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This document, concerning ceiling fans is an action issued by the U.S. Department of Energy (DOE). Though it is not intended or expected, should any discrepancy occur between the document posted here and the document published in the Federal Register, the Federal Register publication controls.
The text of this rule is subject to correction based on the identification of errors as defined in 10 CFR 430.5 before publication in the Federal Register. Readers are requested to notify DOE by email at ApplianceStandardsQuestions@ee.doe.gov, of any typographical or other errors, as described in such regulations, by no later than midnight on January 5, 2017, in order that DOE may make any necessary corrections in the regulatory text submitted to the Office of the Federal Register for publication.
[6450-01-P]
DEPARTMENT OF ENERGY
10 CFR Part 430 [Docket Number EERE – 2012 – BT – STD – 0045] RIN 1904 – AD
Energy Conservation Program: Energy Conservation Standards for Ceiling Fans
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy.
ACTION: Final rule.
SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including ceiling fans. EPCA also requires the U.S. Department of Energy (DOE) to periodically determine whether more-stringent standards would be technologically feasible and economically justified, and would save a significant amount of energy. In this final rule, DOE amends the energy conservation standards for ceiling fans. It has determined that the amended energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified.
DATES: The effective date of this rule is [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Compliance with the
Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue, SW., Washington, DC, 20585-0121. Telephone: (202) 586-7796. E-mail: Elizabeth.Kohl@hq.doe.gov.
SUPPLEMENTARY INFORMATION: Table of Contents I. Synopsis of the Final Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. Background
- Current Standards
- History of Standards Rulemaking for Ceiling Fans III. General Discussion A. Product Classes and Scope of Coverage
- Scope of Coverage
- Product Classes B. Test Procedure C. Technological Feasibility 1. General
- Maximum Technologically Feasible Levels D. Energy Savings
- Determination of Savings E. Economic Justification^ 2. Significance of Savings
- Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP) c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors
- Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment
- Product Classes
- Technology Options B. Screening Analysis
- Screened-Out Technologies 2. Remaining Technologies C. Engineering Analysis
- Standard and Hugger Ceiling Fans
- VSD and HSSD Ceiling Fans
- Large-Diameter Ceiling Fans 4. Reducing Fan Speed to Improve Efficiency
- Standard Level Equations D. Markups Analysis E. Energy Use Analysis
- Inputs for Standard, Hugger, and VSD Ceiling Fans a. Sample of Purchasers b. Operating Hours c. Power Consumption at Each Speed and Standby
- Inputs for Large-Diameter and High-Speed Small-Diameter Ceiling Fans a. Sample of Purchasers b. Operating Hours c. Power Consumption at Each Speed and Standby
- Impact on Air Conditioning or Heating Equipment Use F. Life-Cycle Cost and Payback Period Analysis
- Purchase Price 2. Electricity Prices
- Electricity Price Trends
- Repair Costs
- Product Lifetime
- Discount Rates 7. Efficiency and Blade Span Distribution in the No-New-Standards Case
- Payback Period Analysis G. Shipments Analysis
- Shipments Demand Model
- Stock-Accounting Model 3. Market-Share Projections
- Price Trend
- Impact of a Standard on Shipments H. National Impact Analysis
- National Energy Savings 2. Net Present Value Analysis I. Consumer Subgroup Analysis J. Manufacturer Impact Analysis
- Overview
B. Review Under the Regulatory Flexibility Act
- Need for, and Objectives of, the Rule 2. Significant Comments in Response to the IRFA
- Comments Filed by the Chief Counsel for Advocacy
- Description and Estimate of the Number of Small Entities Affected
- Description of Compliance Requirements
- Significant Alternatives Considered and Steps Taken to Minimize SignificantEconomic Impacts on Small Entities 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 M. Congressional Notification VII. Approval of the Office of the Secretary
I. Synopsis of the Final Rule
Title III, Part B^1 of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309), established the Energy Conservation Program for Consumer Products Other Than Automobiles.^2 These products include ceiling fans, which are the subject of this rulemaking.
Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B))
In accordance with these and other statutory provisions discussed in this document, DOE is adopting amended energy conservation standards for ceiling fans. The amended standards, which are expressed for each product class as the minimum allowable efficiency in terms of cubic feet per minute per watt (CFM/W), as a function of ceiling fan diameter in inches, are shown in Table I.1. These standards would apply to all ceiling fans listed in Table I.1 and manufactured in, or imported into, the United States on and after [INSERT DATE 3 YEARS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].
(^12) For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. Improvement Act of 2015, Public Law 114-11 (April 30, 2015).All references to EPCA in this document refer to the statute as amended through the Energy Efficiency
DOE’s analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document.
B. Impact on Manufacturers The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the reference year through the terminal year of the analysis period (2016-2049). Using a real discount rate of 7.4 percent, DOE estimates that the INPV for manufacturers of ceiling fans in the case without amended standards is $1,211.6 million in 2015$. Under the adopted standards, DOE expects that manufacturers may lose up to 9.9 percent of this INPV, which is approximately $119.4 million.
DOE’s analysis of the impacts of the adopted standards on manufacturers is described in section IV.J of this document.
C. National Benefits and Costs^4 DOE’s analyses indicate that the adopted energy conservation standards for ceiling fans would save a significant amount of energy. Relative to the case without amended standards (referred to as the “no-new-standards case”), the lifetime energy savings for ceiling fans purchased in the 30-year period that begins in the anticipated first full year of compliance with the amended standards (2020-2049), amount to 2.
(^4) All monetary values in this document are expressed in 2015 dollars and, where appropriate, are discounted to 2016 unless explicitly stated otherwise.
quadrillion British thermal units (Btu), or quads.^5 This represents a total energy savings of 26 percent across all product classes relative to the energy use of these products in the no-new-standards case.
The cumulative net present value (NPV) of total consumer costs and savings of the standards for ceiling fans ranges from $4.488 billion (at a 7-percent discount rate) to $12.123 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for ceiling fans purchased in 2020-2049.
In addition, the standards for ceiling fans are projected to yield significant environmental benefits. DOE estimates that the standards would result in cumulative greenhouse gas emission reductions (over the same period as for energy savings) of 120.2 million metric tons (Mt)^6 of carbon dioxide (CO 2 ), 64.0 thousand tons of sulfur dioxide (SO 2 ), 222.6 thousand tons of nitrogen oxides (NOX), 530.1 thousand tons of methane (CH 4 ), 1.3 thousand tons of nitrous oxide (N 2 O), and 0.2 tons of mercury (Hg).^7 The cumulative reduction in CO 2 emissions through 2030 amounts to 18.2 Mt, which is
(^5) The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels),and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section (^6) A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO IV.H.1. 2 are presented in short tons. (^7) DOE calculated emissions reductions relative to the no-new-standards-case, which reflects key assumptions in the Annual Energy Outlook 2015 (AEO 2015).
appropriate valuation of the reduction in other emissions, and did not include any values for other emissions in this rulemaking.
Table I.3 summarizes the economic benefits and costs expected to result from the adopted standards for ceiling fans.
Table I.3 Selected Categories of Economic Benefits and Costs of Amended Energy Conservation Standards for Ceiling Fans * Category Present Value Billion 2015$ Discount Rate Benefits Consumer Operating Cost Savings (^) 16.57.0^ 7%3% CO CO 2 2 Reduction (using mean SCC at 5% discount rate)Reduction (using mean SCC at 3% discount rate) ** **^ 0.83.8 5%3% CO CO 2 2 Reduction (using mean SCC at 2.5% discount rate)Reduction (using 95 th (^) percentile SCC at 3% discount **^ 6.1 2.5% rate) **^ 11.7^ 3% NO (^) X Reduction †^ 0.2 0.4^ 7%3% Total Benefits‡^ 11.0 20.7^ 7%3% Costs Consumer Incremental Installed Costs 2.5 4.4^ 7%3% Total Net Benefits Including CO 2 and NO (^) X Reduction Monetized Value ‡^ 16.38.5^ 7%3%
- This table presents the costs and benefits associated with ceiling fans shipped in 2020-2049. These results includebenefits to consumers which accrue after 2049 from the products purchased in 2020-2049. The incremental installed costs include incremental equipment cost as well as installation costs. The COdue to actions that occur nationally. 2 reduction benefits are global benefits ** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values arebased on the average SCC from the integrated assessment models, at discount rates of 5 percent, 3 percent, and 2. percent. For example, for 2015 emissions, these values are $12.4/t, $40.6/t, and $63.2/t, in 2015$, respectively. Thefourth set ($118/t in 2015$ for 2015 emissions), which represents the 95th (^) percentile of the SCC distribution calculated using a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change furtherout in the tails of the SCC distribution. The SCC values are emission year specific. See section IV.L.1 for more details. † DOE estimated the monetized value of NOX emissions reductions associated with electricity savings using benefit per ton estimates from the Regulatory Impact Analysis for the Clean Power Plan Final Rule, published in August 2015 byEPA’s Office of Air Quality Planning and Standards. (Available at www.epa.gov/cleanpowerplan/clean-power-plan- final-rule-regulatory-impact-analysisusing a national benefit-per-ton estimate for NO.) See sectionX emitted from the Electricity Generating Unit sector based on an IV.L.2 for further discussion. To be conservative, DOE is primarily estimate of premature mortality derived from the ACS study (Krewski et al. 2009). If the benefit-per-ton estimateswere based on the Six Cities study (Lepuele et al. 2011), the values would be nearly two-and-a-half times larger. ‡ Total Benefits for both the 3-percent and 7-percent cases are presented using only the average SCC with 3-percentdiscount rate.
The benefits and costs of the adopted standards, for ceiling fans sold in 2020- 2049, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of (1) the national economic value of the benefits in reduced consumer operating costs, minus (2) the increases in product purchase prices and installation costs, plus (3) the value of the benefits of CO 2 and NOX emission reductions, all annualized.^10
The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products. The national operating cost savings is measured for the lifetime of ceiling fans shipped in 2020-2049. The CO 2 reduction is a benefit that accrues globally due to decreased domestic energy consumption that is expected to result from this rule. Because CO 2 emissions have a very long residence time in the atmosphere, the SCC values in future years reflect future CO 2 - emissions impacts that continue beyond 2100.
Estimates of annualized benefits and costs of the adopted standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent
(^10) To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2016, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOEcalculated a present value associated with each year’s shipments in the year in which the shipments occur (e.g., 2020 or 2030), and then discounted the present value from each year to 2016. The calculation usesdiscount rates of 3 and 7 percent for all costs and benefits except for the value of CO 2 reductions, for which DOE used case-specific discount rates, as shown incalculated the fixed annual payment over a 30-year period, starting in the compliance year,that yields the Table I.3. Using the present value, DOE then same present value.
Table I.4 Selected Categories of Annualized Benefits and Costs of Amended Standards for Ceiling Fans DiscountRate Estimate*^ Primary Low-Net-Benefits Estimate
High-Net-Benefits Estimate million 2015$/year Benefits Consumer Operating Cost Savings 7% 3%^ 688.1919.0^ 579.7764.2^ 1081.9793. CO5% discount rate) 2 Reduction (using mean SCC at ** 5% 62.8 53.7 71. CO3% discount rate) 2 Reduction (using mean SCC at ** 3% 214.1 182.2 242. CO2.5% discount rate) 2 Reduction (using mean SCC at ** 2.5% 314.2 267.2 356. COSCC at 3% discount rate ) 2 Reduction (using 95 th **^ percentile 3% 652.7 555.4 739. NO (^) X Reduction†^ 7% 3%^ 15.121.5^ 13.118.4^ 38.155.
Total Benefits‡
CO^ 7% plus 2 range 766 to 1,356^ 647 to 1,148^ 903 to 1, 7% 917.3 775.0 1,074. CO^ 3% plus 2 range 1,003 to 1,593^ 836 to 1,338^ 1,208 to 1, 3% 1,154.6 964.8 1,379. **Costs***** Consumer Incremental Product Costs 7% 3%^ 245.1243.2^ 288.1298.7^ 272.8273. Net Benefits
Total‡
CO^ 7% plus 2 range 521 to 1,111^ 358 to 860^ 630 to 1, 7% 672.2 487.0 801. CO^ 3% plus 2 range 760 to 1,350^ 538 to 1,039^ 935 to 1,
- This table presents the annualized costs and benefits associated with ceiling fans shipped in 2020-2049. These results^ 3%^ 911.4^ 666.1^ 1,106. include benefits to consumers which accrue after 2049 from the ceiling fans purchased from 2020-2049. Theincremental installed costs include incremental equipment cost as well as installation costs. The CO 2 reduction benefits are global benefits due to actions that occur nationally. The Primary Estimate assumes the Reference case electricityprices and housing starts from AEO 2015 and decreasing product prices for ceiling fans with DC motors, due to price trend on the electronics components. The Low Benefits Estimate uses the Low Economic Growth electricity prices andhousing starts from AEO 2015 and no price trend for ceiling fans with DC motors. The High Benefits Estimate uses the High Economic Growth electricity prices and housing starts from AEO 2015 and the same product price decreasefor ceiling fans with DC motors as in the Primary Estimate. The methods used to derive projected price trends are explained in section ** The CO 2 reduction benefits are calculated using 4 different sets of SCC values. The first three use the average SCC IV.G.4. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The fourth represents the 95th
percentile of the SCC distribution calculated using a 3-percent discount rate. The SCC values are emission yearspecific. See section IV.L.1 for more details. † DOE estimated the monetized value of NOton estimates from the Regulatory Impact Analysis for the Clean Power Plan Final Rule, published in August 2015 byX emissions reductions associated with electricity savings using benefit per EPA’s Office of Air Quality Planning and Standards. (Available atfinal-rule-regulatory-impact-analysis.) See section IV.L.2 for further discussion. For the Primary Estimate and Low www.epa.gov/cleanpowerplan/clean-power-plan- Net Benefits Estimate, DOE used national benefit-per-ton estimates for NOsector based on an estimate of premature mortality derived from the ACS study (Krewski et al. 2009). For the HighX emitted from the Electric Generating Unit Net Benefits Estimate, the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al. 2011); these arenearly two-and-a-half times larger than those from the ACS study. ‡discount rate. In the rows labeled “7% plus CO (^) Total Benefits for both the 3-percent and 7-percent cases are presented using only the average SCC with 3-percent are calculated using the labeled discount rate, and those values are added to the full range of CO^2 range” and “3% plus CO^2 range,” the operating cost and NO 2 values. X^ benefits *** For certain assumed design options (e.g. fan optimization) that are included at the selected standard level, DOEestimated no incremental costs to consumers, but did estimate a one-time industry conversion cost to manufacturers to make their products compliant with the selected standards that are not reflected in the Consumer Incremental ProductCosts. The one-time industry conversion cost to manufacturers of these design options contribute to a loss in industry net present value of $4.8 million, which is equivalent to an annualized cost of $0.4 million/year at a 7.4-percentdiscount rate over the analysis period.
DOE’s analysis of the national impacts of the adopted standards is described in sections IV.H, IV.K, and IV.L of this notice.
D. Conclusion Based on the analyses culminating in this final rule, DOE found the benefits to the nation of the standards (energy savings, consumer LCC savings, positive NPV of consumer benefit, and emission reductions) outweigh the burdens (loss of INPV and LCC increases for some users of these products). DOE has concluded that the standards in this final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in significant conservation of energy.
Pursuant to EPCA, DOE’s energy conservation program for covered products consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. The Federal Trade Commission (FTC) is primarily responsible for labeling, and DOE implements the remainder of the program. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test procedures for ceiling fans appear at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix U, 10 CFR 430.23(w) and 10 CFR 429.32.
DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including ceiling fans. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and (3)(B)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard (1) for certain products, including ceiling fans, if no test
procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:
- The economic impact of the standard on manufacturers and consumers of the products subject to the standard;
- The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;
- The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;
- Any lessening of the utility or the performance of the covered products likely to result from the standard;
- The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;
- The need for national energy and water conservation; and
- Other factors the Secretary of Energy (Secretary) considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII))
