CHAPTER 17. REGULATORY IMPACT ANALYSIS

TABLE OF CONTENTS

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

17.2 METHODOLOGY ........................................................................................................ 17-1

LIST OF TABLES

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

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CHAPTER 17. REGULATORY IMPACT ANALYSIS

17.1 INTRODUCTION

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

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

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

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

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

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

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

policy options to reduce the energy consumption of products. It will evaluate each alternative in 

terms of its ability to achieve significant energy savings at a reasonable cost, and will compare 

the effectiveness of each alternative to the effectiveness of each candidate standard.

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

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

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

methodology for which is briefly addressed below.

Table 17.1.1 Non-Regulatory Alternatives to Standards

No New Regulatory Action

Consumer Rebates

Consumer Tax Credits

Manufacturer Tax Credits

Voluntary Energy Efficiency Targets

Early Replacement

Bulk Government Purchases

17.2 METHODOLOGY

DOE will use the national impact analysis (NIA) spreadsheet model to calculate the 

national energy savings and the net present value (NPV) corresponding to each alternative to 

proposed standards. The NIA model is discussed in chapter 10 of the TSD. To compare each 

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

quantify the effect of each alternative on the purchase and use of energy efficient products. DOE 

will create an integrated NIA-RIA model, built on the NIA model, in which to make the 

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

NIA-RIA model are:

• Market shares of products meeting target efficiency levels (identical to the trial standard 

levels for the mandatory standards)

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• Replacement rates of equipment in the stock

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

• Energy use: Cumulative energy use of products from the compliance date of the new 

standard to 2049. DOE will report electricity consumption as primary energy.

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

minus the alternative-policy-case projection.

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

during the period from the required compliance date of the new standard (2019) to 2049. 

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

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

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

equipment expenditures to 2013 using a 7-percent and 3-percent real discount rate. It will 

calculate operating expenses (including energy costs) for the life of the equipment.

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