Energy Conservation Program: Energy Conservation Standards for Pumps

Federal RegisterApr 2, 2015

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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 431

[Docket Number EERE-2011-BT-STD-0031]

RIN 1904-AC54

Energy Conservation Program: Energy Conservation Standards for Pumps

AGENCY:

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

ACTION:

Notice of proposed rulemaking (NOPR) and public meeting.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, 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, establishes the “Energy Conservation Program for Certain Industrial Equipment.” The covered equipment includes pumps. In this document, DOE proposes to establish new energy conservation standards for pumps and announces a public meeting to receive comment on these proposed standards and associated analyses and results.

DATES:

Meeting:

DOE will hold a public meeting on Wednesday, April 29, 2015, from 2 p.m. to 5 p.m., in Washington, DC. The meeting will also be broadcast as a webinar. See section VIII Public Participation for webinar registration information, participant instructions, and information about the capabilities available to webinar participants.

Comments:

DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than June 1, 2015. See section VIII Public Participation for details.

ADDRESSES:

The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at (202) 586-2945. Persons can attend the public meeting via webinar. For more information, refer to the Public Participation section near the end of this NOPR.

Any comments submitted must identify the NOPR for Energy Conservation Standards for pumps, and provide docket number EE-2011-BT-STD-0031 and/or regulatory information number (RIN) number 1904-AC54. Comments may be submitted using any of the following methods:

Federal eRulemaking Portal:

www.regulations.gov

. Follow the instructions for submitting comments.

Email:

Pumps2011STD0031@ee.doe.gov

. Include the docket number and/or RIN in the subject line of the message.

Mail:

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

Hand Delivery/Courier:

Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite 600, Washington, DC, 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to

Chad_S_Whiteman@omb.eop.gov

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

Docket: 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:

www.regulations.gov/#!docketDetail;D=EERE-2011-BT-STD-0031

. This Web page will contain a link to the docket for this NOPR 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. See section VIII for further information on how to submit comments through

www.regulations.gov

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

Brenda.Edwards@ee.doe.gov

FOR FURTHER INFORMATION CONTACT:

John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE-5B, 1000 Independence Avenue SW., Washington, DC, 20585-0121. Telephone: (202) 287-1692. Email:

pumps@ee.doe.gov

Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC, 20585-0121. Telephone: (202) 586-9507. Email:

Elizabeth.Kohl@hq.doe.gov

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule

A. Benefits and Costs to Consumers

B. Impact on Manufacturers

C. National Benefits

II. Introduction

A. Authority

B. Background

C. Relevant Industry Sectors

III. General Discussion

A. Rulemaking Approach

1. Harmonization

2. Regulatory Options

B. Definition of Covered Equipment

C. Scope of the Energy Conservation Standards in This Rulemaking

D. Test Procedure and Metric

1. PER Rating of a Minimally Compliant Pump

E. Compliance Date

F. Technological Feasibility

1. General

2. Maximum Technologically Feasible Levels

G. Energy Savings

1. Determination of Savings

2. Significance of Savings

H. Economic Justification

1. Specific Criteria

a. Economic Impact on Manufacturers and Consumers

b. Savings in Operating Costs Compared To Increase in Price

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 Comments

A. Market and Technology Assessment

1. Equipment Classes

2. Scope of Analysis and Data Availability

a. Radially Split, Multi-Stage, Vertical, In-Line, Diffuser Casing (RSV)

b. Vertical Turbine Submersible (VTS).1800

3. Technology Assessment

a. General Discussion of Technology Options

b. Additional Technology Options

c. Applicability of Technology Options To Reduced Diameter Impellers

d. Elimination of Technology Options Due to Low Energy Savings Potential

B. Screening Analysis

1. Screened Out Technologies

2. Remaining Technologies

C. Engineering Analysis

1. Representative Equipment for Analysis

a. Representative Configuration Selection

b. Baseline Configuration

2. Design Options

3. Available Energy Efficiency Improvements

4. Efficiency Levels Analyzed

a. Maximum Technologically Feasible Levels

5. Manufacturers Production Cost Assessment Methodology

a. Changes in MPC Associated With Hydraulic Redesign

b. Manufacturer Production Cost (MPC) Model

6. Product and Capital Conversion Costs

7. Manufacturer Markup Analysis

a. Industry-Average Markups

b. Individual Manufacturer Markup Structures

c. Industry-Wide Markup Structure

8. MSP-Efficiency Relationship

D. Markups Analysis

E. Energy Use Analysis

1. Duty Point

2. Pump Sizing

3. Operating Hours

4. Load Profiles

5. Equipment Losses

F. Life-Cycle Cost and Payback Period Analysis

1. Approach

2. Life-Cycle Cost Inputs

a. Equipment Prices

b. Installation Costs

c. Annual Energy Use

d. Electricity Prices

e. Maintenance Costs

f. Repair Costs

g. Equipment Lifetime

h. Discount Rates

3. Payback Period

4. Rebuttable-Presumption Payback Period

G. Shipments Analysis

H. National Impact Analysis

1. Approach

a. National Energy Savings

b. Net Present Value

2. Base-Case and Standards-Case Distribution of Efficiencies

I. Consumer Subgroup Analysis

J. Manufacturer Impact Analysis

1. Overview

2. GRIM Analysis

a. GRIM Key Inputs

b. GRIM Scenarios

3. Manufacturer Interviews

a. Alignment With European Union Energy Efficiency Standards

b. Pattern Production and Engineering Constraints

c. Conversion Requirements

d. Exclusion of Specific Pump Types

K. Emissions Analysis

L. Monetizing Carbon Dioxide and Other Emissions Impacts

1. Social Cost of Carbon

a. Monetizing Carbon Dioxide Emissions

2. Valuation of Other Emissions Reductions

M. Utility Impact Analysis

N. Employment Impact Analysis

V. Analytical Results

A. Trial Standard Levels

1. Trial Standard Level Formulation Process and Criteria

2. Trial Standard Level Equations

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Consumers

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 Direct Employment

c. Impacts on Manufacturing Capacity

d. Impacts on Subgroups of Manufacturers

e. Cumulative Regulatory Burden

3. National Impact Analysis

a. Significance of Energy Savings

b. Net Present Value of Consumer Costs and Benefits

c. Indirect Impacts on Employment

4. Impact on Utility or Performance of Equipment

5. Impact of Any Lessening of Competition

6. Need of the Nation To Conserve Energy

7. Other Factors

C. Proposed Standards

1. Benefits and Burdens of Trial Standard Levels Considered for Pumps

2. Summary of Benefits and Costs (Annualized) of the Proposed Standards

VI. Labeling and Certification Requirements

A. Labeling

B. Certification Requirements

1. Certification Report Requirements

2. Definition of Manufacturer

C. Enforcement Provisions

VII. 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

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

VIII. Public Participation

A. Attendance at the Public Meeting

B. Procedure for Submitting Prepared General Statements for Distribution

C. Conduct of the Public Meeting

D. Submission of Comments

E. Issues on Which DOE Seeks Comment

IX. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

The proposed standards for pumps (collectively, “pumps”) set forth in today's rule reflect the consensus of a stakeholder negotiation. A working group was established under the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) in accordance with the Federal Advisory Committee Act (FACA) and the Negotiated Rulemaking Act (NRA). (5 U.S.C. App. 2; 5 U.S.C. 561-570, Pub. L. 104-320.) The purpose of the working group was to discuss and, if possible, reach consensus on proposed standards for pump energy efficiency. On June 19, 2014, the working group successfully reached consensus on proposed energy conservation standards for specific rotodynamic, clean water pumps used in a variety of commercial, industrial, agricultural, and municipal applications. See section II.B for further discussion of the working group, section II.C for the industry sectors covered, and section III.C for a description of the relevant pumps.

DOE's proposed standards, which are consistent with the working group recommendations, are shown in Table I.1 and consist of pump energy index (PEI) values. Under the proposed standards, a pump model would be compliant if its PEI rating is less than or equal to the proposed standard. PEI is defined as the pump efficiency rating (PER) for a given pump model (at full impeller diameter), divided by a calculated minimally compliant PER for the given pump model. PER is defined as a weighted average of the electric input power supplied to the pump over a specified load profile, represented in units of horsepower (hp).

The minimally compliant PER is unique to each pump model and is a function of specific speed (a dimensionless index describing the geometry of the pump) and each pump model's flow at best efficiency point (BEP), as well as a specified C-value. A C-value is the translational component of a three-dimensional polynomial equation that describes the attainable hydraulic efficiency of pumps as a function of flow at BEP, specific speed, and C-value. Thus, when a C-value is used to define an efficiency level, that efficiency level can be considered equally attainable across the full scope of flow and specific speed encompassed by this proposed rule.

A certain percentage of pumps currently on the market will not meet each efficiency level. That percentage can be referred to as the efficiency percentile. For example, if 10% of the

pumps on the market do not meet a specified efficiency level, that efficiency level represents the lower 10th percentile of efficiency. The efficiency percentile is an effective descriptor of the impact of a selected efficiency level (selected C-value) on the current market.

The C-values proposed by DOE in Table I.1 correspond to the lower 25th percentile of efficiency for End Suction Close-Coupled (ESCC), End Suction Frame Mounted/Own Bearings (ESFM), In-line (IL), and Vertical Turbine Submersible (VTS) equipment classes. The C-values for the radially split, multi-stage, vertical, in-line, diffuser casing (RSV) equipment class were targeted to harmonize with the standards recently enacted in the European Union,

as models in the RSV equipment class are known to be global platforms with no differentiation between products sold into the United States and European Union markets.

Section III.D describes the PEI metric in further detail.

Council of the European Union. 2012. Commission Regulation (EU) No 547/2012 of 25 June 2012 implementing Directive 2009/125/EC of the European Parliament and of the Council with regard to ecodesign requirements for water pumps. Official Journal of the European Union. L 165, 26 June 2012, pp. 28-36.

Market research, limited confidential manufacturer data, and direct input from the CIP working group indicate that RSV models sold in the United States market are global platforms with hydraulic designs equivalent to those in the European market.

These proposed standards, if adopted, would apply to all equipment listed in Table I.1 and manufactured in, or imported into, the United States on or after the date four years after the publication of any final rule for this rulemaking.

Table I.1—Proposed Energy Conservation Standards for Pumps

Equipment class *

Proposed

standard level **

(PEI)

Efficiency

percentile

Proposed

C-values

ESCC.1800.CL

1.00

128.47

ESCC.3600.CL

1.00

130.42

ESCC.1800.VL

1.00

128.47

ESCC.3600.VL

1.00

130.42

ESFM.1800.CL

1.00

128.85

ESFM.3600.CL

1.00

130.99

ESFM.1800.VL

1.00

128.85

ESFM.3600.VL

1.00

130.99

IL.1800.CL

1.00

129.30

IL.3600.CL

1.00

133.84

IL.1800.VL

1.00

129.30

IL.3600.VL

1.00

133.84

RSV.1800.CL

1.00

† 0

129.63

RSV.3600.CL

1.00

† 0

133.20

RSV.1800.VL

1.00

† 0

129.63

RSV.3600.VL

1.00

† 0

133.20

VTS.1800.CL

1.00

134.13

VTS.3600.CL

1.00

134.13

VTS.1800.VL

1.00

134.13

VTS.3600.VL

1.00

134.13

* Equipment class designations consist of a combination (in sequential order separated by periods) of: (1) An equipment family (ESCC = end suction close-coupled, ESFM = end suction frame mounted, IL = inline, RSV = radially split, multi-stage, vertical, in-line, diffuser casing, VTS = vertical turbine submersible); (2) a nominal design speed (1800 = 1800 revolutions per minute (rpm), 3600 = 3600 rpm); and (3) an operating mode (CL = constant load, VL = variable load). For example, “ESCC.1800.CL” refers to the “end suction close-coupled, 1,800 rpm, constant load” equipment class. See discussion in chapter 5 of the NOPR technical support document (TSD) for a more detailed explanation of the equipment class terminology.

** A pump model is compliant if its PEI rating is less than or equal to the proposed standard.

† The standard level for RSV was set at a level that harmonized with the current European Union energy conservation standard level. See discussion in section IV.A.2.a for more detail regarding matters related to harmonization.

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the proposed standards on consumers of pumps, as measured by the average life-cycle cost (LCC) savings and the simple payback period (PBP).

The average LCC savings are positive for all equipment classes for which consumers would be impacted by the proposed standards

and the PBP is less than the average lifetime of pumps, which is estimated to range between 11 and 23 years depending on equipment class, with an average of 15 years (see section IV.F.2.g).

The average LCC savings are measured relative to the base-case efficiency distribution, which depicts the market in the compliance year (see section IV.H.2). The simple PBP, which is designed to compare specific pump efficiency levels, is measured relative to the baseline model (see section IV.C.1.b).

DOE also calculates a distribution of LCC savings; the percentage of consumers that would have negative LCC savings (net cost) under the proposed standards is shown in section V.B.1.a.

Table I.2—Impacts of Proposed Energy Conservation Standards on Consumers of Pumps

Equipment class

Average LCC

savings

(2013$)

Simple payback period

(years)

ESCC.1800

$164

2.2

ESCC.3600

1.0

ESFM.1800

173

2.8

ESFM.3600

547

0.8

IL.1800

149

2.8

IL.3600

139

1.9

RSV.1800

N/A

RSV.3600

N/A

VTS.1800

N/A

VTS.3600

7.2

4.2

Notes:

DOE relied on available data for bare pumps with no information on configuration. Therefore, DOE conducted analysis at the level of equipment type and nominal design speed only. DOE is proposing identical standards for both CL and VL equipment classes. Economic results are not presented for RSV classes because the proposed standard is at the baseline. For the VTS.1800 class, which has a small market share, DOE [did not conduct a separate analysis for this class and is instead proposing to adopt the same levels as for the VTS.3600 class.

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 of the manufacturer impacts analysis through the end of the analysis period (2015 to 2049). Using a real discount rate of 11.8 percent,

DOE estimates that INPV for manufacturers of pumps is $121.4 million in 2013$ for the base case. Under the proposed standards, DOE expects that INPV will change by −32.5 percent to 6.9 percent. Industry conversion costs total $78.4 million.

DOE estimated draft financial metrics, including the industry discount rate, based on data from Securities and Exchange Commission (SEC) filings. DOE presented the draft financial metrics to manufacturers in MIA interviews and adjusted those values based on feedback from industry. The complete set of financial metrics and more detail about the methodology can be found in section 12.4.3 of TSD chapter 12.

C. National Benefits

All monetary values in this section are expressed in 2013 dollars and are discounted to 2015.

DOE's analyses indicate that the proposed standards would save a significant amount of energy. The lifetime savings for pumps purchased in the 30-year period that begins in the first full year of compliance

with new standards (2020-2049) amount to 0.28 quadrillion Btu (quads).

This is a savings of one percent relative to the energy use of this equipment in the base case without new standards.

In this case, the compliance date of any final standards is estimated to be very late 2019, so the analysis period begins in 2020.

A quad is equal to 10

British thermal units (Btu).

The cumulative net present value (NPV) of total consumer costs and savings of the proposed standards for pumps ranges from $0.41 billion (at a 7-percent discount rate) to $1.11 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 2020-2049.

In addition, the proposed standards would have significant environmental benefits. The energy savings would result in cumulative emission reductions of 16 million metric tons (Mt)

of carbon dioxide (CO

), 77 thousand tons of methane (CH

), 13 thousand tons of sulfur dioxide (SO

), 25 thousand tons of nitrogen oxides (NO

), 0.23 thousand tons of nitrous oxide (N

O), and 0.04 tons of mercury (Hg).

The cumulative reduction in CO

emissions through 2030 amounts to 2.5 Mt, which is equivalent to the emissions associated with the annual electricity use of 0.36 million homes.

A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO

are presented in short tons.

DOE calculated emissions reductions relative to the

Annual Energy Outlook 2014

(

AEO 2014

) Reference case, which generally represents current legislation and environmental regulations for which implementing regulations were available as of October 31, 2013.

The value of the CO

reductions is calculated using a range of values per metric ton of CO

(otherwise known as the Social Cost of Carbon, or SCC) developed by a recent Federal interagency process.

The derivation of the SCC values is discussed in section IV.L. Using discount rates appropriate for each set of SCC values, DOE estimates the present monetary value of the CO

emissions reduction is between $0.11 billion and $1.6 billion. DOE also estimates the present monetary value of the NO

emissions reduction, is $13 million at a 7-percent discount rate and $30 million at a 3-percent discount rate.

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.

DOE is currently investigating valuation of avoided Hg and SO

emissions.

Table 1.3 summarizes the national economic costs and benefits expected to result from the proposed standards for pumps.

Table I.3—Summary of National Economic Benefits and Costs of Proposed Energy Conservation Standards for Pumps *

Category

Present value

(billion 2013$)

Discount rate

(%)

Benefits

Operating Cost Savings

0.6

1.4

Reduction Monetized Value ($12.0/t case) **

0.1

Reduction Monetized Value ($40.5/t case) **

0.5

Reduction Monetized Value ($62.4/t case) **

0.8

2.5

Reduction Monetized Value ($119/t case) **

1.6

Reduction Monetized Value (at $2,684/ton) **

0.01

0.03

Total Benefits †

1.1

1.9

Costs

Incremental Installed Costs

0.2

0.3

Total Net Benefits

Including Emissions Reduction Monetized Value †

0.9

1.6

* This table presents the costs and benefits associated with pumps shipped in 2020-2049. These results include benefits to consumers accruing after 2049 from equipment purchased in 2020-2049. The results account for the incremental variable and fixed costs incurred by manufacturers from the standard, some of which may be incurred in preparation for the rule.

** The CO

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 incorporate an escalation factor.

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate ($40.5/t case).

The benefits and costs of today's proposed standards, for equipment sold in 2020-2049, 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 meets the new or amended 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 CO

emission reductions.

To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2014, the year used for discounting the NPV of total customer costs and savings. For the benefits, DOE calculated a present value associated with each year's shipments in the year in which the shipments occur (

e.g.,

2020 or 2030), and then discounted the present value from each year to 2015. The calculation uses discount rates of 3 and 7 percent for all costs and benefits except for the value of CO

reductions, for which DOE used case-specific discount rates, as shown in Table I.3. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value.

Although combining the values of operating savings and CO

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, whereas the value of CO

reductions is based on a global value. Second, the assessments of operating cost savings and CO

savings are performed with different methods that use different time frames for analysis. The national operating cost savings is measured for the lifetime of pumps shipped in 2020-2049. 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 the proposed standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO

reduction, for which DOE used a 3-percent discount rate along with the average SCC series that has a value of $40.5/t in 2015, the cost of the standards proposed in today's rule is $16.9 million per year in increased equipment costs, while the benefits are $60 million per year in reduced equipment operating costs, $29 million in CO

reductions, and $1.3 million in reduced NO

emissions. In this case, the net benefit amounts to $73 million per year. Using a 3-percent discount rate for all benefits and costs and the average SCC series that has a value of $40.5/t in 2015, the cost of the standards proposed in today's rule is $17.5 million per year in increased equipment costs, while the benefits are $81 million per year in reduced operating costs, $29 million in CO

reductions, and $1.7 million in reduced NO

emissions. In this case, the net benefit amounts to $94 million per year.

Table I.4—Annualized Benefits and Costs of Proposed Energy Conservation Standards for Pumps

Discount rate

Million 2013$/year

Primary

estimate *

Low net benefits estimate *

High net benefits estimate *

Benefits

Operating Cost Savings

67.

93.

Reduction Monetized Value ($12.0/t case) *

Reduction Monetized Value ($40.5/t case) *

31.

Reduction Monetized Value ($62.4/t case) *

2.5%

46.

Reduction Monetized Value ($119/t case) *

97.

Reduction Monetized Value (at $2,684/ton) **

1.3

1.7

1.3

1.6

1.4.

1.9.

Total Benefits †

7% plus CO

range

69 to 150

63 to 138

78 to 166.

100.

3% plus CO

range

91 to 172

81 to 156

104 to 192.

112

100

126.

Costs

Consumer Incremental Equipment Costs

16.9

17.5

18.6

19.5

17.2.

17.7.

Net Benefits

Total †

7% plus CO

range

53 to 133

44 to 119

61 to 148.

83.

3% plus CO

range

74 to 155

62 to 136

86 to 174.

108.

* This table presents the annualized costs and benefits associated with pumps shipped in 2020-2049. These results include benefits to consumers which accrue after 2049 from the products purchased in 2020-2049. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the

AEO 2014

Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect a constant rate in the Primary Estimate, an increase rate in the Low Benefits Estimate, and a decline rate in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.2.a.

** The CO

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate ($40.5/t case). In the rows labeled “7% plus CO

range” and “3% plus CO

range,” the operating cost and NO

benefits are calculated using the labeled discount rate, and those values are added to the full range of CO

values.

DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that equipment achieving these standard levels is already commercially available for all equipment classes covered by today's proposal. Based on the analyses described above, DOE has tentatively concluded that the benefits of the proposed 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 higher and lower energy efficiency levels as trial standard levels, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of these energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this notice and related information collected and analyzed during the course of this rulemaking, DOE may adopt energy efficiency levels presented in this notice that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part.

II. Introduction

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

A. Authority

Title III of the Energy Policy and Conservation Act of 1975 “EPCA”), Public Law 94-163, codified at 42 U.S.C. 6291

et seq.,

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.” The covered equipment includes pumps, the subject of today's notice. (42 U.S.C. 6311(1)(A).)

There are currently no energy conservation standards for pumps.

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

Pursuant to EPCA, any new or amended energy conservation standard 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, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(a).)

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. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or

estimated annual operating cost of each covered product. (42 U.S.C. 6314.) Manufacturers of covered equipment must use the prescribed DOE test procedure as the basis for certifying to DOE that their equipment comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6314(d).) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA.

Id.

DOE has proposed a test procedure for pumps through a separate rulemaking. Any final test procedures would appear at title 10 of the Code of Federal Regulations (CFR) part 431.

When setting standards for the equipment addressed by today's notice, EPCA prescribes specific statutory criteria for DOE to consider. See generally 42 U.S.C. 6313(a)(6)(A)-(C), 6295(o), and 6316(a). As indicated previously, any new or amended standard for covered equipment must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. Moreover, DOE may not prescribe a standard: (1) For certain equipment, including pumps, if no test procedure has been established for the equipment, or (2) if DOE determines by rule that the proposed standard is not technologically feasible or economically justified. 42 U.S.C. 6295(o); 6316(a). In considering whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. 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 products 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) through (VII) and 6316(a).)

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).)

There is 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, EPCA 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) consume a different kind of energy from that consumed by other covered equipment within such type (or class); or (B) have a capacity or other performance-related feature which other equipment within such type (or class) do 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 the feature and other factors DOE deems appropriate. 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) through (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

DOE does not currently have a test procedure or energy conservation standards for pumps. In considering whether to establish standards for pumps, DOE issued a Request for Information (RFI) on June 13, 2011. (76 FR 34192.) DOE received several comments in response to the RFI. In December 2011, DOE received a letter from the Appliance Standards Awareness Project (ASAP) and the Hydraulic Institute indicating that efficiency advocates (including ASAP, American Council for an Energy-Efficient Economy, Natural Resources Defense Council, and Northwest Energy Efficiency Alliance) and pump manufacturers (as represented by the Hydraulic Institute) had initiated discussions regarding potential energy conservation standards for pumps. (EERE-2011-BT-STD-0031-0011.) In subsequent letters in March and April 2012, and in a meeting with DOE in May 2012, the stakeholders reported on a tentative path forward on energy conservation standards for water pumps, inclusive of the motor and controls, and certification and labeling. (EERE-2011-BT-STD-0031-0010 and -0012.)

On February 1, 2013, DOE published a notice in the

Federal Register

that announced the availability of the “Commercial and Industrial Pumps Energy Conservation Standard Framework Document,” solicited comment on the document, and invited all stakeholders to a public meeting to discuss the document. (78 FR 7304.) The Framework Document described the procedural and analytical approaches that DOE anticipated using to evaluate energy conservation standards for pumps, addressed stakeholder comments related to the RFI, and identified and solicited comment on various issues to be resolved in the rulemaking. (EERE-2011-BT-STD-0031-0013.)

DOE held the framework public meeting on February 20, 2013 and received many comments that helped identify and resolve issues pertaining to pumps relevant to this rulemaking.

These comments are discussed in subsequent sections of this notice.

As noted previously, DOE established a working group to negotiate proposed energy conservation standards for pumps. Specifically, on July 23, 2013, DOE issued a notice of intent to establish a commercial and industrial pumps working group (“CIP Working Group”). (78 FR 44036.) The working group was established under the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) in accordance with the Federal Advisory Committee Act (FACA) and the Negotiated Rulemaking Act (NRA). (5 U.S.C. App. 2; 5 U.S.C. 561-570, Pub. L. 104-320.) The purpose of the working group was to discuss and, if possible, reach consensus on proposed standard levels for the energy efficiency of pumps. The working group was to consist of representatives of parties having a defined stake in the outcome of the proposed standards, and the group would consult as appropriate with a range of experts on technical issues.

DOE received 19 nominations for membership. Ultimately, the working group consisted of 16 members, including 1 member from the ASRAC and 1 DOE representative. (See Table II.1) The working group met in-person during 7 sets of meetings held December 18-19, 2013 and January 30-31, March 4-5, March 26-27, April 29-30, May 28-29, and June 17-19, 2014.

Table II.1—ASRAC Pump Working Group Members and Affiliations

Member

Affiliation

Lucas Adin

U.S. Department of Energy.

Tom Eckman

Northwest Power and Conservation Council (ASRAC Member).

Robert Barbour

TACO, Inc.

Charles Cappelino

ITT Industrial Process.

Greg Case

Pump Design, Development and Diagnostics.

Gary Fernstrom

Pacific Gas & Electric Company, San Diego Gas & Electric Company, Southern California Edison, and Southern California Gas Company.

Mark Handzel

Xylem Corporation.

Albert Huber

Patterson Pump Company.

Joanna Mauer

Appliance Standards Awareness Project.

Doug Potts

American Water.

Charles Powers

Flowserve Corporation, Industrial Pumps.

Howard Richardson

Regal Beloit.

Steve Rosenstock

Edison Electric Institute.

Louis Starr

Northwest Energy Efficiency Alliance.

Greg Towsley

Grundfos USA.

Meg Waltner

Natural Resources Defense Council.

To facilitate the negotiations, DOE provided analytical support and supplied the group with a variety of analyses and presentations, all of which are available in the docket (

www.regulations.gov/#!docketDetail;D=EERE-2013-BT-NOC-0039

). These analyses and presentations, developed with direct input from the working group members, include preliminary versions of many of the analyses discussed in today's NOPR, including a market and technology assessment; screening analysis; engineering analysis; energy use analysis; markups analysis; life cycle cost and payback period analysis; shipments analysis; national impact analysis; and manufacturer impact analysis.

On June 19, 2014, the working group reached consensus on proposed energy conservation standards for specific types of pumps. The working group assembled their recommendations into a term sheet (See EERE-2013-BT-NOC-0039-0092) that was presented to, and approved by the ASRAC on July 7, 2014. DOE considered the approved term sheet, along with other comments received during the rulemaking process, in developing proposed energy conservation standards.

C. Relevant Industry Sectors

The energy conservation standards proposed in this NOPR will primarily affect the pump and pumping equipment manufacturing industry. The North American Industry Classification System (NAICS) classifies this industry under code 333911. DOE identified 86 manufacturers of pumps covered under this proposed rule, with 56 of those being domestic manufacturers. The leading U.S. industry association for the pumps covered under this proposed rule is the Hydraulic Institute (HI).

III. General Discussion

In developing this NOPR, DOE reviewed the recommendations in the term sheet produced by the CIP Working Group, as well as the 13 comments it received in response to the February 2013 Framework Document. Commenters included: Engineered Software, Inc.; Richard Shaw; Grundfos Pumps Corporation; the Hydraulic Institute (HI); Pacific Gas and Electric Company, San Diego Gas and Electric, Southern California Gas Company, and Southern California Edison (the preceding four commenters hereafter referred to collectively as the CA IOUs); National Fire Protection Association (NFPA); Air-Conditioning, Heating, and Refrigeration Institute (AHRI); Colombia Engineering; Earthjustice; Edison Electric Institute (EEI); The Appliance Standards Awareness Project (ASAP), Alliance to Save Energy (ASE), American Council for an Energy Efficient Economy (ACEEE), Earthjustice, and Natural Resources Defense Council (NRDC) (the preceding five commenters hereafter referred to collectively as the Advocates); and the Northwest Energy Efficiency Alliance and the Northwest Power and Conservation Council (hereafter referred to as NEEA/NPCC). DOE addressed all relevant stakeholder comments and requests throughout this NOPR. DOE notes that comments addressed in this NOPR reflect the views of the stakeholders at the close of the framework comment period in May 2013. DOE recognizes that the working group's ASRAC-approved term sheet may represent views that have progressed since the time of the framework comments. As such, when addressing comments, DOE has noted where stakeholder views have changed.

A. Rulemaking Approach

1. Harmonization

In response to the Framework Document, HI and Grundfos recommended that DOE harmonize its efforts with the approach followed by the European Union (EU). (HI, No. 25 at p. 2; Grundfos, No. 24 at p. 2.) HI noted that harmonizing with the EU provides a logical and consistent path forward for U.S. manufacturers who have international operations and who export equipment from the U.S. to markets worldwide.

Id.

Grundfos also suggested that DOE should harmonize with the EU on specific issues, including: (1) nomenclature and definitions, (2) test procedures, and (3) use of the Minimum Efficiency Index (MEI), including the applicable equation and constants. Grundfos also suggested limiting this initial rulemaking to address 1 potential standards for clean water pumps (as opposed to expanding the scope to

include other pump types).

Id.

DOE notes that throughout the course of negotiations, the CIP Working Group members, including HI and Grundfos, made recommendations that in many cases did not completely harmonize with the EU approach. The level of harmonization reflected in this NOPR and the associated test procedure NOPR directly results from these working group recommendations. This is discussed with more specificity in the applicable sections of the preamble.

2. Regulatory Options

In the Framework Document, DOE considered the following options for regulation:

1. Defining and establishing standards for the pump exclusive of the motor (

i.e.,

the bare pump), except possibly for submersible pumps. This option follows the current EU approach for clean water pumps.

2. Defining and establishing standards for the pump inclusive of the motor and controls, if the pump is sold with them. Using this approach, each pump equipment class would be sub-divided into two categories: (1) Without variable-speed drive (VSD) (pump is sold with or without a motor), and (2) with VSD (VSD included only if the pump is sold with a motor).

For the purposes of this rulemaking, “VSD” will be used when discussing speed control of pumps in general. Variable frequency drive (VFD) will be used when specifically discussing continuous control of AC induction motors.

3. Defining and establishing standards for the pump inclusive of the motor, if the pump is sold with a motor, and considering the VSD as a design option to improve the efficiency of pumps sold with motors. Each pump equipment class could be divided into two further categories: (1) without motor (or VSD), and (2) with motor (with or without VSD). (EERE-2011-BT-0031-0013)

DOE also discussed the metrics it was considering for each option, shown in Table III.1.

Table III.1—Tentative Metrics for Pump Regulatory Options as Proposed in Framework Document

Regulatory option

Equipment class set

Metric

1. Bare Pumps

N/A

Pump efficiency at three points.

2. Pumps inclusive of motor and VSD

Pumps Without VSD (with or without motor)

Pumps With VSD

Pump efficiency at three points.

Overall efficiency at three points.

3. Pumps inclusive of motor, with VSD as a design option for all pumps sold with motors

Pumps Without Motor

Pumps With Motor (with or without VSD)

Pump efficiency at three points.

Potentially based on motor/VSD input power at multiple load points.*

* DOE stated that it may also consider the use of pump efficiency as an additional labeling requirement.

In response, commenters recommended various approaches for dealing with pumps inclusive of the motor and/or controls:

• The Advocates, NEEA/NPCC, and the CA IOUs recommended a modified regulatory option 3, in which pumps sold with motors below a certain horsepower (hp) limit might be required to be sold with VSDs. (Advocates, No. 32 at pp. 5-6; NEEA/NPVCC, No. 33 at p. 2; CA IOUs, No. 26 at p. 3.) The CA IOUs did not see the value in having an equipment class just for pump+motor+VSD (as in regulatory option 2). (CA IOUs, No. 26 at p. 3.)

• HI and Grundfos both supported an approach where the pump would be regulated inclusive of the motor and controls, which would, in their view, be likely to achieve significantly greater savings than an approach based only on the bare pump. (Grundfos, No. 24 at p. 1; HI, No. 25 at p. 2.) HI believes that a large majority of systems can benefit from VSDs. (HI, No. 25 at p. 28.) HI and Grundfos agreed that system feedback control is necessary in this approach. (Grundfos, No. 24 at p. 9; HI, No. 25 at p. 27.) Specifically, HI and Grundfos proposed a two-prong approach: that all pumps be required to meet the MEI (Minimum Efficiency Index, based on the metric of pump efficiency), while pumps sold with motors and VSDs would also have another electric input power-based metric as a label or standard. (HI, No. 25 at p. 2; Grundfos, No. 24 at p.10.) The HI and Grundfos (European) approaches are similar but not identical.

• EEI stated that analyzing energy (and setting standards) on the basis of pumps including their motors is the preferred approach, although EEI was not opposed to establishing pump standards based on `pump only' performance characteristics. EEI did not support establishing standards based on pump performance with a VSD controller, as pumps are used in a variety of applications and not all are a good fit with VSDs. EEI also noted that it was unaware of any other DOE rulemaking where an optional, external component has been proposed as part of the test procedure or standard. (EEI, No. 31 at p. 3.)

• AHRI noted that unless DOE develops coverage of all possible combinations of pumps inclusive of the motor and controls, a regulatory regime may inadvertently cover only 10 percent of the possible combinations that are in use. (AHRI, No. 28 at pp.1-2.)

The CIP Working Group ultimately recommended an alternative regulatory option that considers pumps inclusive of motors and controls, but applies essentially the same metric to all pumps, regardless of how they are sold. (EERE-2013-BT-NOC-0039-0092; Recommendations Nos. 1, 9, and 11.) DOE's proposal is consistent with the recommendation of the working group. The details of the proposed regulatory structure are discussed in the remainder of this NOPR.

DOE recognizes that some pumps, particularly in the agricultural sector, may be sold and operated with non-electric drivers, such as engines, steam turbines, or generators. The CIP Working Group recommended that pumps sold with non-electric drivers be rated as a bare pump, excluding the energy performance of the non-electric driver. (Docket No. EERE-2013-BT-NOC-0039, No. 92, Recommendation #3 at p. 2) DOE believes that there is insufficient technical merit or potential for additional energy savings to justify the additional burden associated with rating and certifying pumps sold with non-electric drivers inclusive of those drivers. This is described in more detail in the test procedure NOPR.

B. Definition of Covered Equipment

Although pumps are listed as covered equipment under 42 U.S.C. 6311(1)(A), the term “pump” is not defined in EPCA. In the test procedure NOPR, DOE proposed a definition for “pump” clarify what would constitute the

covered equipment. The definition reflects the consensus reached by the CIP Working Group in its negotiations: “Pump” means equipment designed to moves liquids (which may include entrained gases, free solids, and totally dissolved solids) by physical or mechanical action and includes a bare pump and, if included by the manufacturer at the time of sale, mechanical equipment, driver and controls. In the test procedure NOPR, DOE also proposed definitions for “bare pump,” “mechanical equipment,” “driver,” and “controls,” as recommended by the CIP Working Group.

C. Scope of the Energy Conservation Standards in this Rulemaking

DOE is considering applying a bifurcated approach that would set out the scope of the types of pumps that would be subject to the test procedure and energy conservation standards, along with potential energy conservation standards that would apply to these pumps. The pumps for which DOE is proposing to set energy conservation standards for in this rulemaking are consistent with the CIP Working Group's recommendations as well as the proposals in the test procedure NOPR, and consist of the following categories:

• End suction close coupled,

• End suction frame mounted/own bearings,

• In-line,

• Radially split, multi-stage, vertical, in-line, diffuser casing, and

• Vertical turbine submersible.

DOE proposed definitions for these pumps in the test procedure NOPR.

For the equipment categories included in this rulemaking, DOE proposes to consider energy conservation standards only for clean water pumps. In the test procedure, DOE proposed to define “clean water pump” as a pump that is designed for use in pumping water with a maximum non-absorbent free solid content of 0.25 kilograms per cubic meter, and with a maximum dissolved solid content of 50 kilograms per cubic meter, provided that the total gas content of the water does not exceed the saturation volume, and disregarding any additives necessary to prevent the water from freezing at a minimum of −10 °C.

In the test procedure NOPR, DOE also proposed to define several kinds of pumps that are clean water pumps, as defined, but would not be subject to the proposed test procedure, in accordance with CIP Working Group recommendations. DOE proposes that these pumps would also not be subject to the proposed energy conservation standards:

(a) Fire pumps;

(b) Self-priming pumps;

(d) Sealless pumps;

(e) Pumps designed to be used in a nuclear facility subject to 10 CFR part 50—Domestic Licensing of Production and Utilization Facilities; and

(f) A pump meeting the design and construction requirements set forth in Military Specification MIL-P-17639F, “Pumps, Centrifugal, Miscellaneous Service, Naval Shipboard Use” (as amended).

The test procedure NOPR included further definitions for “fire pump,” “self-priming pump,” “prime-assist pump,” and “sealless pump.”

For pumps meeting the definition of a clean water pump, with certain exceptions as noted above, DOE proposes to set energy conservation standards only for pumps with the following characteristics, which are identical to those for which DOE proposed the test procedure apply and are in accordance with CIP Working Group recommendations:

• 1-200 hp (shaft power at BEP at full impeller diameter for the number of stages required for testing to the standard);

• 25 gallons/minute and greater (at BEP at full impeller diameter);

• 459 feet of head maximum (at BEP at full impeller diameter);

• Design temperature range from −10 to 120 degrees C;

• Pumps designed to operate with either: (

) a 2- or 4-pole induction motor, or (

) a non-induction motor with a speed of rotation operating range that includes speeds of rotation between 2,880 and 4,320 revolutions per minute and/or 1,440 and 2,160 revolutions per minute;

and

The CIP Working Group recommendation specified pumps designed for nominal 3600 or 1800 revolutions per minute (rpm) driver speed. However, it was intended that this would include pumps driven by non-induction motors as well. DOE believes that its clarification accomplishes the same intent while excluding niche pumps sold with non-induction motors that may not be able to be tested according to the proposed test procedure. The test procedure NOPR contains additional details.

• 6 inch or smaller bowl diameter (VTS/HI VS0).

DOE also proposed in the test procedure that all pump models must be rated and certified in a full impeller configuration, as recommended by the CIP Working Group. (See EERE-2013-BT-NOC-0039-0092, Recommendation No. 7.)

DOE proposed a definition for full impeller in its test procedure NOPR.

The CIP Working Group made this recommendation because a given pump may be distributed to a particular customer with its impeller trimmed, and impeller trim has a direct impact on a pump's performance characteristics. For any pump sold with a trimmed impeller, it was recommended that the certification rating for that pump model with a full diameter impeller would apply. This approach would limit the overall burden when measuring the energy efficiency of a given pump. In addition, a rating at full impeller diameter will typically be the most consumptive rating for the pump.

D. Test Procedure and Metric

DOE is currently conducting a rulemaking to establish a uniform test procedure for determining the energy efficiency of pumps, as well as sampling plans for the purposes of demonstrating compliance with any energy conservation standards for this equipment that DOE adopts. In the test procedure NOPR, DOE proposed to prescribe test methods for measuring the efficiency of pumps, inclusive of motors and/or controls, by measuring the produced hydraulic power and measuring or calculating the shaft power and/or electric input power to the motor or controls. Consistent with the recommendations of the CIP Working Group, DOE proposed that these methods be based on Hydraulic Institute (HI) Standard 40.6-2014, “Hydraulic Institute Standard for Method for Rotodynamic Pump Efficiency Testing,” hereinafter referred to as “HI 40.6-2014.” (See EERE-2013-BT-NOC-0039-0092, Recommendation No. 10.) DOE proposed additions to HI 40.6-2014 to account for the energy performance of motors and/or controls, which is not addressed in the scope of HI 40.6-2014.

The test procedure NOPR proposes that the energy conservation standards for pumps be expressed in terms of a constant load PEI (PEI

) for pumps sold without continuous or non-continuous controls (

i.e.,

either bare pumps or pumps sold inclusive of motors but not continuous or non-continuous controls) or a variable load PEI (PEI

) for pumps sold with continuous or non-continuous controls. The PEI

or PEI

, as applicable, describes the weighted average performance of the rated pump, inclusive of any motor and/or controls, at specific load points, normalized with respect to the performance of a “minimally compliant pump” (as defined in section III.D.1) without controls. The metrics are defined as follows:

EP02AP15.000

Where:

• PER

is the equally-weighted average electric input power to the pump measured (or calculated) at the driver input over a specified load profile, as tested in accordance with the DOE test procedure. This metric applies only to pumps in a fixed speed equipment class. For bare pumps, the test procedure would specify the default motor loss values to use in the calculations of driver input.

• PER

is the equally-weighted average electric input power to the pump measured (or calculated) at the controller input over a specified load profile as tested in accordance with the DOE test procedure. This metric applies only to pumps in a variable speed equipment class.

• PER

STD

is the PER rating of a minimally compliant pump (as defined in section III.D.1). It can be described as the allowable weighted average electric input power to the specific pump, as calculated in the test procedure. This metric applies to all equipment classes.

A value of PEI greater than 1.00 would indicate that the pump is less efficient than DOE's energy conservation standard and does not comply, while a value less than 1.00 would indicate that the pump is more efficient than the standard requires.

1. PER Rating of a Minimally Compliant Pump

DOE is considering using a standardized, minimally compliant bare pump, inclusive of a minimally compliant motor, as a reference pump for each combination of flow at BEP and specific speed. The minimally compliant pump would be defined as a function of certain physical properties of the bare pump, such as flow at BEP and specific speed (Ns), as used in the EU MEI approach. In the MEI approach, a single polynomial equation defines a three-dimensional surface over which minimum efficiency varies across a range of both flow and Ns. The EU uses the same equation for all equipment classes, changing only one value—the C-value—to raise or lower the surface along a vertical axis to cut off a certain percentage of pumps, but without adjusting any variables that would change the shape of the efficiency surface. HI and Grundfos supported the EU MEI approach, which eliminates the least efficient pumps by type category. (HI, No. 25 at p. 2; Grundfos, No. 24 at p. 14.) HI added that Ns versus flow rate is the most practical approach to use when predicting efficiency for a particular class of pump types. (HI, No. 25 at p. 37.)

Grundfos recommended use of the EU equation as well as the same C-values used in the EU, which would result in exact harmonization. (Grundfos, No. 24 at p. 14.) However, HI recommended DOE use the EU equation but with an updated C-value. HI added that although a better data fit could be obtained by changing other coefficients, such complexity is not warranted. (HI, No. 25 at pp. 4-5, 32, 40.)

After reviewing stakeholder comments, as well as discussions of the CIP Working Group, DOE is proposing to base its PER rating using the EU's equation, but modifying the C-values as suggested by HI to better reflect the U.S. market. Specifically, DOE proposes to use the same equation used by the EU to develop its standard (

i.e.,

to determine the shape of the efficiency surface), translated to 60 Hz electrical input power and English units

as shown in equation 2, to determine the efficiency of a minimally compliant pump:

The equation to define the minimally compliant pump in the EU is of the same form, but employs different coefficients to reflect the fact that the flow will be reported in m

/hr at 50 Hz and the specific speed will also be reported in metric units. Specific speed is a dimensionless quantity, but has a different magnitude when calculated using metric versus English units.

EP02AP15.004

Where:

Q = flow at BEP in gallons per minute at 60 Hz,

Ns = specific speed at 60 Hz, and

C = an intercept that is set for the surface based on the speed of rotation and equipment category of the pump model.

The C-value is the translational component of the three-dimensional polynomial equation. Adjusting the C-value increases or decreases the pump efficiency of a minimally compliant pump.

The calculated efficiency of the minimally compliant pump is reflective of the pump efficiency at BEP. This value is adjusted to determine the minimally compliant pump efficiency at 75 percent and 110 percent of BEP flow using the scaling values implemented in the EU regulations for clean water pumps. Namely, the efficiency at 75 percent of BEP flow is assumed to be 94.7 percent of that at 100 percent of BEP flow and the pump efficiency at 110 percent of BEP flow is assumed to be 98.5 percent of that at 100 percent of BEP flow, as shown in equation 3:

EP02AP15.001

Where:

= weighting at each rating point (equal weighting—0.3333);

Hydro,i

= the pump power output at rating point i of the tested pump;

pump,STD

= the minimally compliant pump efficiency, as determined in accordance with equation 52;

= the motor losses at each load point i, as determined in accordance with the procedure specified in the DOE test procedure; and

i = 75%, 100%, and 110% of BEP flow, as determined in accordance with the DOE test procedure.

Equation 3 also demonstrates how a ratio of the minimally compliant pump efficiency and the hydraulic output power for the rated pump is used to determine the input power to a minimally compliant pump at each load point. Note that the pump hydraulic output power for the minimally compliant pump is the same as that for the particular pump being evaluated. The calculated shaft input power for the minimally compliant pump at each load point would then be combined with a minimally compliant motor for that default motor construction and horsepower and the default part-load loss curve, described in the proposed DOE test procedure, to determine the input power to the motor at each load point. Under this proposal, the applicable minimum motor efficiency is determined as a function of construction (

i.e.,

open or enclosed), number of poles, and horsepower as specified by DOE's existing energy conservation standards for electric motors at 10 CFR 431.25. PER

STD

is then determined as the weighted average input power to the motor at each load point, as shown in equation 3.

DOE selected several C-values to establish the efficiency levels analyzed in this proposal. Each C-value and efficiency level accounts for pump efficiency at all load points as well as motor losses, and does so equivalently across the full scope of flow and specific speed encompassed by this proposed rule. See section IV.C.4 for a complete examination of the efficiency levels analyzed in this rulemaking.

E. Compliance Date

Consistent with the recommendations of the CIP Working Group, see EERE-2013-BT-NOC-0039-0092, p. 4, Recommendation No. 9, DOE proposes to require that its standards would apply to equipment manufactured beginning on the date four years after the publication date of the final rule. DOE estimates that any final rule would publish in late 2015, resulting in a compliance date for the standards in late 2019. In its analysis, DOE used an analysis period of 2020 through 2049.

F. Technological Feasibility

1. General

EPCA requires that any new or amended energy conservation standard that DOE prescribes 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 energy conservation 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 light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. (10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii) through (iv).) Section IV.B of this NOPR discusses the results of the screening analysis for pumps, particularly the designs DOE considered, those it screened out, and those that are the basis for the trial standard levels (TSLs) in this proposed rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD.

2. Maximum Technologically Feasible Levels

When DOE proposes to adopt 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) and 6316(a).) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for pumps, using the design options that passed the screening analysis.

G. Energy Savings

1. Determination of Savings

EPCA 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) and (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 pumps 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 pumps that are the subject of this rulemaking purchased in the 30-year period that begins in the first full year of compliance with new standards (2020-2049).

The savings are measured over the entire lifetime of pumps purchased in the 30-year analysis period. 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 that currently exists in the marketplace in the absence of mandatory efficiency standards, and it considers market forces and policies that affect demand for more efficient products. To estimate the base case, DOE used data provided

by the CIP Working Group, as discussed in section IV.H.2.

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

DOE used its national impact analysis (NIA) spreadsheet model to estimate energy savings from potential new standards for the equipment that is the subject of this rulemaking. The NIA spreadsheet model (described in section IV.H of this notice) calculates energy savings in site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. To calculate this primary energy savings, DOE derives annual conversion factors from the model used to prepare the Energy Information Administration's (EIA) most recent

Annual Energy Outlook (AEO)

DOE also estimates full-fuel-cycle (FFC) energy savings, as discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 2012). The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (

i.e.,

coal, natural gas, petroleum fuels) and, thus, presents a more complete picture of the impacts of energy efficiency standards. DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered equipment. For more information on FFC energy savings, see section IV.H.1.a.

2. Significance of Savings

As noted above, EPCA prohibits DOE from adopting a standard for a covered product unless such standard would result in “significant” energy savings. (42 U.S.C. 6295(o)(3)(B) and 6316(a).) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals for the District of Columbia Circuit, in

Natural Resources Defense Council

Herrington,

768 F.2d 1355, 1373 (D.C. Cir. 1985), opined that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” The energy savings for today's proposed standards (presented in section V.B.3.a) are nontrivial and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA.

H. 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) and 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 potential new or amended standard on manufacturers, DOE conducts a manufacturer impact analysis (MIA), as discussed in section IV.J. 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 regulation-and a long-term assessment over a 30-year period. 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.

For individual consumers, measures of economic impact include the changes in 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. Savings in Operating Costs Compared to Increase in Price

EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered equipment that are likely to result from 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. The LCC analysis requires a variety of inputs, such as equipment prices, equipment energy consumption, energy prices, maintenance and repair costs, equipment lifetime, and consumer discount rates. 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 new standards.

The LCC savings for the efficiency levels considered in today's NOPR are calculated relative to a base case that reflects projected market trends in the absence of new 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. DOE's LCC and PBP analysis is discussed in further detail in section IV.F.

c. Energy Savings

Although significant conservation of energy is a separate statutory requirement for adopting 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 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 potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(a).) Based on data available to DOE, the standards proposed in today's notice would not reduce the utility or performance of the products under consideration in this rulemaking.

e. Impact of Any Lessening of Competition

EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) and 6316(a).) It also directs the Attorney General to determine the impact, if any, of any

lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary 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)(ii) and 6316(a).) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. DOE will respond to the Attorney General's determination in the final rule.

f. Need for National Energy Conservation

DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a).) The energy savings from new or amended 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, as discussed in section IV.M.

New or amended 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 the proposed standards, and from each TSL it considered, in section V.B.6 of this notice. DOE also reports estimates of the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L.

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 the proposed standard, DOE has also considered the term sheet of recommendations voted on by the CIP Working Group and approved by the ASRAC. (See EERE-2013-BT-NOC-0039-0092.) DOE has weighed the value of such negotiation in establishing the standards proposed in today's rule. DOE has encouraged the negotiation of proposed standard levels, in accordance with the FACA and the NRA, as a means for interested parties, representing diverse points of view, to analyze and recommend energy conservation standards to DOE. Such negotiations may often expedite the rulemaking process. In addition, standard levels recommended through a negotiation may increase the likelihood for regulatory compliance, while decreasing the risk of litigation.

2. Rebuttable Presumption

EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product 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. (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a).) DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the three-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) and 6316(a). 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 V.B.1.c of this proposed rule.

IV. Methodology and Discussion of Comments

DOE used four analytical tools to estimate the impact of today's proposed standards. The first tool is a spreadsheet that calculates LCC and PBP of potential new energy conservation standards. The second tool is a spreadsheet that provides shipments forecasts calculates national energy savings and net present value resulting from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (GRIM), to assess manufacturer impacts. Additionally, DOE used output from the latest version of EIA's National Energy Modeling System (NEMS) for the emissions and utility impact analyses. NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector. EIA uses NEMS to prepare its

Annual Energy Outlook (AEO),

a widely known energy forecast for the United States.

A. Market and Technology Assessment

When beginning an energy conservation standards rulemaking, 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 (

e.g.,

manufacturer specification sheets, industry publications) and data submitted by manufacturers, trade associations, and other stakeholders. The subjects addressed in the market and technology assessment for this rulemaking include: (1) Quantities and types of equipment sold and offered for sale; (2) retail market trends; (3) equipment covered by the rulemaking; (4) equipment classes; (5) manufacturers; (6) regulatory requirements and non-regulatory programs (such as rebate programs and tax credits); and (7) technologies that could improve the energy efficiency of the equipment under examination. DOE researched manufacturers of pumps and made a particular effort to identify and characterize small business manufacturers in this sector. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment.

1. Equipment Classes

When evaluating and establishing energy conservation standards, DOE divides covered equipment into equipment classes by the type of energy used or by capacity or other performance-related features that would justify a different standard from that which would apply to other equipment classes. DOE proposes dividing pumps into equipment classes based on the following three factors:

1. Basic pump equipment type,

2. Configuration, and

3. Nominal design speed.

DOE notes that some clean water pumps are sold for use with engines or turbines rather than electric motors, and as such, would use a different fuel type (

i.e.,

fossil fuels rather than electricity). However, because of the small market share of clean water pumps using these fuel types, in the test procedure NOPR, DOE proposed that any pump sold with, or for use with, a driver other than an electric motor would be rated as a bare pump.

Therefore, DOE did not

disaggregate equipment classes by fuel type.

Such a rating would include the hydraulic efficiency of the bare pump as well as the efficiency

of a minimally-compliant electric motor, as described in section III.D.1.

As discussed in section III.C, the five pump equipment types considered in this rulemaking, each of which DOE proposes would form the basis for an individual equipment class, include:

• End suction close coupled (ESCC);

• End suction frame mounted/own bearings (ESFM);

• In-line (IL);

• Radially split, multi-stage, vertical, in-line, diffuser casing (RSV); and

• Vertical turbine submersible (VTS).

A pump's configuration is defined by the equipment with which it is sold. Pumps sold inclusive of motors and continuous or non-continuous controls (as defined in the test procedure NOPR), capable of operation at multiple driver shaft speeds are defined as variable load (VL); pumps sold as bare pumps or with motors without such controls, capable only of operation at a fixed shaft speed, are defined as constant load (CL).

In the Framework Document, DOE explored identifying specific equipment types that would always be used in a variable load application. In response, HI and Grundfos reported that application, rather than pump type or equipment class, controls whether the pump can be used in a variable load application. (Grundfos, No. 24 at p. 21; HI, No. 25 at p. 37).) The proposal is based on the assumption that a pump sold with speed controls is intended for a variable load application.

In the Framework Document, DOE requested comment on the use of pump design speed as a feature that distinguishes equipment classes as well as the burden associated with testing under multiple speeds. HI reported that often a manufacturer will need to make modifications to pumps that will be run at higher speed to allow for greater bearing loads. These may include changing the bearing frame size or modifying the axial thrust balancing device, which will impact pump efficiency. These potential modifications will vary by equipment class. (HI, No. 25 at p. 37-38.) Grundfos also added that speed is considered during the design of the pump, specifically as it relates to the design of the shaft and bearings. (Grundfos, No.24 at p. 23.) HI noted that pumps designed for different speeds are normally tested over the range of speeds for which the pumps will be offered for sale. A pump manufacturer offering the same pump at different speeds will have to account for any speed-related effects on efficiency and determine if the pump is compliant with the required MEI level at all offered speeds. (HI, No.25 at p. 38.) Both HI and Grundfos recommended harmonizing equipment classes with the EU, which regulates pumps designed for two- and four-pole nominal driver speeds separately, but at 60 Hz frequency. (Grundfos, No. 24 at p. 22; HI, No. 25 at p. 38.)

The CIP Working Group also recommended separate energy efficiency standards for equipment types at the nominal speeds for two- and four-pole motors. (See EERE-2013-BT-NOC-0039-0092, p. 4, Recommendation No. 9.) In its analysis, DOE found that across the market, pumps at each nominal speed demonstrate distinctly different performance. To account for this variability, DOE proposes that for both constant load and variable load pumps, the equipment classes should also be differentiated on the basis of nominal design speed. Within the scope of this proposed rule, pumps may be defined as being designed for either 3,600 or 1,800 rpm nominal driver speeds. Pumps defined as having a 3,600 rpm nominal driver speed are designed to operate with a 2-pole induction motor or with a non-induction motor with a speed of rotation operating range that includes speeds of rotation between 2,880 and 4,320 rpm. Pumps defined as having an 1,800 rpm nominal driver speed are designed to operate with a 4-pole induction motor or with a non-induction motor with a speed of rotation operating range that includes speeds of rotation between 1,440 and 2,160 rpm. Throughout this document, a 3,600 rpm nominal speed is abbreviated as 3600, and a 1,800 rpm nominal speed is abbreviated as 1800.

Taking into account the basic pump equipment type, nominal design speed, and configuration, DOE proposes the following twenty equipment classes for the types of pumps to be addressed by this rulemaking:

• ESCC.1800.CL;

• ESCC.3600.CL;

• ESCC.1800.VL;

• ESCC.3600.VL;

• ESFM.1800.CL;

• ESFM.3600.CL;

• ESFM.1800.VL;

• ESFM.3600.VL;

• IL.1800.CL;

• IL.3600.CL;

• IL.1800.VL;

• IL.3600.VL;

• RSV.1800.CL;

• RSV.3600.CL;

• RSV.1800.VL;

• RSV.3600.VL;

• VTS.1800.CL;

• VTS.3600.CL;

• VTS.1800.VL; and

• VTS.3600.VL.

Chapter 3 of the NOPR TSD provides further detail on the definition of equipment classes.

As noted in section III.D, as proposed in the test procedure NOPR, CL equipment classes would be rated with the PEI

metric, and VL equipment classes would be rated with the PEI

metric. For today's NOPR, however, DOE relied on available data for bare pumps. Therefore, DOE's analysis is based on equipment type and nominal design speed only—reported results do not use a “.CL” or “.VL” designation. DOE is proposing identical standards for both CL and VL equipment classes.

2. Scope of Analysis and Data Availability

DOE collected data to conduct all NOPR analyses for the following equipment classes directly:

• ESCC.1800;

• ESCC.3600;

• ESFM.1800;

• ESFM.3600;

• IL.1800;

• IL.3600; and

• VTS.3600.

The following subsections summarize DOE's approach for the remaining equipment classes:

• RSV.1800;

• RSV.3600; and

• VTS.1800.

a. Radially Split, Multi-Stage, Vertical, In-Line, Diffuser Casing (RSV)

DOE used available information to identify baseline and the maximum technologically feasible (“max-tech”) efficiency levels for this class. Specifically DOE's contractors used market research and confidential manufacturer information to establish a database of RSV models. The DOE contractor database represented models offered for sale in the United States by three major manufacturers of RSV pumps. DOE reviewed the efficiency data for these RSV pumps and found no models to be less efficient than the European Union's MEI 40 standard level, which took effect on January 1, 2015

. Details of this analysis are presented in Chapter 5 of the TSD. This analysis, in conjunction with confidential discussions with manufacturers led DOE to conclude that RSV models sold in the United States market are global platforms with hydraulic designs equivalent to those in the European market. As such, DOE presented this conclusion to the CIP Working Group for consideration, where it was supported and reaffirmed on numerous occasions (See,

e.g.

EERE-

2013-BT-NOC-0039-0109 at pp. 91-97, EERE-2013-BT-NOC-0039-0105 at pp. 293-300, EERE-2013-BT-NOC-0039-0106 at pp. 38-40, 62-67, 88-95; EERE-2013-BT-NOC-0039-0108 at pp. 119.)

As a result of the conclusion that RSV models sold in the United States market are global platforms with hydraulic designs equivalent to those in the European market, DOE proposes to set the baseline and max-tech levels equal to those established in Europe. Specifically, the baseline would be the European minimum efficiency standard,

and the max-tech level would be the European level referred to as “the indicative benchmark for the best available technology.”

Note that this NOPR and the European Union regulation use different metrics to represent efficiency. DOE used available data to establish harmonized baseline and max-tech efficiency levels using the DOE metric.

Although DOE was able to establish a baseline and max-tech level using aspects of what has already been adopted for the European market, DOE was unable to develop a cost-efficiency relationship or additional efficiency levels for RSV, due to lack of available cost data for this equipment. As a result, DOE has proposed a standard level for RSV that is equivalent to the baseline, consistent with the recommendation of the CIP Working Group. (See EERE-2013-BT-NOC-0039-0092, p. 4, Recommendation No. 9.) Based on the data available and recommendation of the CIP Working Group, DOE concludes that this standard level is representative of the typical minimum efficiency configuration sold in this equipment class, and no significant impact is expected for either the consumers or manufacturers.

Chapter 5 of the NOPR TSD provides complete details on RSV data availability and the development of the baseline efficiency level.

DOE seeks comment on its assumption that all RSV models sold in the United States are based on a global platform. This is identified as Issue 1 in section VIII.E, “Issues on Which DOE Seeks Comment.”

b. Vertical Turbine Submersible (VTS).1800

Market research, confidential manufacturer data, and direct input from the CIP Working Group indicate that the 4-pole electric motor-driven submersible vertical turbine (VTS.1800) is a very uncommon pump configuration in the marketplace. Existing models are hydraulically identical to the 2-pole-based model, with the only differences being in the type of motor used. This means that every 4-pole-based model is constructed from a bare pump that was originally designed for use with a 2-pole motor. Total shipments for this equipment class are estimated to be less than 1 percent of the VTS.3600 equipment class. On the recommendation of the CIP Working Group (See EERE-2013-BT-NOC-0039-0105 at pp. 300-308; EERE-2013-BT-NOC-0039-0106 at pp. 38-40, 62-67, 88-95), DOE proposes efficiency levels for VTS.1800 equal to that of the VTS.3600 equipment class. Chapter 5 of NOPR TSD provides complete details on the development of the VTS.1800 efficiency levels.

DOE seeks comment on whether any pump models would meet the proposed standard at a nominal speed of 3600 but fail at a nominal speed of 1800 if the same C-values were used for each equipment class. This issue is identified as Issue 2 in section VIII.E, “Issues on Which DOE Seeks Comment.”

3. Technology Assessment

In the Framework Document, DOE listed the following technologies that can improve pump efficiency:

• Improved hydraulic design;

• Improved surface finish on wetted components;

• Reduced running clearances;

• Reduced mechanical friction in seals;

• Reduction of other volumetric losses;

• Addition of a variable speed drive (VSD);

• Improvement of VSD efficiency; and

• Reduced VSD standby and off mode power usage.

Chapter 3 of the NOPR TSD details each of these technology options. DOE solicited and received numerous stakeholder comments regarding these options in the Framework Document. The following sections summarize the stakeholder comments.

a. General Discussion of Technology Options

In the Framework Document, DOE requested comment on the applicability of the technology options presented and the accuracy of the potential efficiency gains listed. HI agreed that the presented technology options are applicable to the types of pumps being discussed, but it emphasized that DOE's estimates of potential efficiency gains are representative of the differences between the very worst and very best in class pump designs. HI also stated that the estimated efficiency gains listed by DOE in the Framework document are likely to be larger than the gains that would be realized for pumps that would be subject to an efficiency standard. (HI, Framework Public Meeting Transcript at pp. 297-298; HI, No. 25 at p. 9; HI, No. 25 at p. 39.)

Grundfos also commented on the applicability of the technology options. They suggested that certain design options are interrelated, noting that optimizing components such as the impeller (

i.e.,

the primary rotating component of a centrifugal pump) and volute (

i.e.,

the primary static component of a centrifugal pump) can reduce volumetric losses and improve efficiency. (Grundfos, No. 24 at p. 25.) Grundfos suggested that using combinations of options, such as hydraulic redesign, reduced running clearance, and reduced volumetric losses, may all be incorporated into the design of the pump to optimize the desired characteristics. (

Id.

)

DOE has incorporated both of these suggestions into its market and technology, screening, and engineering analyses.

b. Additional Technology Options

The CA IOUs recommended that DOE evaluate technology options that facilitate maintenance or improve average performance over a pump's lifetime. These include wear rings, flange taps, and compression sleeves. (CA IOUs, No. 26 at pp. 3, 4.) DOE evaluated all available technology options related to pump performance and efficiency, as defined by the proposed PEI metric and test procedure. While the technology options proposed by the CA IOUs may improve maintainability and average performance over a pump's lifetime, they were not found to have a significant impact on pump efficiency (as defined by the test procedure) as stand-alone technology options and, thus, were not considered in the analysis.

c. Applicability of Technology Options to Reduced Diameter Impellers

In the Framework Document, DOE also solicited comments on how the technology options might impact pumps with reduced diameter impellers. In response, HI observed that pursuing efficiency improvements specific to only trimmed impellers would prove costly and result in only minor efficiency gains. (HI, No. 25 at p. 39.) Grundfos noted that modifications in the pump design to achieve improved

performance are not specific to the impeller trim, but to the design of all components as a whole. (Grundfos, No. 24 at p. 26.)

DOE is proposing to set energy conservation standards for pump efficiency based on the pump's full impeller diameter characteristics, which would require testing the pump at its full impeller diameter. As such, DOE's analyses of technology options have been made with respect to the full diameter model. In proposing to set standards only on the full diameter, DOE considered that improvements made to the full diameter pumps will also improve the efficiency for all trimmed or reduced diameter variants.

d. Elimination of Technology Options Due to Low Energy Savings Potential.

DOE eliminated some technologies that were determined to provide little or no potential for efficiency improvement for one of the following additional reasons: (a) The technology does not significantly improve efficiency; (b) the technology is not applicable to the equipment being considered for coverage or does not significantly improve efficiency across the entire scope of each equipment class; and (c) efficiency improvements from the technology degrade quickly.

DOE found that most of the technology options identified in the Framework Document have limited potential to improve the efficiency of pumps. In addition, DOE found that several of the options also do not pass the screening criteria listed in section III.B. DOE discusses the elimination of all of these technologies in section III.B.

B. Screening Analysis

DOE generally uses four screening factors to determine which technology options are suitable for further consideration in a standards rulemaking. If a technology option fails to meet any one of the factors, it is removed from consideration. The factors for screening design options include:

(1) Technological feasibility. Technologies incorporated in commercial products or in working prototypes will be considered technologically feasible.

(2) Practicability to manufacture, install and service. If mass production of a technology in commercial products 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 that technology will be considered practicable to manufacture, install and service.

(3) Adverse impacts on product utility or product availability.

(4) Adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, sections (4)(a)(4) and (5)(b).

1. Screened Out Technologies

Improved Surface Finish on Wetted Components

Grundfos suggested that smoothing the surface finish of pump components is a time consuming manual activity that should not be considered to be a practical manufacturing process. (Grundfos, No. 24 at pp. 25-26.) Additionally, HI responded to DOE's initial estimates of available efficiency improvement by noting that its experience has shown that smoothing and surface finish have very little effect at higher specific speeds and for the range of pumps that are commonly in service. (HI, No. 25 at p. 39.) HI, Grundfos, and ACEEE all suggested that gains in efficiency from improved surface finish and smoothing are non-persistent, with the surface finish quickly being degraded in most applications. (HI, No.25 at pp. 9, 39; Grundfos, No. 24 at p. 25; ACEEE, Framework Public Meeting Transcript at p. 299.) Based on these comments, the agreement of the CIP Working Group (EERE-2013-BT-NOC-0039-0109 at pp. 91-97 pp. 46-50), and the information obtained from manufacturer interviews, DOE observed that, at this time, manual smoothing poses a number of significant drawbacks—(1) the process is manually-intensive, which makes it impractical to implement in a production environment, (2) the efficiency improvements from this process degrade over a short period of time, and (3) the relative magnitude of efficiency improvements are small (

e.g.,

approximately 20:1 for a baseline pump with a specific speed of 2,500 RPMs) when compared to other options, such as hydraulic redesign. Consequently, after considering these limitations and the relative benefits that might be possible from including this particular option, DOE concluded that manual smoothing operations would not be likely to significantly improve the energy efficiency across the entire scope of each equipment class DOE is currently examining. Consequently, DOE screened this technology option out. Chapters 3 and 4 of NOPR TSD provide further details on the justification for screening out this technology.

In addition to smoothing operations, DOE also evaluated two additional methods for improving surface finish; (1) surface coating or plating, and (2) improved casting techniques. In addition to being unable to significantly improve efficiency across the entire scope of each equipment class, surface coatings and platings were also screened out due to reliability and durability concerns, and improved casting techniques were screened out because the efficiency improvements from the technology degrade quickly. Chapters 3 and 4 of NOPR TSD provide further details on these methods for surface finish improvement, and justification for screening out.

Reduced Running Clearances

Grundfos stated that reducing running clearances is a method used by most manufacturers in the design of the individual components with the use of wear rings. (Grundfos, No. 24 at p.25.) HI suggested that the reduction in running clearances may improve efficiency in some applications, depending on specific speed, but it noted that reduced running clearances may also lead to mechanical reliability problems leading to the added expense of larger (stiffer) shafts, larger bearings, and advanced or more costly wear ring materials. (HI, No. 25 at p. 39.) HI and ACEEE also suggest that the efficiency improvements from tightened running clearances degrade quickly. (HI, Framework Public Meeting Transcript at p. 329; ACEEE, Framework Public Meeting Transcript at p. 299.)

Manufacturer interview responses indicate that clearances are currently set as tight as possible, given the limitations of current wear ring materials, machining tolerances, and pump assembly practices. To tighten clearance any further without causing operational contact between rotating and static components would require larger (stiffer) shafts, and larger (stiffer) bearings. Without these stiffer components, operational contact will lead to accelerated pump wear and loosened clearances. Loosened clearances cause the initial efficiency improvements to quickly degrade. Alternatively, the use of larger components to improve the stiffness to appropriate levels results in increased mechanical losses. These losses negate the potential improvements gained from reduced clearances. Consequently, DOE proposes to eliminate this technology option because of the reliability concerns highlighted by HI and the concerns of quickly degrading efficiency improvements highlighted by HI and ACEEE. For additional details on the screening of reduced running clearances, see chapter 4 of the NOPR TSD.

Reduced Mechanical Friction in Seals

DOE evaluated mechanical seal technologies that offered reduced friction when compared to commonly used alternatives. DOE concluded from this evaluation that the reduction in friction resulting from improved mechanical seals would be too small to significantly improve efficiency across the entire scope of each equipment class. For additional details, see chapters 3 and 4 of the NOPR TSD.

Reduction of Other Volumetric Losses

The most common causes of volumetric losses (other than previously discussed technology options) are thrust balance holes. (Thrust balance holes are holes located in the face of an impeller that act to balance the axial loads on the impeller shaft and thus reduce wear on rub surfaces and bearings). DOE found that removal of thrust balance holes from existing impellers will reduce pump reliability. DOE notes that manufacturers may be able to decrease volumetric losses by reducing the number and/or diameter of thrust balance holes as a part of a full hydraulic redesign. For additional details, see chapters 3 and 4 of the NOPR TSD.

Addition of a Variable Speed Drive (VSD)

Grundfos suggested that variable speed drives are a proven method to optimize pump operation and reduce energy consumption. (Grundfos, No. 24 at p. 25.) DOE agrees that variable speed drives are a proven method to optimize pump operation, but only for certain pump applications for which standards are being considered. DOE's analysis has shown that there are many applications for these types of pumps that will not benefit from a VSD. For common applications, such as systems that have unvarying flow and head requirements (constant load), on/off operation, or high percentages of static head,

VFDs may not save energy and may even increase energy consumption when factoring in the efficiency of the VFD unit. EEI reported that technologies that reduce power factor below 85 percent should be screened out because of deleterious impacts on the electric grid but that most VSDs will not reduce power factors to levels that would create extra costs for consumers. (EEI, No. 31 at p. 4.)

Static head is the component of total dynamic head that results from the fluid being lifted a certain height above the pump. Unlike dynamic head, static head requirements stay constant across the system curve, even at zero flow.

Because there are many application types and load profiles that would not benefit from a VSD, and many applications for which energy use would increase with a VSD, DOE has eliminated the use of VSDs from the list of technology options. For additional details, see chapters 3 and 4 of the NOPR TSD.

Improvement of VSD Efficiency

Grundfos stated that proper selection, operation and integration of a VSD with a pump and motor are more important than improving the efficiency of the VSD alone. (Grundfos, No. 24 at p. 25.) Because DOE has eliminated the use of VSDs as a technology option, improvement of VSD efficiency will also not be considered as technology option. For additional details, see chapters 3 and 4 of the NOPR TSD.

Reduced VSD Standby and Off Mode Power Usage

Grundfos stated that reducing VSD standby and off mode power usage has a minor impact on energy efficiency, but can add to the efficiency of the control strategy. (Grundfos, No. 24 at p. 25.) Available information supports Grundfos' characterization of the relative benefits of improved VSD efficiency and reduced standby and off mode power usage. Although improving VSD efficiency and standby/off mode power may help improve overall pump efficiency, DOE has concluded that not all pumps for which DOE is considering standards in this rule would benefit from the use of a VSD. In addition, VSD standby and off model power usage would not impact the PEI rating of equipment as tested under the DOE test procedure. As such, DOE is not considering improved VSD efficiency and reduced standby and off mode power usage as design options in the engineering analysis. For additional details, see chapter 4 of the NOPR TSD.

2. Remaining Technologies

DOE found that only improved hydraulic design met all four screening criteria to be examined further in DOE's analysis. HI commented that hydraulic redesign will be the most prominent method used to improve efficiency because many of the easy to implement efficiency gains, such as tighter clearances, have already been explored by manufacturers. (HI, Framework Public Meeting Transcript at p. 328.) The results of DOE's screening analysis support HI's comment.

Improved hydraulic design is technologically feasible, as there is equipment on the market that has utilized this technology option. DOE also finds that improved hydraulic design meets the other screening criteria (

i.e.,

practicable to manufacture, install, and service and no adverse impacts on consumer utility, product availability, health, or safety). As such, DOE considered hydraulic redesign as a design option in the engineering analysis. For additional details, see chapter 4 of the NOPR TSD.

C. Engineering Analysis

The engineering analysis determines the manufacturing costs of achieving increased efficiency or decreased energy consumption. DOE historically has used the following three methodologies to generate the manufacturing costs needed for its engineering analyses: (1) The design-option approach, which provides the incremental costs of adding to a baseline model design options that will improve its efficiency; (2) the efficiency-level approach, which provides the relative costs of achieving increases in energy efficiency levels, without regard to the particular design options used to achieve such increases; and (3) the cost-assessment (or reverse engineering) approach, which provides “bottom-up” manufacturing cost assessments for achieving various levels of increased efficiency, based on detailed data as to costs for parts and material, labor, shipping/packaging, and investment for models that operate at particular efficiency levels.

DOE conducted the engineering analyses for this rulemaking using a design-option approach. The decision to use this approach was made due to several factors, including the wide variety of equipment analyzed, the lack of numerous levels of equipment efficiency currently available in the market, and the limited design options available for the equipment. More specifically, for the hydraulic redesign option, DOE used industry research to determine changes in manufacturing costs and energy efficiency. DOE directly analyzed costs for the equipment classes listed in section IV.A.2. Consistent with HI's recommendation (HI, Framework Public Meeting Transcript at p. 329) and available data, DOE concluded that it was infeasible to determine the upfront costs (engineering time, tooling, new patterns, qualification, etc.) associated with hydraulic redesign via reverse engineering.

The following sections briefly discuss the methodology used in the engineering analysis. Complete details of the engineering analysis are available in chapter 5 of the NOPR TSD.

1. Representative Equipment for Analysis

a. Representative Configuration Selection

For the engineering analysis, DOE directly analyzed the cost-efficiency relationship for all equipment classes specified in in section IV.A.1, over the full range of sizes, for all pumps falling within the proposed scope. Within the engineering analysis, “size” is defined by a pump's flow at BEP and specific speed. Analyzing over the full size range allowed DOE to use representative configurations for each equipment class, rather than an approach that analyzes a representative unit from each class. A representative unit has a defined size and defined features, while a representative configuration defines only the features of the pump, allowing the cost-efficiency analysis to consider a large range of data points that occur over the full range of sizes. This method addresses the concerns of both EEI and HI that the equipment classes considered by DOE encompass too much variation to effectively be characterized by one representative unit. (EEI, Framework Public Meeting Transcript at pp. 275-276; HI, Framework Public Meeting Transcript at p. 286.)

In selecting representative configurations, DOE researched the offerings of major manufacturers to select configurations generally representative of the typical offerings produced within each equipment class. Configurations and features were based on high-shipment-volume designs prevalent in the market. The key features that define each representative configuration include impeller material, impeller production method, volute/casing material, volute/casing production method, and seal type.

For the ESCC, ESFM, and IL equipment classes, the representative configuration was defined as a pump fitted with a cast bronze impeller; cast-iron volute; and mechanical seal. For the RSV and VTS equipment classes, the representative configuration was defined as a pump fitted with sheet metal-based fabricated stainless-steel impeller(s), and sheet metal-based fabricated stainless-steel casing and internal static components. Chapter 5 of the TSD provides further detail on representative configurations.

b. Baseline Configuration

The baseline configuration defines the lowest efficiency equipment in each analyzed equipment class. This configuration represents equipment that utilizes the lowest efficiency technologies present in the market. Because DOE directly analyzed the cost-efficiency relationship over the full range of sizes, DOE defined a baseline configuration applicable across all sizes, rather than a more specific baseline model. This baseline configuration ultimately defines the energy consumption and associated cost for the lowest efficiency equipment analyzed in each class.

DOE established baseline configurations by reviewing available manufacturer performance and sales data for equipment manufactured at the time of the analysis. Chapter 5 of the NOPR TSD sets forth the process that DOE used to select the baseline configuration for each equipment class and discusses the baseline in greater detail.

2. Design Options

After conducting the screening analysis and removing from consideration technologies that did not warrant inclusion on technical grounds, DOE considered hydraulic redesign as a design option in the NOPR engineering analysis.

3. Available Energy Efficiency Improvements

For each equipment class, DOE assessed the available energy efficiency improvements resulting from a hydraulic redesign. This assessment was informed by manufacturer performance and cost data, confidential manufacturer interview responses, general industry research, and stakeholder input gathered at the CIP Working Group public meetings. DOE concluded that a hydraulic redesign is capable of improving the efficiency of a pump up to and including the max-tech level (discussed in section IV.C.4.a). The efficiency gains that a manufacturer realizes from a hydraulic redesign are expected to be commensurate with the level of effort and capital a manufacturer invests in redesign. Section IV.C.7 discusses the relationship between efficiency gains and conversion cost in more detail.

4. Efficiency Levels Analyzed

In assessing the cost associated with hydraulic redesign, and carrying through to all downstream analyses, DOE analyzed several efficiency levels. Each level consists of a specific C-value, as shown in Table IV.1. (See section III.D.1 for more information about C-values and the related equations.)

Table IV.1—Efficiency Levels Analyzed With Corresponding C-Values

Equipment class

EL0

Baseline

EL1

10th Efficiency percentile

EL 2

25th Efficiency percentile

EL 3

40th Efficiency percentile

EL 4

55th Efficiency percentile

EL 5

70th Efficiency percentile/max tech

ESCC.1800

134.43

131.63

128.47

126.67

125.07

123.71

ESCC.3600

135.94

134.60

130.42

128.92

127.35

125.29

ESFM.1800

134.99

132.95

128.85

127.04

125.12

123.71

ESFM.3600

136.59

134.98

130.99

129.26

127.77

126.07

IL.1800

135.92

133.95

129.30

127.30

126.00

124.45

IL.3600

141.01

138.86

133.84

131.04

129.38

127.35

RSV.1800 *

129.63

N/A

124.73

RSV.3600 *

133.20

N/A

129.10

VTS.1800

137.62

135.93

134.13

130.83

128.92

127.29

VTS.3600

137.62

135.93

134.13

130.83

128.92

127.29

* For RSV equipment, DOE established only baseline and max-tech efficiency levels due to limited data availability.

a. Maximum Technologically Feasible Levels

Efficiency level five (EL5), as shown in Table IV.1, represents the maximum technologically feasible (“max-tech”) efficiency level for the ESCC, ESFM, IL, and VTS equipment classes. EL1 represents max-tech for the RSV equipment classes. To set the max-tech level for the applicable equipment classes, DOE performed an analysis to determine the maximum improvement in energy efficiency that is technologically feasible for each equipment class.

DOE considers technologies to be technologically feasible if they are incorporated in any currently available equipment or working prototypes. A max-tech level results from the combination of design options predicted to result in the highest efficiency level possible for an equipment class.

In the case of pumps, DOE determined, based on available information and consistent with the conclusions of the CIP Working Group, that pumps are a mature technology, with all available design options already existing in the marketplace.

Therefore, DOE assumed in its analysis that the max-tech efficiency level coincides with the maximum available efficiency already offered in the marketplace. As a result, DOE performed a market-based analysis to determine max-tech/max-available levels. The analysis resulted in the 70th efficiency percentile being consider max-tech for each equipment class. A preliminary version of this analysis was provided to the CIP Working Group during the April 29-30, 2014 meetings. (EERE-2013-BT-NOC-0039-0051, pp. 17-32) This analysis proposed the 70th efficiency percentile as the max-tech level and solicited feedback on alternative opinions. Ultimately no alternative feedback on max-tech was received, and the CIP Working Group implicitly agreed with DOE's proposal, and incorporated the 70th efficiency percentile as the highest TSL level evaluated. Chapter 5 of NOPR TSD provides complete details on DOE's market-based max-tech analysis and results.

See EERE-2013-BT-NOC-0039-0072, pp.103-105.

DOE's market-based approach directly addresses Grundfos' concerns (in response to the Framework Document) that it is difficult to accurately predict maximum efficiency levels using theoretical models. (Grundfos, No. 24 at p. 28).

In response to the CA IOUs concerns that manufacturers might not be currently making the most efficient pumps possible in all segments of the market. See CA IOUs, Framework Public Meeting Transcript at p. 331, DOE notes that the maximum available efficiency level was determined using a regression analysis across pumps of all sizes within each equipment class. As such, a broadly applicable max-tech/max-available level was developed, which does not provide any advantage or disadvantage to current low efficiency sub-segments of the market.

5. Manufacturers Production Cost Assessment Methodology

a. Changes in MPC Associated With Hydraulic Redesign

DOE performed an analysis for each equipment class to determine the change in manufacturer production cost (MPC), if any, associated with a hydraulic redesign. For this analysis, DOE reviewed the manufacturer selling price (MSP), component cost, performance, and efficiency data supplied by both individual manufacturers and HI. DOE, with the support of the majority of the CIP Working Group, concluded that for all equipment classes, a hydraulic redesign is not expected to increase the MPC of the representative pump configuration used for analysis.

Specifically, a hydraulic redesign is not expected to increase production or purchase cost of a pump's two primary components; the impeller and the volute.

Refer to the following transcripts in which the conclusion of no change in MPC with improved efficiency is presented to the working group and discussed: EERE-2013-BT-NOC-0039-0072, pp. 114-130 and pp. 270-273; EERE-2013-BT-NOC-0039-0109, p.264).

DOE acknowledges that actual changes in MPC experienced by individual manufacturers will vary, and that in some cases redesigns may actually increase or decrease the cost of the impeller and/or volute. However, available information indicates that the flat MPC-versus-efficiency relationship best represents the aggregated pump industry as a whole. Chapter 5 of the NOPR TSD provides complete details on DOE's MPC-efficiency analysis and results.

b. Manufacturer Production Cost (MPC) Model

For each equipment class, DOE developed a scalable cost model to estimate MPC across all pump sizes. Given a pump's specific speed and BEP flow, the cost model outputs an estimated MPC. Because hydraulic redesign is not expected to result in an increase in MPC, the model is efficiency-independent and predicts the same MPC for all pumps of the identical BEP flow, specific speed, and equipment class, regardless of efficiency.

The DOE MPC model was developed using data supplied by both HI and individual manufacturers. This data set includes information on the MSP, manufacturer markup, shipments volumes, model performance and efficiency, and various other parameters. Chapter 5 of the NOPR TSD provides additional detail on the development of the MPC model.

6. Product and Capital Conversion Costs

DOE expects that hydraulic redesigns will result in significant conversion costs for manufacturers as they attempt to bring their pumps into compliance with the proposed standard. DOE classified these conversion costs into two major groups: (1) Product conversion costs and (2) capital conversion costs. Product conversion costs are investments in research, development, testing, marketing, and other non-capitalized costs necessary to make product designs comply with a new or amended energy conservation standard. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new product designs can be fabricated and assembled.

To evaluate the magnitude of the product and capital conversion costs the pump industry would incur to comply with new energy conservation standards, DOE used a bottom-up approach. For this approach, DOE first determined the industry-average cost, per model, to redesign pumps of varying sizes to meet each of the proposed efficiency levels. DOE then modeled the distribution of unique pump models that would require redesign at each efficiency level. For each efficiency level, DOE multiplied each unique failing model by its associated cost to redesign and summed the total to reach an estimate of the total product and capital conversion cost for the industry.

Data supplied to DOE by HI was used as the basis for the industry-average cost, per model, to redesign a failing pump model. HI, through an independent third party, surveyed 15 manufacturers regarding the product and conversion costs associated with redesigning one-, 50-, and 200-hp pumps from the 10th to the 40th percentile of market efficiency. Specifically, HI's survey contained cost categories for the following: Redesign; prototype and initial test; patterns and tooling; testing; working capital; and marketing.

DOE validated the HI survey data with independent analysis and comparable independently collected manufacturer interview data. In addition, data from the EU pumps regulation preparatory study

was used to augment the HI survey data and scale costs to various efficiency levels above and below the 40th percentile.

AEA Energy & Environment. 2008, Appendix 6: Lot 11—`Circulators in buildings,' Report to European Commission.

During the framework meeting, CA IOUs recommended that DOE use mature market estimates to determine costs associated with efficiency improvements rather than an approach based on the current market. (CA IOUs, Framework Public Meeting Transcript, No. 19, at pp. 324, 345.) In previous rules, the CA IOUs commented that the cost to improve efficiency has been overestimated. DOE recognizes the concerns of the CA IOUs and notes that hydraulic redesigns are a mature technology option and as such, the redesign costs used in the NOPR analysis represent the mature market cost of the technology option.

DOE used a pump model database, developed by its contractors, containing various performance parameters, to model the distribution of unique pump models that would require redesign at each efficiency level. The DOE contractor database is comprised of a combination of data supplied by HI and data collected independently from manufacturers by the DOE. For the ESCC, ESFM, IL, and VT equipment classes, the database is of suitable size to be representative of the industry as a whole. Table IV.2 presents the resulting product and capital conversion costs for each equipment class, at each efficiency level. Complete details on the calculation of industry aggregate product and capital conversion costs are found in chapter 5 of the NOPR TSD.

Table IV.2—Total Conversion Cost at Each Efficiency Level

All values in millions of dollars

EL 0

EL 1

EL 2

EL 3

EL 4

EL 5

ESCC/ESFM *

$12.4

$49.4

$110.6

$210.4

$344.7.

5.1

20.0

45.3

88.2

144.0.

VTS

2.5

9.3

19.2

37.8

61.3.

RSV

N/A

Data Not Available.

* Due to commonality in design and components, DOE calculated the conversion costs for ESCC and ESFM in aggregate. These values were later disaggregated, as appropriate, in downstream analyses.

7. Manufacturer Markup Analysis

To account for manufacturers' non-production costs and profit margin, DOE applies a non-production cost multiplier (the manufacturer markup) to the full MPC. The resulting MSP is the price at which the manufacturer can recover all production and non-production costs and earn a profit. To meet the new energy conservation standards proposed in this rule, DOE expects that manufacturers will hydraulically redesign their product lines, which may result in new and increased capital and equipment conversion costs. Depending on the competitive environment for this equipment, some or all of the increased conversion costs may be passed from manufacturers to retailers and eventually to consumers in the form of higher purchase prices. The MSP should be high enough to recover the full cost of the equipment (

i.e.,

full production and non-production costs) and overhead (including amortized product and capital conversion costs), and still yield a profit. The manufacturer markup has an important bearing on profitability. A high markup under a standards scenario suggests manufacturers can readily pass along more of the increased capital and equipment conversion costs to consumers. A low markup suggests that manufacturers will not be able to recover as much of the necessary investment in plant and equipment.

DOE developed initial estimates of the base case manufacturer markups based on corporate annual reports, Securities and Exchange Commission (SEC) 10-K filings, confidential manufacturer data, and comments made publicly during the CIP Working Group negotiations.

To support the downstream analyses, DOE investigated industry markups in detail, characterizing industry-average markups, individual manufacturer markup structures, and the industry-wide markup structure.

a. Industry-Average Markups

Industry-average manufacturer markups were developed by weighting individual manufacturer markup estimates on a market share basis, as manufacturers with larger market shares more significantly affect the market average.

b. Individual Manufacturer Markup Structures

Using data and information gathered during the manufacturer interviews, DOE concluded that within an equipment class, each manufacturer maintains a flat markup. This means that each manufacturer targets a single markup value for models offered in an equipment class, regardless of size, efficiency, or other design features. Tiered product offerings and markups do not exist at the individual manufacturer level.

c. Industry-Wide Markup Structure

DOE also used the markup data gathered during the manufacturer interviews to assess the industry-wide markup structure. Although tiered product offerings and markups do not exist at the individual manufacturer level, DOE concluded that when analyzed as whole, the industry exhibits a relationship between manufacturer markup and efficiency. DOE's analysis showed that on the industry-wide scale, the lowest efficiency models tend to garner lower markups than higher efficiency models, up to about the 25th percentile of efficiency. Beyond the 25th percentile, the relationship flattens out, and no correlation is seen between markup and efficiency. The data suggest that this relationship is a result of certain manufacturers positioning themselves with more or less efficient product portfolios and charging markups commensurate with their position in the marketplace. They also indicate (consistent with the views of the CIP Working Group) that the market does not value efficiency beyond the lower 25th percentile. (EERE-2013-BT-NOC-0039-0072, pp. 269-278; EERE-2013-BT-NOC-0039-0054, pp. 67-69.) In both private interviews and public working group comments, manufacturers held the view that efficiency is not currently the primary selling point or cost driver for the

majority of pumps within the scope of the proposed rule. Rather, other factors, such as reliability, may influence price significantly and are known to be more influential in the purchaser's decision making process. (EERE-2013-BT-NOC-0039-0072, pp. 269-278.)

DOE notes that the development of the markup-efficiency relationship was based on data from the IL equipment class. DOE, with support of the CIP Working Group, concludes that the markup structure of the IL equipment class is representative of the ESCC, ESFM, and VTS equipment classes.

DOE applied the IL markup-efficiency relationship to these equipment classes, for use in the analyses presented in this NOPR. Chapter 5 of the NOPR TSD provides complete details the markup-efficiency relationship analysis and results.

Refer to the following transcript in which the conclusion that the markup structure of the IL equipment class is representative of the ESCC, ESFM, and VTS equipment classes is presented to the working group and no negative feedback is received: EERE-2013-BT-NOC-0039-0072, pp. 292-295.

8. MSP-Efficiency Relationship

Ultimately, the goal of the engineering analysis is to develop an MSP-Efficiency relationship that can be used in downstream rulemaking analyses such as the Life Cycle Cost (LCC) analysis, the Payback Period (PBP) analysis, and the Manufacturer Impact Analysis (MIA).

For the downstream analyses, DOE evaluated the base case MSP-Efficiency relationship as well as two separate MSP-Efficiency relationship scenarios to represent the uncertainty regarding the potential impacts on prices and profitability for manufacturers following the implementation of new energy conservation standards. The two scenarios are: (1) Flat pricing, and (2) cost recovery pricing. These scenarios result in varying revenue and cash flow impacts and were chosen to represent the lower and upper bounds of potential revenues for manufacturers.

The base pricing scenario represents a snapshot of the pump market, as it stands prior to this rulemaking. The base pricing scenario was developed by applying the markup-efficiency relationship presented in section IV.C.7.c to the MPC model presented in section IV.C.5.a. Both the markup and MPC model are based on data supplied by individual manufacturers. From these data, DOE created a scalable model that can determine MSP as a function of efficiency, specific speed, and flow at BEP.

Under the flat pricing standards case scenario, DOE maintains the same pricing as in the base case, which resulted in no price changes at a given efficiency level for the manufacturer's first consumer. Because this pricing scenario assumes that manufacturers would not increase their pricing as a result of standards, even as they incur conversion costs, this scenario is considered a lower bound for revenues.

In the cost recovery pricing scenario, manufacturer pricing is set so that manufacturers recover their conversion costs over the analysis period. This cost recovery is enabled by an increase in mark-up, which results in higher sales prices for pumps even as MPCs stay the same. The cost recovery calculation assumes manufacturers raise prices on models where a redesign is necessitated by the standard. The additional revenue due to the increase in markup results in manufacturers recovering 100 percent of their conversion costs over the 30-year analysis period, taking into account the time-value of money. The final MSP-efficiency relationship for this scenario is created by applying the markup-efficiency relationship to the MPC cost model presented in section IV.C.5.b., resulting in a scalable model that can determine MSP as a function of efficiency, specific speed, and flow at BEP. In the LCC and NIA analysis, DOE evaluated only the cost recovery pricing scenario, as it would be the most conservative case for consumers, resulting in the fewest benefits.

The cost recovery pricing scenario is the most conservative case (

ie,

i.e., resulting in the fewest benefits) for consumers and the most positive case for manufacturers (ie,i.e., resulting in the fewest negative impacts). In the MIA, DOE analyses this scenario and the flat pricing scenario, which results in the most positive case for consumer and the most conservative case for manufacturers.

D. Markups Analysis

DOE uses markups (

e.g.,

manufacturer markups, distributor markups, contractor markups) and sales taxes to convert the MSP estimates from the engineering analysis to consumer prices, which are then used in the LCC and PBP analysis and in the manufacturer impact analysis. The markups are multipliers that represent increases above the MSP. DOE develops baseline and 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 consumer price.

Before developing markups, DOE defines key market participants and identifies distribution channels. In the Framework Document, DOE presented initial information regarding the distribution channels for pumps. DOE revised these channels and their assigned market share in response to manufacturer interviews and discussions in the CIP Working Group. (See,

e.g.,

EERE-2013-BT-NOC-0039-0072, pp. 327-330.) Based on this information, DOE proposes to use the following main distribution channels that describe how pumps pass from the manufacturer to end-users: (1) Manufacturer to distributor to contractor to end-users (70 percent of sales); (2) manufacturer to distributor to end-users (17 percent of sales); (3) manufacturer to original equipment manufacturer to end-users (8 percent of sales); (4) manufacturer to end-users (2 percent of sales); and (5) manufacturer to contractor to end-users (1 percent of sales). Other distribution channels exist but are estimated to account for a minor share of pump sales (combined 2 percent).

To develop markups for the parties involved in the distribution of the equipment, DOE utilized several sources, including: (1) The U.S. Census Bureau 2007

Economic Census Manufacturing Industry Series

(NAICS 33 Series)

to develop original equipment manufacturer markups; (2) the U.S. Census Bureau 2012

Annual Wholesale Trade Survey, Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers

to develop distributor markups; and (3) 2013 RS Means

Electrical Cost Data

to develop mechanical contractor markups.

U.S. Census Bureau (2007).

Economic Census Manufacturing Industry Series (NAICS 33 Series)

http://www.census.gov/manufacturing/asm

U.S. Census Bureau (2012).

Annual Wholesale Trade Survey, Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers (NAICS 4237).

http://www.census.gov/wholesale/index.html

RS Means (2013), Electrical Cost Data, 36th Annual Edition (Available at:

http://www.rsmeans.com

In addition to the markups, DOE derived State and local taxes from data provided by the Sales Tax Clearinghouse.

These data represent weighted-average taxes that include county and city rates. DOE derived shipment-weighted-average tax values for each region considered in the analysis.

Sales Tax Clearinghouse, Inc. (last accessed on January 10, 2014),

State sales tax rates along with combined average city and county rates,

http://thestc.com/STrates.stm

In the Framework Document, DOE also considered accounting for shipping costs in its markups analysis. In response to the Framework Document,

Grundfos noted that transportation and shipping costs from freight companies and package delivery companies are based on size, weight and transit time requirements. (Grundfos, No. 24 at p. 31.) DOE's understanding is that pump size and weight do not change with efficiency level; therefore, DOE did not account for shipping costs in this analysis.

Chapter 6 of the NOPR TSD provides further detail on the estimation of markups.

Because the identified market channels are complex and their characterization required a number of assumptions, DOE seeks input on its analysis of market channels for the above equipment classes, particularly related to whether the channels include all necessary intermediate steps, and the estimated market share of each channel. DOE identified this as Issue 3 under “Issues on Which DOE Seeks Comment” in section VIII.E of this NOPR.

E. Energy Use Analysis

DOE analyzed the energy use of pumps to estimate the savings in energy costs that consumers would realize from more energy-efficient pump equipment. Annual energy use depends on a number of factors that depend on the utilization of the pump, particularly duty point (

i.e.,

flow, head, and power required for a given application), pump sizing, annual hours of operation, load profiles, and equipment losses. The annual energy use is calculated as a weighted sum of input power multiplied by the annual operating hours across all load points.

1. Duty Point

DOE researched information on duty points for the commercial, industrial, and agricultural sectors from a variety of sources. DOE identified statistical samples only for the agricultural sector. Therefore, DOE used manufacturer shipment data to estimate the distribution of pumps in use by duty point. To account for the wide range of pump duty points in the field, DOE placed pump models in bins with varying power capacities using the shipment data provided by individual manufacturers. DOE grouped all pump models into nine power bins on a log-scale between 1 and 200 hp. Then, for each equipment class, DOE grouped the pump models into nine flow bins on a log-scale between minimum flow at BEP and maximum flow at BEP. Based on the power and flow binning process, DOE defined a representative unit for each of the combined power and flow bins. Within each bin, DOE defined the pump performance data (power and flow at BEP, pump curve and efficiency curve) as the shipment-weighted averages over all units in the bin. DOE used these data to calculate the annual energy use for each of the equipment classes.

2. Pump Sizing

In the Framework Document, DOE requested information on pump sizing. Grundfos noted that the general selection guidelines and other resources are available from HI and specific professional or trade associations such as ASHRAE.

(Grundfos, No. 24 at p. 32.) DOE reviewed relevant guidelines and resources and introduced a variable called the BEP offset to capture variations in pump sizing practices in the field. The BEP offset is essentially the relative distance between the consumer's duty point and the pump's BEP. Pumps are often sized to operate within 75 percent to 110 percent of their BEP flow. Therefore, for this analysis, the BEP offset is assumed to be uniformly distributed between −0.25 (

i.e.,

25% less than BEP flow) and 0.1 (10% more than BEP flow).

ASHRAE was formerly known as the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

3. Operating Hours

DOE estimated average annual operating hours by application based on inputs from a market expert and feedback from the CIP Working Group.

DOE developed statistical distributions to use in its energy use analysis.

Refer to the following transcripts in which operating hours are presented to the working group and no negative feedback is received: EERE-2013-BT-NOC-0039-0072, pp. 353-355; EERE-2013-BT-NOC-0039-XXXX0109, pp. 128-140139-152.

DOE requests information and data on average annual operating hours for the pump types and applications in the scope of this rulemaking. This is identified as Issue 4 in section VIII.E, “Issues on Which DOE Seeks Comment.”

4. Load Profiles

Information on typical load profiles for pumps is not available in the public domain. DOE requested information on load profiles in the Framework Document. Grundfos responded that available public data related to the use of pumps is very limited and provided a reference that may be considered for heating, cooling, and hot water load profiles: California's 2013 Title 24 Nonresidential Alternative Calculation Method (ACM) Reference Manual, Appendix 5.4B. (Grundfos, No. 24 at p. 32.) Grundfos also noted that general selection guidelines and other resources are available from HI and suggested that DOE review EU Commission Regulation No 547/2012 and the work being considered under the Ecodesign Preparatory Study (ENER Lot 29). (Grundfos, No. 24 at p. 34.) HI mentioned that application-specific duty profiles could lead to confusion for pumps with motors and/or controls serving multiple applications and suggested that a single duty profile, consisting of equally weighted time intervals at 100 percent, 75 percent, 50 percent, and 25 percent of the BEP flow, be used to evaluate pump efficiency. (HI, No. 25 at p. 43.)

DOE reviewed the resources suggested by Grundfos, as well as other information on pump load profiles, such as building simulation files. DOE concluded, however, that these load profiles were not sufficiently representative of the variability expected in the field for commercial applications. In addition, DOE did not identify any similar information for other sectors, including the industrial, agricultural, and municipal sectors. However, DOE believed it would be appropriate to analyze more than one duty profile. Considering the range of all applications of the pump equipment classes for which DOE is considering standards, DOE developed four load profiles, characterized by different weights at 50 percent, 75 percent, 100 percent, and 110 percent of the flow at the duty point. These load profiles represent different types of loading conditions in the field: Flat load at BEP, flat/over-sized load weighted evenly at 50 percent and 75 percent BEP, variable load over-sized, and variable load under-sized. During the CIP Working Group negotiations, DOE initially proposed that each of these load profiles would be weighted equally in the consumer sample. However, a stakeholder commented that pumps generally operated on the pump curve to the left of the BEP (

i.e.,

pumps generally require less flow than that provided at BEP) as opposed to beyond the BEP. (Charles Cappellino, ITT, EERE-2013-BT-NOC-0039-0072, p. 356.) This indicates that pumps are generally oversized rather than undersized. Therefore, DOE estimated that only 10 percent of consumers would use pumps with the variable load/undersized load profile; the remaining load profiles were estimated to apply to 30 percent of consumers each. DOE notes that changes in weighting across the load profiles have very little impact on energy use results.

DOE requests information and data on typical load profiles for the pump types and applications in the scope of this

rulemaking. This is identified as Issue 5 in section VIII.E, “Issues on Which DOE Seeks Comment.”

To describe a pump's power requirements at points on the load profile away from the BEP, DOE used the shipment-weighted average pump curves, modeled as second-order polynomial functions, for each of the representative units.

5. Equipment Losses

Using the duty point, load profile, and operational hours, DOE calculated the energy use required for the end-use (or the energy which that is converted to useful hydraulic horsepower). However, the total energy use by pumps also depends on pump losses, motor losses, and control losses.

Pump losses account for the differences between pump shaft horsepower and hydraulic horsepower due to friction and other factors. DOE takes this into account using the efficiency information available in the manufacturer shipment data for each pump. To describe pump efficiency at points away from the BEP, DOE calculated shipment-weighted average efficiency curves for each representative unit, modeled as second-order polynomial functions.

In the Framework Document, DOE requested information on motor losses Grundfos noted that existing motor efficiency standards based on prior requirements set by the Energy Policy Act of 1992 (Pub. L. 102-486, Oct. 24 1992) and the Energy Independence and Security Act of 2007 (Pub. L. 110-140, Dec. 19, 2007) can be utilized as minimum efficiency levels. (Grundfos, No. 24 at p. 34) DOE used existing minimum motor efficiency standards in calculating annual energy use.

In the Framework Document, DOE also requested information on variable frequency drive (VFD) efficiency. VFDs are the most common type of VSD used in the pump market; they automatically control the speed of a pump by adjusting frequency in response to system feedback. In this way, pumps can deliver the appropriate amount of flow required by the system with less head and power compared to reducing flow at full speed by closing a throttling valve. Grundfos noted that the efficiencies of a VFD vary by manufacturer and suggested that a sampling of these efficiencies can be obtained from the members of the Adjustable Speed Drive Systems group of the Industrial Automation section of the National Electrical Manufacturers Association (NEMA). (Grundfos, No. 24 at p. 34.) DOE has reviewed all available VFD efficiency information in developing the test procedure NOPR. However, DOE estimates that very few pump users operate their pumps with VFDs. (See section IV.H.1.a, the life-cycle cost analysis is not meant to represent national impacts, DOE's energy use analysis assumes that all users with variable loads throttled their pumps and therefore did not include VFD efficiency. This assumption allows for the analysis of impacts to the largest group of customers in the market (

i.e.,

those that throttle their pumps). However, DOE considered use of VFDs—in the life-cycle cost customer subgroup and national impact analyses. (See section IV.I and IV.H.1.a, respectively.)

As noted previously, DOE proposed in the test procedure NOPR that pumps sold with non-electric drivers be rated as bare pumps. Any hydraulic improvements made to the bare pump to comply with any applicable energy conservation standards would also result in energy savings if the pump is used with a non-electric driver. However, DOE estimated, based on information from consultants and the CIP Working Group, that only 1-2% of pumps in scope are driven by non-electric drivers. Therefore DOE accounted for the energy use of all pumps as electricity use and chose not to account for fuel use in its analysis.

DOE requests comment on the percent of pumps in scope operated by each fuel type other than electricity (

e.g.,

diesel, gasoline, liquid propane gas, or natural gas) and the efficiency or losses of each type of non-electric driver, including transmission losses if any, that would allow DOE to estimate the fuel use and savings of pumps sold with non-electric drivers. This is identified as Issue 6 in section VIII.E, “Issues on Which DOE Seeks Comment.”

F. Life-Cycle Cost and Payback Period Analysis

DOE conducted the life-cycle cost (LCC) and payback period (PBP) analysis to estimate the economic impacts of potential standards on individual consumers of pump equipment. The LCC calculation considers total installed cost (equipment cost, sales taxes, distribution chain markups, and installation cost), operating expenses (energy, repair, and maintenance costs), equipment lifetime, and discount rate. DOE calculated the LCC for all consumers as if each would purchase a pump in the year the standard takes effect. DOE presumes that the purchase year for all pump equipment for purposes of the LCC calculation is 2020, the first full year following the expected compliance date of late 2019. To compute LCCs, DOE discounted future operating costs to the time of purchase and summed them over the lifetime of the equipment.

DOE analyzed the effect of changes in installed costs and operating expenses by calculating the PBP of potential standards relative to baseline efficiency levels. The PBP estimates the amount of time it would take the consumer to recover the incremental increase in the purchase price of more-efficient equipment through lower operating costs. In other words, the PBP is the change in purchase price divided by the change in annual operating cost that results from the energy conservation standard. DOE expresses this period in years. Similar to the LCC, the PBP is based on the total installed cost and operating expenses. However, unlike the LCC, DOE only considers the first year's operating expenses in the PBP calculation. Because the PBP does not account for changes in operating expense over time or the time value of money, it is also referred to as a simple PBP.

DOE's LCC and PBP analyses are presented in the form of a spreadsheet model, available on DOE's Web site for pumps.

DOE accounts for variability in energy use and prices, discount rates by doing individual LCC calculations for a large sample of pumps (10,000 for each equipment class) that are assigned different installation conditions. Installation conditions include consumer attributes such as sector and application, and usage attributes such as duty point and annual hours of operation. Each pump installation in the sample is equally weighted. The simple average over the sample is used to generate national LCC savings by efficiency level. The results of DOE's LCC and PBP analysis are summarized in section V.B.1.a and described in detail in chapter 8 of the NOPR TSD.

See

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/14

1. Approach

DOE conducted the LCC analysis by developing a large sample of 10,000 pump installations, which represent the general population of pumps that would be affected by proposed energy conservation standards. Separate LCC analyses are conducted for each equipment class. Conceptually, the LCC distinguishes between the pump installation and the pump itself. The pump installation is characterized by a combination of consumer attributes (sector, application, electricity price, discount rate) and usage attributes (duty point, BEP offset, load profile, annual

hours of operation, mechanical lifetime) that do not change among the considered efficiency levels. The pump itself is the regulated equipment, so its efficiency and selling price change in the analysis.

In the base case, which represents the market in the absence of new energy efficiency standards, DOE assigns a specific representative pump to each pump installation. These pumps are chosen from the set of representative units described in the energy use analysis. The relative weighting of different representative units in the LCC sample is determined based on 2012 shipments data supplied by the manufacturers.

The base case also includes an estimate of the distribution of equipment efficiencies. DOE developed a base-case distribution of efficiency levels for pumps using the shipments data mentioned above. DOE assumed that this distribution would remain constant over time and applied the 2012 distribution in 2020. Out of this distribution, DOE assigns a pump efficiency based on the relative weighting of different efficiencies. Chapter 8 of the NOPR TSD contains details regarding the base case efficiency distribution.

At each efficiency level, the pump assigned in the base case has a PEI rating that either would or would not meet a standard set at that efficiency level. If the pump would meet the standard at a given efficiency level, the installation is left unchanged. For that installation, the LCC at the given TSL is the same as the LCC in the base case and the standard does not impact that user. If the pump would not meet the standard at a given efficiency level, the base case pump is replaced with a compliant unit (

i.e.,

a redesigned pump) having a higher selling price and higher efficiency, and the LCC is recalculated. The LCC savings at that efficiency level are defined as the difference between the LCC in the base case and the LCC for the more efficient pump. The LCC is calculated for each pump installation at each efficiency level.

In the engineering analysis, DOE determines the total conversion costs required to bring the entire population of pump models up to a given efficiency level. DOE uses these conversion costs to calculate the selling price of a redesigned pump within each of the combined power and flow bins that define a representative unit. DOE assumes that all consumers whose base case pump would not meet the standard at a given efficiency level will purchase the new redesigned pump at the new selling price, and that manufacturers recover the total conversion costs at each efficiency level. DOE allocates conversion costs to each representative unit based on the proportion of total revenues generated by that unit in the base case.

DOE calculates the selling price in two stages. In the first stage, for each equipment class and efficiency level, DOE calculates the total revenue generated from all failing units, adds the total conversion costs to the revenues from failing units to generate the new revenue requirement, and defines a markup as the ratio of the new revenue requirement to the base cas

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