[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Rules and Regulations]
[Pages 30933-31014]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11201]



[[Page 30933]]

Vol. 79

Thursday,

No. 103

May 29, 2014

Part II





Department of Energy





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10 CFR Part 431





 Energy Conservation Program: Energy Conservation Standards for 
Commercial and Industrial Electric Motors; Final Rule

Federal Register / Vol. 79 , No. 103 / Thursday, May 29, 2014 / Rules 
and Regulations

[[Page 30934]]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2010-BT-STD-0027]
RIN 1904-AC28


Energy Conservation Program: Energy Conservation Standards for 
Commercial and Industrial Electric Motors

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 
commercial and industrial electric motors. EPCA also requires the U.S. 
Department of Energy (DOE) to determine whether more-stringent, amended 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this final rule, DOE 
establishes energy conservation standards for a number of different 
groups of electric motors that DOE has not previously regulated. For 
those groups of electric motors currently regulated, today's rulemaking 
would maintain the current energy conservation standards for some 
electric motor types and amend the energy conservation standards for 
other electric motor types. DOE has determined that the new and amended 
energy conservation standards for this equipment would result in 
significant conservation of energy, and are technologically feasible 
and economically justified.

DATES: The effective date of this rule is July 28, 2014. Compliance 
with the standards established for commercial and industrial electric 
motors in today's final rule is required starting on June 1, 2016.
    The incorporation by reference of a certain publication listed in 
this rule was approved by the Federal Register on May 4, 2012.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at regulations.gov. All 
documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2010-BT-STD-0027. This Web 
page will contain a link to the docket for this rule on the 
regulations.gov site. The regulations.gov Web page will contain simple 
instructions on how to access all documents, including public comments, 
in the docket.
    For further information on how to review the docket, contact Ms. 
Brenda Edwards at (202) 586-2945 or by email: 
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: James Raba, U.S. Department of Energy, 
Office of Energy Efficiency and Renewable Energy, Building Technologies 
Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. 
Telephone: (202) 586-8654. Email: medium_electric_motors@ee.doe.gov.
    Ami Grace-Tardy, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-5709. Email: Ami.Grace-Tardy@hq.doe.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Final Rule and Its Benefits
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Electric Motors
    3. Process for Setting Energy Conservation Standards
III. General Discussion
    A. Compliance Date
    B. Test Procedure
    1. Vertical Electric Motors
    C. Current Equipment Classes and Scope of Coverage
    D. Updated Equipment Classes and Scope of Coverage
    E. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    F. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    G. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Current Scope of Electric Motors Energy Conservation 
Standards
    2. Expanded Scope of Electric Motor Energy Conservation 
Standards
    a. Summary
    b. Definitions, Terminology, and Regulatory Language
    c. Horsepower Rating
    d. High-Horsepower Six- and Eight-Pole Motors
    e. Frame Size
    f. IEC Motors
    g. Frequency
    h. Random Winding
    i. Duty Cycle
    j. Gear Motors
    k. Partial Electric Motors
    l. Certification Considerations Related to Expanded Scope
    m. Electric Motors With Separately Powered Blowers
    3. Advanced Electric Motors
    4. Equipment Class Groups and Equipment Classes
    a. U-Frame Motors
    b. Electric Motor Design Letter
    c. Fire Pump Electric Motors
    d. Brake Electric Motors
    e. Horsepower Rating
    f. Pole Configuration
    g. Enclosure Type
    h. Other Motor Characteristics
    5. Technology Assessment
    a. Increase the Cross-Sectional Area of Copper in the Stator 
Slots
    b. Decrease the Length of Coil Extensions
    c. Die-Cast Copper Rotor Cage
    d. Increase Cross-Sectional Area of Rotor Conductor Bars
    e. Increase Cross-Sectional Area of End Rings
    f. Electrical Steel With Lower Losses
    g. Thinner Steel Laminations
    h. Increase Stack Length
    i. Optimize Bearing and Lubrication
    j. Improve Cooling System
    k. Reduce Skew on Conductor Cage
    l. Improve Rotor Bar Insulation
    m. Technology Options Not Considered
    B. Screening Analysis
    1. Technology Options Not Screened Out of the Analysis
    a. Die-Cast Copper Rotors
    b. Increase the Cross-Sectional Area of Copper in the Stator 
Slots
    c. Power Factor
    2. Technology Options Screened Out of the Analysis
    C. Engineering Analysis
    1. Engineering Analysis Methodology
    2. Representative Units
    a. Electric Motor Design Type
    b. Horsepower Rating
    c. Pole-Configuration
    d. Enclosure Type
    3. Efficiency Levels Analyzed
    4. Testing and Teardowns
    5. Software Modeling
    6. Cost Model
    a. Copper Pricing
    b. Labor Rate and Non-Production Markup

[[Page 30935]]

    c. Catalog Prices
    d. Product Development Cost
    7. Engineering Analysis Results
    8. Scaling Methodology
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Costs
    2. Installation Costs
    3. Maintenance Costs
    4. Repair Costs
    5. Unit Energy Consumption
    6. Electricity Prices and Electricity Price Trends
    7. Lifetime
    8. Discount Rate
    9. Base Case Market Efficiency Distributions
    10. Compliance Date
    11. Payback Period Inputs
    12. Rebuttable-Presumption Payback Period
    13. Comments on Other Issues
    G. Shipments Analysis
    H. National Impact Analysis
    1. Efficiency Trends
    2. National Energy Savings
    3. Electric Motor Weights
    4. Equipment Price Forecast
    5. Net Present Value of Customer Benefit
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Manufacturer Production Costs
    2. Shipment Projections
    3. Markup Scenarios
    4. Product and Capital Conversion Costs
    5. Other Comments from Interested Parties
    a. Manufacturer Markups used in the MIA versus the NIA
    b. Potential Trade Barriers
    6. Manufacturer Interviews
    K. Emissions Analysis
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Development of Social Cost of Carbon Values
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    M. Utility Impact Analysis
    N. Employment Impact Analysis
    O. Other Comments Received
V. Analytical Results
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Customers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Sub-Group of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Customer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Summary of National Economic Impacts
    8. Other Factors
    C. Conclusions
    1. Benefits and Burdens of Trial Standard Levels Considered for 
Electric Motors
    2. Summary of Benefits and Costs (Annualized) of Today's 
Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    a. Manufacturer Participation
    b. Electric Motor Industry Structure and Nature of Competition
    c. Comparison Between Large and Small Entities
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    4. Significant Alternatives to the Rule
    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. Summary of the Final Rule and Its Benefits

    Title III of the Energy Policy and Conservation Act of 1975 (42 
U.S.C. 6291, et seq.; ``EPCA''), 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,'' including certain electric motors.\1\ (Within this 
preamble, DOE will use the terms ``electric motors'' and ``motors'' 
interchangeably as today's rulemaking only pertains to electric 
motors.) 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) and 6316(a)) 
Furthermore, the new or amended standards must result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(a))
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Pub. L. 112-210 (December 18, 2012).
---------------------------------------------------------------------------

    In accordance with these and other statutory provisions discussed 
in this final rule, DOE is adopting new and amended energy conservation 
standards for electric motors by applying the standards currently in 
place to a wider scope of electric motors that DOE does not currently 
regulate. In setting these standards, DOE is addressing a number of 
different groups of electric motors that have, to date, not been 
required to satisfy the energy conservation standards currently set out 
in 10 CFR part 431. In addition, today's rule, would require all 
currently regulated motors, with the exception of fire pump electric 
motors, to satisfy the efficiency levels (ELs) prescribed in Table 12-
12 of National Electrical Manufacturers Association (NEMA) Standards 
Publication MG 1-2011, ``Motors and Generators;'' fire pump motors 
would continue to meet the current standards that apply. All other 
electric motors covered in today's rulemaking would also need to meet 
the efficiency levels found in MG 1-2011, Table 12-12. As a practical 
matter, most currently regulated motors would continue to be required 
to meet the same standards that they are already required to meet, but 
certain motors, such as those that satisfy the general purpose electric 
motors (subtype II) (i.e. ``subtype II'') or that are NEMA Design B (or 
equivalent IEC Design N) motors with a power rating of more than 200 
horsepower, but not greater than 500 horsepower, would now be required 
to meet the more stringent levels prescribed by MG 1-2011, Tables 12-
12. These adopted efficiency levels (depicted here as trial standard 
levels or ``TSLs'') and the motor types to which they apply are shown 
in Table I.1.

[[Page 30936]]



                          Table I.1--Energy Conservation Standards for Electric Motors
                                       [Compliance starting June 1, 2016]
----------------------------------------------------------------------------------------------------------------
  Equipment class      Electric motor       Horsepower           Pole
       group             design type          rating         configuration       Enclosure        Adopted TSL**
----------------------------------------------------------------------------------------------------------------
1..................  NEMA Design A & B*             1-500        2, 4, 6, 8  Open.............                 2
                                                                             Enclosed.........                 2
2..................  NEMA Design C*....             1-200           4, 6, 8  Open.............                 2
                                                                             Enclosed.........                 2
3..................  Fire Pump*........             1-500        2, 4, 6, 8  Open.............                 2
                                                                             Enclosed.........                 2
----------------------------------------------------------------------------------------------------------------
 *Indicates International Electrotechnical Commission (IEC) equivalent electric motors are included. Also, due
  to the elimination of an equipment class for brake motors, previously reported brake motor results are now
  reported in Equipment Class Group 1 (ECG 1).
 **Tables I.2 through I.4 detail the various standard levels that compose TSL 2. Table I.2 applies to NEMA
  Design A & B, Table I.3 applies to NEMA Design C and Table I.4 applies to fire pump electric motors.

    In determining where a particular motor with a certain horsepower 
(hp) or kilowatt (kW) rating would fall within the requirements, 
today's final rule establishes the same approach provided in current 
regulations to determine which rating would apply for compliance 
purposes. Namely:
    1. A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    2. A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
and
    3. A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = (1/0.746) horsepower. The 
conversion should be calculated to three significant decimal places, 
and the resulting horsepower shall be rounded in accordance with the 
rules listed in (1) and (2).

                Table I.2--Energy Conservation Standards for NEMA Design A and NEMA Design B Motors (Excluding Fire Pump Electric Motors)
                                                           [Compliance starting June 1, 2016]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Nominal full-load efficiency  (percent)
                                         ---------------------------------------------------------------------------------------------------------------
   Motor horsepower/standard kilowatt               2 Pole                      4 Pole                      6 Pole                      8 Pole
               equivalent                ---------------------------------------------------------------------------------------------------------------
                                            Enclosed        Open        Enclosed        Open        Enclosed        Open        Enclosed        Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...................................          77.0          77.0          85.5          85.5          82.5          82.5          75.5          75.5
1.5/1.1.................................          84.0          84.0          86.5          86.5          87.5          86.5          78.5          77.0
2/1.5...................................          85.5          85.5          86.5          86.5          88.5          87.5          84.0          86.5
3/2.2...................................          86.5          85.5          89.5          89.5          89.5          88.5          85.5          87.5
5/3.7...................................          88.5          86.5          89.5          89.5          89.5          89.5          86.5          88.5
7.5/5.5.................................          89.5          88.5          91.7          91.0          91.0          90.2          86.5          89.5
10/7.5..................................          90.2          89.5          91.7          91.7          91.0          91.7          89.5          90.2
15/11...................................          91.0          90.2          92.4          93.0          91.7          91.7          89.5          90.2
20/15...................................          91.0          91.0          93.0          93.0          91.7          92.4          90.2          91.0
25/18.5.................................          91.7          91.7          93.6          93.6          93.0          93.0          90.2          91.0
30/22...................................          91.7          91.7          93.6          94.1          93.0          93.6          91.7          91.7
40/30...................................          92.4          92.4          94.1          94.1          94.1          94.1          91.7          91.7
50/37...................................          93.0          93.0          94.5          94.5          94.1          94.1          92.4          92.4
60/45...................................          93.6          93.6          95.0          95.0          94.5          94.5          92.4          93.0
75/55...................................          93.6          93.6          95.4          95.0          94.5          94.5          93.6          94.1
100/75..................................          94.1          93.6          95.4          95.4          95.0          95.0          93.6          94.1
125/90..................................          95.0          94.1          95.4          95.4          95.0          95.0          94.1          94.1
150/110.................................          95.0          94.1          95.8          95.8          95.8          95.4          94.1          94.1
200/150.................................          95.4          95.0          96.2          95.8          95.8          95.4          94.5          94.1
250/186.................................          95.8          95.0          96.2          95.8          95.8          95.8          95.0          95.0
300/224.................................          95.8          95.4          96.2          95.8          95.8          95.8  ............  ............
350/261.................................          95.8          95.4          96.2          95.8          95.8          95.8  ............  ............
400/298.................................          95.8          95.8          96.2          95.8  ............  ............  ............  ............
450/336.................................          95.8          96.2          96.2          96.2  ............  ............  ............
500/373.................................          95.8          96.2          96.2          96.2  ............  ............  ............  ............
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[[Page 30937]]


                        Table I.3--Energy Conservation Standards for NEMA Design C Motors
                                       [Compliance starting June 1, 2016]
----------------------------------------------------------------------------------------------------------------
                                                    Nominal full-load efficiency  (percent)
                             -----------------------------------------------------------------------------------
  Motor horsepower/standard             4 Pole                      6 Pole                      8 Pole
     kilowatt equivalent     -----------------------------------------------------------------------------------
                                Enclosed        Open        Enclosed        Open        Enclosed        Open
----------------------------------------------------------------------------------------------------------------
1/.75.......................          85.5          85.5          82.5          82.5          75.5          75.5
1.5/1.1.....................          86.5          86.5          87.5          86.5          78.5          77.0
2/1.5.......................          86.5          86.5          88.5          87.5          84.0          86.5
3/2.2.......................          89.5          89.5          89.5          88.5          85.5          87.5
5/3.7.......................          89.5          89.5          89.5          89.5          86.5          88.5
7.5/5.5.....................          91.7          91.0          91.0          90.2          86.5          89.5
10/7.5......................          91.7          91.7          91.0          91.7          89.5          90.2
15/11.......................          92.4          93.0          91.7          91.7          89.5          90.2
20/15.......................          93.0          93.0          91.7          92.4          90.2          91.0
25/18.5.....................          93.6          93.6          93.0          93.0          90.2          91.0
30/22.......................          93.6          94.1          93.0          93.6          91.7          91.7
40/30.......................          94.1          94.1          94.1          94.1          91.7          91.7
50/37.......................          94.5          94.5          94.1          94.1          92.4          92.4
60/45.......................          95.0          95.0          94.5          94.5          92.4          93.0
75/55.......................          95.4          95.0          94.5          94.5          93.6          94.1
100/75......................          95.4          95.4          95.0          95.0          93.6          94.1
125/90......................          95.4          95.4          95.0          95.0          94.1          94.1
150/110.....................          95.8          95.8          95.8          95.4          94.1          94.1
200/150.....................          96.2          95.8          95.8          95.4          94.5          94.1
----------------------------------------------------------------------------------------------------------------


                                         Table I.4--Energy Conservation Standards for Fire Pump Electric Motors
                                                           [Compliance starting June 1, 2016]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Nominal full-load efficiency  (percent)
                                         ---------------------------------------------------------------------------------------------------------------
   Motor horsepower/standard kilowatt               2 Pole                      4 Pole                      6 Pole                      8 Pole
               equivalent                ---------------------------------------------------------------------------------------------------------------
                                            Enclosed        Open        Enclosed        Open        Enclosed        Open        Enclosed        Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...................................          75.5  ............          82.5          82.5          80.0          80.0          74.0          74.0
1.5/1.1.................................          82.5          82.5          84.0          84.0          85.5          84.0          77.0          75.5
2/1.5...................................          84.0          84.0          84.0          84.0          86.5          85.5          82.5          85.5
3/2.2...................................          85.5          84.0          87.5          86.5          87.5          86.5          84.0          86.5
5/3.7...................................          87.5          85.5          87.5          87.5          87.5          87.5          85.5          87.5
7.5/5.5.................................          88.5          87.5          89.5          88.5          89.5          88.5          85.5          88.5
10/7.5..................................          89.5          88.5          89.5          89.5          89.5          90.2          88.5          89.5
15/11...................................          90.2          89.5          91.0          91.0          90.2          90.2          88.5          89.5
20/15...................................          90.2          90.2          91.0          91.0          90.2          91.0          89.5          90.2
25/18.5.................................          91.0          91.0          92.4          91.7          91.7          91.7          89.5          90.2
30/22...................................          91.0          91.0          92.4          92.4          91.7          92.4          91.0          91.0
40/30...................................          91.7          91.7          93.0          93.0          93.0          93.0          91.0          91.0
50/37...................................          92.4          92.4          93.0          93.0          93.0          93.0          91.7          91.7
60/45...................................          93.0          93.0          93.6          93.6          93.6          93.6          91.7          92.4
75/55...................................          93.0          93.0          94.1          94.1          93.6          93.6          93.0          93.6
100/75..................................          93.6          93.0          94.5          94.1          94.1          94.1          93.0          93.6
125/90..................................          94.5          93.6          94.5          94.5          94.1          94.1          93.6          93.6
150/110.................................          94.5          93.6          95.0          95.0          95.0          94.5          93.6          93.6
200/150.................................          95.0          94.5          95.0          95.0          95.0          94.5          94.1          93.6
250/186.................................          95.4          94.5          95.0          95.4          95.0          95.4          94.5          94.5
300/224.................................          95.4          95.0          95.4          95.4          95.0          95.4  ............  ............
350/261.................................          95.4          95.0          95.4          95.4          95.0          95.4  ............  ............
400/298.................................          95.4          95.4          95.4          95.4  ............  ............  ............  ............
450/336.................................          95.4          95.8          95.4          95.8  ............  ............  ............  ............
500/373.................................          95.4          95.8          95.8          95.8  ............  ............  ............  ............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Energy conservation standards for fire pump electric motors have not changed and remain at the current efficiency levels.


[[Page 30938]]

A. Benefits and Costs to Consumers

    Table I.5 presents DOE's evaluation of the economic impacts of 
today's standards on consumers of electric motors, as measured by the 
weighted average life-cycle cost (LCC) savings and the median payback 
period. The average LCC savings are positive for all equipment classes 
for which consumers are impacted by the standards.

 Table I.5--Impacts of Today's Standards on Consumers of Electric Motors
------------------------------------------------------------------------
                                   Weighted average     Weighted median
      Equipment class group          LCC savings*       payback period*
                                        (2013$)             (years)
------------------------------------------------------------------------
1...............................  160...............  2.9
2...............................  53................  4.5
3...............................  N/A**.............  N/A**
------------------------------------------------------------------------
* The results for each equipment class group (ECG) are a shipment
  weighted average of results for the representative units in the group.
  ECG 1: Representative units 1, 2, 3, 9, and 10; ECG 2: Representative
  units 4 and 5; ECG 3: Representative units 6, 7, and 8. The weighted
  average lifetime in each equipment class is 15 years and ranges from 8
  to 29 years, depending on the motor horsepower and application.
** For the ECG 3 motor, the standard level is the same as the baseline;
  thus, no customers are affected.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2014 to 2045). Using a real discount rate of 9.1 
percent, DOE estimates that the industry net present value (INPV) for 
manufacturers of electric motors is $3,478 million in 2013$. Under 
today's standards, DOE expects that manufacturers may lose up to 10.0 
percent of their INPV, which is approximately $348 million. 
Additionally, based on DOE's interviews with the manufacturers of 
electric motors, DOE does not expect any plant closings or significant 
loss of employment based on the energy conservation standards chosen in 
today's rule.

C. National Benefits and Costs \2\
---------------------------------------------------------------------------

    \2\ All monetary values in this section are expressed in 2013 
dollars and are discounted to 2014.
---------------------------------------------------------------------------

    DOE's analyses indicate that today's standards would save a 
significant amount of energy. Estimated lifetime savings for electric 
motors purchased over the 30-year period that begins in the year of 
compliance with new and amended standards (2016-2045) would amount to 
7.0 quads (full-fuel-cycle energy).\3\ The annualized energy savings 
(0.23 quad) is equivalent to one percent of total U.S. industrial 
primary energy consumption in 2013.\4\
---------------------------------------------------------------------------

    \3\ The agency also conducted the site energy analysis as well 
(see TSD chapter 10). One quad (quadrillion Btu) is the equivalent 
of 293 billion kilowatt hours (kWh) or 172.3 million barrels of oil.
    \4\ Based on U.S. Department of Energy, Energy Information 
Administration, Annual Energy Outlook (AEO) 2013 data.
---------------------------------------------------------------------------

    The estimated cumulative net present value (NPV) of total consumer 
costs and savings attributed to today's standards for electric motors 
ranges from $11.3 billion (at a 7-percent discount rate) to $28.8 
billion (at a 3-percent discount rate). This NPV expresses the 
estimated total value of future operating-cost savings minus the 
estimated increased equipment costs for equipment purchased in 2016-
2045.\5\
---------------------------------------------------------------------------

    \5\ The analytic timeframe includes motors shipped each year 
from 2016 to 2045.
---------------------------------------------------------------------------

    In addition, today's standards would have significant environmental 
benefits across the entire analysis period. Estimated energy savings 
would result in cumulative greenhouse gas emission reductions of 
approximately 395 million metric tons (Mt) \6\ of carbon dioxide 
(CO2), 1,883 thousand tons of methane, 673 thousand tons of 
sulfur dioxide (SO2), 498 thousand tons of nitrogen oxides 
(NOX) and 0.8 tons of mercury (Hg).\7\ The cumulative 
reduction in CO2 emissions through 2030 amounts to 96 Mt.
---------------------------------------------------------------------------

    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \7\ DOE calculates emissions reductions relative to the Annual 
Energy Outlook (AEO) 2013 Reference case, which generally represents 
current legislation and environmental regulations for which 
implementing regulations were available as of December 31, 2012.
---------------------------------------------------------------------------

    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed by a recent Federal 
interagency process.\8\ The derivation of the SCC values is discussed 
in section IV.L. Using discount rates appropriate for each set of SCC 
values, DOE estimates that the present monetary value of the 
CO2 emissions reductions is between $2.7 billion and $38.3 
billion. DOE also estimates that the present monetary value of the 
NOX emissions reductions is $0.3 billion at a 7-percent 
discount rate, and $0.7 billion at a 3-percent discount rate.\9\
---------------------------------------------------------------------------

    \8\ Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. Interagency Working 
Group on Social Cost of Carbon, United States Government. May 2013; 
revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
    \9\ DOE is currently investigating valuation of avoided Hg and 
SO2 emissions.
---------------------------------------------------------------------------

    Table I.6 summarizes the national economic costs and benefits 
expected to result from today's standards for electric motors.

 Table I.6--Summary of National Economic Benefits and Costs of Electric
 Motors Energy Conservation Standards, Present Value for Motors Shipped
                     in 2016-2045 in Billion 2013$ *
------------------------------------------------------------------------
                                      Present value
             Category                 billion 2013$     Discount rate %
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Consumer Operating Cost Savings...               18.2                  7
                                                 41.4                  3
CO2 Reduction Monetized Value                     2.7                  5
 ($12.0/t case) **
CO2 Reduction Monetized Value                    12.4                  3
 ($40.5/t case) **
CO2 Reduction Monetized Value                    19.7                2.5
 ($62.4/t case) **
CO2 Reduction Monetized Value                    38.3                  3
 ($119/t case) **
NOX Reduction Monetized Value (at                 0.3                  7
 $2,684/ton) **...................
                                                  0.7                  3
    Total Benefits [dagger].......               30.9                  7
                                                 54.4                  3
------------------------------------------------------------------------

[[Page 30939]]

 
                                  Costs
------------------------------------------------------------------------
Consumer Incremental Installed                    6.9                  7
 Costs............................
                                                 12.5                  3
------------------------------------------------------------------------
                              Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX Reduction                  24.0                  7
 Monetized Value..................
                                                 41.9                  3
------------------------------------------------------------------------
* This table presents the costs and benefits associated with electric
  motors shipped in 2016-2045. These results include benefits to
  customers which accrue after 2045 from the equipment purchased in 2016-
  2045. The results account for the incremental variable and fixed costs
  incurred by manufacturers due to the amended standard, some of which
  may be incurred in preparation for this final rule.
** The CO2 values represent global monetized values of the SCC, in
  2013$, in 2015 under several scenarios of the updated SCC values. The
  first three cases use the averages of SCC distributions calculated
  using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
  represents the 95th percentile of the SCC distribution calculated
  using a 3% discount rate. The SCC time series used by DOE incorporates
  an escalation factor. The value for NOX is the average of the low and
  high values used in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to SCC value of $40.5/t in 2015.

    The benefits and costs of today's standards for electric motors, 
sold in 2016-2045, can also be expressed in terms of annualized values. 
The annualized monetary values are the sum of: (1) The annualized 
national economic value of the benefits from operation of the 
commercial and industrial equipment that meet the standards (consisting 
primarily of operating cost savings from using less energy, minus 
increases in equipment purchase and installation costs, which is 
another way of representing consumer NPV); and (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\10\
---------------------------------------------------------------------------

    \10\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2014, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2016 through 2045) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the value of operating savings and 
CO2 emissions reductions provides a useful perspective, two 
issues should be considered. First, the national operating cost savings 
are domestic U.S. consumer monetary savings that occur as a result of 
market transactions, while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings is measured over the lifetime of electric motors shipped 
in years 2016-2045. The SCC values, on the other hand, reflect the 
present value of some future climate-related impacts resulting from the 
emission of one ton of carbon dioxide in each year. These impacts 
continue well beyond 2100.
    Estimates of annualized benefits and costs of today's standards are 
shown in Table I.8. The results under the primary estimate are as 
follows. Using a 7-percent discount rate for benefits and costs other 
than CO2 reduction (for which DOE used a 3-percent discount 
rate along with the average SCC series that uses a 3-percent discount 
rate) the cost of the standards in today's rule is $517 million per 
year in increased equipment costs (incremental installed costs), while 
the estimated benefits are $1,367 million per year in reduced equipment 
operating costs, $614 million in CO2 emission reductions, 
and $23.3 million in reduced NOX emissions. In this case, 
the net benefits would amount to $1,488 million per year. Using a 3-
percent discount rate for all benefits and costs and the average SCC 
series, the estimated cost of the standards in today's rule is $621 
million per year in increased equipment costs, while the estimated 
benefits are $2,048 million per year in reduced operating costs, $614 
million in CO2 emission reductions, and $32.9 million in 
reduced NOX emissions. In this case, the net benefit would 
amount to approximately $2,074 million per year.

          Table I.8--Annualized Benefits and Costs of Energy Conservation Standards for Electric Motors
                                              [Million 2013$/year]
----------------------------------------------------------------------------------------------------------------
                                                          Primary estimate   Low net benefits  High net benefits
                                        Discount rate            *              estimate *         estimate *
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.....                 7%              1,367              1,134              1,664
                                                     3%              2,048              1,684              2,521
CO2 Reduction Monetized Value ($12.0/                5%                166                143                192
 t case) *..........................
CO2 Reduction Monetized Value ($40.5/                3%                614                531                712
 t case) *..........................
CO2 Reduction Monetized Value ($62.4/              2.5%                920                795              1,066
 t case) *..........................
CO2 Reduction Monetized Value ($119/                 3%              1,899              1,641              2,200
 t case) *..........................
NOX Reduction Monetized Value (at                    7%               23.3               20.1               26.8
 $2,684/ton) **.....................

[[Page 30940]]

 
                                                     3%               32.9               28.4               38.0
Total Benefits [dagger].............  7% plus CO2 range     1,556 to 3,289     1,297 to 2,795     1,882 to 3,890
                                                     7%              2,005              1,685              2,402
                                      3% plus CO2 range     2,247 to 3,980     1,855 to 3,353     2,750 to 4,758
                                                     3%              2,696              2,243              3,270
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Installed Costs.........                 7%                517                582                503
                                                     3%                621                697                616
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
Total [dagger]......................  7% plus CO2 range     1,039 to 2,772       716 to 2,213     1,380 to 3,388
                                                     7%              1,488              1,103              1,900
                                      3% plus CO2 range     1,626 to 3,359     1,158 to 2,656     2,134 to 4,143
                                                     3%              2,074              1,546              2,654
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with electric motors shipped in 2016-2045.
  These results include benefits to consumers which accrue after 2045 from the equipment purchased in years 2016-
  2045. Costs incurred by manufacturers, some of which may be incurred in preparation for the rule, are not
  directly included, but are indirectly included as part of incremental equipment costs. The Primary, Low
  Benefits, and High Benefits Estimates are in view of projections of energy prices from the Annual Energy
  Outlook (AEO) 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental
  equipment costs reflect a medium constant projected equipment price in the Primary Estimate, a declining rate
  for projected equipment price trends in the Low Benefits Estimate, and an increasing rate for projected
  equipment price trends in the High Benefits Estimate. The methods used to derive projected price trends are
  explained in section IV.F.1.
** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the
  updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
  2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
  calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The
  value for NOX is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
  the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
  to the full range of CO2 values.

D. Conclusion

    DOE has concluded that the standards in today's final rule 
represent the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, and would result 
in significant conservation of energy. DOE further notes that equipment 
achieving these standard levels is already commercially available for 
most equipment classes covered by today's final rule. Based on the 
analyses described above, DOE has concluded that the benefits of the 
standards to the Nation (energy savings, positive NPV of consumer 
benefits, consumer LCC savings, and emission reductions) would outweigh 
the burdens (loss of INPV for manufacturers and LCC increases for some 
consumers).
    DOE also considered more-stringent energy efficiency levels as 
trial standard levels. However, DOE has concluded that the potential 
burdens of the more-stringent energy efficiency levels would outweigh 
the projected benefits.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's final rule, as well as some of the relevant 
historical background related to the establishment of standards for 
electric motors.

A. Authority

    Title III of the Energy Policy and Conservation Act of 1975 (42 
U.S.C. 6291, et seq.; ``EPCA''), 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, as 
codified), establishes the ``Energy Conservation Program for Certain 
Industrial Equipment,'' including certain electric motors.\11\ The 
Energy Policy Act of 1992 (EPACT 1992) (Pub. L. 102-486) amended EPCA 
by establishing energy conservation standards and test procedures for 
certain commercial and industrial electric motors (in context, 
``motors'') manufactured (alone or as a component of another piece of 
equipment) after October 24, 1997. In December 2007, Congress enacted 
the Energy Independence and Security Act of 2007 (EISA 2007) (Pub. L. 
110-140). Section 313(b)(1) of EISA 2007 updated the energy 
conservation standards for those electric motors already covered by 
EPCA and established energy conservation standards for a larger scope 
of motors not previously covered by standards. (42 U.S.C. 6313(b)(2))
---------------------------------------------------------------------------

    \11\ All references to EPCA in this document refer to the 
statute as amended through the American Energy Manufacturing 
Technical Corrections Act (AEMTCA), Public Law 112-210 (December 18, 
2012).
---------------------------------------------------------------------------

    Pursuant to EPCA, DOE's energy conservation program for covered 
equipment consists essentially of four parts: (1) Testing; (2) 
labeling; (3) the establishment of Federal energy conservation 
standards; and (4) certification and enforcement procedures. For those 
electric motors for which Congress established standards, or for which 
DOE amends or establishes standards, the required test procedure is 
found at 10 CFR part 431, subpart B. The test procedure is subject to 
review

[[Page 30941]]

and revision by the Secretary in accordance with certain criteria and 
conditions. (See 42 U.S.C. 6314(a))
    As required by section 343(a)(5)(A) of EPCA, 42 U.S.C. 
6314(a)(5)(A), DOE's electric motors test procedures are those 
procedures specified in two documents: National Electrical 
Manufacturers Association (NEMA) Standards Publication MG 1 and 
Institute of Electrical and Electronics Engineers (IEEE) Standard 112 
(Test Method B) for motor efficiency.\12\
---------------------------------------------------------------------------

    \12\ DOE also added Canadian Standards Association (CSA) CAN/CSA 
C390-93, ``Energy Efficiency Test Methods for Three-Phase Induction 
Motors'' as an equivalent and acceptable test method, which aligns 
with industry practices.
---------------------------------------------------------------------------

    Manufacturers of covered equipment must use these methods, as 
described in appendix B to subpart B of 10 CFR part 431as the basis for 
certifying to DOE that their equipment complies with the applicable 
energy conservation standards adopted under EPCA and when making 
representations to the public regarding the energy use or efficiency of 
such equipment. (42 U.S.C. 6314(d)) Similarly, DOE must use these test 
procedures to determine whether the equipment complies with standards 
adopted pursuant to EPCA.
    DOE must follow specific statutory criteria for prescribing new and 
amended standards for covered equipment. In the case of electric 
motors, the criteria set out in relevant subsections of 42 U.S.C. 6295 
apply to the setting of energy conservation standards for motors via 42 
U.S.C. 6316(a). As indicated above, new and amended standards 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 6316(a)) Furthermore, DOE may not adopt any standard 
that would not result in significant conservation of energy. (42 U.S.C. 
6295(o)(3) and 6316(a)) Moreover, DOE may not prescribe a standard: (1) 
For certain commercial and industrial equipment, including electric 
motors, if no test procedure has been established for the equipment, or 
(2) if DOE determines by rule that the new and amended standard is not 
technologically feasible or economically justified. (42 U.S.C. 
6295(o)(3)(A)-(B) and 6316(a)) In deciding whether a new and amended 
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) and 6316(a)) DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
greatest extent practicable, the following seven factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
equipment likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(a))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any new or amended standard that either increases the maximum allowable 
energy use or decreases the minimum required energy efficiency of a 
covered product or piece of equipment. (42 U.S.C. 6295(o)(1) and 
6316(a)) Also, the Secretary may not prescribe an amended or new 
standard if interested persons have established by a preponderance of 
the evidence that the standard is likely to result in the 
unavailability in the United States of any covered product- or 
equipment-type (or class) of performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as those generally available in the United 
States. (42 U.S.C. 6295(o)(4) and 6316(a))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing equipment complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 
6316(a))
    Additionally, 42 U.S.C. 6295(q)(1), as applied to covered equipment 
via 42 U.S.C. 6316(a), specifies requirements when promulgating a 
standard for a type or class of covered equipment that has two or more 
subcategories. DOE must specify a different standard level than that 
which applies generally to such type or class of equipment for any 
group of covered equipment that have the same function or intended use 
if DOE determines that equipment within such group: (A) Consumes a 
different kind of energy from that consumed by other covered equipment 
within such type (or class); or (B) has a capacity or other 
performance-related feature which other equipment within such type (or 
class) does not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6295(q)(1) and 6316(a)) In determining whether a 
performance-related feature justifies a different standard for a group 
of equipment, DOE must consider such factors as the utility to the 
consumer of such a feature and other factors DOE deems appropriate. Id. 
Any rule prescribing such a standard must include an explanation of the 
basis on which such higher or lower level was established. (42 U.S.C. 
6295(q)(2) and 6316(a))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c) and 6316(a)) DOE may, however, 
grant waivers of Federal preemption for particular State laws or 
regulations, in accordance with the procedures and other provisions set 
forth under 42 U.S.C. 6297(d)).

B. Background

1. Current Standards
    An electric motor is a device that converts electrical power into 
rotational mechanical power. The outside structure of the motor is 
called the frame, which houses a rotor (the spinning part of the motor) 
and the stator (the stationary part that creates a magnetic field to 
drive the rotor). Although many different technologies exist, DOE's 
rulemaking is concerned with squirrel-cage induction motors, which 
represent the majority of electric motor energy use. In squirrel-cage 
induction motors, the stator drives the rotor by inducing an electric 
current in the squirrel-cage, which then reacts with the rotating 
magnetic field to propel the rotor in the same way a person can repel 
one handheld magnet with another. The squirrel-cage used in the rotor 
of induction motors consists of longitudinal conductive bars (rotor 
bars) connected at both ends by rings (end rings) forming a cage-like 
shape. Among other design parameters, motors can

[[Page 30942]]

vary in horsepower, number of ``poles'' (which determines how quickly 
the motor rotates), and torque characteristics. Most motors have 
``open'' frames that allow cooling airflow through the motor body, 
though some have enclosed frames that offer added protection from 
foreign substances and bodies. DOE regulates various motor types from 
between 1 and 500 horsepower, with 2, 4, 6, and 8 poles, and with both 
open and enclosed frames.
    EPACT 1992 amended EPCA by establishing energy conservation 
standards and test procedures for certain commercial and industrial 
electric motors manufactured either alone or as a component of another 
piece of equipment on or after October 24, 1997. Section 313 of EISA 
2007 amended EPCA by: (1) Striking the definition of ``electric motor'' 
provided under EPACT 1992, (2) setting forth definitions for ``general 
purpose electric motor (subtype I)'' and ``general purpose electric 
motor (subtype II),'' and (3) prescribing energy conservation standards 
for ``general purpose electric motors (subtype I),'' ``general purpose 
electric motors (subtype II),'' ``fire pump electric motors,'' and 
``NEMA Design B general purpose electric motors'' with a power rating 
of more than 200 horsepower but not greater than 500 horsepower. (42 
U.S.C. 6311(13) and 6313(b)) The current standards for these motors 
(available at 10 CFR 431.25(a)-(e)), which are reproduced in the 
regulatory text at the end of this rulemaking, are divided into four 
tables that prescribe specific efficiency levels for each of those 
groups of motors.
2. History of Standards Rulemaking for Electric Motors
    On October 5, 1999, DOE published in the Federal Register, a final 
rule to codify the EPACT 1992 electric motor requirements. See 64 FR 
54114. After EISA 2007's enactment, DOE updated, among other things, 
the corresponding electric motor regulations at 10 CFR part 431 by 
incorporating the new definitions and energy conservation standards 
that the law established. See 74 FR 12058 (March 23, 2009). DOE 
subsequently updated its test procedures for electric motors and small 
electric motors, see 73 FR 78220 (December 22, 2008), and later 
finalized key provisions related to small electric motor testing. See 
74 FR 32059 (July 7, 2009). Further updates to the test procedures for 
electric motors and small electric motors followed when DOE issued a 
rule that primarily focused on updating various definitions and 
incorporations by reference related to the current test procedure. See 
77 FR 26608 (May 4, 2012). That rule defined the term ``electric 
motor'' to account for EISA 2007's removal of the previous statutory 
definition of ``electric motor''. DOE also clarified definitions 
related to those motors that EISA 2007 laid out as part of EPCA's 
statutory framework, including motor types that DOE had not previously 
regulated. See generally, id. at 26613-26619. DOE also published a new 
test procedure on December 13, 2013, that further refined various 
electric motor definitions and added certain definitions and test 
procedure preparatory steps to address a wider variety of electric 
motor types than are currently regulated, including those electric 
motors that are largely considered to be special-or definite-purpose 
motors. 78 FR 75961.
    DOE received numerous comments from interested parties who provided 
significant input to DOE in response to DOE's framework document and 
preliminary analysis for this rulemaking. See 75 FR 59657 (September 
28, 2010) (framework document notice of availability) and 77 FR 43015 
(July 23, 2012) (preliminary analysis notice of availability). All such 
comments were addressed in the December 6, 2013, notice of proposed 
rulemaking (standards NOPR). 78 FR 73589 During the framework document 
comment period, several interested parties urged DOE to consider 
including additional motor types currently without energy conservation 
standards in DOE's analyses and establishing standards for such motor 
types. In the commenters' view, this approach would more effectively 
increase energy savings than setting more stringent standards for 
currently regulated electric motors. In response, DOE published a 
Request for Information (RFI) seeking public comments from interested 
parties regarding establishment of energy conservation standards for 
several types of definite and special purpose motors for which EISA 
2007 did not provide energy conservation standards. 76 FR 17577 (March 
30, 2011) DOE received comments responding to the RFI advocating that 
DOE regulate many of the electric motors discussed in the RFI, as well 
as many additional motor types.
    Then, on August 15, 2012, a group of interested parties (the 
``Motor Coalition'' \13\) submitted the ``Joint Petition to Adopt Joint 
Stakeholder Proposal As it Relates to the Rulemaking on Energy 
Conservation Standards for Electric Motors'' (the ``Petition'') to DOE 
asking the agency to adopt a consensus stakeholder proposal that would 
amend the energy conservation standards for electric motors.\14\ The 
Motor Coalition's proposal advocated expanding the scope of coverage to 
a broader range of motors than what DOE currently regulates and it 
recommended that energy conservation standards for all covered electric 
motors be set at levels that are largely equivalent to what DOE adopts 
in today's notice (i.e., efficiency levels in NEMA MG 1-2011 Tables 12-
12).\15\ (Motor Coalition, No. 35 at pp. 1-3) Several interested 
parties submitted comments supporting the Petition, including: U.S. 
Senators Lisa Murkowski and Jeff Bingaman, BBF and Associates, the Air 
Movement and Control Association International, Inc., the Hydraulic 
Institute, the Arkansas Economic Development and Commission--Energy 
Office, and the Power Transmission Distributors Association.
---------------------------------------------------------------------------

    \13\ The members of the Motor Coalition include: National 
Electrical Manufacturers Association, American Council for an 
Energy[hyphen]Efficient Economy, Appliance Standards Awareness 
Project, Alliance to Save Energy, Earthjustice, Natural Resources 
Defense Council, Northwest Energy Efficiency Alliance, Northeast 
Energy Efficiency Partnerships, and Northwest Power and Conservation 
Council.
    \14\ The Petition is available at: http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0027-0035.
    \15\ DOE's final rule differs from the Motor Coalition's 
proposal in that DOE's rule covers all types of brake electric 
motors and does not set separate, lower standards for U-frame motors 
and does not cover open, special- and definite-purpose 56-frame 
motors.
---------------------------------------------------------------------------

3. Process for Setting Energy Conservation Standards
    Section 325(o) of EPCA (as applied to covered equipment via 42 
U.S.C. 6316(a)), provides criteria for prescribing new or amended 
standards which are designed to achieve the maximum improvement in 
energy efficiency and for which the Secretary of Energy determines are 
technologically feasible and economically justified. Consequently, DOE 
must consider, to the greatest extent practicable, the seven factors 
listed at 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) (as applied to commercial 
equipment via 6316(a)). Other statutory requirements are set forth in 
42 U.S.C. 6295(o)(1)-(2)(A), (2)(B)(ii)-(iii), and (3)-(4). These 
criteria apply to the setting of standards for electric motors through 
42 U.S.C. 6316(a).
    The Motor Coalition expressed concern that much of the relevant 
information regarding electric motors spans various rulemaking 
documents. It requested that DOE consolidate all documents related to 
electric motors at one place, which can serve as a quick and easy 
reference for any consumer or

[[Page 30943]]

manufacturer in the U.S or outside the U.S. (Motor Coalition, Pub. Mtg. 
Tr., No. 87 at p. 20-21) Baldor expressed similar concerns and 
suggested that DOE clearly state in the Code of Federal Regulations 
(CFR) whatever information manufacturers need to comply with standards. 
(Baldor, No. 100 at p. 2) NEMA commented that the notice needs to be 
clearer and unambiguous so that it is easier for anyone (such as 
offshore suppliers) to follow it. It added that the final rule should 
include all required information. (NEMA, Pub. Mtg. Tr., No. 87 at p. 
46-47)
    First, DOE notes that its regulatory requirements are incorporated 
into the CFR. The regulations laid out in the CFR comprise the official 
set of requirements that a regulated entity must follow. While any 
member of the public (including manufacturers) may seek guidance from 
DOE, the requirements laid out in the CFR provide the regulatory 
framework that manufacturers must follow and apply when determining 
which (if any) requirements a given motor must meet. DOE may issue 
related guidance documents, if needed, which are available on its Web 
site at http://www1.eere.energy.gov/guidance/default.aspx?pid=2&spid=1. 
Finally, it is worth noting that the division of regulations in 10 CFR 
431.25(a)-(f) (for currently regulated electric motors) and 10 CFR 
431.25(g)-(l) (for newly regulated electric motors) was developed as a 
mechanism to demonstrate the upcoming change in standards without 
creating confusion about existing standards. At some point in the 
future after the new standards being adopted in this final rule have 
been in effect for some time, DOE anticipates removing the standards 
currently at 10 CFR 431.25(a)-(f), as DOE has done in the past.

III. General Discussion

    DOE developed today's rule after considering input, including 
verbal and written comments, data, and information from interested 
parties that represent a variety of interests. All commenters, along 
with their corresponding abbreviations and affiliations, are listed in 
Table III.1 below. The issues raised by these commenters are addressed 
in the discussions that follow.

                   Table III.1--Summary of Commenters
------------------------------------------------------------------------
   Company or organization           Abbreviation          Affiliation
------------------------------------------------------------------------
Air Movement and Control       AMCAI...................  Trade
 Association International,                               Association.
 Inc..
Alliance to Save Energy......  ASE.....................  Energy
                                                          Efficiency
                                                          Advocates.
American Council for an        ACEEE...................  Energy
 Energy-Efficient Economy.                                Efficiency
                                                          Advocates.
American Forest & Paper        AF&PA...................  Trade
 Association.                                             Association.
American Fuel & Petrochemical  AFPM....................  Trade
 Manufacturers.                                           Association.
Appliance Standards Awareness  ASAP....................  Energy
 Project.                                                 Efficiency
                                                          Advocates.
Baldor Electric Co...........  Baldor..................  Manufacturers.
BBF & Associates.............  BBF.....................  Representative
                                                          for Trade
                                                          Association.
California Energy Commission.  CEC.....................  State
                                                          Government
                                                          Agency.
California Investor Owned      CA IOUs.................  Utilities.
 Utilities.
Cato Institute...............  Cato....................  Public Interest
                                                          Group.
China WTO/TBT National         China WTO/TBT...........  Chinese
 Notification & Enquiry                                   Government
 Center.                                                  Agency.
Copper Development             CDA.....................  Trade
 Association.                                             Association.
Earthjustice.................  Earthjustice............  Energy
                                                          Efficiency
                                                          Advocates.
Edison Electric Institute....  EEI.....................  Association of
                                                          U.S. investor-
                                                          owned electric
                                                          companies.
Electric Apparatus Service     EASA....................  Trade
 Association.                                             Association.
European Committee of          CEMEP...................  Trade
 Manufacturers of Electrical                              Association.
 Machines and Power
 Electronics.
Flolo Corporation............  Flolo...................  Electromechanic
                                                          al Repairer.
Greg Gerritsen...............  Gerritsen...............  Individual.
Industrial Energy Consumers    IECA....................  Trade
 of America.                                              Association.
Motor Coalition*.............  MC......................  Energy
                                                          Efficiency
                                                          Advocates,
                                                          Trade
                                                          Associations,
                                                          Manufacturers,
                                                          Utilities.
National Electrical            NEMA....................  Trade
 Manufacturers Association.                               Association.
Natural Resources Defense      NRDC....................  Energy
 Council.                                                 Efficiency
                                                          Advocates.
Nidec Corporation............  Nidec...................  Manufacturer.
NORD Gear Corporation........  NORD Gear...............  Manufacturer.
Northwest Energy Efficiency    NEEA....................  Energy
 Alliance.                                                Efficiency
                                                          Advocates.
Northeast Energy Efficiency    NEEP....................  Energy
 Partnerships.                                            Efficiency
                                                          Advocates.
Northwest Power &              NPCC....................  Utilities.
 Conservation Council.
Oakland University...........  OU......................  Academic
                                                          Institution.
PlasticMetal.................  PlasticMetal............  Non-motor
                                                          Manufacturer.
Regal Beloit.................  Regal Beloit............  Manufacturer.
Scott Mohs...................  Scott...................  Individual.
SEW-Eurodrive, Inc...........  SEWE....................  Manufacturer.
Siemens......................  Siemens.................  Manufacturer.
Southern California Edison...  SCE.....................  Utility.
UL LLC.......................  UL......................  Testing
                                                          Laboratory.
University of Michigan.......  UMI.....................  Academic
                                                          Institution.
WEG Electric Corporation.....  WEG.....................  Manufacturer.
------------------------------------------------------------------------
* The members of the Motor Coalition include: National Electrical
  Manufacturers Association (NEMA), American Council for an
  Energy[hyphen]Efficient Economy (ACEEE), Appliance Standards Awareness
  Project (ASAP), Alliance to Save Energy (ASE), Earthjustice, Natural
  Resources Defense Council (NRDC), Northwest Energy Efficiency Alliance
  (NEEA), Northeast Energy Efficiency Partnerships (NEEP), and Northwest
  Power and Conservation Council (NPCC).


[[Page 30944]]

A. Compliance Date

    During the NOPR public meeting and in written comments, many 
interested parties, including the Motor Coalition, requested that DOE 
provide at least two years for compliance from the date of publication 
of the final rule. (Motor Coalition, Pub. Mtg. Tr., No. 87 at pp. 21-
22; NEMA, Pub. Mtg. Tr., No. 87 at p. 29; CA IOUs, Pub. Mtg. Tr., No. 
87 at p. 31; ASAP, Pub. Mtg. Tr., No. 87 at p. 32; CEMEP, No. 89 at p. 
2; Joint Advocates, \16\ No. 97 at p. 3; NEMA, No. 93 at p. 7; CA IOUs, 
No. 99 at p. 2; Nidec, No. 98 at pp. 2-3; SCE, No. 101 at p. 2)
---------------------------------------------------------------------------

    \16\ For the purposes of this document, ``Joint Advocates'' is a 
term used to describe NPCC, NEEA, ACEEE, ASAP, Earthjustice, ASE, 
NRDC, and NEEP, who commented jointly.
---------------------------------------------------------------------------

    DOE received other comments on the proposed compliance date for the 
newly covered equipment requesting that DOE provide more than two years 
after publication of the final rule for newly covered motors to comply 
with today's standards because such motors may require testing and/or 
modification of original equipment manufacturer (OEM) equipment within 
which these motors are used. (NEMA, No. 93 at p. 7; NEMA, Pub. Mtg. 
Tr., No. 87 at p. 30-31) Regal Beloit commented that manufacturers of 
these newly covered motors should be given 48 months for compliance, 
whereas EEI argued for a three-year lead time for such motors. (Regal 
Beloit, Pub. Mtg. Tr., No. 87 at pp. 34-35; EEI, Pub. Mtg. Tr., No. 87 
at pp. 24-25, 33) EEI also noted that many manufacturers should be fine 
with a two-year compliance lead time for already-covered equipment 
since they anticipated the change in regulatory requirements coming 
after EISA 2007. (EEI, Pub. Mtg. Tr., No. 87 at pp. 24-25, 33) DOE 
notes that NEMA, as part of the Motor Coalition, had commented earlier 
in the Petition that a two-year compliance lead time would be 
sufficient for all motors covered by today's rule and this stance was 
reiterated by the Motor Coalition representative at the NOPR public 
meeting and NEMA in their NOPR comments. (Motor Coalition, Pub. Mtg. 
Tr., No. 87 at pp. 21-22; Motor Coalition, No. 35 at p. 9; NEMA, No. 93 
at p. 7)
    Regarding the compliance date that would apply to the requirements 
of today's rule, the energy conservation standards established under 
EISA 2007 went into effect after the three-year period beginning on the 
date of enactment of EISA 2007. Under 42 U.S.C. Sec.  6313(b)(4)(B), 
EPCA directs the Secretary of Energy to publish a final rule amending 
such standards and to apply the rule to electric motors manufactured 
five years after the effective date EISA 2007. DOE is relying on the 
Congressionally established two-year spread between the effective date 
of the latest amendments to electric motor energy conservation 
standards and the date by which DOE must amend such standards to arrive 
at the two-year lead-time for manufacturers to comply with today's rule 
after its date of issuance. See 42 U.S.C. 6313(b).

B. Test Procedure

    On June 26, 2013, DOE published a notice that proposed to 
incorporate definitions for certain motor types not currently subject 
to energy conservation standards (78 FR 38456). The notice also 
proposed to clarify several definitions for motor types currently 
regulated by energy conservation standards and add some necessary steps 
to facilitate the testing of certain motor types that DOE does not 
currently require to meet standards. During the preliminary analysis 
stage, DOE received comments concerning definitions and test procedure 
set-up steps suggested for testing motors under an expanded scope 
approach. DOE addressed the comments as part of the test procedure 
NOPR. See 78 FR 38456.
    On December 13, 2013, DOE published a test procedure final rule 
(2013 test procedure) that incorporated comments from the test 
procedure NOPR and added and clarified both definitions and testing 
instructions for a variety of electric motors that DOE was considering 
for regulation under this standards rulemaking. 78 FR 75961. The test 
procedure changes published in the 2013 final test procedure allow DOE 
to require testing and compliance to meet the energy conservation 
standards established today.
    Commenting on DOE's recent round of electric motor rulemakings, 
Baldor raised concerns that developing the standards rulemaking and 
test procedures rulemaking in parallel has caused inconsistencies that 
need to be resolved. For example, the 2013 test procedure used the term 
``brake electric motor'' to refer jointly to what the standards NOPR 
published earlier had called ``integral'' and ``non-integral'' brake 
electric motors. Baldor suggested that definitions for NEMA Design A 
and B motors in the 2013 test procedure should refer to nine 
characteristics for covered equipment that are laid out in the NOPR. 
(Baldor, No. 100 at p. 7)
    Inconsistencies, if any, are resolved in today's rule. DOE 
developed the nine criteria in 10 CFR 431.25(g) below to characterize 
all of the newly covered and currently covered motor types. Therefore, 
adding these characteristics to the definitions for motor types is 
unnecessary. Moreover, as described earlier, the regulatory structure 
proposed by DOE and adopted in this rule preserves the existing 
standards and structure for currently regulated motors while providing 
a new section for new standards for motors being regulated for the 
first time and amended standards for currently regulated motors.
    CEC recommended that DOE should add definitions of continuous duty 
and duty type S1 (IEC) in 10 CFR 431.12. It also recommended that DOE 
revise the current definitions of NEMA Design A, B, and C motors to 
update the reference from NEMA MG 1-2009 to the revised document ANSI/
NEMA MG 1-2011. (CEC, No. 96 at p. 3)
    DOE understands that ``continuous'' and ``S1'' are terms well 
understood by the motor industry, and DOE has therefore not established 
definitions for these terms. DOE clarifies in this rule that these 
terms are used to designate a motor that can operate indefinitely in 
rated conditions and reaches thermal equilibrium. This stands in 
contrast to motors that may be rated for intermittent operation or with 
specific loading, braking, or starting restrictions.
    With respect to the MG 1 publication version, DOE notes that the 
terms mentioned by CEC are identical in both versions of MG 1. DOE, 
therefore, finds there is no reason to amend the reference.
1. Vertical Electric Motors
    NEMA and Nidec both suggested several modifications in the test 
procedure for vertical electric motors and expressed concern that, 
without these changes, it will be difficult for manufacturers to test 
vertical electric motors correctly for compliance purposes. (NEMA, No. 
93 at p. 29; Nidec, No. 98 at p. 9-10)
    DOE recognizes the desire for clarification in the 2013 test 
procedure for vertical electric motors, but notes that the rule has now 
gone into effect and the changes suggested by commenters are beyond the 
scope of today's energy conservation standard. Based on stakeholder 
concerns, however, DOE will evaluate whether further clarification on 
the testing of vertical electric motors is necessary.

C. Current Equipment Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered equipment into equipment classes by the type of energy

[[Page 30945]]

used or by capacity or other performance-related features that would 
justify a different standard. In making a determination whether a 
performance-related feature justifies a different standard, DOE must 
consider factors such as the utility to the consumer of the feature and 
other factors DOE determines are appropriate. (42 U.S.C. 6295(q) and 
6316(a))
    Existing energy conservation standards cover electric motors that 
fall into four categories based on design features of the motor. These 
four categories are: General purpose electric motors (subtype I), 
general purpose electric motors (subtype II), fire pump electric 
motors, and NEMA Design B motors (with a horsepower rating from 201 
through 500). Definitions for each of these terms can be found at 10 
CFR 431.12.

D. Updated Equipment Classes and Scope of Coverage

    DOE has the authority to set energy conservation standards for a 
wider range of electric motors than those classified as general purpose 
electric motors (e.g., definite or special purpose motors). EPACT 1992 
first provided DOE with the statutory authority to regulate ``electric 
motors,'' which were defined as including certain ``general purpose'' 
motors. (42 U.S.C. 6311(13)(A) (1992)) In addition to defining this 
term, Congress prescribed specific energy conservation standards for 
electric motors (i.e., general purpose electric motors (subtype I). 
EPACT 1992 also defined the terms ``definite purpose motors'' and 
``special purpose motor''. (42 U.S.C. 6311(13)(C) and (D) (1992)) EPACT 
1992 explicitly excluded definite purpose and special purpose motors 
from the prescribed standards. (42 U.S.C. 6313(b)(1) (1992)) However, 
EISA 2007 struck the narrow EPACT 1992 definition of ``electric 
motor''. (42 U.S.C. 6311(13)) With the removal of this definition, the 
term ``electric motor'' became broader in scope. As a result of these 
changes, both definite and special purpose motors fell under the broad 
heading of ``electric motors'' that previously only applied to 
``general purpose'' motors. While EISA 2007 prescribed standards for 
general purpose motors, it did not apply those standards to definite or 
special purpose motors. (42 U.S.C. 6313(b) (2012))
    Consistent with EISA 2007's reworking of the ``electric motor'' 
definition, the 2012 test procedure broadly defined the term ``electric 
motor''. 77 FR 26608 (codified at 10 CFR 431.12). In view of the 
changes introduced by EISA 2007 and the absence of energy conservation 
standards for special purpose and definite purpose motors, it is DOE's 
view that both of these motors are categories of ``electric motors'' 
covered under EPCA, as currently amended. Accordingly, DOE added the 
term ``electric'' to the definitions of ``special purpose motor'' and 
``definite purpose motor'' in the 2013 test procedure. See 78 FR 75994. 
Today's rule amends and establishes standards for a variety of electric 
motors, including certain definite purpose and special purpose motors. 
DOE is setting energy conservation standards for any electric motor 
exhibiting all of the following nine characteristics:
    (1) Is a single-speed, induction motor,
    (2) Is rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC),
    (3) Contains a squirrel-cage (MG 1) or cage (IEC) rotor,
    (4) Operates on polyphase alternating current 60-hertz sinusoidal 
line power,
    (5) Is rated 600 volts or less,
    (6) Has a 2-, 4-, 6-, or 8-pole configuration,
    (7) Is built in a three-digit or four-digit NEMA frame size (or IEC 
metric equivalent), including those designs between two consecutive 
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA 
frame size (or IEC metric equivalent),
    (8) Produces at least 1 horsepower (0.746 kW) but not greater than 
500 horsepower (373 kW), and
    (9) Meets all of the performance requirements of a NEMA Design A, 
B, or C motor or of an IEC Design N or H motor.
    However, the updated standards specifically do not apply to the 
following equipment:
     Air-over electric motors;
     Component sets of an electric motor;
     Liquid-cooled electric motors;
     Submersible electric motors; and
     Inverter-only electric motors.
    To facilitate the potential application of energy conservation 
standards to special and definite purpose motors, DOE defined certain 
motors and provided certain preparatory test procedure steps in the 
2013 test procedure. See 78 FR 75961. DOE chose not to establish 
standards for the component sets of an electric motor, liquid-cooled, 
submersible, and inverter-only electric motors listed above because of 
the current absence of a reliable and repeatable method to test them 
for efficiency. If a test procedure becomes available, DOE may consider 
setting standards for these motors at that time. For air-over electric 
motors, during the course of the test procedure rulemaking, DOE learned 
about a possible test procedure for such motors but DOE does not 
currently have enough information to support the establishment of a 
test method. 78 FR 75975.
    Finally, as discussed in the NOPR, although DOE believes that EPCA, 
as amended through EISA 2007, provides sufficient statutory authority 
to regulate a wider variety of electric motors (including those 
commonly referred to as special purpose or definite purpose motors) 
than those already regulated as ``electric motors,'' DOE notes that 
section 10 of the American Energy Manufacturing Technical Corrections 
Act (``AEMTCA''), Public Law 112-210 (December 18, 2012), amended DOE's 
authority to regulate commercial and industrial equipment by including 
``other motors,'' in addition to ``electric motors''. (42 U.S.C. 
6311(2)(B)(xiii).) Therefore, even if special and definite purpose 
motors were not ``electric motors,'' special and definite purpose 
motors would be considered as ``other motors'' that EPCA already treats 
as covered industrial equipment.\17\
---------------------------------------------------------------------------

    \17\ EPCA specifies the types of industrial equipment that can 
be classified as covered in addition to the equipment enumerated in 
42 U.S.C. 6311(1). This equipment includes ``other motors'' (to be 
codified at 42 U.S.C. 6311(2)(B)). Industrial equipment must also, 
without regard to whether such equipment is in fact distributed in 
commerce for industrial or commercial use, be of a type that: (1) In 
operation consumes, or is designed to consume, energy in operation; 
(2) to any significant extent, is distributed in commerce for 
industrial or commercial use; and (3) is not a covered product as 
defined in 42 U.S.C. 6291(a)(2) of EPCA, other than a component of a 
covered product with respect to which there is in effect a 
determination under 42 U.S.C. 6312(c). (42 U.S.C. 6311 (2)(A).) Data 
from the 2002 United States Industrial Electric Motor Systems Market 
Opportunities Assessment estimated total energy use from industrial 
motor systems to be 747 billion kWh. Based on the expansion of 
industrial activity, it is likely that current annual electric motor 
energy use is higher than this figure. Electric motors are 
distributed in commerce for both the industrial and commercial 
sectors. According to data provided by the Motor Coalition, the 
number of electric motors manufactured in, or imported into, the 
United States is over five million electric motors annually, 
including special and definite purpose motors. Finally, special and 
definite purpose motors are not currently regulated under Title 10 
of the Code of Federal Regulations, part 430 (10 CFR Part 430).
    To classify equipment as covered commercial or industrial 
equipment, the Secretary must also determine that classifying the 
equipment as covered equipment is necessary for the purposes of Part 
A-1 of EPCA. The purpose of Part A-1 is to improve the efficiency of 
electric motors, pumps and certain other industrial equipment to 
conserve the energy resources of the nation. (42 U.S.C. 6312(a)-(b)) 
In today's rule, DOE has determined that the regulation of special 
and definite purpose motors is necessary to carry out the purposes 
of part A-1 of EPCA because regulating these motors will promote the 
conservation of energy supplies. Efficiency standards that may 
result from coverage would help to capture some portion of the 
potential for improving the efficiency of special and definite 
purpose motors.

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

[[Page 30946]]

    In response to the NOPR, the Motor Coalition recognized that DOE's 
proposed broadening of the scope of motors that would be covered at TSL 
2 efficiency levels is consistent with the Petition. (Motor Coalition, 
Pub. Mtg. Tr., No. 87 at pp. 18-19) NEMA agreed with DOE's proposed 
expansion of scope of coverage, noting that it is largely consistent 
with the Petition. (NEMA, No. 93 at p. 3) Nidec commented that DOE's 
proposal presents a sufficiently broad scope of coverage and that no 
further adjustment is needed. (Nidec, No. 98 at p. 5) The CA IOUs 
supported DOE in adopting TSL 2 for most equipment class groups. (CA 
IOUs, No. 99 at pp. 1-2) The Joint Advocates supported the proposed 
standards, noting that the standards will save 7 quads of energy over 
thirty years of equipment sales and will significantly contribute to 
the President's Climate Action Plan goal for new standards. It urged 
DOE to complete the final rule by May 2014 as previously committed to 
the Attorneys General of several states. (Joint Advocates, No. 97 at p. 
2) The European Committee of Manufacturers of Electrical Machines and 
Power Electronics (CEMEP) expressed support for increasing certain 
motor efficiency standards to TSL 2, or NEMA Table 12-12. CEMEP noted 
that DOE is appropriately considering impacts on and perspectives of 
OEMs and end users, as well as global harmonization issues. (CEMEP, No. 
89 at p. 2) Gerritsen supported the proposed standards, noting that is 
the standards are essential to curb carbon dioxide emissions. 
(Gerritsen, No. 81 at p. 1) Southern California Edison commented that 
they support DOE in adopting TSL 2, i.e., NEMA Premium[supreg]\18\ 
levels, noting that these will lead to ``the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified'' as well as significant energy savings. In view of 
significant energy savings and general stakeholder support, SCE 
requested that DOE publish final rule soon. (SCE, No. 101 at pp. 1-2)
---------------------------------------------------------------------------

    \18\ DOE notes that ``NEMA Premium'' is a registered trademark 
of NEMA. NEMA has removed the term ``NEMA'' from the title of MG 1-
2011, Table 12-12. Unless indicated otherwise, in the remainder of 
this document, any reference to ``premium'' standards should be 
considered a reference to MG 1-2011, Table 12-12.
---------------------------------------------------------------------------

    The Copper Development Association (CDA) supported DOE's current 
rulemaking and the inclusion of additional motor categories and 
requiring motors that operate at 201 hp through 500 hp to meet premium 
standards. CDA suggested that DOE investigate covering motors over 500 
hp and currently uncovered motors 1 hp through 500 hp for future 
rulemaking. CDA noted that motors over 500 hp consume 27 percent of all 
U.S. energy consumed by motors in operation. Noting that some 
manufacturers even currently offer motors significantly above premium 
efficiency levels, CDA suggested that DOE investigate the development 
of a new even higher energy efficiency category--``super premium'' 
above the current premium efficiencies. (CDA, No. 90 at pp. 1-2)
    DOE may consider expanding the scope of its regulations to large 
motors, which carry different technologies and usage patterns, in 
future updates to the rule. At that time, DOE would consider any 
efficiency levels beyond premium efficiency in place and evaluate them 
for standards.

E. Technological Feasibility

1. General
    EPCA requires that any new or amended energy conservation standard 
that DOE prescribes shall be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is technologically 
feasible. (42 U.S.C. 6295(o)(2)(A) and 6316(a)). In each standards 
rulemaking, DOE conducts a screening analysis based on information 
gathered on all current technology options and prototype designs that 
could improve the efficiency of the products or equipment that are the 
subject of the rulemaking. As the first step in such an analysis, DOE 
develops a list of technology options for consideration in consultation 
with manufacturers, design engineers, and other interested parties. DOE 
then determines which of those means for improving efficiency are 
technologically feasible.
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in view of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on equipment utility or availability; and (3) adverse impacts on health 
or safety. Section IV.B of this rule discusses the results of the 
screening analysis for electric motors, particularly the designs DOE 
considered, those it screened out, and those that are the basis for the 
trial standard levels (TSLs) in this rulemaking. For further details on 
the screening analysis for this rulemaking, see chapter 4 of the final 
TSD.
2. Maximum Technologically Feasible Levels
    When DOE adopts a new or amended standard for a type or class of 
covered equipment, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such product. (42 U.S.C. 6295(p)(1)) This requirement also 
applies to DOE proposals to amend the standards for electric motors. 
(42 U.S.C. 6316(a)) Accordingly, in its engineering analysis, DOE 
determined the maximum technologically feasible (``max-tech'') 
improvements in energy efficiency for electric motors, using the design 
parameters for the most efficient motors available on the market or in 
working prototypes. (See chapter 5 of the final TSD.) The max-tech 
levels that DOE determined for this rulemaking are described in section 
IV.C.3 of this final rule.
    In response to the NOPR, CEC claimed that DOE has not provided the 
technological feasibility and economic justification as required by 
statute for updating the existing energy consumption standards for 
general purpose electric motors (subtype I or II) that are not NEMA 
Design A, B, or C, or IEC Design N or H, and for polyphase motors rated 
between 1 and 250 hp (2 poles) and motors between 1 and 350 hp (8 
poles). It further stated that DOE did not provide market and 
technology analysis for motors greater than 500 hp, motors with more 
than 8 poles and shaded pole motors. (CEC, No. 96 at pp. 1, 3)
    DOE acknowledges that the motors in the scope of today's rulemaking 
are not the only possible motors for which standards may produce 
economically justified energy savings. As detailed above, DOE's 
electric motor regulations came about due to statutory requirements 
that initially included a narrow scope of electric motors that DOE 
could regulate, but that has become increasingly broad with the changes 
brought about by EISA 2007 and AEMTCA. As that universe of electric 
motors that DOE is authorized to regulate expands, DOE considers other 
motor types that it may regulate under the statute and considers what 
types of electric motors use large amounts of energy, are produced in 
large volume, and have opportunities for efficiency gains. DOE may 
consider future regulation of some of the motor types which CEC 
mentions and welcomes data that illustrates savings potential of 
currently unregulated technologies.
    The University of Michigan and Oakland University (UMI & OU)

[[Page 30947]]

suggested that before finalizing the current rulemaking, DOE should 
conduct a study to update National Electrical Code Table 430.250, which 
is used to design circuits of motors covered by current regulation. UMI 
& OU suggested that before finalizing the current rulemaking, a study 
should be conducted to determine the optional method of establishing 
the nameplate ratings of combination HVAC equipment rated according to 
running load amperes. (UMI & OU, No. 92 at pp. 1-2)
    DOE understands that NEC Table 430.250, mentioned by UMI & OU, 
helps engineers specify wiring in building by providing current as a 
function of motor power, voltage, and power factor. DOE understands 
that more efficient motors may cause application engineers to 
differently design building circuits which contain electric motors. If 
such changes brought by a technology have adverse impacts to safety or 
equipment utility, DOE may opt to remove that technology from 
consideration in its screening analysis. Presently, DOE has not learned 
of any such expected impacts resulting from the standard levels 
selected in today's rule. Moreover, the National Electrical Code is 
developed by the National Fire Protection Association (NFPA) and DOE 
has no authority to change this code.

F. Energy Savings

1. Determination of Savings
    Section 325(o) of EPCA also provides that any new or amended energy 
conservation standard that DOE prescribes shall be designed to achieve 
the maximum improvement in energy efficiency that DOE determines is 
economically justified. (42 U.S.C. 6295(o)(2)(A)-(B) and 6316(a)) In 
addition, in determining whether such standard is technologically 
feasible and economically justified, DOE may not prescribe standards 
for certain types or classes of electric motors if such standards would 
not result in significant energy savings. (42 U.S.C. 6295(o)(3)(B) and 
6316(a)) For each TSL, DOE projected energy savings from the motors 
that would be covered under this rulemaking and that would be purchased 
in the 30-year period that begins in the year of compliance with the 
new and amended standards (2016-2045). The savings are measured over 
the entire lifetime of equipment purchased in the 30-year period.\19\ 
DOE quantified the energy savings attributable to each TSL 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 or amended mandatory efficiency standards, and 
considers market forces and policies that affect demand for more 
efficient equipment.
---------------------------------------------------------------------------

    \19\ In the past DOE, presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of equipment 
purchased in the 30-year period. DOE has chosen to modify its 
presentation of national energy savings to be consistent with the 
approach used for its national economic analysis.
---------------------------------------------------------------------------

    DOE used its national impact analysis (NIA) spreadsheet model to 
estimate energy savings from new and amended standards for electric 
motors subject to this rulemaking. The NIA spreadsheet model (described 
in section IV.H of this rule) calculates energy savings in site energy, 
which is the energy directly consumed by motors at the locations where 
they are used. For electricity, DOE reports national energy savings in 
terms of the savings in the energy that is used to generate and 
transmit the site electricity, which is referred to as primary energy. 
To convert electricity in kWh to primary energy units, on-site 
electricity consumption is multiplied by the site-to-power plant energy 
use factor (see TSD chapter 10). The site-to-power plant energy use 
factor is defined as the ratio of the marginal change in total primary 
energy consumption by the electric power sector (in quadrillion Btu's) 
divided by the change in total electricity generation due to a 
standard. DOE derives site-to-power plant energy use factors from the 
model used to prepare the Energy Information Administration's (EIA) 
Annual Energy Outlook (AEO).
    DOE also estimates full-fuel-cycle energy savings. 76 FR 51282 
(August 18, 2011), as amended at 77 FR 49701 (August 17, 2012). The 
full-fuel-cycle (FFC) metric 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. 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.\20\ The NAS report discusses that FFC was primarily 
intended for energy efficiency standards rulemakings where multiple 
fuels may be used by a particular product or piece of equipment. In the 
case of this rulemaking pertaining to electric motors, 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 the rulemakings is consistent with the recommendations, the 
methodology for estimating FFC does not project how fuel markets would 
respond to this particular standard 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 rulemaking. It is also important to 
note that inclusion of FFC savings does not affect DOE's choice of 
standards.
---------------------------------------------------------------------------

    \20\ ``Review of Site (Point-of-Use) and Full-Fuel-Cycle 
Measurement Approaches to DOE/EERE Building Appliance Energy-
Efficiency Standards,'' (Academy report) was completed in May 2009 
and included five recommendations. A copy of the study can be 
downloaded at: http://www.nap.edu/catalog.php?record_id=12670.
---------------------------------------------------------------------------

2. Significance of Savings
    As noted above, 42 U.S.C. 6295(o)(3)(B) (as applied to equipment 
via 6316(a)) prevents DOE from adopting a standard for a covered 
product unless such standard would result in ``significant'' energy 
savings. Although the term ``significant'' is not explicitly defined in 
EPCA, 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 this context to be 
savings that were not ``genuinely trivial''. DOE believes that the 
energy savings for all of the TSLs considered in this rulemaking 
(presented in section V.A) are nontrivial, and, therefore, DOE 
considers them ``significant'' within the meaning of section 325 of 
EPCA.

G. Economic Justification

1. Specific Criteria
    EPCA provides seven factors to be evaluated in determining whether 
a potential energy conservation standard is economically justified. (42 
U.S.C. 6295(o)(2)(B)(i) (as applied to equipment via 6316(a))) The 
following sections discuss how DOE has addressed each of those seven 
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a standard on manufacturers, DOE 
first uses an annual cash-flow approach to determine the quantitative 
impacts. This step includes both a short-term assessment--based on the 
cost and capital requirements during the period between when a 
regulation is issued and when entities must comply with the

[[Page 30948]]

regulation--and a long-term assessment over a 30-year period.\21\ The 
industry-wide impacts analyzed include industry net present value 
(INPV), which values the industry on the basis of expected future cash 
flows; cash flows by year; changes in revenue and income; and other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
---------------------------------------------------------------------------

    \21\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    For individual consumers, measures of economic impact include the 
changes in life-cycle cost (LCC) and payback period (PBP) associated 
with new or amended standards. These measures are discussed further in 
the following section. For consumers in the aggregate, DOE also 
calculates the national net present value of the economic impacts 
applicable to a particular rulemaking. DOE also evaluates the LCC 
impacts of potential standards on identifiable subgroups of consumers 
that may be affected disproportionately by a national standard.
b. Life-Cycle Costs
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered equipment compared 
to any increase in the price of the covered equipment that are likely 
to result from the imposition of the standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II) and 6316(a)) DOE conducts this comparison in its 
LCC and PBP analysis.
    The LCC is the sum of the purchase price of a piece of equipment 
(including its installation) and the operating expense (including 
energy, maintenance, and repair expenditures) discounted over the 
lifetime of the equipment. To account for uncertainty and variability 
in specific inputs, such as equipment lifetime and discount rate, DOE 
uses a distribution of values, with probabilities attached to each 
value. For its analysis, DOE assumes that consumers will purchase the 
covered equipment in the first year of compliance with amended 
standards.
    The LCC savings for the considered efficiency levels are calculated 
relative to a base case that reflects projected market trends in the 
absence of amended standards.
    DOE identifies the percentage of consumers estimated to receive LCC 
savings or experience an LCC increase, in addition to the average LCC 
savings associated with a particular standard level.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and 
6316(a)) As discussed in section IV.H, DOE uses the NIA spreadsheet to 
project national site energy savings.
d. Lessening of Utility or Performance of Products
    In establishing classes of equipment, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
standards that would not lessen the utility or performance of the 
considered equipment. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(a)) As 
noted earlier, the substance of this provision applies to the equipment 
at issue in today's rule as well. DOE has determined that the standards 
in today's notice will not reduce the utility or performance of the 
equipment under consideration in this rulemaking. Currently, many 
motors are already commonly being sold at the selected levels (i.e., 
``premium efficiency'' designation). In addition, the selected 
standards closely track the recommendations of NEMA, a trade 
association that represents electric motor manufacturers. DOE assumes 
that NEMA would not recommend efficiency levels that would harm 
electric motor performance or utility.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition that is likely to result from the imposition of a standard. 
(42 U.S.C. 6295(o)(2)(B)(i)(V) and 6316(a)) It also directs the 
Attorney General of the United States to determine the impact, if any, 
of any lessening of competition likely to result from a standard and to 
transmit such determination to the Secretary of Energy within 60 days 
of the publication of a proposed rule, together with an analysis of the 
nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and 
(B)(ii)) To assist the Attorney General in making a determination for 
electric motor standards, DOE provided the Department of Justice (DOJ) 
with copies of the NOPR and the TSD for review. DOE received no adverse 
comments from DOJ regarding the proposal.
f. Need for National Energy Conservation
    The energy savings from today's standards are likely to provide 
improvements to the security and reliability of the nation's energy 
system. Reductions in the demand for electricity also may result in 
reduced costs for maintaining the reliability of the nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the nation's needed power generation capacity.
    Today's standards also are likely to result in environmental 
benefits in the form of reduced emissions of air pollutants and 
greenhouse gases associated with energy production. DOE reports the 
emissions impacts from today's standards, and from each TSL it 
considered, in section V.B.4 of this rule. DOE also reports estimates 
of the economic value of emissions reductions resulting from the 
considered TSLs.
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) 
and 6316(a)) In developing this final rule, DOE has also considered the 
submission of the Petition, which DOE believes sets forth a statement 
by interested persons that are representative of relevant points of 
view (including representatives of manufacturers of covered equipment, 
and efficiency advocates) and contains recommendations with respect to 
an energy conservation standard. DOE has encouraged the submission of 
consensus agreements as a way to bring diverse interested parties 
together, to develop an independent and probative analysis useful in 
DOE standard setting, and to expedite the rulemaking process. DOE also 
believes that standard levels recommended in the Petition may increase 
the likelihood for regulatory compliance, while decreasing the risk of 
litigation.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the

[[Page 30949]]

consumer of a product or piece of equipment that meets the standard is 
less than three times the value of the first year's energy savings 
resulting from the standard, as calculated under the applicable DOE 
test procedure. DOE's LCC and PBP analyses generate values used to 
calculate the effect potential amended energy conservation standards 
would have on the payback period for consumers. These analyses include, 
but are not limited to, the 3-year payback period contemplated under 
the rebuttable-presumption test. In addition, DOE routinely conducts an 
economic analysis that considers the full range of impacts to 
consumers, manufacturers, the nation, and the environment, as required 
under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as 
the basis for DOE's evaluation of the economic justification for a 
potential standard level (thereby supporting or rebutting the results 
of any preliminary determination of economic justification). The 
rebuttable presumption payback calculation is discussed in section 
IV.F.12 of this final rule.

IV. Methodology and Discussion of Related Comments

    DOE used four spreadsheet tools to estimate the impact of today's 
standards. The first spreadsheet calculates LCCs and PBPs of potential 
new energy conservation standards. The second provides shipments 
forecasts and the third calculate national energy savings and net 
present value impacts of potential new energy conservation standards. 
The fourth tool helps assess manufacturer impacts, largely through use 
of the Government Regulatory Impact Model (GRIM).
    Additionally, DOE estimated the impacts of energy conservation 
standards for electric motors on utilities and the environment. DOE 
used a version of EIA's National Energy Modeling System (NEMS) for the 
utility and environmental analyses. The NEMS model simulates the energy 
sector of the U.S. economy. EIA uses NEMS to prepare its Annual Energy 
Outlook (AEO), a widely known energy forecast for the United States. 
The version of NEMS used for standards analysis is called NEMS-BT \22\ 
and is based on the AEO version with minor modifications.\23\
---------------------------------------------------------------------------

    \22\ BT stands for DOE's Building Technologies Program.
    \23\ The EIA allows the use of the name ``NEMS'' to describe 
only an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the 
model as used here. For more information on NEMS, refer to The 
National Energy Modeling System: An Overview, DOE/EIA-0581 (98) 
(February 1998), available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
---------------------------------------------------------------------------

A. Market and Technology Assessment

    For the market and technology assessment, DOE develops information 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, and market characteristics. This activity includes both 
quantitative and qualitative assessments, based primarily on publicly 
available information. The subjects addressed in the market and 
technology assessment for this rulemaking include scope of coverage, 
equipment classes, types of equipment sold and offered for sale, and 
technology options that could improve the energy efficiency of the 
equipment under examination. Chapter 3 of the TSD contains additional 
discussion of the market and technology assessment.
1. Current Scope of Electric Motors Energy Conservation Standards
    EISA 2007 amended EPCA to prescribe energy conservation standards 
for four categories of electric motors: General purpose electric motors 
(subtype I) (hereinafter, ``subtype I''), general purpose electric 
motors (subtype II) (hereinafter, ``subtype II''), fire pump electric 
motors, and NEMA Design B, general purpose electric motors that also 
meet the subtype I or subtype II definitions and are rated above 200 
horsepower through 500 horsepower. DOE's 2012 test procedure added 
clarity to the definitions for each of these motor categories, which 
are now codified at 10 CFR 431.12. 77 FR 26608.
    DOE understands that an IEC frame motor could be treated as either 
a subtype I or subtype II motor depending on its other characteristics. 
Having an IEC frame alone does not dictate whether a motor is a general 
purpose subtype I or subtype II motor; rather, other characteristics 
provided in the definitions of general purpose electric motor (subtype 
I or subtype II) at 10 CFR 431.12 determine whether an IEC motor should 
be considered subtype I or II. All of these elements flow directly from 
the statutory changes enacted by EISA 2007. Currently, electric motors 
are required to meet energy conservation standards as follows:

                      Table IV.1--Current Electric Motor Energy Conservation Standards \24\
----------------------------------------------------------------------------------------------------------------
        Electric motor category               Horsepower range            Energy conservation standard level
----------------------------------------------------------------------------------------------------------------
General Purpose Electric Motors          1 to 200 (inclusive)......  MG 1-2011 Table 12-12.
 (Subtype I).
General Purpose Electric Motors          1 to 200 (inclusive)......  MG 1-2011 Table 12-11.
 (Subtype II).
NEMA Design B and IEC Design N Motors..  201 to 500 (inclusive)....  MG 1-2011 Table 12-11.
Fire Pump Electric Motors..............  1 to 500 (inclusive)......  MG 1-2011 Table 12-11.
----------------------------------------------------------------------------------------------------------------

    In response to the NOPR, NEMA commented that the proposed standards 
do not resolve the confusion regarding IEC electric motors. NEMA 
explained that it is not clear whether an electric motor in an IEC 
frame size that meets the other criteria of a general purpose electric 
motor (subtype I) would be classified as equivalent to a T-frame, hence 
subtype I, or U-frame, hence subtype II. Therefore, NEMA suggested that 
IEC frame sizes be considered equivalent to NEMA T-frames. NEMA 
suggested that the pertinent portion of the definition of ``general 
purpose electric motor (subtype II)'' in 10 CFR 431.12 should be 
revised from ``(i) A U-Frame motor'' to read ``(i) Is built in 
accordance with NEMA U-frame dimensions as described in NEMA MG 1-1967 
(incorporated by reference, see Sec.  431.15), including a frame size 
that is between two consecutive NEMA frame sizes.'' (NEMA, No. 93 at 
pp. 3-5, 32)
---------------------------------------------------------------------------

    \24\ For the purposes of determining compliance, DOE assesses a 
motors horsepower rating according to the provisions of 10 CFR 
431.25(e).
---------------------------------------------------------------------------

    Changes to the applicability of the electric motor standards 
currently in effect are outside the scope of this rulemaking. 
Additionally, DOE notes that NEMA's proposed changes to the definition 
of ``general purpose electric motor (subtype II)'' reflect that it may 
have been looking at an older version of the definition rather than the 
current

[[Page 30950]]

definition found at 10 CFR 431.12. DOE notes that the current 
definition of ``general purpose electric motor (subtype II)'' already 
includes the language being suggested by NEMA.
2. Expanded Scope of Electric Motor Energy Conservation Standards
a. Summary
    As referenced above, on August 15, 2012, the Motor Coalition 
petitioned DOE to adopt the Coalition's consensus agreement, which, in 
part, formed the basis for today's rule. The Motor Coalition petitioned 
DOE to simplify coverage to address a broad array of electric motors 
with a few clearly identified exceptions. The Motor Coalition advocated 
this approach to simplify manufacturer compliance and to help 
facilitate DOE's enforcement efforts. The Petition highlighted 
potential energy savings that would result from expanding the scope of 
covered electric motors. (Motor Coalition, No. 35 at pp. 1-30)
    DOE is now requiring electric motor types beyond those currently 
covered to meet energy conservation standards. DOE's proposed expansion 
is similar to the approach recommended by the Motor Coalition in its 
Petition (Motor Coalition, No. 35 at pp. 1-3). DOE establishes energy 
conservation standards for electric motors that exhibit all of the 
characteristics listed in Table IV.2, with a limited number of 
exceptions, listed in Table IV.4.

 Table IV.2--Characteristics of Motors Regulated Under Expanded Scope of
                                Coverage
------------------------------------------------------------------------
                          Motor characteristic
-------------------------------------------------------------------------
Is a single-speed, induction motor,
Is rated for continuous duty (MG 1) operation or for duty type S1 (IEC),
Contains a squirrel-cage (MG 1) or cage (IEC) rotor,
Operates on polyphase alternating current 60-hertz sinusoidal power,
Is rated for 600 volts or less,
Is built with a 2-, 4-, 6-, or 8-pole configuration,
Is built in a three-digit or four-digit NEMA frame size (or IEC metric
 equivalent), including those designs between two consecutive NEMA frame
 sizes (or IEC metric equivalent), or an enclosed 56 NEMA frame size (or
 IEC metric equivalent),
Produces at least 1 horsepower (0.746 kW) but not greater than 500
 horsepower (373 kW) and
Meets all of the performance requirements of a NEMA Design A, B, or C
 motor or of an IEC Design N or H electric motor.
------------------------------------------------------------------------

    Table IV.3 lists the formerly unregulated electric motor types that 
will be covered by today's rule. Further details and definitions for 
the specific motor types can be found in DOE's 2013 test procedure. 78 
FR 75961.

 Table IV.3--Currently Unregulated Motor Types That Are Covered by This
                                  Rule
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Electric Motor Type
------------------------------------------------------------------------
NEMA Design A from 201 to 500        Electric motors with non-standard
 horsepower                           endshields or flanges.
Electric motors with moisture        Electric motors with non-standard
 resistant windings                   bases.
Electric motors with sealed          Electric motors with special
 windings                             shafts.
Partial electric motors              Vertical hollow-shaft electric
                                      motors.
Totally enclosed non-ventilated      Electric motors with sleeve
 (TENV) electric motors               bearings.
Immersible electric motors           Electric motors with thrust
                                      bearings.
Brake electric motors                Electric motors with encapsulated
                                      windings.
Electric motors with separately      ...................................
 powered blowers
------------------------------------------------------------------------

    However, the new standards specifically do not apply to the 
following equipment:

        Table IV.4--Equipment Specifically Excluded From Coverage
------------------------------------------------------------------------
                           Electric Motor Type
-------------------------------------------------------------------------
Air-over electric motors.
Component sets of an electric motor.
Liquid-cooled electric motors.
Submersible electric motors.
Inverter-only electric motors.
------------------------------------------------------------------------

    Additionally, DOE is clarifying the design, construction, and 
performance characteristics of covered electric motors. Specifically, 
DOE is clarifying that only motors rated from 1 to 500 horsepower 
(inclusive), or their IEC equivalents, would be covered by the 
standards established in today's rulemaking. Finally, with regard to 
IEC-frame motors, DOE's standards would not regulate IEC motors on the 
singular basis of frame size, but would regulate such motors if they 
meet all the criteria of Table IV.2. In other words, an IEC-frame motor 
that meets these nine criteria and does not fit within one of the five 
exceptions would have to meet today's final standards.
    In response to the NOPR, DOE received several comments on its scope 
criteria. CEMEP supported the nine characteristics to define electric 
motors, noting that using those criteria to define covered motors will 
lead to huge energy savings by covering millions of units. CEMEP 
believed that the nine characteristics definition can be applied by 
customs and other enforcement officers to improve overall enforcement 
activities. (CEMEP, No. 89 at p. 2).
    Nidec commented that DOE should bring more clarity to 
characteristic 8 (i.e., 1-500 hp as proposed as (g)(8)) by 
including kilowatt values corresponding to the given horsepower values 
(e.g., 500 horsepower (343 kilowatts), 1 horsepower (0.75 kilowatt). 
(Nidec, No. 98 at pp. 2, 7-8) DOE believes this is a helpful suggestion 
that comports with the inclusion of IEC motors in today's rulemaking 
and is incorporating the suggestion into today's rule.
    NEMA sought clarification regarding whether solid shaft medium and 
high thrust motors are included in the scope of coverage. (NEMA, No. 93 
at p. 27) During the NOPR public meeting, CEC and EEI requested 
clarification on whether pool pump motors are covered under new 
standards or by the Small Electric Motors regulations. (CEC, Pub. Mtg. 
Tr., No. 87 at p. 55) The CA IOUs commented during the public meeting 
that most pump motors are single-phase and, sometimes, variable-speed, 
both of which would disqualify motors from coverage. (CA IOUs, Pub. 
Mtg. Tr., No. 87 at pp. 55-56). Nidec added its belief that the small 
motor rule does not cover variable speed motors. (Nidec, Pub. Mtg. Tr., 
No. 87 at p.56).
    Any motor that meets the nine criteria as given in paragraph (g) 
and which is not explicitly exempted by criteria given in paragraph (m) 
is covered under the current rulemaking. Both single-phase and variable 
speed motors are not

[[Page 30951]]

covered in today's rule, and so any motor with those qualities would 
not be subject to today's standards.
b. Definitions, Terminology, and Regulatory Language
    In response to the NOPR, DOE received a number of comments 
requesting clarification on its choice of terminology.
``Motor'' and ``Electric Motor''
    Baldor commented that the use of the terms ``motor'' and ``electric 
motor'' interchangeably in the NOPR is very confusing. DOE understands 
that the terms ``motor'' and ``electric motor'' may refer to a variety 
of machines outside of its regulatory context. In the NOPR, DOE used 
the terms to mean the same thing. 78 FR 73589. In addition, because 
there are no NEMA Design B motors, for example, that are not 
electrically driven, in DOE's view, the potential for ambiguity is 
minimal.
    The Department chose to not include the term ``electric'' in the 
NEMA-designated motor types to be consistent with NEMA's definitions. 
In the regulatory context, however, DOE does not consider there to be 
any difference between the two terms and notes that all motors 
currently regulated under 10 CFR part 431, subpart B, are electric 
motors as stated in the title to 10 CFR part 431, subpart B and the 
purpose and scope section at 10 CFR 431.11. Moreover, NEMA itself uses 
the term ``motor'' in MG 1 to refer to electric motors.
Specificity of Definitions
    Baldor stated that the definitions for ``NEMA Design A motor'' and 
``NEMA Design B motor'' in 2013 test procedure does not make reference 
to nine characteristics listed in paragraph (g) and, thus, implies that 
it includes multi-speed motors, motors rated for voltages greater than 
600 volts, motors rated for only 50 Hz, and motors constructed with 
more than 8 poles. According to Baldor, this conflicts with DOE's 
proposed scope of coverage in Table 4 and Table 5 of the NOPR. It noted 
that paragraph (i) and Table 6 for NEMA Design C motor are similarly 
confusing. (Baldor, No. 100 at pp. 2-4)
    DOE agrees with Baldor that minimizing ambiguity in regulatory text 
is critical. In this case, however, DOE does not see the potential for 
confusion. DOE believes that today's regulatory text is of sufficient 
clarity that stakeholders will understand that the new standards apply 
only to those motors that meet the nine criteria in the new 10 CFR 
431.25(g).
    NEMA Design A, B or C motors are not defined to include these nine 
characteristics, which DOE is using to narrow the scope of covered 
electric motors. The definition of NEMA Design A may include multi-
speed motors, motors rated for voltages greater than 600 volts, motors 
rated for only 50 Hz, and motors constructed with more than 8 poles. 
However, only NEMA Design A motors meeting all nine characteristics in 
Sec.  431.25(g) are covered under today's rule. DOE's regulatory 
structure maintains the current standards at 10 CFR 431.25(a)-(f) while 
adding broader coverage in new paragraphs (g) through (l). The 
structure that DOE chose preserves the current regulatory text and 
allows DOE to use the same definitions for all motors covered under 10 
CFR 431.25.
``NEMA Design A Motor'' Correction
    NEMA commented that the definition for NEMA Design A motor needs to 
be corrected by replacing the phrase ``has a locked rotor current not 
to exceed'' the values shown in NEMA MG 1-2009, as proposed in the NOPR 
with ``has a locked rotor current higher than'' the values shown in 
NEMA MG 1-2009. (NEMA, No. 93 at p. 29) The Joint Advocates requested 
that DOE consider NEMA's comments on definitions to bring clarity to 
the covered motors. (Joint Advocates, No. 97 at p. 3)
    DOE agrees with NEMA that the Department inadvertently used the 
incorrect phrase when discussing the locked rotor current in the 
definition of a ``NEMA Design A motor''. As evidenced in the preamble 
of the 2013 test procedure (78 FR 75968) and the preamble and 
regulatory text of the proposed test procedure (78 FR 38462, 38481), 
DOE intended to include locked rotor current that exceeds the maximum 
locked rotor current established for a NEMA Design B motor in the 
``NEMA Design A motor'' definition. In today's rule, DOE is modifying 
the regulatory text accordingly.
``NEMA Design C Motor'' Correction
    NEMA suggested DOE revise paragraph (i) and the title of Table 6 of 
the proposed 10 CFR 431.25 by replacing ``NEMA Design C electric 
motor'' with ``NEMA Design C motor'' for consistency with DOE's 
regulatory definitions.
    As described above, DOE agrees, and has made the corresponding 
change in the regulatory text for consistency with the definitions 
adopted in the 2013 test procedure. DOE notes that it has further 
corrected the reference to ``NEMA Design A and B motors'' in the title 
of Table 5 to be consistent with the DOE regulatory definitions.
``Inverter-Only Electric Motor'' Definition
    Baldor and NEMA raised concerns that DOE has defined ``inverter-
only electric motor'' and not ``definite-purpose, inverter-fed electric 
motors'' which is the term that the NOPR referenced. Baldor noted that 
the term ``definite-purpose, inverter-fed electric motors'' is 
preferred and recognized by the motor industry as given in Part 31 of 
the NEMA MG 1 standard. (Baldor, No. 100 at p. 6; NEMA at pp. 2-3)
    Although DOE has previously used the term ``definite-purpose, 
inverter-fed electric motor,'' DOE instead adopted the term ``inverter-
only electric motor'' in its 2013 test procedure because ''definite-
purpose''' is a term that has meaning in the context of many other 
motor types which DOE does not wish to be confused with those requiring 
inverters. DOE also wishes to define these motors in terms of their 
actual capabilities instead of design intent. See 78 FR 75989.
c. Horsepower Rating
    DOE's proposed standards include only motors rated from 1-500 
horsepower, inclusive. In its comments, NEMA agreed with DOE's decision 
not to cover fractional hp motors, noting that these motors do not fall 
within the scope of rating for which NEMA Design A, B and C performance 
standards are defined. (NEMA, No. 93 at p. 15) Consequently, DOE is 
continuing not to regulate fractional horsepower, enclosed, 56-frame 
motors in today's notice.
d. High-Horsepower Six- and Eight-Pole Motors
    NEMA noted that Table 2 does not contain the higher horsepower 
ratings for large motors in 6 and 8 poles that are added in Table 7 and 
it suggested that DOE conform Table 7 to Table 2. (NEMA, No. 93 at pp. 
23-26) Baldor made a similar comment. (Baldor, No. 100 at p. 4)
    In keeping with the Motor Coalition's Petition and with MG 1-2009, 
DOE had proposed standards for motors with certain high horsepower and 
pole ratings (8-pole above 250 hp and 6-pole above 350 hp) that NEMA 
commented do not exist under MG 1's medium motors designations. For 
example, it is impossible to produce a NEMA Design A 6-pole motor of 
400 hp because the criteria required to qualify a medium

[[Page 30952]]

motor as Design A \25\ do not extend to such a high horsepower motor. 
NEMA notes that the table in the 2011 version of MG 1 has corrected the 
mistake of MG 1-2009 and moved these higher horsepower motors to the 
large motor Table 20-20 of MG 1. In its written comments in response to 
the NOPR, NEMA asked DOE not to adopt standards for motors of this pole 
and horsepower configuration because NEMA Design A and B types are not 
defined for and are not applicable to large motors. (NEMA, No. 93 at 
pp. 23-26) Accordingly, DOE has removed several efficiency levels that 
were proposed in table 5. As the eliminated ratings are nonexistent--it 
is not possible to build motors meeting such specifications--motors 
shipments analyses used in today's rule are unaffected.
---------------------------------------------------------------------------

    \25\ As described in both MG 1-2009 and 10 CFR 431.12.
---------------------------------------------------------------------------

e. Frame Size
    In response to the NOPR, DOE received a number of comments related 
to frame size.
Scope Characteristic 7
    NEMA requested that DOE amend the nine characteristics of regulated 
motor to include four-digit frame sizes because 500 hp and 6- and 8-
pole motors only come in frame sizes larger than three-digit frame 
sizes. (NEMA, Pub. Mtg. Tr., No. 87 at pp. 42-43; NEMA, No. 93 at p 26)
    NEMA also noted that IEC does not put design specifications on the 
motor, especially for larger-sized motors. Therefore, it requested that 
DOE use language that will include all such motors (through 500 hp) 
equivalent to covered NEMA motors. (NEMA, Pub. Mtg. Tr., No. 87 at pp. 
42-44; NEMA, No. 93 at p. 26)
    Nidec added that the higher horsepower ratings as shown in table 4 
of the NOPR are above current three-digit frame size. (Nidec, Pub. Mtg. 
Tr., No. 87 at p. 45) Secondly, Nidec commented that while the proposed 
standard helps clarify the IEC motor coverage, removing characteristic 
7 from the nine characteristics in paragraph (g) of 10 CFR 
431.25 would remove any confusion about motor size. It commented that 
DOE may add electric motors covered by the regulations for small 
electric motors to the list of exempted motors in paragraph (m) of the 
proposed 10 CFR 431.25.
    DOE agrees with the above commenters that it was DOE's intent to 
ensure that four-digit frame size motors and IEC equivalents of covered 
motors are covered by these new standards and has adopted revised 
language in paragraph (g)(7) of Sec.  431.25 to reflect that fact. The 
updated language covers three-digit frame sizes, four-digit frame 
sizes, IEC equivalents, and equivalents between NEMA frame sizes.
NEMA 56-Frame Motors Coverage
    NEMA 56-frame motors at 1 hp or greater have been the subject of 
considerable discussion, due to the fact that they may be covered as a 
small electric motor under subpart X of 10 CFR part 431, or as an 
electric motor under subpart B of 10 CFR part 431 depending on whether 
they are general-purpose, definite or special purpose, or have an open 
or enclosed frame. Currently, 56-frame motors are covered as small 
electric motors if the motor is an open, general-purpose motor that 
meets the ``small electric motor'' definition at 10 CFR 431.442. The 
NOPR proposed to extend coverage to 56-frame enclosed motors rated at 1 
hp or greater. 78 FR 73589. For 56-frame open, special and definite 
purpose motors, the NOPR stated that DOE was considering establishing 
standards for these motor types as well, but requested additional 
information on those motor types. 78 FR 73606, 73679. Today's rule 
covers enclosed 56-frame motors rated at 1 hp or greater but does not 
establish standards for 56-frame open, definite or special purpose 
motors. DOE notes that, because today's rule covers all enclosed 56-
frame motors, both general purpose and special and definite purpose 
enclosed 56-frame motors are covered under today's rule.
    In response to the NOPR, NEMA provided detailed comments about how 
DOE should rephrase characteristic 7 and add a sixth exemption 
to 10 CFR 431.25 if DOE chose to include 56-frame open, definite or 
special purpose motors. This would also eliminate any confusion 
regarding covering all IEC frame sizes and all frame sizes between two 
consecutive NEMA or IEC frame sizes. It also commented that it is 
ambiguous as to whether a 56-frame, open general purpose motor has 
different efficiency levels and nameplate markings as compared to the 
56-frame open, special and definite purpose motors. (NEMA, No. 93 at 
pp. 14-15; NEMA, Pub. Mtg. Tr., No. 87 at p. 61) NEMA noted that the 
current rulemaking cannot be compared with the small motors rule in 
terms of efficiency requirements and ELs, because the small motor rule 
requirements are based on average efficiency while electric motor rule 
are based on nominal full-load efficiency. (NEMA, No. 93 at pp. 28-29)
    DOE agrees that coverage of 56-frame, open, special- and definite-
purpose motors would require coordination with DOE's small electric 
motor requirements. In the NOPR, DOE requested additional data on this 
subset of 56-frame motors to allow DOE to fully assess these motor 
types. No commenter provided DOE such data. As a result of these 
complications and the need for more data, DOE does not cover them in 
today's rule, but may consider covering such motors in a future 
rulemaking. As explained in the ``Scope Characteristic 7'' 
section of this section, IVA.2.e, DOE has modified Characteristic 
7 accordingly. Table IV.5 provides a summary of respective 
coverage of 56-frame electric motors.

        Table IV.5--56-Frame Regulation, 1 Horsepower and Greater
------------------------------------------------------------------------
                                         Open               Enclosed
------------------------------------------------------------------------
General Purpose...............  Covered as a ``small    Not currently
                                 electric motor'' up     covered;
                                 to 3 hp.\26\            covered by this
                                                         rule.
Special/Definite Purpose......  Not currently covered;  Not currently
                                 not covered by this     covered;
                                 rule.                   covered by this
                                                         rule.
------------------------------------------------------------------------

f. IEC Motors
    NEMA noted that: (1) There is no one-to-one correspondence between 
NEMA frame sizes and IEC metric equivalents; (2) the phrase ``NEMA 
frame'' refers to specific NEMA T-frame sizes; and (3) IEC 100 frames 
are currently exempt but should be covered. Based on the above, NEMA 
commented that DOE has

[[Page 30953]]

removed nearly all IEC motors from any requirement to meet efficiency 
standards. In order to effectively include standards for IEC motors, it 
suggested DOE to change the titles of table 5 and 6 and the contents of 
paragraphs (h) and (i) within 10 CFR 431.25 to reflect that they 
included the IEC equivalents. (NEMA, No. 93 at p 4) DOE agrees that it 
was the intent to cover these motors and has amended the regulatory 
language to make this clear.
---------------------------------------------------------------------------

    \26\ See 10 CFR 431.442.
---------------------------------------------------------------------------

    In response to the NOPR, NEMA commented that it believed DOE may be 
of the opinion that because, in DOE's proposed rule, reference is no 
longer being made to T-frames and all covered frame sizes would have 
three digits, that DOE no longer needs the text ``including a frame 
size that is between two consecutive NEMA frame sizes or their IEC 
metric equivalents'' when describing coverage. NEMA noted, however, 
that manufacturers may mistakenly equate ``NEMA frame'' with ``T-
frame,'' and mistakenly conclude that certain IEC motors (e.g., IEC 100 
frame) were uncovered. To remedy this ambiguity, NEMA suggested that 
DOE modify scope Characteristic 7. (NEMA, No. 93 at p. 26)
    DOE appreciates the need to clarify coverage of NEMA versus IEC 
motors and their equivalents and, consistent with its stated intentions 
in the NOPR to cover IEC-equivalents of all covered motors, has 
modified characteristic 7 to make coverage of IEC equivalents 
more explicit. See 78 FR 73589.
g. Frequency
    NEMA noted that characteristic 4 in paragraph (g) is 
described as ``operate on polyphase alternating current 60-hertz line 
power''. NEMA acknowledged that DOE has explained that this is intended 
to cover electric motors rated at 60 Hz and 50/60 Hz; however, as 
written, the provision could be read as requiring coverage of 50 Hz 
motors that are operated on 60 Hz. It is not clear from the proposed 
standards whether an efficiency standard would apply to a motor's 
operation at the frequency or frequencies marked on the nameplate of 
the electric motor or to operation just at 60 Hz. NEMA suggested that 
DOE add ``at 60 Hz'' to all efficiency table titles to make clear that 
the covered motors were required to meet the efficiency standard while 
operating at 60 Hz. (NEMA, No. 93 at p. 5)
    DOE agrees that the suggestion brings clarity to the regulations 
and reflects DOE's intent in the NOPR. Therefore, corresponding changes 
were made in the regulatory text. Although the efficiency values apply 
at 60 Hz only, DOE points out that the ability to operate at other 
frequencies (e.g., 50 Hz) in addition to 60 Hz does not, itself, 
exclude a motor from coverage.
h. Random Winding
    Noting that DOE has established the efficiency levels based on NEMA 
MG 1 Table 12-12, Nidec raised concern that Table 12-12 is intended 
only for random wound motors and, therefore, DOE, should amend 
characteristic 5 to include only electric motors that contain 
a random wound stator winding. (Nidec, No. 98 at pp. 2, 7-8)
    DOE is not aware of any particular winding technique that would 
make it significantly more difficult for a motor to meet standards and 
has received no comment suggesting as much. DOE's understanding is that 
random winding is mostly done automatically to reduce assembly cost, 
and that more strategic winding (e.g., on a form) is generally done for 
increased insulation performance at higher voltages. Hand winding is 
considered in DOE's analysis and generally exhibits performance 
superior to random winding and would more easily reach higher 
efficiencies. As a result, DOE perceives no reason to further constrain 
scope and does not alter scope with respect to the winding method in 
today's rule.
i. Duty Cycle
    DOE's proposed standards applied only to motors rated for 
continuous duty, which means that a motor may operate indefinitely 
without pausing for heat to dissipate.
    CEC suggested that DOE revise the criterion in proposed section 
431.25(g)(2) such that motors not rated for continuous duty are also 
subject to standards. It suggested that both motors rated or not rated 
for continuous duty can meet the nominal full-load efficiency 
standards. (CEC, No. 96 at p. 3)
    Although DOE did not receive data on the relative usages of 
continuous vs. intermittent duty motors, it understands that continuous 
duty motors account for the majority of the energy consumption of 
motors investigated within this rulemaking. Due to their inherent 
limitations, intermittent duty motors are more likely to be used in 
applications with a lower fraction of the time spent switched on. As a 
result, these motors use less energy than continuous duty motors. 
Although DOE has thus far focused its efforts on continuous duty 
motors, it remains possible that other motor types may achieve cost-
effective energy savings through standards, and DOE may consider 
exploring their future inclusion. DOE notes that the scope of the MG 1 
sections to which the standards listed in Tables 12-10, 12-11, and 12-
12 apply is continuous duty motors. DOE also notes that today's rule 
represents an evolution of existing standards for General Purpose 
Electric Motors (Subtypes I and II), which are defined in 10 CFR part 
431, subpart B to have continuous ratings.
j. Gear Motors
    Presently, DOE does not define ``gear motor'' or ``gearmotor,'' but 
understands that these are motors that have gears attached to the motor 
body, usually for the purpose of trading speed for torque. Depending on 
the exact configuration, the motor may meet the definition of ``partial 
electric motor'' as defined in 10 CFR 431.12. In the NOPR, DOE stated 
that it believed that certain gearmotors could be tested as partial 
electric motors by first removing the gearbox, so that manufacturers 
could certify the partial electric motor and be freed from certifying 
every conceivable motor/gearbox combination. 78 FR 73647. In the 2013 
test procedure, DOE specifically addressed integral gear motors and how 
to test such motors if they meet DOE's definition of ``partial electric 
motor''. See 78 FR 75979, 75994.
    Baldor raised concern that the scope of coverage of integral gear 
motors (or other integral motors under the groupings of ``partial 
electric motors'') is not clear. Moreover, DOE did not define or 
propose test procedures for ``integral gearmotors'' in the 2013 test 
procedure. (Baldor, No. 100 at p. 5-6) In response, DOE reiterates that 
it does not, at this time, treat gear motors as a distinct category of 
equipment. Gear motors would be subject to standards if they meet the 
definition of ``partial electric motor'' or of another type of 
equipment subject to standards. In those cases, gear motors would be 
required to certify using whichever test instructions were applicable 
to that type of motor. DOE notes that manufacturers may apply for a 
test procedure waiver if their equipment cannot be tested under the 
methods found in 10 CFR part 431, subpart B.
    NORD Gear Corp. recommended that integral gear motors be excluded 
from the coverage as they do not meet the statutory definition of 
``electric motor''. It commented that if gearmotors are subject to 
rulemaking, it would require the NORD gear motors to be heavier due to 
the increased copper, steel and aluminum content. It will also require 
an increase in frame size for some motors and, thus, will prevent the 
combination of some gearmotors that are currently in use, leading to a 
product gap in the market for significant amount

[[Page 30954]]

of time and creating undue economic burden on gearmotor end users. 
Further, if gear motors are redesigned to meet the standard, millions 
of combinations of motors and gearboxes will have to be tested and this 
would place an undue economic burden on gearbox manufacturers. (NORD 
Gear, No. 91 at p. 2)
    DOE understands that an investment of time and capital may be 
required by the imposition of any standard, and has attempted to 
discuss, quantify and consider those investments in its Manufacturer 
Impact Analysis in section IV.J. DOE believes that there should be 
sufficient time for manufacturers to make changes in designs (if 
needed) to comply with standards and make the integral gear motors 
available in the market. With respect to the question of statutory 
authority, DOE believes that EPCA, as amended through EISA 2007, 
provides sufficient statutory authority for the regulation of a wide 
variety of electric motors as described in detail in section II.A.
k. Partial Electric Motors
    In response to the NOPR, NEMA raised concern that it is not clear 
whether the proposed standards in Tables 5 through 8 apply to partial 
electric motors. To clarify, NEMA recommended that DOE either revise 
paragraph (g) in 10 CFR 431.15 or add a tenth characteristic to include 
``partial electric motors''. (NEMA, No. 93 at pp. 26-27) Baldor raised 
concerns that the content of Table IV of the NOPR implies that DOE 
intends to cover partial electric motors, however, these motors are 
neither mentioned in the NOPR nor are efficiency standard levels 
proposed for them. (NEMA, No. 93 at pp. 26-27)
    Under the new regulatory scheme in today's final rule, DOE 
considers partial electric motors to be electric motors subject to the 
new requirements listed in 10 CFR 431.25(h)-(l) if they meet the nine 
criteria specified in paragraph (g) of the new Sec.  431.25. DOE's 2013 
test procedure provides instructions for testing these motor types to 
ensure their nominal full-load efficiency can be assessed. 78 FR 75961. 
To make the inclusion of these motor types abundantly clear, DOE has 
taken NEMA's suggestion of modifying the regulatory text in 10 CFR 
431.25(g) to expressly state that partial electric motors are included.
    Additionally, DOE now refers in the to ``special-purpose'' and 
``definite-purpose'' ``electric motors''. The word ``electric'' was 
added in the 2013 test procedure. 78 FR 75961.
    Finally, DOE notes that it has updated the definition of ``partial 
electric motor'' found in 10 CFR 431.12 to correct a typographical 
error: Repetition of the word ``an'' before ``electric motor''.
l. Certification Considerations Related to Expanded Scope
    Baldor sought clarification on which manufacturer should be 
responsible to file compliance certification report with DOE. Baldor 
asked whether it should be the manufacturer of the partial electric 
motor or if instead the manufacturer of the electric motor or assembly 
of which the partial electric motor is a component must certify it. 
(Baldor, No. 100 at pp. 5-7)
    DOE noted in the 2011 certification, compliance and enforcement 
rule that it intends to undertake a rulemaking to moving and harmonize, 
where possible, the certification, compliance, and enforcement 
provisions for electric motors into Part 429. 76 FR 12422, 12447. DOE 
will address the party responsible for certifying in that rulemaking.
m. Electric Motors With Separately Powered Blowers
    In its comments, NEMA provides an ``Appendix B'' in which it 
outlines the ``industry interpretation'' of which motor types are 
covered by the rule. DOE notes that NEMA lists electric motors with 
separately powered blowers under the ``not a covered product'' 
category. (NEMA, No. 93 at p. 37)
    In the 2013 test procedure, DOE established a method of testing for 
this type of motor and stated that at least some non-immersible motors 
that are furnished with separately-powered blowers would meet the same 
nine criteria that DOE was, at that time, considering applying with 
respect to its standards rulemaking. 78 FR 75986. Moreover, DOE did not 
propose to exempt these types of motors from standards in the standards 
NOPR. 78 FR 73681. DOE maintains its position that electric motors with 
separately powered blowers that meet the requirements in the new 10 CFR 
431.25(g) are covered in today's rule.
3. Advanced Electric Motors
    In its final rule analysis, DOE addressed various ``advanced 
electric motor'', which included those listed in Table IV.6. While DOE 
recognizes that such motors could offer improved efficiency, regulating 
them would represent a significant shift for DOE, which has primarily 
focused on the efficiency of polyphase, single-speed induction motors.

                  Table IV.6--Advanced Electric Motors
------------------------------------------------------------------------
                            Motor Description
-------------------------------------------------------------------------
Inverter drives.
Permanent magnet motors.
Electrically commutated motors.
Switched-reluctance motors.
------------------------------------------------------------------------

    At this time, DOE has chosen not to regulate advanced motors and 
knows of no established definitions or test procedures that could be 
applied to them. Because DOE agrees that significant energy savings may 
be possible for some advanced motors, DOE plans to keep abreast of 
changes to these technologies and their use within industry, and may 
consider regulating them in the future.
4. Equipment Class Groups and Equipment Classes
    When DOE prescribes or amends an energy conservation standard for a 
type (or class) of covered equipment, it considers: (1) The type of 
energy used; (2) the capacity of the equipment; or (3) any other 
performance-related feature that justifies different standard levels, 
such as features affecting consumer utility. (42 U.S.C. 6295(q) and 
6316(a)) Due to the large number of characteristics involved in 
electric motor design, DOE has developed both ``equipment class 
groups'' and ``equipment classes''. An equipment class represents a 
unique combination of motor characteristics for which DOE is 
establishing a specific energy conservation standard. There are 482 
potential equipment classes that consist of all permutations of 
electric motor design types (i.e., NEMA Design A & B, NEMA Design C 
(and IEC equivalents), and fire pump electric motor), standard 
horsepower ratings (i.e., standard ratings from 1 to 500 horsepower), 
pole configurations (i.e., 2-, 4-, 6-, or 8-pole), and enclosure types 
(i.e., open or enclosed). An equipment class group is a collection of 
equipment classes that share a common motor design type. The NEMA 
Standards Publication MG 1-2011, ``Motors and Generators,'' defines a 
series of standard electric motor designs (i.e., Designs A, B and C) 
that are differentiated by variations in performance requirements. DOE 
chose to use these design types to establish equipment class groups 
because design types affect an electric motor's utility and efficiency.
    In the NOPR, DOE had divided electric motors into four groups based 
on three main characteristics: NEMA (or IEC) design letter, whether the 
motor met the definition of ``fire pump electric

[[Page 30955]]

motor,'' and whether the motor had a brake. Within each of these 
groups, DOE utilized combinations of other pertinent motor 
characteristics to enumerate individual equipment classes. To 
illustrate the differences between the two terms, consider the 
following example. A NEMA Design B, 50 horsepower, two-pole enclosed 
electric motor and a NEMA Design B, 100 horsepower, six-pole open 
electric motor would be in the same equipment class group (ECG 1), but 
each would represent a unique equipment class that will ultimately have 
its own efficiency standard.\27\
---------------------------------------------------------------------------

    \27\ At its core, the equipment class concept, which is being 
applied only as a structural tool for purposes of this rulemaking, 
is equivalent to a ``basic model''. See 10 CFR 431.12. The 
fundamental difference between these concepts is that a ``basic 
model'' pertains to an individual manufacturer's equipment class. 
Each equipment class for a given manufacturer would comprise a basic 
model for that manufacturer.
---------------------------------------------------------------------------

    At the NOPR stage, brake electric motors were separated out because 
DOE was concerned that the presence of a brake (which provides utility 
in the form of hastened stopping of the motor) might cause additional 
losses, thereby reducing the motors' ability to meet standards cost-
effectively. In its 2013 test procedure, however, DOE established a 
method of testing brake motors that allowed exclusion of losses 
attributable to the brake, thereby allowing brake electric motors to be 
tested without regard to the brake. 78 FR 75995.
    For today's final rule, then, DOE divided electric motors into 
three groups based on two main characteristics: NEMA (or IEC) design 
letter and whether the motor met the definition of a fire pump electric 
motor. DOE's three resulting equipment class groups are: NEMA Design A 
and B and IEC Design N motors (ECG 1), NEMA Design C and IEC Design H 
motors (ECG 2), and fire pump electric motors (ECG 3). Table IV.7 
outlines the relationships between equipment class groups and the 
characteristics used to define equipment classes.

                  Table IV.7--Electric Motor Equipment Class Groups for the Final Rule Analysis
----------------------------------------------------------------------------------------------------------------
   Equipment class group      Electric motor design      Horsepower         Poles              Enclosure
----------------------------------------------------------------------------------------------------------------
1.........................  NEMA Design A & B*.......           1-500      2, 4, 6, 8  Open.
                                                                                       Enclosed.
2.........................  NEMA Design C*...........           1-200         4, 6, 8  Open.
                                                                                       Enclosed.
3.........................  Fire Pump*...............           1-500      2, 4, 6, 8  Open.
                                                                                       Enclosed.
----------------------------------------------------------------------------------------------------------------
* Including IEC equivalents.

a. U-Frame Motors
    EISA 2007 prescribed energy conservation standards for electric 
motors built with a U-frame, whereas previously, only electric motors 
built with a T-frame were covered.\28\ (Compare 42 U.S.C. 
6311(13)(A)(1992) with 42 U.S.C. 6311(13)(B)(2011)) In general, for the 
same combination of horsepower rating and pole configuration, an 
electric motor built in a U-frame is built with a larger ``D'' 
dimension than an electric motor built in a T-frame. The ``D'' 
dimension is a measurement of the distance from the centerline of the 
shaft to the bottom of the mounting feet. Consequently, U-frame motors 
should be able to reach efficiencies as high, or higher, than T-frame 
motors with similar ratings (i.e., horsepower, pole-configuration, and 
enclosure) because the larger frame size allows for more active 
materials, such as copper wiring and electrical steel, which help 
reduce I\2\R (i.e., losses arising from the resistivity of the current-
carrying material) and core losses (i.e., losses that result from 
magnetic field stability changes).\29\ Furthermore, U-frame motors do 
not have any unique utility relative to comparable T-frame motors. In 
general, a T-frame design could replace an equivalent U-frame design 
with minor modification of the mounting configuration for the driven 
equipment. By comparison, a U-frame design that is equivalent to a T-
frame design could require substantial modification to the mounting 
configuration for the same piece of driven equipment because of its 
larger size. DOE's research indicated that manufacturers sell 
conversion brackets for installing T-frame motors into applications 
where a U-frame motor had previously been used.\30\ In the NOPR, DOE 
proposed standards for both T-frame and U-frame motors.
---------------------------------------------------------------------------

    \28\ The terms ``U-frame'' and ``T-frame'' refer to lines of 
frame size dimensions, with a T-frame motor having a smaller frame 
size for the same horsepower rating as a comparable U-frame motor. 
In general, ``T'' frame became the preferred motor design around 
1964 because it provided more horsepower output in a smaller 
package.
    Under EPACT 1992, the only covered electric motors were T-frame 
electric motors. See 42 U.S.C. 6311(13)(A)(1992). These motors were 
redefined to be ``general purpose electric motor (subtype I)'' under 
EISA 2007, which, at the time, DOE defined as a motor that can be 
used in most general purpose applications and that meets standard 
operating characteristics and mechanical construction for use under 
usual or unusual service conditions in accordance with specific 
provisions of NEMA MG 1-1993. That version of MG 1 only included 
specifications for T-frame motors because the last version of MG 1 
to contain U-frame dimensions was published in 1967. See 77 FR 
266.8.
    \29\ Several manufacturers provide premium efficient U-frame 
motors. See, for example, http://www.usmotors.com/Our-Products/~/
media/USMotors/Documents/Literature/Datasheets/PDS/PDS--PREMIUM--
EFFICIENT.ashx.
    \30\ See, for example, http://www.overlyhautz.com/adaptomounts1.html.
---------------------------------------------------------------------------

    In response to the NOPR, NEMA and the Joint Advocates recommended 
that DOE keep the standards for U-frame motors at current EPACT 1992 
(NEMA MG 1-2011,Table 12-11) levels. These commenters argued that U-
frame motors are a legacy design used only in the automotive 
manufacturing industry and that their market share is small and 
declining; according to these commenters, re-designing of U-frame 
motors would entail huge costs. NEMA commented that new U-frame motors 
are not being designed currently, and the old designs primarily cater 
to the replacement market. According to NEMA, there are no suppliers of 
U-frame general purpose motors (subtype II) at premium efficiency 
levels, and its review showed that only one manufacturer of U-frame 
general purpose electric motors (subtype II) would be impacted by the 
proposed change in efficiency standards. NEMA also stated that the cost 
of U-frame motors is generally significantly higher than T-frame motors 
of the same rating, as indicative of the larger size of the U-frame 
motor and the costs associated with maintaining of production equipment 
for old designs. Therefore, it would be highly unlikely that

[[Page 30956]]

consumers would increase purchases of U-frame motors of lower 
efficiency as substitutes for T-frame motors. NEMA claimed that DOE did 
not evaluate the cost burden on manufacturers from re-designing old U-
frame motors, and if it did, the results would not support the increase 
in efficiency standards proposed in the NOPR. The Joint Advocates 
commented that leaving U-frame motor standards unchanged would enable 
manufacturers to direct scarce product design resources to product 
types with larger market shares. (NEMA, Pub. Mtg. Tr., No. 87 at pp. 
69-70; NEMA, No. 93 at pp. 27-28; Joint Advocates, No. 97 at p. 2)
    By contrast, Nidec supported DOE's proposal to raise efficiency 
standards of U-frame motors to EL2 (i.e., Table 12-12) levels, noting 
that it is technologically feasible to increase the efficiency level of 
these motors. (Nidec, No. 98 at p. 5)
    DOE understands NEMA's concerns regarding the diminishing market 
size of U-frame motors. However, DOE has determined that a complete 
phase-out of U-frame motors would not be the result of an efficiency 
standard that is technologically infeasible for U-frame motors, but 
because U-frame motors offer no unique utility relative to T-frame 
motors. Furthermore, DOE has concluded that the updated standards are 
unlikely to result in the unavailability of U-frame motors. Based on 
catalog data from several large electric motor manufacturers, DOE has 
observed manufacturer offerings of premium efficiency U-frame motors on 
the market today.\31\ DOE sees no technical reason why U-frame 
manufacturers would not be able to comply with standards corresponding 
to TSL 2. DOE notes that it requested, but did not receive, data 
suggesting that U-frame motors would be eliminated from the market 
under the standard levels adopted in today's final rule. See 78 FR 
73610.
---------------------------------------------------------------------------

    \31\ See, for example: http://www.marathonelectric.com/motors/docs/manuals/SB547.pdf.
---------------------------------------------------------------------------

    Under 42 U.S.C. 6295(o)(4), as applied to commercial and industrial 
equipment via 42 U.S.C. 6316(a), DOE cannot prescribe a standard that 
would result in the ``unavailability in the United States in any 
covered equipment type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States at the time of the Secretary's finding''. However, DOE notes 
that this statutory provision does not require the continued protection 
of particular classes or types of equipment--in this case, electric 
motors--if the same utility continues to be available to consumers. 
Consequently, based on available information, DOE continues to believe 
that U-frame motors fail to merit a separate equipment class with lower 
standards and has not created one for them in this final rule.
b. Electric Motor Design Letter
    The first criterion that DOE considered when disaggregating 
equipment class groups was based on the NEMA (and IEC) design letter. 
The NEMA Standards Publication MG 1-2011, ``Motors and Generators,'' 
defines a series of standard electric motor designs that are 
differentiated by variations in performance requirements. These designs 
are designated by letter--Designs A, B, and C. (See NEMA MG 1-2011, 
paragraph 1.19.1). These designs are categorized by performance 
requirements for full-voltage starting and developing locked-rotor 
torque, breakdown torque, and locked-rotor current, all of which affect 
an electric motor's utility and efficiency. DOE is regulating the 
efficiency of motors of each of these design types.
    The primary difference between a NEMA Design A and NEMA Design B 
motor is that they have different locked-rotor current requirements. 
NEMA Design B motors must not exceed the applicable locked-rotor 
current level specified in NEMA MG 1-2011, paragraph 12.35.1. NEMA 
Design A motors, on the other hand, do not have a maximum locked-rotor 
current limit. In most applications, NEMA Design B motors are generally 
preferred because locked-rotor current is constrained to established 
industry standards, making it easier to select suitable motor-starting 
devices. However, certain applications have special load torque or 
inertia requirements, which result in a design with high locked-rotor 
current (NEMA Design A). When selecting starting devices for NEMA 
Design A motors, extra care must be taken in properly sizing electrical 
protective devices to avoid nuisance tripping during motor startup. The 
distinction between NEMA Design A and NEMA Design B motors is important 
to applications that are sensitive to high locked-rotor current; 
however, both NEMA Design A and Design B motors have identical 
performance requirements in all other metrics, which indicates that 
they offer similar levels and types of utility. Given these 
similarities, DOE is grouping these motors together into a single 
equipment class group for the purposes of this rulemaking.
    In contrast, DOE believes that the different torque requirements 
for NEMA Design C motors represent a change in utility that can affect 
efficiency performance. NEMA Design C motors are characterized by high 
starting torques. Applications that are hard to start, such as heavily 
loaded conveyors and rock crushers, require this higher starting 
torque. The difference in torque requirements will restrict which 
applications can use which NEMA Design types. As a result, NEMA Design 
C motors cannot always be replaced with NEMA Design A or B motors, or 
vice versa. Therefore, as in the preliminary analysis and NOPR, DOE has 
analyzed NEMA Design C motors in an equipment class group separate from 
NEMA Design A and B motors.
    In chapter two, ``Analytical Framework,'' of the technical support 
document, DOE noted numerous instances where manufacturers were 
marketing electric motors rated greater than 200 horsepower as NEMA 
Design C motors. (see Chapter 2 of TSD) \32\ DOE understands that NEMA 
MG 1-2011 specifies Design C performance requirements for motors rated 
1-200 hp in four-, six-, and eight-pole configurations--a motor rated 
above 200 hp or using a two-pole configuration would not meet the 
Design C specifications. DOE understands that without established 
performance standards that form the basis for a two-pole NEMA Design C 
motor or a NEMA Design C motor with a horsepower rating above 200, 
motors labeled as such would not meet the regulatory definition for 
``NEMA Design C motor'' as provided in the 2013 test procedure. 78 FR 
75994. DOE considers motors at these ratings to be improperly labeled 
if they are name-plated as NEMA Design C. Mislabeled NEMA Design C 
motors, however, are still subject to energy conservation standards if 
they meet the definitions and performance standards for a regulated 
motor--e.g., NEMA Design A or B. And since these motors either need to 
meet the same efficiency levels or would be required by customers to 
meet specific performance criteria expected of a given design letter 
(i.e., Design A, B, or C), DOE does not foresee at this time any 
incentive that would encourage a manufacturer to identify a Design A or 
B motor as a Design C motor for standards circumvention purposes. DOE 
understands, however, that NEMA Design C motors as a whole constitute

[[Page 30957]]

an extremely small percentage of motor shipments--less than two percent 
of shipments--covered by this rulemaking, which would appear to create 
an unlikely risk that mislabeling motors as NEMA Design C will be used 
as an avenue to circumvent standards. In addition, DOE received no 
comments suggesting this would be likely. Nevertheless, DOE will 
monitor the potential presence of such motors and may reconsider 
standards for them provided such practice becomes prevalent.
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    \32\ For instructions on how to access the TSD, visit the 
rulemaking page at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/42.
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c. Fire Pump Electric Motors
    In addition to considering the NEMA design type when establishing 
equipment class groups, DOE considered whether an electric motor is a 
fire pump electric motor. EISA 2007 prescribed energy conservation 
standards for fire pump electric motors (42 U.S.C. 6313(b)(2)(B)) and, 
subsequently, DOE adopted a definition for the term ``fire pump 
electric motor,'' which incorporated portions of National Fire 
Protection Association Standard (NFPA) 20, ``Standard for the 
Installation of Stationary Pumps for Fire Protection'' (2010). (See 77 
FR 26608 (codified at 10 CFR 431.12)) Pursuant to NFPA 20, a fire pump 
electric motor must comply with NEMA Design B performance standards and 
must continue to operate in spite of any risk of damage stemming from 
overheating or continuous operation. The additional requirements for a 
fire pump electric motor are intended to further the purpose of public 
safety and constitute a change in utility that DOE believes could also 
affect its performance and efficiency. Therefore, DOE established a 
separate equipment class group for such motors in the preliminary 
analysis to account for the special utility offered by these motors and 
maintained that practice through the NOPR and today's final rule.
    Regarding the ``fire pump electric motor'' definition, as detailed 
in the 2012 test procedure (77 FR 26608), DOE intends its ``fire pump 
electric motor'' definition to cover both NEMA Design B motors and IEC-
equivalents that meet the requirements of section 9.5 of NFPA 20. See 
77 FR 26617-26618. As stated in the 2012 test procedure, DOE believes 
that IEC-equivalent motors should be included within the scope of the 
definition of ``fire pump electric motor,'' although NFPA 20 does not 
explicitly recognize the use of IEC motors with fire pumps. Id. DOE 
realizes that section 9.5 of NFPA 20 specifically requires that fire 
pump motors shall be marked as complying with NEMA Design B. The fire 
pump electric motor definition that DOE created focuses on ensuring 
that compliance with the energy efficiency requirements are applied in 
a consistent manner. DOE believes that there are IEC motors that can be 
used in fire pump applications that meet both NEMA Design B and IEC 
Design N criteria, as well as NEMA MG 1 service factors. DOE's 
definition encompasses both NEMA Design B motors and IEC-equivalents. 
To the extent that there is any ambiguity as to how DOE would apply 
this definition, in DOE's view, any Design B or IEC-equivalent motor 
that otherwise satisfies the relevant NFPA requirements would meet the 
fire pump electric motor definition in 10 CFR 431.12. See the standards 
NOPR for a historical discussion of comments related to fire pump 
electric motors. 78 FR 73623.
    NEMA suggested that DOE should change the title of Table 7 and the 
content of paragraph (j) to specifically refer to NEMA Design B fire 
pump electric motors. NEMA commented that although DOE has stated that 
the standards for fire pump electric motors are based on NEMA Design B 
types, that fact it is not clear in the definition of ``fire pump 
electric motor'' in 10 CFR 431.12. (NEMA, No. 93 at p. 5) Baldor also 
raised concern that the scope of coverage of fire pump electric motors 
is not clear from only referring to the definition proposed in 10 CFR 
431.12., nothing that it had to go through several documents to 
determine that fire pump electric motors that meet nine criteria and 
are limited to NEMA Design B and IEC equivalents are covered. (Baldor, 
No. 100 at p. 4)
    Pursuant to NFPA 20, a fire pump electric motor must comply with 
NEMA Design B performance standards and must continue to run in spite 
of any risk of damage stemming from overheating or continuous 
operation. Therefore, DOE considers it unnecessary to add further 
restrictions in its regulatory text. DOE also wishes to avoid the 
implication that IEC equivalents would not be covered. Regarding having 
to review the nine criteria in the new 10 CFR 431.25(g) to know if a 
fire pump motor is covered, as DOE explained above, the regulatory 
scheme used in the new regulations was chosen to maintain the existing 
regulations for currently regulated electric motors while providing the 
criteria that all motors must meet if they are regulated motors under 
the new standards.
    NEMA commented that it is aware of few entities that have listed 
IEC motors for application with fire pumps in the U.S. It also 
commented that there is confusion regarding the coverage of the 
efficiency standards for fire pump electric motors. (NEMA, No. 93 at p. 
14) By contrast, Nidec provided a link to data on companies that have a 
UL certification for IEC motors for fire pump applications. (Nidec, No. 
98 at p. 5)
    Regarding IEC fire pump motors, DOE views Nidec's comment and the 
fact that IEC motors can be built to very similar specifications as 
Design B motors (even though they may not be labeled as such) as 
sufficient cause to maintain the requirement that IEC designs comply 
with fire pump motor standards as well.
    Specifically regarding standards for fire pump electric motors, 
NEMA and Baldor both raised concerns that the proposed standards for 
fire pump electric motors in Table 7 were not consistent with the 
current standards for fire pump electric motors in Table 2, as 
suggested in the Petition and as DOE intended to propose (see 78 FR 
73592). (NEMA, No. 93 at pp. 23, 26; Baldor, No. 100 at p. 4)
    Finally, the NOPR had mistakenly listed a standard for 1 hp, 2 
pole, open fire pump electric motors even though no standard for this 
configuration is currently in effect, as evidenced by the absence of a 
standard for this rating in DOE's regulations at 10 CFR 431.25(b). This 
standard has been removed from the final rule.
d. Brake Electric Motors
    In its final rule analyses, DOE considered whether brake electric 
motors (both integral brake electric motors and non-integral brake 
electric motors). In the 2013 test procedure, DOE adopted a definition 
for brake electric motors. 78 FR 75993 In the NOPR, the two types of 
brake electric motor were contained in one equipment class group as 
separate from the equipment class groups established for NEMA Design A 
and B motors, NEMA Design C motors, and fire pump electric motors.
    DOE understands that brake electric motors contain multiple 
features that can affect both utility and efficiency. In most 
applications, electric motors are not required to stop immediately. 
Instead, electric motors typically slow down and gradually stop after 
power is removed from the motor due to a buildup of friction and 
windage from the internal components of the motor. However, some 
applications \33\ require electric motors to stop quickly. Motors used 
in such applications may employ a brake component that, when engaged, 
abruptly slows or stops shaft rotation.

[[Page 30958]]

The brake component attaches to one end of the motor and surrounds a 
section of the motor's shaft. During normal operation of the motor, the 
brake is disengaged from the motor's shaft--it neither touches nor 
interferes with the motor's operation. However, under normal operating 
conditions, the brake is drawing power from the electric motor's power 
source and may also be contributing to windage losses, because the 
brake is an additional rotating component on the motor's shaft. When 
power is removed from the electric motor (and therefore the brake 
component), the brake component de-energizes and engages the motor 
shaft, quickly slowing or stopping rotation of the rotor and shaft 
components. Because of these utility related features that affect 
efficiency, DOE had proposed to establish a separate equipment class 
group for electric motors with a brake.
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    \33\ For example, some conveyor and other material-handling 
applications require motors to stop quickly.
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    During the NOPR public meeting, NEMA argued that DOE has captured 
most standard stock available and agreed with DOE's decision to limit 
standards for brake motors to 1-30 hp and 4-, 6- and 8-pole 
configurations. It commented that larger brake motors are generally 
design D or intermittent-duty motors for cranes and hoists, which are 
currently out of the scope of coverage. (NEMA, Pub. Mtg. Tr., No. 87 at 
pp. 70-71) In its written comments, NEMA noted that brakes can be 
treated as an accessory because in DOE's test procedure for brake 
motors, brake electrical losses are not included in the efficiency 
calculation. Therefore, it suggested that brake motors should not be 
put in separate equipment class but should be included in tables 5 and 
6. (NEMA, No. 93 at pp. 7-8)
    The Joint Advocates stated that they support inclusion of integral 
brake motors in the scope of coverage. However, they commented that 
establishing a separate class and table of standards for brake motors 
is unnecessary, because DOE has proposed setting standards for brake 
motors identical to other motors. Moreover, it requested that DOE 
include brake motors above 30 hp since there are some motors sold above 
30 hp, and capping the brake motors coverage at 30 hp may create 
confusion about scope of coverage. (Joint Advocates, No. 97 at p. 2)
    The Appliance Standards Awareness Project (ASAP) commented that if 
brake motors have the same standards as other motors, they would not 
require a separate equipment class group and would not only be 
regulated at the limited horsepower range proposed. (ASAP, Pub. Mtg. 
Tr., No. 87 at p. 74)
    Regarding the brake motor standards proposed, Baldor raised concern 
that the title of table 8 does not fully identify the type of integral 
brake electric motors and non-integral brake electric motors to which 
the proposed standards apply. Baldor raised concern that DOE has not 
defined integral and non-integral brake motors in 10 CFR 431.12, even 
though it makes reference to these motors in the NOPR. Baldor raised 
concern that the term ``dedicated mechanism for speed reduction'' used 
in the definition of brake electric motors is ambiguous, stating that 
it is not clear what DOE intends to cover other than a ``brake''. 
(Baldor, No. 100 at p. 5)
    WEG raised concern that even though a slight friction or windage 
adder needs to be considered due to brake, there is no need to create a 
separate equipment class group for brake motors because separate 
efficiency levels are not set for these motors. WEG commented that 
larger brake motors exist in the market, but most of them are special 
motors, which are out of scope of coverage. However, if any larger 
brake motor falls under the scope of coverage, the proposed standards 
(only up to 30 hp) may create a loophole. It commented that if it is a 
standard motor with a brake, the manufacturers would like to use same 
standard electrical design and not create special one to account for 
just a few losses. Therefore, it requested that DOE consider exclusion 
of the brake losses in the criteria. (WEG, Pub. Mtg. Tr., No. 87 at pp. 
72-73, 75)
    In response, DOE notes that as per the updated test procedures for 
brake motors, only power used to drive the motor is included in the 
efficiency calculation, and the power supplied to prevent the brake 
from engaging is not considered. Through that lens, the efficiency 
determination for brake motors is similar to that for any motor. 
Therefore, DOE has removed the separate equipment class group for brake 
motors in the final rule. DOE understands that most brake motors sold 
in the market would fall into ECG 1, but notes that a brake motor could 
be constructed such that it fell into other equipment classes, or none 
at all. For the purposes of analytical results, however, DOE is still 
reporting brake motors separately as equipment class subgroup 1b. 
Results of the former ECG 1 (NEMA Design A and Design B) are now 
reported as equipment class subgroup 1a. DOE notes that in the final 
rule, it is not segregating brake motors into ``integral brake motors'' 
and ``non-integral brake motors'' because it is not necessary for 
testing. Under this same logic, larger brake motors (i.e., above 30 hp) 
are now also subject to coverage if rated from 1-500 hp, just as would 
any other motor type in ECG 1.
    With respect to Baldor's concern on terminology, DOE's definition 
makes reference to a ``dedicated mechanism for speed reduction'' to 
clarify what is meant by a ``brake''. The definition aims to maintain 
the general sense of the term to avoid any loophole that may arise with 
an unnecessarily narrow definition.
    The Chinese WTO/TBT National Notification & Enquiry Center 
acknowledged the energy conservation efforts of United States and 
requested more clarification about the efficiency values for brake 
motors given in Table I.5 of NOPR, particularly for 8-pole brake 
motors, 4-pole open brake motors and 6-pole closed brake motors. (China 
WTO/TBT NNEC, No. 104 at p. 3)
    DOE notes that the confusion around Table I.5 in the NOPR is due to 
the formatting issues. For the final rule, DOE has deleted what was 
previously Table I.5 because brake motors are no longer in a separate 
equipment class group. Depending on the specific characteristics and 
configuration of a brake motor, it may fall under any ECG category and 
be subject to the corresponding efficiency standards.
e. Horsepower Rating
    In its preliminary analysis, DOE considered three criteria when 
differentiating equipment classes. The first criterion was horsepower, 
a critical performance attribute of an electric motor that is directly 
related to the capacity of an electric motor to perform useful work and 
that generally scales with efficiency. For example, a 50-horsepower 
electric motor would generally be considered more efficient than a 10-
horsepower electric motor. In view of the direct correlation between 
horsepower and efficiency, DOE preliminarily used horsepower rating as 
a criterion for distinguishing equipment classes in the framework 
document. In today's rule, DOE continues to use horsepower as an 
equipment class-setting criterion.
f. Pole Configuration
    The number of poles in an induction motor determines the 
synchronous speed (i.e., revolutions per minute) of that motor. There 
is an inverse relationship between the number of poles and a motor's 
speed. As the number of poles increases from two to four to six to 
eight, the synchronous speed drops from 3,600 to 1,800 to 1,200 to 900 
revolutions per minute, respectively. In addition, manufacturer 
comments and independent analysis performed on behalf of DOE indicate

[[Page 30959]]

that the number of poles has a direct impact on the electric motor's 
performance and achievable efficiency because some pole configurations 
utilize the space inside of an electric motor enclosure more 
efficiently than other pole configurations. For example, eight pole 
motors have twice as many poles as four-pole motors and, 
correspondingly, less space for efficiency improvements. Two-pole 
motors have more internal space, but carry a greater magnetic field 
spacing which yields inherently less-efficient operation. DOE used the 
number of poles as a means of differentiating equipment classes in the 
preliminary analysis. In today's rule, DOE continues to use pole-
configuration as an equipment class-setting criterion.
g. Enclosure Type
    EISA 2007 prescribes separate energy conservation standards for 
open and enclosed electric motors. (42 U.S.C. 6313(b)(2)) Electric 
motors manufactured with open construction allow a free interchange of 
air between the electric motor's interior and exterior. Electric motors 
with enclosed construction have no direct air interchange between the 
motor's interior and exterior (but are not necessarily air-tight) and 
may be equipped with an internal fan for cooling. Whether an electric 
motor is open or enclosed affects its utility; open motors are 
generally not used in harsh operating environments, whereas totally 
enclosed electric motors often are. The enclosure type also affects an 
electric motor's ability to dissipate heat, which directly affects 
efficiency. For these reasons, DOE used an electric motor's enclosure 
type (open or enclosed) as an equipment class setting criterion in the 
preliminary analysis. DOE received no related comments during the NOPR. 
In today's rule, DOE is continuing to use separate equipment class 
groups for open and enclosed electric motors but is declining to 
further break out separate equipment classes for different types of 
open or enclosed enclosures because DOE does not have data supporting 
such separation.
h. Other Motor Characteristics
    In its analysis, DOE addressed various other motor characteristics, 
but did not use them to disaggregate equipment classes. In the final 
TSD, DOE provided its rationale for not disaggregating equipment 
classes for vertical electric motors, electric motors with thrust or 
sleeve bearings, close-coupled pump motors, or by rated voltage or 
mounting feet. DOE believes that none of these electric motor 
characteristics provide any special utility that would impact 
efficiency and justify separate equipment classes.
5. Technology Assessment
    The technology assessment provides information about existing 
technology options and designs used to construct more energy-efficient 
electric motors. Electric motors have four main types of losses that 
can be reduced to improve efficiency: Losses due to the resistance of 
conductive materials (stator and rotor I\2\R losses), core losses, 
friction and windage losses, and stray load losses. These losses are 
interrelated such that measures taken to reduce one type of loss can 
result in an increase in another type of losses. In consultation with 
interested parties, DOE identified several technology options that 
could be used to reduce such losses and improve motor efficiency. These 
technology options are presented in Table IV.8. (See chapter 3 of the 
TSD for details.)

  Table IV.8--Technology Options To Increase Electric Motor Efficiency
------------------------------------------------------------------------
         Type of loss to reduce                 Technology option
------------------------------------------------------------------------
Stator I\2\R Losses....................  Increase cross-sectional area
                                          of copper in stator slots.
                                         Decrease the length of coil
                                          extensions.
Rotor I\2\R Losses.....................  Use a die-cast copper rotor
                                          cage.
                                         Increase cross-sectional area
                                          of rotor conductor bars.
                                         Increase cross-sectional area
                                          of end rings.
Core Losses............................  Use electrical steel
                                          laminations with lower losses
                                          (watts/lb).
                                         Use thinner steel laminations
                                         Increase stack length (i.e.,
                                          add electrical steel
                                          laminations).
Friction and Windage Losses............  Optimize bearing and
                                          lubrication selection.
                                         Improve cooling system design.
Stray-Load Losses......................  Reduce skew on rotor cage.
                                         Improve rotor bar insulation.
------------------------------------------------------------------------

    DOE made several changes to the technology options considered and 
how they are analyzed between the NOPR TSD and the final rule TSD. 
First, DOE notes the listed option of ``improved rotor insulation'' 
refers to increasing the resistance between the rotor squirrel-cage and 
the rotor laminations. Manufacturers use different methods to insulate 
rotor cages, such as applying an insulating coating on the rotor slot 
prior to die-casting or heating and quenching \34\ the rotor to 
separate rotor bars from rotor laminations after die-casting. DOE has 
updated the discussion in the TSD chapter 3 to clarify that there are 
multiple ways to implement this technology option.
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    \34\ Quenching is rapid cooling, generally by immersion in a 
fluid instead of allowing the rotor temperature to equalize to 
ambient temperature.
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    Second, DOE notes that increasing the cross-sectional area of 
copper in the stator is synonymous with reducing the stator resistance, 
and has updated the discussion in TSD chapter 3 for clarity.
    Third, DOE notes that increasing rotor slot size is a technique 
that reduces rotor resistivity. DOE also considered other techniques to 
reduce rotor resistivity such as increasing the volume of the rotor end 
rings and using die-cast copper rotors. For the sake of clarity, DOE 
has replaced the technology option ``reduce rotor resistance'' in the 
TSD discussion with the specific techniques that DOE considered in its 
analysis: Increasing the cross-sectional area of the rotor conductor 
bars, increasing the cross-sectional area of the end rings, and using a 
die-cast copper rotor cage.
    Fourth, with regard to increasing the flux density in the air gap, 
DOE consulted with its subject matter expert (SME) \35\ and 
acknowledges that this approach is not necessarily an independently 
adjustable design parameter used to increase motor efficiency and has 
removed it from its discussion in chapters 3 and 4 of the TSD. DOE 
notes that it understands that the technology options that it discusses 
do have limits, both practical limits in terms of manufacturing and 
design limits in terms of their effectiveness. DOE also understands 
that a manufacturer must balance any options to improve efficiency 
against the possible impacts on the performance attributes of its motor 
designs.
    Other technology options considered are described in detail below.
a. Increase the Cross-Sectional Area of Copper in the Stator Slots
    A manufacturer may increase the total cross-section of copper in 
the stator slots by either increasing slot fill or by increasing the 
number of stator slots.
Increasing Slot Fill
    Increasing the slot fill by either adding windings or changing the 
gauge of wire used in the stator winding can also increase motor 
efficiency. Motor design engineers can achieve this by manipulating the 
wire gauges to allow for a greater total cross-sectional area of wire 
to be incorporated into the stator slots. This could mean either an

[[Page 30960]]

increase or decrease in wire gauge, depending on the dimensions of the 
stator slots and insulation thicknesses. As with the benefits 
associated with larger cross-sectional area of rotor conductor bars, 
using more total cross-sectional area in the stator windings decreases 
the winding resistance and associated losses. However, this change 
could affect the slot fill factor of the stator. The stator slot 
openings must be able to fit the wires so that automated machinery or 
manual labor can pull (or push) the wire into the stator slots. In the 
preliminary analysis, DOE increased the cross-sectional area of copper 
in the stator slots of the representative units by employing a 
combination of additional windings, thinner gauges of copper wire, and 
larger slots.
    As described in the NOPR, DOE calculated the slot fill by measuring 
the total area of the stator slot and then subtracting the cross-
sectional area for the slot insulation. This method gave DOE a net area 
of the slot available to house copper winding. DOE then identified the 
slot with the most windings and found the cross-sectional area of the 
insulated copper wires to get the total copper cross sectional area per 
slot. DOE then divided the total copper cross-sectional area by the 
total slot area to derive the slot fill. 78 FR 73620-73621. DOE's 
estimated slot fills for its teardowns and software models are all 
provided in chapter 5 of the TSD.\36\
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    \36\ See TSD at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/42.
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    DOE notes that the software designs exhibiting these changes in 
slot fill were used when switching from aluminum to a copper rotor 
design. Therefore, changing slot geometries impacted the design's slot 
fill and the slot fill changes resulted from different motor designs. 
Consequently, a 3-percent increase in slot fill does not imply that 
this change was made to increase the efficiency of another design, but 
could have been made to change other performance criteria of the motor, 
such as locked-rotor current.
    DOE notes that motor design engineers can adjust slot fill by 
changing the gauge of wire used in fractions of half a gauge. DOE 
clarified that all the modeled motors utilized standard AWG wire sizes, 
either whole- or half-gauge sizes (i.e., 18 or 18\1/2\). DOE clarifies 
that the statement of ``fractions of a half gauge'' referred to sizes 
in between a whole gauge (i.e. 18\1/2\ of a gauge is a fraction of 18 
gauge wire). DOE did not end up using fractions consisting of a half 
gauge of wire sizes to conduct its modeling, but did indicate that this 
was a design option used by the motor industry.
    DOE is aware of the extra time involved with hand winding and has 
attempted to incorporate this time into efficiency levels that it 
believes would require hand winding. DOE added additional labor hours 
accounted for hand winding in its engineering analysis. DOE reiterates 
that should the increase in infrastructure, manpower, or motor cost 
increase beyond a reasonable means, then ELs utilizing this technology 
will be screened out during the downstream analysis.
    DOE captured the impact of jobs shifting out of the country if hand 
winding became more widespread during the manufacturer impact analysis 
(MIA) portion of DOE's analysis. Please see section IV.J for a 
discussion of the manufacturer impact analysis.
Increase the Number of Stator Slots
    Increasing the number of stator slots associated with a given motor 
design can, in some cases, improve motor efficiency. Similar to 
increasing the amount of copper wire in a particular slot, increasing 
the number of slots may in some cases permit the manufacturer to 
incorporate more copper into the stator slots. This option would 
decrease the losses in the windings, but can also affect motor 
performance. Torque, speed and current can vary depending on the 
combination of stator and rotor slots used.
    With respect to stator slot numbers, DOE understands that a motor 
manufacturer would not add stator slots without any appreciation of the 
impacts on the motor's performance. DOE also understands that there is 
an optimum combination of stator and rotor slots for any particular 
frame size and horsepower combination. DOE consulted with its SME and 
understands that optimum stator and rotor slot combinations have been 
determined by manufacturers and are already currently in use on 
existing production lines. DOE does not anticipate further efficiency 
gains from optimizing the combination of stator and rotor slots at the 
efficiency levels being considered for this rulemaking. Consequently, 
DOE removed this technology option from chapter 4 of the TSD in the 
NOPR.
b. Decrease the Length of Coil Extensions
    One method of reducing resistance losses in the stator is by 
decreasing the length of the coil extensions at the end turns. Reducing 
the length of copper wire outside the stator slots not only reduces the 
resistive losses, but also reduces the material cost of the electric 
motor because less copper is being used.
    DOE understands that there may be limited efficiency gains, if any, 
for most electric motors using this technology option. DOE also 
understands that electric motors have been produced for many decades 
and that many manufacturers have improved their production techniques 
to the point where certain design parameters may already be fully 
optimized. However, DOE maintains that this is a design parameter that 
affects efficiency and should be considered when designing an electric 
motor. DOE did not receive any additional comments regarding this 
technology option in response to the NOPR and continues to consider it 
for the final rule analysis.
c. Die-Cast Copper Rotor Cage
    Copper offers lower resistivity than aluminum, as well as a 
potentially more compact design, both of which can contribute to higher 
efficiency. Manufacturers commonly use copper today to build high 
performance motors. Although a rotor of arbitrary size may be 
fabricated by hand, the economics of scale manufacturing demand die-
casting of those wishing to produce at significant volumes. As a 
result, DOE considered die-cast copper only as a technology option. 
Die-cast copper rotors have been the subject of frequent comment and 
are more thoroughly discussed in the screening analysis section 
IV.B.1.a.
d. Increase Cross-Sectional Area of Rotor Conductor Bars
    Increasing the cross-sectional area of the rotor bars, by changing 
the cross-sectional geometry of the rotor, can improve motor 
efficiency. Increasing the cross-sectional area of the rotor bars 
reduces the resistance and thus lowers the I\2\R losses. However, 
changing the shape of the rotor bars may affect the size of the end 
rings and can also change the torque characteristics of the motor.
    DOE recognizes that increasing the cross-sectional area of a 
conductor rotor bar may yield limited efficiency gains for most 
electric motors. However, DOE maintains that this is a design parameter 
that affects efficiency and must be considered when designing an 
electric motor. Additionally, when creating its software models, DOE 
considered rotor slot design, including cross sectional areas, such 
that any software model produced was designed to meet the appropriate 
NEMA performance requirements for torque and locked rotor current. DOE 
did not receive any additional comments regarding this

[[Page 30961]]

technology option in response to the NOPR and continues to consider it 
for the final rule analysis.
e. Increase Cross-Sectional Area of End Rings
    End rings are the components of a squirrel-cage rotor that create 
electrical connections between the rotor bars. Increasing the cross-
sectional area of the end rings reduces the resistance and, thus, 
lowers the I\2\R losses in the end rings. A reduction in I\2\R losses 
will occur only when any proportional increase in current as a result 
of an increase in the size of the end ring is less than the square of 
the proportional reduction in the end ring resistance.
    When developing its software models, DOE relied on the expertise of 
its SME. Generally, increases to end ring area were limited to 10-20 
percent, which are unlikely to have significant negative impacts on the 
mechanical aspects of the rotor. Furthermore, DOE ensured that the 
appropriate NEMA performance requirements for torque and locked-rotor 
current were maintained with its software modeled motors. DOE did not 
receive any additional comments regarding this technology option in 
response to the NOPR and continues to consider it for the final rule 
analysis.
f. Electrical Steel With Lower Losses
    Losses generated in the electrical steel in the core of an 
induction motor can be significant and are classified as either 
hysteresis or eddy current losses. Hysteresis losses are caused by 
magnetic domains resisting reorientation to the alternating magnetic 
field. Eddy currents are physical currents that are induced in the 
steel laminations by the magnetic flux produced by the current in the 
windings. Both of these losses generate heat in the electrical steel.
    In studying the techniques used to reduce steel losses, DOE 
considered two types of materials: Conventional silicon steels, and 
``exotic'' steels, which contain a relatively high percentage of boron 
or cobalt. Conventional steels are commonly used in electric motors 
manufactured today. There are three types of steel that DOE considers 
``conventional:'' Cold-rolled magnetic laminations, fully processed 
non-oriented electrical steel, and semi-processed non-oriented 
electrical steel.
    One way to reduce core losses is to incorporate a higher grade of 
core steel into the electric motor design (e.g., switching from an M56 
to an M19 grade). In general, higher grades of electrical steel exhibit 
lower core losses. Lower core losses can be achieved by adding silicon 
and other elements to the steel, thereby increasing its electrical 
resistivity. Lower core losses can also be achieved by subjecting the 
steel to special heat treatments during processing.
    The exotic steels are not generally manufactured for use 
specifically in the electric motors covered in this rulemaking. These 
steels include vanadium permendur and other alloyed steels containing a 
high percentage of boron or cobalt. These steels offer a lower loss 
level than the best electrical steels, but are more expensive per 
pound. In addition, these steels can present manufacturing challenges 
because they come in nonstandard thicknesses that are difficult to 
manufacture.
    In the NOPR, DOE noted that its computer software did not model 
general classes of electrical steel, but instead modeled vendor-
specific electrical steel. DOE's software utilized core loss vs. flux 
density curves supplied by an electrical steel vendor as one component 
of the core loss calculated by the program. A second component was also 
added to account for high frequency losses. DOE noted that relative 
performance derived from Epstein testing might not be indicative of 
relative performance in actual motor prototypes. DOE did not solely 
rely on relative steel grade when selecting electrical steels for its 
designs. To illustrate this point, DOE noted that almost all of its 
software modeled designs utilized M36 grade steel, even though it was 
not the highest grade of electrical steel considered in the analysis. 
When higher grade M15 steel was evaluated in DOE's software modeled 
designs, the resulting efficiencies were actually lower than the 
efficiencies when using M36 grade steel for several reasons. The 
Epstein test results for various grades of steel provided in chapter 3 
of the NOPR TSD were purely informational and intended to give an 
indication of the relative performance of a sample of electrical steels 
considered. That information was removed from chapter 3 of the NOPR TSD 
to avoid any further confusion. See 78 FR 73614.
    DOE did not receive any additional comments regarding this 
technology option in response to the NOPR and continues to consider it 
for the final rule analysis.
g. Thinner Steel Laminations
    As addressed earlier, there are two types of core losses that 
develop in the electrical steel of induction motors--hysteresis losses 
and losses due to eddy current. Electric motors can use thinner 
laminations of core steel to reduce eddy currents. The magnitude of the 
eddy currents induced by the magnetic field become smaller in thinner 
laminations, making the motor more energy efficient. In the technology 
analysis, DOE only considered conventional steels with standard gauges 
available in the market. DOE did not receive any comments regarding 
this technology option in response to the NOPR and continues to 
consider it for the final rule analysis.
h. Increase Stack Length
    Adding electrical steel to the rotor and stator to lengthen the 
motor (axially) can also reduce the core losses in an electric motor. 
Lengthening the motor by increasing stack length reduces the magnetic 
flux density, which reduces core losses. However, increasing the stack 
length affects other performance attributes of the motor, such as 
starting torque. Issues can arise when installing a more efficient 
motor with additional stack length because the motor becomes longer and 
may not fit into applications with dimensional constraints. DOE did not 
receive any comments regarding this technology option in response to 
the NOPR and continues to consider it in the final rule analysis.
i. Optimize Bearing and Lubrication
    DOE notes that bearings and lubrication can be optimized for cost, 
performance, maintenance, and other attributes depending on the design 
requirements. However, DOE is of the understanding that choice of 
bearing and lubricant is generally driven by considerations unrelated 
to efficiency for common motors, and so does not vary it as a design 
parameter in the engineering analysis. DOE received no comments 
regarding this technology in response to the NOPR and does not include 
performance gains due to advanced bearings or lubricants in the 
engineering analysis in today's final rule.
j. Improve Cooling System
    Optimizing a motor's cooling system that circulates air through the 
motor is another technology option to improve the efficiency of 
electric motors. Improving the cooling system reduces air resistance 
and associated frictional losses and decreases the operating 
temperature (and associated electrical resistance) by cooling the motor 
during operation. This can be accomplished by changing the fan or 
adding baffles to the current fan to help redirect airflow through the 
motor.
    DOE notes that an improved cooling system may be more or less 
efficient, itself, as long losses within the motor at-large decline. 
When the design of an

[[Page 30962]]

electric motor is changed, losses associated with the cooling system 
may increase in order to provide a decrease in losses associated with 
some other part of the design. DOE did not receive any comments 
regarding this technology option in response to the NOPR and continues 
to consider it for the final rule analysis.
k. Reduce Skew on Conductor Cage
    In the rotor, the conductor bars are not straight from one end to 
the other, but skewed or twisted slightly around the axis of the rotor. 
Decreasing the degree of skew can improve a motor's efficiency. The 
conductor bars are skewed to help eliminate harmonics that add cusps, 
losses, and noise to the motor's speed-torque characteristics. Reducing 
the degree of skew can help reduce the rotor resistance and reactance, 
which helps improve efficiency. However, overly reducing the skew also 
may have adverse effects on starting, noise, and the speed-torque 
characteristics.
    DOE notes that all software designs used in the technology analysis 
had skewed rotor designs and, in general, the skews used were 
approximately 100 percent of a stator or rotor slot pitch, whichever 
had the smaller number of slots. Additionally, DOE intended for the 
option of reducing the skew on the conductor cage to be an option 
associated with reducing stray load losses and has made the appropriate 
adjustments to its text and tables. (See TSD Chapter 4)
l. Improve Rotor Bar Insulation
    In motors, rotor bars are usually insulated to contain current 
within the rotor. Because no insulation is ideal, some current will 
always leak and induce undesired stray losses in other parts of the 
motor. By improving rotor insulation, this effect may be reduced. 
Insulation, however, competes for space within the motor with conductor 
and electrical steel. Therefore, manufacturers look to balance 
insulation with preservation of volume. DOE received no comments in 
response to the NOPR and does not change insulation assumptions for the 
final rule.
m. Technology Options Not Considered
    Variable-speed drives (VSDs) are solid-state electronic devices 
able to vary the voltage, current, and frequency of a motor's input 
signal in order to vary (often continuously) vary torque and speed. DOE 
acknowledges that the ability to modulate motor output may produce 
energy savings in certain applications, if properly controlled. DOE 
does not consider this technology in today's rule because the scope of 
coverage only pertains to single-speed motors. DOE notes that many 
motors within the scope of the rulemaking may be capable of operation 
with a VSD. Inverter-only motors, which are not able to operate on 60 
Hz sinusoidal current, are not subject to today's standards as today's 
rule only applies to motors capable of operation at 60 Hz.
    In response to the NOPR, PlasticMetal commented that DOE should 
consider the use of syncrospeed VFD technology in reducing the energy 
consumed by motors, especially for motors used in injection molding 
machines. PlasticMetal noted that VFD technology can also be used for 
agricultural pump and hydraulic pump motors. (PlasticMetal, No. 80 at 
p. 1)
    Although DOE's proposed standards were limited to single-speed 
motors, DOE recognizes that VFDs may offer further energy savings in 
injection molding (among other applications). DOE may consider 
exploring this technology further in a future rulemaking, but at 
present retains coverage of only single-speed motors.

B. Screening Analysis

    After DOE identified the technologies that might improve the energy 
efficiency of electric motors, DOE conducted a screening analysis. The 
purpose of the screening analysis is to determine which options to 
consider further and which to screen out. DOE consulted with industry, 
technical experts, and other interested parties in developing a list of 
design options. DOE then applied the following set of screening 
criteria, under sections 4(a)(4) and 5(b) of 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,'' to determine which design options are unsuitable 
for further consideration in the rulemaking:
     Technological Feasibility: DOE will consider only those 
technologies incorporated in commercial equipment or in working 
prototypes to be technologically feasible.
     Practicability to Manufacture, Install, and Service: If 
mass production of a technology in commercial equipment and reliable 
installation and servicing of the technology could be achieved on the 
scale necessary to serve the relevant market at the time of the 
effective date of the standard, then DOE will consider that technology 
practicable to manufacture, install, and service.
     Adverse Impacts on Equipment Utility or Equipment 
Availability: DOE will not further consider a technology if DOE 
determines it will have a significant adverse impact on the utility of 
the equipment to significant subgroups of customers. DOE will also not 
further consider a technology that will result in the unavailability of 
any covered equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as equipment generally available in the United 
States at the time.
     Adverse Impacts on Health or Safety: DOE will not further 
consider a technology if DOE determines that the technology will have 
significant adverse impacts on health or safety.
    Table IV.9 presents a general summary of potential methods that a 
manufacturer may use to reduce losses in electric motors. The 
approaches presented in this table refer either to specific 
technologies (e.g., aluminum versus copper die-cast rotor cages, 
different grades of electrical steel) or physical changes to the motor 
geometries (e.g., cross-sectional area of rotor conductor bars, 
additional stack height). For additional details on the screening 
analysis, please refer to chapter 4 of the final rule TSD.

     Table IV.9--Summary List of Options From Technology Assessment
------------------------------------------------------------------------
         Type of loss to reduce                 Technology option
------------------------------------------------------------------------
Stator I\2\R Losses....................  Increase cross-sectional area
                                          of copper in stator slots.
                                         Decrease the length of coil
                                          extensions.
Rotor I\2\R Losses.....................  Use a die-cast copper rotor
                                          cage.
                                         Increase cross-sectional area
                                          of rotor conductor bars.
                                         Increase cross-sectional area
                                          of end rings.
Core Losses............................  Use electrical steel
                                          laminations with lower losses
                                          (watts/lb).
                                         Use thinner steel laminations.
                                         Increase stack length (i.e.,
                                          add electrical steel
                                          laminations).
Friction and Windage Losses............  Optimize bearing and
                                          lubrication selection.
                                         Improve cooling system design.
Stray-Load Losses......................  Reduce skew on rotor cage.
                                         Improve rotor bar insulation.
------------------------------------------------------------------------

1. Technology Options Not Screened Out of the Analysis
    The technology options in this section are options that passed the 
screening

[[Page 30963]]

criteria of the analysis. DOE considers the technology options in this 
section to be viable means of improving the efficiency of electric 
motors.
    In the NOPR, DOE stated that the notice provides detailed 
information about each technology option considered. With the exception 
of die-cast copper rotors, which many manufacturers stated they would 
usually never consider when increasing efficiency for the reasons 
detailed below, DOE understands that each technology option that it has 
not screened out is a design option that a manufacturer would consider 
for each motor designed and built. DOE recognized that manufacturers 
design their motors to balance a number of competing and interrelated 
factors, including performance, reliability, and energy efficiency. 
Because the options DOE had identified can be modified to improve 
efficiency while maintaining performance, it was DOE's view that at 
least some significant level of energy efficiency improvement is 
possible with each technology option not screened out by DOE. See 78 FR 
73616.
    Furthermore, DOE noted that it did not explicitly use each of the 
technology options that passed the screening criteria in the 
engineering analysis. As discussed in section IV.C of the NOPR, DOE's 
engineering analysis was a mixture of two approaches that DOE routinely 
uses in its engineering analysis methodology: The reverse-engineering 
approach (in which DOE has no control over the design parameters) and 
the efficiency-level approach (in which DOE tried to achieve a certain 
level of efficiency, rather than applying specific design options). 
This hybrid of methods did not allow for DOE to fully control which 
design parameters were ultimately used for each representative unit in 
the analysis. Without the ability to apply specific design options, DOE 
could not include every option that was not screened out of the 
analysis. See 78 FR 73616.
    In addition, in the NOPR, DOE noted that its analysis neither 
assumes nor requires manufacturers to use identical technology for all 
motor types, horsepower ratings, or equipment classes. In other words, 
DOE's standards are technology-neutral and permit manufacturers design 
flexibility. See id.
    DOE did not receive any comments regarding the technology screening 
process in response to the NOPR and maintains this same approach in the 
final rule.
a. Die-Cast Copper Rotors
    Aluminum is the most common material used today to create die-cast 
rotor bars for electric motors. Some manufacturers that focus on 
producing high-efficiency designs have started to offer electric motors 
with die-cast rotor bars made of copper. Copper can offer better 
performance than aluminum because it has better electrical conductivity 
(i.e., a lower electrical resistance). However, because copper also has 
a higher melting point than aluminum, the casting process becomes more 
difficult and is likely to increase both production time and cost.
    DOE acknowledges that using copper in rotors may require different 
design approaches and considerations. In its own modeling and testing 
of copper rotor motors, DOE ensured that performance parameters stayed 
within MG 1-2011 limits (i.e., met NEMA Design B criteria).
    DOE did not screen out copper as a die-cast rotor conductor 
material in the NOPR because it believed that it passed the four 
screening criteria. Because several manufacturers currently die-cast 
copper rotors, DOE concluded that this material is both technologically 
feasible and practicable to manufacture, install, and service. 
Additionally, manufacturers are already producing such equipment, with 
no known increase in accidents or other health/safety problems. 
Finally, DOE's own engineering analysis supports what it sees in the 
market for copper rotors--that copper rotor motors may require some 
design tradeoffs but that, in general, it is possible to use copper and 
remain within NEMA Design A, B, or C specifications. In addition, DOE 
notes that its analysis neither assumes nor requires manufacturers to 
use identical technology for all motor types, horsepower ratings, or 
equipment classes. Moreover, DOE does not believe that the TSL chosen 
for today's standard would require most manufacturers to use copper 
rotor motors.
    DOE received considerable feedback concerning copper rotor 
technology both in response to the preliminary analysis and the NOPR. 
DOE addressed comments made on this topic at the preliminary analysis 
stage in the NOPR (see 78 FR 73616-73620). Here DOE responds to 
comments made on this topic in response to the NOPR and organizes its 
responses by the four screening criteria. Although it is well-
documented that die-cast copper rotors are available in the market to 
at least 30 hp, they are not widely marketed at the higher horsepower 
ratings. It is not clear precisely why copper rotor motors are not 
marketed at horsepowers greater than 30. It is possible that because it 
is impracticable to die-cast copper at those rotor sizes or there is 
simply a lack of demand at higher horsepowers to justify investment in 
production capacity.
    As part of its analysis, DOE intends to ensure that utility, which 
includes frame size considerations, is maintained. Increased shipping 
costs are also taken into account in the national impact analysis (NIA) 
and the life-cycle cost (LCC) analysis portions of DOE's analytical 
procedures.
Technological Feasibility
    In the NOPR, DOE cited a number of high horsepower designs with 
copper rotors as evidence of technological feasibility, as well as 
observing that distribution transformers, another large industrial 
product that uses conductors around electrical steel, commonly improve 
efficiency by replacing aluminum with copper. 78 FR 73618.
    In response to the statements that DOE made in the NOPR (see 78 FR 
73618), NEMA pointed out that transformers and induction motors are not 
comparable because the performance tradeoff between efficiency and 
inrush current is different in both cases. (NEMA, No. 93 at p. 10) 
Nidec commented that the examples of Tesla, REMY, and Oshkosh traction 
motors cited by DOE as evidence of the feasibility of copper die-cast 
rotors involved motors that operated at higher speeds and lower 
torques. Consequently, in its view, these comparisons were not an 
accurate representation of those motors that would be covered under 
DOE's proposal. (Nidec, No. 98 at pp. 3-4) NEMA agreed with Nidec, and 
made the point that it is physical rotor size, and not horsepower, that 
sets limits on copper die-casting. (NEMA, No. 93 at p. 9) NEMA also 
noted that, from a manufacturer perspective, the issue of importance is 
not the feasibility of designing a suitable copper rotor, but rather 
the issue of whether copper rotors can be die-cast and mass-produced. 
(NEMA, No. 93 at p. 9)
    DOE recognizes that assessing the technological feasibility of 
high-horsepower copper die-cast rotors is made more complex by the fact 
that DOE believes that manufacturers do not offer them commercially. 
DOE acknowledges that the listed motor examples are of higher speed 
that those under consideration in this rule, and that horsepower must 
be discussed in the context of speed. DOE agrees with NEMA that the 
challenges with designing with copper rotor motors lie less in the 
feasibility of designing

[[Page 30964]]

copper rotor motors, and more in the die-casting of large copper 
rotors. As a result, DOE views the debate as residing chiefly in the 
domain of manufacturability, considered in the next section. Commenters 
have not demonstrated that it would be technologically infeasible to 
develop and incorporate copper die-cast rotors in lower-speed motors. 
Therefore, DOE does not screen out die-cast copper on the basis of 
technological feasibility.
Practicability to Manufacture, Install, and Service
    In the NOPR, DOE stated that it was not able to conclude copper 
rotors were impracticable to manufacture because DOE identified parties 
already manufacturing copper rotor motors. DOE was able to purchase and 
tear down a copper rotor motor, which performed at DOE's max-tech level 
at its horsepower (5 hp) and met NEMA Design B requirements. 78 FR 
73617.
    In response to the NOPR, NEMA maintained its position that copper 
die-cast rotors should be screened out of the analysis for the current 
rulemaking. NEMA and Nidec argued that designs modeled by DOE for ECG 1 
at EL 4 and ECG 2 at EL 2 used copper rotor technology and, thus, 
implied that copper rotor technology is a requirement to meet max-tech 
efficiency levels. (NEMA, No. 93 at p. 8; Nidec, No. 98 at p. 3) 
Referring to the U.S. Department of the Army studies on die-cast copper 
rotor motors that NEMA discussed in its preliminary analysis comments, 
NEMA raised concern that it is difficult to successfully die cast a 
copper rotors of the required size in mass production. NEMA commented 
that it is not aware of manufacturing, in the United States or outside, 
capable of mass production of copper die-cast rotors ``on the scale 
necessary to serve the relevant market at the time of the effective 
date of the standard,'' as proposed in the NOPR. NEMA stated that the 
challenge to design a motor when the material of the rotor is changed 
is not limited to meeting only a required value of efficiency and the 
limits on torques and current that DOE specifies in the definitions in 
10 CFR 431.12. Noting that particular TSL levels were developed based 
on the EL levels, NEMA commented that if the copper die-cast rotor 
technology were screened out, then EL 4 would not be included in the 
creation of any TSL level, and TSL 3 would represent the maximum 
technology designs. (NEMA, No. 93 at pp. 8-12)
    Baldor commented that the Motor Coalition has submitted earlier 
that they do not have the capacity to produce copper rotors at a volume 
of 5 million units per year. It raised concerns that it is challenging 
to manufacture a better design in actual production. (Baldor, Pub. Mtg. 
Tr., No. 87 at pp. 118-119)
    In contrast, CDA disagreed with the manufacturers' claims that die-
cast copper rotor motors are not commercially available. CDA commented 
that die-cast copper rotor motors--60 Hz ``Ultra'' motors manufactured 
by Siemens--have been commercially available at certain horsepower 
ratings in North America since February 2006. Siemens has copper rotor 
die-casting capabilities in Denver, Ohio, and Mexico. Multiple 
countries in Europe and Asia also have copper rotor die casters. 
Siemens produces 50 Hz motors in Germany, and SEW-Eurodrive produces 50 
Hz and 60 Hz motors for worldwide shipment. Therefore, CDA stated that 
die-cast copper rotors are commercially available, and DOE should 
continue to include them in their evaluations. (CDA, No. 90 at p. 2)
    Following publication of the NOPR, DOE was able to speak with a 
manufacturer of die-casting equipment who confirmed their ability to 
die-cast copper rotors in excess of 500 lbs in a single ``shot''. DOE 
has not been able to obtain written verification of this capability. If 
true, however, the question is whether such rotor size is sufficient to 
reach the limits of the horsepower scope of today's rule.
    Although DOE did not directly model a copper rotor that large, DOE 
did purchase and tear down a 30 hp motor of specification within the 
scope of this rulemaking with a die-cast copper rotor and found the 
weight to be 29 lbs, or roughly 1 lb/hp. DOE understands that the 
active mass of a motor grows sublinearly with power, and by extension, 
that a 500 hp motor of similar design could be built with a copper 
rotor of less than 500 lbs.
    Although these figures are estimates, DOE believes there is 
evidence to suggest that copper die-cast rotor would be practicable to 
manufacture, install, or service and, consequently, this technology 
should not be screened out on that basis. DOE understands that full-
scale deployment of copper would likely require considerable capital 
investment and that such investment could increase the production cost 
of large copper rotor motors considerably. DOE believes that its 
current engineering analysis reflects this likelihood. DOE acknowledges 
that if it were adopting a max-tech standard, the chance that any 
manufacturer would use copper die-cast rotors would be much greater 
than the chance that any manufacturer would choose to use this 
technology under the efficiency level chosen in today's rule.
Adverse Impacts on Equipment Utility or Equipment Availability
    For the NOPR, DOE acknowledged that the industry would need to make 
substantial investments in production capital to ensure the 
availability of motors at current production levels. DOE noted that, in 
some cases, redesigning equipment lines to use copper would entail 
substantial cost. DOE's engineering analysis reflects its estimates of 
these costs and discusses them in detail in section IV.C. Although 
using copper in place of aluminum can require design changes in order 
to keep parameters such as locked-rotor current within rated limits, 
DOE was able to model copper rotor motors adhering to the 
specifications of NEMA Design B,\37\ including the reduced (relative to 
Design A) locked-rotor current.
---------------------------------------------------------------------------

    \37\ The parameters DOE believed to present the largest risk of 
rendering a motor noncompliant with NEMA MG 1-2011standards were 
those related to NEMA design letter, which were adhered to in DOE's 
modeling efforts.
---------------------------------------------------------------------------

    In response, to the NOPR, NEMA reiterated many of its concerns 
about production capability worldwide and that utility may be impacted 
with respect to torque/speed characteristics if copper becomes a de 
facto standard. (NEMA, No. 93 at pp. 11-13)
    Based on DOE's own shipments analysis (see final TSD, Chapter 9) 
and estimates of worldwide annual copper production,\38\ DOE estimates 
that .01-.02 percent of worldwide copper supply would be required for 
electric motor manufacturers to use copper rotors for every single 
motor within DOE's scope of coverage. DOE acknowledges the need to vary 
design parameters in order to maintain equipment utility through a 
transition to copper rotors, but does not believe commenters have 
demonstrated that it is infeasible, particularly when DOE has been able 
to procure and test equipment meeting Design B specification. At the 
present, DOE does not believe there is sufficient evidence to screen 
copper die-cast rotors from the analysis on the basis of adverse 
impacts to equipment utility or availability.
---------------------------------------------------------------------------

    \38\ See http://minerals.usgs.gov/minerals/pubs/commodity/copper/mcs-2012-coppe.pdf.
---------------------------------------------------------------------------

Adverse Impacts on Health or Safety
    In the NOPR, DOE did not screen out copper die-casting on the basis 
of adverse impacts to health or safety. DOE is aware of the higher 
melting point of copper (1084 degrees Celsius versus 660 degrees 
Celsius for aluminum) and the potential impacts this may have on the

[[Page 30965]]

health or safety of plant workers. However, DOE does not believe at 
this time that this potential impact is sufficiently adverse to screen 
out copper as a die-cast material for rotor conductors. The process for 
die-casting copper rotors involves risks similar to those of die-
casting aluminum. DOE believes that manufacturers who die-cast metal at 
660 Celsius or 1085 Celsius (the respective temperatures required for 
aluminum and copper) would need to observe strict protocols to operate 
safely. DOE understands that many plants already work with molten 
aluminum die-casting processes and believes that similar processes 
could be adopted for copper. DOE has not received any supporting data 
about the increased risks associated with copper die-casting, and could 
not locate any studies suggesting that the die-casting of copper 
inherently represents incrementally more risks to worker safety and 
health. DOE notes that several OSHA standards relate to the safety of 
``Nonferrous Die-Castings, Except Aluminum,'' of which die-cast copper 
is part. DOE did not receive comment on this topic specifically in 
response to the NOPR and maintains this approach for the final rule.
b. Increase the Cross-Sectional Area of Copper in the Stator Slots
    DOE describes its approach for ``Increase the Cross-Sectional Area 
of Copper in the Stator Slots'' in section IV.A.5.a. Considering the 
four screening criteria for this technology option, DOE did not screen 
out the possibility of changing gauges of copper wire in the stator as 
a means of improving efficiency. Motor design engineers adjust this 
option by using different wire gauges when manufacturing an electric 
motor to achieve desired performance and efficiency targets. Because 
this design technique is in commercial use today, DOE considers this 
technology option both technologically feasible and practicable to 
manufacture, install, and service. DOE is not aware of any adverse 
impacts on consumer utility, reliability, health, or safety associated 
with changing the wire gauges in the stator to obtain increased 
efficiency. Should the technology option prove to not be economical on 
a scale necessary to supply the entire industry, then this technology 
option would be likely not be selected for in the analysis, either in 
the LCC or MIA.
    In response to the NOPR, NEMA commented that hand winding is not a 
viable technology to gain an increase in slot fill of less than 5% and 
thus suggested that hand winding should be screened out. NEMA stated 
that hand winding poses adverse impacts on manufacturing relative to 
mass production and may shift production of stators to cheaper labor 
locations outside of the United States. Hand winding also has adverse 
impacts on health and safety of personnel and on product utility and 
availability. Noting that none of the representative units are hand 
wound, it commented that the engineering analysis should not be based 
on stator slot fill levels which require hand winding (NEMA, No. 93 at 
pp. 12-13)
    DOE acknowledges that the industry is moving towards increased 
automation. However, hand winding is currently practiced by 
manufacturers, making it a viable option for DOE to consider as part of 
its engineering analysis. Furthermore, DOE is not aware of any data or 
studies suggesting hand-winding leads to negative health consequences 
and notes that hand winding is currently practiced by industry. In 
response to the NOPR, DOE did not receive any comment on its cost 
estimates for hand-wound motors nor on studies suggesting any health 
impacts. DOE acknowledges that, were hand-winding to become widespread, 
manufacturers would need to hire more workers to perform hand-winding 
to maintain person-winding-hour equivalence and has accounted for the 
added costs of hand-winding in its engineering analysis.
c. Power Factor
    Although not considered as a technology option per se, several 
commenters commented on power factor in response to DOE's NOPR. Power 
factor is the ratio of real power to apparent power, or the fraction of 
power sent to a device divided by its actual power consumption. Power 
factor equals one for purely resistive loads, but falls for circuits 
with loads that are capacitive or (in the usual case of electric 
motors) inductive. Generally, low power factor is viewed as 
undesirable; it may force the use of larger conductors and hardware 
within a building. Furthermore, many industrial customers are charged 
more for electrical power by their utility as their net power factor 
falls. Because power factor has value to owners of electric motors, any 
standard that causes power factor to rise significantly could be said 
to negatively affected consumer utility. Several parties commented on 
power factor in response to DOE's NOPR.
    The CA IOUs noted that energy saved in the motor can show up as 
energy lost in the building and utility distribution systems. (CA IOUs, 
Pub. Mtg. Tr., No. 87 at p. 115)
    Baldor commented that it is challenging to get a higher efficiency 
motor along with good power factor and low inrush current. When a motor 
is redesigned for efficiency, power factor goes down when efficiency 
goes up and inrush current can rise and change motor design from Design 
B to Design A. (Baldor, Pub. Mtg. Tr., No. 87 at pp. 118-119)
    EEI expressed concern that larger industrial facilities (having 
heavy motor populations) may incur higher economic costs if higher 
efficiency requirements lead to lower power factor. This is because 
larger customers are metered for kVA and they are penalized if the 
facility power factor goes below a certain level. (EEI, Pub. Mtg. Tr., 
No. 87 at pp. 120-121)
    DOE acknowledges that power factor is one parameter of many that 
requires supervision in redesigning motors for greater efficiency. 
Electric motors, by their very nature, are highly inductive loads with 
correspondingly low power factors. Facilities with large numbers of 
motors often choose to add capacitance in parallel with their inductive 
loads in order to correct power factor, and often be charged lower 
rates for electricity. Several motor manufacturers advocate power 
factor correction and advertise equipment to do it.\39\
---------------------------------------------------------------------------

    \39\ For example, http://www.baldor.com/support/Literature/Load.ashx/FM1307?LitNumber=FM1307.
---------------------------------------------------------------------------

    Furthermore, DOE notes that MG 1-2009 characterizes the 
relationship between motor efficiency and power factor in paragraph 
14.44.1. This relationship is nonlinear, but it can be used to show 
that \40\ even when going from 74% motor efficiency \41\ to the 
corresponding premium efficiency requirement of 82.5%, power factor 
falls by only 11% Higher horsepower motors would be predicted (by 
paragraph 14.44.1) to experience smaller declines in power factor. 
Finally, Premium efficiency motors are in widespread use today, 
suggesting to DOE that the associated power factor considerations are 
not insurmountable. As a result, DOE does not view power factor as a 
significant obstacle in adopted of today's standards.
---------------------------------------------------------------------------

    \40\ Taking the derivative suggests that power factor may scale 
inversely with efficiency raised to the -2 power.
    \41\ The current requirement for 1 horsepower, 8-pole, subtype 
II electric motors.
---------------------------------------------------------------------------

2. Technology Options Screened Out of the Analysis
    DOE developed an initial list of design options from the 
technologies identified in the technology assessment.

[[Page 30966]]

DOE reviewed the list to determine if the design options are 
practicable to manufacture, install, and service; would adversely 
affect equipment utility or equipment availability; or would have 
adverse impacts on health and safety. In the engineering analysis, DOE 
did not consider any of those options that failed to satisfy one or 
more of the screening criterion. The design options screened out are 
summarized in Table IV.10.

        Table IV.10--Design Options Screened Out of the Analysis
------------------------------------------------------------------------
    Design option excluded          Eliminating screening criterion
------------------------------------------------------------------------
Plastic Bonded Iron Powder     Technological Feasibility.
 (PBIP).
Amorphous Steels.............  Technological Feasibility.
------------------------------------------------------------------------

    At the preliminary analysis stage, NEMA, Baldor, and NPCC agreed 
with DOE that plastic bonded iron powder has not been proven to be a 
technologically feasible method of construction of stator and rotor 
cores in induction motors, and that amorphous metal laminations are not 
a type of material that lends itself to use in electric motors in the 
foreseeable future. (NEMA, No. 54 at pp. 63-64; Baldor, Pub. Mtg. Tr., 
No. 60 at p. 108; Advocates, No. 56 at p. 3)
    As DOE did in the NOPR, DOE is continuing to screen out both of 
these technology options from further consideration in the engineering 
analysis in the final rule. See 78 FR 73622. Additionally, DOE 
understands the concerns expressed by NEMA regarding technological 
feasibility, but DOE maintains that if a working prototype exists, 
which implies that the motor has performance characteristics consistent 
with other motors using a different technology, then that technology 
would be deemed technologically feasible. However, that fact would not 
necessarily mean that a technology option would pass all three of the 
remaining screening criteria.
    Chapter 4 of the TSD discusses each of these screened out design 
options in more detail, as well as the design options that DOE 
considered in the electric motor engineering analysis. DOE did not 
receive additional comments on the technology options screened out in 
response to the NOPR.

C. Engineering Analysis

    The engineering analysis develops cost-efficiency relationships for 
the equipment that are the subject of a rulemaking by estimating 
manufacturer costs of achieving increased efficiency levels. DOE uses 
manufacturing costs to determine retail prices for use in the LCC 
analysis and MIA. In general, the engineering analysis estimates the 
efficiency improvement potential of individual design options or 
combinations of design options that pass the four criteria in the 
screening analysis. The engineering analysis also determines the 
maximum technologically feasible energy efficiency level.
    When DOE adopts a new or amended standard for a type or class of 
covered equipment, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such equipment. (42 U.S.C. 6295(p)(1) and 6316(a)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for electric motors, using the design parameters for the 
most efficient equipment available on the market or in working 
prototypes. (See chapter 5 of the TSD) The max-tech levels that DOE 
determined for this rulemaking are described in IV.3 of this rule.
    In general, DOE used three methodologies to generate the 
manufacturing costs needed for the engineering analysis. These methods 
are:
    (1) The design-option approach--reporting the incremental costs of 
adding design options to a baseline model;
    (2) the efficiency-level approach--reporting relative costs of 
achieving improvements in energy efficiency; and
    (3) the reverse engineering or cost assessment approach--involving 
a ``bottoms up'' manufacturing cost assessment based on a detailed bill 
of materials derived from electric motor teardowns.
1. Engineering Analysis Methodology
    DOE's analysis for the electric motor rulemaking is based on a 
combination of the efficiency-level approach and the reverse 
engineering approach. Primarily, DOE elected to derive its production 
costs by tearing down electric motors and recording detailed 
information regarding individual components and designs. DOE used the 
costs derived from the engineering teardowns and the corresponding 
nameplate nominal efficiency of the torn down motors to report the 
relative costs of achieving improvements in energy efficiency. DOE 
derived material prices from current, publicly available data, as well 
as input from SMEs and manufacturers. For most representative units 
analyzed, DOE was not able to test and teardown a max-tech unit, 
because such units are generally cost-prohibitive and are not readily 
available. Therefore, DOE supplemented the results of its test and 
teardown analysis with software modeling.
    When developing its engineering analysis for electric motors, DOE 
divided covered equipment into equipment class groups. As discussed 
above, there are three electric motor equipment class groups: ECG 1: 
NEMA Design A and B motors, ECG 2: NEMA Design C motors, and ECG 3: 
Fire pump electric motors. The motors within these ECGs are further 
divided into equipment classes based on pole-configuration, enclosure 
type, and horsepower rating. For DOE's rulemaking, there are 482 
equipment classes.
2. Representative Units
    Due to the high number of equipment classes for electric motors, 
DOE selected and analyzed only a few representative units from each ECG 
and based its overall analysis for all equipment classes within that 
ECG on those representative units. Results are scaled to equipment 
classes not directly analyzed.\42\ During the final rule analysis, DOE 
selected three units to represent ECG 1 and two units to represent ECG 
2. DOE based the analysis of ECG 3 on the representative units for ECG 
1 because of the low shipment volume and run time of fire pump electric 
motors. When selecting representative units for each ECG, DOE 
considered NEMA design type, horsepower rating, pole-configuration, and 
enclosure.
---------------------------------------------------------------------------

    \42\ See Chapter 5 of the TSD for details.
---------------------------------------------------------------------------

a. Electric Motor Design Type
    For ECG 1, which includes all NEMA Design A and B motors, DOE only 
selected NEMA Design B motors as representative units to analyze in the 
engineering analysis. DOE chose NEMA Design B motors because NEMA 
Design

[[Page 30967]]

B motors have slightly more stringent performance requirements, namely 
their locked-rotor current has a maximum allowable level for a given 
rating. Consequently, NEMA Design B motors are slightly more restricted 
in terms of their maximum efficiency levels. Therefore, by analyzing a 
NEMA Design B motor, DOE could ensure technological feasibility for all 
designs covered in ECG 1. Additionally, NEMA Design B units have much 
higher shipment volumes than NEMA Design A motors because most motor 
driven equipment is designed (and UL listed) to run with NEMA Design B 
motors.
    As mentioned for ECG 2, DOE selected two representative units to 
analyze. Because NEMA Design C is the only NEMA design type covered by 
this ECG, DOE only selected NEMA Design C motors as its representative 
units.
    For ECG 3, which consists of fire pump electric motors, DOE based 
its engineering analysis on the NEMA Design B units analyzed for ECG 1. 
As noted above, in order to be in compliance with section 9.5 of 
National Fire Protection Association (NFPA) ``Standard for the 
Installation of Stationary Pumps for Fire Protection'' Standard 20-
2010, which is a requirement for a motor to meet DOE's current 
definition of a ``fire pump electric motor,'' the motor must comply 
with NEMA Design B requirements.\43\ Although DOE understands that fire 
pump electric motors have additional performance requirements, DOE 
believed that analysis of the ECG 1 motors would serve as a sufficient 
approximation for the cost-efficiency relationship for fire pump 
electric motors. The design differences between a NEMA Design B motor 
(or IEC-equivalent) and fire pump electric motor are small and unlikely 
to greatly affect incremental cost behavior.
---------------------------------------------------------------------------

    \43\ With the exception of having a thermal shutoff switch, 
which could prevent a fire pump motor from performing its duty in 
hot conditions, NFPA 20 also excludes several motor types not 
considered in this rulemaking from the NEMA Design B requirement. 
They are direct current, high-voltage (over 600 V), large-horsepower 
(over 500 hp), single-phase, universal-type, and wound-rotor motors.
---------------------------------------------------------------------------

    Regarding DOE's ``fire pump electric motor'' definition, as 
detailed in the electric motors 2012 test procedure,\44\ DOE intends 
its ``fire pump electric motor'' definition to cover both NEMA Design B 
motors and IEC-equivalents that meet the requirements of section 9.5 of 
NFPA 20. See 77 FR 26617-18. As stated in the 2012 test procedure, DOE 
agrees that IEC-equivalent motors should be included within the scope 
of the definition of ``fire pump electric motor,'' although NFPA 20 
does not explicitly recognize the use of IEC motors with fire pumps. 77 
FR 26617. DOE realizes that section 9.5 of NFPA 20 specifically 
requires that fire pump motors shall be marked as complying with NEMA 
Design B. The ``fire pump electric motor'' definition that DOE created 
focuses on ensuring that compliance with the energy efficiency 
requirements are applied in a consistent manner. DOE believes that 
there are IEC motors that can be used in fire pump applications that 
meet both NEMA Design B and IEC Design N criteria, as well as NEMA MG 1 
service factors. DOE's definition encompasses both NEMA Design B motors 
and IEC-equivalents. To the extent that there is any ambiguity as to 
how DOE would apply this definition, in DOE's view, any Design B or 
IEC-equivalent motor that otherwise satisfies the relevant NFPA 
requirements would meet the ``fire pump electric motor'' definition in 
10 CFR 431.12. See the standards NOPR for a historical discussion of 
comments related to fire pump electric motors. 78 FR 73623.
---------------------------------------------------------------------------

    \44\ 77 FR 26608.
---------------------------------------------------------------------------

    ECG 4 proposed in the NOPR consisted of brake electric motors and 
was also based on ECG 1, because DOE is only aware of brake motors 
being built to NEMA Design B specifications. Furthermore, DOE 
understands that there is no fundamental difference in design between 
brake and non-brake electric motors, other than the presence of the 
brake. Therefore, the same design options could be used on both sets of 
electric motors, and both motor types are likely to exhibit similar 
cost versus efficiency relationships. In today's final rule, brake 
motors no longer constitute a separate equipment class group and, 
therefore, brake motors fall into equipment classes based on their 
other characteristics (e.g., pole count, design type).
b. Horsepower Rating
    Horsepower rating is an important equipment class setting 
criterion. When DOE selected its preliminary analysis representative 
units, DOE chose those horsepower ratings that constitute a high volume 
of shipments in the market and provide a wide range upon which DOE 
could reasonably base a scaling methodology. For NEMA Design B motors, 
for example, DOE chose 5-, 30-, and 75-horsepower-rated electric motors 
to analyze as representative units. DOE selected the 5-horsepower 
rating because these motors have the highest shipment volume of all 
motors. DOE selected the 30-horsepower rating as an intermediary 
between the small and large frame number series electric motors. 
Finally, DOE selected a 75-horsepower unit because there is minimal 
variation in efficiency for motors with horsepower ratings above 75-
horsepower. Based on this fact, DOE determined it was unnecessary to 
analyze a higher horsepower motor. Additionally, as horsepower levels 
increase, shipments typically decrease. Therefore, DOE believed there 
would be minimal gains to its analysis had it examined a higher 
horsepower representative unit.
    DOE selected the 5-horsepower motor for multiple reasons. The 5-
horsepower unit had the highest percentage of shipments for all covered 
electric motors, which ensured that there would be multiple efficiency 
levels from multiple manufacturers available for comparison during the 
teardown analysis. In addition, because DOE later employed scaling to 
establish efficiency levels for all equipment classes, it attempted to 
find a frame series and D-dimension \45\ that could serve as a strong 
basis from which to scale to a relatively small set of unanalyzed frame 
series. The standard NEMA MG 1-2011 frame series for the 5-horsepower 
enclosed motor was a midpoint between the standard frame series for 1 
horsepower and 10-horsepower motors, which was the group of ratings 
covered by the 5- horsepower representative unit. A larger 
representative unit would have meant a larger range of frame series on 
which to apply the scaling methodology.
---------------------------------------------------------------------------

    \45\ ``D'' dimension is the length from the centerline of the 
shaft to the mounting feet of the motor, and impacts how large the 
motor's laminations can be, impacting the achievable efficiency of 
the motor. ``D'' dimensions are designated in NEMA MG 1-2011 Section 
4.2.1, Table 4-2.
---------------------------------------------------------------------------

    As to DOE's selection of the 75-horsepower representative unit as a 
maximum, DOE understands that the 75-horsepower motor is not built in 
the largest NEMA MG 1-2011 frame series covered, but maintains that its 
selection is appropriate for this analysis. As stated previously, 
efficiency changes slowly when approaching the highest horsepower 
ratings, and choosing a higher horsepower rating would not have 
provided any appreciable improvement over the data DOE already 
developed for its analysis. DOE has found minimal variation in 
efficiency for motors above 75-horsepower. Because the change in 
efficiency diminishes with increasing horsepower, one may achieve a 
similar level of analytical accuracy with fewer data points at higher 
horsepower. Stated inversely, one needs more data points to accurately 
characterize a curve where it has a greater rate of change, such as

[[Page 30968]]

lower horsepower. Finally, DOE notes that its scaling methodology 
mirrors the scaling methodology used in NEMA's MG 1-2011 tables of 
efficiencies, including the rate of change in efficiency with 
horsepower.
    DOE also notes that part 13 \46\ of NEMA MG 1-2011 does not 
standardize frame series for NEMA Design B motors at the highest 
horsepower levels covered in today's rule. Therefore, motors with the 
highest capacity have variability in their frame series. This added 
flexibility would give manufacturers more options to improve the 
efficiency of their largest motors covered by this rulemaking. Although 
altering the frame size of a motor may be costly, DOE believes that its 
selection of a 75-hp representative unit for higher horsepower motors 
is appropriate for scaling higher horsepower efficiency levels and the 
efficiency levels examined are technologically feasible for the largest 
capacity motors.
---------------------------------------------------------------------------

    \46\ This part provides standardized frame sizing by horsepower 
and speed for integral horsepower AC induction motors.
---------------------------------------------------------------------------

    For NEMA Design C motors, DOE again selected the 5-horsepower 
rating because of its prevalence. In addition, DOE selected a 50-
horsepower rating as an incrementally higher representative unit. DOE 
only selected two horsepower ratings for these electric motors because 
of their low shipment volumes. For more information on how DOE selected 
these horsepower ratings see chapter 5 of the TSD.
    In its preliminary analysis comments NEMA questioned DOE's 
selection of the 50-horsepower representative unit for the NEMA Design 
C equipment class group because the NEMA T-frame size for such a rating 
is three NEMA T-frame number series below the largest frame number 
series and the fact that the 2011 shipment data that DOE used to select 
its representative units was not broken down by NEMA design type. 
(NEMA, No. 54 at p. 66)
    As stated in the NOPR and as DOE maintains in this final rule, as 
with ECG 1, DOE selected representative units that fell in the middle 
of the range of ratings covered in this rulemaking and not necessarily 
the largest frame size covered in the rulemaking. Furthermore, as 
discussed earlier, NEMA Design C motors are produced in a smaller range 
of horsepower ratings than NEMA Design B motors (1 to 200 rather than 1 
to 500). With this smaller horsepower range, a correspondingly smaller 
range of representative units is needed. Therefore, DOE selected a 
slightly lower rating as its maximum for ECG 2. See 78 FR 73625. As for 
the shipments data used to select the 5-hp representative unit, DOE did 
not separate the data by design type within an ECG because the same 
standard applies to motors of any design type (e.g., ``Design A'') 
within an ECG, and has revised the text for the final TSD to clarify 
that fact. See id. However, DOE still maintains that the prevalence of 
5-hp units make it an appropriate selection as a representative unit. 
DOE did not receive further comments on representative units in 
response to the NOPR and has maintained its approach for the final 
rule.
c. Pole-Configuration
    Pole-configuration is another important equipment class setting 
criterion that DOE had to consider when selecting its representative 
units. For the preliminary analysis, DOE selected 4-pole motors for all 
of its representative units. DOE chose 4-pole motors because they 
represent the highest shipment volume of motors compared to other pole 
configurations. DOE chose not to alternate between pole configurations 
for its representative units because it wanted to keep as many design 
characteristics constant as possible. Doing so allowed DOE to more 
accurately identify how design changes affect efficiency across 
horsepower ratings. Additionally, DOE believed that the horsepower 
rating-versus-efficiency relationship is the most important (rather 
than pole-configuration and enclosure type-versus-efficiency) because 
there are significantly more horsepower ratings to consider.
    In the preliminary analysis, NEMA and Baldor commented that scaling 
across pole configurations will lead to inaccurate results. (NEMA, No. 
54 at pp. 26, 66-67; Baldor, Pub. Mtg. Tr., No. 60 at pp. 130, 131)
    As mentioned earlier, DOE assessed energy conservation standards 
for 482 equipment classes. As described in the NOPR \47\ and as DOE 
retains in today's rule, analyzing each of the classes individually is 
not feasible, which requires DOE to select representative units on 
which to base its analysis. DOE understands that different pole-
configurations have different design constraints. Originally, DOE 
selected only 4-pole motors to analyze because they were the most 
common, allowing DOE to most accurately characterize motor behavior at 
the pole configuration consuming the majority of motor energy. 
Additionally, by holding pole-configuration constant across its 
representative units, DOE would be able to develop a baseline from 
which to scale. By maintaining this baseline and holding all other 
variables constant, DOE is able to modify the horsepower of the various 
representative units and isolate which efficiency effects are due to 
size.
---------------------------------------------------------------------------

    \47\ See 78 FR 73625.
---------------------------------------------------------------------------

    Also as described in the NOPR \48\ and as DOE retains in today's 
rule, as discussed in section IV.C.8, DOE has used the simpler of two 
scaling approaches presented in the preliminary analysis because both 
methods had similar results. This simpler approach does not require DOE 
to develop a relationship for 4-pole motors from which to scale. 
Furthermore, DOE notes that the scaling approach it selected mirrors 
the scaling laid out in NEMA's MG 1-2011 tables, in which at least a 
subset of the motors industry has already presented a possible 
relationship between efficiency and pole count. DOE has continued to 
analyze 4-pole electric motors because they are the most common and DOE 
believes that all of the efficiency levels it has developed are 
technologically feasible.
---------------------------------------------------------------------------

    \48\ See 78 FR 73625.
---------------------------------------------------------------------------

d. Enclosure Type
    The final equipment class setting criterion that DOE considered 
when selecting its representative units was enclosure type. For the 
preliminary analysis, DOE elected to analyze electric motors with 
enclosed designs rather than open designs for all of its representative 
units. DOE selected enclosed motors because, as with pole-
configurations, these motors have higher shipments than open motors. 
Again, DOE did not alternate between the two design possibilities for 
its representative units because it sought to keep design 
characteristics as constant as possible in an attempt to more 
accurately identify the reasons for efficiency improvements.
    At the preliminary analysis stage, NEMA and Baldor commented that 
DOE's analysis did not consider the significance of enclosure type as 
it relates to efficiency as there is generally a lower efficiency level 
designated for open-frame motors. (NEMA, No. 54 at p. 68; Baldor, Pub. 
Mtg. Tr., No. 60 at p. 131)
    For the preliminary analysis, DOE analyzed only electric motors 
with totally enclosed, fan-cooled (TEFC) designs rather than open 
designs for all of its representative units. DOE selected TEFC motors 
because, as with pole configurations, DOE wanted as many design 
characteristics to remain constant as possible. The Department used the 
same approach for the NOPR \49\

[[Page 30969]]

and today's final rule. DOE believed then and still believes that such 
an approach allows it to more accurately pinpoint the factors that 
affect efficiency. While DOE only analyzed one enclosure type, it notes 
that its scaling follows NEMA's efficiency tables (Table 12-11 and 
Table 12-12), which already map how efficiency changes with enclosure 
type. Finally, TEFC electric motors represented more than three times 
the shipment volume of open motors. DOE chose ELs that correspond to 
the tables of standards published in NEMA's MG 1-2011 and to efficiency 
bands derived from those tables, preserving the relationship between 
NEMA's standards for open and enclosed motors.
---------------------------------------------------------------------------

    \49\ See 78 FR 73625.
---------------------------------------------------------------------------

    DOE did not receive additional comments on enclosure type as an 
equipment class setting criterion in response to the NOPR.
3. Efficiency Levels Analyzed
    After selecting its representative units for each electric motor 
equipment class group, DOE examined the impacts on the cost of 
improving the efficiency of each of the representative units to 
evaluate the impact and assess the viability of potential energy 
conservation standards. As described in the technology assessment and 
screening analysis, there are numerous design options available for 
improving efficiency and each incremental improvement increases the 
electric motor efficiency along a continuum. The engineering analysis 
develops cost estimates for several efficiency levels \50\ along that 
continuum.
---------------------------------------------------------------------------

    \50\ For the purposes of the final rule, the term ``efficiency 
level'' (EL) is equivalent to that of Candidate Standard Level (CSL) 
in the preliminary analysis.
---------------------------------------------------------------------------

    ELs are often based on: (1) Efficiencies available in the market; 
(2) voluntary specifications or mandatory standards that cause 
manufacturers to develop equipment at particular efficiency levels; and 
(3) the max-tech level.
    Currently, there are two energy conservation standard levels that 
apply to various types of electric motors. In ECG 1, some motors 
currently must meet efficiency standards that correspond to NEMA MG 1-
2011 Table 12-11 (i.e., EPACT 1992 levels \51\), others must meet 
efficiency standards that correspond to NEMA MG 1-2011 Table 12-12 
(i.e., premium efficiency levels), and some are not currently required 
to meet any energy conservation standard levels. DOE cannot establish 
energy conservation standards that are less efficient than current 
standards (i.e., the ``anti-backsliding'' provision at 42 U.S.C. 
6295(o)(1) as applied via 42 U.S.C. 6316(a)). ECG 1 includes both 
currently regulated and unregulated electric motors. For the baseline, 
DOE selected the lowest efficiency level available for unregulated 
motors for all motors in this group rather than applying the current 
standard requirements to an ECG that includes unregulated motors. 
However, in estimating the base case efficiency distribution, DOE 
accounted for the fact that the regulated motors are already at least 
at the current standard requirements. For ECG 1, DOE established an EL 
that corresponded to each of these levels, with EL 0 as the baseline 
(i.e., the lowest efficiency level available for unregulated motors), 
EL 1 as equivalent to EPACT 1992 levels, and EL 2 as equivalent to 
premium efficiency levels for ECG 1 motors. Additionally, DOE analyzed 
two ELs above EL 2. One of these levels was the max-tech level, denoted 
as EL 4 and one was an incremental level that approximated a best-in-
market efficiency level (EL 3). For all equipment classes within ECG 1, 
EL 3 was a one ``band'' increase in NEMA nominal efficiency relative to 
premium efficiency and EL 4 was a two ``band'' increase.\52\ For ECG 3 
and 4, DOE used the same ELs with one exception for ECG 3. Because fire 
pump electric motors are required to meet EPACT 1992 efficiency levels 
and those are the only motors in that equipment class group, EPACT 1992 
levels were used as the baseline efficiency level, which means that 
fire pump electric motors have one fewer EL than ECG 1 for purposes of 
DOE's analysis. Following the preliminary analysis, DOE adjusted one 
max-tech Design B representative unit level (5 hp) after receiving 
additional data in order to base that level on a physical unit in place 
of modeling. Table IV.11 and Table IV.12 show the ELs for ECGs 1 and 3.
---------------------------------------------------------------------------

    \51\ EPACT 1992 only established efficiency standards for motors 
up to and including 200 hp. Eventually, NEMA MG 1-2011 added a 
table, 20-A, which functioned as an extension of Table 12-11. So, 
although EPACT 1992 is a slight misnomer, DOE is using it to refer 
to those ELs that were based on Table 12-11.
    \52\ Because motor efficiency varies from unit to unit, even 
within a specific model, NEMA has established a list of standardized 
efficiency values that manufacturers use when labeling their motors. 
Each incremental step, or ``band,'' constitutes a 10 percent change 
in motor losses. NEMA MG 1-2011 Table 12-10 contains the list of 
NEMA nominal efficiencies.

                          Table IV.11--Efficiency Levels for Equipment Class Group 1**
----------------------------------------------------------------------------------------------------------------
                                       EL 0         EL 1 (EPACT    EL 2 (premium  EL 3 (best-in-    EL 4 (max-
       Representative unit          (baseline)         1992)        efficiency)      market*)          tech)
                                     (percent)       (percent)       (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
5 hp (ECG 1)....................            82.5            87.5            89.5            90.2            91.0
30 hp (ECG 1)...................            89.5            92.4            93.6            94.1            94.5
75 hp (ECG 1)...................            93.0            94.1            95.4            95.8            96.2
----------------------------------------------------------------------------------------------------------------
* Best-in-market represents the best or near best efficiency level at which current manufacturers are producing
  electric motors. Although these efficiencies represent the best-in-market values found for the representative
  units, but when efficiency was scaled to the remaining equipment classes, the scaled efficiency was sometimes
  above and sometimes below the best-in-market value for a particular rating.
** ECG 1 includes both currently regulated and unregulated electric motors. For the baseline, DOE selected the
  lowest efficiency level available for unregulated motors for all motors in this group rather than applying the
  current standard requirements to an ECG that includes unregulated motors. However, in estimating the base case
  efficiency distribution, DOE accounted for the fact that the regulated motors are already at least at the
  current standard requirements.


[[Page 30970]]


                           Table IV.12--Efficiency Levels for Equipment Class Group 3
----------------------------------------------------------------------------------------------------------------
                                                    EL 0 (EPACT    EL 1 (premium  EL 2 (best-in-    EL 3 (max-
               Representative unit                     1992)        efficiency)      market *)         tech)
                                                     (percent)       (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
5 hp............................................            87.5            89.5            90.2            91.0
30 hp...........................................            92.4            93.6            94.1            94.5
75 hp...........................................            94.1            95.4            95.8            96.2
----------------------------------------------------------------------------------------------------------------

    For ECG 2, DOE took a similar approach in developing its ELs as it 
did for ECG 1, but with two primary differences. First, when DOE 
examined catalog data, it found that no NEMA Design C motors had 
efficiencies below EPACT 1992 levels, which is the current standard for 
all covered NEMA Design C motors. For DOE's representative units, it 
also found no catalog listings above the required EPACT 1992 levels. 
Additionally, when DOE's SME modeled NEMA Design C motors, the model 
would only generate designs at premium efficiency levels and one 
incremental level above that while maintaining proper performance 
standards. Therefore, ECG 2 only contains three ELs: EPACT 1992 (EL 0), 
premium efficiency (EL 1), and a max-tech level (EL 2).
    These ELs differed slightly from the CSLs presented in the 
preliminary analysis for ECG2. In the preliminary analysis, a CSL for 
the 50 hp unit existed between two industry standard levels in order to 
provide greater resolution in selection of a standard (NEMA MG 1 Table 
12-11 and Table 12-12). For the final rule analysis, this level was 
removed so that the ELs analyzed would align with Tables 12-11 and 12-
12. For the 5 hp representative unit, DOE also removed one preliminary 
analysis CSL, which was intended to represent the ``best in market'' 
level in the preliminary analysis. After further market research, DOE 
found that few Design C motors are offered above the baseline, and 
those that were mainly met the premium efficiency level, without going 
higher in efficiency. It determined that for the final rule analysis, 
the previously designated ``max in market'' level was not applicable. 
The ELs analyzed for ECG2 are shown in Table IV.13.

                           Table IV.13--Efficiency Levels for Equipment Class Group 2
----------------------------------------------------------------------------------------------------------------
                                                                    EL 0 (EPACT    EL 1 (premium    EL 2 (max-
                       Representative unit                             1992)        efficiency)        tech)
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
5 hp............................................................            87.5            89.5            91.0
50 hp...........................................................            93.0            94.5            95.0
----------------------------------------------------------------------------------------------------------------

    DOE has found many instances of electric motors being sold and 
marketed one or two NEMA bands of efficiency above premium efficiency, 
which suggests that manufacturers have extended technological 
performance where they perceived market demand for higher efficiencies. 
In other words, DOE has seen no evidence suggesting that the absence of 
equipment on the market at any given EL implies that such equipment 
could not be developed, were there sufficient demand. DOE contends that 
all of the ELs analyzed in its engineering analysis are viable because 
equipment is currently commercially available at such levels \53\ and, 
to the extent possible, has been included in DOE's analysis.
---------------------------------------------------------------------------

    \53\ DOE understands that this is not true for every equipment 
classes covered by this rulemaking, but has not seen evidence to 
suggest that the absence of equipment in any particular classes is 
not due to lack of market demand instead of technological 
limitations.
---------------------------------------------------------------------------

    In response to the NOPR, NEMA and Baldor both raised concern that 
it is not clear what horsepower rated motors in 6 and 8 poles are 
covered because NEMA Design A and B are not defined under MG 1 for 
large motors. This is because motors of higher horsepower rating in 6 
and 8 poles are covered by the standards for large motors in Part 20 of 
NEMA MG 1. However, DOE defined NEMA Design A and Design B types in 10 
CFR 431.12 with respect to the standards in Part 12 of NEMA MG 1 and 
not with respect to Part 20. NEMA noted that DOE took Table 5 values 
for large motors from an incorrect table (i.e., Table 12-12) that was 
submitted to DOE previously in the Petition. NEMA commented that in 
order to align Table 12-12 with the scope of Part 12, it has removed 
the ratings for large motors from Table 12-12 and has included them in 
premium efficiency standards in Part 20 for large motors. NEMA and 
Baldor suggested that DOE either remove standards for higher horsepower 
rating 6 and 8 poles motors from Table 5 of the proposed rule to 
properly represent only ratings for which Design A and B standards 
apply. NEMA also suggested that DOE could modify 10 CFR 431.12 to 
define large motors covered by the standards and 10 CFR 431.25 to 
include efficiency standards for these new covered large motors. (NEMA, 
No. 93 at p. 22; NEMA, Pub. Mtg. Tr., No. 87 at pp. 48-50, Baldor, No. 
100 at p. 4)
    DOE agrees with NEMA and Baldor that large motors given in NEMA MG 
1 Part 20 (i.e. 6-pole motors with horsepower ratings greater than 400 
hp and 8-pole motors with horsepower ratings greater than 300 hp) are 
not defined for NEMA Design A and B. Therefore, DOE has modified the 
efficiency tables as suggested. See Section IV.A.2.c for further 
detail. DOE notes that the standards adopted today, as well as those 
proposed in the NOPR, as well as those suggested by the Motor 
Coalition, still contain efficiency values for 300 and 350 hp 6 pole 
motors which are the same as their corresponding 250 hp values and 
which are not found on MG 1-2011's Table 12-12.
    In response to the NOPR, CEC sought clarification on the efficiency 
levels selected by DOE for Design C motors. CEC commented that it 
expected DOE to choose a baseline above the current market minimum. 
Second, CEC asked for clarification regarding the selected ECG 2 
representative unit picked to

[[Page 30971]]

represent the efficiency levels and noted that the baseline level was 
below the EPACT 1992 level for the 50 horsepower motor. Third, CEC 
asked clarification regarding the EL numbering for ECG 2 in Table IV.11 
of the NOPR. (CEC, No. 96 at p. 3)
    Both ECG 1 and ECG 2 contain currently regulated and unregulated 
electric motors. For the baseline, DOE selected the lowest efficiency 
level available for unregulated motors for all motors in this group 
rather than applying the current standard requirements to an ECG that 
includes unregulated motors. However, in estimating the base case 
efficiency distribution, DOE accounted for the fact that the regulated 
motors are already at least at the current standard requirements. See 
Chapter 10 of the TSD for details.
    With respect to the EL numbering in Table IV.10 of the NOPR, DOE 
notes that the table's values should have begun at EL 0 (instead of EL 
1) and reached EL 2 (instead of EL 3). DOE always labels its baseline 
``EL 0'' in this rulemaking, and the error was limited to mislabeling 
of the table in question rather than a more fundamental mistake in the 
analysis. In other words, there are no representative units for which 
the analysis should be at EL 1, as had been indicated in the NOPR's 
Table V.10. This mislabeling was confined to the table in question and 
has been fixed for the final rule.
4. Testing and Teardowns
    Whenever possible, DOE attempted to base its engineering analysis 
on actual electric motors being produced and sold in the market today. 
First, DOE identified electric motors in manufacturer catalogs that 
represented a range of efficiencies corresponding to the ELs discussed 
in the previous sections. Next, DOE had the electric motors shipped to 
a certified testing laboratory where each was tested in accordance with 
IEEE Standard 112 (Test Method B) to verify its nameplate-rated 
efficiency. After testing, DOE derived production and material costs by 
having a professional motor laboratory \54\ disassemble and inventory 
the purchased electric motors. For ECG 1, DOE obtained tear-down 
results for all of the 5-horsepower ELs and all of the 30- and 75-
horsepower ELs except the max-tech levels. For ECG 2, DOE obtained 
tear-down results only for the baseline EL, which corresponds to EPACT 
1992 efficiency levels.
---------------------------------------------------------------------------

    \54\ The Center for Electromechanics at the University of Texas 
at Austin, a 140,000 sq. ft. lab with 40 years of operating 
experience, performed the teardowns, which were overseen by Dr. 
Angelo Gattozzi, an electric motor expert with previous industry 
experience. DOE also used Advanced Energy Corporation of North 
Carolina to perform some of the teardowns.
---------------------------------------------------------------------------

    These tear-downs provided DOE with the necessary data to construct 
a bill of materials (BOM), which, along with a standardized cost model 
and markup structure, DOE could use to estimate a manufacturer selling 
price (MSP). DOE paired the MSP derived from the tear-down with the 
corresponding nameplate nominal efficiency to report the relative costs 
of achieving improvements in energy efficiency. DOE's estimates of 
material prices came from a combination of current, publicly available 
data, manufacturer feedback, and conversations with its SME. DOE 
supplemented the findings from its tests and tear-downs through: (1) a 
review of data collected from manufacturers about prices, efficiencies, 
and other features of various models of electric motors, and (2) 
interviews with manufacturers about the techniques and associated costs 
used to improve efficiency.
    As discussed earlier, DOE's engineering analysis documents the 
design changes and associated costs when improving electric motor 
efficiency from the baseline level up to a max-tech level. This 
includes considering improved electrical steel for the stator and 
rotor, interchanging aluminum and copper rotor bar material, increasing 
stack length, and any other applicable design options remaining after 
the screening analysis. As each of these design options are added, the 
manufacturer's cost increases and the electric motor's efficiency 
improves.
    At the preliminary analysis stage, DOE received multiple comments 
regarding its test and tear-down analysis. (NEMA, No. 54 at p. 27, 74-
75) In its NOPR response, DOE stated that it accurately captured such 
changes because electric motor was torn down, components such as 
electrical steel and copper wiring were weighed. 78 FR 73629.
    DOE noted in the NOPR and re-assert today that an increased sample 
size would improve the value of efficiency used in its analysis, but 
only if DOE were using an average full-load efficiency value, as it did 
for the small electric motors rulemaking engineering analysis, which 
did not have the benefit of NEMA-developed nominal efficiency values. 
See 78 FR 73629. For the analysis in the NOPR and the final rule, DOE 
did not use the tested efficiency value and believes that to do so 
would be erroneous precisely because it only tested and tore down one 
unit for a given representative unit and EL. Rather than using an 
average efficiency of a sample of multiple units that is likely to 
change with each additional motor tested, DOE elected to use the 
nameplate NEMA nominal efficiency given. DOE understands that this 
value, short of testing data, is the most accurate value to use to 
describe a statistically valid population of motors of a given design; 
that is, in part, why manufacturers use NEMA nominal efficiencies on 
their motors' nameplates.
    Also, DOE believes that the bill of materials generated is more is 
likely to be representative of the motor's nominal efficiency value 
rather efficiency than as-tested. DOE believes that the variance from 
unit-to-unit, in terms of materials, is likely to be insignificant 
because manufacturers have an incentive to produce equipment with 
consistent performance (i.e., characteristics other than efficiency). 
Changes in the tested efficiency are likely to occur because of 
variations in production that motor manufacturers have less control 
over (e.g., the quality of the electrical steel). DOE does not believe 
that the amount of material (in particular, electrical steel, copper 
wiring, and die-cast material) from unit-to-unit for a given design is 
likely to change significantly, if at all, because manufacturers have 
much greater control of those production variables. Therefore, 
additional tests and tear-downs are unlikely to change the MSP 
estimated for a given motor design and DOE believes that its sample 
size of one is appropriate.
    In the preliminary engineering analysis, DOE replaced a tear-down 
result with a software model for CSL 2 of its 30-horsepower 
representative unit because it believed that it had inadvertently 
tested and torn down a motor with an efficiency equivalent to CSL 3. 
DOE noted that it removed the tear-down because there was conflicting 
efficiency information on the Web site, in the catalog, and on the 
physical nameplate. Subsequently, NEMA and Baldor commented that the 
30-horsepower, CSL 2 motor should not have been replaced with a 
software-modeled motor, stating that the test result was statistically 
viable. (NEMA, No. 54 at pp. 76-79; Baldor, Pub. Mtg. Tr., No. 60 at 
pp. 150-155) NEMA and Baldor also asserted that DOE had placed emphasis 
on the use of purchased motors in its analysis only when the tested 
value of efficiency was less than or not significantly greater than the 
marked value of NEMA efficiency. (NEMA, No. 54 at p. 80; Baldor, Pub. 
Mtg. Tr., No. 60 at pp. 156, 157)

[[Page 30972]]

    DOE understands that the test result may have been viable for 
either of the efficiency ratings that the manufacturer had assigned. 
Given the uncertainty, however, DOE elected to replace the motor. For 
its updated NOPR engineering analysis, DOE has tested and torn down a 
new 30-horsepower motor to describe CSL 2. As stated previously, DOE 
always prefers to base its analysis using motors purchased in the 
market when possible.
    After DOE's tear-down lab determined that the torn-down motors were 
machine-wound, a precise measurement of the slot fill was not taken. 
Although the actual measurement of slot fill has no bearing on the 
estimates of the MSP, because the actual copper weights were measured 
and not calculated, DOE did ask its lab to provide actual measurements 
of slot fill on any subsequent tear-downs and has included the data in 
chapter 5 of the TSD.
5. Software Modeling
    DOE worked with technical experts to develop certain ELs, in 
particular, the max-tech efficiency levels for each representative unit 
analyzed. To this end, DOE retained an electric motors (SME \55\ with 
significant experience in terms of both design and related software, 
who prepared a set of electric motor designs with increasing 
efficiency. The software program used for this analysis is a 
proprietary software program called VICA.\56\ The SME also checked his 
designs against tear-down data and calibrated the software using the 
relevant test results. As new designs were created, DOE's SME ensured 
that the critical performance characteristics that define a NEMA design 
letter (e.g., locked-rotor torque, breakdown torque, pull-up torque, 
and locked-rotor currents) were maintained. For a given representative 
unit, DOE ensured that the modeled electric motors met the same set of 
torque and locked-rotor current requirements as the purchased electric 
motors. This was done to ensure that the utility of the baseline unit 
was maintained as efficiency improved, and that the unit in question 
did not meet the criteria of a different equipment class. Additionally, 
DOE limited its modeled stack length increases based on teardown data 
and maximum ``C'' dimensions found in manufacturer's catalogs, also to 
ensure the utility of the baseline units was maintained \57\ DOE has 
provided comparisons of software estimates and tested efficiencies in 
Appendix 5C of the TSD.
---------------------------------------------------------------------------

    \55\ Dr. Howard Jordan, Ph.D., an electric motor design expert 
with over 40 years of industry experience, served as DOE's subject 
matter expert.
    \56\ VICA stands for ``Veinott Interactive Computer Aid''.
    \57\ The ``C'' dimension of an electric motor is the length of 
the electric motor from the end of the shaft to the end of the 
opposite side's fan cover guard. Essentially, the ``C'' dimension is 
the overall length of an electric motor including its shaft 
extension.
---------------------------------------------------------------------------

    During the preliminary analysis, DOE approached motor laboratories 
in an attempt to build physical prototypes of its software models. DOE 
was unable to identify a laboratory that could prototype its software-
modeled motors in a manner that would exactly replicate the designs 
produced (i.e., they could not die-cast copper). Consequently, DOE did 
not build a prototype of its software models. However, DOE was able to 
procure a 5-horsepower NEMA Design B die-cast copper rotor motor with 
an efficiency two NEMA bands above the premium efficiency level. 
Therefore, DOE elected to use this design to represent the max-tech EL 
for the 5-horsepower representative unit in equipment class group 1, 
rather than the software-modeled design used in the preliminary 
analysis. DOE's SME used information gained from testing and tearing 
down this motor to help corroborate the software modeling.
    Since that time, DOE has conducted further calibration of its 
software program using data obtained from motor teardowns, has provided 
comparisons of software estimates, and tested efficiencies for both 
aluminum and copper rotor motors in Appendix 5C of the TSD. DOE 
eliminated designs from its preliminary analysis because of concerns 
regarding the feasibility of certain efficiency levels. Regarding 
performance parameters beyond efficiency,\58\ DOE understands that 
these characteristics must be maintained when improving an electric 
motor's efficiency. However, the performance parameters DOE believed to 
present the largest risk of rendering a motor noncompliant with NEMA MG 
1-2011 standards were those related to NEMA design letter, and these 
were adhered to in DOE's modeling efforts. Based on comparisons of 
motor teardowns and software estimates, DOE has no reason at this time 
to believe that its modeled designs would violate the additional 
performance parameters.
---------------------------------------------------------------------------

    \58\ For example, locked-rotor current or locked-rotor torque.
---------------------------------------------------------------------------

    DOE's SME, who has been designing electric motors for several 
decades, is well qualified to understand the design tradeoffs that must 
be considered. Although the SME's primary task was to design a more-
efficient motor using various technologies, it was of critical 
importance that the designs be feasible. Even though DOE was unable to 
prototype its modeled designs, DOE has conducted comparisons of 
software estimates and tested efficiencies for both aluminum and copper 
rotor motors and has concluded that these actions corroborate the 
modeled designs. Based on this work and its total analysis, which 
included input from its SME, DOE has concluded that it has developed a 
sufficiently robust set of technically feasible efficiency levels for 
its engineering analysis.
    In the final rule TSD, DOE also shows that any increase in stack 
length would fit into the existing frame designation for that 
particular motor rating. (DOE noted that the frame designation does not 
limit frame length, but rather frame diameter.) DOE understands that 
manufacturers have fixed-length frames that they use when manufacturing 
motors. In addition to generating per-unit costs associated with 
redesigning motors with new frames at all ELs above the premium 
efficiency levels (see section IV.C.6), DOE sought to maintain motor 
length by limiting how much it would modify stack dimensions to improve 
efficiency. First, the software models created by DOE used lamination 
diameters observed during teardowns, which ensured that the software-
modeled designs would fit into existing frame designations. However, 
for some designs, DOE increased the number of laminations (i.e., length 
of the stack of laminations, or stack length) beyond the stack lengths 
observed during the motor teardowns in order to achieve the desired 
efficiency gains.
    DOE limited the amount by which it would increase the stack length 
of its software-modeled electric motors in order to preserve the 
motor's utility. The maximum stack lengths used in the software-modeled 
ELs were determined by first analyzing the stack lengths and ``C'' 
dimensions of torn-down electric motors. Then, DOE analyzed the ``C'' 
dimensions of various electric motors in the marketplace conforming to 
the same design constraints as the representative units (same 
horsepower rating, NEMA frame size, enclosure type, and pole 
configuration). For each representative unit, DOE found the largest 
``C'' dimension currently available on the marketplace and estimated a 
maximum stack length based on the stack length to ``C'' dimension 
ratios of motors it tore down. The resulting equipment served as the 
basis for the maximum stack length value that DOE used in its software-
modeled designs, although DOE notes that it did not always model a 
motor with that maximum stack length. In most instances, the SME was

[[Page 30973]]

able to achieve the desired improvement in efficiency with a stack 
length shorter than DOE's estimated maximum. Table IV.14 presents the 
estimated maximum stack length,\59\ the maximum stack length found 
during tear-downs, and the maximum stack length modeled for a given 
representative unit. DOE notes that the 5-horsepower Design B 
representative unit is not shown because modeling was not performed, as 
described earlier.
---------------------------------------------------------------------------

    \59\ Based on manufacturer product offerings. See Chapter 5 of 
the TSD for details.

                                     Table IV.14--Maximum Stack Length Data
----------------------------------------------------------------------------------------------------------------
                                      Estimated maximum stack   Maximum stack length      Maximum stack length
         Representative unit                   length           of a torn down motor            modeled
----------------------------------------------------------------------------------------------------------------
30 Horsepower Design B..............  8.87 in................  8.02 in. (EL 2).......  7.00 in.
75 Horsepower Design B..............  13.06 in...............  11.33 in. (EL 3)......  12.00 in.
5 Horsepower Design C...............  5.80 in................  4.75 in. (EL 0).......  5.32 in.
50 Horsepower Design C..............  9.55 in................  8.67 in. (EL 0).......  9.55 in.
----------------------------------------------------------------------------------------------------------------

    During the NOPR public meeting, several parties commented with 
respect to modeling. Noting that all the components of loss are first 
calculated and summed together to obtain efficiency, Nidec sought 
clarification as to how friction and windage component losses 
(mechanical loss), I\2\R losses and stray losses were obtained. Nidec 
also sought clarification on how the area of conductors was calculated 
to obtain slot fill. (Nidec, Pub. Mtg. Tr., No. 87 at pp. 103-108) 
Regal Beloit commented that the VICA program used by DOE's SME to model 
efficiency may be over ten years old. (Regal Beloit, Pub. Mtg. Tr., No. 
87 at p. 110)
    DOE responded that the friction and windage losses were input items 
into the VICA program and were obtained as average values from data on 
various frame sizes. I\2\R losses and stray losses were also input 
items into VICA. Stray losses were obtained as a percentage of the 
full-load value. DOE performed correlations of the estimated value and 
the values obtained from the testing of motors. DOE found that the 
estimated value was very close to the average of tested values. DOE 
also noted that the square method was used to calculate the area of the 
conductor. The number of conductors in the slot was multiplied by the 
square of the conductor diameter.
6. Cost Model
    When developing manufacturer selling prices (MSPs) for the motor 
designs obtained from DOE's tear-downs and software models, DOE used 
modeling to generate a more accurate approximation of the costs 
necessary to improve electric motor efficiency. DOE derived the 
manufacturer's selling price for each design in the engineering 
analysis by considering the full range of production and non-production 
costs. The full production cost is a combination of direct labor, 
direct materials, and overhead. The overhead contributing to full 
production cost includes indirect labor, indirect material, 
maintenance, depreciation, taxes, and insurance related to company 
assets. Non-production cost includes the cost of selling, general and 
administrative items (market research, advertising, sales 
representatives, logistics), research and development (R&D), interest 
payments, warranty and risk provisions, shipping, and profit factor. 
Because profit factor is included in the non-production cost, the sum 
of production and non-production costs is an estimate of the MSP. DOE 
utilized various markups to arrive at the total cost for each component 
of the electric motor, which are detailed in chapter 5 of the final 
rule TSD. The following subsections discuss specific features of the 
DOE's cost model.
a. Copper Pricing
    DOE conducted the engineering analysis using material prices based 
on manufacturer feedback, industry experts, and publicly available 
data. In the preliminary analysis, most material prices were based on 
2011 prices, with the exception of cast copper and copper wire pricing, 
which were based on a five-year (2007-2011) average price.
    Noting the comments of interested parties during the preliminary 
analysis phase, DOE slightly modified its approach in the NOPR. First, 
DOE added updated data for 2012 pricing. Second, rather than a five-
year average, DOE changed to a three-year average price for copper 
materials. DOE made this modification based on feedback received during 
manufacturer interviews. By reducing to a three-year average, DOE 
eliminated data from 2008 and 2009, which manufacturers believed were 
unrepresentative data points due to the recession. Data from those two 
years had the effect of depressing the five-year average calculated.
    In response to the NOPR, NEMA raised concern about the potential 
for copper price volatility. (NEMA, No. 93 at p. 12)
    DOE acknowledges that price volatility can affect the economic 
results of a standards rulemaking, either in the positive or negative 
direction depending on the relative movement of raw materials and 
energy. To diminish the effect of volatility on the engineering 
analysis results, DOE used a 3-year average for copper, from 2010-2012. 
DOE's understanding is that manufacturers may choose to use financial 
instruments in cases where raw material volatility is exceptionally 
high in order to guarantee margins. Although DOE has not published a 
formal materials price sensitivity in this rulemaking, it observes that 
for the highest ELs examined across all representative units, copper 
cost amount to roughly 3 percent of the installed price. At these 
levels, copper would have to more than quadruple in price in order to 
increase installed price by 10 percent. At the levels being adopted in 
today's rule, however, DOE's engineering analysis does not suggest 
significantly increased demand for copper and, therefore, does not 
suggest significantly increased exposure to volatility in copper price. 
DOE discusses material pricing in greater detail in Appendix 5A of the 
final rule TSD.
b. Labor Rate and Non-Production Markup
    In the preliminary analysis, DOE looked at the percentage of 
electric motors imported into the U.S. and the percentage of electric 
motors built domestically and calculated the ratio of foreign and 
domestic labor rates on these percentages. During the preliminary 
analysis public meeting, Nidec commented that the labor rate DOE used 
in its analysis seems high if

[[Page 30974]]

that number is weighted towards offshore labor. Nidec agreed with DOE's 
smaller markup on the lower-horsepower motors, but commented that the 
overall markups seem to be high. (Nidec, Pub. Mtg. Tr., No. 60 at p. 
184) WEG commented that DOE was adequately addressing the cost 
structure variations among the different motor manufacturers. 
Additionally, WEG stated that basing a labor rate on both foreign and 
domestic labor rates increases accuracy of the analysis, but that it 
could encourage production moving outside the United States. (WEG, Pub. 
Mtg. Tr., No. 60 at pp. 184-186)
    In the NOPR, and again in today's final rule, DOE elected to keep 
the same labor rates and markups as were used in the preliminary 
analysis. DOE is basing this decision on additional feedback received 
during interviews with manufacturers (which suggested that DOE's labor 
rates and markups are appropriate) and the absence of any alternative 
labor rate or markups to apply. DOE does not expect that use of the 
most accurate labor rates possible in its analyses will contribute to 
outsourcing of jobs in the electric motors industry.
    Finally, DOE is aware of potential cost increases caused by 
increased slot fill,\60\ including the transition to hand-wound stators 
in motors requiring higher slot fills. In the preliminary analysis, DOE 
assigned a higher labor hour to any tear-down motor which it determined 
to be hand-wound. DOE found that none of the tear-down motors were 
hand-wound, and, therefore, no hand-winding labor-hour amounts were 
assigned. This has been clarified in the final rule analysis. 
Additionally, DOE has assumed that all of its max-tech software models 
require hand-winding, which is reflected in its increased labor time 
assumptions for those motors. For additional details, please see 
chapter 5 of the final rule TSD.
---------------------------------------------------------------------------

    \60\ A measure of how efficiently conductor is packed into the 
stator slots, which affects efficiency.
---------------------------------------------------------------------------

    DOE understands that lower-volume equipment will often realize 
higher per-unit costs, and has concluded that this reality is common to 
most or all manufacturing processes in general. Because DOE's analysis 
focuses on the differential impacts on cost due to energy conservation 
standards, and because DOE has no evidence to suggest a significant 
market shift to lower production volume equipment in a post-standards 
scenario, DOE expects that the relative mix of high-volume and low-
volume production would be preserved. Indeed, because DOE is expanding 
the scope of coverage and bringing many previously excluded motor types 
to premium efficiency levels, DOE sees the possibility that 
standardization may increase and that average production volume may, in 
fact, rise.\61\
---------------------------------------------------------------------------

    \61\ Labor costs may rise starkly at max-tech levels, where 
hand-winding is employed in order to maximize slot fill. DOE's 
engineering analysis reflects this fact.
---------------------------------------------------------------------------

c. Catalog Prices
    At the preliminary analysis stage, NEMA requested that DOE publish 
the purchase price for its torn-down motors, so that they could be 
compared to the MSPs DOE derived from its motor tear-downs. (NEMA, No. 
54 at p. 27; Baldor, Pub. Mtg. Tr., No. 60 at pp. 181, 182) As stated 
in the NOPR \62\ and reaffirmed today, DOE elects not to include the 
purchase price for its torn-down motors. DOE believes that such 
information is not relevant and could lead to erroneous conclusions. 
Some of the purchased motors were more expensive to purchase based on 
certain features that do not affect efficiency, which could skew the 
price curves incorrectly and indicate incorrect trends. For these 
reasons, in the engineering analysis, DOE develops its own cost model 
so that a consistent cost structure can be applied to similar 
equipment. The details of this model are available in Appendix 5A of 
the final rule TSD. Because DOE purchased electric motors that were 
built by different manufacturers and sold by different distributors, 
who all have different costs structures, DOE does not believe that such 
a comparison as NEMA suggests would provide a meaningful evaluation.
---------------------------------------------------------------------------

    \62\ See 78 FR 73633.
---------------------------------------------------------------------------

d. Product Development Cost
    DOE's preliminary analysis cost model included an incremental 
markup used to account for higher production costs associated with 
manufacturing copper die-cast rotors. Although DOE used this 
incremental markup in the preliminary analysis, after conducting 
manufacturer interviews, it determined that additional cost adders were 
warranted for the examined ELs that exceeded the premium efficiency 
level. For the NOPR and final rule, DOE developed a per-unit adder \63\ 
for the manufacturer production costs (MPCs) intended to capture one-
time increased equipment development and capital conversion costs that 
would likely result if an energy conservation standard with an 
efficiency level above premium efficiency levels were established.
---------------------------------------------------------------------------

    \63\ The ``per-unit adder'' discussed in this section refers to 
a fixed adder for each motor that varies based on horsepower and 
NEMA design letter. Each representative unit has their own unique 
``per-unit adder'' that is fixed for the analysis.
---------------------------------------------------------------------------

    DOE's per-unit adder reflects the additional cost passed along to 
the consumer by manufacturers attempting to recover the costs incurred 
from having to redevelop their equipment lines as a result of higher 
energy conservation standards. The conversion costs incurred by 
manufacturers include capital investment (e.g., new tooling and 
machinery), equipment development (e.g., reengineering each motor 
design offered), plus testing and compliance certification costs.
    The conversion cost adder was only applied to ELs above premium 
efficiency based on manufacturer feedback. Most manufacturers now offer 
premium efficiency motors for a significant portion of their equipment 
lines as a result of EISA 2007, which required manufacturers to meet 
this level. Many manufacturers also offer certain ratings with 
efficiency levels higher than premium efficiency. However, DOE is not 
aware of any manufacturer with a complete line of motors above premium 
efficiency. Consequently, DOE believes that energy conservation 
standards above premium efficiency would result in manufacturers 
incurring significant conversion costs to bring offerings of electric 
motors up to the higher standard.
    DOE developed the various conversion costs from data collected 
during manufacturer interviews that were conducted for the Manufacturer 
Impact Analysis (MIA). For more information on the MIA, see chapter 12 
of the final rule TSD. DOE used the manufacturer-supplied data to 
estimate industry-wide capital conversion costs and equipment 
conversion costs for each EL above premium efficiency. DOE then assumed 
that manufacturers would mark up their motors to recover the total 
conversion costs over a seven-year period. By dividing industry-wide 
conversion costs by seven years of expected industry-wide revenue, DOE 
obtained a percentage estimate of how much each motor would be marked 
up by manufacturers. The conversion costs as a percentage of seven-year 
revenue that DOE derived for each NEMA band above premium efficiency 
are shown below. Details on these calculations are shown in Chapter 5 
of the final rule TSD.

[[Page 30975]]



 Table IV.15--Product Conversion Costs as a Percentage of 7-Year Revenue
------------------------------------------------------------------------
                                                        Conversion costs
         NEMA Bands above premium efficiency            as a percentage
                                                       of 7-year revenue
------------------------------------------------------------------------
1....................................................               4.1%
2....................................................               6.5%
------------------------------------------------------------------------

    The percentage markup was then applied to the full production cost 
(direct material + direct labor + overhead) at the premium efficiency 
levels to derive the per-unit adder for levels above premium efficiency 
(see Table IV.16). DOE received no comments in response to the NOPR and 
maintained its approach for the final rule.

    Table IV.16--Product Conversion Costs for Efficiency Levels Above
                           Premium Efficiency
------------------------------------------------------------------------
                                       Per-unit adder    Per-unit adder
                                      for 1 band above     for 2 bands
         Representative unit               premium        above premium
                                         efficiency        efficiency
                                           (2013$)           (2013$)
------------------------------------------------------------------------
5 hp, Design B......................            $11.06            $17.36
30 hp, Design B.....................             32.89             51.61
75 hp, Design B.....................             66.18            103.86
5 hp, Design C......................             10.68             16.75
50 hp, Design C.....................             60.59             95.08
------------------------------------------------------------------------

7. Engineering Analysis Results
    The results of the engineering analysis are reported as cost-
versus-efficiency data in the form of MSP (in dollars) versus nominal 
full-load efficiency (in percentage). These data form the basis for 
subsequent analyses in today's notice. Table IV.17 through Table IV.21 
show the results of DOE's updated engineering analysis.
    Results for Equipment Class Group 1 (NEMA Design A and B Motors)

 Table IV.17--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline).....................              82.5               333
EL 1 (EPACT 1992)...................              87.5               344
EL 2 (Premium Efficiency)...........              89.5               371
EL 3 (Best-in-Market)...............              90.2               406
EL 4 (Max-Tech).....................              91.0               677
------------------------------------------------------------------------


Table IV.18--Manufacturer Selling Price and Efficiency for 30-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline).....................              89.5               856
EL 1 (EPACT 1992)...................              92.4             1,096
EL 2 (Premium Efficiency)...........              93.6             1,168
EL 3 (Best-in-Market)...............              94.1             1,308
EL 4 (Max-Tech).....................              94.5             2,077
------------------------------------------------------------------------


Table IV.19--Manufacturer Selling Price and Efficiency for 75-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline).....................              93.0             1,910
EL 1 (EPACT 1992)...................              94.1             2,068
EL 2 (Premium Efficiency)...........              95.4             2,351
EL 3 (Best-in-Market)...............              95.8             2,804
EL 4 (Max-Tech).....................              96.2             3,656
------------------------------------------------------------------------

Results for Equipment Class Group 2 (NEMA Design C Motors)

[[Page 30976]]



 Table IV.20--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              87.5               334
EL 1 (Premium Efficiency)...........              89.5               358
EL 2 (Max-Tech).....................              91.0               627
------------------------------------------------------------------------


Table IV.21--Manufacturer Selling Price and Efficiency for 50-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              93.0             1,552
EL 1 (Premium Efficiency)...........              94.5             2,152
EL 2 (Max-Tech).....................              95.0             2,612
------------------------------------------------------------------------

Results for Equipment Class Group 3 (Fire Pump Electric Motors)

 Table IV.22--Manufacturer Selling Price and Efficiency for 5-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              87.5               344
EL 1 (Premium Efficiency)...........              89.5               371
EL 2 (Best-in-Market)...............              90.2               406
EL 3 (Max-Tech).....................              91.0               677
------------------------------------------------------------------------


Table IV.23--Manufacturer Selling Price and Efficiency for 30-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              92.4             1,096
EL 1 (Premium Efficiency)...........              93.6             1,168
EL 2 (Best-in-Market)...............              94.1             1,308
EL 3 (Max-Tech).....................              94.5             2,077
------------------------------------------------------------------------


Table IV.24--Manufacturer Selling Price and Efficiency for 75-Horsepower
                           Representative Unit
------------------------------------------------------------------------
                                                          Manufacturer
          Efficiency level             Efficiency (%)     selling price
                                                             (2013$)
------------------------------------------------------------------------
EL 0 (Baseline/EPACT 1992)..........              94.1             2,068
EL 1 (Premium Efficiency)...........              95.4             2,351
EL 2 (Best-in-Market)...............              95.8             2,804
EL 3 (Max-Tech).....................              96.2             3,656
------------------------------------------------------------------------

8. Scaling Methodology
    Once DOE has identified cost-efficiency relationships for its 
representative units, it must appropriately scale the efficiencies 
analyzed for its representative units to those equipment classes not 
directly analyzed. DOE recognizes that scaling motor efficiencies is a 
complicated proposition that has the potential to result in efficiency 
standards that are not evenly stringent across all equipment classes. 
However, between DOE's three ECGs, there are 482 equipment classes, 
reflecting the various combinations of horsepower rating, pole 
configuration, and enclosure. Within these combinations, there are a 
large number of standardized frame number series. Given the sizable 
number of frame number series and equipment classes, DOE cannot 
feasibly analyze all of these variants directly, hence, the need for 
scaling. Thus, scaling across horsepower ratings, pole configurations, 
enclosures, and frame number series is a necessity.
    For the preliminary analysis, DOE considered two methods to 
scaling, one that develops a set of power law equations based on the 
relationships found in the EPACT 1992 and Premium tables of efficiency 
in MG 1, and one based on the incremental improvement in motor losses. 
As discussed in the preliminary analysis, DOE did not find a large 
discrepancy between the results of the two approaches and, therefore,

[[Page 30977]]

used the simpler, incremental improvement in motor losses approach in 
its final rule analysis.
    As discussed in section IV.C.3, some of the ELs analyzed by DOE 
were based on existing efficiency standards (i.e., EPACT 1992 and 
premium efficiency). Additionally, the baseline EL is based on the 
lowest efficiency levels found for each horsepower rating, pole 
configuration, and enclosure type observed in motor catalog data. 
Therefore, DOE only required the use of scaling when developing the two 
ELs above premium efficiency (only one EL above premium efficiency for 
ECG 2).
    For the higher ELs in ECG 1, DOE's scaling approach relies on NEMA 
MG 1-2011 Table 12-10 of nominal efficiencies and the relative 
improvement in motor losses of the representative units. As has been 
discussed, each incremental improvement in NEMA nominal efficiency (or 
NEMA band) corresponds to roughly a 10-percent reduction in motor 
losses. After ELs 3 and 4 were developed for each representative unit, 
DOE applied the same reduction in motor losses (or the same number of 
NEMA band improvements) to various segments of the market based on its 
representative units. DOE assigned a segment of the electric motors 
market, based on horsepower ratings, to each representative unit 
analyzed. DOE's assignments of these segments of the markets were in 
part based on the standardized NEMA frame number series that NEMA MG 1-
2011 assigns to horsepower and pole combinations. In the end, EL 3 
corresponded to a one band improvement relative to premium efficiency 
level, and EL 4 corresponded to a two-band improvement relative to 
premium efficiency level.
    DOE maintains that scaling is a tool necessary to analyze the 
potential effects of energy conservation standards above premium 
efficiency levels. As stated earlier, DOE is evaluating energy 
conservation standards for 482 equipment classes. DOE acknowledges that 
analyzing every one of these classes individually is not feasible, 
which requires DOE to choose representative units on which to base its 
analysis. Consequently, DOE has concluded that scaling is necessary and 
suitable for establishing appropriate efficiency levels for new or 
amended energy conservation standards for electric motors.
    However, DOE notes that its analysis neither assumes nor requires 
manufacturers to use identical technology for all motor types and 
horsepower ratings. In other words, although DOE may choose a certain 
set of technologies to estimate cost behavior at varying efficiencies, 
DOE's standards are technology-neutral and permit manufacturers design 
flexibility. DOE clarifies that the national impacts analysis is one of 
the primary ways in which DOE analyses those potential efficiency 
levels and determines if they would be economically justified. As DOE 
has stated, it is also important that the levels be technically 
feasible. In order to maintain technical feasibility, DOE has 
maintained the scaling approach that it developed for the preliminary 
analysis, which accomplishes that objective while maintaining the use 
of NEMA nominal efficiencies. For each incremental EL above the premium 
efficiency level, DOE has incremented possible efficiency levels by 
just one band of efficiency. Through the use of this conservative 
approach to scaling, DOE believes that it has helped ensure the 
technological feasibility of each of its ELs to the greatest extent 
practicable. DOE received no comments in response to the NOPR on this 
issue and has maintained its approach for the final rule.

D. Markups Analysis

    The markups analysis develops appropriate markups in the 
distribution chain to convert the estimates of manufacturer selling 
price derived in the engineering analysis to customer prices (the term 
``customer'' refers to purchasers of the equipment being regulated). 
For the NOPR, DOE determined the distribution channels for electric 
motors, the percentage of shipments sold through either of these 
channels, and the markups associated with the main parties in the 
distribution chain (distributors and contractors).
    Several stakeholders, including NEMA and NEEA, commented that the 
OEM distribution channel (manufacturer to OEM to end-user), which 
represents the distribution channel for 50 percent of shipments, is 
further divided into shipments going directly to the user (25 percent) 
and shipments going through a distributor and then to the customer (25 
percent). (WEG, NEMA, NEEA, Pub. Mtg. Tr., No. 87 at p. 131) For the 
final rule, DOE modified its distribution channels in accordance with 
the channels and shares described by the commenters.
    DOE developed average distributor and contractor markups by 
examining the contractor cost estimates provided by RS Means Electrical 
Cost Data 2013.\64\ DOE calculates baseline and overall incremental 
markups based on the equipment markups at each step in the distribution 
chain. The incremental markup relates the change in the manufacturer 
sales price of higher-efficiency models (the incremental cost increase) 
to the change in the customer price. Chapter 6 of the final rule TSD 
addresses estimating markups.
---------------------------------------------------------------------------

    \64\ RS Means (2013), Electrical Cost Data, 36th Annual Edition 
(Available at: http://www.rsmeans.com).
---------------------------------------------------------------------------

E. Energy Use Analysis

    The energy use analysis provides estimates of the annual energy 
consumption of commercial and industrial electric motors at the 
considered efficiency levels. DOE uses these values in the LCC and PBP 
analyses and in the NIA. DOE developed energy consumption estimates for 
all equipment analyzed in the engineering analysis.
    The annual energy consumption of an electric motor that has a given 
nominal full-load efficiency depends on the electric motor's sector 
(industry, agriculture, or commercial) and application (compressor, 
fans, pumps, material handling, fire pumps, and others), which in turn 
determine the electric motor's annual operating hours and load.
    To calculate the annual kilowatt-hours (kWh) consumed at each 
efficiency level in each equipment class, DOE used the nominal 
efficiencies at various loads from the engineering analysis, along with 
estimates of operating hours and electric motor load for electric 
motors in various sectors and applications.
    In the preliminary analysis, DOE used statistical information on 
annual electric motor operating hours and load derived from a database 
of more than 15,000 individual motor field assessments obtained through 
the Washington State University and the New York State Energy Research 
and Development Authority \65\ to determine the variation in field 
energy use in the industrial sector. For the agricultural and the 
commercial sectors, DOE relied on data found in the literature.
---------------------------------------------------------------------------

    \65\ Database of motor nameplate and field measurement data 
compiled by the Washington State University Extension Energy Program 
(WSU) and Applied Proactive Technologies (APT) under contract with 
the New York State Energy Research and Development Authority 
(NYSERDA). 2011.
---------------------------------------------------------------------------

    As part of its NOPR analysis, for the industrial sector, DOE re-
examined its initial usage profiles and recalculated motor distribution 
across applications, operating hours, and load information based on 
additional motor field data

[[Page 30978]]

compiled by the Industrial Assessment Center at the University of 
Oregon,\66\ which includes over 20,000 individual motor records. For 
the agricultural sector, DOE revised its average annual operating hours 
assumptions based on additional data found in the literature. No 
changes were made to the commercial sector average annual operating 
hours.
---------------------------------------------------------------------------

    \66\ Strategic Energy Group (January, 2008), Northwest 
Industrial Motor Database Summary. From Regional Technical Forum. 
Retrieved March 5, 2013 from http://rtf.nwcouncil.org/subcommittees/osumotor/Default.htm.
---------------------------------------------------------------------------

    In response to the NOPR, DOE did not receive any comments regarding 
the energy use analysis and retained the same approach for the final 
rule. Chapter 7 of the final rule TSD describes the energy use analysis 
in further detail.

F. Life-Cycle Cost and Payback Period Analysis

    For each representative unit analyzed in the engineering analysis, 
DOE conducts LCC and PBP analyses to evaluate the economic impacts on 
individual customers of potential energy conservation standards for 
electric motors. The LCC is the total customer expense over the life of 
the motor, consisting of equipment and installation costs plus 
operating costs over the lifetime of the equipment (expenses for energy 
use, maintenance and repair). DOE discounts future operating costs to 
the time of purchase using customer discount rates. The PBP is the 
estimated amount of time (in years) it takes customers to recover the 
increased total installed cost (including equipment and installation 
costs) of a more efficient type of equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in total installed 
cost (normally higher) due to a standard by the change in annual 
operating cost (normally lower) which results from the standard.
    For any given efficiency level, DOE measures the PBP and the change 
in LCC relative to an estimate of the base-case efficiency levels. The 
base-case estimate reflects the market in the absence of new or amended 
energy conservation standards, including the market for equipment that 
exceeds the current energy conservation standards.
    For each representative unit, DOE calculated the LCC and PBP for a 
distribution of individual electric motors across a range of operating 
conditions. DOE used Monte Carlo simulations to model the distributions 
of inputs. The Monte Carlo process statistically captures input 
variability and distribution without testing all possible input 
combinations. Therefore, while some atypical situations may not be 
captured in the analysis, DOE believes the analysis captures an 
adequate range of situations in which electric motors operate.
    The following sections contain brief discussions of comments on the 
inputs and key assumptions of DOE's LCC and PBP analysis and explain 
how DOE took these comments into consideration.
1. Equipment Costs
    In the LCC and PBP analysis, the equipment costs faced by electric 
motor purchasers are derived from the MSPs estimated in the engineering 
analysis and the overall markups estimated in the markups analysis.
    To forecast a price trend for the NOPR analysis, DOE derived an 
inflation-adjusted index of the producer price index (PPI) for integral 
horsepower motors and generators manufacturing from 1969 to 2011. These 
data show a long-term decline in the PPI from 1985 to 2003, and a steep 
increase in the PPI since then. DOE also examined a forecast based on 
the ``chained price index--industrial equipment'' that was forecasted 
for AEO2013 out to 2040. This index is the most disaggregated category 
that includes electric motors. These data show a short-term increase in 
the PPI from 2011 to 2015, and then a steep decrease. DOE believes that 
there is considerable uncertainty as to whether the recent increasing 
trend has peaked, and would be followed by a return to the previous 
long-term declining trend, or whether the recent trend represents the 
beginning of a long-term rising trend due to global demand for electric 
motors and rising commodity costs for key motor components. Given the 
uncertainty, DOE chose to use constant prices for both its LCC and PBP 
analysis and the NIA. For the NIA, DOE also analyzed the sensitivity of 
results to alternative electric motor price forecasts.
    DOE did not receive comments on the trend it used for electric 
motor prices, and it retained the approach used in the NOPR analysis 
for the final rule.
2. Installation Costs
    In the NOPR analysis, the engineering analysis showed that for some 
representative units, increased efficiency led to increased stack 
length. However, the electric motor frame remained in the same NEMA 
frame size requirements as the baseline electric motor, and the motor's 
``C'' dimension remained fairly constant across efficiency levels. In 
addition, electric motor installation cost data from RS Means 
Electrical Cost Data 2013 showed a variation in installation costs by 
horsepower (for three-phase electric motors), but not by efficiency. 
Therefore, in the NOPR analysis, DOE assumed there is no variation in 
installation costs between a baseline efficiency electric motor and a 
higher efficiency electric motor.
    DOE did not receive comments on the installation costs it used for 
electric motors, and it retained the approach used in the NOPR analysis 
for the final rule.
3. Maintenance Costs
    In the NOPR analysis, DOE did not find data indicating a variation 
in maintenance costs between a baseline efficiency and higher 
efficiency electric motor. According to data from Vaughen's Price 
Publishing Company,\67\ which publishes an industry reference guide on 
motor repair pricing, the price of replacing bearings, which is the 
most common maintenance practice, is the same at all efficiency levels. 
Therefore, DOE did not consider maintenance costs for electric motors. 
DOE did not receive comments on this issue and retained the approach 
used for the NOPR analysis for the final rule.
---------------------------------------------------------------------------

    \67\ Vaughen's (2011, 2013), Vaughen's Motor & Pump Repair Price 
Guide, 2011, 2013 Edition.  http://www.vaughens.com/.
---------------------------------------------------------------------------

4. Repair Costs
    In the NOPR analysis, DOE accounted for the differences in repair 
costs of a higher efficiency motor compared to a baseline efficiency 
motor and defined a repair as including a rewind and reconditioning. 
Based on data from Vaughen's, DOE derived a model to estimate repair 
costs by horsepower, enclosure and pole, for each EL.
    The Electrical Apparatus Service Association (EASA), which 
represents the electric motor repair service sector, noted that DOE 
should clarify the definition of repair as including rewinding and 
reconditioning. (EASA, No. 86 at p. 1) DOE agrees with this suggestion 
and defines a motor repair as repair including rewinding and 
reconditioning.
5. Unit Energy Consumption
    The analysis used in the final rule uses the same approach for 
determining unit energy consumptions (UECs) as the NOPR analysis. The 
UEC was determined for each application and sector based on estimated 
load points and annual operating hours.
6. Electricity Prices and Electricity Price Trends
    In the NOPR analysis, DOE derived sector-specific weighted average 
electricity prices for four different U.S.

[[Page 30979]]

Bureau of the Census (Census) regions (Northeast, Midwest, South, and 
West) using data from the Energy Information Administration (EIA Form 
861). For each utility in a region, DOE used the average industrial or 
commercial price, and then weighted the price by the number of 
customers in each sector for each utility.
    For each representative motor, DOE assigned electricity prices 
using a Monte Carlo approach that incorporated weightings based on the 
estimated share of electric motors in each region. The regional shares 
were derived based on indicators specific to each sector (e.g., 
commercial floor space from the Commercial Building Energy Consumption 
Survey for the commercial sector \68\) and assumed to remain constant 
over time. To estimate future trends in energy prices, DOE used 
projections from the EIA's Annual Energy Outlook 2013 (AEO 2013). DOE 
did not receive any comments regarding the electricity prices and 
today's rulemaking retains the same approach for determining 
electricity prices.
---------------------------------------------------------------------------

    \68\ U.S. Department of Energy Information Administration 
(2003), Commercial Buildings Energy Consumption Survey, http://www.eia.gov/consumption/commercial/data/2003/pdf/a4.pdf.
---------------------------------------------------------------------------

7. Lifetime
    In the NOPR analysis, DOE estimated the mechanical lifetime of 
electric motors in hours (i.e., the total number of hours an electric 
motor operates throughout its lifetime), depending on its horsepower 
size and sector of application. DOE then developed Weibull 
distributions of mechanical lifetimes. The lifetime in years for a 
sampled electric motor was then calculated by dividing the sampled 
mechanical lifetime by the sampled annual operating hours of the 
electric motor. DOE did not receive any comments regarding lifetimes 
and retained the same approach and lifetime assumptions for the final 
rule.
8. Discount Rate
    DOE did not receive any comments regarding discount rates and 
retained the same approach as used in the NOPR for the final rule. The 
discount rate is the rate at which future expenditures are discounted 
to estimate their present value. The cost of capital commonly is used 
to estimate the present value of cash flows to be derived from a 
typical company project or investment. Most companies use both debt and 
equity capital to fund investments, so the cost of capital is the 
weighted-average cost to the firm of equity and debt financing. DOE 
uses the capital asset pricing model (CAPM) to calculate the equity 
capital component, and financial data sources to calculate the cost of 
debt financing.
    For today's rulemaking, DOE estimated a statistical distribution of 
industrial and commercial customer discount rates by calculating the 
average cost of capital for the different types of electric motor 
owners (e.g., chemical industry, food processing, and paper industry). 
For the agricultural sector, DOE assumed similar discount rates as in 
industry. More details regarding DOE's estimates of motor customer 
discount rates are provided in chapter 8 of the TSD.
9. Base Case Market Efficiency Distributions
    For the LCC analysis, DOE analyzed the considered motor efficiency 
levels relative to a base case (i.e., the case without new or amended 
energy efficiency standards). This requires an estimate of the 
distribution of equipment efficiencies in the base case (i.e., what 
consumers would have purchased in the compliance year in the absence of 
new standards). DOE refers to this distribution of equipment energy 
efficiencies as the base case efficiency distribution.
    Data on motor sales by efficiency are not available. In the 
preliminary analysis, DOE used the number of models meeting the 
requirements of each efficiency level from six major manufacturers and 
one distributor's catalog data to develop the base-case efficiency 
distributions. The distribution is estimated separately for each 
equipment class group and horsepower range and was assumed constant and 
equal to 2012 throughout the analysis period.
    For the NOPR, DOE retained the same approach to estimate the base 
case efficiency distribution in 2012, but it updated the base case 
efficiency distributions to account for the NOPR engineering analysis 
(revised ELs) and for the update in the scope of electric motors 
considered in the analysis. Beyond 2012, DOE assumed the efficiency 
distributions for equipment class group 1 and 4 vary over time based on 
historical data \69\ for the market penetration of Premium motors 
within the market for integral alternating current induction motors. 
For equipment class groups 2 and 3, which represent a very minor share 
of the market (less than 0.2 percent), DOE believes the overall trend 
in efficiency improvement for the total integral AC induction motors 
may not be representative, so DOE kept the base case efficiency 
distributions in the compliance year equal to 2012 levels. DOE did not 
receive additional comments and retained the same approach for the 
final rule.
---------------------------------------------------------------------------

    \69\ Robert Boteler, USA Motor Update 2009, Energy Efficient 
Motor Driven Systems Conference (EEMODS) 2009.
---------------------------------------------------------------------------

10. Compliance Date
    DOE calculated customer impacts as if each new electric motor 
purchase occurs in the year that manufacturers must comply with the 
standard. As discussed in section III.A, any amended standard for 
electric motors shall apply to electric motors manufactured on or after 
June 1, 2016. DOE has chosen to retain the same compliance date for 
both the amended and new energy conservation standards to simplify the 
requirements and to avoid any potential confusion for manufacturers.
11. Payback Period Inputs
    The payback period is the amount of time it takes the consumer to 
recover the additional installed cost of more efficient equipment, 
compared to baseline equipment, through energy cost savings. Payback 
periods are expressed in years. Payback periods that exceed the life of 
the equipment mean that the increased total installed cost is not 
recovered in reduced operating expenses. DOE did not receive any 
comments regarding the PBP calculation.
    The inputs to the PBP calculation are the total installed cost of 
the equipment to the customer for each efficiency level and the average 
annual operating expenditures for each efficiency level. The PBP 
calculation uses the same inputs as the LCC analysis, except that 
discount rates are not needed as it only takes into account the totaled 
installed costs and the first year of operating expenses.
12. Rebuttable-Presumption Payback Period
    EPCA establishes a rebuttable presumption that a standard is 
economically justified if the Secretary finds that the additional cost 
to the consumer of purchasing equipment complying with an energy 
conservation standard level will be less than three times the value of 
the energy (and, as applicable, water) savings during the first year 
that the consumer will receive as a result of the standard, as 
calculated under the test procedure in place for that standard. (42 
U.S.C. 6295(o)(2)(B)(iii) and 6316(a)) For each considered efficiency 
level, DOE determines the value of the first year's energy savings by 
calculating the quantity of those savings in accordance

[[Page 30980]]

with the applicable DOE test procedure, and multiplying that amount by 
the average energy price forecast for the year in which compliance with 
the new or amended standards would be required.
13. Comments on Other Issues
    In response to DOE's request for comments regarding whether there 
are features or attributes of the more efficient electric motors that 
could impact how customers use their equipment. NEMA commented that 
higher efficiency motors could have increased inrush currents, reduced 
starting torque, longer frames, and higher speeds. (NEMA, No. 93 at p. 
15).
    DOE acknowledges that some manufacturers may choose to produce 
higher efficiency motors in a way that could impact the inrush current, 
starting torque, frame size, and speed. However, in the engineering 
analysis, for all efficiency levels, DOE analyzed motors that remain 
within the NEMA Design B design requirements for inrush currents and 
torque characteristics and kept the frame size constant. Therefore, DOE 
maintained installation costs constant across all efficiency levels 
(see section IV.F.2)
    With respect to the potential for higher efficiency motors having 
higher speed, DOE acknowledges that this could occur and affect the 
benefits gained by using efficient electric motors. Although it is 
possible to quantify this impact for an individual motor, DOE was not 
able to extend this analysis to the national level because DOE does not 
have robust data related to the overall share of motors that would be 
negatively impacted by higher speeds. Instead, DOE developed 
assumptions \70\ and estimated the effects of higher operating speeds 
as a sensitivity analysis in the LCC spreadsheet (see appendix 7-A of 
the final TSD).
---------------------------------------------------------------------------

    \70\ DOE assumed that 60 percent of pumps, fans and compressor 
applications are variable torque applications. Of these 60 percent, 
DOE assumed that all fans and a majority (70 percent) of compressors 
and pumps would be negatively impacted by higher operating speeds; 
and that 30 percent of compressors and pumps would not be negatively 
impacted from higher operating speeds as their time of use would 
decrease as the flow increases with the speed (e.g. a pump filling a 
reservoir).
---------------------------------------------------------------------------

G. Shipments Analysis

    DOE uses projections of equipment shipments to calculate the 
national impacts of standards on energy use, NPV, and future 
manufacturer cash flows. DOE develops shipment projections based on 
historical data and an analysis of key market drivers for each type of 
equipment.
    To populate the model with current data, DOE used data from a 
market research report,\71\ confidential inputs from manufacturers, 
trade associations, and other interested parties' responses to the 2011 
RFI. DOE then used estimates of market distributions to redistribute 
the shipments across pole configurations, horsepower, and enclosures 
within each electric motor equipment class and also by sector.
---------------------------------------------------------------------------

    \71\ IMS Research (February 2012), The World Market for Low 
Voltage Motors, 2012 Edition (Available at: http://www.imsresearch.com/report/Motor_Drives_Low_Voltage_World_2012).
---------------------------------------------------------------------------

    DOE's shipments projection assumes that electric motor sales are 
driven by machinery production growth for equipment, including motors. 
DOE estimated that growth rates for total motor shipments correlate to 
growth rates in fixed investment in equipment and structures including 
motors, which is provided by the U.S. Bureau of Economic Analysis 
(BEA).\72\ Projections of real gross domestic product (GDP) from AEO 
2013 for 2015-2040 were used to project fixed investments in equipment 
and structures including motors. The current market distributions are 
maintained over the forecast period.
---------------------------------------------------------------------------

    \72\ Bureau of Economic Analysis (March 1, 2012), Private Fixed 
Investment in Equipment and Software by Type and Private Fixed 
Investment in Structures by Type (Available at: http://www.bea.gov/iTable/iTable.cfm?ReqID=12&step=1).
---------------------------------------------------------------------------

    For the preliminary analysis, DOE collected data on historical 
series of shipment quantities and values for the 1990-2003 period, but 
concluded that the data were not sufficient to estimate motor price 
elasticity.\73\ Consequently, DOE assumed zero price elasticity for all 
efficiency standards cases and did not estimate any impact of potential 
standards levels on shipments. DOE requested stakeholder 
recommendations on data sources to help better estimate the impacts of 
increased efficiency levels on shipments. DOE did not receive further 
comments on this issue and retained the same approach for the final 
rule.
---------------------------------------------------------------------------

    \73\ Business Trend Analysts, The Motor and Generator Industry, 
2002; U.S. Census Bureau (November 2004), Motors and Generators--
2003.MA335H(03)-1 (Available at: http://www.census.gov/manufacturing/cir/historical_data/discontinued/ma335h/index.html); 
and U.S. Census Bureau (August 2003), Motors and Generators--
2002.MA335H(02)-1 (Available at: http://www.census.gov/manufacturing/cir/historical_data/discontinued/ma335h/ma335h02.xls).
---------------------------------------------------------------------------

    Including the NOPR's proposed expansion of motor coverage, DOE 
estimates total in-scope shipments were 5.43 million units in 2011. DOE 
did not receive any NOPR comments on shipments and maintained the same 
estimate for the final rule. For further information on DOE's shipments 
analysis, see chapter 9 of the final rule TSD.

H. National Impact Analysis

    The NIA assesses the national energy savings (NES) and the national 
NPV of total customer costs and savings that would be expected to 
result from new and amended standards at specific efficiency levels.
    To make the analysis more accessible and transparent to all 
interested parties, DOE used a spreadsheet model to calculate the 
energy savings and the national customer costs and savings from each 
TSL.\74\ The NES and NPV are based on the annual energy consumption and 
total installed cost data from the energy use analysis and the LCC 
analysis. DOE forecasted the lifetime energy savings, energy cost 
savings, equipment costs, and NPV of customer benefits for each 
equipment class for equipment sold from 2016 through 2045. In addition, 
DOE analyzed scenarios that used inputs from the AEO 2013 Low Economic 
Growth and High Economic Growth cases. These cases have higher and 
lower energy price trends compared to the reference case.
---------------------------------------------------------------------------

    \74\ DOE's use of spreadsheet models provides interested parties 
with access to the models within a familiar context. In addition, 
the TSD and other documentation that DOE provides during the 
rulemaking help explain the models and how to use them, and 
interested parties can review DOE's analyses by changing various 
input quantities within the spreadsheet.
---------------------------------------------------------------------------

    DOE evaluated the impacts of potential new and amended standards 
for electric motors by comparing base-case projections with standards-
case projections. The base-case projections characterize energy use and 
customer costs for each equipment class in the absence of new and 
amended energy conservation standards. DOE compared these projections 
with projections characterizing the market for each equipment class if 
DOE were to adopt new or amended standards at specific energy 
efficiency levels (i.e., the standards cases) for that class.
    Table IV.25 summarizes all the major NOPR analysis inputs to the 
NIA and whether those inputs were revised for the final rule.

[[Page 30981]]



                              Table IV.25--Inputs for the National Impact Analysis
----------------------------------------------------------------------------------------------------------------
             Input                   NOPR Analysis description                 Changes for final rule
----------------------------------------------------------------------------------------------------------------
Shipments......................  Annual shipments from shipments    No change.
                                  model..
Compliance date of standard....  2016.............................  No change.
Equipment Classes..............  Four separate equipment class      Three separate equipment class groups. Brake
                                  groups for NEMA Design A and B     motors were added to ECG 1 (NEMA Design A
                                  motors, NEMA Design C motors,      and B motors).
                                  Fire Electric Pump Motors, and
                                  brake motors.
Base case efficiencies.........  Constant efficiency from 2015      No change in methodology. Constant
                                  through 2044 for ECG 2 and         efficiency from 2016 through 2045 for ECG 2
                                  3.Trend for the efficiency         and 3.Trend for the efficiency distribution
                                  distribution of ECG 1 and 4.       of ECG 1.
Standards case efficiencies....  Constant efficiency from 2015      No change in methodology. Constant
                                  through 2044 for ECG 2 and         efficiency from 2016 through 2045 for ECG 2
                                  3.Trend for the efficiency         and 3.Trend for the efficiency distribution
                                  distribution of ECG 1 and 4.       of ECG 1.
Annual energy consumption per    Average unit energy use data are   No change.
 unit.                            calculated for each horsepower
                                  rating and equipment class based
                                  on inputs from the Energy use
                                  analysis..
Total installed cost per unit..  Based on the MSP and weight data   No change.
                                  from the engineering, and then
                                  scaled for different hp and
                                  enclosure categories..
Electricity expense per unit...  Annual energy use for each         No change.
                                  equipment class is multiplied by
                                  the corresponding average energy
                                  price..
Escalation of electricity        AEO 2013 forecasts (to 2035) and   No change.
 prices.                          extrapolation for 2044 and
                                  beyond..
Electricity site-to-primary      A time series conversion factor;   No change.
 conversion.                      includes electric generation,
                                  transmission, and distribution
                                  losses..
Discount rates.................  3% and 7% real...................  No change.
Present year...................  2013.............................  2014.
----------------------------------------------------------------------------------------------------------------

1. Efficiency Trends
    As explained in section IV.F, for the NOPR, DOE assumed that the 
efficiency distributions in the base case for ECGs 1 changes over time. 
The projected share of 1 to 5 horsepower Premium motors (EL 2) for 
equipment class subgroup 1.a. grows from 36.6 percent to 45.5 percent 
over the analysis period, and for equipment class subgroup 1.b., it 
grows from 30.0 percent to 38.9 percent. For ECG 2 and 3, DOE assumed 
that the efficiency remains constant from 2016 to 2045.
    In the standards cases, equipment with efficiency below the 
standard levels ``roll up'' to the standard level in the compliance 
year. Thereafter, for ECG 1, DOE assumed that the level immediately 
above the standard would show a similar increase in market penetration 
as the Premium motors in the base case.
    The Joint Advocates commented that DOE's ``rollup'' scenario will 
lead to conservative energy saving estimates and given that some 
manufacturers already offer motors with efficiency levels above 
Premium, one would expect that the adoption of standards at or above 
Premium would accelerate the interest in more efficient motor designs. 
(Joint Advocates, No. 97 at p. 3)
    The ``rollup'' scenario was used to establish the efficiency 
distributions in the compliance year. Thereafter, for ECGs 1, DOE used 
a shift scenario and assumed that the level immediately above the 
standard would show a similar increase in market penetration as the 
Premium motors in the base case. This approach aligns with the Joint 
Advocates' suggestion. DOE did not receive any other comments on 
efficiency trends and, consequently, retained the same approach for the 
final rule. The assumed efficiency trends in the base case and 
standards cases are described in chapter 10 of the TSD.
2. National Energy Savings
    For each year in the forecast period, DOE calculates the national 
energy savings for each standard level by multiplying the shipments of 
electric motors affected by the energy conservation standards by the 
per-unit lifetime annual energy savings. Cumulative energy savings are 
the sum of the NES for all motors shipped during the analysis period, 
2016-2045.
    DOE estimated energy consumption and savings based on site energy 
and converted the electricity consumption and savings to primary energy 
(power plant energy use) using annual conversion factors derived from 
the AEO 2013 version of the NEMS.
    DOE has historically presented NES in terms of primary energy 
savings. In response to the recommendations of a committee on ``Point-
of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards'' appointed by the National Academy of Science, DOE announced 
its intention to use full-fuel-cycle (FFC) measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in the Federal Register in which DOE 
explained its determination that NEMS is the most appropriate tool for 
its FFC analysis and its intention to use NEMS for that purpose. 77 FR 
49701 (August 17, 2012). The approach used for today's final rule, and 
the FFC multipliers that were applied, are described in appendix 10-C 
of the final TSD.
3. Electric Motor Weights
    NEMA commented that motors vary greatly when it comes to frame 
length, thickness, material and weights for comparable ratings. It 
disagreed a with the motor weight estimates as performed by DOE. NEMA 
stated that there are too many variables to accurately determine 
weights relative to motor performance attributes. NEMA listed variables 
such as the construction material for the frame (iron, steel, and 
aluminum), the casting variations (robust, thin), the inclusion of 
packaging weight in the total weight, and other variations in

[[Page 30982]]

construction practices. NEMA did not provide an alternative method or 
additional information that could be used to refine the approach DOE 
used for estimating weights. (NEMA, No. 93 at pp. 6-7)
    Weight data are used to estimate shipping costs, which are a 
component of the total installed cost used to calculate the life cycle 
cost. The LCC results show that the average shipping costs represent a 
small fraction of the total installed costs (about 15 percent) and less 
than one percent of the total life cycle cost. While manufacturer 
catalogs contain weight data, these data showed some variations in 
weights.\75\ To account for these variations, DOE performed a 
sensitivity analysis to evaluate the impacts of lower and higher weight 
assumptions. Since the shipping costs are such a small fraction of the 
LCC, the variations in weights did not significantly impact the 
results. Therefore, DOE retained the same approach for establishing 
weights for motors configurations not directly analyzed in the 
engineering analysis.
---------------------------------------------------------------------------

    \75\ For example, in the case of a 50 horsepower motor, a 
standard deviation equal to 18 percent of the average weight was 
observed.
---------------------------------------------------------------------------

4. Equipment Price Forecast
    As noted in section IV.F.2, DOE assumed no change in electric motor 
prices over the 2016-2045 period. In addition, DOE conducted a 
sensitivity analysis using alternative price trends. DOE developed one 
forecast in which prices decline after 2011, and one in which prices 
rise. These price trends, and the NPV results from the associated 
sensitivity cases, are described in appendix 10-B of the TSD.
5. Net Present Value of Customer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers of considered equipment are: (1) Total annual 
installed cost; (2) total annual savings in operating costs; and (3) a 
discount factor. DOE calculates the lifetime net savings for motors 
shipped each year as the difference between the base case and each 
standards case in total lifetime savings in lifetime operating costs 
and total lifetime increases in installed costs. DOE calculates 
lifetime operating cost savings over the life of each motor shipped 
during the forecast period.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. DOE 
estimates the NPV using both a 3-percent and a 7-percent real discount 
rate, in accordance with guidance provided by the Office of Management 
and Budget (OMB) to Federal agencies on the development of regulatory 
analysis.\76\ The 7-percent real value is an estimate of the average 
before-tax rate of return to private capital in the U.S. economy. The 
3-percent real value represents the ``social rate of time preference,'' 
which is the rate at which society discounts future consumption flows 
to their present value.
---------------------------------------------------------------------------

    \76\ OMB Circular A-4, section E (September 17, 2003). http://www.whitehouse.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impacts of new or amended standards, DOE 
evaluates impacts on identifiable groups (i.e., subgroups) of customers 
that may be disproportionately affected by a national standard. For the 
final rule, DOE evaluated impacts on various subgroups (e.g., customer 
from the agricultural, commercial, and industrial sector; customers 
with lower electricity prices) using the LCC spreadsheet model. DOE did 
not receive any comments on its consumer subgroup analysis in response 
to the NOPR. The customer subgroup analysis is discussed in detail in 
chapter 11 of the final rule TSD.

J. Manufacturer Impact Analysis

    DOE conducted an MIA to estimate the financial impact of new and 
amended energy conservation standards on manufacturers of covered 
electric motors. The MIA also estimates the impact standards could have 
on direct employment, manufacturing capacity, manufacturer subgroups, 
and the cumulative regulatory burden. The MIA has both quantitative and 
qualitative aspects. The quantitative aspect of the MIA primarily 
relies on the GRIM, an industry cash-flow model customized for electric 
motors covered in this rulemaking. The key GRIM inputs are data on the 
industry cost structure, MPCs, shipments, and assumptions about 
manufacturer 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 TSLs (the standards case). The difference in INPV between the 
base and standards cases represents the financial impact of standards 
on manufacturers of covered electric motors. DOE employed different 
assumptions about manufacturer markups to produce ranges of results 
that represent the uncertainty about how electric motor manufacturers 
will respond to standards. The qualitative part of the MIA addresses 
factors such as manufacturing capacity; characteristics of, and impacts 
on, any particular subgroup of manufacturers; impacts on competition; 
and the cumulative regulatory burden of electric motor manufacturers.
    DOE outlined its complete methodology for the MIA in the previously 
published NOPR. Also the complete MIA is presented in chapter 12 of 
this final TSD.
1. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the need for more costly 
components and more extensive R&D to reduced motor losses. The 
resulting changes in the MPCs of the analyzed equipment can affect the 
revenues, gross margins, and cash flows of manufacturers. DOE strives 
to accurately model the potential changes in these equipment costs, as 
they are a key input for the GRIM and DOE's overall analysis. For the 
final rule, DOE only updated the dollar year of the MPCs from 2012$, 
the dollar year used in the NOPR, to 2013$. For a complete description 
of the how the MPCs were created see section IV.C of this final rule.
2. Shipment Projections
    Changes in sales volumes and efficiency distribution of equipment 
over time can significantly affect manufacturer finances. The GRIM 
estimates manufacturer revenues based on total unit shipment 
projections and the distribution of shipments by efficiency level. For 
the final rule, DOE slightly altered the distribution of shipments 
across pole configuration at the highest horsepower ratings based on 
stakeholder comments. This had a negligible effect on the MIA results. 
For the MIA, the GRIM used the NIA's annual shipment projections from 
2014, the base year, to 2045, the end of the analysis period. For a 
complete description of the shipment analysis see section IV.G of this 
final rule.
3. Markup Scenarios
    For the MIA, DOE modeled three standards case markup scenarios to 
represent the uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of new and 
amended energy conservation standards: (1) A flat, or preservation of 
gross margin, markup scenario; (2) a

[[Page 30983]]

preservation of operating profit markup scenario; and (3) a two-tiered 
markup scenario. These scenarios lead to different manufacturer markup 
values, which when applied to the inputted MPCs, result in varying 
revenue and cash-flow impacts.
    The Joint Advocates commented that the lower bound markup scenarios 
overstated the negative impacts to electric motor manufacturers. They 
also stated that manufacturer support for the standards proposed in the 
NOPR suggests that the lower bound markup scenario is unrealistic. 
(Joint Advocates, No. 97 at p. 4) DOE presents an upper bound to 
manufacturer impacts, which are positive for all TSLs, and a lower 
bound to manufacturer impacts, which are negative for all TSLs. This 
range of possible manufacturer impacts represents the uncertainty of 
manufacturers' profitability following standards. The lower bound to 
manufacturer impacts represents a worst-case scenario for manufacturers 
and does not imply that this will be the markup scenario manufacturers 
will face following standards. Just as the upper bound markup scenario 
represents a best-case scenario for manufacturers and again does not 
imply that this will be the markup scenario manufacturers will face 
following standards. Therefore, DOE believes that the lower bound 
markup scenario presented in this final rule is an appropriate worst-
case scenario for manufacturers and is not intended to represent the 
true outcome for all electric motor manufacturers following standards, 
simply the lower bound of a range of possible outcomes.
    NEEA commented that since there is an enormous range of electric 
motor types covered in this rulemaking (e.g., horsepower, pole 
configuration) and since there are several distribution channels these 
motors could be sold through, different markup scenarios might apply to 
different motor sizes, different markets, and different distribution 
channels. (NEEA, Pub. Mtg. Tr., No. 87 at p. 172) DOE agrees with this 
assessment of the market as various manufacturers could markup various 
motors differently following new and amended energy conservation 
standards. The upper and lower bound markup scenarios represent this 
range of various markup options that manufacturers will pursue 
following standards given the unique circumstances each manufacture 
faces.
    For the final rule, DOE did not alter the markup scenarios or the 
methodology used to calculate the markup values from those used in the 
NOPR analysis.
4. Product and Capital Conversion Costs
    New and amended energy conservation standards will cause 
manufacturers to incur one-time conversion costs to bring their 
production facilities and equipment designs into compliance. For the 
MIA, DOE classified these one-time conversion costs into two major 
groups: (1) Product conversion costs and (2) capital conversion costs. 
Product conversion costs are one-time investments in R&D, testing, 
compliance, marketing, and other non-capitalized costs necessary to 
make equipment designs comply with standards. Capital conversion costs 
are one-time investments in property, plant, and equipment necessary to 
adapt or change existing production facilities such that new equipment 
designs can be fabricated and assembled. For the preliminary analysis 
NEMA commented that electric motors at ELs above premium efficiency 
levels, and especially at ELs requiring die-cast copper rotors, would 
require manufacturers to make significant capital investments and 
significant time to redesign, test, and certify their entire production 
lines. (NEMA, No. 54 at p. 4 & 11) For the NOPR analysis, DOE 
incorporated NEMA's comment when creating the conversion costs for 
electric motors at ELs requiring die-cast copper rotors. For the final 
rule, DOE only updated the dollar year of the conversion costs from 
2012$, the dollar year used in the NOPR, to 2013$.
5. Other Comments From Interested Parties
    During the NOPR public meeting and comment period, interested 
parties commented on the assumptions, methodology, and results of the 
NOPR MIA. DOE received comments about the manufacturer markups used in 
the MIA versus the NIA and potential trade barriers. These comments are 
addressed in the following sections.
a. Manufacturer Markups Used in the MIA Versus the NIA
    The Joint Advocates commented that while the MIA presents a range 
of potential changes to manufacturers' INPV by altering the 
manufacturer markups, the NIA only uses one manufacturer markup when 
analyzing the impacts to customers. Further, they state that the 
manufacturer markup that is used in the NIA typically yields a higher 
customer purchase price for more efficient equipment analyzed in the 
rulemaking. (Joint Advocates, No. 97 at p. 4) Based on manufacturer 
interviews and DOE's understanding of the electric motor market, DOE 
believes that manufacturers might not be able to maintain their gross 
margin on all motors sold if the MPCs for those motors increased 
significantly due to standards. Therefore, the MIA conducted a 
sensitivity analysis around the manufacturer markup by modeling a lower 
bound manufacturer markup where manufacturers must compress their 
manufacturer markup to maintain market competition. This lower bound 
represents a worse-case scenario for manufacturer profitability. The 
NIA, which looks at the impacts of standards on customers, only models 
the scenario where manufacturers are able to maintain their 
manufacturer markup (the upper bound manufacturer markup scenario in 
the MIA). This manufacturer markup used in the NIA is the most 
conservative estimate for the purchase price that customers would pay 
for the equipment. Since there is uncertainty regarding how 
manufacturers would markup specific equipment following standards, DOE 
uses the most conservative estimates for the impacts to customers and 
manufacturers in the NIA and MIA respectively.
b. Potential Trade Barriers
    Baldor commented that if electric motor energy conservation 
standards are set above the rest of the world's standards, it could be 
a potential trade barrier for foreign motor manufacturer trying to sell 
electric motors in the United States. Baldor states that there are a 
lot of small foreign motor manufacturers, so they might not have the 
resources to manufacture separate motor production lines specifically 
to comply with U.S. electric motor standards. (Baldor, Pub. Mtg. Tr., 
No. 87 at p. 176-177) DOE acknowledge that manufacturers selling motors 
in the United States and other countries with standards below the 
United States could be required to operate motor production lines 
specifically for the U.S. market. However, DOE does not believe that 
setting electric motor standards above other countries' standards would 
constitute a potential trade barrier because all motor sold in the 
United States must comply with U.S. standards regardless if the motor 
is manufactured domestically or abroad. Also, DOE is not adopting 
standards above premium efficiency levels, which are the standards 
other countries have recently adopted for electric motors (e.g., the 
European Union).
6. Manufacturer Interviews
    DOE interviewed manufacturers representing more than 75 percent of 
covered electric motor sales in the

[[Page 30984]]

United States. The NOPR interviews were in addition to the preliminary 
interviews DOE conducted as part of the preliminary analysis. DOE 
outlined the key issues for the rulemaking for electric motor 
manufacturers in the NOPR. DOE considered the information received 
during these interviews in the development of the NOPR and this final 
rule. Comments on the NOPR regarding the impact of standards on 
manufacturers were discussed in the preceding sections. DOE did not 
conduct interviews with manufacturers between the publication of the 
NOPR and this final rule. Also, DOE did not receive any comments on the 
key issues identified in the NOPR.

K. Emissions Analysis

    In the emissions analysis, DOE estimates the reduction in power 
sector emissions of carbon dioxide (CO2), nitrogen oxides 
(NOX), sulfur dioxide (SO2), and mercury (Hg) 
from potential energy conservation standards for electric motors. In 
addition, DOE estimates emissions impacts in production activities 
(extracting, processing, and transporting fuels) that provide the 
energy inputs to power plants. These are referred to as ``upstream'' 
emissions. Together, these emissions account for the full-fuel-cycle 
(FFC). In accordance with DOE's FFC Statement of Policy (76 FR 51282 
(August 18, 2011) as amended at 77 FR 49701 (August 17, 2012), the FFC 
analysis includes impacts on emissions of methane (CH4) and 
nitrous oxide (N2O), both of which are recognized as 
greenhouse gases.
    DOE primarily conducted the emissions analysis using emissions 
factors for CO2 and other gases derived from data in AEO 
2013, supplemented by data from other sources. DOE developed separate 
emissions factors for power sector emissions and upstream emissions. 
The method that DOE used to derive emissions factors is described in 
chapter 13 of the TSD.
    For CH4 and N2O, DOE calculated emissions 
reduction in tons and also in terms of units of carbon dioxide 
equivalent (CO2eq). Gases are converted to CO2eq 
by multiplying the physical units by the gas' global warming potential 
(GWP) over a 100 year time horizon. Based on the Fourth Assessment 
Report of the Intergovernmental Panel on Climate Change,\77\ DOE used 
GWP values of 25 for CH4 and 298 for N2O.
---------------------------------------------------------------------------

    \77\ Forster, P., V. Ramaswamy, P. Artaxo, T. Berntsen, R. 
Betts, D.W. Fahey, J. Haywood, J. Lean, D.C. Lowe, G. Myhre, J. 
Nganga, R. Prinn,G. Raga, M. Schulz and R. Van Dorland. 2007: 
Changes in Atmospheric Constituents and in Radiative Forcing. In 
Climate Change 2007: The Physical Science Basis. Contribution of 
Working Group I to the Fourth Assessment Report of the 
Intergovernmental Panel on Climate Change. S. Solomon, D. Qin, M. 
Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller, 
Editors. 2007. Cambridge University Press, Cambridge, United Kingdom 
and New York, NY, USA. p. 212.
---------------------------------------------------------------------------

    EIA prepares the Annual Energy Outlook using the National Energy 
Modeling System (NEMS). Each annual version of NEMS incorporates the 
projected impacts of existing air quality regulations on emissions. AEO 
2013 generally represents current legislation and environmental 
regulations, including recent government actions, for which 
implementing regulations were available as of December 31, 2012.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States (42 U.S.C. 
7651 et seq.) and the District of Columbia (DC). SO2 
emissions from 28 eastern states and DC were also limited under the 
Clean Air Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which 
created an allowance-based trading program. CAIR was remanded to the 
U.S. Environmental Protection Agency (EPA) by the U.S. Court of Appeals 
for the District of Columbia Circuit but it remained in effect.\78\ See 
North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); North Carolina 
v. EPA, 531 F.3d 896 (D.C. Cir. 2008). In 2011, EPA issued a 
replacement for CAIR, the Cross-State Air Pollution Rule (CSAPR). 76 FR 
48208 (August 8, 2011). On August 21, 2012, the DC Circuit issued a 
decision to vacate CSAPR.\79\ The court ordered EPA to continue 
administering CAIR. The AEO 2013 emissions factors used for today's 
final rule assumes that CAIR remains a binding regulation through 2040.
---------------------------------------------------------------------------

    \78\ See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
    \79\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 
(D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696, 
81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
---------------------------------------------------------------------------

    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of tradable emissions allowances. Under 
existing EPA regulations, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of a new or amended efficiency standard could be used to allow 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning in 2015, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants. 
77 FR 9304 (February 16, 2012). In the final MATS rule, EPA established 
a standard for hydrogen chloride as a surrogate for acid gas hazardous 
air pollutants (HAP), and also established a standard for 
SO2 (a non-HAP acid gas) as an alternative equivalent 
surrogate standard for acid gas HAP. The same controls are used to 
reduce HAP and non-HAP acid gas; thus, SO2 emissions will be 
reduced as a result of the control technologies installed on coal-fired 
power plants to comply with the MATS requirements for acid gas. AEO 
2013 assumes that, in order to continue operating, coal plants must 
have either flue gas desulfurization or dry sorbent injection systems 
installed by 2015. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions. Under the MATS, NEMS 
shows a reduction in SO2 emissions when electricity demand 
decreases (e.g., as a result of energy efficiency standards). Emissions 
will be far below the cap that would be established by CAIR, so it is 
unlikely that excess SO2 emissions allowances resulting from 
the lower electricity demand would be needed or used to allow 
offsetting increases in SO2 emissions by any regulated EGU. 
Therefore, DOE believes that efficiency standards will reduce 
SO2 emissions in 2015 and beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
allow offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions from the standards considered in today's final 
rule for these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions reduction using emissions factors based on AEO 2013, which 
incorporates the MATS.

[[Page 30985]]

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of today's rule, DOE considered the 
estimated monetary benefits from the reduced emissions of 
CO2 and NOX that are expected to result from each 
of the TSLs considered. In order to make this calculation analogous to 
the calculation of the NPV of consumer benefit, DOE considered the 
reduced emissions expected to result over the lifetime of equipment 
shipped in the forecast period for each TSL. This section summarizes 
the basis for the monetary values used for each of these emissions and 
presents the values considered in this final rule.
    For today's final rule, DOE is relying on a set of values for the 
SCC that was developed by a Federal interagency process. The basis for 
these values is summarized below, and a more detailed description of 
the methodologies used is provided as an appendix to chapter 14 of the 
final rule TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.
    Under section 1(b) of Executive Order 12866, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs''. The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions. The estimates are presented with an acknowledgement 
of the many uncertainties involved and with a clear understanding that 
they should be updated over time to reflect increasing knowledge of the 
science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of challenges. A 
report from the National Research Council \80\ points out that any 
assessment will suffer from uncertainty, speculation, and lack of 
information about (1) future emissions of GHGs, (2) the effects of past 
and future emissions on the climate system, (3) the impact of changes 
in climate on the physical and biological environment, and (4) the 
translation of these environmental impacts into economic damages. As a 
result, any effort to quantify and monetize the harms associated with 
climate change will raise questions of science, economics, and ethics 
and should be viewed as provisional.
---------------------------------------------------------------------------

    \80\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. 2009. National Academies 
Press: Washington, DC.
---------------------------------------------------------------------------

    Despite the limits of both quantification and monetization, SCC 
estimates can be useful in estimating the social benefits of reducing 
CO2 emissions. The agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC values 
appropriate for that year. The net present value of the benefits can 
then be calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Development of Social Cost of Carbon Values
    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across Federal agencies, the Administration 
sought to develop a transparent and defensible method, specifically 
designed for the rulemaking process, to quantify avoided climate change 
damages from reduced CO2 emissions. The interagency group 
did not undertake any original analysis. Instead, it combined SCC 
estimates from the existing literature to use as interim values until a 
more comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: Global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules.
c. Current Approach and Key Assumptions
    After the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specially, the group considered public comments and further explored 
the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models commonly used to estimate 
the SCC: The FUND, DICE, and PAGE models. These models are frequently 
cited in the peer-reviewed literature and were used in the last 
assessment of the Intergovernmental Panel on Climate Change (IPCC). 
Each model was given equal weight in the SCC values that were 
developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models, while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an

[[Page 30986]]

input into all three models. In addition, the interagency group used a 
range of scenarios for the socio-economic parameters and a range of 
values for the discount rate. All other model features were left 
unchanged, relying on the model developers' best estimates and 
judgments.
    The interagency group selected four sets of SCC values for use in 
regulatory analyses. Three sets of values are based on the average SCC 
from the three IAMs, at discount rates of 2.5, 3, and 5 percent. The 
fourth set, which represents the 95th percentile SCC estimate across 
all three models at a 3-percent discount rate, was included to 
represent higher than expected impacts from temperature change further 
out in the tails of the SCC distribution. The values grow in real terms 
over time. Additionally, the interagency group determined that a range 
of values from 7 percent to 23 percent should be used to adjust the 
global SCC to calculate domestic effects,\81\ although preference is 
given to consideration of the global benefits of reducing 
CO2 emissions. Table IV.26 presents the values in the 2010 
interagency group report,\82\ which is reproduced in appendix 14-A of 
the TSD.
---------------------------------------------------------------------------

    \81\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
    \82\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

                     Table IV.26--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate %
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th percentile
----------------------------------------------------------------------------------------------------------------
2010................................                4.7               21.4               35.1               64.9
2015................................                5.7               23.8               38.4               72.8
2020................................                6.8               26.3               41.7               80.7
2025................................                8.2               29.6               45.9               90.4
2030................................                9.7               32.8               50.0              100.0
2035................................               11.2               36.0               54.2              109.7
2040................................               12.7               39.2               58.4              119.3
2045................................               14.2               42.1               61.7              127.8
2050................................               15.7               44.9               65.0              136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's notice were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\83\ Table IV.27 
shows the updated sets of SCC estimates in 5-year increments from 2010 
to 2050. The full set of annual SCC estimates between 2010 and 2050 is 
reported in appendix 14B of the DOE final rule TSD. The central value 
that emerges is the average SCC across models at the 3 percent discount 
rate. However, for purposes of capturing the uncertainties involved in 
regulatory impact analysis, the interagency group emphasizes the 
importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \83\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf

                     Table IV.27--Annual SCC Values From 2013 Interagency Report, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate %
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th percentile
----------------------------------------------------------------------------------------------------------------
2010................................                 11                 32                 51                 89
2015................................                 11                 37                 57                109
2020................................                 12                 43                 64                128
2025................................                 14                 47                 69                143
2030................................                 16                 52                 75                159
2035................................                 19                 56                 80                175
2040................................                 21                 61                 86                191
2045................................                 24                 66                 92                206
2050................................                 26                 71                 97                220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The 2009 National 
Research Council report mentioned above points out that there is 
tension between the goal of producing

[[Page 30987]]

quantified estimates of the economic damages from an incremental ton of 
carbon and the limits of existing efforts to model these effects. There 
are a number of analytic challenges that are being addressed by the 
research community, including research programs housed in many of the 
Federal agencies participating in the interagency process to estimate 
the SCC. The interagency group intends to periodically review and 
reconsider those estimates to reflect increasing knowledge of the 
science and economics of climate impacts, as well as improvements in 
modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report adjusted to 2012$ using the GDP price deflator. 
For each of the four sets of SCC values, the values for emissions in 
2015 were $11.8, $39.7, $61.2, and $117 per metric ton avoided (values 
expressed in 2012$). DOE derived values after 2050 using the relevant 
growth rates for the 2040-2050 period in the interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
    NEMA provided a lengthy critique of the integrated assessment 
models (IAMs) that were utilized by the Interagency Working Group to 
projecting future damages from CO2 emissions, pointing out 
that there is enormous uncertainty in the models. (NEMA, No. 93 at p. 
16) The Cato Institute stated that the determination of the SCC is 
discordant with the best scientific literature on the equilibrium 
climate sensitivity and the fertilization effect of carbon dioxide--two 
critically important parameters for establishing the net externality of 
carbon dioxide emissions, at odds with existing OMB guidelines for 
preparing regulatory analyses, and founded upon the output of IAMs that 
encapsulate such large uncertainties as to provide no reliable guidance 
as to the sign, much less the magnitude of the social cost of carbon. 
(Cato Institute, No. 94 at p. 1)
    NEMA stated that the monetized benefits of carbon emission 
reductions are informative at some level, but should not be considered 
as determinative in the Secretary's decision-making under EPCA. NEMA 
believes that DOE should base its net benefit determination for 
justifying a particular energy conservation standard on the traditional 
criteria relied upon by DOE--impacts on manufacturers, consumers, 
employment, energy savings, and competition. (NEMA, No. 93 at p. 16) 
The American Forest & Paper Association (AF&PA) and the American Fuel & 
Petrochemical Manufacturers (AFPM) stated that the SCC calculation 
should not be used in any rulemaking and/or policymaking until it 
undergoes a more rigorous notice, review and comment process.\84\ 
(AF&PA and AFPM, No. 95 at p. 1) Similarly, the Cato Institute stated 
that the SCC should not be used in this or other rulemakings. (Cato 
Institute, No. 94 at p. 1) In contrast, the Joint Advocates and CA IOUs 
expressed support for the use of the updated SCC values that are based 
on the interagency working group's most recent review of peer-reviewed 
models on the subject. (Joint Advocates, No. 97 at p. 4; CA IOUs, No. 
99 at p. 2)
---------------------------------------------------------------------------

    \84\ AF&PA and AFPM pointed to more detailed comments that were 
filed by AFPM and several other trade associations on DOE's Energy 
Conservation Standards for Commercial Refrigeration Equipment. 
http://www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0003-
0079.
---------------------------------------------------------------------------

    In response to the comments on the SCC values, DOE acknowledges the 
limitations in the SCC estimates, which are discussed in detail in the 
2010 interagency group report. Specifically, uncertainties in the 
assumptions regarding climate sensitivity, as well as other model 
inputs such as economic growth and emissions trajectories, are 
discussed and the reasons for the specific input assumptions chosen are 
explained. However, the three integrated assessment models used to 
estimate the SCC are frequently cited in the peer-reviewed literature 
and were used in the last assessment of the IPCC. In addition, new 
versions of the models that were used in 2013 to estimate revised SCC 
values were published in the peer-reviewed literature (see appendix 14B 
of the final rule TSD for discussion). Although uncertainties remain, 
the revised estimates that were issued in November, 2013 are based on 
the best available scientific information on the impacts of climate 
change. The current estimates of the SCC have been developed over many 
years, using the best science available, and with input from the 
public. In November 2013, OMB announced a new opportunity for public 
comment on the interagency technical support document underlying the 
revised SCC estimates. See 78 FR 70586. The comment period for the OMB 
announcement closed on February 26, 2014. OMB is currently reviewing 
comments and considering whether further revisions to the 2013 SCC 
estimates are warranted. DOE stands ready to work with OMB and the 
other members of the interagency working group on further review and 
revision of the SCC estimates as appropriate.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the TSLs it considered. As noted above, 
DOE has taken into account how new or amended energy conservation 
standards would reduce NOX emissions in those 22 states not 
affected by the CAIR. DOE estimated the monetized value of 
NOX emissions reductions resulting from each of the TSLs 
considered for today's rule based on estimates found in the relevant 
scientific literature. Estimates of monetary value for reducing 
NOX from stationary sources range from $476 to $4,893 per 
ton (2013$).\85\ DOE calculated monetary benefits using a medium value 
for NOX emissions of $2,684 per short ton (in 2014$), and 
real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------

    \85\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included monetization in the current analysis.

M. Utility Impact Analysis

    The utility impact analysis estimates several effects on the power 
generation industry that would result from the adoption of new or 
amended energy conservation standards. In the utility impact analysis, 
DOE analyzes the changes in installed electricity capacity and 
generation that would result for each trial standard level. The utility 
impact analysis uses NEMS-BT to account for selected utility impacts of 
new or amended energy conservation standards. DOE's analysis consists 
of a comparison between model results for the most recent AEO Reference 
case and for cases in which energy use is decremented to reflect the 
impact of potential standards. The energy savings inputs associated 
with each TSL come from the NIA. Chapter 15 of the final rule TSD 
describes the utility impact analysis in further detail.

[[Page 30988]]

N. Employment Impact Analysis

    Employment impacts from new or amended energy conservation 
standards include direct and indirect impacts. Direct employment 
impacts are any changes in the number of employees of manufacturers of 
the equipment subject to standards; the MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more-efficient equipment. Indirect 
employment impacts from standards consist of the jobs created or 
eliminated in the national economy, other than in the manufacturing 
sector being regulated, due to: (1) Reduced spending by end users on 
energy; (2) reduced spending on new energy supply by the utility 
industry; (3) increased consumer spending on the purchase of new 
equipment; and (4) the effects of those three factors throughout the 
economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (BLS \86\). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy. There are many reasons for these differences, including 
wage differences and the fact that the utility sector is more capital-
intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, based 
on the BLS data alone, DOE believes net national employment may 
increase because of shifts in economic activity resulting from new and 
amended standards.
---------------------------------------------------------------------------

    \86\ See Labor Department's Bureau of Labor Statistics, Current 
Employment Statistics (Available at: http://www.bls.gov/ces/.)
---------------------------------------------------------------------------

    For the standard levels considered, DOE estimated indirect national 
employment impacts using an input/output model of the U.S. economy 
called Impact of Sector Energy Technologies, Version 3.1.1 (ImSET). 
ImSET is a special purpose version of the ``U.S. Benchmark National 
Input-Output'' (I-O) model, which was designed to estimate the national 
employment and income effects of energy-saving technologies. The ImSET 
software includes a computer-based I-O model having structural 
coefficients that characterize economic flows among the 187 sectors. 
ImSET's national economic I-O structure is based on a 2002 U.S. 
benchmark table, specially aggregated to the 187 sectors most relevant 
to industrial, commercial, and residential building energy use. DOE 
notes that ImSET is not a general equilibrium forecasting model, and 
understands the uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may over-estimate actual job impacts over the long 
run. For the final rule, DOE did not receive any comments and retained 
the same approach using ImSET only to estimate short-term employment 
impacts.
    For more details on the employment impact analysis, see chapter 16 
of the final rule TSD.

O. Other Comments Received

    In response to the NOPR, interested parties submitted additional 
comments on a variety of general issues. CEC and NEMA both pointed out 
a table formatting error that appeared in Table 4 on p. 73679 the 
Federal Register version of the NOPR.\87\ (CEC, No. 96 at p. 3, NEMA, 
No. 93 at p. 30) DOE notes that this error was corrected in the CFR and 
future versions of the table. The Office of the Federal Register 
published a correction to the table on February 14, 2014. See 79 FR 
8309.
---------------------------------------------------------------------------

    \87\ 78 FR 73679.
---------------------------------------------------------------------------

    In response to the NOPR, Scott Mohs raised concern about loss of 
wildlife habitat due to corn acreage. (Scott Mohs, No. 102 at p. 1) 
This issue is beyond the scope of the electric motors rulemaking, and, 
accordingly, DOE does not discuss corn acreage in today's final rule.

V. Analytical Results

A. Trial Standard Levels

    DOE ordinarily considers several Trial Standard Levels (TSLs) in 
its analytical process. TSLs are formed by grouping different 
Efficiency Levels (ELs), which are standard levels for each Equipment 
Class Grouping (ECG) of motors. Within each equipment class grouping, 
DOE established equipment classes based on pole configuration, 
horsepower rating, and enclosure, leading to a total of 482 equipment 
classes (see section IV.A.4). DOE analyzed the benefits and burdens of 
the TSLs developed for today's final rule. DOE examined four TSLs for 
electric motors. Table V.1 presents the TSLs analyzed and the 
corresponding efficiency level for each equipment class group.
    The efficiency levels in each TSL can be characterized as follows: 
TSL 1 represents each equipment class group moving up one efficiency 
level from the current baseline, with the exception of fire-pump 
motors, which remain at their baseline level; TSL 2 represents Premium 
levels for all equipment class groups with the exception of fire-pump 
motors, which remain at the baseline; TSL 3 represents one NEMA band 
above Premium for all groups except fire-pump motors, which move up to 
Premium; and TSL 4 represents the maximum technologically feasible 
level (max-tech) for all equipment class groups.\1\ Because today's 
final rule includes equipment class groups containing both currently 
regulated motors and newly regulated motors, at certain TSLs, an 
equipment class group may encompass different standard levels, some of 
which may be above one EL above the baseline. For example, at TSL1, EL1 
is being selected for equipment class group 1. However, a large number 
of motors in equipment class group 1 already have to meet EL2. If TSL1 
was selected, these motors would continue to be required to meet the 
standards at TSL2, while currently un-regulated motors would be 
regulated to TSL1 (see TSD chapter 10).

                                           Table V.1--Summary of TSLs
----------------------------------------------------------------------------------------------------------------
      Equipment class group              TSL 1               TSL 2               TSL 3               TSL 4
----------------------------------------------------------------------------------------------------------------
1...............................  EL 1..............  EL 2..............  EL 3..............  EL 4.

[[Page 30989]]

 
2...............................  EL 1..............  EL 1..............  EL 2..............  EL 2.
3...............................  EL 0..............  EL 0..............  EL 1..............  EL 3.
----------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

    As discussed in section II.A, EPCA provides seven factors to be 
evaluated in determining whether a potential energy conservation 
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-
(VII) as applied to equipment via 6316(a)) The following sections 
generally discuss how DOE is addressing each of those seven factors in 
this rulemaking.
1. Economic Impacts on Individual Customers
    DOE analyzed the economic impacts on electric motor customers by 
looking at the effects standards would have on the LCC and PBP. DOE 
also examined the rebuttable presumption payback periods for each 
equipment class, and the impacts of potential standards on customer 
subgroups. These analyses are discussed below.
a. Life-Cycle Cost and Payback Period
    To evaluate the net economic impact of standards on electric motor 
customers, DOE conducted LCC and PBP analyses for each TSL. In general, 
higher-efficiency equipment would typically affect customers in two 
ways: (1) Annual operating expense would decrease, and (2) purchase 
price would increase. Section IV.F of this rule discusses the inputs 
DOE used for calculating the LCC and PBP. The LCC and PBP results are 
calculated from electric motor cost and efficiency data that are 
modeled in the engineering analysis (section IV.C).
    For each representative unit, the key outputs of the LCC analysis 
are a mean LCC savings and a median PBP relative to the base case, as 
well as the fraction of customers for which the LCC will decrease (net 
benefit), increase (net cost), or exhibit no change (no impact) 
relative to the base-case product forecast. No impacts occur when the 
base-case efficiency equals or exceeds the efficiency at a given TSL. 
Table V.2 show the key shipment-weighted average of results for the 
representative units in each equipment class group.

            Table V.2--Summary Life-Cycle Cost and Payback Period Results for Equipment Class Group 1
----------------------------------------------------------------------------------------------------------------
                       Trial Standard Level *                             1          2          3          4
----------------------------------------------------------------------------------------------------------------
                          Efficiency Level                                1          2          3          4
----------------------------------------------------------------------------------------------------------------
Customers with Net LCC Cost (%) **..................................        0.3        7.8       34.8       83.3
Customers with Net LCC Benefit (%) **...............................       10.9       34.3       44.7        9.4
Customers with No Change in LCC (%) **..............................       88.8       57.9       20.4        7.3
Mean LCC Savings ($)................................................        $55       $160        $98      -$409
Median PBP (Years)..................................................        1.0        2.9        6.0       26.5
----------------------------------------------------------------------------------------------------------------
* The results for equipment class group 1 are the shipment weighted averages of the results for representative
  units 1, 2, 3, 9 and 10.
** Rounding may cause some items to not total 100 percent.


            Table V.3--Summary Life-Cycle Cost and Payback Period Results for Equipment Class Group 2
----------------------------------------------------------------------------------------------------------------
                       Trial Standard Level *                             1          2          3          4
----------------------------------------------------------------------------------------------------------------
                          Efficiency Level                                1          1          2          2
----------------------------------------------------------------------------------------------------------------
Customers with Net LCC Cost (%) **..................................       18.6       18.6       92.8       92.8
Customers with Net LCC Benefit (%) **...............................       71.5       71.5        7.2        7.2
Customers with No Change in LCC (%) **..............................        9.8        9.8        0.0        0.0
Mean LCC Savings ($)................................................        $53        $53      -$280      -$280
Median PBP (Years)..................................................        4.5        4.5       20.7       20.7
----------------------------------------------------------------------------------------------------------------
* The results for equipment class group 2 are the shipment weighted averages of the results for representative
  units 4 and 5.
** Rounding may cause some items to not total 100 percent.


            Table V.4--Summary Life-Cycle Cost and Payback Period Results for Equipment Class Group 3
----------------------------------------------------------------------------------------------------------------
                       Trial Standard Level *                             1          2          3          4
----------------------------------------------------------------------------------------------------------------
                          Efficiency Level                                0          0          1          3
----------------------------------------------------------------------------------------------------------------
Customers with Net LCC Cost (%) **..................................        0.0        0.0       81.7      100.0
Customers with Net LCC Benefit (%) **...............................        0.0        0.0        0.0        0.0
Customers with No Change in LCC (%) **..............................        0.0        0.0       18.3        0.0
Mean LCC Savings ($)................................................    N/A ***    N/A ***     -$64.6      -$807
Median PBP (Years)..................................................    N/A ***    N/A ***       3016      11632
----------------------------------------------------------------------------------------------------------------
* The results for equipment class group 3 are the shipment weighted averages of the results for representative
  units 6, 7, and 8.
** Rounding may cause some items to not total 100 percent.
*** For equipment class group 3, TSLs 1 and 2 are the same as the baseline; thus, no customers are affected.


[[Page 30990]]

b. Consumer Subgroup Analysis
    In the customer subgroup analysis, DOE estimated the LCC impacts of 
the electric motor TSLs on various groups of customers. Table V.5 and 
Table V.6 compare the weighted average mean LCC savings and median 
payback periods for ECG 1 at each TSL for different customer subgroups. 
Chapter 11 of the TSD presents the detailed results of the customer 
subgroup analysis and results for the other equipment class groups.

                        Table V.5--Summary Life-Cycle Cost Results for Subgroups for Equipment Class Group 1: Average LCC Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average LCC savings (2013$) *
                                                         -----------------------------------------------------------------------------------------------
                       EL                           TSL      Reference      Low energy                      Industrial      Commercial     Agricultural
                                                             scenario          price      Small business    sector only     sector only     sector only
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................       1              55              55              49              65              52              20
2...............................................       2             160             160             141             195             148              11
3...............................................       3              98              97              76             136              85            -100
4...............................................       4            -409            -410            -439            -355            -428            -701
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The results for equipment class group 1 are the shipment weighted averages of the results for representative units 1, 2, 3, 9 and 10.


                       Table V.6--Summary Life-Cycle Cost Results for Subgroups for Equipment Class Group 1: Median Payback Period
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Median payback period (years)*
                                                         -----------------------------------------------------------------------------------------------
                       EL                           TSL      Reference      Low energy                      Industrial      Commercial     Agricultural
                                                             scenario          price      Small business    sector only     sector only     sector only
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................       1             1.0               1               1               1               1               3
2...............................................       2             2.9               3               3               2               3               7
3...............................................       3             6.0               6               6               4               7              23
4...............................................       4            26.5              26              27              18              30             126
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The results for equipment class group 1 are the shipment weighted averages of the results for representative units 1, 2, 3, 9 and 10.

c. Rebuttable Presumption Payback
    As discussed in section IV.F.12, EPCA establishes a rebuttable 
presumption that an energy conservation standard is economically 
justified if the increased purchase cost for equipment that meets the 
standard is less than three times the value of the first-year energy 
savings resulting from the standard. (42 U.S.C. 6295(o)(2)(B)(iii) and 
6316(a)) DOE calculated a rebuttable-presumption PBP for each TSL to 
determine whether DOE could presume that a standard at that level is 
economically justified. DOE based the calculations on average usage 
profiles. As a result, DOE calculated a single rebuttable-presumption 
payback value, and not a distribution of PBPs, for each TSL. Table V.7 
shows the rebuttable-presumption PBPs for the considered TSLs. The 
rebuttable presumption is fulfilled in those cases where the PBP is 
three years or less. However, DOE routinely conducts an economic 
analysis that considers the full range of impacts to the customer, 
manufacturer, Nation, and environment, as required under 42 U.S.C. 
6295(o)(2)(B)(i) as applied to equipment via 42 U.S.C. 6316(a). The 
results of that analysis serve as the basis for DOE to definitively 
evaluate the economic justification for a potential standard level 
(thereby supporting or rebutting the results of any three-year PBP 
analysis). Section V.C addresses how DOE considered the range of 
impacts to select today's final rule.

        Table V.7--Rebuttable-Presumption Payback Periods (Years)
------------------------------------------------------------------------
                                           Trial standard level
     Equipment class group*      ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
1...............................       0.5       0.8       1.2       4.0
2...............................       1.6       1.6       7.3       7.3
3...............................     N/A**     N/A**       817     4,991
------------------------------------------------------------------------
*The results for each equipment class group (ECG) are a shipment
  weighted average of results for the representative units in the group.
  ECG 1: Representative units 1, 2, 3, 9 and 10; ECG 2: Representative
  units 4 and 5; ECG 3: Representative units 6, 7, and 8.
**For equipment class group 3, TSLs 1 and 2 are the same as the
  baseline; thus, no customers are affected.

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new and amended 
energy conservation standards on manufacturers of covered electric 
motors. The following section describes the expected impacts on 
manufacturers at each TSL. Chapter 12 of this final rule TSD explains 
the analysis in further detail.
a. Industry Cash-Flow Analysis Results
    The results below show three INPV tables representing the three 
markup scenarios used for the analysis. The first table reflects the 
flat, or gross margin, markup scenario, which is the upper (less 
severe) bound of impacts. To assess the lower end of the range of 
potential impacts, DOE modeled two potential markup scenarios, a two-
tiered markup

[[Page 30991]]

scenario and a preservation of operating profit markup scenario. The 
two-tiered markup scenario assumes manufacturers offer two different 
tiers of markups--one for lower efficiency levels and one for higher 
efficiency levels. Meanwhile 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 in the 
standards case as in the base case. In general, the larger the MPC 
price increases, the less likely manufacturers are able to fully pass 
through additional costs due to standards calculated in the flat markup 
scenario.
    Table V.8, Table V.9, and Table V.10 present the results for all 
electric motors under the flat, two-tiered, and preservation of 
operating profit markup scenarios. DOE examined all three ECGs (Design 
A and B motors, Design C motors, fire pump motors) together.

                Table V.8--Manufacturer Impact Analysis for Electric Motors--Flat Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2013$ millions)     $3,478.0     $3,486.4     $3,870.6     $4,541.9     $5,382.1
Change in INPV...............  (2013$ millions)  ...........         $8.4       $392.6     $1,063.9     $1,904.1
                               (%).............  ...........         0.2%        11.3%        30.6%        54.7%
Product Conversion Costs.....  (2013$ millions)  ...........         $6.2        $58.0       $618.1       $627.4
Capital Conversion Costs.....  (2013$ millions)  ...........         $0.0        $26.6       $222.8       $707.2
Total Conversion Costs.......  (2013$ millions)  ...........         $6.2        $84.6       $841.0     $1,334.6
----------------------------------------------------------------------------------------------------------------


             Table V.9--Manufacturer Impact Analysis for Electric Motors--Two-Tiered Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2013$ millions)     $3,478.0     $3,481.6     $3,130.4     $2,928.3     $3,282.0
Change in INPV...............  (2013$ millions)  ...........         $3.6      $-347.7      $-549.7      $-196.0
                               (%).............  ...........         0.1%       -10.0%       -15.8%        -5.6%
Product Conversion Costs.....  (2013$ millions)  ...........         $6.2        $58.0       $618.1       $627.4
Capital Conversion Costs.....  (2013$ millions)  ...........         $0.0        $26.6       $222.8       $707.2
Total Conversion Costs.......  (2013$ millions)  ...........         $6.2        $84.6       $841.0     $1,334.6
----------------------------------------------------------------------------------------------------------------


 Table V.10--Manufacturer Impact Analysis for Electric Motors--Preservation of Operating Profit Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
INPV.........................  (2013$ millions)     $3,478.0     $3,461.3     $3,643.0     $3,362.0     $2,048.3
Change in INPV...............  (2013$ millions)  ...........       $-16.7       $165.0      $-116.0    $-1,429.8
                               (%).............  ...........        -0.5%         4.7%        -3.3%       -41.1%
Product Conversion Costs.....  (2013$ millions)  ...........         $6.2        $58.0       $618.1       $627.4
Capital Conversion Costs.....  (2013$ millions)  ...........         $0.0        $26.6       $222.8       $707.2
Total Conversion Costs.......  (2013$ millions)  ...........         $6.2        $84.6       $841.0     $1,334.6
----------------------------------------------------------------------------------------------------------------

    TSL 1 represents EL 1 for ECG 1 and ECG 2 motors and baseline for 
ECG 3 motors. At TSL 1, DOE estimates impacts on INPV to range from 
$8.4 million to -$16.7 million, or a change in INPV of 0.2 percent to -
0.5 percent. At this TSL, industry free cash flow is estimated to 
decrease by approximately 1 percent to $164.3 million, compared to the 
base case value of $166.1 million in 2015.
    The INPV impacts at TSL 1 range from slightly positive to slightly 
negative. Consequently, DOE does not anticipate that manufacturers 
would lose a significant portion of their INPV at this TSL. This is 
because the vast majority of shipments already meets or exceeds the 
efficiency levels prescribed at TSL 1. DOE estimates that in the year 
of compliance (2016), 90 percent of all electric motor shipments (91 
percent of ECG 1a, 68 percent of ECG 1b, 8 percent of ECG 2, and 100 
percent of ECG 3 shipments) would already meet the efficiency levels at 
TSL 1 or higher in the base case. Since ECG 1a shipments account for 
over 97 percent of all electric motor shipments, the effects on those 
motors are the primary driver for the impacts at this TSL. Only a few 
ECG 1a shipments not currently covered by the existing electric motor 
standard and a small amount of ECG 1b and ECG 2 shipments would need to 
be converted to comply with efficiency standards prescribed at TSL 1.
    DOE expects conversion costs to be small compared to the industry 
value because most of the electric motor shipments, on a volume basis, 
already meet the efficiency levels analyzed at this TSL. DOE estimates 
product conversion costs of $6.2 million due to the expanded scope of 
motors covered by this rulemaking, which includes motors previously not 
covered by the existing electric motor energy conservation standards. 
DOE believes that at this TSL, there will be some engineering costs, as 
well as testing and certification costs associated with this scope 
expansion. DOE estimates the capital conversion costs to be minimal at 
TSL 1. This is mainly because almost all manufacturers currently 
produce

[[Page 30992]]

some motors that are compliant at TSL 1 efficiency levels, and it would 
not be much of a capital investment to bring all motor production to 
this efficiency level.
    TSL 2 represents EL 2 for ECG 1a and ECG 1b motors, EL 1 for ECG 2 
motors, and baseline for ECG 3 motors. At TSL 2, DOE estimates impacts 
on INPV to range from $392.6 million to -$347.7 million, or a change in 
INPV of 11.3 percent to -10.0 percent. At this TSL, industry free cash 
flow is estimated to decrease by approximately 17 percent to $137.1 
million, compared to the base case value of $166.1 million in 2015.
    The INPV impacts at TSL 2 range from moderately positive to 
slightly negative. DOE estimates that in the year of compliance (2016), 
60 percent of all electric motor shipments (60 percent of ECG 1a, 31 
percent of ECG 1b, 8 percent of ECG 2, and 100 percent of ECG 3 
shipments) would already meet the efficiency levels at TSL 2 or higher 
in the base case. The majority of shipments are currently covered by an 
electric motors standard that requires general purpose Design A and B 
motors to meet the efficiency levels at this TSL. Therefore, only 
previously non-covered Design A and B motors and most ECG 1b and ECG 2 
motors would need to be converted to comply with efficiency standards 
prescribed at TSL 2.
    At TSL 2, DOE expects conversion costs to increase significantly 
from TSL 1. However, these conversion costs do not represent a large 
portion of the base case INPV, since the majority of electric motor 
shipments already meet the efficiency levels required at this TSL. DOE 
estimates product conversion costs of $58.0 million due to the expanded 
scope of this rulemaking, which includes motors not previously covered 
by the existing electric motor energy conservation standards and the 
inclusion of ECG 1b and ECG 2 motors. DOE believes there will be 
moderate engineering costs, as well as testing and certification costs 
at this TSL associated with this scope expansion. DOE estimates the 
capital conversion costs to be approximately $26.6 million at TSL 2. 
While most manufacturers already produce at least some motors that are 
compliant at TSL 2, these manufacturers would likely have to invest in 
machinery to bring all motor production to these efficiency levels.
    TSL 3 represents EL 3 for ECG 1a and ECG 1b motors, EL 2 for ECG 2 
motors, and EL 1 for ECG 3 motors. At TSL 3, DOE estimates the impacts 
on INPV to range from $1,063.9 million to -$549.7 million, or a change 
in INPV of 30.6 percent to -15.8 percent. At this TSL, industry free 
cash flow is estimated to decrease by approximately 170 percent to -
$116.0 million, compared to the base case value of $166.1 million in 
2015.
    The INPV impacts at TSL 3 range from significantly positive to 
moderately negative. DOE estimates that in the year of compliance 
(2016), 23 percent of all electric motor shipments (24 percent of ECG 
1a, 4 percent of ECG 1b, less than 1 percent of ECG 2, and 19 percent 
of ECG 3 shipments) would already meet the efficiency levels at TSL 3 
or higher in the base case. The majority of shipments would need to be 
converted to comply with efficiency standards prescribed at TSL 3.
    DOE expects conversion costs to increase significantly at TSL 3 and 
become a substantial investment for manufacturers. DOE estimates 
product conversion costs of $618.1 million at TSL 3, since most 
electric motors in the base case do not exceed the current motor 
standards set at premium efficiency levels for Design A and B motors, 
which represents EL 2 for ECG 1a. DOE believes there would need to be a 
massive reengineering effort that manufacturers would have to undergo 
to have all motors meet this TSL. Additionally, motor manufacturers 
would have to increase the efficiency levels for ECG 1b, ECG 2, and ECG 
3 motors. DOE estimates the capital conversion costs to be 
approximately $222.8 million at TSL 3. Most manufacturers would have to 
make significant investments to their production facilities in order to 
convert all their motors to be compliant at TSL 3.
    TSL 4 represents EL 4 for ECG 1a and ECG 1b motors, EL 2 for ECG 2 
motors, and EL 3 for ECG 3 motors. At TSL 4, DOE estimates impacts on 
INPV to range from $1,904.1 million to -$1,429.8 million, or a change 
in INPV of 54.7 percent to -41.1 percent. At this TSL, industry free 
cash flow is estimated to decrease by approximately 303 percent to -
$336.6 million, compared to the base case value of $166.1 million in 
2015.
    The INPV impacts at TSL 4 range from significantly positive to 
significantly negative. DOE estimates that in the year of compliance 
(2016) only 8 percent of all electric motor shipments (9 percent of ECG 
1a, less than 1 percent of ECG 1b, less than 1 percent of ECG 2, and no 
ECG 3 shipments) would meet the efficiency levels at TSL 2 or higher in 
the base case. Almost all shipments would need to be converted to 
comply with efficiency standards prescribed at TSL 4.
    DOE expects conversion costs again to increase significantly from 
TSL 3 to TSL 4. Conversion costs at TSL 4 now represent a massive 
investment for electric motor manufacturers. DOE estimates product 
conversion costs of $627.4 million at TSL 4, which are only slightly 
more than at TSL 3. DOE believes that manufacturers would need to 
completely reengineer almost all electric motors sold, as well as test 
and certify those motors. DOE estimates capital conversion costs of 
$707.2 million at TSL 4. This is a significant increase in capital 
conversion costs from TSL 3, since manufacturers would need to adopt 
copper die-casting at TSL 4. This technology requires a significant 
level of investment because the majority of manufacturers' machinery 
would need to be replaced or significantly modified.
b. Impacts on Employment
    DOE quantitatively assessed the impact of new and amended energy 
conservation standards on direct employment in the electric motors 
industry. DOE used the GRIM to estimate the domestic labor expenditures 
and number of domestic production workers in the base case and at each 
TSL from the announcement of standards in 2014 (i.e., the publication 
of this final rule) to the end of the analysis period in 2045. DOE used 
statistical data from the U.S. Census Bureau's 2011 Annual Survey of 
Manufacturers \88\ (ASM), the results of the engineering analysis, and 
interviews with manufacturers to determine the inputs necessary to 
calculate industry-wide labor expenditures and domestic employment 
levels. Labor expenditures involved with the manufacturing of electric 
motors are a function of the labor intensity of the equipment, the MPC 
of the equipment, the sales volume, and an assumption that wages remain 
fixed in real terms over time.
---------------------------------------------------------------------------

    \88\ See http://www.census.gov/manufacturing/asm/index.html.
---------------------------------------------------------------------------

    In the GRIM, DOE used the labor content of the equipment and the 
MPCs to estimate the annual labor expenditures of the industry. DOE 
used Census data and interviews with manufacturers to estimate the 
portion of the total labor expenditures attributable to domestic labor.
    The production worker estimates in this employment section cover 
only workers up to the line-supervisor level who are directly involved 
in fabricating and assembling an electric motor within a motor 
facility. Workers performing services that are closely associated with 
production operations, such as material

[[Page 30993]]

handling with a forklift, are also included as production labor. DOE's 
estimates account for only production workers who manufacture the 
specific equipment covered by this rulemaking. For example, a worker on 
an electric motor production line manufacturing a fractional horsepower 
motor (i.e., a motor with less than one horsepower) would not be 
included with this estimate of the number of electric motor workers, 
since fractional motors are not covered by this rulemaking.
    The employment impacts shown in the tables below represent the 
potential production employment impact resulting from new and amended 
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 standards when assuming that manufacturers 
continue to produce the same scope of covered equipment in the same 
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 
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 U.S. While the results present a range of employment 
impacts following 2016, the following sections also include qualitative 
discussions of the likelihood of negative employment impacts at the 
various TSLs. Finally, the employment impacts shown are independent of 
the indirect employment impacts from the broader U.S. economy, which 
are documented in chapter 16 of this final rule TSD.
    Based on 2011 ASM data and interviews with manufacturers, DOE 
estimates approximately 60 percent of electric motors sold in the U.S. 
are manufactured domestically. Using this assumption, DOE estimates 
that in the absence of new and amended energy conservation standards, 
there would be approximately 7,313 domestic production workers involved 
in manufacturing all electric motors covered by this rulemaking in 
2016. Table V.11 shows the range of potential impacts of standards on 
U.S. production workers in the electric motor industry. However, 
because ECG 1a motors comprise more than 97 percent of the electric 
motors covered by this rulemaking, DOE believes that potential changes 
in domestic employment will be driven primarily by the standards that 
are selected for ECG 1a (i.e., Design A and B motors).

                       Table V.11--Potential Changes in the Total Number of All Domestic Electric Motor Production Workers in 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Trial standard level
                                                                 Base case   ---------------------------------------------------------------------------
                                                                                      1                  2                  3                  4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of Domestic Production Workers in 2016 (upper             7,313              7,346              7,498              8,374             16,049
 bound: without changes in production locations)............
Total Number of Domestic Production Workers in 2016 (lower             7,313              7,313              6,947              3,657                  0
 bound: with changes to off-shore production locations).....
Potential Changes in Domestic Production Workers in 2016\*\.  ..............            33 to 0        185 to -366    1,061 to -3,656    8,736 to -7,313
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts.

    Most manufacturers agree that any standard that involves expanding 
the scope of equipment required to meet premium efficiency levels for 
ECG 1a motors would not significantly change domestic employment 
levels. For standards that required ECG 1a motors to be at premium 
efficiency levels (the efficiency levels required for ECG 1a motors at 
TSL 2), most large manufacturers would not need to make major 
modifications to their production lines nor would they have to 
undertake new manufacturing processes. A few small manufacturers who 
primarily make electric motors outside the scope of coverage for the 
existing electric motor standards, but whose equipment would be covered 
by these electric motor standards, could be impacted by efficiency 
standards at TSL 2. These impacts to small manufacturers, including 
employment impacts, are discussed in more detail in section VI.B of 
today's final rule.
    Overall, DOE believes there would not be a significant decrease in 
domestic employment levels at TSL 2, the selected TSL in today's final 
rule. DOE created a lower bound of the potential loss of domestic 
employment at 366 employees for TSL 2. DOE based this lower bound 
estimate on the fact that approximately 5 percent of the electric motor 
market is comprised of manufacturers that do not currently produce any 
motors at Premium efficiency levels. Therefore, DOE estimated that at 
most 5 percent of domestic electric motor employment in the base case 
in 2016 could potentially move abroad or exit the market entirely. 
However, DOE similarly estimated that all electric motor manufacturers 
produce some electric motors at or above TSL 1 efficiency levels. 
Therefore, DOE does not believe that any potential loss of domestic 
employment would occur at TSL 1.
    Manufacturers, however, cautioned that any energy conservation 
standard set above premium efficiency levels would require major 
changes to production lines, large investments in capital and labor, 
and would result in extensive stranded assets. This is largely because 
manufacturers would have to design and build motors with larger frame 
sizes and could potentially have to use copper, rather than aluminum 
rotors. Several manufacturers pointed out that this would require 
extensive retooling, vast engineering resources, and would ultimately 
result in a more labor-intensive production process. Manufacturers 
generally agreed that a shift toward copper rotors would cause 
companies to incur higher labor costs. These factors could cause 
manufacturers to consider moving production offshore in an attempt to 
reduce labor costs or they may choose to exit the market entirely. 
Therefore, DOE believes it is more likely that efficiency standards set 
above premium efficiency levels could result in a decrease of labor. 
Accordingly, DOE set the lower bound

[[Page 30994]]

on the potential loss of domestic employment at 50 percent of the 
domestic labor market in the base case in 2016 for TSL 3 and 100 
percent for TSL 4. However, these values represent the worst-case 
scenario DOE modeled. Manufacturers also stated that larger motor 
manufacturing (i.e., the manufacturing of motors above 200 horsepower) 
would be very unlikely to move abroad, because the shipping costs 
associated with those motors are very large. Consequently, DOE believes 
that standards set at TSL 3 and TSL 4 would not necessarily result in 
the large losses of domestic employment suggested by the lower bound of 
DOE's direct employment analysis.
c. Impacts on Manufacturing Capacity
    Most manufacturers agree that any standard expanding the scope of 
equipment required to meet premium efficiency levels would not have a 
significant impact on manufacturing capacity. Manufacturers pointed 
out, however, that standards that required them to use copper rotors 
would severely disrupt manufacturing capacity. Baldor commented that 
motor manufacturers do not have the capacity to produce 5 million 
copper rotors per year. They stated it is challenging to manufacture 
better motor designs in actual production, compared to what can be 
obtained on paper. (Baldor, Pub. Mtg. Tr., No. 87 at p. 118-119) Most 
manufacturers emphasized they do not currently have the machinery, 
technology, or engineering resources to produce copper rotors in-house. 
Some manufacturers claim that the few manufacturers that do have the 
capability of producing copper rotors are not able to produce these 
motors in volumes sufficient to meet the demands of the entire market. 
For manufacturers to either completely redesign their motor production 
lines or significantly expand their fairly limited copper rotor 
production line would require a massive retooling and engineering 
effort, which could take several years to complete. Most manufacturers 
stated they would have to outsource copper rotor production because 
they would not be able to modify their facilities and production 
processes to produce copper rotors in-house within a two year time 
period. Most manufacturers agree that outsourcing copper rotor die-
casting would constrain capacity by creating a bottleneck in copper 
rotor production, as there are very few companies that produce copper 
rotors.
    Manufacturers also pointed out that there is substantial 
uncertainty surrounding the global availability and price of copper, 
which has the potential to constrain capacity. NEMA commented they are 
concerned about the potential price volatility with any standards 
requiring copper rotors. (NEMA, No. 93 at p. 12) DOE acknowledges that 
it is likely that there could be copper capacity concerns at any TSL 
requiring copper rotor motors. Currently, there is only a limited 
amount of copper die-casting machinery and companies with experience 
die-casting copper today. In addition, there could be significant 
fluctuations in the price of copper in the near term, which could lead 
to supply chain problems. Because the TSL selected in today's final 
rule (TSL 2) does not require the use of copper rotors for any motors, 
DOE does not anticipate that today's electric motor standards will 
cause any manufacturing capacity constraints.
d. Impacts on Sub-Group of Manufacturers
    Using average cost assumptions to develop industry cash-flow 
estimates may not adequately assess 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 analyzed the impacts to small businesses in 
section VI.B and did not identify any other adversely impacted electric 
motor subgroups for this rulemaking based on the results of the 
industry characterization.
e. 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 production lines or markets with lower expected future 
returns than competing equipment. For these reasons, DOE conducts an 
analysis of cumulative regulatory burden as part of its rulemakings 
pertaining to equipment efficiency.
    During previous stages of this rulemaking, DOE identified a number 
of requirements, in addition to new and amended energy conservation 
standards for electric motors, that manufacturers will face for 
equipment they manufacture approximately three years prior to, and 
three years after, the compliance date of the standards selected in 
today's final rule, such as the small electric motors standard (75 FR 
10874) and the distribution transformers standard (78 FR 23336). The 
following section briefly addresses comments DOE received with respect 
to cumulative regulatory burden.
    Baldor commented that DOE should try to harmonize electric motor 
standards with the rest of the world. Baldor stated that the European 
Union's (EU's) electric motor standards will be set at premium 
efficiency levels in the next few years, so having U.S. electric motor 
standards at premium efficiency levels would harmonize U.S. electric 
motor standards with the EU's standards. Baldor also stated that no 
other country is setting electric motor standards above premium 
efficiency levels, so any U.S. standards set above premium efficiency 
levels would cause the U.S. motor market to be out of synchronization 
with the rest of the world's standards. Also, there is an ongoing 
effort to develop global markings for electric motors so that 
manufacturers do not have to conduct separate compliance testing and 
approvals for each country. Therefore, standards that are harmonized 
with the rest of the world's standards would benefit manufacturers. 
(Baldor, Pub. Mtg. Tr., No. 87 at p. 176-180) The standards adopted in 
today's final rule do not require motor manufacturers to exceed premium 
efficiency levels for any motors. Therefore, the U.S. standards 
prescribed in today's final rule would keep U.S. standards in harmony 
with the rest of the world and would not significantly add to the motor 
manufacturers' cumulative regulatory burden from a global standards 
perspective.
3. National Impact Analysis
a. Significance of Energy Savings
    For each TSL, DOE projected energy savings for electric motors 
purchased in the 30-year period that begins in the year of compliance 
with new and amended standards (2016-2045). The savings are measured 
over the entire lifetime of equipment purchased in the 30-year period. 
DOE quantified the energy savings attributable to each TSL as the 
difference in energy consumption between each standards case and the 
base case. Table V.12 presents the estimated primary energy savings for 
each considered TSL, and Table V.13 presents the estimated FFC energy 
savings for each considered TSL. The approach for estimating national 
energy

[[Page 30995]]

savings is further described in section IV.H.

 Table V.12--Cumulative Primary Energy Savings for Electric Motors Trial
               Standard Levels for Units Sold in 2016-2045
------------------------------------------------------------------------
                                           Trial standard level
         Equipment class         ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
                                                   quads
                                 ---------------------------------------
1...............................      1.08      6.83     10.54     13.42
2...............................      0.02      0.02      0.03      0.03
3...............................      0.00      0.00      0.00      0.00
                                 ---------------------------------------
    Total all classes...........      1.10      6.85     10.57     13.45
------------------------------------------------------------------------


   Table V.13--Cumulative Full-Fuel-Cycle Energy Savings for Electric
        Motors Trial Standard Levels for Units Sold in 2016-2045
------------------------------------------------------------------------
                                           Trial standard level
         Equipment class         ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
                                                   quads
                                 ---------------------------------------
1...............................      1.10      6.95     10.72     13.64
2...............................      0.02      0.02      0.03      0.03
3...............................      0.00      0.00      0.00      0.00
                                 ---------------------------------------
    Total all classes...........      1.12      6.97     10.75     13.67
------------------------------------------------------------------------

    OMB Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using nine rather than 30 years of equipment 
shipments. The choice of a nine-year period is a proxy for the timeline 
in EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards.\89\ 
DOE notes that the review timeframe established in EPCA generally does 
not overlap with the equipment lifetime, equipment manufacturing 
cycles, or other factors specific to electric motors. Thus, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology. The NES 
results based on a 9-year analytical period are presented in Table 
V.14. The impacts are counted over the lifetime of electric motors 
purchased in 2016-2024.
---------------------------------------------------------------------------

    \89\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. While adding 
a 6-year review to the 3-year compliance period adds up to 9 years, 
DOE notes that it may undertake reviews at any time within the 6 
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given 
the variability that occurs in the timing of standards reviews and 
the fact that for some consumer products, the compliance period is 5 
years rather than 3 years.

Table V.14--Cumulative National Energy Savings for Electric Motors Trial
               Standard Levels for Units Sold in 2016-2024
------------------------------------------------------------------------
                                           Trial standard level
         Equipment class         ---------------------------------------
                                      1         2         3         4
------------------------------------------------------------------------
                                                   quads
                                 ---------------------------------------
1...............................      0.42      1.59      2.35      3.05
2...............................      0.00      0.00      0.01      0.01
3...............................      0.00      0.00      0.00      0.00
                                 ---------------------------------------
    Total all classes...........      0.43      1.59      2.36      3.06
------------------------------------------------------------------------


[[Page 30996]]

b. 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 TSLs considered for electric 
motors. In accordance with OMB's guidelines on regulatory analysis,\90\ 
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 it 
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 equipment 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 
United States Treasury notes), which has averaged about 3-percent for 
the past 30 years.
---------------------------------------------------------------------------

    \90\ OMB Circular A-4, section E (September 17, 2003), available 
at: http://www.whitehouse.gov/omb/circulars_a004_a-4.

 Table V.15--Net Present Value of Customer Benefits for Electric Motors Trial Standard Levels for Units Sold in
                                                    2016-2045
                                                 [Billion 2013$]
----------------------------------------------------------------------------------------------------------------
                                                                               Trial standard level
                   Equipment class                     Discount  -----------------------------------------------
                                                        rate %         1           2           3           4
----------------------------------------------------------------------------------------------------------------
1...................................................                    6.91       28.75        8.61      -39.27
2...................................................                    0.06        0.06       -0.02       -0.02
3...................................................           3        0.00        0.00        0.00       -0.03
    Total All Classes...............................                    6.97       28.81        8.59      -39.32
----------------------------------------------------------------------------------------------------------------
1...................................................                    3.34       11.27       -1.50      -31.29
2...................................................                    0.02        0.02       -0.03       -0.03
3...................................................           7        0.00        0.00        0.00       -0.02
    Total All Classes...............................                    3.36       11.29       -1.54      -31.34
----------------------------------------------------------------------------------------------------------------

    The NPV results based on the afore-mentioned 9-year analytical 
period are presented in Table V.16. The impacts are counted over the 
lifetime of equipment purchased in 2016-2024. The review timeframe 
established in EPCA is generally not synchronized with the product 
lifetime, product manufacturing cycles, or other factors specific to 
electric motors. As mentioned previously, this information is presented 
for informational purposes only and is not indicative of any change in 
DOE's analytical methodology or decision criteria.

 Table V.16--Net Present Value of Customer Benefits for Electric Motors Trial Standard Levels for Units Sold in
                                                    2016-2024
                                                 [Billion 2013$]
----------------------------------------------------------------------------------------------------------------
                                                                               Trial standard level
                   Equipment class                     Discount  -----------------------------------------------
                                                        rate %         1           2           3           4
----------------------------------------------------------------------------------------------------------------
1...................................................                    3.15        8.81        4.79      -11.60
2...................................................                    0.01        0.01       -0.01       -0.01
3...................................................           3        0.00        0.00        0.00       -0.01
    Total All Classes...............................                    3.17        8.83        4.78      -11.61
----------------------------------------------------------------------------------------------------------------
1...................................................                    1.95        5.02        1.04      -12.94
2...................................................                    0.01        0.01       -0.02       -0.02
3...................................................           7        0.00        0.00        0.00       -0.01
    Total All Classes...............................                    1.95        5.02        1.03      -12.97
----------------------------------------------------------------------------------------------------------------

c. Indirect Impacts on Employment
    DOE expects energy conservation standards for electric motors to 
reduce energy costs for equipment owners, with the resulting net 
savings being redirected to other forms of economic activity. Those 
shifts in spending and economic activity could affect the overall 
domestic demand for labor. As described in section IV.N, DOE used an 
input/output model of the U.S. economy to estimate indirect employment 
impacts of the TSLs that DOE considered in this rulemaking. DOE 
understands that there are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term time frames 
(2016-2021), where these uncertainties are reduced.
    The results suggest that today's standards are likely to have 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the TSD presents detailed results.

[[Page 30997]]

4. Impact on Utility or Performance
    DOE believes that today's standards will not lessen the utility or 
performance of electric motors.
5. Impact of Any Lessening of Competition
    DOE has also considered any lessening of competition that is likely 
to result from new and amended energy conservation standards. The 
Attorney General determines the impact, if any, of any lessening of 
competition likely to result from a proposed standard, and transmits 
such determination in writing to the Secretary, together with an 
analysis of the nature and extent of such impact. (42 U.S.C. 
6295(o)(2)(B)(i)(V) and (ii); 42 U.S.C. 6316(a))
    To assist the Attorney General in making such determination, DOE 
transmitted a copy of its proposed rule and NOPR TSD to the Attorney 
General with a request that the Department of Justice (DOJ) provide its 
determination on this issue. DOJ's response, that the proposed energy 
conservation standards are unlikely to have a significant adverse 
impact on competition, is reprinted at the end of this rule.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts or costs of energy production. Reduced 
electricity demand due to energy conservation standards is also likely 
to reduce the cost of maintaining and increase the reliability of the 
electricity system, particularly during peak-load periods. As a measure 
of this reduced demand, chapter 15 in the TSD presents the estimated 
reduction in the growth of generating capacity in 2044 for the TSLs 
that DOE considered in this rulemaking.
    Energy savings from energy conservation standards for electric 
motors could also produce environmental benefits in the form of reduced 
emissions of air pollutants and greenhouse gases associated with 
electricity production. Table V.17 provides DOE's estimate of 
cumulative emissions reductions projected to result from the TSLs 
considered in this rulemaking. DOE reports annual emissions reductions 
for each TSL in chapter 13 of the TSD.

         Table V.17--Cumulative Emissions Reduction Estimated for Electric Motors Trial Standard Levels
----------------------------------------------------------------------------------------------------------------
                                                                               Trial standard level
                                                                 -----------------------------------------------
                                                                       1           2           3           4
----------------------------------------------------------------------------------------------------------------
                                            Primary Energy Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................................        62.7         373         574         731
NOX (thousand tons).............................................         106         668       1,032       1,312
SO2 (thousand tons).............................................        33.6         196         301         383
Hg (tons).......................................................       0.132       0.819        1.26        1.61
N2O (thousand tons).............................................        1.24        8.30        12.9        16.3
CH4 (thousand tons).............................................        7.38        46.2        71.4        90.7
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................................        3.55        22.0        33.9        43.1
NOX (thousand tons).............................................       0.761        4.71        7.26        9.23
SO2 (thousand tons).............................................        48.8         302         466         593
Hg (tons).......................................................       0.002       0.012       0.018       0.023
N2O (thousand tons).............................................       0.036       0.221       0.341       0.433
CH4 (thousand tons).............................................         296       1,837       2,834       3,604
----------------------------------------------------------------------------------------------------------------
                                            Full-Fuel-Cycle Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................................        66.2         395         608         774
NOX (thousand tons).............................................         107         673       1,039       1,321
SO2 (thousand tons).............................................        82.5         498         767         977
Hg (tons).......................................................       0.134       0.831        1.28        1.63
N2O (thousand tons).............................................        1.27        8.52        13.2        16.8
CH4 (thousand tons).............................................         304       1,883       2,905       3,695
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that DOE estimated for each of the TSLs considered. 
As discussed in section IV.L, DOE used values for the SCC developed by 
an interagency process. The four sets of SCC values resulting from that 
process \91\ (expressed in 2013$) are represented in today's rule as 
the value of emission reductions in 2015 by $12.0/metric ton (the 
average value from a distribution that uses a 5-percent discount rate), 
$40.5/metric ton (the average value from a distribution that uses a 3-
percent discount rate), $62.4/metric ton (the average value from a 
distribution that uses a 2.5-percent discount rate), and $119 metric 
ton (the 95th-percentile value from a distribution that uses a 3-
percent discount rate). These values correspond to the value of 
emission reductions in 2015; the values for later years are higher due 
to increasing damages as the projected magnitude of climate change 
increases.
---------------------------------------------------------------------------

    \91\ These values reflect the latest SCC values developed by 
interagency process (November 2013) (see IV.L.1).
---------------------------------------------------------------------------

    Table V.18 presents the global value of CO2 emissions 
reductions at each TSL. For each of the four cases, DOE calculated a 
present value of the stream of annual values using the same discount 
rate as was used in the studies upon which the dollar-per-ton values 
are based. DOE calculated domestic

[[Page 30998]]

values as a range from 7 percent to 23 percent of the global values, 
and these results are presented in chapter 14 of the final rule TSD.

  Table V.18--Estimates of Global Present Value of CO2 Emissions Reduction under Electric Motors Trial Standard
                                                     Levels
                                                 [Million 2013$]
----------------------------------------------------------------------------------------------------------------
                                                                            SCC Case *
                                                 ---------------------------------------------------------------
                       TSL                          5% discount     3% discount    2.5% discount    3% discount
                                                   rate, average   rate, average   rate, average    rate, 95th
                                                        *               *               *          percentile *
----------------------------------------------------------------------------------------------------------------
                                            Primary Energy Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             465           2,070           3,269           6,373
2...............................................           2,529          11,720          18,651          36,225
3...............................................           3,870          17,985          28,633          55,600
4...............................................           4,939          22,923          36,488          70,858
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................            25.7             116             183             357
2...............................................             146             682           1,087           2,110
3...............................................             223           1,049           1,673           3,246
4...............................................             285           1,335           2,129           4,132
----------------------------------------------------------------------------------------------------------------
                                            Full-Fuel-Cycle Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             491           2,185           3,452           6,730
2...............................................           2,675          12,402          19,738          38,335
3...............................................           4,094          19,033          30,306          58,845
4...............................................           5,223          24,258          38,618          74,991
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.0, $40.5, $62.4, and $119
  per metric ton (2013$).

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other greenhouse gas (GHG) emissions 
to changes in the future global climate and the potential resulting 
damages to the world economy continues to evolve rapidly. Thus, any 
value placed on reducing CO2 emissions in this rulemaking is 
subject to change. DOE, together with other Federal agencies, will 
continue to review various methodologies for estimating the monetary 
value of reductions in CO2 and other GHG emissions. This 
ongoing review will consider the comments on this subject that are part 
of the public record for this and other rulemakings, as well as other 
methodological assumptions and issues.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emissions reductions 
anticipated to result from new and amended standards for electric 
motors. The low and high dollar-per-ton values that DOE used are 
discussed in section IV.L. Table V.19 presents the estimated cumulative 
present values of NOX emissions reductions for each TSL 
calculated using seven-percent and three-percent discount rates.

 Table V.19--Estimates of Present Value of NOX Emissions Reduction Under
                  Electric Motors Trial Standard Levels
                             [Million 2013$]
------------------------------------------------------------------------
                                            3% discount     7% discount
                  TSL                          rate            rate
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
1.......................................            52.1            28.8
2.......................................             269             131
3.......................................             410             197
4.......................................             524             253
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.......................................            71.5            36.9
2.......................................             396             179
3.......................................             606             272
4.......................................             773             348
------------------------------------------------------------------------
                        Full-Fuel-Cycle Emissions
------------------------------------------------------------------------
1.......................................             124            65.8
2.......................................             664             310
3.......................................           1,016             469
4.......................................           1,297             601
------------------------------------------------------------------------

7. Summary of National Economic Impacts
    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the customer 
savings calculated for each TSL considered in this rulemaking. Table 
V.20 presents the NPV values that result from adding the estimates of 
the potential economic benefits resulting from reduced CO2 
and NOX emissions in each of four valuation scenarios to the 
NPV of customer savings calculated for each TSL considered in this 
rulemaking, at both a seven-percent and three-percent discount rate. 
The CO2 values used in the columns of each table correspond 
to the four sets of SCC values discussed above.

[[Page 30999]]



Table V.20--Net Present Value of Customer Savings Combined With Net Present Value of Monetized Benefits From CO2
                                          and NOX Emissions Reductions
                                                 [Billion 2013$]
----------------------------------------------------------------------------------------------------------------
                                           SCC Case $12.0/   SCC Case $40.5/   SCC Case $62.4/   SCC Case $119/
                                           metric ton CO2*   metric ton CO2*   metric ton CO2*   metric ton CO2*
                   TSL                      and Low Value   and Medium Value  and Medium Value   and High Value
                                             for NOX**          for NOX**         for NOX**        for NOX**
----------------------------------------------------------------------------------------------------------------
                                                       Customer NPV at 3% Discount Rate added with:
----------------------------------------------------------------------------------------------------------------
1.......................................               7.5               9.3              10.6              13.9
2.......................................              31.6              41.9              49.2              68.4
3.......................................              12.9              28.6              39.9              69.3
4.......................................             -33.9             -13.8               0.6              38.0
----------------------------------------------------------------------------------------------------------------
                                                       Customer NPV at 7% Discount Rate added with:
----------------------------------------------------------------------------------------------------------------
1.......................................               3.9               5.6               6.9              10.2
2.......................................              14.0              24.0              31.3              50.2
3.......................................               2.6              18.0              29.2              58.2
4.......................................             -26.0              -6.5               7.9              44.7
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2013$.
** Low Value corresponds to $476 per ton of NOX emissions. Medium Value corresponds to $2,684 per ton, and High
  Value corresponds to $4,893 per ton.

    Although adding the value of customer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. customer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of equipment shipped in 2016-2045. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of 
CO2 in each year. These impacts continue well beyond 2100.
8. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) DOE 
has considered the submission of the Petition under this factor. As 
described previously, DOE believes the Petition sets forth a statement 
by interested persons that are fairly representative of relevant points 
of view (including representatives of manufacturers of covered 
equipment, efficiency advocates, and others) and contains 
recommendations with respect to an energy conservation standard that 
are technologically feasible, economically justified, and likely to 
save significant energy. DOE encourages the submission of such 
consensus agreements as a way to bring diverse interested parties 
together, to develop an independent and probative analysis useful in 
DOE standard setting, and to expedite the rulemaking process. DOE also 
believes that standard levels recommended in the Petition may increase 
the likelihood for regulatory compliance, while decreasing the risk of 
litigation.

C. Conclusions

    When considering standards, the new or amended energy conservation 
standard that DOE adopts for any type (or class) of covered equipment 
shall be designed to achieve the maximum improvement in energy 
efficiency that the Secretary of Energy determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 
6316(a)) In determining whether a standard is economically justified, 
the Secretary must determine whether the benefits of the standard 
exceed its burdens to the greatest extent practicable, considering the 
seven statutory factors discussed previously. (42 U.S.C. 
6295(o)(2)(B)(i) and 6316(a)) The new or amended standard must also 
``result in significant conservation of energy''. (42 U.S.C. 
6295(o)(3)(B) and 6316(a))
    For today's final rule, DOE considered the impacts of standards at 
each TSL, beginning with the max-tech level, to determine whether that 
level was economically justified. Where the max-tech level was not 
justified, DOE then considered the next most efficient level and 
undertook the same evaluation until it reached the highest efficiency 
level that is technologically feasible, economically justified, and 
saves a significant amount of energy. Throughout this process, DOE also 
considered the consensus recommendations made by the Motors Coalition 
and the views of other stakeholders in their submitted comments.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, tables in this section summarize the quantitative analytical 
results for each TSL, based on the assumptions and methodology 
discussed herein. The efficiency levels contained in each TSL are 
described in section V.A. In addition to the quantitative results 
presented in the tables, DOE also considers other burdens and benefits 
that affect economic justification. These include the impacts on 
identifiable subgroups of customers who may be disproportionately 
affected by a national standard, and impacts on employment. Section 
V.B.1.b presents the estimated impacts of each TSL for the considered 
subgroup. DOE discusses the impacts on employment in the electric motor 
manufacturing sector in section V.B.2.b, and discusses the indirect 
employment impacts in section V.B.3.c
1. Benefits and Burdens of Trial Standard Levels Considered for 
Electric Motors
    Table V.21 and Table V.22 summarize the quantitative impacts 
estimated for each TSL for electric motors.

[[Page 31000]]



                 Table V.21--Summary of Analytical Results for Electric Motors: National Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
National Full-Fuel-Cycle Energy Savings quads
                                                             1.1             7.0            10.7            13.7
NPV of Consumer Benefits 2013$ billion
    3% discount rate............................             7.0            28.8             8.6           -39.3
    7% discount rate............................             3.4            11.3            -1.5           -31.3
Cumulative Emissions Reduction (Total FFC
 Emissions)
    CO2 million metric tons.....................            66.2             395             608             774
    SO2 thousand tons...........................             107             673           1,039           1,321
    NOX thousand tons...........................            82.5             498             767             977
    Hg tons.....................................           0.134           0.831            1.28            1.63
    N2O thousand tons...........................            1.27            8.52            13.2            16.8
    CH4 thousand tons...........................             304           1,883           2,905           3,695
Value of Emissions Reduction (Total FFC
 Emissions)
    CO2 2013$ million*..........................    491 to 6,730        2,675 to        4,094 to        5,233 to
                                                                          38,335          58,845          74,991
    NOX--3% discount rate 2013$ million.........             124             664           1,016           1,297
    NOX--7% discount rate 2013$ million.........              66             310             469             601
----------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
  emissions.


        Table V.22--Summary of Analytical Results for Electric Motors: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
INPV (2013$ million) (Base Case INPV of               3,486.4 to      3,870.6 to      4,541.9 to      5,382.2 to
 $3,478.0)......................................         3,461.3         3,130.4         2,928.3         2,048.3
INPV (change in 2013$)..........................    8.4 to -16.7      392.6 to -    1,063.9 to -    1,904.1 to -
                                                                           347.7           549.7         1,429.8
INPV (% change).................................     0.2 to -0.5   11.3 to -10.0   30.6 to -15.8   54.7 to -41.1
Consumer Mean LCC Savings * 2013$
Equipment Class Group 1.........................              55             160              98            -409
Equipment Class Group 2.........................              53              53            -280            -280
Equipment Class Group 3.........................          N/A **          N/A **             -65            -807
Consumer Median PBP * years
Equipment Class Group 1.........................             1.0             2.9             6.0            26.5
Equipment Class Group 2.........................             4.5             4.5            20.7            20.7
Equipment Class Group 3.........................          N/A **          N/A **           3,016          11,632
Equipment Class Group 1
Net Cost %......................................             0.3             7.8            34.8            83.3
Net Benefit %...................................            10.9            34.3            44.7             9.4
No Impact %.....................................            88.8            57.9            20.4             7.3
Equipment Class Group 2
Net Cost %......................................            18.6            18.6            92.8            92.8
Net Benefit %...................................            71.5            71.5             7.2             7.2
No Impact %.....................................             9.8             9.8             0.0             0.0
Equipment Class Group 3
Net Cost (%)....................................             0.0             0.0            81.7           100.0
Net Benefit (%).................................             0.0             0.0             0.0             0.0
No Impact (%)...................................             0.0             0.0            18.3             0.0
----------------------------------------------------------------------------------------------------------------
* The results for each equipment class group (ECG) are a shipment weighted average of results for the
  representative units in the group. ECG 1: Representative units 1, 2, 3, 9, and 10; ECG 2: Representative units
  4 and 5; ECG 3: Representative units 6, 7, and 8.
** For equipment class group 3, TSL 1 and 2 are the same as the baseline; thus, no customers are affected.

    First, DOE considered TSL 4, the most efficient level (max-tech), 
which would save an estimated total of 13.7 quads of energy, an amount 
DOE considers significant. TSL 4 has an estimated NPV of customer 
benefit of -31.3 billion using a 7-percent discount rate, and -39.3 
billion using a 3-percent discount rate.
    The cumulative emissions reductions at TSL 4 are 774 million metric 
tons of CO2, 977 thousand tons of NOX, 1,321 
thousand tons of SO2, and 1.6 tons of Hg. The estimated 
monetary value of the CO2 emissions reductions at TSL 4 
ranges from $5,233 million to $74,991 million.
    At TSL 4, the weighted average LCC impact ranges from $-807 for ECG 
3 to $-280 for ECG 2. The weighted average median PBP ranges from 20.7 
years for ECG 2 to 11,632 years for ECG 3. The weighted average share 
of customers experiencing a net LCC benefit ranges from 0-percent for 
ECG 3 to 9.4-percent for ECG 1.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$1,429.8 million to an increase of $1,904.1 million. If the decrease of 
$1,429.8 million were to occur, TSL 4 could result in a net loss of 
41.1 percent in INPV to manufacturers of covered electric motors.
    Based on the foregoing, DOE concludes that, at TSL 4 for electric 
motors, the benefits of energy savings, generating capacity reductions, 
emission reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the potential multi-billion dollar 
negative

[[Page 31001]]

net economic cost; the economic burden on customers as indicated by the 
increase in customer LCC (negative savings), large PBPs, the large 
percentage of customers who would experience LCC increases; the 
increase in the cumulative regulatory burden on manufacturers; and the 
capital and engineering costs that could result in a large reduction in 
INPV for manufacturers at TSL 4. Additionally, DOE believes that 
efficiency standards at this level could result in significant impacts 
on OEMs due to larger and faster motors. Although DOE has not 
quantified these potential OEM impacts, DOE believes that it is 
possible that these impacts could be significant and further reduce any 
potential benefits of standards established at this TSL. Consequently, 
DOE has concluded that TSL 4 is not economically justified.
    Next, DOE considered TSL 3, which would save an estimated total of 
10.7 quads of energy, an amount DOE considers significant. TSL 3 has an 
estimated NPV of customer benefit of $-1.5 billion using a 7-percent 
discount rate, and $8.6 billion using a 3-percent discount rate.
    The cumulative emissions reductions at TSL 3 are 608 million metric 
tons of CO2, 767 thousand tons of NOX, 1,039 
thousand tons of SO2, and 1.3 tons of Hg. The estimated 
monetary value of the CO2 emissions reductions at TSL 4 
ranges from $4,094 million to $58,845 million.
    At TSL 3, the weighted average LCC impact ranges from $-280 for ECG 
2 to $98 for ECG 1. The weighted average median PBP ranges from 6 years 
for ECG 1 to 3,016 years for ECG 3. The share of customers experiencing 
a net LCC benefit ranges from 0-percent for ECG 3 to 44.7-percent for 
ECG 1.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$549.7 million to an increase of $1,063.9 million. If the decrease of 
$549.7 million were to occur, TSL 3 could result in a net loss of 15.8 
percent in INPV to manufacturers of covered electric motors.
    Based on the foregoing, DOE concludes that, at TSL 3 for electric 
motors, the benefits of energy savings, positive weighted average 
customer LCC savings for some ECGs, generating capacity reductions, 
emission reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the potential negative net economic 
cost; the economic burden on customers as indicated by the increase in 
weighted average LCC for some ECGs (negative savings), large PBPs, the 
large percentage of customers who would experience LCC increases; the 
increase in the cumulative regulatory burden on manufacturers; and the 
capital and engineering costs that could result in a large reduction in 
INPV for manufacturers at TSL 3. Additionally, DOE believes that 
efficiency standards at this level could result in significant impacts 
on OEMs due to larger and faster motors. Although DOE has not 
quantified these potential OEM impacts, DOE believes that it is 
possible that these impacts could be significant and further reduce any 
potential benefits of standards established at this TSL. Consequently, 
DOE has concluded that TSL 3 is not economically justified.
    Next, DOE considered TSL 2, which would save an estimated total of 
7.0 quads of energy, an amount DOE considers significant. TSL 2 has an 
estimated NPV of customer benefit of $11.3 billion using a 7-percent 
discount rate, and $28.8 billion using a 3-percent discount rate.
    The cumulative emissions reductions at TSL 2 are 395 million metric 
tons of CO2, 498 thousand tons of NOX, 673 
thousand tons of SO2, and 0.8 tons of Hg. The estimated 
monetary value of the CO2 emissions reductions at TSL 4 
ranges from $2,675 million to $38,335 million.
    At TSL 2, the weighted average LCC impact ranges from no impacts 
for ECG 3 to $160 for ECG 1. The weighted average median PBP ranges 
from 0 years for ECG 3 to 4.5 years for ECG 2. The share of customers 
experiencing a net LCC benefit ranges from 0-percent for ECG 3 to 71.5-
percent for ECG 2.The share of motors already at TSL2 efficiency levels 
varies by equipment class group and by horsepower range (from 0- to 
57.9-percent). For ECG 1, which represents the most significant share 
of the market, about 30-percent of motors already meet the TSL levels.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$347.7 million to an increase of $392.6 million. If the decrease of 
$347.7 million were to occur, TSL 2 could result in a net loss of 10.0 
percent in INPV to manufacturers of covered electric motors.
    After considering the analysis and weighing the benefits and the 
burdens, DOE has concluded that at TSL 2 for electric motors, the 
benefits of energy savings, positive NPV of customer benefit, positive 
impacts on consumers (as indicated by positive weighted average LCC 
savings for all ECGs impacted at TSL 2), favorable PBPs, the large 
percentage of customers who would experience LCC benefits, emission 
reductions, and the estimated monetary value of the emissions 
reductions would outweigh the slight increase in the cumulative 
regulatory burden on manufacturers and the risk of small negative 
impacts if manufacturers are unable to recoup investments made to meet 
the standard. In particular, the Secretary of Energy has concluded that 
TSL 2 would save a significant amount of energy and is technologically 
feasible and economically justified.
    In addition, DOE notes that TSL 2 most closely corresponds to the 
standards that were proposed by the Motor Coalition, as described in 
section II.B.2. Based on the above considerations, DOE today adopts the 
energy conservation standards for electric motors at TSL 2. Table V.23 
through Table V.25 present the energy conservation standards for 
electric motors.

                                  Table V.23--Energy Conservation Standards for NEMA Design A and NEMA Design B Motors
                                                           [Compliance starting June 1, 2016]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Nominal full-load efficiency (%)
                                                 -------------------------------------------------------------------------------------------------------
 Motor horsepower/ standard kilowatt equivalent            2-Pole                    4-Pole                    6-Pole                    8-Pole
                                                 -------------------------------------------------------------------------------------------------------
                                                    Enclosed       Open       Enclosed       Open       Enclosed       Open       Enclosed       Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................         77.0         77.0         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1.........................................         84.0         84.0         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5...........................................         85.5         85.5         86.5         86.5         88.5         87.5         84.0         86.5
3/2.2...........................................         86.5         85.5         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7...........................................         88.5         86.5         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5.........................................         89.5         88.5         91.7         91.0         91.0         90.2         86.5         89.5

[[Page 31002]]

 
10/7.5..........................................         90.2         89.5         91.7         91.7         91.0         91.7         89.5         90.2
15/11...........................................         91.0         90.2         92.4         93.0         91.7         91.7         89.5         90.2
20/15...........................................         91.0         91.0         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5.........................................         91.7         91.7         93.6         93.6         93.0         93.0         90.2         91.0
30/22...........................................         91.7         91.7         93.6         94.1         93.0         93.6         91.7         91.7
40/30...........................................         92.4         92.4         94.1         94.1         94.1         94.1         91.7         91.7
50/37...........................................         93.0         93.0         94.5         94.5         94.1         94.1         92.4         92.4
60/45...........................................         93.6         93.6         95.0         95.0         94.5         94.5         92.4         93.0
75/55...........................................         93.6         93.6         95.4         95.0         94.5         94.5         93.6         94.1
100/75..........................................         94.1         93.6         95.4         95.4         95.0         95.0         93.6         94.1
125/90..........................................         95.0         94.1         95.4         95.4         95.0         95.0         94.1         94.1
150/110.........................................         95.0         94.1         95.8         95.8         95.8         95.4         94.1         94.1
200/150.........................................         95.4         95.0         96.2         95.8         95.8         95.4         94.5         94.1
250/186.........................................         95.8         95.0         96.2         95.8         95.8         95.8         95.0         95.0
300/224.........................................         95.8         95.4         96.2         95.8         95.8         95.8  ...........  ...........
350/261.........................................         95.8         95.4         96.2         95.8         95.8         95.8  ...........  ...........
400/298.........................................         95.8         95.8         96.2         95.8  ...........  ...........  ...........  ...........
450/336.........................................         95.8         96.2         96.2         96.2  ...........  ...........  ...........  ...........
500/373.........................................         95.8         96.2         96.2         96.2  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------


                       Table V.24--Energy Conservation Standards for NEMA Design C Motors
                                       [Compliance starting June 1, 2016]
----------------------------------------------------------------------------------------------------------------
                                                          Nominal full-load efficiency (%)
                                   -----------------------------------------------------------------------------
Motor horsepower/standard kilowatt           4-Pole                    6-Pole                    8-Pole
            equivalent             -----------------------------------------------------------------------------
                                      Enclosed       Open       Enclosed       Open       Enclosed       Open
----------------------------------------------------------------------------------------------------------------
1/.75.............................         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1...........................         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5.............................         86.5         86.5         88.5         87.5         84.0         86.5
3/2.2.............................         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7.............................         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5...........................         91.7         91.0         91.0         90.2         86.5         89.5
10/7.5............................         91.7         91.7         91.0         91.7         89.5         90.2
15/11.............................         92.4         93.0         91.7         91.7         89.5         90.2
20/15.............................         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5...........................         93.6         93.6         93.0         93.0         90.2         91.0
30/22.............................         93.6         94.1         93.0         93.6         91.7         91.7
40/30.............................         94.1         94.1         94.1         94.1         91.7         91.7
50/37.............................         94.5         94.5         94.1         94.1         92.4         92.4
60/45.............................         95.0         95.0         94.5         94.5         92.4         93.0
75/55.............................         95.4         95.0         94.5         94.5         93.6         94.1
100/75............................         95.4         95.4         95.0         95.0         93.6         94.1
125/90............................         95.4         95.4         95.0         95.0         94.1         94.1
150/110...........................         95.8         95.8         95.8         95.4         94.1         94.1
200/150...........................         96.2         95.8         95.8         95.4         94.5         94.1
----------------------------------------------------------------------------------------------------------------


                                         Table V.25--Energy Conservation Standards for Fire Pump Electric Motors
                                                           [Compliance starting June 1, 2016]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Nominal full-load efficiency (%)
                                                 -------------------------------------------------------------------------------------------------------
 Motor horsepower/ standard kilowatt equivalent            2-Pole                    4-Pole                    6-Pole                    8-Pole
                                                 -------------------------------------------------------------------------------------------------------
                                                    Enclosed       Open       Enclosed       Open       Enclosed       Open       Enclosed       Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................         75.5  ...........         82.5         82.5         80.0         80.0         74.0         74.0
1.5/1.1.........................................         82.5         82.5         84.0         84.0         85.5         84.0         77.0         75.5
2/1.5...........................................         84.0         84.0         84.0         84.0         86.5         85.5         82.5         85.5
3/2.2...........................................         85.5         84.0         87.5         86.5         87.5         86.5         84.0         86.5
5/3.7...........................................         87.5         85.5         87.5         87.5         87.5         87.5         85.5         87.5
7.5/5.5.........................................         88.5         87.5         89.5         88.5         89.5         88.5         85.5         88.5
10/7.5..........................................         89.5         88.5         89.5         89.5         89.5         90.2         88.5         89.5

[[Page 31003]]

 
15/11...........................................         90.2         89.5         91.0         91.0         90.2         90.2         88.5         89.5
20/15...........................................         90.2         90.2         91.0         91.0         90.2         91.0         89.5         90.2
25/18.5.........................................         91.0         91.0         92.4         91.7         91.7         91.7         89.5         90.2
30/22...........................................         91.0         91.0         92.4         92.4         91.7         92.4         91.0         91.0
40/30...........................................         91.7         91.7         93.0         93.0         93.0         93.0         91.0         91.0
50/37...........................................         92.4         92.4         93.0         93.0         93.0         93.0         91.7         91.7
60/45...........................................         93.0         93.0         93.6         93.6         93.6         93.6         91.7         92.4
75/55...........................................         93.0         93.0         94.1         94.1         93.6         93.6         93.0         93.6
100/75..........................................         93.6         93.0         94.5         94.1         94.1         94.1         93.0         93.6
125/90..........................................         94.5         93.6         94.5         94.5         94.1         94.1         93.6         93.6
150/110.........................................         94.5         93.6         95.0         95.0         95.0         94.5         93.6         93.6
200/150.........................................         95.0         94.5         95.0         95.0         95.0         94.5         94.1         93.6
250/186.........................................         95.4         94.5         95.0         95.4         95.0         95.4         94.5         94.5
300/224.........................................         95.4         95.0         95.4         95.4         95.0         95.4  ...........  ...........
350/261.........................................         95.4         95.0         95.4         95.4         95.0         95.4  ...........  ...........
400/298.........................................         95.4         95.4         95.4         95.4  ...........  ...........  ...........  ...........
450/336.........................................         95.4         95.8         95.4         95.8  ...........  ...........  ...........  ...........
500/373.........................................         95.4         95.8         95.8         95.8  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Summary of Benefits and Costs (Annualized) of Today's Standards
    The benefits and costs of today's standards, for equipment sold in 
2016-2045, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of: (1) The annualized national 
economic value of the benefits from consumer operation of equipment 
that meet the standards (consisting primarily of operating cost savings 
from using less energy, minus increases in equipment purchase and 
installation costs, which is another way of representing consumer NPV), 
and (2) the annualized monetary value of the benefits of emission 
reductions, including CO2 emission reductions.\92\
---------------------------------------------------------------------------

    \92\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2014, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2016 through 2045) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings is measured for the lifetime of electric motors shipped in 
2016-2045. The SCC values, on the other hand, reflect the present value 
of some future climate-related impacts resulting from the emission of 
one ton of carbon dioxide in each year. These impacts continue well 
beyond 2100.
    Estimates of annualized benefits and costs of today's standards for 
electric motors are shown in Table V.26. The results under the primary 
estimate are as follows. Using a 7-percent discount rate for benefits 
and costs other than CO2 reduction, for which DOE used a 3-
percent discount rate along with the average SCC series that uses a 3-
percent discount rate, the cost of today's standards is $517 million 
per year in increased equipment costs; while the estimated benefits are 
$1,367 million per year in reduced equipment operating costs, $614 
million per year in CO2 reductions, and $23.3 million per 
year in reduced NOX emissions. In this case, the net benefit 
would amount to $1,488 million per year. Using a 3-percent discount 
rate for all benefits and costs and the average SCC series, the 
estimated cost of today's standards is $621 million per year in 
increased equipment costs; while the estimated benefits are $2,048 
million per year in reduced operating costs, $614 million per year in 
CO2 reductions, and $32.9 million per year in reduced 
NOX emissions. In this case, the net benefit would amount to 
approximately $2,074 million per year.

                   Table V.26--Annualized Benefits and Costs of Standards for Electric Motors
                                              [Million 2013$/year]
----------------------------------------------------------------------------------------------------------------
                                                      Primary estimate   Low net benefits    High net benefits
                                    Discount rate            *              estimate *           estimate *
----------------------------------------------------------------------------------------------------------------
Benefits
    Consumer Operating Cost       7%...............  1,367............  1,134............  1,664
     Savings.
                                  3%...............  2,048............  1,684............  2,521
    CO2 Reduction Monetized       5%...............  166..............  143..............  192
     Value ($12.0/t case) *.
    CO2 Reduction Monetized       3%...............  614..............  531..............  712
     Value ($40.5/t case) *.

[[Page 31004]]

 
    CO2 Reduction Monetized       2.5%.............  920..............  795..............  1,066
     Value ($62.4/t case) *.
    CO2 Reduction Monetized       3%...............  1,899............  1,641............  2,200
     Value $119/t case) *.
    NOX Reduction Monetized       7%...............  23.3.............  20.1.............  26.8
     Value (at $2,684/ton) **.
                                  3%...............  32.9.............  28.4.............  38.0
        Total Benefits [dagger].  7% plus CO2 range  1,556 to 3,289...  1,297 to 2,795...  1,882 to 3,890
                                  7%...............  2,005............  1,685............  2,402
                                  3% plus CO2 range  2,247 to 3,980...  1,855 to 3,353...  2,750 to 4,758
                                  3%...............  2,696............  2,243............  3,270
Costs
    Consumer Incremental          7%...............  517..............  582..............  503
     Equipment Costs.
                                  3%...............  621..............  697..............  616
Net Benefits
        Total [dagger]..........  7% plus CO2 range  1,039 to 2,772...  716 to 2,213.....  1,380 to 3,388
                                  7%...............  1,488............  1,103............  1,900
                                  3% plus CO2 range  1,626 to 3,359...  1,158 to 2,656...  2,134 to 4,143
                                  3%...............  2,074............  1,546............  2,654
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with electric motors shipped in 2016-2045.
  These results include benefits to consumers which accrue after 2044 from the equipment purchased in years 2016-
  2045. Costs incurred by manufacturers, some of which may be incurred in preparation for the rule, are not
  directly included, but are indirectly included as part of incremental equipment costs. The Primary, Low
  Benefits, and High Benefits Estimates are in view of projections of energy prices from the Annual Energy
  Outlook (AEO) 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental
  equipment costs reflect a medium constant projected equipment price in the Primary Estimate, a decline rate
  for projected equipment price trends in the Low Benefits Estimate, and an increasing rate for projected
  equipment price trends in the High Benefits Estimate. The methods used to derive projected price trends are
  explained in section IV.F.1.
** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values
  are based on the average SCC from the three integrated assessment models, at discount rates of 2.5, 3, and 5
  percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-
  percent discount rate, is included to represent higher-than-expected impacts from temperature change further
  out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time
  series incorporate an escalation factor. The value for NOX is the average of the low and high values used in
  DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  average SCC with 3-percent discount rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,''
  the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added
  to the full range of CO2 values.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (October. 4, 1993), requires each agency to 
identify the problem that it intends to address, including, where 
applicable, the failures of private markets or public institutions that 
warrant new agency action, as well as to assess the significance of 
that problem. The problems that today's standards address are as 
follows: There are external benefits resulting from improved energy 
efficiency of covered electric motors which are not captured by the 
users of such equipment. These benefits include externalities related 
to environmental protection and energy security that are not reflected 
in energy prices, such as emissions of greenhouse gases. DOE attempts 
to quantify some of the external benefits through use of Social Cost of 
Carbon values.
    In addition, DOE has determined that today's regulatory action is a 
``significant regulatory action'' under section 3(f)(1) Executive Order 
12866. DOE presented to the Office of Information and Regulatory 
Affairs (OIRA) in the OMB for review the draft rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
for this rulemaking.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011. 76 FR 3281 (January 21, 2011). EO 
13563 is supplemental to and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, agencies are 
required by Executive Order 13563 to: (1) Propose or adopt a regulation 
only upon a reasoned determination that its benefits justify its costs 
(recognizing that some benefits and costs are difficult to quantify); 
(2) tailor regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, taking into account, 
among other things, and to the extent practicable, the costs of 
cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity); (4) to the 
extent feasible, specify performance objectives, rather than specifying 
the behavior or manner of compliance that regulated entities must 
adopt; and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, OIRA has emphasized that such techniques may include 
identifying changing future compliance costs that might result from 
technological innovation or anticipated behavioral changes. For the 
reasons stated in the preamble, DOE believes that today's final rule is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, benefits justify costs and that net 
benefits are maximized.

[[Page 31005]]

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, and a final 
regulatory flexibility analysis (FRFA) for any such rule that an agency 
adopts as a final rule, 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 the December 2013 NOPR (78 FR 73590) and 
today's final rule under the provisions of the Regulatory Flexibility 
Act and the procedures and policies published on February 19, 2003.
    As a result of this review, DOE has prepared a FRFA for electric 
motors. As presented and discussed in the following section, the FRFA 
describes impacts on electric motor manufacturers and discusses 
alternatives that could minimize these impacts. A statement of the 
reasons for establishing the standards in today's final rule, and the 
objectives of, and legal basis for these standards, are set forth 
elsewhere in the preamble and not repeated here. Chapter 12 of the TSD 
contains more information about the impact of this rulemaking on 
manufacturers.
1. Description and Estimated Number of Small Entities Regulated
    For manufacturers of electric motors, the Small Business 
Administration (SBA) has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. 65 FR 30836, 30850 (May 15, 2000), as amended at 65 FR 53533, 
53545 (September 5, 2000) and codified at 13 CFR part 121. The size 
standards are listed by North American Industry Classification System 
(NAICS) code and industry description and are available at http://www.sba.gov/content/table-small-business-size-standards. Electric motor 
manufacturing is classified under NAICS 335312, ``Motor and Generator 
Manufacturing''. The SBA sets a threshold of 1,000 employees or less 
for an entity to be considered as a small business for this category.
    To estimate the number of companies that could be small business 
manufacturers of equipment covered by this rulemaking, DOE conducted a 
market survey using publicly available information. DOE's research 
involved industry trade association membership directories (including 
NEMA \93\), information from previous rulemakings, UL qualification 
directories, individual company Web sites, and market research tools 
(e.g., Hoover's reports \94\). DOE also asked stakeholders and industry 
representatives if they were aware of any other small manufacturers 
during manufacturer interviews and DOE public meetings. DOE used 
information from these sources to create a list of companies that could 
potentially manufacture electric motors covered by this rulemaking. As 
necessary, DOE contacted companies to determine whether they met the 
SBA's definition of a small business manufacturer. DOE screened out 
companies that do not offer equipment covered by this rulemaking, do 
not meet the definition of a ``small business,'' or are completely 
foreign-owned and -operated.
---------------------------------------------------------------------------

    \93\ http://www.nema.org/Products/Pages/Motor-and-Generator.aspx.
    \94\ http://www.hoovers.com.
---------------------------------------------------------------------------

    DOE initially identified 60 potential manufacturers of electric 
motors sold in the United States. After reviewing publicly available 
information on these potential electric motor manufacturers, DOE 
determined that 33 were either large manufacturers or manufacturers 
that did not sell electric motors covered by this rulemaking. DOE then 
contacted the remaining 27 companies to determine whether they met the 
SBA definition of a small business and whether they manufactured the 
equipment that would be affected by today's standards. Based on these 
efforts, DOE estimates that there are 13 small business manufacturers 
of electric motors covered by this rulemaking in the United States.
a. Manufacturer Participation
    As stated in the December 2013 NOPR (78 FR at 73670), DOE attempted 
to contact the 13 identified small businesses to invite them to take 
part in a small business manufacturer impact analysis interview. Of the 
electric motor manufacturers DOE contacted, 10 responded, and three did 
not. Eight of the 10 responding manufacturers declined to be 
interviewed. Therefore, DOE was able to reach and discuss potential 
standards with two of the 13 small business manufacturers. DOE also 
obtained information about small business manufacturers and potential 
impacts while interviewing large manufacturers.
b. Electric Motor Industry Structure and Nature of Competition
    Eight major manufacturers supply approximately 90 percent of the 
market for electric motors. None of the major manufacturers of electric 
motors covered in this rulemaking is a small business. DOE estimates 
that approximately 50 percent of the market is served by imports. Many 
of the small businesses that compete in the electric motor market 
produce specialized motors, many of which have not been regulated under 
previous standards. Most of these low-volume manufacturers do not 
compete directly with large manufacturers and tend to occupy niche 
markets for their equipment, which are currently not required to comply 
with existing electric motor standards but would be required to comply 
with the standards in this final rule. There are a few small business 
manufacturers that produce general purpose motors; however, these 
motors already meet premium efficiency levels, which correspond to the 
efficiency levels being selected for the majority of electric motors 
covered in today's final rule.
c. Comparison Between Large and Small Entities
    For electric motors, small manufacturers differ from large 
manufacturers in several ways that affect the extent to which a 
manufacturer would be impacted by selected standards. Characteristics 
of small manufacturers include: lower production volumes, fewer 
engineering resources, less technical expertise, and less access to 
capital.
    A lower-volume manufacturer's conversion costs would need to be 
spread over fewer units than a larger competitor. Smaller companies are 
also more likely to have more limited engineering resources, and they 
often operate with lower levels of design and manufacturing 
sophistication. Smaller companies typically also have less experience 
and expertise in working with more advanced technologies. Standards 
that required these technologies could strain the engineering resources 
of these small manufacturers, if they chose to maintain a vertically 
integrated business model.

[[Page 31006]]

Small manufacturers of electric motor can also be at a disadvantage due 
to their lack of purchasing power for high-performance materials. For 
example, more expensive low-loss steels are needed to meet higher 
efficiency standards, and steel cost grows as a percentage of the 
overall equipment cost. Small manufacturers who pay higher per-pound 
prices would be disproportionately impacted by these prices. Lastly, 
small manufacturers typically have less access to capital, which may be 
needed by some to cover the conversion costs associated with new 
technologies.
2. Description and Estimate of Compliance Requirements
    In its market survey, DOE identified three categories of small 
manufacturers of electric motors that may be impacted differently by 
today's final rule. The first group, which includes approximately five 
of the 13 small businesses, consists of manufacturers that produce 
specialty motors that were not required to meet previous Federal 
standards, but would need to do so under the expanded scope of today's 
final rule. DOE believes that this group would likely be the most 
impacted by expanding the scope of equipment required to meet premium 
efficiency levels. The second group, which includes approximately five 
different small businesses, consists of manufacturers that produce a 
small amount of covered equipment and primarily focus on other types of 
motors not covered in this rulemaking, such as single-phase or direct-
current motors. Because generally less than 10 percent of these 
manufacturers' revenue comes from covered equipment, DOE does not 
believe new standards will substantially impact their business. The 
third group, which includes approximately three small businesses, 
consists of manufacturers that already offer premium efficiency general 
purpose and specialty motors. DOE expects these manufacturers to face 
conversion costs similar to large manufacturers, in that they will not 
experience high capital conversion costs as they already have the 
design and production experience necessary to bring their motors up to 
premium efficiency levels. It is likely, however, that some of the 
specialty equipment these manufacturers produce will be included in the 
expanded scope of this rule and is likely to result in these small 
businesses incurring additional certification and testing costs. These 
manufacturers could also face equipment development costs if they have 
to redesign any motors that are not currently meeting the premium 
level.
    At TSL 2, the level adopted in today's notice, DOE estimates 
capital conversion costs of $1.88 million and equipment conversion 
costs of $3.75 million for a typical small manufacturer in the first 
group (manufacturers that produce specialized motors previously not 
covered by Federal standards). Meanwhile, DOE estimates a typical large 
manufacturer would incur capital and equipment conversion costs of 
$3.29 million and $7.25 million, respectively, at the same TSL. Small 
manufacturers that predominately produce specialty motors would face 
higher relative capital conversion costs at TSL 2 than large 
manufacturers because large manufacturers have been independently 
pursuing higher efficiency motors as a result of the efficiency 
standards prescribed by EISA 2007 (10 CFR 431.25) and, consequently, 
have built up more design and production experience. Large 
manufacturers have also been innovating as a result of the small 
electric motors rulemaking at 75 FR 10874 (March 9, 2010). This rule 
did not apply to non-general purpose small electric motors that many of 
these small business manufacturers produce. Many large manufacturers of 
general purpose motors offer equipment that was covered by the 2010 
small electric motors rule, as well as equipment that falls under this 
rule. Small manufacturers pointed out that this fact would give large 
manufacturers an advantage in that they already have experience with 
the technology necessary to redesign their equipment and are familiar 
with the steps they will have to take to upgrade their manufacturing 
equipment and processes. Small manufacturers, whose specialized motors 
were not required to meet the standards prescribed by the small 
electric motors rule and EISA 2007 have not undergone these processes 
and, therefore, would have to put more time and resources into redesign 
efforts.
    The small businesses whose equipment lines consist of a high 
percentage of equipment that are not currently required to meet 
efficiency standards would need to make significant capital investments 
relative to large manufacturers to upgrade their production lines with 
equipment necessary to produce motors that can satisfy the levels being 
adopted today. As Table VI.1 illustrates, these manufacturers would 
have to drastically increase their capital expenditures to purchase new 
lamination die sets, and new winding and stacking equipment.
    For small manufacturers in the second group (manufacturers whose 
revenue from covered equipment in this rulemaking is less than 10 
percent of total company revenue), DOE believes that these small 
manufacturers would lose no more than 10 percent of their company 
revenue. This lower bound is because these manufacturers could always 
choose not to make the investments necessary to convert the newly 
covered electric motors subject to standards in today's final rule. 
This lower bound is similar to the lower bound estimate of the entire 
electric motor industry at TSL 2, the TSL adopted in this final rule.
    For small manufacturers in the third group (manufacturer that 
produces general purpose motors currently covered by Federal 
standards), DOE predicts that these small manufacturers would not have 
any conversion costs or decrease in revenue since they already 
manufacture electric motors that are compliant with the standards being 
adopted for this final rule.

  Table VI.1--Estimated Capital and Product Conversion Costs as a Percentage of Annual Capital Expenditures and
                                                   R&D Expense
----------------------------------------------------------------------------------------------------------------
                                                              Capital            Product
                                                          conversion cost    conversion cost    Total conversion
                                                          as a percentage    as a percentage       cost as a
                                                         of annual capital    of annual R&D      percentage of
                                                            expenditures         expense         annual revenue
                                                             (percent)          (percent)          (percent)
----------------------------------------------------------------------------------------------------------------
Typical large manufacturer.............................                 14                 31                  2
Typical small manufacturer that produces specialty                     188                490                 75
 motors previously not covered by Federal standards....

[[Page 31007]]

 
Typical small manufacturer who revenue from covered                     NA                 NA          \*\ <= 10
 equipment is less than 10% of total company revenue...
Typical small manufacturer that produces general                         0                  0                  0
 purpose motors currently covered by Federal standards.
----------------------------------------------------------------------------------------------------------------
* The most these manufacturers would lose is 10% of their annual revenue if they choose not to invest in
  upgrading the equipment they currently manufacture, which is not covered by Federal energy conservation
  standards, but that would now be covered by the standards prescribed in this final rule.

    Table VI.1 also illustrates that small manufacturers whose 
equipment lines contain many motors that are not currently required to 
meet Federal standards face high relative equipment conversion costs 
compared to large manufacturers, despite the lower dollar value. In 
interviews, these small manufacturers expressed concern that they would 
face a large learning curve relative to large manufacturers, due to the 
fact that many of the equipment types have not had to meet Federal 
standards. In its market survey, DOE learned that for some 
manufacturers, the expanded scope of specialized motors that would have 
to meet the levels adopted by today's rule could affect nearly half the 
equipment they offer. They would need to hire additional engineers and 
would have to spend considerable time and resources redesigning their 
equipment and production processes. DOE does not expect the small 
businesses that already manufacture motors meeting the levels adopted 
by today's rule or those small businesses that offer very few 
alternating-current motors to incur these high costs.
    Manufacturers also expressed concern about testing and 
certification costs associated with new standards. They pointed out 
that these costs are particularly burdensome on small businesses that 
produce a wide variety of specialized equipment. As a result of the 
wide variety of equipment they produce and their relatively low output, 
small manufacturers are forced to certify multiple small batches of 
motors, the costs of which are spread out over far fewer units than 
large manufacturers.
    Small manufacturers that produce equipment not currently required 
to meet efficiency standards also pointed out that they would face 
significant challenges supporting current business while making changes 
to their production lines. While large manufacturers could shift 
production of certain equipment to different plants or equipment lines 
while they made updates, small businesses would have limited options. 
Most of these small businesses have only one plant and would have to 
find a way to continue to fulfill customer needs while redesigning 
production lines and installing new equipment. In interviews with DOE, 
small manufacturers said that it would be difficult to quantify the 
impacts that downtime and the possible need for external support could 
have on their businesses.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict With the rule being considered today.
4. Significant Alternatives to the Rule
    Section VI.B.2 analyzes impacts on small businesses that would 
result from DOE's adopted final rule. Though TSLs lower than the one 
serving as the basis for today's final rule would be likely to reduce 
the impacts on small entities, DOE is required by EPCA to establish 
standards that achieve the maximum improvement in energy efficiency 
that are technically feasible and economically justified, and result in 
a significant conservation of energy. Therefore, DOE rejected the lower 
TSLs it had been considering.
    In addition to the other TSLs that DOE considered, the final rule 
TSD includes a regulatory impact analysis (RIA). For electric motors, 
the RIA discusses the following policy alternatives: (1) Consumer 
rebates, (2) consumer tax credits, (3) manufacturer tax credits, (4) 
voluntary energy efficiency targets, (5) early replacement, and (6) 
bulk government purchases. While these alternatives may mitigate to 
some varying extent the economic impacts on small entities compared to 
the standards, DOE determined that the energy savings of these 
alternatives are significantly smaller than those that would be 
expected to result from the adopted standard levels. Accordingly, DOE 
is declining to adopt any of these alternatives and is adopting the 
standards set forth in this rulemaking. (See chapter 17 of this final 
TSD for further detail on the policy alternatives DOE considered.)
    DOE only received one public comment regarding the impact of the 
rule on small manufacturers. Baldor asked why DOE does not consider 
impacts on the many small manufacturers outside of the U.S. (Baldor, 
Pub. Mtg. Tr., No. 87 at pp. 176-177). Under the Regulatory Flexibility 
Act, the term ``small business concern'' is defined by reference to 
SBA's regulations. SBA's regulations state that a small business 
concern is ``a business entity organized for profit, with a place of 
business located in the United States, and which operates primarily 
within the United States or which makes a significant contribution to 
the U.S. economy through payment of taxes or use of American products, 
materials or labor''. 13 CFR 121.105(a)(1). As a result, under the 
Regulatory Flexibility Act, DOE must assess impacts on domestic small 
businesses. DOE did not receive any comments suggesting that small 
business manufacturers would not be able to achieve the efficiency 
levels required at TSL 2, the selected standards in today's final rule.

C. Review Under the Paperwork Reduction Act

    Manufacturers of electric motors that are currently subject to 
energy conservation standards must certify to DOE that their equipment 
complies with any applicable energy conservation standards. In 
certifying compliance, manufacturers must test their equipment 
according to the DOE test procedures for electric motors,

[[Page 31008]]

including any amendments adopted for those test procedures. The 
collection-of-information requirement for the certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (PRA). This requirement has been approved by 
OMB under OMB control number 1910-1400. Public reporting burden for the 
certification is estimated to average 20 hours per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. DOE intends to address revised 
certification requirements for electric motors in a separate 
rulemaking.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has determined that the rule fits within the category of actions 
included in Categorical Exclusion (CX) B5.1 and otherwise meets the 
requirements for application of a CX.(10 CFR part 1021, App. B, 
B5.1(b); 1021.410(b) and Appendix B, B(1)-(5)). The rule fits within 
the category of actions because it is a rulemaking that establishes 
energy conservation standards for consumer products or industrial 
equipment, and for which none of the exceptions identified in CX 
B5.1(b) apply. Therefore, DOE has made a CX determination for this 
rulemaking, and DOE does not need to prepare an Environmental 
Assessment or Environmental Impact Statement for this rule. DOE's CX 
determination for this rule is available at http://cxnepa.energy.gov/.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism'' 64 FR 43255 (August10, 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 the 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. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the equipment that is the subject of today's final 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 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 (February 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 final rule 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. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For the new and amended 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 
``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/downloads/unfunded-mandates-reform-act-intergovernmental-consultation.
    DOE has concluded that this final rule would likely require 
expenditures of $100 million or more. Such expenditures may include: 
(1) Investment in research and development and in capital Expenditures 
by electric motor manufacturers in the years between the final rule and 
the compliance date for the new standards, and (2) incremental 
additional expenditures by consumers to purchase higher-efficiency 
electric motors, starting at the compliance date for the applicable 
standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the final rule. 2 U.S.C. 1532(c). The content requirements 
of section 202(b) of UMRA relevant to a private sector mandate 
substantially overlap the economic analysis requirements that apply 
under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of today's final rule and the 
``Regulatory Impact Analysis'' section of the TSD accompanying the 
final rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required.

[[Page 31009]]

2 U.S.C. 1535(a). DOE is required to select from those alternatives the 
most cost-effective and least burdensome alternative that achieves the 
objectives of the rule unless DOE publishes an explanation for doing 
otherwise, or the selection of such an alternative is inconsistent with 
law. As required by 42 U.S.C. 6295(d), (f), and (o) and 6316(a), 
today's final rule would establish energy conservation standards for 
electric motors that are designed to achieve the maximum improvement in 
energy efficiency that DOE has determined to be both technologically 
feasible and economically justified. A full discussion of the 
alternatives considered by DOE is presented in the ``Regulatory Impact 
Analysis'' section of the TSD for today's final rule.

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

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

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (March 18, 1988), that this regulation would not 
result in any 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 (February 
22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 
7, 2002). DOE has reviewed today's final rule under the OMB and DOE 
guidelines and has concluded that it is consistent with applicable 
policies in those guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any 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 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.
    DOE has concluded that today's regulatory action, which sets forth 
energy conservation standards for electric motors, is not a significant 
energy action because the new and amended standards are not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects 
on the final rule.

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 (January14, 
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.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is a ``major rule'' as 
defined by 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's final 
rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Commercial and industrial Equipment, 
Imports, Incorporation by reference, Intergovernmental relations, 
Reporting and recordkeeping requirements, and Small businesses.

    Issued in Washington, DC, on May 8, 2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
    For the reasons set forth in the preamble, DOE amends part 431 of 
chapter II of title 10 of the Code of Federal Regulations, as set forth 
below:

PART 431--ENERGY CONSERVATION PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 431 continues to read as follows:

    Authority: 42 U.S.C. 6291-6317.

0
2. Amend Sec.  431.12 by revising the definitions of ``NEMA Design A 
motor'' and ``partial electric motor'' to read as follows:

[[Page 31010]]

Sec.  431.12  Definitions.

* * * * *
    NEMA Design A motor means a squirrel-cage motor that:
    (1) Is designed to withstand full-voltage starting and developing 
locked-rotor torque as shown in NEMA MG 1-2009, paragraph 12.38.1 
(incorporated by reference, see Sec.  431.15);
    (2) Has pull-up torque not less than the values shown in NEMA MG 1-
2009, paragraph 12.40.1;
    (3) Has breakdown torque not less than the values shown in NEMA MG 
1-2009, paragraph 12.39.1;
    (4) Has a locked-rotor current higher than the values shown in NEMA 
MG 1-2009, paragraph 12.35.1 for 60 hertz and NEMA MG 1-2009, paragraph 
12.35.2 for 50 hertz; and
    (5) Has a slip at rated load of less than 5 percent for motors with 
fewer than 10 poles.
* * * * *
    Partial electric motor means an assembly of motor components 
necessitating the addition of no more than two endshields, including 
bearings, to create an electric motor capable of operation in 
accordance with the applicable nameplate ratings.
* * * * *

0
3. Revise Sec.  431.25 to read as follows:


Sec.  431.25  Energy conservation standards and effective dates.

    (a) Except as provided for fire pump electric motors in paragraph 
(b) of this section, each general purpose electric motor (subtype I) 
with a power rating of 1 horsepower or greater, but not greater than 
200 horsepower, including a NEMA Design B or an equivalent IEC Design N 
motor that is a general purpose electric motor (subtype I), 
manufactured (alone or as a component of another piece of equipment) on 
or after December 19, 2010, but before June 1, 2016, shall have a 
nominal full-load efficiency that is not less than the following:

    Table 1--Nominal Full-Load Efficiencies of General Purpose Electric Motors (Subtype I), Except Fire Pump
                                                 Electric Motors
----------------------------------------------------------------------------------------------------------------
                                                                  Nominal full-load efficiency
                                               -----------------------------------------------------------------
                                                 Open motors (number of poles)      Enclosed motors (number of
 Motor horsepower/Standard kilowatt equivalent ---------------------------------              poles)
                                                                                --------------------------------
                                                    6          4          2          6          4          2
----------------------------------------------------------------------------------------------------------------
1/.75.........................................       82.5       85.5       77.0       82.5       85.5       77.0
1.5/1.1.......................................       86.5       86.5       84.0       87.5       86.5       84.0
2/1.5.........................................       87.5       86.5       85.5       88.5       86.5       85.5
3/2.2.........................................       88.5       89.5       85.5       89.5       89.5       86.5
5/3.7.........................................       89.5       89.5       86.5       89.5       89.5       88.5
7.5/5.5.......................................       90.2       91.0       88.5       91.0       91.7       89.5
10/7.5........................................       91.7       91.7       89.5       91.0       91.7       90.2
15/11.........................................       91.7       93.0       90.2       91.7       92.4       91.0
20/15.........................................       92.4       93.0       91.0       91.7       93.0       91.0
25/18.5.......................................       93.0       93.6       91.7       93.0       93.6       91.7
30/22.........................................       93.6       94.1       91.7       93.0       93.6       91.7
40/30.........................................       94.1       94.1       92.4       94.1       94.1       92.4
50/37.........................................       94.1       94.5       93.0       94.1       94.5       93.0
60/45.........................................       94.5       95.0       93.6       94.5       95.0       93.6
75/55.........................................       94.5       95.0       93.6       94.5       95.4       93.6
100/75........................................       95.0       95.4       93.6       95.0       95.4       94.1
125/90........................................       95.0       95.4       94.1       95.0       95.4       95.0
150/110.......................................       95.4       95.8       94.1       95.8       95.8       95.0
200/150.......................................       95.4       95.8       95.0       95.8       96.2       95.4
----------------------------------------------------------------------------------------------------------------

    (b) Each fire pump electric motor that is a general purpose 
electric motor (subtype I) or general purpose electric motor (subtype 
II) manufactured (alone or as a component of another piece of 
equipment) on or after December 19, 2010, but before June 1, 2016, 
shall have a nominal full-load efficiency that is not less than the 
following:

                                          Table 2--Nominal Full-Load Efficiencies of Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Nominal full-load efficiency
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  Open motors (number of poles)             Enclosed motors (number of poles)
                                                                 ---------------------------------------------------------------------------------------
                                                                      8          6          4          2          8          6          4          2
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       74.0       80.0       82.5  .........       74.0       80.0       82.5       75.5
1.5/1.1.........................................................       75.5       84.0       84.0       82.5       77.0       85.5       84.0       82.5
2/1.5...........................................................       85.5       85.5       84.0       84.0       82.5       86.5       84.0       84.0
3/2.2...........................................................       86.5       86.5       86.5       84.0       84.0       87.5       87.5       85.5
5/3.7...........................................................       87.5       87.5       87.5       85.5       85.5       87.5       87.5       87.5
7.5/5.5.........................................................       88.5       88.5       88.5       87.5       85.5       89.5       89.5       88.5
10/7.5..........................................................       89.5       90.2       89.5       88.5       88.5       89.5       89.5       89.5
15/11...........................................................       89.5       90.2       91.0       89.5       88.5       90.2       91.0       90.2
20/15...........................................................       90.2       91.0       91.0       90.2       89.5       90.2       91.0       90.2
25/18.5.........................................................       90.2       91.7       91.7       91.0       89.5       91.7       92.4       91.0
30/22...........................................................       91.0       92.4       92.4       91.0       91.0       91.7       92.4       91.0

[[Page 31011]]

 
40/30...........................................................       91.0       93.0       93.0       91.7       91.0       93.0       93.0       91.7
50/37...........................................................       91.7       93.0       93.0       92.4       91.7       93.0       93.0       92.4
60/45...........................................................       92.4       93.6       93.6       93.0       91.7       93.6       93.6       93.0
75/55...........................................................       93.6       93.6       94.1       93.0       93.0       93.6       94.1       93.0
100/75..........................................................       93.6       94.1       94.1       93.0       93.0       94.1       94.5       93.6
125/90..........................................................       93.6       94.1       94.5       93.6       93.6       94.1       94.5       94.5
150/110.........................................................       93.6       94.5       95.0       93.6       93.6       95.0       95.0       94.5
200/150.........................................................       93.6       94.5       95.0       94.5       94.1       95.0       95.0       95.0
250/186.........................................................       94.5       95.4       95.4       94.5       94.5       95.0       95.0       95.4
300/224.........................................................  .........       95.4       95.4       95.0  .........       95.0       95.4       95.4
350/261.........................................................  .........       95.4       95.4       95.0  .........       95.0       95.4       95.4
400/298.........................................................  .........  .........       95.4       95.4  .........  .........       95.4       95.4
450/336.........................................................  .........  .........       95.8       95.8  .........  .........       95.4       95.4
500/373.........................................................  .........  .........       95.8       95.8  .........  .........       95.8       95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (c) Except as provided for fire pump electric motors in paragraph 
(b) of this section, each general purpose electric motor (subtype II) 
with a power rating of 1 horsepower or greater, but not greater than 
200 horsepower, including a NEMA Design B or an equivalent IEC Design N 
motor that is a general purpose electric motor (subtype II), 
manufactured (alone or as a component of another piece of equipment) on 
or after December 19, 2010, but before June 1, 2016, shall have a 
nominal full-load efficiency that is not less than the following:

                Table 3--Nominal Full-Load Efficiencies of General Purpose Electric Motors (Subtype II), Except Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Nominal full-load efficiency
                                                                 ---------------------------------------------------------------------------------------
         Motor horsepower/ Standard kilowatt equivalent                  Open motors (number of poles)             Enclosed motors (number of poles)
                                                                 ---------------------------------------------------------------------------------------
                                                                      8          6          4          2          8          6          4          2
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       74.0       80.0       82.5  .........       74.0       80.0       82.5       75.5
1.5/1.1.........................................................       75.5       84.0       84.0       82.5       77.0       85.5       84.0       82.5
2/1.5...........................................................       85.5       85.5       84.0       84.0       82.5       86.5       84.0       84.0
3/2.2...........................................................       86.5       86.5       86.5       84.0       84.0       87.5       87.5       85.5
5/3.7...........................................................       87.5       87.5       87.5       85.5       85.5       87.5       87.5       87.5
7.5/5.5.........................................................       88.5       88.5       88.5       87.5       85.5       89.5       89.5       88.5
10/7.5..........................................................       89.5       90.2       89.5       88.5       88.5       89.5       89.5       89.5
15/11...........................................................       89.5       90.2       91.0       89.5       88.5       90.2       91.0       90.2
20/15...........................................................       90.2       91.0       91.0       90.2       89.5       90.2       91.0       90.2
25/18.5.........................................................       90.2       91.7       91.7       91.0       89.5       91.7       92.4       91.0
30/22...........................................................       91.0       92.4       92.4       91.0       91.0       91.7       92.4       91.0
40/30...........................................................       91.0       93.0       93.0       91.7       91.0       93.0       93.0       91.7
50/37...........................................................       91.7       93.0       93.0       92.4       91.7       93.0       93.0       92.4
60/45...........................................................       92.4       93.6       93.6       93.0       91.7       93.6       93.6       93.0
75/55...........................................................       93.6       93.6       94.1       93.0       93.0       93.6       94.1       93.0
100/75..........................................................       93.6       94.1       94.1       93.0       93.0       94.1       94.5       93.6
125/90..........................................................       93.6       94.1       94.5       93.6       93.6       94.1       94.5       94.5
150/110.........................................................       93.6       94.5       95.0       93.6       93.6       95.0       95.0       94.5
200/150.........................................................       93.6       94.5       95.0       94.5       94.1       95.0       95.0       95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (d) Each NEMA Design B or an equivalent IEC Design N motor that is 
a general purpose electric motor (subtype I) or general purpose 
electric motor (subtype II), excluding fire pump electric motors, with 
a power rating of more than 200 horsepower, but not greater than 500 
horsepower, manufactured (alone or as a component of another piece of 
equipment) on or after December 19, 2010, but before June 1, 2016 shall 
have a nominal full-load efficiency that is not less than the 
following:

[[Page 31012]]



      Table 4--Nominal Full-Load Efficiencies of NEMA Design B General Purpose Electric Motors (Subtype I and II), Except Fire Pump Electric Motors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Nominal full-load efficiency
                                                                 ---------------------------------------------------------------------------------------
         Motor horsepower/ standard kilowatt equivalent                  Open motors (number of poles)             Enclosed motors (number of poles)
                                                                 ---------------------------------------------------------------------------------------
                                                                      8          6          4          2          8          6          4          2
--------------------------------------------------------------------------------------------------------------------------------------------------------
250/186.........................................................       94.5       95.4       95.4       94.5       94.5       95.0       95.0       95.4
300/224.........................................................  .........       95.4       95.4       95.0  .........       95.0       95.4       95.4
350/261.........................................................  .........       95.4       95.4       95.0  .........       95.0       95.4       95.4
400/298.........................................................  .........  .........       95.4       95.4  .........  .........       95.4       95.4
450/336.........................................................  .........  .........       95.8       95.8  .........  .........       95.4       95.4
500/373.........................................................  .........  .........       95.8       95.8  .........  .........       95.8       95.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (e) For purposes of determining the required minimum nominal full-
load efficiency of an electric motor that has a horsepower or kilowatt 
rating between two horsepower or two kilowatt ratings listed in any 
table of energy conservation standards in paragraphs (a) through (d) of 
this section, each such motor shall be deemed to have a listed 
horsepower or kilowatt rating, determined as follows:
    (1) A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    (2) A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
or
    (3) A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = ( \1\/0.746) 
horsepower. The conversion should be calculated to three significant 
decimal places, and the resulting horsepower shall be rounded in 
accordance with paragraph (e)(1) or (e)(2) of this section, whichever 
applies.
    (f) The standards in Table 1 through Table 4 of this section do not 
apply to definite purpose electric motors, special purpose electric 
motors, or those motors exempted by the Secretary.
    (g) The standards in Table 5 through Table 7 of this section apply 
only to electric motors, including partial electric motors, that 
satisfy the following criteria:
    (1) Are single-speed, induction motors;
    (2) Are rated for continuous duty (MG 1) operation or for duty type 
S1 (IEC);
    (3) Contain a squirrel-cage (MG 1) or cage (IEC) rotor;
    (4) Operate on polyphase alternating current 60-hertz sinusoidal 
line power;
    (5) Are rated 600 volts or less;
    (6) Have a 2-, 4-, 6-, or 8-pole configuration,
    (7) Are built in a three-digit or four-digit NEMA frame size (or 
IEC metric equivalent), including those designs between two consecutive 
NEMA frame sizes (or IEC metric equivalent), or an enclosed 56 NEMA 
frame size (or IEC metric equivalent),
    (8) Produce at least one horsepower (0.746 kW) but not greater than 
500 horsepower (373 kW), and
    (9) Meet all of the performance requirements of one of the 
following motor types: A NEMA Design A, B, or C motor or an IEC Design 
N or H motor.
    (h) Starting on June 1, 2016, each NEMA Design A motor, NEMA Design 
B motor, and IEC Design N motor that is an electric motor meeting the 
criteria in paragraph (g) of this section and with a power rating from 
1 horsepower through 500 horsepower, but excluding fire pump electric 
motors, manufactured (alone or as a component of another piece of 
equipment) shall have a nominal full-load efficiency of not less than 
the following:

     Table 5--Nominal Full-Load Efficiencies of NEMA Design A, NEMA Design B and IEC Design N Motors (Excluding Fire Pump Electric Motors) at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
         Motor horsepower/ standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................................       77.0       77.0       85.5       85.5       82.5       82.5       75.5       75.5
1.5/1.1.........................................................       84.0       84.0       86.5       86.5       87.5       86.5       78.5       77.0
2/1.5...........................................................       85.5       85.5       86.5       86.5       88.5       87.5       84.0       86.5
3/2.2...........................................................       86.5       85.5       89.5       89.5       89.5       88.5       85.5       87.5
5/3.7...........................................................       88.5       86.5       89.5       89.5       89.5       89.5       86.5       88.5
7.5/5.5.........................................................       89.5       88.5       91.7       91.0       91.0       90.2       86.5       89.5
10/7.5..........................................................       90.2       89.5       91.7       91.7       91.0       91.7       89.5       90.2
15/11...........................................................       91.0       90.2       92.4       93.0       91.7       91.7       89.5       90.2
20/15...........................................................       91.0       91.0       93.0       93.0       91.7       92.4       90.2       91.0
25/18.5.........................................................       91.7       91.7       93.6       93.6       93.0       93.0       90.2       91.0
30/22...........................................................       91.7       91.7       93.6       94.1       93.0       93.6       91.7       91.7
40/30...........................................................       92.4       92.4       94.1       94.1       94.1       94.1       91.7       91.7
50/37...........................................................       93.0       93.0       94.5       94.5       94.1       94.1       92.4       92.4
60/45...........................................................       93.6       93.6       95.0       95.0       94.5       94.5       92.4       93.0
75/55...........................................................       93.6       93.6       95.4       95.0       94.5       94.5       93.6       94.1
100/75..........................................................       94.1       93.6       95.4       95.4       95.0       95.0       93.6       94.1
125/90..........................................................       95.0       94.1       95.4       95.4       95.0       95.0       94.1       94.1
150/110.........................................................       95.0       94.1       95.8       95.8       95.8       95.4       94.1       94.1
200/150.........................................................       95.4       95.0       96.2       95.8       95.8       95.4       94.5       94.1
250/186.........................................................       95.8       95.0       96.2       95.8       95.8       95.8       95.0       95.0

[[Page 31013]]

 
300/224.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
350/261.........................................................       95.8       95.4       96.2       95.8       95.8       95.8  .........  .........
400/298.........................................................       95.8       95.8       96.2       95.8  .........  .........  .........  .........
450/336.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
500/373.........................................................       95.8       96.2       96.2       96.2  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (i) Starting on June 1, 2016, each NEMA Design C motor and IEC 
Design H motor that is an electric motor meeting the criteria in 
paragraph (g) of this section and with a power rating from 1 horsepower 
through 200 horsepower manufactured (alone or as a component of another 
piece of equipment) shall have a nominal full-load efficiency that is 
not less than the following:

            Table 6--Nominal Full-Load Efficiencies of NEMA Design C and IEC Design H Motors at 60 Hz
----------------------------------------------------------------------------------------------------------------
                                                          Nominal full-load efficiency (%)
                                   -----------------------------------------------------------------------------
Motor horsepower/standard kilowatt           4 Pole                    6 Pole                    8 Pole
            equivalent             -----------------------------------------------------------------------------
                                      Enclosed       Open       Enclosed       Open       Enclosed       Open
----------------------------------------------------------------------------------------------------------------
1/.75.............................         85.5         85.5         82.5         82.5         75.5         75.5
1.5/1.1...........................         86.5         86.5         87.5         86.5         78.5         77.0
2/1.5.............................         86.5         86.5         88.5         87.5         84.0         86.5
3/2.2.............................         89.5         89.5         89.5         88.5         85.5         87.5
5/3.7.............................         89.5         89.5         89.5         89.5         86.5         88.5
7.5/5.5...........................         91.7         91.0         91.0         90.2         86.5         89.5
10/7.5............................         91.7         91.7         91.0         91.7         89.5         90.2
15/11.............................         92.4         93.0         91.7         91.7         89.5         90.2
20/15.............................         93.0         93.0         91.7         92.4         90.2         91.0
25/18.5...........................         93.6         93.6         93.0         93.0         90.2         91.0
30/22.............................         93.6         94.1         93.0         93.6         91.7         91.7
40/30.............................         94.1         94.1         94.1         94.1         91.7         91.7
50/37.............................         94.5         94.5         94.1         94.1         92.4         92.4
60/45.............................         95.0         95.0         94.5         94.5         92.4         93.0
75/55.............................         95.4         95.0         94.5         94.5         93.6         94.1
100/75............................         95.4         95.4         95.0         95.0         93.6         94.1
125/90............................         95.4         95.4         95.0         95.0         94.1         94.1
150/110...........................         95.8         95.8         95.8         95.4         94.1         94.1
200/150...........................         96.2         95.8         95.8         95.4         94.5         94.1
----------------------------------------------------------------------------------------------------------------

    (j) Starting on June 1, 2016, each fire pump electric motor meeting 
the criteria in paragraph (g) of this section and with a power rating 
of 1 horsepower through 500 horsepower, manufactured (alone or as a 
component of another piece of equipment) shall have a nominal full-load 
efficiency that is not less than the following:

                                      Table 7--Nominal Full-Load Efficiencies of Fire Pump Electric Motors at 60 Hz
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Nominal full-load efficiency (%)
                                                 -------------------------------------------------------------------------------------------------------
 Motor horsepower/ standard kilowatt equivalent            2 Pole                    4 Pole                    6 Pole                    8 Pole
                                                 -------------------------------------------------------------------------------------------------------
                                                    Enclosed       Open       Enclosed       Open       Enclosed       Open       Enclosed       Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
1/.75...........................................         75.5  ...........         82.5         82.5         80.0         80.0         74.0         74.0
1.5/1.1.........................................         82.5         82.5         84.0         84.0         85.5         84.0         77.0         75.5
2/1.5...........................................         84.0         84.0         84.0         84.0         86.5         85.5         82.5         85.5
3/2.2...........................................         85.5         84.0         87.5         86.5         87.5         86.5         84.0         86.5
5/3.7...........................................         87.5         85.5         87.5         87.5         87.5         87.5         85.5         87.5
7.5/5.5.........................................         88.5         87.5         89.5         88.5         89.5         88.5         85.5         88.5
10/7.5..........................................         89.5         88.5         89.5         89.5         89.5         90.2         88.5         89.5
15/11...........................................         90.2         89.5         91.0         91.0         90.2         90.2         88.5         89.5
20/15...........................................         90.2         90.2         91.0         91.0         90.2         91.0         89.5         90.2
25/18.5.........................................         91.0         91.0         92.4         91.7         91.7         91.7         89.5         90.2
30/22...........................................         91.0         91.0         92.4         92.4         91.7         92.4         91.0         91.0
40/30...........................................         91.7         91.7         93.0         93.0         93.0         93.0         91.0         91.0

[[Page 31014]]

 
50/37...........................................         92.4         92.4         93.0         93.0         93.0         93.0         91.7         91.7
60/45...........................................         93.0         93.0         93.6         93.6         93.6         93.6         91.7         92.4
75/55...........................................         93.0         93.0         94.1         94.1         93.6         93.6         93.0         93.6
100/75..........................................         93.6         93.0         94.5         94.1         94.1         94.1         93.0         93.6
125/90..........................................         94.5         93.6         94.5         94.5         94.1         94.1         93.6         93.6
150/110.........................................         94.5         93.6         95.0         95.0         95.0         94.5         93.6         93.6
200/150.........................................         95.0         94.5         95.0         95.0         95.0         94.5         94.1         93.6
250/186.........................................         95.4         94.5         95.0         95.4         95.0         95.4         94.5         94.5
300/224.........................................         95.4         95.0         95.4         95.4         95.0         95.4  ...........  ...........
350/261.........................................         95.4         95.0         95.4         95.4         95.0         95.4  ...........  ...........
400/298.........................................         95.4         95.4         95.4         95.4  ...........  ...........  ...........  ...........
450/336.........................................         95.4         95.8         95.4         95.8  ...........  ...........  ...........  ...........
500/373.........................................         95.4         95.8         95.8         95.8  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (k) For purposes of determining the required minimum nominal full-
load efficiency of an electric motor that has a horsepower or kilowatt 
rating between two horsepower or two kilowatt ratings listed in any 
table of energy conservation standards in paragraphs (h) through (l) of 
this section, each such motor shall be deemed to have a listed 
horsepower or kilowatt rating, determined as follows:
    (1) A horsepower at or above the midpoint between the two 
consecutive horsepowers shall be rounded up to the higher of the two 
horsepowers;
    (2) A horsepower below the midpoint between the two consecutive 
horsepowers shall be rounded down to the lower of the two horsepowers; 
or
    (3) A kilowatt rating shall be directly converted from kilowatts to 
horsepower using the formula 1 kilowatt = ( \1\/ 0.746) 
horsepower. The conversion should be calculated to three significant 
decimal places, and the resulting horsepower shall be rounded in 
accordance with paragraph (k)(1) or (k)(2) of this section, whichever 
applies.
    (l) The standards in Table 5 through Table 7 of this section do not 
apply to the following electric motors exempted by the Secretary, or 
any additional electric motors that the Secretary may exempt:
    (1) Air-over electric motors;
    (2) Component sets of an electric motor;
    (3) Liquid-cooled electric motors;
    (4) Submersible electric motors; and
    (5) Inverter-only electric motors.
    [Note: The following letter from the Department of Justice will 
not appear in the Code of Federal Regulations.]

APPENDIX TO FINAL RULE

U.S. Department of Justice
Antitrust Division
William J. Baer
Assistant Attorney General
RFK Main Justice Building
950 Pennsylvania Ave. NW.
Washington, DC 20530-0001
(202) 514-2401/(202) 616-2645 (Fax)

February 3, 2014

Eric J. Fygi
Deputy General Counsel
Department of Energy
Washington, DC 20585

Dear Deputy General Counsel Fygi:
    I am responding to your December 11, 2013 letter seeking the 
views of the Attorney General about the potential impact on 
competition of proposed energy conservation standards for certain 
types of commercial and industrial electric motors. Your request was 
submitted under Section 325(o)(2)(B)(i)(V) of the Energy Policy and 
Conservation Act, as amended (ECPA), 42 U.S.C. 6295(o)(2)(B)(i)(V), 
which requires the Attorney General to make a determination of the 
impact of any lessening of competition that is likely to result from 
the imposition of proposed energy conservation standards. The 
Attorney General's responsibility for responding to requests from 
other departments about the effect of a program on competition has 
been delegated to the Assistant Attorney General for the Antitrust 
Division in 28 CFR Sec.  0.40(g).
    In conducting its analysis the Antitrust Division examines 
whether a proposed standard may lessen competition, for example, by 
substantially limiting consumer choice, by placing certain 
manufacturers at an unjustified competitive disadvantage, or by 
inducing avoidable inefficiencies in production or distribution of 
particular products. A lessening of competition could result in 
higher prices to manufacturers and consumers, and perhaps thwart the 
intent of the revised standards by inducing substitution to less 
efficient products.
    We have reviewed the proposed standards contained in the Notice 
of Proposed Rulemaking (78 Fed. Reg. 235, December 6, 2013). We have 
also reviewed supplementary information submitted to the Attorney 
General by the Department of Energy, including a transcript of the 
public meeting held on the proposed standards on December 11, 2013. 
Based on this review, our conclusion is that the proposed energy 
conservation standards for certain commercial and industrial 
electric motors can advance the Department of Energy's goal of 
energy conservation without causing a significant adverse impact on 
competition.
Sincerely,
William J. Baer.

[FR Doc. 2014-11201 Filed 5-28-14; 8:45 am]
BILLING CODE 6450-01-P