Energy Conservation Program: Energy Conservation Standards for High-Intensity Discharge Lamps

AGENCY:

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

ACTION:

Notice of proposed determination (NOPD).

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, requires DOE to prescribe test procedures and energy conservation standards for high-intensity discharge (HID) lamps for which it has determined that standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice, DOE proposes to determine that energy conservation standards for high-intensity discharge (HID) lamps do not meet these criteria.

DATES:

DOE will accept comments, data, and information regarding this NOPD no later than December 22, 2014. Interested parties may further request, no later than November 5, 2014, a public meeting to discuss this NOPD. See section VII Public Participation for details.

ADDRESSES:

Any comments submitted must identify the NOPD for Energy Conservation Standards for High-Intensity Discharge Lamps and provide docket number EE-2010-BT-STD-0043 and/or regulatory information number (RIN) 1904-AC36. Comments may be submitted using any of the following methods:

1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments.

2. Email: HIDLamps-2010-STD-0043@ee.doe.gov. Include the docket number and/or RIN in the subject line of the message.

3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a CD. It is not necessary to include printed copies.

4. 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. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document (Public Participation).

Docket: The docket is available for review at www.regulations.gov,, including Federal Register notices, framework documents, public meeting attendee lists and transcripts, comments, and other supporting documents/materials. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.

The docket Web page can be found at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/23. This Web page contains a link to the docket for this notice on the regulations.gov site. The regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. See section VII for further information on how to submit comments through www.regulations.gov.

For further information on how to submit a comment or review other public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT:

Ms. Lucy deButts, 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) 287-1604. Email: high_intensity_discharge_lamps@ee.doe.gov.

Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7796. Email: elizabeth.kohl@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Determination

A. Legal Authority

B. Background

1. Current Standards

2. History of Standards Rulemaking for High-Intensity Discharge Lamps

3. Changes From the 2010 Determination

a. Color

b. Replacement Options

c. Shipments

d. Summary of Changes

II. Issues Affecting the Lamps Analyzed by This Determination

A. Lamps Analyzed by This Determination

B. Standby/Off Mode

C. Metric

D. Coordination of the Metal Halide Lamp Fixture and HID Lamp Rulemakings

III. 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

IV. Methodology and Discussion

A. Market and Technology Assessment

1. General

2. Equipment Classes

3. Technology Options

a. Mercury Vapor

b. High-Pressure Sodium Lamps

c. Metal Halide

d. Summary

B. Screening Analysis

C. Engineering Analysis

1. Representative Equipment Classes

2. Baseline Lamps and Representative Lamp Types

3. More Efficacious Substitutes

4. Determine Efficacy Levels

5. Scaling to Equipment Classes Not Directly Analyzed

6. HID Systems

D. Equipment Price Determination

E. Markups Analysis

F. Energy Use Analysis

G. Life-Cycle Cost and Payback Period Analysis

H. Shipments Analysis

I. National Impact Analysis

J. Manufacturer Impact Analysis

V. Analytical Results

A. Economic Impacts on Individual Customers

B. Economic Impacts on Manufacturers

1. Industry Cash-Flow Analysis Results

2. Impacts on Employment

3. Impacts on Manufacturing Capacity

4. Impacts on Subgroups of Manufacturers

5. Cumulative Regulatory Burden

C. National Impact Analysis

1. Significance of Energy Savings

2. Net Present Value of Customer Costs and Benefits

D. Proposed Determination

1. Technological Feasibility

2. Significance of Energy Savings

3. Economic Justification

4. Conclusions

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act of 1969

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

VII. Public Participation

A. Public Meeting Requests

B. Submission of Comments

C. Issues on Which DOE Seeks Comment

VIII. Approval of the Office of the Secretary

I. Summary of the Proposed Determination

DOE proposes to determine that energy conservation standards for HID lamps do not meet the EPCA requirements described in section I.A, that such standards be technologically feasible, economically justified, and result in a significant conservation of energy. (42 U.S.C. 6317(a)(1)) Specifically, DOE concludes that standards for high-pressure sodium (HPS) lamps are not technologically feasible, and that standards for mercury vapor (MV) and metal halide (MH) lamps are not economically justified (HPS, MV, and MH lamps are subcategories of HID lamps). DOE's proposed determination is based on analysis of several efficacy levels (ELs) as a means of conserving energy. These analyses and DOE's results are described in the following sections of this notice and in the notice of proposed determination (NOPD) technical support document (TSD).

A. Legal Authority

Title III of EPCA (42 U.S.C. 6291, et seq), Public Law 94-163, sets forth a variety of provisions designed to improve energy efficiency. Part C of title III, which for editorial reasons was re-designated as Part A-1 upon incorporation into the U.S. Code (42 U.S.C. 6311-6317), establishes the “Energy Conservation Program for Certain Industrial Equipment,” a program covering certain industrial equipment, which include the HID lamps that are the subject of this proposed determination. Pursuant to EPCA, DOE must prescribe test procedures and energy conservation standards for HID lamps for which DOE has determined that standards would be technologically feasible, economically justified, and would result in a significant conservation of energy. (42 U.S.C. 6317(a)(1))

B. Background

1. Current Standards

There are currently no Federal energy conservation standards for HID lamps.

2. History of Standards Rulemaking for High-Intensity Discharge Lamps

Pursuant to EPCA, in 2010 DOE published a final determination (hereafter the “2010 determination”) that standards for certain HID lamps are technologically feasible, economically justified, and would result in significant energy savings (a positive determination). 75 FR 37975 (July 1, 2010). As a result of the 2010 determination, DOE initiated a test procedure rulemaking for the specified lamps (see section III.A).

DOE also initiated an energy conservation standards rulemaking in response to the 2010 determination. On February 28, 2012, DOE published in the Federal Register an announcement of the availability of a framework document for energy conservation standards for HID lamps, as well as a notice of a public meeting. DOE held a public meeting on March 29, 2012, to receive feedback in response to the framework document.

DOE gathered additional information and performed interim analyses to develop potential energy conservation standards for HID lamps. On February 28, 2013, DOE published in the Federal Register an announcement of the availability of the interim technical support document (the interim TSD) and notice of a public meeting (hereafter, the “February 2013 notice”) to discuss and receive comments on the following matters: (1) The equipment classes DOE planned to analyze; (2) the analytical framework, models and tools that DOE used to evaluate standards; (3) the results of the interim analyses performed by DOE; and (4) potential standard levels that DOE could consider. 78 FR 13566. In the February 2013 notice, DOE requested comment on issues that would affect energy conservation standards for HID lamps or that DOE should address in the following analysis stage. The interim TSD is available at: www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/23.

The interim TSD summarized the activities DOE undertook in developing standards for HID lamps. It also described the analytical framework that DOE uses in a typical energy conservation standards rulemaking, including a description of the methodology, the analytical tools, and the relationships among the various analyses that are part of the rulemaking. The interim TSD presented and described in detail each analysis DOE performed, including descriptions of inputs, sources, methodologies, and results.

The public meeting for the interim analysis took place on April 2, 2013. At this meeting, DOE presented the methodologies and results of the analyses set forth in the interim TSD. Interested parties discussed the following major issues at the public meeting: the scope of the interim analysis, equipment classes, sapphire arc tube technology, the engineering analysis (including the representative units, baselines, and candidate standard levels [CSLs]), the life-cycle cost (LCC) and payback period (PBP) analysis, and the shipment analysis.

All comments received by DOE in response to the framework document were considered when performing the interim analysis for HID lamps. Chapter 2 of this NOPD TSD summarizes and responds to comments received on the framework document and the interim analysis.

After revising the interim analyses based on stakeholder comments and updated information, DOE proposes in this NOPD to determine that standards for HID lamps are no longer justified based on technological feasibility and economic justification.

3. Changes From the 2010 Determination

As discussed previously, DOE published a determination in 2010 that concluded that standards for certain HID lamps would be technologically feasible, economically justified, and would result in significant energy savings. 75 FR 37975 (July 1, 2010) Since the publication of the 2010 determination, DOE held public meetings and received written comments, conducted interviews with manufacturers, and conducted additional research. Based upon this new information, DOE revised its analyses for potential HID lamp energy conservation standards. The following sections summarize the major changes in assumptions and analyses between the 2010 determination and this NOPD, in which DOE proposes to determine that standards for HID lamps would not be technologically feasible and economically justified, and would not result in significant energy savings.

a. Color

In contrast to the 2010 determination, DOE established separate equipment classes based on correlated color temperature (CCT) in the interim analysis and in this NOPD. CCT represents the color appearance of a light source and is expressed in kelvins (K). The higher the CCT, the cooler or more blue the light appears, and the lower the CCT, the warmer or more red the light appears. HID lamps are available with a wide range of CCT values depending on lamp type and design. DOE's analysis of commercially available lamp catalog data concluded that CCT is correlated with lamp efficacy. DOE determined that higher-CCT lamps were less efficacious than lower CCT lamps of the same wattage. Because CCT is an approximation of the color appearance of a lamp, customers typically specify different CCTs for different applications. Some lamp substitutions are not suitable because certain applications have specific color requirements (typically indoor applications that demand white light). Because CCT affects HID lamp efficacy and impacts consumer utility, DOE has established separate equipment classes based on CCT.

DOE established equipment classes based on three different ranges of CCT. HPS lamps were included in the 1900 K-2800 K equipment class while MH lamps were included in the 2800 K-4500 K or 4500 K-7000 K equipment classes. DOE investigated higher efficacy replacement options for HPS lamps such that customers could save energy while maintaining the utility (e.g., CCT) of the lamp type. As discussed in section IV.A.3, DOE concluded no technology options exist for improving the efficacy of HPS lamps. Therefore, DOE tentatively determined standards for HPS lamps are not technologically feasible in this NOPD.

b. Replacement Options

In the 2010 determination, DOE assumed that any customer purchasing a compliant lamp would choose a reduced-wattage lamp more efficacious than their existing non-compliant lamp. However, DOE received feedback from manufacturer interviews that not all customers would choose to reduce wattage in response to standards for HID lamps. Some customers would choose to continue using their existing wattage (e.g., a more-efficacious, increased lumen output lamp that complies with standards, but has the same wattage) for the convenience and lower cost of not purchasing a new fixture and/or ballast that may be necessary for use with the reduced-wattage lamp. During interviews, manufacturers also indicated that some customers may not understand the metrics used to measure light output and would opt to keep lamps at their existing wattage because wattage is the metric they most commonly consider for lighting. The result for these customers would be an increase in light output, but no energy savings. As a result of this information, DOE models a percentage of customers replacing lamps with more efficacious, equal wattage lamps in this NOPD. The results of the model indicate a reduced potential for energy savings and corresponding operating cost savings associated with HID lamp standards. See chapter 5 of the NOPD TSD for more details about the engineering analysis and chapter 12 of the NOPD TSD for more detail about the national impact analysis (NIA).

c. Shipments

For the 2010 determination, DOE calculated the installed base of HID lamps using historical shipments data provided by the National Electrical Manufacturers Association (NEMA). DOE projected future lamp shipments based on the lamp lifetimes and operating scenarios developed for the LCC and PBP analysis, as well as estimated market and substitution trends in the base case and standards case. 75 FR 37975, 37981 (July 1, 2010). The shipments analysis and NIA for this NOPD (see sections IV.H and IV.I) draw upon the same historical NEMA lamp shipments data in calculating the installed base of HID lamps, supplemented with additional shipments data and manufacturer input on HID market trends. DOE's current projections illustrate a sharper decline in and lower overall HID lamp shipments than projected in the 2010 determination.

d. Summary of Changes

Since the publication of the 2010 determination, DOE received additional information from public meetings, written comments, manufacturer interviews, and further research. This new information led to the following major changes presented in this NOPD: (1) The determination that equipment classes should be separated based on CCT; (2) the introduction of a percentage of customers replacing lamps with more efficacious, equal wattage lamps in response to potential standards; and (3) the revision downward of projected HID lamp shipments in the shipments analysis, based on supplemental data and collected manufacturer input on HID market trends. As a result of the update regarding separate equipment classes for CCT, DOE tentatively determined that standards for HPS lamps are not technologically feasible in this NOPD. Additionally, as a result of the updates regarding customers replacing lamps with equal wattage lamps and supplemental shipment data, the NIA yielded negative NPVs in this NOPD (see section V.C for a discussion of NIA results in the NOPD). As such, DOE tentatively proposes to determine that standards for MV and MH lamps would not be economically justified.

II. Issues Affecting the Lamps Analyzed by This Determination

A. Lamps Analyzed by This Determination

HID is the generic name for a family of lamps including MV, MH, and HPS lamps. Although low-pressure sodium lamps are often included in the family, the definition of HID lamp set forth in EPCA requires the arc tube wall loading to be greater than three watts per square centimeter. (42 U.S.C. 6291(46)) Because low-pressure sodium lamps do not satisfy this requirement, they are not considered HID lamps according to the statute, and are therefore not considered in this NOPD. Definitions for these lamps are discussed in chapter 2 of the NOPD TSD.

DOE first analyzed the potential energy savings of the HID lamp types that fall within the EPCA definition of “HID lamp”, as well as the technological feasibility of more efficient lamps for each type. For the HID lamps that passed those criteria, DOE conducted a full economic analysis with the LCC analysis, NIA, and manufacturer impact analysis (MIA) (see sections IV.G, IV.I, and IV.J) to determine whether standards would be economically justified.

After considering the comments on the interim analysis, and additional feedback from manufacturer interviews, DOE determined that there are no design options to increase the efficacy of HPS lamps, indicating that standards for this lamp technology are not technologically feasible. Specifically, DOE determined that sapphire arc tube technology is not a valid technology option for increased efficacy in HPS lamps (see section IV.B for further details).

Available information indicates that energy conservation standards for certain MV and MH lamps are both technologically feasible and would save a significant amount of energy. Therefore, DOE conducted the full economic analysis for those lamp types to determine whether standards would be economically justified. Specifically, DOE analyzed the economic justification of potential energy conservation standards for MH lamps with a rated wattage of greater than or equal to 50 watts (W) and less than or equal to 2000 W, and CCTs greater than or equal to 2800 K and less than 7000 K. DOE also analyzed the economic justification of energy conservation standards for MV lamps with a rated wattage greater than or equal to 50 W and less than or equal to 1000 W, and CCTs greater than or equal to 3200 K and less than or equal to 6800 K. Table II.1 provides a summary of the HID lamps analyzed.

In summary, DOE excluded the following HID lamps from its analysis based on those lamps not meeting the criteria of potential for significant energy savings or technological feasibility:

• HPS lamps;
• directional HID lamps;
• self-ballasted HID lamps;
• lamps designed to operate exclusively on electronic ballasts;
• high-color rendering index (CRI) lamps (a CRI greater than or equal to 95);
• colored MH lamps (a CRI of less than 40);
• MV lamps that are double-ended, have a non-screw base, and have no outer bulb;
• HID lamps that have a CCT of 5000 K-6999 K, have a non-screw base, and have non-T-shaped bulbs; and
• electrodeless HID lamps.

See chapter 2 of the NOPD TSD for a more detailed discussion of which HID lamps did and did not meet the criteria for analysis and of the rationale behind those selections.

B. Standby/Off Mode

EPCA defines active mode as the condition in which an energy-using piece of equipment is connected to a main power source, has been activated, and provides one or more main functions (42 U.S.C. 6295)(gg)(1)(A)). Standby mode is defined as the condition in which an energy-using piece of equipment is connected to a main power source and offers one or more of the following user-oriented or protective functions: facilitating the activation or deactivation of other functions (including active mode) by remote switch (including remote control), internal sensor, or timer; or providing continuous functions, including information or status displays (including clocks) or sensor-based functions. Id. Off mode is defined as the condition in which an energy-using piece of equipment is connected to a main power source, and is not providing any standby or active mode function. Id.

DOE conducted an analysis of the applicability of standby mode and off mode energy use for HID lamps. DOE tentatively determined that HID lamps that are subject of this NOPD do not operate in standby mode or off mode. HID lamps do not offer any secondary user-oriented or protective functions or continuous standby mode functions. Because all energy use of HID lamps is accounted for in the active mode, DOE does not analyze potential standards for lamp operation in standby and off mode in this NOPD.

C. Metric

To analyze energy conservation standards related to HID lamps, DOE must select a metric for rating the performance of the lamps. In the framework document and interim analysis, DOE considered a number of potential metrics for the energy conservation standards of HID lamps and requested comment. In response to comments received and based on DOE's own analysis, DOE used initial efficacy for consideration and analysis of energy conservation standards for HID lamps. For a full description of metrics explored and discussion of stakeholder comments, see chapter 2 of the NOPD TSD.

D. Coordination of the Metal Halide Lamp Fixture and HID Lamp Rulemakings

For this NOPD, DOE continued to use shared data sources between the metal halide lamp fixture (MHLF) standards rulemaking and this HID lamp determination. DOE's analysis of HID lamps assumes that MHLFs purchased after the compliance date of the MHLF final rule use ballasts compliant with those standards.

III. General Discussion

A. Test Procedures

EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6314) Manufacturers of covered equipment must use these test procedures to certify to DOE that their equipment complies with EPCA energy conservation standards and to quantify the efficiency of their equipment. Also, these test procedures must be used whenever testing is required in an enforcement action to determine whether covered equipment complies with EPCA standards.

Based on comments received on the HID lamps test procedures notice of proposed rulemaking (NOPR) and subsequent additional research, DOE proposed revisions to and clarification of the proposed HID lamp test procedures. DOE published these revisions and clarifications in a test procedure supplemental notice of proposed rulemaking (SNOPR). 79 FR 29631 (May 22, 2014). The analysis in this NOPD is based upon the test procedures put forward in the test procedure SNOPR.

B. Technological Feasibility

1. General

In this NOPD, DOE conducted a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficacy of HID lamps. As the first step in such an analysis, DOE developed a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determined which of those means for improving efficacy are technologically feasible. DOE considers technologies incorporated in commercially available products or in working prototypes to be technologically feasible, pursuant to 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i).

After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv). For further details on the screening analysis, see section IV.B of this NOPD and chapters 2 and 4 of the NOPD TSD.

2. Maximum Technologically Feasible Levels

When DOE analyzes a new standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for that product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficacy for HID lamps, using the design parameters for the most efficacious products available on the market or in working prototypes. (See chapter 5 of the NOPD TSD.) The max-tech levels that DOE determined for this NOPD are described in chapters 2 and 5 of the NOPD TSD.

C. Energy Savings

1. Determination of Savings

For each EL in each equipment class, DOE projected energy savings for the equipment that is the subject of this NOPD purchased in the 30-year period that would begin in the expected year of compliance with any new standards (2017-2046). The savings are measured over the entire lifetime of equipment purchased in the 30-year analysis period. DOE quantified the energy savings attributable to each EL as the difference in energy consumption between each standards case and the base case. The base case represents a projection of energy consumption in the absence of new mandatory efficacy standards, and it considers market forces and policies that affect demand for more efficient equipment.

DOE used its NIA spreadsheet model to estimate energy savings from potential standards for the equipment that are the subject of this NOPD. The NIA spreadsheet model (described in section IV.I of this notice) calculates energy savings in site energy, which is the energy directly consumed by equipment at the locations where they are used. DOE reports national energy savings on an annual basis in terms of the source (primary) energy savings, which is the savings in the energy that is used to generate and transmit the site energy. To convert site energy to source energy, DOE derived annual conversion factors from the model used to prepare the Energy Information Administration's (EIA's) Annual Energy Outlook 2013 (AEO2013 ).

DOE has begun to also estimate full-fuel-cycle (FFC) energy savings. 76 FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 2012). The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels, and thus presents a more complete picture of the impacts of energy efficiency standards. DOE's evaluation of FFC savings is driven in part by the National Academy of Science's (NAS) report on FFC measurement approaches for DOE's Appliance Standards Program. The NAS report discusses that FFC was primarily intended for energy efficiency standards rulemakings where multiple fuels may be used by particular equipment. In the case of this NOPD pertaining to HID lamps, only a single fuel—electricity—is consumed by the equipment. DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered equipment. Although the addition of FFC energy savings in rulemakings is consistent with the recommendations, the methodology for estimating FFC does not project how fuel markets would respond to a potential standards rulemaking. The FFC methodology simply estimates how much additional energy, and in turn how many tons of emissions, may be displaced if the estimated fuel were not consumed by the equipment covered in this NOPD. It is also important to note that inclusion of FFC savings does not affect DOE's choice of potential standards. For more information on FFC energy savings, see section IV.I of this notice, and chapter 11 and appendix 11A of the NOPD TSD.

2. Significance of Savings

To adopt standards that are more stringent for a covered product, DOE must determine that such action would result in “significant” energy savings. 42 U.S.C. 6295(o)(3)(B) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals, in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” DOE analyzed the energy savings for each potential standard level for each equipment class in this NOPD (presented in section V.C.1).

D. Economic Justification

In determining whether potential energy conservation standards for HID lamps would be economically justified, DOE analyzed the results of the following analyses: (1) A market and technology assessment that characterizes where and how HID lamps are used; (2) an engineering analysis that estimates the relationship between product costs and energy use; (3) an LCC and PBP analysis that estimates the costs and benefits to users from increased efficacy in HID lamps; (4) an NIA that estimates potential energy savings on a national scale and potential economic costs and benefits that would result from improving energy efficacy in the considered HID lamps; and (5) an MIA that determines the potential impact new standards for HID lamps would have on manufacturers.

IV. Methodology and Discussion

A. Market and Technology Assessment

1. General

In conducting the market and technology assessment for this NOPD, DOE developed information that provides an overall picture of the market for the equipment concerned, including the purpose of the products, the industry structure, and the market characteristics. This activity included both quantitative and qualitative assessments based on publicly available information. The subjects addressed in the market and technology assessment for this NOPD include: Equipment classes and manufacturers; historical shipments; market trends; regulatory and non-regulatory programs; and technologies that could improve the efficacy of the HID lamps under examination. See chapter 3 of the NOPD TSD for further discussion of the market and technology assessment.

2. Equipment Classes

For this NOPD, DOE divided equipment into classes by: (a) The type of energy used, (b) the capacity of the equipment, or (c) any other performance-related features that justifies different standard levels, such as features affecting consumer utility. (42 U.S.C. 6295(q)) DOE then considers establishing separate standard levels for each equipment class based on the criteria set forth in 42 U.S.C. 6295(o).

In this NOPD, DOE analyzed CCT, wattage, bulb finish, and luminaire characteristics as the equipment-class-setting factors. DOE analyzed 24 equipment classes for HID lamps, as shown in Table IV.1. See chapters 2 and 3 of the NOPD TSD for a more detailed discussion on equipment classes analyzed for HID lamps.

3. Technology Options

The following sections detail the technology options that DOE is analyzing in this NOPD as viable means of increasing the efficacy of HID lamps.

a. Mercury Vapor

MV ballasts, other than specialty application MV ballasts, have been banned from import or production in the United States since January 1, 2008. (42 U.S.C. 6295(ee)) This ban effectively limits the installation of new MV fixtures and ballasts, meaning the only MV lamps currently sold are replacement lamps. DOE understands there is limited industry design emphasis on MV lamps and that there are limited methods to improving the efficacy of MV lamps. DOE found that the only pathway to increase efficacy is a change of technology to MH lamps, and considers a change of technology as the sole technology option for MV lamps in this NOPD.

b. High-Pressure Sodium Lamps

HPS lamps are already very efficacious (up to 150 lumens per watt), but have intrinsically poor color quality. DOE did not identify any technology options currently utilized in commercially available HPS lamps. In the interim analysis, DOE identified academic papers that indicated potential increases in efficacy were possible by constructing the arc tubes out of a sapphire material, or single crystal aluminum oxide. Several manufacturers produced HPS lamps with a sapphire arc tube beginning in the late 1970s, but these lamps have since been discontinued.

In the interim analysis, DOE found that sapphire had five percent greater transmission of light compared to the traditionally used polycrystalline alumina (PCA) and equated this with a potential five percent increase in lamp efficacy. However, DOE has since received feedback from manufacturers that the increase in transmission associated with using sapphire material instead of PCA does not necessarily result in an equal increase in efficacy. This is because the material does not transmit all wavelengths uniformly, which affects the perceived brightness of the light. Because these lamps are no longer manufactured, DOE cannot empirically validate the potential increase in efficacy using sapphire arc tubes. Additionally, DOE has received feedback that HPS lamps using sapphire arc tubes are much more susceptible to catastrophic failure and would require enclosed fixtures for safe operation. Currently all HPS lamps that are commercially available can be used in open fixtures. An enclosed fixture would reduce the efficacy of the sapphire HPS system (due to absorption in the lens used to enclose the fixture) and likely negate any small increase in efficacy gained from using sapphire arc tubes.

For these reasons, DOE does not believe that the use of sapphire arc tubes would increase the efficacy of HPS lamps in practice. As such, DOE no longer finds sapphire arc tubes to be a valid technology option for HPS lamps in this NOPD.

c. Metal Halide

DOE identified a number of technology options that could improve MH lamp efficacy. These technology options include improving arc tube design through the use of ceramic arc tubes, optimization of the arc tube, and optimization of the arc tube fill gas.

d. Summary

Table IV.2 summarizes the technology options identified for HID lamps in this NOPD. For more detail on the technology options that DOE considered to improve MV, HPS, and MH lamp efficacy, see chapters 2 and 3 of the NOPD TSD.

B. Screening Analysis

DOE consults with industry, technical experts, and other interested parties to develop a list of technology options for consideration. In the screening analysis, DOE determines which technology options to consider further and which to screen out.

Appendix A to subpart C of 10 CFR part 430, “Procedures, Interpretations, and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer Products” (the Process Rule), sets forth procedures to guide DOE in its consideration and promulgation of new or revised energy conservation standards. These procedures elaborate on the statutory criteria provided in 42 U.S.C. 6295(o) and, in part, eliminate problematic technologies early in the process of prescribing an energy conservation standard. In particular, sections 4(b)(4) and 5(b) of the Process Rule provide guidance to DOE for determining which technology options are unsuitable for further consideration: Technological feasibility, practicability to manufacture, install and service, adverse impacts on product utility or product availability, and adverse impacts on health or safety.

For MH lamps, DOE identified ceramic arc tubes as a technology option. While CMH lamps are commercially available from 50 W-400 W, they are not manufactured from 401 W-2000 W. DOE learned from manufacturers that it is technologically possible to create CMH lamps in this wattage range on an individual scale in laboratory conditions. However, the difficulty in mass manufacturing these lamps would result in a very costly lamp which may not be able to be produced at a large enough scale to serve the entire market. Because of this, DOE determined that ceramic arc tubes from 401 W-2000 W do not pass the criterion that they be practicable to manufacture, install, and service. In this NOPD, DOE does not consider ceramic arc tubes as design options for MH lamps from 401 W-2000 W.

All other technology options for MV and MH lamps meet the screening criteria and are considered as design options in the engineering analysis. These design options are summarized in Table IV.3. Chapters 2 and 4 of the NOPD TSD provide additional information regarding the design options considered in the NOPD.

C. Engineering Analysis

For this NOPD, DOE derived ELs in the engineering analysis and lamp end-user prices in the equipment price determination. The engineering analysis focuses on selecting commercially available lamps that incorporate design options that improve efficacy. The following discussion summarizes the general steps and results of the engineering analysis.

1. Representative Equipment Classes

When multiple equipment classes exist, to streamline analysis, DOE selects certain classes as “representative,” primarily because of their high market volumes and unique performance characteristics. DOE then adapts the ELs from representative equipment classes to those equipment classes it does not analyze directly. Table IV.4 lists the equipment classes that DOE selected as representative.

2. Baseline Lamps and Representative Lamp Types

Because no federal energy conservation standards exist for HID lamps, the baseline lamps represent the most common, least efficacious lamps sold within the equipment class. For each baseline lamp, DOE selected more efficacious replacement lamps to measure potential energy-saving improvements. DOE refers to the baseline lamp and its more efficacious replacements collectively herein as a “representative lamp type.” The representative lamp type is named by its baseline unit. For example, the 400 W MV representative lamp type refers to the 400 W MV baseline lamp and all of its more efficacious replacements.

DOE uses performance data presented in manufacturer catalogs to determine lamp efficacy. DOE also considers other lamp characteristics in choosing the most appropriate baseline for each equipment class. These characteristics include the wattage and technology type (i.e., MH or MV), among others. For some of the representative lamp types, DOE selects multiple baseline models to ensure consideration of different high-volume lamps and their associated customer economics. For example, although MV lamps are the least efficacious products available, the HID market has largely shifted away from MV lamps and customers of MH lamp-and-ballast systems incur different costs than customers of MV lamp-and-ballast systems. For these reasons, DOE selects both MV and MH lamps as baselines for certain equipment classes.

Table IV.5 lists the baseline lamps and representative lamp types. See chapters 2 and 5 of the NOPD TSD for additional detail.

3. More Efficacious Substitutes

DOE selects commercially available HID lamps with efficacies above the baseline as replacements for the baseline model(s) in each representative equipment class. When selecting more efficacious substitute lamps, DOE considers only design options that meet the criteria outlined in the screening analysis (see section IV.B). Depending on the equipment class, DOE analyzes standard efficacy quartz MH, high efficacy quartz MH, and CMH lamps as more efficacious substitutes for the baseline lamps.

In this NOPD, DOE considers a number of different potential pathways a customer might choose when identifying replacements that are more efficacious. When purchasing a new and compliant lamp, a customer can purchase just a new lamp, a new lamp-and-ballast system, or an entirely new fixture. For each of these options, a customer can also choose between keeping the lighting system at the wattage they already had or reducing the wattage of the lighting system. See chapters 2 and 5 of the NOPD TSD for additional detail.

4. Determine Efficacy Levels

DOE develops ELs based on: (1) The design options associated with the equipment class studied and (2) the max-tech EL for that class. DOE's ELs are based on catalog data. Table IV.6 summarizes the EL equations for each representative equipment class. More information on the described ELs can be found in chapters 2 and 5 of the NOPD TSD.

5. Scaling to Equipment Classes Not Directly Analyzed

For the equipment classes not analyzed directly, DOE scaled the ELs from the representative to non-representative equipment classes based on efficacy ratios observed in catalog data. For example, DOE calculated an average percentage difference in efficacy between lamps in different equipment classes (one representative and one non-representative) and used this percentage difference to scale the ELs from the representative to the non-representative equipment classes. Table IV.7 lists the scaling factors calculated in the NOPD analysis.

6. HID Systems

In this NOPD, DOE is only analyzing standards for HID lamps. However, HID lamps are just one component of an HID lighting system. HID lamps must be paired with specific ballasts to regulate the current and power supplied to the lamp. These lamp-and-ballast systems are then housed in an HID lamp fixture to protect the components, enable mounting, and direct the light to the target area. When considering changes to HID lamps, DOE recognizes the importance of also analyzing the impact on both the ballast and the fixture. Additional components may also be required if placing a new lamp-and-ballast system in an existing fixture, including an appropriate lamp socket and ballast brackets. See chapters 2, 5, and appendices 5A and 5B of the NOPD TSD for additional detail.

D. Equipment Price Determination

The equipment price determination describes the methodology followed in developing end-user prices for HID lamps and manufacturer selling prices (MSPs) for ballasts, fixtures, and retrofit kit components (brackets and sockets) analyzed in this NOPD. DOE developed ballast and fixture MSPs in addition to lamp MSPs because a change of ballast and fixture is often required when switching to a more efficacious lamp. In addition, DOE developed MSPs for brackets and sockets packaged in lamp-and-ballast retrofit kits because customers will sometimes also have the option of keeping the fixture housing and installing a new lamp-and-ballast system. These systems will often require a change in the socket and brackets used for mounting the ballast.

For HID lamps, DOE developed three sets of discounts from blue-book prices, representing low (State procurement), medium (electrical distributors), and high (Internet retailers) end-user lamp prices. For MH ballasts, fixtures, sockets, and brackets, DOE performed teardown analyses to estimate manufacturer production costs (MPCs) and a manufacturer markup analysis to estimate the MSPs. For additional detail on the equipment price determination, see chapters 2, 6, and appendix 6A of the NOPD TSD.

E. Markups Analysis

Markups are multipliers that relate MSPs to end-user purchase prices, and vary with the distribution channel through which purchase the equipment. DOE estimated end-user prices for representative HID lamp designs directly, rather than develop MSPs from a bill of materials and manufacturer markup analysis (NOPD TSD chapter 6). However, DOE also estimated price markups to calculate end-user prices from MSPs for HID ballasts and fixtures as inputs to the LCC and PBP analysis, and the NIA (chapters 9 and 11, respectively, of the NOPD TSD). Appendix 6A of the NOPD TSD describes the process by which DOE developed MPCs and MSPs for HID ballasts and fixtures. Chapters 2 and 7 of the NOPD TSD provide additional detail on the markups analysis for developing end-user prices for HID ballasts and fixtures.

F. Energy Use Analysis

For the energy use analysis, DOE estimated the energy use of HID lamp-and-ballast systems in actual field conditions. The energy use analysis provided the basis for other DOE analyses, particularly assessments of the energy savings and the savings in operating costs that could result from DOE's adoption of potential new standard levels. DOE multiplied annual usage (in hours per year) by the lamp-and-ballast system input power (in watts) to develop annual energy use estimates. Chapters 2 and 8 of the NOPD TSD provide a more detailed description of DOE's energy use analysis.

G. Life-Cycle Cost and Payback Period Analysis

DOE conducted the LCC and PBP analysis to evaluate the economic effects of potential energy conservation standards for HID lamps on individual customers. For any given EL, DOE calculated the PBP and the change in LCC relative to an estimated baseline equipment EL. The LCC is the total customer expense over the life of the equipment, consisting of purchase, installation, and operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounted future operating costs to the time of purchase and summed them over the lifetime of the equipment. The PBP is the estimated amount of time (in years) it takes customers to recover the increased purchase cost (including installation) of more efficacious equipment through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost (normally higher) by the change in average annual operating cost (normally lower) that results from the more stringent standard. Chapters 2 and 9, and appendices 9A and 9B, of the NOPD TSD provide details on the spreadsheet model and all the inputs to the LCC and PBP analysis.

H. Shipments Analysis

DOE projected equipment shipments to calculate the national effects of potential standards on energy use, NPV, and future manufacturer cash flows. DOE developed shipment projections based on an analysis of key market drivers for each considered HID lamp type. In DOE's shipments model, shipments of equipment are driven by new construction, stock replacements, and other types of purchases. The shipments model takes an accounting approach, tracking market shares of each equipment class and the vintage of units in the existing stock. Stock accounting uses equipment shipments as inputs to estimate the age distribution of in-service equipment stocks for all years. The age distribution of in-service equipment stocks is a key input to calculations of both the NES and the NPV, because operating costs for any year depend on the age distribution of the stock. Chapters 2 and 10 of the NOPD TSD provide a more detailed description of DOE's shipments analysis.

I. National Impact Analysis

DOE's NIA assessed the cumulative NES and the cumulative national economic impacts of ELs (i.e., potential standards cases) considered for the equipment classes analyzed. The analysis measures economic impacts using the NPV metric, which presents total customer costs and savings expected to result from potential standards at specific ELs, discounted to their present value. For a given EL, DOE calculates the NPV, as well as the NES, as the difference between a baseline projection and the standards-case projections. Chapters 2 and 11, and appendices 11A and 11B, of the NOPD TSD provide details on the spreadsheet model and all the inputs to the NIA.

J. Manufacturer Impact Analysis

DOE conducted an MIA for HID lamps to estimate the financial impact of potential energy conservation standards on manufacturers. The MIA has both quantitative and qualitative aspects. The quantitative part of the MIA relies on the Government Regulatory Impact Model (GRIM), an industry cash-flow model customized for HID lamps covered in this NOPD. The key GRIM inputs are industry cost structure data, shipment data, equipment costs, and assumptions about markups and conversion costs. The key MIA output is INPV. DOE used the GRIM to calculate cash flows using standard accounting principles and to compare changes in INPV between a base case and various ELs at each equipment class (the standards case). The difference in INPV between the base and standards cases represents the financial impact of potential energy conservation standards on HID lamp manufacturers. Different sets of assumptions (scenarios) produce different INPV results. The qualitative part of the MIA addresses how potential standards could impact manufacturing capacity and industry competition, as well as any differential impact the potential standard could have on any particular subgroup of manufacturers. See chapter 12 of this NOPD TSD for additional details on DOE's MIA.

V. Analytical Results

A. Economic Impacts on Individual Customers

To evaluate the net economic impact of standards on customers, DOE conducted an LCC and PBP analysis for each EL. In general, a higher efficacy product would affect customers in two ways: (1) Annual operating expenses would decrease; and (2) purchase prices would increase. Section IV.G of this notice discusses the inputs DOE used for calculating the LCC and PBP.

The key outputs of the LCC analysis are mean LCC savings relative to the baseline case, as well as a probability distribution or likelihood of LCC reduction or increase, for each efficacy level and equipment class. In its LCC analysis, DOE traditionally assumes that the customer purchases a covered design upon the effective date of potential standards (in this case, 2017). The resulting values then necessarily reflect the projected market for HID equipment in 2017, and are reported by equipment class in Table V.1, Table V.2, and Table V.3. The LCC analysis also estimates the fraction of customers for which the LCC will decrease (net benefit), remain unchanged (no impact), or increase (net cost) relative to the baseline case. The last column in each table contains the median PBPs for the customers purchasing a design compliant with the efficacy level.

In evaluating these results relative to cumulative NPV, it is important to note that the LCC and PBP analysis does not reflect the long-term dynamics of the declining market for HID equipment, which are captured in the NIA shipments period (2017-2046). As a result, the average LCC savings—based on the projected 2017 market—may be positive in some cases (e.g., EL2 and EL3 for the >2800 K and ≤4500 K and ≥50 W to ≤400 W equipment class), whereas the cumulative NPV results for these ELs are negative (see Table V.16). DOE explored the effects of the declining HID market on average LCC savings by conducting a sensitivity analysis based on the projected market in 2022, with results reported by equipment class in Table V.4, Table V.5, and Table V.6. These results show a general erosion of average LCC savings, and demonstrate increasing consistency with the cumulative NPV results. For the >2800 K and ≤4500 K and ≥50 W to ≤400 W equipment class, average LCC savings for EL2 become negative, with a majority of affected customers remaining negatively impacted. Average LCC savings for EL3 in this equipment class—while still positive—are significantly diminished, with a majority of affected customers experiencing a net cost. Following this trend, DOE would expect LCC savings for EL3 to become increasingly negative for an increasing proportion of affected customers over the NIA analysis period.

Based on this sensitivity analysis, DOE believes its main LCC and PBP analysis results (including some cases of positive average LCC savings) are consistent with negative cumulative NPV results in the NIA, given the declining market for HID equipment. Chapter 9 of the NOPD TSD examines the relationship of the LCC and PBP analysis and projected HID market in further detail.

B. Economic Impacts on Manufacturers

DOE performed the MIA to estimate the impact of potential energy conservation standards on manufacturers of HID lamps. The section below describes the expected impacts on HID lamp manufacturers at each EL for each equipment class. Chapter 12 of the NOPD TSD explains the MIA in further detail.

1. Industry Cash-Flow Analysis Results

The tables in the following sections depict the financial impacts (represented by changes in INPV) of potential energy conservation standards on HID lamp manufacturers as well as the conversion costs that DOE estimates HID lamp manufacturers would incur at each EL for each equipment class. To evaluate the range of cash-flow impacts on the HID lamp industry, DOE modeled two markup scenarios that correspond to the range of anticipated market responses to potential standards. Each scenario results in a unique set of cash flows and corresponding industry values at each EL for each equipment class. In the following discussion, the INPV results refer to the difference in industry value between the base case and the standards case that result from the sum of discounted cash flows from the base year (2014) through the end of the analysis period.

To assess the upper (less severe) end of the range of potential impacts on HID lamp manufacturers, DOE modeled a flat, or preservation of gross margin, markup scenario. This scenario assumes that in the standards case, manufacturers would be able to pass along all the higher production costs required for more efficacious equipment to their customers. To assess the lower (more severe) end of the range of potential impacts, DOE modeled a preservation of operating profit markup scenario. The preservation of operating profit markup scenario assumes that in the standards case, manufacturers would be able to earn the same operating margin in absolute dollars as they would in the base case. This represents the lower bound of industry profitability in the standards case.

Table V.7 and Table V.8 present the projected results of the 50 W-400 W equipment class under the flat and preservation of operating profit markup scenarios.

Table V.9 and Table V.10 present the projected results of the 401 W-1000 W equipment class under the flat and preservation of operating profit markup scenarios.

Table V.11 and Table V.12 present the projected results of the 1001 W-2000 W equipment class under the flat and preservation of operating profit markup scenarios.

2. Impacts on Employment

DOE quantitatively assessed the impacts of potential energy conservation standards on direct employment. DOE used the GRIM to estimate the domestic labor expenditures and number of domestic production workers in the base case and at each EL for the 50 W-400 W equipment class, since the 50 W-400 W equipment class represents over 90 percent of all covered HID lamp shipments in 2017. Furthermore, manufacturers stated that most domestic employment decisions would be based on the standards set for the 50 W-400 W equipment class.

The employment impacts shown in Table V.13 represent the potential production employment that could result following potential energy conservation standards. The upper bound of the results estimates the maximum change in the number of production workers that could occur after compliance with any potential energy conservation standards assuming that manufacturers continue to produce the same scope of covered equipment in the same domestic production facilities. It also assumes that domestic production does not shift to lower labor-cost countries. Because there is a real risk of manufacturers evaluating sourcing decisions in response to potential energy conservation standards, the lower bound of the employment results includes the estimated total number of U.S. production workers in the industry who could lose their jobs if some or all existing production were moved outside of the United States.

DOE estimates that approximately one third of the HID lamps sold in the United States are manufactured domestically. With this assumption, DOE estimates that in the absence of potential energy conservation standards, there would be approximately 292 domestic production workers involved in manufacturing HID lamps in 2017. The table below shows the range of the impacts of potential standards on U.S. production workers in the HID lamp industry.

3. Impacts on Manufacturing Capacity

HID lamp manufacturers stated that they did not anticipate any significant capacity constraints unless all lamps in the 50 W-400 W equipment class had to be converted to CMH technology. Most manufacturers stated that they do not have the equipment to produce the volume of CMH lamps that would be necessary to satisfy demand. Manufacturers would have to expend significant capital resources to obtain additional equipment that is specific to CMH lamp production. Manufacturers also pointed out that thousands of man-hours would be necessary to redesign specific lamps and lamp production lines at ELs requiring CMH. The combination of obtaining new equipment and the engineering effort that manufacturers would have to undergo could cause significant downtime for manufacturers. Most manufacturers agreed that there would not be any significant capacity constraints at any ELs that did not require CMH technology.

4. Impacts on Subgroups of Manufacturers

Using average cost assumptions to develop an industry cash-flow estimate may not be adequate for assessing differential impacts among manufacturer subgroups. Small manufacturers, niche equipment manufacturers, and manufacturers exhibiting cost structures substantially different from the industry average could be affected disproportionately. DOE did not identify any adversely impacted subgroups for HID lamps for this NOPD based on the results of the industry characterization. DOE analyzed the impacts on small manufacturers as required by the Regulatory Flexibility Act, 5 U.S.C. 601, et. seq.

5. Cumulative Regulatory Burden

While any one regulation may not impose a significant burden on manufacturers, the combined effects of recent or 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. In addition to energy conservation standards, other regulations can significantly affect manufacturers' financial operations. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing equipment. For these reasons, DOE conducts a cumulative regulatory burden analysis as part of its rulemakings pertaining to lighting efficacy to make sure that this proposed standard does not create a cumulative regulatory burden that is unacceptable to the overall lighting industry.

C. National Impact Analysis

1. Significance of Energy Savings

For each efficacy level, DOE projected energy savings for HID lamps purchased in the 30-year period that begins in the year 2017, ending in the year 2046. The savings are measured over the entire lifetime of equipment purchased in the 30-year period. DOE quantified the energy savings attributable to each efficacy level as the difference in energy consumption between each standards case and the base case. Table V.14 presents the estimated primary energy savings for each efficacy level analyzed. Table V.15 presents the estimated FFC energy savings for each efficacy level. Chapter 11 of the NOPD TSD describes these estimates in more detail.

2. Net Present Value of Customer Costs and Benefits

DOE estimated the cumulative NPV of the total costs and savings for customers that would result from the efficacy levels considered for HID lamps. In accordance with the Office of Management and Budget's (OMB's) guidelines on regulatory analysis, DOE calculated the 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 on private capital in the U.S. economy, and reflects the returns on real estate and small business capital as well as corporate capital. This discount rate approximates the opportunity cost of capital in the private sector (OMB analysis has found the average rate of return on capital to be near this rate). The 3-percent rate reflects the potential effects of standards on private consumption (e.g., through higher prices for products and reduced purchases of energy). This rate represents the rate at which society discounts future consumption flows to their present value. It can be approximated by the real rate of return on long-term government debt (i.e., yield on U.S. Treasury notes), which has averaged about 3 percent for the past 30 years.

Table V.16 shows the customer NPV results for each efficacy level DOE considered for HID lamps, using both 7-percent and 3-percent discount rates. In each case, the impacts cover the lifetime of equipment purchased in 2017 through 2046. See chapter 11 of the NOPD TSD for more detailed NPV results.

D. Proposed Determination

As required by EPCA, this NOPD analyzes whether standards for HID lamps would be technological feasible, economically justified, and would result in significant energy savings. (42 U.S.C. 6317(b)(1)) Each of these criteria is discussed below.

1. Technological Feasibility

EPCA mandates that DOE determine whether energy conservation standards for HID lamps would be “technologically feasible.” (42 U.S.C. 6317(a)(1)) DOE proposes to determine that standards for HPS lamps would not be technologically feasible due to the lack of technology options discussed in section IV.A.3. DOE proposes to determine that energy conservation standards for other HID lamps (MV and MH lamps) would be technologically feasible because they can be satisfied with HID lighting systems currently available on the market.

2. Significance of Energy Savings

EPCA also mandates that DOE determine whether energy conservation standards for HID lamps would result in “significant energy savings.” (42 U.S.C. 6317(a)(1)) The proposed determination estimates that a standard for HID lamps would result in energy savings of up to 1.6 quads over a 30-year analysis period (2017-2046). Therefore, DOE proposes to determine that potential energy conservation standards for HID lamps would result in significant energy savings.

3. Economic Justification

EPCA requires DOE to determine whether energy conservation standards for HID lamps would be economically justified. (42 U.S.C. 6317(b)(1)) Using the methods and data described in section IV.G, DOE conducted an LCC analysis to estimate the net costs/benefits to users from increased efficacy in the considered HID lamps. DOE then aggregated the results from the LCC analysis to estimate national energy savings and national economic impacts in section V.A. DOE also conducted an MIA to estimate the financial impact of potential energy conservation standards on manufacturers.

DOE first considered the most efficacious level, EL 3, which is applicable only to the 50 W-400 W equipment class. As listed in Table V.16, EL3 would have a negative NPV at both a 7-percent and 3-percent discount rate. EL3 could result in HID lamp manufacturers experiencing a loss in INPV. On the basis of the negative NPV and decrease in industry value for HID lamp manufacturers, DOE determined that the EL3 standard was not economically justified.

DOE then considered the next most efficacious level, EL2, which applies to the 50 W-400 W and 401 W-1000 W equipment classes. As listed in Table V.16, EL2 results in a negative NPV for all applicable equipment classes at both a 7-percent and 3-percent discount rate. As listed in section V.A, available designs result in positive mean LCC savings for the 50 W-400 W equipment class and negative mean LCC savings for the 401 W-1000 W equipment class. However, a majority of customers affected by the standard experience a net cost at EL2 in all applicable equipment classes. EL2 could result in HID lamp manufacturers experiencing a loss in INPV for the applicable equipment classes. On the basis of the negative NPV, majority of customers affected by the standard experiencing a net cost, and potential decrease in industry value for HID lamp manufacturers, DOE determined that an EL2 standard was not economically justified.

DOE finally considered EL1, which would apply to all equipment classes. DOE's NPV analysis (results listed in Table V.16) indicates that all equipment classes have a negative or negligible NPV at a 7-percent and 3-percent discount rate for EL1. As listed in section V.A, available designs result in negative mean LCC savings for all three of the representative equipment classes at EL 1, with a majority of customers affected by the standard experiencing a net cost. EL1 could result in HID lamp manufacturers experiencing a loss in INPV for all equipment classes. On the basis of the negative NPV, negative mean LCC savings, majority of customers affected by the standard experiencing a net cost, and decrease in industry value for HID lamp manufacturers, DOE determined that an EL1 standard was not economically justified.

4. Conclusions

DOE tentatively determines that potential standards for HID lamps are either not technologically feasible or not economically justified. DOE will consider all comments received on this proposed determination in issuing any final determination of whether standards for HID lamps would be technologically feasible and economically justified, and would result in significant energy savings. If DOE determines that all of these criteria are met, DOE must prescribe test procedures and energy conservation standards for HID lamps. If DOE determines that one or more of the criteria are not met, DOE will not consider establishing test procedures and standards for these lamps.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

This proposed determination is not subject to review under Executive Order (E.O.) 12866, “Regulatory Planning and Review.” 58 FR 51735 (October 4, 1993).

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 ( http://energy.gov/gc/office-general-counsel ).

DOE reviewed this proposed determination under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. In the proposed determination, DOE finds that standards for HID lamps would not meet all of the required criteria of technologically feasibility, economic justification, and significant energy savings. If adopted, the determination would not establish any energy conservation standards for HID lamps, and DOE would not consider prescribing test procedures and standards for HID lamps. On the basis of the foregoing, DOE certifies that the proposed determination, if adopted, would have no significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared an IRFA for this proposed determination. DOE will transmit this certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act

This proposed determination, which proposes to determine that energy conservation standards for HID lamps would not meet all of the required criteria of technologically feasibility, economic justification, and significant energy savings, would impose no new information or record keeping requirements. Accordingly, the Office of Management and Budget (OMB) clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

D. Review Under the National Environmental Policy Act of 1969

In this NOPD, DOE tentatively determines that energy conservation standards for HID lamps would not meet all of the required criteria of technologically feasibility, economic justification, and significant energy savings. DOE has determined that review under the National Environmental Policy Act of 1969 (NEPA), Pub. L. 91-190, codified at 42 U.S.C. 4321 et seq. is not required at this time because standards are not being proposed. NEPA review can only be initiated “as soon as environmental impacts can be meaningfully evaluated.” Because this final determination concludes only that future standards are unlikely to be warranted, and does not propose or set any standard, DOE has determined that there are no environmental impacts to be evaluated at this time. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

E. Review Under Executive Order 13132

Executive Order 13132, “Federalism.” 64 FR 43255 (Aug. 10, 1999) imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of states and to 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. As this NOPD determines that standards are not likely to be warranted for HID lamps, there is no impact on the policymaking discretion of the states. Therefore, no 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,” imposes on Federal 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. 61 FR 4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make 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 determination meets the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531). 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 annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects 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. DOE's policy statement is also available at http://energy.gov/gc/office-general-counsel. This proposed determination contains neither an intergovernmental mandate nor a mandate that may result in the expenditure of $100 million or more in any year, so these UMRA requirements do not apply.

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 determination 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 (Mar. 18, 1988), that this proposed determination would not result in any takings that might 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 Federal 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 this proposed determination 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.

Because the NOPD finds that standards for HID lamps are unlikely to be warranted, it is not a significant energy action, nor has it been designated as such by the Administrator at 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 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 2667.

In response to OMB's Bulletin, DOE conducted formal in-progress 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 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 the following Web site: www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VII. Public Participation

A. Public Meeting Requests

Interested parties may submit comments requesting that a public meeting discussing this NOPD be held at DOE Headquarters. DOE will accept such requests no later than the date provided in the DATES section at the beginning of this notice. As with other comments regarding this determination, interested parties may submit requests using any of the methods described in the ADDRESSES section at the beginning of this notice.

B. Submission of Comments

DOE will accept comments, data, and information regarding this NOPD no later than the date provided in the DATES section at the beginning of this determination. Interested parties may submit comments, data, and other information using any of the methods described in the ADDRESSES section at the beginning of this determination.

Submitting comments via regulations.gov. The regulations.gov Web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.

However, your contact information will be publicly viewable if you include it in the comment itself or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Otherwise, persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.

Do not submit to regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information [CBI]). Comments submitted through regulations.gov cannot be claimed as CBI. Comments received through the Web site will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section below.

DOE processes submissions made through regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that regulations.gov provides after you have successfully uploaded your comment.

Submitting comments via email, hand delivery/courier, or mail. Comments and documents submitted via email, hand delivery, or mail also will be posted to regulations.gov. If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information in a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments.

Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery/courier, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted.

Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, that are written in English, and that are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.

Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.

Confidential Business Information. According 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 via email, postal mail, or hand delivery/courier two well-marked copies: One copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. 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.

It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).

C. Issues on Which DOE Seeks Comment

Although DOE welcomes comments on any aspect of this proposed determination, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:

1. The HID lamps selected for and excluded from analysis of economic justification for standards;

2. The technology options analyzed and in particular the elimination of sapphire arc tubes and starting method as technology option(s);

3. The equipment classes analyzed in this NOPD;

4. The design options identified in the screening analysis;

5. The representative equipment classes analyzed in this NOPD;

6. The baseline lamps selected, including the inclusion of a 150 W MH lamp;

7. The selection of more efficacious substitute lamps analyzed in this NOPD;

8. The decision to analyze equal wattage replacement lamps, as well as the methodology used to select the equal wattage replacement lamps;

9. The methodology used to determine ELs, as well as the resulting ELs analyzed in this NOPD;

10. The factors used in this NOPD to scale to equipment classes not directly analyzed;

11. The decision to include replacement pathways other than full fixture replacement in this NOPD;

12. The results and methodology from the equipment price determination;

13. Methods to improve DOE's energy use analysis, as well as any data supporting alternate operating hour estimates or assumptions regarding dimming of HID lamp-and-ballast systems;

14. The assumptions and methodology for estimating annual operating hours, which were based on data from the 2010 U.S. Lighting Market Characterization;

15. Methods to improve DOE's equipment price projections beyond the assumption of constant real prices, as well as any data supporting alternate methods;

16. The reasonableness of assuming a zero percent rebound effect (the potential tendency for customers to increase HID lamp usage in response to more efficient lamp-and-ballast systems);

17. Whether the shipment scenarios under various policy scenarios are reasonable and likely to occur;

18. The impediments that prevent users of HID lamps from switching to LED lighting to garner further energy savings;

19. The expected impact of potential standards on the rate at which HID lamp customers transition to non-HID technology;

20. The methodology used in the MIA and the results of the MIA;

21. The proposal of a negative determination stating that standards for HID lamps are not justified.

VIII. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of this NOPD.

List of Subjects in 10 CFR Part 431

• Administrative practice and procedure
• Confidential business information
• Energy conservation, and Reporting and recordkeeping requirements