ADVANCE TRANSFORMER CO

10275 W Higgins

Rosemont, 11 60018

April 6, 2000

US Department of Energy

Attn: Brenda Edwards-Jones

Office of Energy Efficiency and Renewable Energy

EE-41

1000 Independence Ave, SW

Washington, DC 20585-0121

Subject: Docket No EE-RM-97-500

Public Hearing; Fluorescent Lamp Ballasts

Dear Ms Edwards-Jones:

Attached is a statement from Advance Transformer for the April 18, 200 Public Hearing on

Fluorescent Lamp Ballasts.

I look forward to presenting a summary of these comments at the hearing.

If you need further information I can be reached at 847-913-8238 by phone or at 847-913-0266

by fax.

Robert W Wisbey

Consultant to Advance Transformer

cc; P Franco, N Grimshaw, R Moorhead

EE-RM-97-500 COMMENT 99DD
Comments of Advance Transformer Co

April 18, 2000 Public Hearing

Energy Conservation Program for Consumer Products: Fluorescent Lamp Ballasts

Docket No EE-RM-97-500

I am Bob Wisbey.

I would like to provide comments on the Proposed Rule regarding fluorescent lamp ballast

efficiency standards, as published in the Federal Register Notice of March 15, 2000. I am

submitting these comments on behalf of Advance Transformer Company.

Advance is an operating division of Philips Electronics North America Corporation. Advance is

a leader in the design, manufacture and sale of both magnetic and electronic ballasts, and is one

of the largest manufacturers of each technology. Advance's business is very dependent on energy

saving initiatives and products.

Advance, and Philips, have participated in all aspects of fluorescent lamp ballast efficiency

regulations dating back to the State of California regulations of the early 1980's. Advance

representatives were very involved in advocating and developing the initial US regulations in

1987/88. I, personally, and Advance/Philips as a company, have been extremely involved in the

current rulemaking process, since the publication of the poorly conceived and ill-fated "eight

product rulemaking" NOPR on March 4, 1994.

Fluorescent lamp ballasts are components utilized in lighting fixtures primarily used in

commercial and industrial buildings . In 1987/88, ballasts were incorporated in NAECA

legislation, which otherwise covers home appliances used in primarily residential applications. At

that time, a national ballast efficiency regulation was considered desirable by all concerned

parties. Attaching it to NAECA was an expediency, agreed to by all stakeholders, and in

retrospect, was an overall good choice. However , the periodic review process ofNAECA is

basically designed for residential appliances . In fact, the title of the program, as listed in the

heading of these comments is; "Energy Conservation Program for Consumer Products"

Fluorescent lamp ballasts are not generally "consumer products ". Ballasts are different because

they are only components of lighting fixtures and because they are mostly used in commercial

and industrial applications.

Advance has been a very active member of the NEMA Ballast Section Energy Task Force that

has been the primary industry group dealing with this issue. This group of six companies

comprises the vast majority of both magnetic and electronic ballast sales and manufacturing in

this country. Even though the product lines and business interests of the six are not all the same,

our interests in and commitment to a regulation process that is open and transparent and based on

thorough and factual analyses are all the same.

EE-RM-97-500 COMMENT 99DD
The majority of our input has been expressed through the NEMA Ballast Section. Advance

supports and endorses all of the comments that have been and are being provided by the NEMA

Ballast Section. Advance is also one of the signatories to the "Agreement on Consensus

Recommendations to the Department of Energy Relating to Energy Efficiency Standards for

Fluorescent Lamp Ballasts" (October 1999); Advance also participated in the development of the

"Joint Comments Relating to Energy Conservation Standards for Ballasts" (December 1999). We

affirm our support of the Agreement and the Joint Comments. The NOPR issued by DOE and

published in the Federal Register on March 15, 2000 accurately reflects the proposal agreed to by

the Joint Stakeholders. Advance and Philips support the proposal's adoption.

I would like to make some comments on the three primary ingredients in the DOE economic

analysis: Life Cycle Cost (LCC) analysis, which evaluates the impact of potential rules on users;

National Energy Savings (NES) analysis, which evaluates impacts on the nation as a whole; and

Manufacturers Impact Analysis (MIA), which evaluates impacts on manufacturers.

The quality of these analyses has improved immensely since the original NOPR in 1994,

particularly since the implementation of DOE's Process Improvement Rule in 1996.

We have some specific comments on the latest round of these analyses; released in September of

1999:

The MIA shows that a rule requiring essentially only electronic ballasts, taking effect in

2003, would have a major negative economic impact on companies that manufacture

magnetic ballasts, and their suppliers. We believe this analysis is very thorough and

accurate.

The LCC shows an economic advantage to a very large majority of users. There are four

factors in this analysis with which we continue to disagree . They are: the derivation of

user ballast prices, the use of the same electricity prices for all ballast users, the

comparison of T8 lighting systems vs T12 lighting systems and the comparison of 3 and

4 lamp fixtures using one ballast vs fixtures using multiple ballasts.

These points are covered in more detail in previous and concurrent NEMA

comments. We do not suggest that the analyses be redone at this time. We also

are not submitting our own version of the LCC analyses as we have done in the

past. It is virtually impossible to determine user ballast prices with any degree of

certainty. The ballast price information previously used is now four years old and

not representative of today's market. We are satisfied that properly done LCC

analyses today would show advantages for most users, just not the overwhelming

majority shown in the TSD.

The NES shows a substantial national energy savings. We believe the basic energy

savings portion of this analysis is thorough and accurate, given the acknowledged

uncertainty range of continued electronic ballast market penetration without further

regulation. The economic national benefit is overstated because of the problems with user

ballast prices and electricity prices described above in the LCC commentary.

EE-RM-97-500 COMMENT 99DD
By last summer, the analyses had improved to the point that the items listed above were the only

major disagreements. At the ballast workshop in June Dan Reicher suggested that the interested

stakeholders try to reach a consensus recommendation. Our NEMA group, spearheaded by Randy

Moorhead of Philips, organized a negotiating session. All of the interested stakeholders, as well

as representatives of DOE and their technical consultants, ADL and LBNL, were invited and

participated. The NEMA group included the affected ballast companies, several suppliers to the

ballast industry, luminaire manufacturers and lamp manufacturers. The other stakeholders

included the energy advocacy groups and state energy offices who had shown ongoing interest in

this regulation. DOE representatives were able to observe the negotiation and provide guidance.

After two days of negotiation, a consensus was reached on a common proposal that could be

presented to DOE by the Joint Stakeholders.

This proposal will achieve greater overall energy savings than could have been accomplished had

DOE elected to try to go ahead with an all electronic ballast regulation in the shortest possible

time frame, in view of the rebuttable presumptions that would have been triggered by the negative

impacts on manufacturers.

The estimated direct lighting energy savings will be 1.2 quads compared to a base case where

magnetic ballast shipments decline at a rate of 5% of 1997 shipments per year, 2.3 quads

compared to a base case with a magnetic decline rate of 3% and 4.9 quads compared to an

unlikely base case where there is no further shift from magnetic to electronic. (See TSD,

Appendix E, Table E. 1) The market shift in recent years has approximated the 5% reduction

scenario. It is our opinion the rate of natural market shift to electronic ballasts in the future will

increase to an even higher degree. In any event, additional energy savings of approximately 5

quads will be achieved by the combined effect of this regulation and market forces.

The proposal has a reasonable level of safeguards against economic damage and inconvenience

to users, based on delayed implementation for replacement ballasts and the allowance of T8

magnetic ballasts.

The negative impacts on manufacturers will be reduced compared to those shown in the MIA

portion of the TSD, because the implementation dates will allow a more orderly transition from

magnetic to electronic ballasts.

Advance is one of the companies that manufacture both magnetic and electronic ballasts who

would suffer significant economic hardships as shown in the MIA. According to the MIA the

value of the affected portions of the business would be reduced by between 25 and 50 %, and

cash flows would be reduced dramatically beginning in 2002. We are satisfied that these

economic losses will be reduced under the proposal. We are prepared to tolerate the level of

negative economic impacts that will result under the joint proposal.

EE-RM-97-500 COMMENT 99DD
Finally, while we fully support the language of the proposed rule, we do have two issues with the

preamble portion of the NOPR that we would like to see addressed adequately in the preamble to

the Final Rule.

First, DOE presumes that all of our previous comments are superseded by the Joint Comments.

"... NEMA ... submitted a joint comment .... While these stakeholders had previously

commented on the above three documents ... the Department assumes, based on their joint

comment, that it supersedes their previous comments. Therefore, the previous comments are not

addressed in today's notice. " This is an incorrect presumption and the Final Rule should include

acknowledgement of the disputed and unresolved issues in the Life Cycle Cost analysis described

earlier. We do not request that DOE redo these analyses, or delay the implementation of the

Proposed Rule to respond to these comments, only that they be acknowledged as unresolved.

Secondly, there is undo emphasis in the NOPR on a scenario in which a major US ballast factory

is closed in the base case. ". . . there is evidence to suggest that magnetic ballast production

facilities in the US may be closed regardless of a standard, ... " Advance operates the major US

magnetic ballast factory. There is no evidence to indicate the potential closure of that plant

without standards. DOE must rephrase its comments regarding this "sensitivity analysis", because

it is extremely unlikely, and is only a hypothetical scenario.

We believe DOE can adequately address these two issues in the preamble section of the Final

Rule and their resolution should result in no change to the proposal and no delay in adoption of

the Final Rule.

We appreciate the opportunity to participate in this rulemaking process and pledge ourselves to

participate openly and thoroughly in any future rulemaking process conducted as this one has

been conducted since the Process Improvement Rule was enacted.

In conclusion, Advance Transformer and Philips Electronics fully support the adoption of the rule

provided by the Joint Stakeholders and published in the NOPR as a Final Rule.

4/6/00

EE-RM-97-500 COMMENT 99DD