these systems are the model 
28W and 54W halophosphor lamps, as discussed in section V.C.3.a. At 
TSL5 (EL2 for standard output T5 lamps), all consumers of standard 
output lamps have available lamp designs which result in positive LCC 
savings of $1.22 (for lamp replacement) and $45.27 to $47.03 (for new 
construction or renovation). At TSL5 (EL1 for high output T5 lamps), 
consumers of high-output lamps who need only a lamp replacement would 
experience negative LCC savings of -$3.42. However, purchasing a T5 
high-output system for new construction or renovation would result in 
positive LCC savings of $55.60 to $56.60.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL5, the Secretary has reached the following initial 
conclusion: At TSL 5, the benefits of energy savings, emissions 
reductions (both in physical reductions and the monetized value of 
those reductions), and the positive net economic savings to the Nation 
(over 30 years) would be outweighed by the economic burden on some 
consumers (as indicated by the large increase in total installed cost) 
and the potentially large reduction in INPV for manufacturers resulting 
from large conversion costs and reduced gross margins. Specifically, 
consumers who operate a 4-foot MBP, 8-foot SP slimline, or 8-foot RDC 
HO T12 ballast prior to 2012 would be forced to retrofit their system 
upon lamp failure, incurring an initial cost six to thirteen times that 
of a simple lamp replacement. Additionally, consumers who installed T12 
electronic ballasts before 2012 would bear the large increases in first 
cost without benefiting from LCC savings. Consequently, the Secretary 
has tentatively concluded that trial standard level 5 is not 
economically justified.
b. Trial Standard Level 4
    Next, DOE considered TSL 4, which would save an estimated total of 
4.5 to 11.6 quads of energy through 2042, a significant amount of 
energy. For the Nation as a whole, TSL4 would have a net savings of 
$8.9 billion to $23.4 billion at a 7-percent discount rate. The 
emissions reductions at TSL4 are estimated at 240 to 598 MMt of 
CO<INF>2</INF>, 17 to 951 kt of NO<INF>X</INF>, and up to 8 metric tons 
of Hg. Total generating capacity in 2042 is estimated to decrease 
compared to the reference case by 1.3 to 4.3 GW under TSL4.
    Similar to TSL5, the impacts on manufacturers would be very 
significant because TSL4 also would commoditize most high-efficacy 
lamps and require a complete conversion of all T12 4-foot MBP, 8-foot 
SP slimline, and 8-foot RDC HO lines to T8 lines, a capital investment 
of $181.5 million. The projected change in industry value ranges from a 
decrease of $195 million to a decrease of $9 million. At TSL4, DOE 
recognizes the risk of very large negative impacts if the high end of 
the range of impacts is reached, resulting in a net loss of 34 percent 
in INPV.
    As seen in Table VI.5 through Table VI.11, at TSL4, DOE projects 
that 4-foot MBP, 8-foot SP slimline, and 8-foot RDC HO consumers would 
experience similar life-cycle cost savings and increases as they would 
experience at TSL5. Like TSL5, consumers who own T12 ballasts prior to 
2012 at TSL4 would likely experience negative economic impacts, either 
through life-cycle cost increases or by large increases in total 
installed cost. For 4-foot MiniBP T5 standard-output lamps, TSL4 would 
require these lamps to meet EL1, resulting in positive LCC savings of 
$1.22 for lamp replacement and $42.84 for new construction or 
renovation (seen in Table VI.8). For 4-foot MiniBP T5 high-output 
lamps, TSL4 would require the same efficacy level (EL1) as TSL5, 
resulting in identical life-cycle cost impacts.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL4, the Secretary has reached the following initial 
conclusion: At TSL4, the benefits of energy savings, emissions 
reductions (both in physical reductions and the monetized value of 
those reductions), and the positive net economic savings to the Nation 
(over 30 years) would be outweighed by the economic burden on some 
consumers (as indicated by the large increase in total installed cost) 
and the potentially large reduction in INPV for manufacturers. 
Specifically, consumers who operate a 4-foot MBP, 8-foot SP slimline, 
or 8-foot RDC HO T12 ballast prior to 2012 would be forced to retrofit 
their system upon lamp failure, incurring an initial cost six to 
thirteen times that of a simple lamp replacement. Additionally, 
consumers who installed T12 electronic ballasts before 2012 would bear 
the large increases in first cost without benefiting from LCC savings. 
Consequently, the Secretary has tentatively concluded that trial 
standard level 4 is not economically justified.
c. Trial Standard Level 3
    Next, DOE considered TSL3, which would save an estimated total of 
3.2 to 7.3 quads of energy through 2042, a significant amount of 
energy. For the Nation as a whole, TSL3 would have a net savings of 
$3.2 billion to $11.1 billion at a 7-percent discount rate. The 
emissions reductions at TSL3 are estimated at 184 to 395 MMt of 
CO<INF>2</INF>, 12 to 623 kt of NO<INF>X</INF>, and up to 7 metric tons 
of Hg. Total generating capacity in 2042 would be estimated to decrease 
compared to the reference case by 1100 to 3400 megawatts under TSL3.
    As opposed to TSL4 and TSL5, TSL3 does not eliminate all T12 lamps 
from

[[Page 17017]]

the market. The impacts on manufacturers are less significant because 
TSL3 does not require a complete conversion of all T12 4-foot MBP, 8-
foot SP slimline, and 8-foot RDC HO lines to T8 lines. Instead, the 
required capital investments of $104.5 million are to account for the 
likely accelerated consumer migration toward T8 lamps. The projected 
change in industry value ranges from a decrease of $139 million to an 
increase of $71 million. The upper range of these impacts results from 
the reduced efficacy range of the product line and the corresponding 
reduction in gross margins. Compared with TSL 4 and TSL 5, TSL 3 
maintains a broader product line and, thus, provides manufacturers with 
a greater opportunity to differentiate lamp offerings.
    At TSL3, DOE projects that most GSFL consumers would experience 
life-cycle cost savings. Because the minimum efficacy levels for the T5 
product classes are the same for TSL3 as they are for TSL4, the life-
cycle cost impacts on these consumers are identical as well. However, 
for the other GSFL product classes, the consumer economic impacts do 
differ at TSL3 from TSL4 and TSL5. Because T12 lamps are still 
available at this level, all consumers have viable lamp replacement 
options without needing to retrofit their ballasts. As a result, 
initial costs for 4-foot MBP, 8-foot SP slimline, or 8-foot RDC HO T12 
lamp replacements are significantly lower than initial costs required 
at TSL4 and TSL5 when consumers must purchase a new lamp and new 
ballast with standards. For example, for 4-foot MBP lamps, installed 
costs at TSL3 may increase by $13.91 over a baseline lamp cost of 
$11.22 in the commercial sector or by $8.48 over the baseline lamp cost 
of $3.98 in the residential sector.
    Although incremental total installed costs are considerably reduced 
in comparison to TSL4 and TSL5, some consumers would still experience 
negative life-cycle cost savings at TSL3. These are many of the same 
consumers that would have negative savings at TSL4 and TSL5. 
Residential consumers who own T12 ballasts prior to 2012 would 
experience negative LCC savings when replacing only their lamps 
(approximately 2 percent of 4-foot MBP shipments in 2012). Consumers 
who, absent standards, replace reduced-wattage T12 lamps on 8-foot SP 
slimline systems (24 percent of 8-foot SP slimline shipments in 2012) 
experience net life-cycle cost increases. Approximately 33 percent of 
8-foot RDC HO shipments in 2012 (those consumers who replace reduced-
wattage T12 lamps) result in negative LCC savings. As seen in section 
VI.B.1.a.i, for GSFL, often higher efficacy level lamps result in 
higher (or less negative) life-cycle cost savings. At TSL3, consumers 
have the option of purchasing these higher-efficacy lamps, and, 
therefore, can achieve similar life-cycle cost savings as at TSL4 and 
TSL5.
    After considering the analysis and the benefits and burdens of 
trial standard level 3, the Secretary has reached the following 
tentative conclusion: Trial standard level 3 offers the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified, and will result in significant conservation of 
energy. The Secretary has reached the initial conclusion that the 
benefits of energy savings, emissions reductions (both in physical 
reductions and the monetized value of those reductions), and the 
positive net economic savings to the Nation would outweigh the economic 
burden on some consumers (as indicated by negative life-cycle cost 
savings) and the potentially large reduction in INPV for manufacturers. 
TSL 3 offers almost all consumers the choice to select lamp and ballast 
systems that will reduce their life-cycle costs but does not force them 
to incur the increased first costs of a new ballast if they elect not 
to do so. Therefore, DOE today proposes to adopt the energy 
conservation standards for GSFL at trial standard level 3.
    DOE will seriously consider adopting a more stringent standard 
level in the final rule that would eliminate T12 lamps, as described in 
discussions regarding TSL4 and TSL5. An example may be for DOE to adopt 
a more stringent standard level in the final rule that, similar to TSL4 
and TSL5, would eliminate T12 lamps, but allow an extended lead time 
before compliance would be required. A second example may be for DOE to 
adopt a more stringent standard level, while continuing to allow the 
sale of specially packaged or labeled T12 lamps in the residential 
sector only. DOE seeks comment on these or other possible alternative 
scenarios.
3. Incandescent Reflector Lamps Conclusion
a. Trial Standard Level 5
    For IRL, DOE first considered the most efficient level, TSL5, which 
would save an estimated total of 1.5 to 2.6 quads of energy through 
2042--a significant amount of energy. For the Nation as a whole, TSL5 
would have a net savings of $4.3 billion to $7.5 billion at a 7-percent 
discount rate. The emissions reductions at TSL5 are estimated at 79 to 
119 MMt of CO<INF>2</INF>, 5 to 193 kt of NO<INF>X</INF>, and up to 2 
metric tons of Hg. Total generating capacity in 2042 is estimated to 
decrease compared to the reference case by 40 to 500 MW under TSL5. As 
seen in Table VI.12, regardless of the baseline lamp purchased absent 
standards, consumers have available lamp designs which result in 
positive LCC savings, ranging from $1.49 to $9.41, at TSL5. The higher 
savings result from consumers who purchase lamps with larger lumen 
packages, while the lower savings result from consumers who purchase 
lamps with smaller lumen packages.
    The projected change in industry value would range from a decrease 
of $82 million to $103 million, or a net loss of 31 to 50 percent in 
INPV. The range in impacts is attributed in part to uncertainty 
concerning the future share of emerging technologies in the IRL market, 
as well as the expected migration to R-CFL and exempted IRL 
technologies under standards.
    DOE based TSL5 on commercially-available IRL which employ a silver 
reflector, an improved IR coating, and a filament design that results 
in a lifetime of 4,200 hours. To DOE's knowledge, only one manufacturer 
currently sells products that meet TSL5. In addition, it is DOE's 
understanding that the silver reflector is a proprietary technology 
that all manufacturers may not be able to employ. However, DOE 
considered TSL5 in its analysis because it believes that there are 
alternate pathways to achieve this level. A combination of redesigning 
the filament to achieve higher-temperature operation (and thus reducing 
lifetime to 3,000 hours), employing other non-proprietary high-
efficiency reflectors, or applying higher-efficiency IR coatings has 
the potential to result in an IRL that meets an equivalent efficacy 
level. However, to DOE's knowledge, no prototype IRL exists that meets 
this efficacy level and does not use proprietary technology. Therefore, 
DOE is uncertain as to whether there are barriers to implementing these 
alternate pathways. In addition, DOE is uncertain of the manufacturer 
costs associated with producing such an IRL. As documented in appendix 
5D of the TSD, DOE received manufacturer cost estimates from an IR 
coating manufacturer. Based on these cost estimates, DOE estimated that 
a medium-range end-user price for PAR 38 IRL that meet TSL5 and do not 
employ the proprietary silverized reflector would be $7.91. This price, 
when compared to the end-user price of the commercially-available PAR38 
IRL that meet TSL5 and use the silverized

[[Page 17018]]

reflector ($8.03), would appear to be cost-competitive. However, DOE 
requires verification of these cost estimates before proposing a 
standard that would require this higher-efficiency IR coating 
technology. If it is significantly more costly for some manufacturers 
to meet this level than others, it is likely to cause a lessening of 
competition and distortions in the marketplace.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL5, the Secretary has reached the following initial 
conclusion: At TSL5, the benefits of energy savings, emissions 
reductions (both in physical reductions and the monetized value of 
those reductions), the positive net economic savings to the Nation 
(over 30 years) would be outweighed by the large capital conversion 
costs that could result in a reduction in INPV for manufacturers and 
possible lessening of competition. Consequently, the Secretary has 
tentatively concluded that trial standard level 5 is not economically 
justified.
    As discussed above, DOE is not proposing TSL5 because DOE finds 
that the benefits to the Nation of TSL5 do not outweigh the costs, and, 
therefore, DOE proposes that TSL5 is not economically justified. This 
proposal reflects DOE's tentative conclusion that there remains too 
much uncertainty regarding the ability for manufacturers to produce 
lamps that meet this level. While information is available that 
suggests that there are other economical pathways (without the use of 
proprietary technology) to meet this efficacy level, DOE believes that 
it must have a higher degree of confidence that these pathways exist 
and a clearer understanding of the economic burdens (to consumers and 
manufacturers) to warrant higher standards before it imposes such 
requirements. DOE is soliciting public comments on these and other 
issues, and will reconsider this tentative conclusion during the 
development of its final rule. Specifically, DOE requests comment on 
other technology pathways that may be utilized to meet TSL5, and 
whether these pathways may have any adverse effects on consumer utility 
or the ability for the product to be mass produced. In addition, DOE 
requests comment on the manufacturer costs associated with these 
pathways and resulting consumer product prices for lamps that meet this 
efficacy level. Based upon the information it receives, DOE may 
consider adoption of TSL5 at the final rule stage.
b. Trial Standard Level 4
    DOE next considered TSL4, which would save an estimated total of 
1.3 to 2.3 quads of energy through 2042--a significant amount of 
energy. For the Nation as a whole, TSL4 would have a net savings of 
$3.7 billion to $6.8 billion at a 7-percent discount rate. The 
emissions reductions at TSL4 are estimated at 59 to 114 MMt of 
CO<INF>2</INF>, 4 to181 kt of NO<INF>X</INF>, and up to 2 metric tons 
of Hg. Total generating capacity in 2042 is estimated to decrease 
compared to the reference case by 0 to 500 MW under TSL4. As seen in 
Table VI.12, regardless of the baseline lamp currently employed, 
consumers have available lamp designs which would result in positive 
LCC savings, ranging from $1.62 to $8.14, at TSL4.
    To DOE's knowledge, two of the three major manufacturers of IRL 
currently sell a full product line (across common wattages) that meet 
this standard level. In addition, it is DOE's understanding that the 
third manufacturer employs a technology platform that, due to the 
positioning of the filament in the HIR capsule, is inherently less 
efficient. Therefore, it is likely that in order to meet TSL4, this 
manufacturer would have to make considerably higher investments than 
the other manufacturers, placing it at a competitive disadvantage. DOE 
projects that change in industry value at TSL4 ranges from a decrease 
of $77 million to $94 million, or net loss of 29 to 46 percent in INPV. 
However, compared to each of the baselines, TSL4 showed significant 
positive life-cycle cost savings on a national average basis and for 
all consumer subgroups. In addition, TSL4 is projected to result in 
significant net economic savings to the Nation.
    After considering the analysis, comments on the ANOPR, and the 
benefits and burdens of trial standard level 4, the Secretary has 
reached the following tentative conclusion: Trial standard level 4 
offers the maximum improvement in efficacy that is technologically 
feasible and economically justified, and will result in significant 
conservation of energy. The Secretary has reached the initial 
conclusion that the benefits of energy savings, emissions reductions 
(both in physical reductions and the monetized value of those 
reductions), the positive net economic savings to the Nation, and 
positive life-cycle cost savings would outweigh the potentially large 
reduction in INPV for manufacturers. Therefore, DOE today proposes to 
adopt the energy conservation standards for IRL at trial standard level 
4.

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

    Today's regulatory action has been determined to be an economically 
significant regulatory action under Executive Order 12866, ``Regulatory 
Planning and Review.'' 58 FR 51735 (Oct. 4, 1993). Accordingly, this 
action was subject to review under the Executive Order by the Office of 
Information and Regulatory Affairs (OIRA) at OMB.
    The Executive Order requires that each agency identify in writing 
the specific market failure or other specific problem that it intends 
to address that warrant new agency action, as well as assess the 
significance of that problem, to enable assessment of whether any new 
regulation is warranted. Executive Order 12866, Sec.  1(b)(1).
    DOE's analysis for GSFL and IRL explicitly accounts for the 
percentage of consumers that already purchase more-efficient products 
and takes these consumers into account when determining the national 
energy savings associated with various trial standard levels. The 
analysis suggests that accounting for the market value of energy 
savings alone (i.e., excluding any possible ``externality'' benefits 
such as those noted below) would produce enough benefits to yield net 
benefits across a wide array of products and circumstances. In its 
ANOPR, DOE requested additional data on and suggestions for testing the 
existence and extent of potential market failures to assess the 
significance of these failures and, thus, the net benefits of 
regulation. 73 FR 13620, 13688 (March 13, 2008) In particular, DOE 
sought to verify the estimates of the percentage of consumers 
purchasing efficient lighting equipment and the extent to which 
consumers will continue to purchase more-efficient equipment in future 
years. DOE received no such data in response to the ANOPR but continues 
to request such data in today's proposed rule.
    DOE believes that there is a lack of consumer information and/or 
information processing capability about energy efficiency opportunities 
in the lighting market. If this is the case, DOE would expect the 
efficiency for lighting products to be randomly distributed across key 
variables such as electricity prices and usage levels. Although DOE has 
identified the percentage of consumers that already purchase more-
efficient lighting products, DOE does not correlate the consumers' 
usage pattern and electricity price with the efficiency of the 
purchased product. In

[[Page 17019]]

its ANOPR, DOE sought data on the correlation between the efficacy of 
existing lamps, usage patterns (e.g., how many hours the product is 
used), and its associated electricity price (geographic region of the 
country). 73 FR 13620, 13688 (March 13, 2008) DOE received no such data 
from interested parties in response to the ANOPR but continues to 
request this data in today's proposed rule. DOE plans to use these data 
to test the extent to which purchasers of this equipment behave as if 
they are unaware of the costs associated with their energy consumption.
    DOE believes several factors contribute to the lack of consumer 
information for lighting products. In the residential sector, consumers 
that base purchases on wattage rather than lumen output may reject 
higher efficacy or energy-saving lamp designs. For example, consumers 
may not recognize that a higher efficacy, reduced-wattage lamp fulfills 
the same utility as a higher-wattage lamp, although both lamps may have 
similar lumen outputs. For this reason, higher-efficiency products may 
be unduly rejected in the marketplace. In the commercial and industrial 
sectors, the complexity of GSFL systems may introduce high information 
costs. GSFL systems are composed of lamps and ballasts with a multitude 
of varying properties, such as lamp wattage, lumen output, lifetime, 
and ballast factor. These variables impose high information costs which 
may prevent purchasers from selecting the most cost-effective GSFL 
system. In its ANOPR, DOE sought comment on the potential for the 
Federal ENERGY STAR program to increase consumer knowledge of the 
availability and benefits of energy-efficient lamps. DOE received no 
data in response to the ANOPR but continues to request this data in 
today's proposed rule.
    A related issue is the problem of asymmetric information (one party 
to a transaction has more and better information than the other) and/or 
high transactions costs (costs of gathering information and effecting 
exchanges of goods and services). In many instances, the party 
responsible for the lamp purchase may not pay to operate it. For 
example, in the commercial and industrial sectors, building owners and 
developers may make purchasing decisions about lighting fixtures that 
include ballasts and lamps, but tenants pay the utility bills. Although 
renters often have the opportunity to purchase replacement lamps, 
renters are severely limited in their choices by prior fixture and 
ballast selections. The separation of fixture purchases and payment for 
the operating costs imposes transaction costs on the renter. If there 
were no transactions costs, building developers and owners would 
install the lighting fixtures renters would choose on their own. For 
example, a tenant who knowingly faces higher utility bills from low-
efficacy lighting would be willing to pay less in rent, and the 
building owner would indirectly bear the higher utility cost. However, 
this information is not costless, and it may not be in the interest of 
the renter to take the time to develop the knowledge of the higher 
operating cost of low-efficacy lighting. Similarly, it may not be in 
the interest of the building owner who installs lighting systems to 
convey operating cost information to the renter.
    DOE did not receive any data that would enable it to conduct tests 
of market failure in response to the March 2008 ANOPR. DOE would not 
expect a correlation between higher rents for office space with high-
efficacy lighting systems if there were a market failure due to 
asymmetric information and/or high transactions costs. If there were 
symmetric information with low transaction costs, renters would be 
fully knowledgeable about the lower operating costs of high-efficacy 
lighting systems and would compensate owners for their reduced costs.
    This proposed rulemaking is likely to yield certain external 
benefits resulting from improved energy efficiency of GSFL and IRL that 
are not captured by the users of such products. These benefits include 
externalities related to environmental protection and energy security 
which are not reflected in energy prices, such as reduced emissions of 
greenhouse gases. The emissions reductions in today's proposed rule are 
projected to be 184 to 395 MMt and 59 to 114 MMt of CO<INF>2</INF> for 
GSFL and IRL, respectively, and 12 to 623 kt, 4 to 181 kt of 
NO<INF>X</INF>, for GSFL and IRL, respectively. In addition, today's 
proposed rule is projected to result in Hg emissions reduction of up to 
7 metric tons and 2 metric tons for GSFL and IRL, respectively. DOE 
invites comments on the weight that DOE should place on these factors 
in determining the maximum energy efficacy level at which the total 
benefits are likely to exceed the total burdens resulting from an 
amended standard.
    As previously stated, DOE generally seeks data that might enable it 
to conduct tests of market failure for products under consideration for 
standard-setting. For example, given adequate data, there are ways to 
test for the extent of market failure for commercial GSFL. One would 
expect the owners of fluorescent lamps who also pay for their 
electricity consumption to purchase more-efficient lamps compared to 
owners who do not pay for their electricity usage. To test for this 
form of market failure, DOE needs data on energy efficiency of such 
units and whether the owner of the equipment also pays the operating 
costs. DOE is also interested in other potential tests of market 
failure and data that would enable such tests.
    DOE conducted a regulatory impact analysis (RIA) and, under the 
Executive Order, was subject to review by OIRA. DOE presented to OIRA 
for review the draft proposed rule and other documents prepared for 
this rulemaking, including the RIA, and has included these documents in 
the rulemaking record. They are available for public review in the 
Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, 
SW., 6th Floor, Washington, DC 20024, (202) 586-9127, between 9 a.m. 
and 4 p.m., Monday through Friday, except Federal holidays.
    The RIA is contained in the TSD as a separate report. The RIA 
consists of: (1) A statement of the problem addressed by this 
regulation, and the mandate for government action; (2) a description 
and analysis of the feasible policy alternatives to this regulation; 
(3) a quantitative comparison of the impacts of the alternatives; and 
(4) the national economic impacts of the proposed standard.
    The RIA calculates the effects of feasible policy alternatives to 
energy conservation standards for GSFL and IRL and provides a 
quantitative comparison of the impacts of the alternatives. DOE 
identified the following major policy alternatives for achieving 
increased energy efficiency in GSFL and IRL:
    <bullet> No new regulatory action.
    <bullet> Consumer rebates.
    <bullet> Consumer tax credits.
    <bullet> Manufacturer tax credits.
    <bullet> Voluntary energy-efficiency targets.
    <bullet> Bulk government purchases.
    <bullet> Early replacement.
    <bullet> The proposed energy conservation standards.
    DOE evaluated each alternative's ability to achieve significant 
energy savings at reasonable costs (Table VII.1 and Table VII.2) and 
compared it to the effectiveness of the proposed rule. DOE analyzed 
these alternatives using a series of regulatory scenarios as inputs to 
the NIA spreadsheets for the two products, which it modified to allow 
inputs for voluntary measures.

[[Page 17020]]



 Table VII.1--GSFL National Energy Savings and Net Present Value of Non-Regulatory Alternatives Compared to the
                                               Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                             Net present value (billion $2007)
               Policy alternatives \1\                  National energy  ---------------------------------------
                                                        savings (quads)    7% Discount rate    3% Discount rate
----------------------------------------------------------------------------------------------------------------
No New Regulatory Action............................                   0                   0                   0
Consumer Rebates....................................           1.33-1.74           1.93-2.67           4.72-6.58
Consumer Tax Credits................................           0.63-0.83           1.13-1.33           2.47-3.17
Manufacturer Tax Credits............................           0.35-0.44           0.68-0.73           1.49-1.64
Voluntary Energy Efficiency Targets.................           1.09-1.44           1.54-2.10           3.83-5.19
Bulk Government Purchases...........................           1.21-1.61           1.69-2.36           4.23-5.82
Proposed Standards \2\..............................           3.15-7.12          3.15-10.75          8.73-24.87
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ NPV discounted to 2007; Non-regulatory alternatives encourage purchases of GSFL at TSL 3.


  Table VII.2--IRL National Energy Savings and Net Present Value of Non-Regulatory Alternatives Compared to the
                                               Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                             Net present value (billion $2007)
               Policy alternatives \1\                  National energy  ---------------------------------------
                                                        savings (quads)    7% Discount rate    3% Discount rate
----------------------------------------------------------------------------------------------------------------
No New Regulatory Action............................                   0                   0                   0
Consumer Rebates....................................           0.52-0.69           1.52-1.89           3.19-3.97
Consumer Tax Credits................................           0.32-0.42           0.96-1.17           1.97-2.44
Manufacturer Tax Credits............................           0.16-0.21           0.53-0.64           1.05-1.28
Voluntary Energy Efficiency Targets.................           0.26-0.45           0.83-1.28           1.65-2.59
Bulk Government Purchases...........................           0.04-0.24           0.23-0.72           0.32-1.33
Proposed Standards..................................           1.25-2.21           3.72-6.00          7.68-12.45
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ NPV discounted to 2007, Non-regulatory alternatives encourage purchases of IRL at TSL 4.

    The results for each scenario are reported at the TSLs proposed by 
DOE in this rulemaking; they are TSL 3 for GSFL and TSL 4 for IRL. For 
GSFL, the range presented results from the effects of applying the 
lighting expertise scenario discussed in section V.E.4.b. The lower end 
of the range represents the Emerging Technologies, market-segment based 
lighting expertise scenario. In contrast, the upper end of the range 
for GSFL represents the Existing Technologies, high-lighting expertise 
scenario. For IRL, the range of impacts results from the two base-case 
shipment scenarios analyzed in the NIA. The lower end of the range for 
IRL represents the Emerging Technologies scenario, whereas the upper 
end of the range represents the Existing Technologies scenario.
    DOE did not analyze one of the policy alternatives (early 
replacement), because, as discussed below, DOE believes that the 
lifetimes of the lamps analyzed are too short for early replacement to 
result in significant savings. In overview, of the other alternatives 
that DOE examined, none would save as much energy nor have an NPV as 
high as the proposed standards. Also, some of the alternatives would 
require new enabling legislation (e.g., consumer or manufacturer tax 
credits), as authority to carry out those alternatives does not 
presently exist. The following paragraphs summarize each policy 
alternative. Additional details can be found in the regulatory impact 
analysis report of the TSD.
    No New Regulatory Action. The case in which DOE takes no regulatory 
action regarding GSFL and IRL is the base case (or no action) scenario. 
Because this is the base case, energy savings and NPV for GSFL and IRL 
are zero by definition. In this case, between 2012 and 2042, as 
determined in the NIA, energy consumption for GSFL is expected to range 
from 82.16 to 94.73 quads of primary energy and energy consumption for 
IRL is expected to range from 5.64 to 10.52 quads of primary energy.
    Consumer Rebates. Consumer rebates cover a portion of the 
difference in incremental product price between products meeting 
baseline efficacy levels and those meeting higher efficacy levels, 
resulting in a higher percentage of consumers purchasing more efficient 
models. For GSFL, DOE estimated the impact of improving the simple 
payback through a rebate that paid 70 percent of the incremental 
product price. DOE based the 70-percent rebate on existing utility 
rebate programs for replacing a T12 lamp with a T8 lamp or upgrading an 
existing T8 lamp to a more-efficacious T8 GSFL.\85\ DOE studied each 
program and found that the average rebate amounted to about 70 percent 
of the incremental product price for GSFL. DOE assumed that the 
consumer rebate policy would reduce the incremental product price for 
IRL during the analysis period by the same percentage. DOE calculated 
the simple payback period of each higher efficacy lamp, both with and 
without the rebate. Then by using the market penetration curves 
discussed in section V.E.2.c, DOE estimated percent market adoption of 
a technology as a function of technology simple payback. The difference 
between the market penetration with and without the rebate was assumed 
to represent the market share that would participate in a consumer 
rebate program. For both GSFL and IRL, DOE assumed that the impact of 
this policy would be to permanently transform the market so that the 
increased market penetration seen in the first year of the program 
would be maintained throughout the forecast period.
---------------------------------------------------------------------------

    \85\ DOE averaged the rebates from utility programs across the 
United States, including NSTAR, Pacific Gas & Electric, Xcel, Idaho 
Power and Light, Duke Energy, and Alliant. (See the RIA to the TSD 
for additional detail.)

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

[[Page 17021]]

    At the estimated participation rates for GSFL, DOE calculated that 
consumer rebates would provide between 1.33 and 1.74 quads of national 
energy savings and an NPV between $1.93 and $2.67 billion (at a 7-
percent discount rate). For IRL, DOE calculated that consumer rebates 
at the estimated participation rates would provide between 0.52 and 
0.69 quads of national energy savings and an NPV between $1.52 and 
$1.89 billion (at a 7-percent discount rate).
    Although DOE estimated that consumer rebates would provide national 
benefits for GSFL and IRL products, these benefits would be smaller 
than the benefits resulting from the proposed energy conservation 
standards. Thus, DOE rejected consumer rebates as a policy alternative 
to energy conservation standards.
    Consumer Tax Credits. Consumer tax credits cover a percentage of 
the difference in incremental product price between products meeting 
baseline efficacy levels and those with higher efficiencies. Consumer 
tax credits are considered a viable non-regulatory market 
transformation program, as the inclusion of Federal consumer tax 
credits in EPACT 2005 for various residential appliances shows. 
(section 1333 of EPACT 2005; codified at 26 U.S.C. 25C) DOE assumed a 
consumer tax credit equivalent to the amount covered by rebates (i.e., 
70 percent of the difference in incremental product price between the 
base case and higher-efficacy products).
    DOE estimated that for both lamp types, the consumer participation 
rate for tax credits would be lower than the rate of participation in 
consumer rebates. Research on tax credits has shown that the time delay 
to the consumer in receiving a reimbursement through a tax credit, plus 
the added transaction costs in tax-return preparation, make the tax 
credit incentive less effective than a rebate received at the time of 
purchase. Based on previous analyses, DOE assumed that only 60 percent 
as many consumers would take advantage of the tax credit as would take 
advantage of a rebate. DOE assumed the impact of the policy would be to 
permanently transform the market at this market penetration level.
    For GSFL, at the estimated participation rate, consumer tax credits 
would provide national energy savings between 0.63 and 0.83 quads and 
an NPV between $1.13 and $1.33 billion (at a 7-percent discount rate). 
At the estimated participation rates for IRL, consumer tax credits 
would provide between 0.32 and 0.42 quads of national energy savings 
and an NPV between $0.96 and $1.17 billion (at a 7-percent discount 
rate). DOE estimated that while consumer tax credits would yield 
national benefits for GSFL and IRL, these benefits would be much 
smaller than the benefits from the proposed energy conservation 
standards. Thus, DOE rejected consumer tax credits as a policy 
alternative to energy conservation standards.
    Manufacturer Tax Credits. Manufacturer tax credits are considered a 
viable non-regulatory market transformation program, as the inclusion 
of Federal tax credits in EPACT 2005 for manufacturers of residential 
appliances shows. (section 1334 of EPACT 2005; codified at 26 U.S.C. 
45M) Similar to consumer tax credits, manufacturer tax credits would 
effectively result in lower product prices for consumers by an amount 
that covered part of the incremental product price difference between 
products meeting baseline efficacy levels and those meeting higher 
efficacy levels. Because these tax credits would go to manufacturers 
instead of consumers, fewer consumers would be affected by a 
manufacturer tax credit program than by consumer tax credits.\86\ \87\ 
Although consumers would benefit from price reductions passed through 
to them by manufacturers, approximately half the consumers who would 
benefit from a consumer tax credit program would be aware of the 
economic benefits of more-efficient technologies included in an 
appliance manufacturer tax credit program. Therefore, DOE estimated 
that the effect of a manufacturer tax credit program would be only half 
of the maximum impact of a consumer tax credit program. For both GSFL 
and IRL, DOE assumed that this policy would permanently transform the 
market so that the increased market penetration seen in the first year 
of the program would be maintained throughout the forecast period.
---------------------------------------------------------------------------

    \86\ Kenneth Train, Customer Decision Study: Analysis of 
Residential Customer Equipment Purchase Decisions (Prepared for 
Southern California Edison by Cambridge Systematics, Pacific 
Consulting Services, The Technology Applications Group, and 
California Survey Research Services) (1994).
    \87\ Lawrence Berkeley National Laboratory, End-Use Forecasting 
Group, Analysis of Tax Credits for Efficient Equipment (1997). 
Available at: http://enduse.lbl.gov/Projects/TaxCredits.html (Last 
accessed April 24, 2008).
---------------------------------------------------------------------------

    At the estimated participation rates for GSFL, DOE calculated that 
manufacturer tax credits would provide between 0.35 and 0.44 quads of 
national energy savings and an NPV between $0.68 and $0.73 billion (at 
a 7-percent discount rate). For IRL, DOE estimated national energy 
savings between 0.16 and 0.21 quads and an NPV between $0.53 and $0.64 
billion (at a 7-percent discount rate). DOE estimated that while 
manufacturer tax credits would yield national benefits for GSFL and 
IRL, these benefits would be much smaller than the benefits from the 
proposed energy conservation standards. Thus, DOE rejected manufacturer 
tax credits as a policy alternative to energy conservation standards.
    Voluntary Energy Efficiency Targets. DOE estimated the impact of a 
voluntary energy efficiency program by reviewing the historical and 
projected market transformation performance of past and current ENERGY 
STAR programs. The Environmental Protection Agency (EPA) introduced the 
Green Lights program in January of 1991. Green Lights was a voluntary 
(non-regulatory) program tasked with a goal of reducing air pollution 
by promoting energy-efficient lighting. Companies that elected to 
participate installed energy-efficient lighting where it proved to be 
cost-effective (as long as lighting quality was not diminished). In 
return, the EPA provided technical assistance and public recognition. 
In a similar effort, the EPA launched the ENERGY STAR program in 1992 
as a voluntary labeling program to help consumers identify the most 
energy-efficient products on the market. In 1995, Green Lights became a 
part of the ENERGY STAR program.\88\
---------------------------------------------------------------------------

    \88\ Available at: http://www.energystar.gov/index.cfm?c=about.ab_milestones.
---------------------------------------------------------------------------

    In order to determine how a lighting market would respond to a 
voluntary energy program, DOE analyzed the success of the Green Lights 
program in the 1990s. One of the significant results of the Green 
Lights program was demonstrated in its initiative to encourage 
consumers to purchase higher-efficiency electronic ballasts over less-
efficient magnetic ballasts. As a result of this initiative, electronic 
ballasts began to enter the market in increasing numbers. A study that 
analyzed the impact of public programs on fluorescent ballast shipments 
concluded that of all the electronic ballasts shipped between 1986 and 
2000, 61 percent were due to this public program.\89\ DOE used data 
from the US Census to calculate the percent of the market that opted to 
use more efficient ballasts as a result of a voluntary program. Based 
on this analysis, DOE concluded that 20 percent of the market would 
shift to more-efficient products as a result of a voluntary energy 
efficiency program. DOE assumed this participation rate would be the 
same for

[[Page 17022]]

both GSFL and IRL. DOE also assumed that the impact of this policy 
would be to permanently transform the market so that the increased 
market penetration seen in the first year of the program would be 
maintained throughout the forecast period.
---------------------------------------------------------------------------

    \89\ Horowitz, Marvin J., ``Economic Indicators of Market 
Transformation: Energy Efficient Lighting and EPA's Green Lights,'' 
Energy Journal, Vol. 22, No. 4, (2001) pp. 95-122.
---------------------------------------------------------------------------

    For GSFL, DOE estimated that voluntary energy efficiency targets 
would provide between 1.09 and 1.44 quads of national energy savings 
and an NPV between $1.54 and $2.10 billion (at a 7-percent discount 
rate). For IRL, DOE estimated national energy savings between 0.26 and 
0.45 quads and an NPV between $0.83 and $1.28 billion (at a 7-percent 
discount rate). DOE estimated that while voluntary energy-efficiency 
targets would yield national benefits for GSFL and IRL, these benefits 
would be much smaller than the benefits from the proposed energy 
conservation standards. Thus, DOE rejected voluntary energy efficiency 
targets as a policy alternative to energy conservation standards.
    Early Replacement. The early replacement policy alternative 
envisions a program to replace old, inefficient units with models 
meeting efficacy levels higher than baseline equipment. DOE did not 
model this alternative because the lifetimes of GSFL and IRL are very 
short (on the order of 1 to 5 years), so the savings would not be very 
great. Early replacement policies are generally beneficial for products 
with long lifetimes (e.g., washers and dryers, furnaces) and that 
represent a significant upfront investment, neither of which apply to 
GSFL and IRL.
    Bulk Government Purchases. Under this policy alternative, the 
government sector would be encouraged to shift its purchases to 
products that meet the target efficacy levels. DOE assumed that 
Federal, State, and local government agencies would administer such a 
program. DOE modeled this program by assuming an increase in the 
installation of equipment meeting higher efficacy levels for those 
locations where government agencies purchase or influence the purchase 
of appliances.
    Similar to previous analysis, DOE used floor space data from CBECS 
2003 to derive the proportion of government-owned floor space to total 
commercial floor space, which is 21.4 percent. DOE assumed that the 
portion of government-owned floor space is proportional to the portion 
of government lamp purchases. DOE then added a 1.4 percent market-pull 
impact to arrive at a conservative 22.8 percent market penetration 
rate.\90\ Bulk government purchases will not affect the residential 
market as DOE believes that most government-owned buildings are in the 
commercial sector. DOE assumed that the impact of this policy would be 
to permanently transform the market so that the increased market 
penetration seen in the first year of the program would be maintained 
throughout the forecast period.
---------------------------------------------------------------------------

    \90\ U.S. Department of Energy, Regulatory Impact Analysis: 
Energy Conservation Standards for Consumer Products, Covering: 
Fluorescent Lamp Ballasts (Oct. 1999). Available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/regulatory_impact.pdf.
---------------------------------------------------------------------------

    At the above estimated participation rates, the bulk government 
purchases scenario would provide between 1.21 and 1.61 quads of 
national energy savings and an NPV between $1.69 and $2.36 billion (at 
a 7-percent discount rate) for GSFL, and between 0.04 and 0.24 quads of 
national energy savings and an NPV between $0.23 and $0.72 billion (at 
a 7-percent discount rate) for IRL. DOE estimated that while bulk 
government purchases would yield national benefits for GSFL and IRL, 
these benefits would be much smaller than the benefits from the 
proposed energy conservation standards. Thus, DOE rejected voluntary 
energy efficiency targets as a policy alternative to energy 
conservation standards.
    Energy Conservation Standards. As indicated in the paragraphs 
above, none of the alternatives DOE examined would save as much energy 
as the proposed energy conservation standards. Therefore, DOE proposes 
to adopt the efficacy levels listed in section VI.C

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that 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. 
As required by Executive Order 13272, Proper Consideration of Small 
Entities in Agency Rulemaking, 67 FR 53461 (August 16, 2002), DOE 
published procedures and policies on February 19, 2003, to ensure that 
the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site at http://www.gc.doe.gov.
    DOE reviewed today's proposed rule under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003. 68 FR 7990. A regulatory flexibility analysis 
examines the impact of the rule on small entities and considers 
alternative ways of reducing negative impacts. DOE identified producers 
of all products covered by this rulemaking which have manufacturing 
facilities located within the United States. DOE then looked at 
publicly-available data and contacted manufacturers, as necessary, to 
determine if they meet the Small Business Administration (SBA) 
definition of a small manufacturing facility.
    In the context of this rulemaking, ``small businesses,'' as defined 
by the SBA, for the GSFL and IRL manufacturing industries, are 
manufacturing enterprises with 1,000 employees or fewer. DOE used the 
small business size standards published on March 11, 2008, as amended, 
by the SBA to determine whether any small entities would be required to 
comply with the rule. 61 FR 3286 (codified at 13 CFR part 121). The 
size standards are listed by North American Industry Classification 
System (NAICS) code and industry description. GSFL and IRL 
manufacturing is classified under NAICS 335110, ``Electric Lamp Bulb 
and Part Manufacturing,'' which sets a threshold of 1,000 employees or 
less for an entity in this category to be considered a small business.
    In overview, the GSFL and IRL industries include both domestic and 
international manufacturers. The majority of covered GSFL and IRL are 
manufactured by three large companies, with a small percentage of the 
market being manufactured by either large or small companies that are 
primarily specialized in lamps not covered by this rulemaking. Prior to 
issuing this notice of proposed rulemaking, DOE interviewed one small 
business affected by the rulemaking. DOE also obtained information 
about small business impacts while interviewing manufacturers that 
exceeded the small business size threshold of 1,000 employees.
    To better assess the potential impacts of this rulemaking on small 
entities, DOE proceeded to conduct a more focused inquiry, as explained 
below. During its market survey, DOE created a list of every company 
that manufactures covered and non-covered GSFL and IRL for sale in the 
United States. DOE also asked stakeholders and industry representatives 
if they were aware of any other small manufacturers. DOE then reviewed 
publicly-available data and contacted companies on its list, as 
necessary, to determine whether

[[Page 17023]]

they met the SBA's definition of a small business manufacturer in the 
GSFL or IRL industries. In total, DOE contacted 57 companies that could 
potentially be small businesses. During initial review of the 57 
companies in its list, DOE either contacted or researched each company 
to determine if it sold covered GSFL and IRL. Based on its research, 
DOE screened out companies that did not offer lamps covered by this 
rulemaking. Consequently, DOE estimated that only 12 out of 57 
companies listed were potentially small business manufacturers of 
covered products. DOE contacted these potential small business 
manufacturers to request an interview about the possible impacts on 
small business manufacturers. Of the 12 potential small business 
manufacturers, four agreed to be interviewed. Based on its initial 
screening and subsequent interviews, DOE identified only one company as 
a small business manufacturer based on SBA's definition of a small 
business manufacturer for this industry. The small business 
manufacturer that DOE identified only produces covered GSFL products.
    DOE found that the small manufacturer of covered GSFL shared some 
of the same concerns about energy conservation standards as large 
manufacturers. DOE summarized the key issues in section V.G.4.a of 
today's notice. However, the small manufacturer was less concerned 
about the potential of standards to severely harm its business. Because 
the small manufacturer is more focused on specialty products not 
covered by this rulemaking, covered GSFL represents a smaller portion 
of its revenue and product portfolio. In addition, this manufacturer 
stated that it is possible to pass along cost increases to consumers, 
thereby limiting margin impacts due to energy conservation standards.
    DOE could not use the GSFL GRIM to model the impacts of energy 
conservation standards on the small business manufacturer of covered 
GSFL. The GSFL GRIM models the impacts on GSFL manufacturers if 
concerns about margin pressure and significant capital investments 
necessitated by standards are realized. The small manufacturer did not 
share these concerns, and, therefore, the GRIM model would not be 
representative of the identified small business manufacturer. Like 
large manufacturers, the small business manufacturer stated that more-
efficient products earn a premium; however, unlike larger 
manufacturers, the small manufacturer stated that it could pass costs 
along to its customers. Since the GSFL GRIM models the financial impact 
of the standards commoditizing premium products, it is not 
representative of the small business manufacturer because the small 
business manufacturer did not share these concerns. Because of its 
focus on specialized products, the small manufacturer was more 
concerned about being able to offer the products to their customers 
than the impact on its bottom line. For further information about the 
scenarios modeled in the GRIM, see section VI.B.2.a of today's notice 
and chapter 13 of the TSD.
    DOE seeks further comment on how small businesses could be impacted 
by standards on GSFL and IRL.
    DOE reviewed the standard levels considered in today's notice of 
proposed rulemaking under the provisions of the Regulatory Flexibility 
Act and the procedures and policies published on February 19, 2003. On 
the basis of the foregoing, DOE certifies that this proposed rule, if 
promulgated, would not have a significant economic impact on a 
substantial number of small entities. Accordingly, DOE has not prepared 
a regulatory flexibility analysis for this rulemaking. DOE's 
certification and supporting statement of factual basis will be 
provided to the Chief Counsel for Advocacy of the Small Business 
Administration pursuant to 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), a person is not required to respond to a collection of 
information by a Federal agency, including a requirement to maintain 
records, unless the collection displays a valid OMB control number. (44 
U.S.C. 3506(c)(1)(B)(iii)(V)) This rulemaking would impose no new 
information or record keeping requirements. Accordingly, OMB clearance 
is not required under the PRA.

D. Review Under the National Environmental Policy Act

    DOE has prepared a draft environmental assessment (EA) of the 
impacts of the proposed rule pursuant to the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of the 
Council on Environmental Quality (40 CFR Parts 1500-1508), and DOE's 
regulations for compliance with the National Environmental Policy Act 
(10 CFR Part 1021). This assessment includes an examination of the 
potential effects of emission reductions likely to result from the rule 
in the context of global climate change, as well as other types of 
environmental impacts. The draft EA has been incorporated into the TSD. 
Before issuing a final rule for GSFL and IRL, DOE will consider public 
comments and, as appropriate, determine whether to issue a finding of 
no significant impact as part of a final EA or to prepare an 
environmental impact statement (EIS) for this rulemaking.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999) 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have Federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. The Executive Order also requires agencies 
to have an accountable process to ensure meaningful and timely input by 
State and local officials in the development of regulatory policies 
that have Federalism implications. On March 14, 2000, DOE published a 
statement of policy describing the intergovernmental consultation 
process it will follow in the development of such regulations. 65 FR 
13735. DOE has examined today's proposed rule and has determined that 
it would not have a substantial direct effect on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. EPCA governs and prescribes Federal preemption of State 
regulations on energy conservation for the products that are the 
subject of today's proposed rule. States can petition DOE for exemption 
from such preemption to the extent, and based on criteria, set forth in 
EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D)) No further action is 
required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform'' (61 FR 4729 (Feb. 7, 1996)) imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make

[[Page 17024]]

every reasonable effort to ensure that the regulation: (1) Clearly 
specifies the preemptive effect, if any; (2) clearly specifies any 
effect on existing Federal law or regulation; (3) provides a clear 
legal standard for affected conduct while promoting simplification and 
burden reduction; (4) specifies the retroactive effect, if any; (5) 
adequately defines key terms; and (6) addresses other important issues 
affecting clarity and general draftsmanship under any guidelines issued 
by the Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that, to the extent 
permitted by law, this proposed rule meets the relevant standards of 
Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    DOE reviewed this regulatory action under Title II of the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4) (UMRA), which requires each 
Federal agency to assess the effects of Federal regulatory actions on 
State, local and Tribal governments and the private sector. For a 
proposed regulatory action likely to result in a rule that may cause 
the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted for inflation), section 202 of UMRA requires an agency 
to publish a written statement assessing the costs, benefits, and other 
effects of the rule on the national economy. (2 U.S.C. 1532(a), (b)) 
The UMRA also requires a Federal agency to develop an effective process 
to permit timely input by elected officers of State, local, and Tribal 
governments on a proposed ``significant intergovernmental mandate,'' 
and requires an agency plan for giving notice and opportunity for 
timely input to potentially affected small governments before 
establishing any requirements that might significantly or uniquely 
affect small governments. On March 18, 1997, DOE published a statement 
of policy on its process for intergovernmental consultation under UMRA 
(62 FR 12820) (also available at http://www.gc.doe.gov). Although 
today's proposed rule does not contain a Federal intergovernmental 
mandate, it may impose expenditures of $100 million or more on the 
private sector.
    Section 202 of UMRA authorizes an agency to respond to the content 
requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. 2 U.S.C. 1532(c). The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the notice of proposed rulemaking 
and the ``Regulatory Impact Analysis'' section of the TSD for this 
proposed rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. DOE is required to select from those alternatives the most 
cost-effective and least burdensome alternative that achieves the 
objectives of the rule unless DOE publishes an explanation for doing 
otherwise or the selection of such an alternative is inconsistent with 
law. As required by 42 U.S.C. 6295(i) and (o), today's proposed rule 
would establish energy conservation standards for GSFL and IRL that are 
designed to achieve the maximum improvement in energy efficiency that 
DOE has determined to be both technologically feasible and economically 
justified. A full discussion of the alternatives considered by DOE is 
presented in the ``Regulatory Impact Analysis'' section of the TSD for 
today's proposed rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This proposed rule would not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 12630

    DOE has determined under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights,'' 53 FR 8859 (March 18, 1988), that this regulation would not 
result in any taking that would require compensation under the Fifth 
Amendment to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and 
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has 
reviewed today's proposed rule under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    Today's regulatory action is not a ``significant energy action'' 
because it would not have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator of OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its ``Final Information 
Quality Bulletin for Peer Review'' (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is

[[Page 17025]]

disseminated by the Federal government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the Bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2664, 2667 (Jan. 14, 2005).
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and analyses, and 
has prepared a Peer Review Report pertaining to the energy conservation 
standards rulemaking analyses. Generation of this report involved a 
rigorous, formal, and documented evaluation process using objective 
criteria and qualified and independent reviewers to make a judgment as 
to the technical/scientific/business merit, the actual or anticipated 
results, and the productivity and management effectiveness of programs 
and/or projects. The ``Energy Conservation Standards Rulemaking Peer 
Review Report,'' dated February 2007, has been disseminated and is 
available at: http://www.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VIII. Public Participation

    DOE will make the entire record of this proposed rulemaking, 
including the transcript from the public meeting, available for 
inspection at the U.S. Department of Energy, Resource Room of the 
Building Technologies Program, 950 L'Enfant Plaza, SW., Washington, DC 
20024, (202) 586-2945, between 9 a.m. and 4 p.m., Monday through 
Friday, except Federal holidays. Any person may buy a copy of the 
transcript from the transcribing reporter.

A. Submission of Comments

    DOE began accepting comments, data, and information regarding the 
proposed rule at the public meeting, and will continue to accept 
comments until no later than the date provided at the beginning of this 
notice of proposed rulemaking. Information submitted should be 
identified by docket number EE-2006-STD-0131 and/or RIN 1904- AA92. 
Comments, data, and information submitted to DOE's e-mail address for 
this rulemaking should be provided in WordPerfect, Microsoft Word, PDF, 
or text (ASCII) file format. Stakeholders should avoid the use of 
special characters or any form of encryption and, wherever possible, 
comments should carry the electronic signature of the author. Comments, 
data, and information submitted to DOE via mail or hand delivery/
courier should include one signed paper original. No telefacsimiles 
(faxes) will be accepted.
    Pursuant to 10 CFR 1004.11, any person submitting information that 
he or she believes to be confidential and exempt by law from public 
disclosure should submit two copies: one copy of the document including 
all the information believed to be confidential, and one copy of the 
document with the information believed to be confidential deleted. DOE 
will make its own determination about the confidential status of the 
information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.

B. Issues on Which DOE Seeks Comment

    DOE is particularly interested in receiving comments and views of 
interested parties concerning:
    (1) The scope of covered products DOE considered in this 
rulemaking--specifically, DOE's decision to cover 4-foot T5 miniature 
bipin SO and 4-foot T5 miniature bipin HO lamps;
    (2) DOE's decision to amend the definition of ``colored fluorescent 
lamp'' to exclude lamps with a CCT greater than 7,000K;
    (3) The appropriateness of establishing separate product classes 
for IRL by lamp diameter and rated lamp voltage;
    (4) The appropriateness of establishing separate product classes 
for 4-foot T5 miniature bipin SO and 4-foot T5 miniature bipin HO 
lamps;
    (5) The added 4-foot MBP residential sector engineering analysis, 
particularly the choice of the baseline system (lamp and ballast);
    (6) The performance characteristics (e.g., lumen output, lifetime, 
wattage) established for both GSFL and IRL model lamps DOE used in the 
engineering analysis--specifically, the properties of the T5 
halophosphor GSFL baseline lamps and the improved halogen IRL that uses 
xenon as a fill gas (the lamp established for TSL1);
    (7) The efficacy levels DOE considered for IRL, in particular the 
added EL1 and EL5;
    (8) The efficacy levels DOE used for each GSFL product class--
particularly, DOE's decision to use compliance report data to establish 
GSFL efficacy levels;
    (9) The methodology DOE used to scale efficacy levels from 
representative product classes to product classes DOE did not analyze 
(i.e., 2-foot U-shaped lamps and high CCT lamps for GSFL, modified 
spectrum lamps, lamps with diameters less than or equal to 2.5 inches, 
lamps with rated voltage greater than 125V);
    (10) The choice of ballast lifetimes DOE used in the commercial, 
residential, and industrial sectors and operating hours for GSFL in the 
residential sector;
    (11) The growth rates DOE used in the residential sector IRL and 
GSFL shipments analysis, the market penetration of emerging 
technologies in the IRL and GSFL shipments analysis, and the T5 lamp 
shipment forecasts;
    (12) Base-case market-share matrices and standards-case market-
share matrices for IRL and GSFL--particularly the percentage of GSFL 
consumers with sufficient lighting expertise (i.e., those consumers who 
will choose a lower-BF ballast or reduced-wattage lamp to maintain 
lumen output under standards) by market segment;
    (13) The methodology and inputs DOE used for the manufacturer 
impact analysis--specifically, DOE's assumptions regarding markups, 
capital costs, conversion costs, and stranded assets;
    (14) The determination of the environmental impacts of the proposed 
rule--specifically, methods for valuing the CO<INF>2</INF>, 
NO<INF>X</INF>, SO<INF>X</INF>, and Hg emissions savings due to the 
proposed standards;
    (15) The appropriateness of trial standard levels DOE considered 
for GSFL and IRL, in particular the combinations of efficacy levels of 
each GSFL product class;
    (16) The proposed standard levels for GSFL and IRL;
    (17) Alternative scenarios for GSFL standards that could achieve 
greater energy savings. One example may be for DOE to adopt a more 
stringent standard level in the final rule that would eliminate T12 
lamps, as described in

[[Page 17026]]

relation to TSL4 and TSL5. Another example may be for DOE to adopt a 
more stringent standard level in the final rule that, similar to TSL4 
and TSL5, would eliminate T12 lamps, but allow an extended lead time 
before compliance would be required. A third example may be for DOE to 
adopt a more stringent standard level, while continuing to allow the 
sale of specially packaged or labeled T12 lamps in the residential 
sector only.
    (18) Other technology pathways that may be utilized to meet IRL 
TSL5, whether these pathways may have any adverse effects on consumer 
utility or the ability for the product to be mass-produced, 
manufacturer costs associated with these pathways, and resulting 
consumer product prices for lamps that meet this standard level.

IX. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this proposed 
rule.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Intergovernmental relations, Small businesses.

    Issued in Washington, DC on March 23, 2009.
Steven G. Chalk,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable 
Energy.

    For the reasons stated in the preamble, DOE proposes to amend 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

    1. The authority citation for Part 430 continues to read as 
follows:

    Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

    2. Section 430.2 is amended by revising the definition of ``colored 
fluorescent lamp,'' ``fluorescent lamp,'' and ``rated wattage'' to read 
as follows:


Sec.  430.2  Definitions.

* * * * *
    Colored fluorescent lamp means:
    (1) A fluorescent lamp designated and marketed as a colored lamp 
with a CRI less than 40, as determined according to the method given in 
CIE Publication 13.2 (incorporated by reference, see Sec.  430.3);
    (2) A fluorescent lamp designed and marketed as a colored lamp with 
a correlated color temperature (CCT) less than 2,500K; or
    (3) A fluorescent lamp with a CCT greater than 7,000K.
* * * * *
    Fluorescent lamp means a low pressure mercury electric-discharge 
source in which a fluorescing coating transforms some of the 
ultraviolet energy generated by the mercury discharge into light, 
including only the following:
    (1) Any straight-shaped lamp (commonly referred to as 4-foot medium 
bipin lamps) with medium bipin bases of nominal overall length of 48 
inches and rated wattage of 25 or more;
    (2) Any U-shaped lamp (commonly referred to as 2-foot U-shaped 
lamps) with medium bipin bases of nominal overall length between 22 and 
25 inches and rated wattage of 25 or more;
    (3) Any rapid start lamp (commonly referred to as 8-foot high 
output lamps) with recessed double contact bases of nominal overall 
length of 96 inches;
    (4) Any instant start lamp (commonly referred to as 8-foot slimline 
lamps) with single pin bases of nominal overall length of 96 inches and 
rated wattage of 52 or more;
    (5) Any straight-shaped lamp (commonly referred to as 4-foot 
miniature bipin standard output lamps) with miniature bipin bases of 
nominal length between 45 and 48 inches and rated wattage of 26 or 
more; and
    (6) Any straight-shaped lamp (commonly referred to 4-foot miniature 
bipin high output lamps) with miniature bipin bases of nominal length 
between 45 and 48 inches and rated wattage of 51 or more.
* * * * *
    Rated wattage, with respect to general service fluorescent lamps, 
means:
    (1) If the lamp is listed in ANSI C78.81-2005 or ANSI C78.901-2005, 
the rated wattage of a lamp determined by the lamp designation of 
Clause 11.1 of ANSI C78.81-2005 or ANSI C78.901- 2005;
    (2) If the lamp is a residential straight-shaped lamp, and not 
listed in ANSI C78.81-2005, the wattage of a lamp when operated on a 
reference ballast for which the lamp is designed;
    (3) If the lamp is neither listed in one of the ANSI guides 
referenced in (1) nor a residential straight-shaped lamp, the wattage 
of a lamp when measured according to the test procedures outlined in 
Appendix R to subpart B of this part; or
    (4) With respect to general service incandescent lamps and 
incandescent reflector lamps, the wattage measured according to the 
test procedures outlined in Appendix R to subpart B of this part.
* * * * *
    3. Section 430.32 is amended by revising paragraph (n) to read as 
follows:


Sec.  430.32  Energy and water conservation standards and their 
effective dates.

* * * * *
    (n) General service fluorescent lamps and incandescent reflector 
lamps. (1) Except as provided in paragraphs (n)(2) and (n)(3) of this 
section, each of the following general service fluorescent lamps 
manufactured after the effective dates specified in the table shall 
meet or exceed the following lamp efficacy and CRI standards:

----------------------------------------------------------------------------------------------------------------
                                                                         Minimum
                                      Nominal lamp                    average lamp
             Lamp type                   wattage       Minimum CRI    efficacy (lm/         Effective date
                                                                           W)
----------------------------------------------------------------------------------------------------------------
4-foot medium bipin................           > 35W              69            75.0  Nov. 1, 1995
                                             <= 35W              45            75.0  Nov. 1, 1995.
2-foot U-shaped....................           > 35W              69            68.0  Nov. 1, 1995.
                                             <= 35W              45            64.0  Nov. 1, 1995.
8-foot slimline....................           > 65W              69            80.0  May 1, 1994.
                                             <= 65W              45            80.0  May 1, 1994.
8-foot high output.................          > 100W              69            80.0  May 1, 1994.
                                            <= 100W              45            80.0  May 1, 1994.
----------------------------------------------------------------------------------------------------------------


[[Page 17027]]

    (2) The standards described in paragraph (n)(1) of this section do 
not apply to:
    (i) Any 4-foot medium bipin lamp or 2-foot U-shaped lamp with a 
rated wattage less than 28 watts;
    (ii) Any 8-foot high output lamp not defined in ANSI C78.1-1978 or 
related supplements, or not 0.800 nominal amperes; or
    (iii) Any 8-foot slimline lamp not defined in ANSI C78.3-1978 
(R1984) or related supplement ANSI C78.3a-1985.
    (3) Each of the following general service fluorescent lamps 
manufactured after June 30, 2012, shall meet or exceed the following 
lamp efficacy standards shown in the table:

------------------------------------------------------------------------
                                                              Minimum
                                            Correlated     average lamp
                Lamp type                      color      efficacy  (lm/
                                            temperature         W)
------------------------------------------------------------------------
4-foot medium bipin.....................       <= 4,500K              84
                                                > 4,500K              78
2-foot U-shaped.........................       <= 4,500K              78
                                                > 4,500K              73
8-foot slimline.........................       <= 4,500K              95
                                                > 4,500K              91
8-foot high output......................       <= 4,500K              88
                                                > 4,500K              84
4-foot miniature bipin standard output..       <= 4,500K             103
                                                > 4,500K              97
4-foot miniature bipin high output......       <= 4,500K              89
                                                > 4,500K              85
------------------------------------------------------------------------

    (4) Except as provided in paragraph (n)(5) of this section, each of 
the following incandescent reflector lamps manufactured after November 
1, 1995, shall meet or exceed the lamp efficacy standards shown in the 
table:

------------------------------------------------------------------------
                                                        Minimum average
                 Nominal lamp wattage                  lamp efficacy (lm/
                                                               W)
------------------------------------------------------------------------
40-50................................................               10.5
51-66................................................               11.0
67-85................................................               12.5
86-115...............................................               14.0
116-155..............................................               14.5
156-205..............................................               15.0
------------------------------------------------------------------------

    (5) Each of the following incandescent reflector lamps manufactured 
after June 30, 2012, shall meet or exceed the lamp efficacy standards 
shown in the table:

----------------------------------------------------------------------------------------------------------------
                                                                                                      Minimum
                                                                                                   average lamp
                          Lamp spectrum                            Lamp diameter   Rated voltage  efficacy  (lm/
                                                                                                        W)
----------------------------------------------------------------------------------------------------------------
Standard Spectrum...............................................   > 2.5<gr-thn-         >= 125V      7.1P\0.27\
                                                                             eq>
                                                                  ..............          < 125V      6.2P\0.27\
                                                                  <= 2.5<gr-thn-         >= 125V      6.3P\0.27\
                                                                             eq>
                                                                  ..............          < 125V      5.5P\0.27\
Modified Spectrum...............................................   > 2.5<gr-thn-         >= 125V      5.8P\0.27\
                                                                             eq>
                                                                  ..............          < 125V      5.0P\0.27\
                                                                  <= 2.5<gr-thn-         >= 125V      5.1P\0.27\
                                                                             eq>
                                                                  ..............          < 125V      4.4P\0.27\
----------------------------------------------------------------------------------------------------------------
Note: P is equal to the rated lamp wattage, in watts.

    (6)(i)(A) Subject to the exclusions in paragraph (6)(ii) of this 
section, the standards specified in this section shall apply to ER 
incandescent reflector lamps, BR incandescent reflector lamps, BPAR 
incandescent reflector lamps, and similar bulb shapes on and after 
January 1, 2008.
    (B) Subject to the exclusions in paragraph (6)(ii) of this section, 
the standards specified in this section shall apply to incandescent 
reflector lamps with a diameter of more than 2.25 inches, but not more 
than 2.75 inches, on and after June 15, 2008.
    (ii) The standards specified in this section shall not apply to the 
following types of incandescent reflector lamps:
    (A) Lamps rated at 50 watts or less that are ER30, BR30, BR40, or 
ER40 lamps;
    (B) Lamps rated at 65 watts that are BR30, BR40, or ER40 lamps; or
    (C) R20 incandescent reflector lamps rated 45 watts or less.

[FR Doc. E9-7634 Filed 4-10-09; 8:45 am]
BILLING CODE 6450-01-P


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