Energy Conservation Program: Energy Conservation Standards for Pumps

Federal RegisterJan 26, 2016

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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:

Final rule.

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 establishes the “Energy Conservation Program for Certain Industrial Equipment.” The covered equipment includes pumps. In this final rule, the U.S. Department of Energy (DOE) adopts new energy conservation standards for pumps. DOE has determined that the new energy conservation standards for pumps would result in significant conservation of energy, and are technologically feasible and economically justified.

DATES:

The effective date of this rule is March 28, 2016. Compliance with the new standards established for pumps in this final rule is required on and after January 27, 2020.

ADDRESSES:

The docket, which includes

Federal Register

notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at

www.regulations.gov

. All documents in the docket are listed in the

www.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

. The

www.regulations.gov

Web page will contain instructions on how to access all documents, including public comments, in the docket.

For further information on how to review the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email:

Brenda.Edwards@ee.doe.gov

FOR FURTHER INFORMATION CONTACT:

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

A. Benefits and Costs to Consumers

B. Impact on Manufacturers

C. National Benefits

D. Conclusion

II. Introduction

A. Authority

B. Background

C. Relevant Industry Sectors

III. General Discussion

A. Definition of Covered Equipment

B. Scope of the Energy Conservation Standards in this Rulemaking

C. Test Procedure and Metric

1. PER of a Minimally Compliant Pump

D. Compliance Date

E. Technological Feasibility

1. General

2. Maximum Technologically Feasible Levels

F. Energy Savings

1. Determination of Savings

2. Significance of Savings

G. Economic Justification

1. Specific Criteria

a. Economic Impact on Manufacturers and Consumers

b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP)

c. Energy Savings

d. Lessening of Utility or Performance of Products

e. Impact of Any Lessening of Competition

f. Need for National Energy Conservation

g. Other Factors

2. Rebuttable Presumption

IV. Methodology and Discussion of Related 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

b. Submersible Turbine, 1800 RPM

3. Technology Assessment

a. Applicability of Technology Options to Reduced Diameter Impellers

b. 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. No-New-Standards 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. Discussion of MIA Comments

K. Emissions Analysis

L. Monetizing Carbon Dioxide and Other Emissions Impacts

1. Social Cost of Carbon

a. Monetizing Carbon Dioxide Emissions

b. Development of Social Cost of Carbon Values

c. Current Approach and Key Assumptions

2. Valuation of Other Emissions Reductions

M. Utility Impact Analysis

N. Employment Impact Analysis

V. Analytical Results and Conclusions

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. Labeling Costs

c. Impacts on Direct Employment

d. Impacts on Manufacturing Capacity

e. Impacts on Subgroups of Manufacturers

f. 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

8. Summary of National Economic Impacts

C. Conclusion

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

2. Summary of Annualized Benefits and Costs of the Adopted Standards

VI. Labeling and Certification Requirements

A. Labeling

B. Certification Requirements

C. Representations

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

1. Description on 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

M. Congressional Notification

VIII. Approval of the Office of the Secretary

I. Synopsis of the Final Rule

Title III of the Energy Policy and Conservation Act of 1975 (42 U.S.C. 6291,

et seq.;

“EPCA”), Public Law 94-163, sets forth a variety of provisions designed to improve energy efficiency. Part C of Title III, which for editorial reasons was re-designated as Part A-1 upon incorporation into the U.S. Code (42 U.S.C. 6311-6317), establishes the “Energy Conservation Program for Certain Industrial Equipment.” Covered industrial equipment includes pumps, the subject of this document. (42 U.S.C. 6311(1)(H)).

All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015, Public Law 114-11 (Apr. 30, 2015).

The standards for certain pumps set forth in this document 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.; 5 U.S.C. 561-570) 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.

The new standards are expressed as a Pump Energy Index (PEI). PEIs for each equipment class and the respective nominal design speed are shown in Table I.1. These standards apply to all equipment classes listed in Table I.1 and manufactured in, or imported into, the United States on and after January 27, 2020.

Table I.1—New Energy Conservation Standards for Pumps

[Compliance starting January 27, 2020]

Equipment class *

Standard

level **

PEI

Efficiency

percentile

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

†† 0

138.78

VTS.3600.CL

1.00

134.85

VTS.1800.VL

1.00

†† 0

138.78

VTS.3600.VL

1.00

134.85

* 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/own bearing, IL = inline, RSV = radially split, multi-stage, vertical, in-line diffuser casing, VTS = submersible turbine); (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 final rule 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 adopted 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.

†† The standard level for VTS.1800 was set based on the baseline C-value for VTS.3600 pumps due to limited data availability. See discussion in section IV.A.2.b for more detail.

Under the adopted standards, a pump model would be compliant if its PEI rating is less than or equal to the adopted 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). A value of PEI greater than 1.00 would indicate that the pump does not comply with DOE's energy conservation standard, while a value less than 1.00 would indicate that the pump is more efficient than the standard requires.

The minimally compliant PER is unique to each pump model and is a function of specific speed (a dimensionless quantity describing the geometry of the pump); flow at best efficiency point (BEP); and 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 final 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 listed in Table I.1 correspond to the lower 25th percentile of efficiency for the End Suction Close-Coupled (ESCC), End Suction Frame Mounted/Own Bearings (ESFM), and In-line (IL) equipment classes. For the Submersible Turbine (VTS) equipment classes,

the C-values of 3600 rpm speed pumps correspond to the lower 25th percentile of efficiency, while those of 1800 rpm speed pumps correspond to the baseline efficiency level. The C-values for the radially split, multi-stage, vertical, in-line diffuser casing (RSV) equipment class harmonize with the standards recently enacted in the European Union.

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.C describes the PEI metric in further detail.

In the test procedure final rule (See EERE-2013-BT-TP-0055), DOE changed the terminology for this equipment class from “vertical turbine submersible” to “submersible turbine” for consistency with the definition of this equipment class. DOE is adopting the acronym “ST” in the regulatory text for long-term consistency with the defined term but has retained the “VTS” abbreviation in the preamble for consistency with the energy conservation standards NOPR and all Working Group discussions and recommendations to date (Docket No. EERE-2013-BT-NOC-0039).

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.

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the adopted 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 adopted 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 no-new-standards 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 adopted standards is shown in section V.B.1.a.

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

Equipment class

Average LCC savings

(2014$)

Simple payback period

(years)

ESCC.1800

163

2.2

ESCC.3600

1.0

ESFM.1800

174

2.9

ESFM.3600

549

0.8

IL.1800

147

2.9

IL.3600

138

2.0

RSV.1800

N/A

RSV.3600

N/A

VTS.1800

N/A

VTS.3600

3.1

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 adopting identical standards for both CL and VL equipment classes.Economic results are not presented for RSV.1800, RSV.3600, and VTS.1800 classes because the adopted standard is at the baseline.

DOE's analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document.

B. Impact on Manufacturers

The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2015 to 2049). Using a real discount rate of 11.8 percent,

DOE estimates that the (INPV) for manufacturers of pumps in the case without new standards is $120.0 million in 2014$. Under the

standards adopted in this final rule, DOE expects INPV impacts to be between a loss of 32.9 percent to an increase of 7.0 percent of INPV, which is between approximately −$39.5 million and $8.4 million. Additionally, based on DOE's interviews with pump manufacturers, DOE does not expect significant impacts on manufacturing capacity or loss of employment for the industry as a whole to result from the standards for pumps. DOE expects the industry to incur $81.2 million in conversion costs.

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.

DOE's analysis of the impacts of the adopted standards on manufacturers is described in section V.B.2 of this document.

C. National Benefits

All monetary values in this section are expressed in 2014 dollars and, where appropriate, are discounted to 2015 unless explicitly stated otherwise. Energy savings in this section refer to the full-fuel-cycle savings (see section IV.H for discussion).

DOE's analyses indicate that the adopted energy conservation standards for pumps would save a significant amount of energy. Relative to the case without new standards, the lifetime energy savings for pumps purchased in the 30-year period that begins in the anticipated year of compliance with the new standards (2020-2049), amount to 0.29 quadrillion Btu (quads).

This represents a savings of one percent relative to the energy use of these products in the case without new standards (referred to as the “no-new-standards case”).

A quad is equal to 10

British thermal units (Btu). The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (

i.e.,

coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.1.

The cumulative net present value (NPV) of total consumer costs and savings of the standards for pumps ranges from $0.39 billion (at a 7-percent discount rate) to $1.1 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 pumps purchased in 2020-2049.

In addition, the standards for pumps would have significant environmental benefits. DOE estimates that the standards would result in cumulative greenhouse gas emission reductions (over the same period as for energy savings) of 17 million metric tons (Mt)

of carbon dioxide (CO

), 9.5 thousand tons of sulfur dioxide (SO

), 31 tons of nitrogen oxides (NO

), 75 thousand tons of methane (CH

), 0.20 thousand tons of nitrous oxide (N

O), and 0.035 tons of mercury (Hg).

The cumulative reduction in CO

emissions through 2030 amounts to 2.7 Mt, which is equivalent to the emissions resulting from the annual electricity use of more than 0.37 million homes.

A metric ton is equivalent to 1.1 short tons. Results for NO

and Hg are presented in short tons.

DOE calculated emissions reductions relative to the no-new-standards-case, which reflects key assumptions in the

Annual Energy Outlook 2015

(

AEO 2015

) Reference case, which generally represents current legislation and environmental regulations for which implementing regulations were available as of October 31, 2014.

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.1. Using discount rates appropriate for each set of SCC values, DOE estimates that the net present monetary value of the CO

emissions reduction (not including CO

equivalent emissions of other gases with global warming potential) is between $0.11 billion and $1.6 billion, with a value of $0.52 billion using the central SCC case represented by $40.0/t in 2015. DOE also estimates that the net present monetary value of the NO

emissions reduction to be $0.04 billion at a 7-percent discount rate, and $0.09 billion 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 July 2015) (Available at:

www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf

DOE estimated the monetized value of NO

emissions reductions using benefit per ton estimates from the

Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,”

published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at:

http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf

.) See section IV.L.2 for further discussion. Note that the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electricity Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski et al., 2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al., 2011), the values would be nearly two-and-a-half times larger. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's Regulatory Impact Analysis for the Clean Power Plan Final Rule. Note that DOE is currently investigating valuation of avoided SO

and Hg emissions.

Table I.3 summarizes the national economic benefits and costs expected to result from the adopted standards for pumps.

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

Category

Present value

Billion 2014$

Discount rate

(%)

Benefits

Consumer Operating Cost Savings

0.5

1.4

Reduction Value ($12.2/t case) **

0.1

Reduction Value ($40.0/t case) **

0.5

Reduction Value ($62.3/t case) **

0.8

2.5

Reduction Value ($117/t case) **

1.6

Reduction Monetized Value †

0.04

0.09

Total Benefits ††

1.1

2.0

Costs

Consumer Incremental Installed Costs

0.2

0.3

Total Net Benefits

Including CO

and NO

Reduction Monetized Value ††

0.9

1.7

* This table presents the 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 costs 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 CO

values represent global monetized values of the SCC, in 2014$, 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.

† The $/ton values used for NO

are described in section IV.L.2. DOE estimated the monetized value of NO

emissions reductions using benefit per ton estimates from the

Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,”

published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at:

http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf

†† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate ($40.0/t case).

The benefits and costs of the adopted standards, for pumps sold in 2020-2049, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of (1) the national economic value of the benefits in reduced operating costs, minus (2) the increases in product purchase prices and installation costs, plus (3) the value of the benefits of CO

and NO

emission reductions, all annualized.

To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2015, the year used for discounting the NPV of total consumer 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 DOE believes that the value of operating cost savings and CO

emission reductions are both important, two issues are relevant. First, the national operating cost 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 are measured for the lifetime of pumps shipped in 2020-2049. Because CO

emissions have a very long residence time in the atmosphere,

the SCC values in future years reflect future CO

-emissions impacts that continue beyond 2100.

The atmospheric lifetime of CO

is estimated of the order of 30-95 years. Jacobson, MZ (2005), “Correction to `Control of fossil-fuel particulate black carbon and organic matter, possibly the most effective method of slowing global warming,' ”

J. Geophys. Res.

110. pp. D14105.

Estimates of annualized benefits and costs of the adopted standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO

reduction, (for which DOE used a 3-percent discount rate along with the SCC series that has a value of $40.0/t in 2015),

the estimated cost of the standards in this rule is $17 million per year in increased equipment costs, while the estimated annual benefits are $58 million in reduced equipment operating costs, $30 million in CO

reductions, and $3.7 million in reduced NO

emissions. In this case, the net benefit amounts to $74 million per year. Using a 3-percent discount rate for all benefits and costs and the SCC series has a value of $40.0/t in 2015, the estimated cost of the standards is $17 million per year in increased equipment costs, while the estimated annual benefits are $78 million in reduced operating costs, $30 million in CO

reductions, and $5.4 million in reduced NO

emissions. In this case, the net benefit amounts to $96 million per year.

DOE used a 3-percent discount rate because the SCC values for the series used in the calculation were derived using a 3-percent discount rate (see section IV.L.1).

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

Discount rate

Million 2014$/year

Primary

estimate

Low net

benefits

estimate

High net benefits

estimate

Benefits

Consumer Operating Cost Savings

68.

94.

Reduction Value ($12.2/t case) **

8.7

8.1.

9.5.

Reduction Value ($40.0/t case) **

33.

Reduction Value ($62.3/t case) **

2.5%

48.

Reduction Value ($117/t case) **

99.

Reduction Value †

3.7

5.4

3.5

5.0

9.0.

13.

Total Benefits ††

7% plus CO

range

70 to 152

64 to 140

86 to 176.

109.

3% plus CO

range

92 to 174

83 to 159

116 to 206.

113

102

139.

Costs

Consumer Incremental Equipment Costs

17.

18.

Net Benefits

Total ††

7% plus CO

range

53 to 136

45 to 121

69 to 159.

92.

3% plus CO

range

75 to 157

63 to 139

99 to 189.

122.

* 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 pumps purchased from 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 and shipments from the

AEO 2015

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

** The CO

† The $/ton values used for NO

are described in section IV.L.2. DOE estimated the monetized value of NO

emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,” published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at:

http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf

.) See section IV.L.2 for further discussion. For DOE's Primary Estimate and Low Net Benefits Estimate, the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electric Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski et al., 2009). For DOE's High Net Benefits Estimate, the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al., 2011), which are nearly two-and-a-half times larger than those from the ACS study. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emission, DOE intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's Regulatory Impact Analysis for the Clean Power Plan Final Rule.

†† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate ($40.0/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's analysis of the national impacts of the adopted standards is described in sections IV.H, IV.K, and IV.L of this document.

D. Conclusion

Based on the analyses culminating in this final rule, DOE found the benefits to the nation of the standards (energy savings, LCC savings for most consumers, positive NPV of consumer benefit, and emission reductions) outweigh the burdens (potential loss of INPV and LCC increases for some users of these products). DOE has concluded that the standards in this final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in significant conservation of energy.

II. Introduction

The following section briefly discusses the statutory authority underlying this final rule, 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

et seq.

), establishes the “Energy Conservation Program for Certain Industrial Equipment.” The covered equipment includes pumps, the subject of this rulemaking. (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 Energy Efficiency Improvement Act of 2015, Public Law 114-11 (Apr. 30, 2015).

Pursuant to EPCA, DOE's energy conservation program for covered equipment consists essentially of four parts: (1) Testing; (2) labeling; (3) the establishment of Federal energy conservation standards; and (4) certification and enforcement procedures. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and 6316(a)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those equipment. (42 U.S.C. 6314(d)) Similarly, DOE must use these test procedures to determine whether the equipment complies with standards adopted pursuant to EPCA.

Id.

The DOE test procedures for pumps appear at title 10 of the Code of Federal Regulations (CFR) part 431, subpart Y, appendix A.

DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including pumps. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(C), 6295(o), and 6316(a)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3) and 6316(a)) Moreover, DOE may not prescribe a standard: (1) For certain products, including pumps, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o) and 6316(a)) In deciding 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 statutory 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 products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;

(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;

(4) Any lessening of the utility or the performance of the covered products likely to result from 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 standard;

(6) The need for national energy and water conservation; and

(7) Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(a))

Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product 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))

EPCA, as codified, also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any new standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) and 6316(a)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product 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))

Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered equipment that has two or more subcategories. DOE must specify a different standard level for a group of equipment that has 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 such a feature and other factors DOE deems appropriate.

Id.

Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2)) and 6316(a))

Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) and 6316(a)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d).

B. Background

Prior to this final rule, DOE did not have 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 clean 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 document 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.

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.; 5 U.S.C. 561-570) 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 one member from the ASRAC and one DOE representative. (See Table II.1) The working group met in-person during seven 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 this rulemaking, 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 the proposed energy conservation standards. DOE published the notice of proposed rulemaking (NOPR) on April 2, 2015 with proposed standards for pumps. 80 FR 17826. DOE received multiple comments from interested parties and considered these comments in the preparation of the final rule. Relevant comments and DOE's responses are provided in the appropriate sections of this document.

C. Relevant Industry Sectors

The energy conservation standards adopted in this final rule 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 adopted rule, with 56 of those being domestic manufacturers. The leading U.S. industry association for the pumps covered under this adopted rule is the Hydraulic Institute (HI).

III. General Discussion

DOE developed this final rule after considering comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters.

In developing this final rule, DOE reviewed comments received on the April 2015 energy conservation standards NOPR (herein referred to as “NOPR”). 80 FR 17826. Commenters included: The Hydraulic Institute (HI); Wilo USA (Wilo); Pacific Gas and Electric Company, San Diego Gas and Electric, Southern California Gas Company, and Southern California Edison collectively, the CA IOUs); Edison Electric Institute (EEI); The Appliance Standards Awareness Project (ASAP), Natural Resources Defense Council (NRDC), the Northwest Energy Efficiency Alliance, and the Northwest Power and Conservation Council (collectively, the Advocates); the Cato Institute; and the U.S. Chamber of Commerce, the American Chemistry Council, the American Forest & Paper

Association, the American Fuel & Petrochemical Manufacturers, the American Petroleum Institute, the Brick Industry Association, the Council of Industrial Boiler Owners, the National Association of Manufacturers, the National Mining Association, the National Oilseed Processors Association, and the Portland Cement Association (collectively, “the Associations”). DOE addressed all relevant stakeholder comments and requests throughout this final rule.

DOE notes that they received two comments in support of the proposed standards in general. Specifically, the Advocates and the CA IOUs supported the proposed standards (which are consistent with TSL 2 in the final rule) and believed they reflect the negotiations of the ASRAC working group. (Advocates, No. 49 at p. 1;

CA IOUs, No. 50 at p. 1) The following sections describe the specifics of DOE's proposed standard and all relevant comments from interested parties.

A notation in the form “Advocates, No. 49 at p. 1” identifies a written comment that DOE has received and has included in the docket of this rulemaking (Docket No. EERE-2011-BT-STD-0031). This particular notation refers to (1) a comment submitted by the Advocates, (2) in document number 49 in the docket of this rulemaking, and (3) appearing on page 1 of document number 49.

A. 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 final rule (See EERE-2013-BT-TP-0055) DOE defined “pump” to clarify what constitutes covered equipment. The definition reflects the consensus reached by the CIP Working Group in its negotiations: “Pump” means equipment designed to move 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 final rule, DOE also defined “bare pump,” “mechanical equipment,” “driver,” and “controls,” as recommended by the CIP Working Group.

B. Scope of the Energy Conservation Standards in this Rulemaking

The pumps for which DOE is setting energy conservation standards in this rulemaking are consistent with the scope of applicability of the test procedure final rule. (See EERE-2013-BT-TP-0055) This scope is also consistent with the recommendations of the CIP Working Group and includes the following five equipment categories, which are defined in the test procedure final rule:

• End suction close-coupled,

• End suction frame mounted/own bearings,

• In-line,

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

• Submersible turbine.

As discussed in the test procedure final rule (See EERE-2013-BT-TP-0055), DOE is further limiting the scope of this rulemaking to clean water pumps. DOE defined “clean water pump” as a pump that is designed for use in pumping water with a maximum non-absorbent free solid content of 0.016 pounds per cubic foot, and with a maximum dissolved solid content of 3.1 pounds per cubic foot, 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 14 °F.

In the test procedure final rule (See EERE-2013-BT-TP-0055), DOE also specified several kinds of pumps that fall within one of the five equipment categories and are clean water pumps, but will not be subject to the test procedure, in accordance with CIP Working Group recommendations. DOE has not adopted standards for these pumps in this rule:

(a) Fire pumps;

(b) self-priming pumps;

(d) magnet driven 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); MIL-P-17881D, “Pumps, Centrifugal, Boiler Feed, (Multi-Stage)” (as amended); MIL-P-17840C, “Pumps, Centrifugal, Close-Coupled, Navy Standard (For Surface Ship Application)” (as amended); MIL-P-18682D, “Pump, Centrifugal, Main Condenser Circulating, Naval Shipboard” (as amended); MIL-P-18472G, “Pumps, Centrifugal, Condensate, Feed Booster, Waste Heat Boiler, And Distilling Plant” (as amended). Military specifications and standards are available for review at

http://everyspec.com/MIL-SPECS

In the test procedure final rule (See EERE-2013-BT-TP-0055), DOE defined “fire pump,” “self-priming pump,” “prime-assist pump,” and “magnet driven pump.” DOE also limited the applicability of the test procedure to those pumps with the following characteristics:

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

• 459 feet of head maximum (at BEP at full impeller diameter and the number of stages specified for testing);

• Design temperature range from 14 to 248 °F;

• 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 in either case, the driver and impeller must rotate at the same speed;

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 final rule contains additional details.

• For VTS pumps, 6 inch or smaller bowl diameter; and

• For ESCC and ESFM pumps, specific speed less than or equal to 5000 when calculated using U.S. customary units.

DOE notes that the NOPR included a scope limitation of 1 to 200 hp. In the test procedure final rule, these parameters have been included in the equipment category definitions. Therefore, the limitation is no longer listed separately.

In this final rule, DOE is not adopting standards for pumps that do not have these characteristics. DOE responded to all comments on these scope parameters in the test procedure final rule (See EERE-2013-BT-TP-0055) including those from Wilo regarding horsepower, BEP flow, and speed, provided in the energy conservation standards docket (See Wilo, No. 44 at p. 1-2).

DOE also specified in the test procedure final rule (See EERE-2013-BT-TP-0055) 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 also

specified a definition for full impeller in that rule.

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.

C. Test Procedure and Metric

DOE established a uniform test procedure for determining the energy consumption of certain pumps, as well as sampling plans for the purposes of demonstrating compliance with the energy conservation standards that DOE is adopting in this final rule. In the test procedure final rule (See EERE-2013-BT-TP-0055), DOE prescribed test methods for measuring the energy consumption 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 specified 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 specified additions to HI 40.6-2014 to account for the energy performance of motors and/or controls, which is not addressed in HI 40.6-2014.

Wilo commented on several elements of the test procedure. Namely, Wilo noted that there are no standard losses associated with VFDs; that calculation-based methods in the test procedure should be eliminated; and that the allowed fluctuations in power measure such as voltage and frequency will cause error and discrepancy between tests conducted by manufacturers and DOE. (Wilo, No. 44 at p. 3). DOE has addressed these comments in the pumps test procedure final rule (See EERE-2013-BT-TP-0055).

The test procedure final rule (See EERE-2013-BT-TP-0055) specifies 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.C.1) without controls. The metrics are defined as follows:

ER26JA16.000

Where:

PER

= 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 specifies the default motor loss values to use in the calculations of driver input.

PER

= 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

= the PER rating of a minimally compliant pump (as defined in section III.C.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 indicates that the pump consumes more energy than allowed by DOE's energy conservation standard and thus does not comply. A value less than 1.00 indicates that the pump consumes less energy than the level required by the standard.

HI requested that DOE release a calculation tool for both PEI

and PEI

, to ensure that all manufacturers are rating pumps in the same manner. (HI, No. 45 at pp. 2-3). Wilo also commented that, in absence of such a calculation tool, parties could potentially make errors in calculating PEI. (Wilo, No. 44 at p. 3). As a convenience to interested parties, DOE has provided a draft Excel spreadsheet designed to perform the calculations necessary to determine PEI.

DOE notes that interested parties should not rely on this spreadsheet and should consult the final test procedure rule (See EERE-2013-BT-TP-0055) for the formulas for calculating PEI. Ultimately, it is the responsibility of any party certifying the performance of a given pump to ensure the accuracy of calculation of PEI according to the DOE test procedure.

The draft PEI calculator is available at:

http://www.energy.gov/eere/buildings/downloads/draft-pei-calculator.

1. PER of a Minimally Compliant Pump

DOE is 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 efficiency of a minimally compliant pump is defined as a function of certain physical properties of the bare pump, such as flow at BEP and specific speed (Ns), as shown in equation 2:

ER26JA16.001

Where:

100%

= BEP flow rate of the tested pump at full impeller diameter and nominal speed of rotation (gpm),

Ns = specific speed of the tested pump at 60 Hz and calculated using U.S. customary units, and

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

As noted in the test procedure final rule, DOE developed this equation based on the equation used in the EU to develop its regulations for clean water pumps, translated to 60 Hz electrical input power and U.S. customary units.

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

/h 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 U.S. customary units. DOE notes that an exact translation from metric to U.S. customary units is not possible due to the logarithmic relationship of the terms.

The C-value is the translational component of the three-dimensional polynomial equation that controls pump efficiency by a constant factor across the

entire range of flow and specific speed. A positive or negative change in C-value corresponds to a decrease or increase in the pump efficiency of a minimally compliant pump, respectively. The efficiency of the minimally compliant pump calculated from this function corresponds to pump efficiency at BEP flow. 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.

Using the efficiency of a minimally compliant pump, PER for a minimally compliant pump is determined using equation 3:

ER26JA16.002

Where:

= weighting at each load point i (equal weighting or 0.3333 in this case);

u,i

= the measured hydraulic output power at load point i of the tested pump (hp);

= 0.947 for 75 percent of the BEP flow rate, 1.000 for 100 percent of the BEP flow rate, and 0.985 for 110 percent of the BEP flow rate;

pump,STD

= the minimally compliant pump efficiency, as determined in accordance with equation 2,

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

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

Equation 3 defines PER as a function of the average power input to the pump motor at three load points, 75%, 100%, and 110% of BEP flow. The input power to the motor at each load point comprises a shaft input power term and a motor loss term. The shaft input power is computed as the quotient of hydraulic output power divided by the minimally compliant pump efficiency, where the pump hydraulic output power for the minimally compliant pump is the same as that for the particular pump being evaluated. As described in the test procedure final rule, the corresponding motor loss term is calculated assuming a minimally compliant motor that is sized for the calculated shaft input power at 120% BEP flow, as well as the default part-load loss curve. 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 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 final rule. 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 final rule. See section IV.C.4 for a complete examination of the efficiency levels analyzed in this rulemaking.

D. Compliance Date

Pump manufacturers must comply with the energy conservation standards established in this final rule as of January 27, 2020. The compliance date is consistent with the recommendations of the CIP Working Group. (See EERE-2013-BT-NOC-0039-0092, Recommendation No. 9) In its analysis, DOE used an analysis period of 2020 through 2049.

E. 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 determining the maximum possible improvement in energy efficiency, DOE conducts a screening analysis based on all current technology options and working prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. 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)-(iv).) Section IV.B of this final rule 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 rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the final rule TSD.

2. Maximum Technologically Feasible Levels

When DOE adopts a new or amended standard for a type or class of covered equipment, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such equipment. (42 U.S.C. 6295(p)(1) and 6316(a)). Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for pumps, using the design options that passed the screening analysis.

F. Energy Savings

1. Determination of Savings

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 no-new-standards case. The no-new-standards 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 no-new-standards 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 document) 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)

2015 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 the covered equipment. For more information on FFC energy savings, see section IV.H.1.a.

2. Significance of Savings

To adopt standards for a covered product, DOE must determine that such action 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), indicated opined that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” The energy savings for all the TSLs considered in this rulemaking, including the adopted standards, are nontrivial, and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA.

G. Economic Justification

1. Specific Criteria

As noted above, 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: (1) Industry net present value (INPV), which values the industry on the basis of expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) 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 new 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 (LCC and PBP)

EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a 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 product (including its installation) and the operating cost (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of

values, with probabilities attached to each value.

The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.

For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with new standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new standards. 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 new 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 adopted in the final rule would not reduce the utility or performance of the equipment 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 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 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 transmitted a copy of its proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. In a letter dated July 10, 2015, DOJ stated that it did not have sufficient information to conclude that the proposed energy conservation standards or test procedure likely will substantially lessen competition in any particular product or geographic market. However, DOJ noted that the possibility exists that the proposed energy conservation standards and test procedure—which will apply to a broad range of pumps—may result in anticompetitive effects in certain pump markets. Specifically in relation to the proposed standards, DOJ expressed concern that “by design, the bottom quartile of pumps in each class of covered pumps will not meet the new standards. The non-compliance of the bottom quartile of pump models may result in some manufacturers stopping production of pumps altogether and fewer firms producing models that comply with the new standards. At this point, it is not possible to determine the impact on any particular product or geographic market.”

Although the terminology in this rule is different from that typically used in energy conservation standards rulemaking documents, as requested by the Pumps Working Group, the options for non-compliant models are no different from other rules. In all energy conservation standards rulemakings that set new standards or amend standards, a certain percentage of the market is affected by the standard. The percentage of affected pumps is represented by any models below the amended standard, which may have a distribution of efficiencies (

i.e.,

some pump models will be closer to the new or amended standard level than others). It is not unusual for a large fraction of models (sometimes greater than 25%) to be at or near the baseline and thus be impacted. As in all rulemakings, manufacturers have a choice between re-designing a non-compliant model to meet the standard and discontinuing it.

The ASRAC working group indicated that between 5 and 10% of models requiring redesign may be dropped because current sales are very low. (Docket No. EERE-2013-BT-NOC-0039, May 28 Pumps Working Group Meeting, p. 61-63) Manufacturers indicated that additional models may be dropped where they can be replaced by another existing equivalent model currently made by the same manufacturer, often under an alternative brand. (Docket No. EERE-2013-BT-NOC-0039, April 29 Pumps Working Group Meeting, p. 100) In either case, the elimination of these models would not have an adverse impact on the market or overall availability of pumps to serve particular applications.

For these reasons, DOE has concluded that the standard levels included in this final rule will not result in adverse impacts on competition within the pump marketplace. The remaining concerns in the DOJ letter regarding the test procedure have been addressed in the parallel test procedure rulemaking (Docket No. EERE-2013-BT-TP-0055).

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 the adopted 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.

The adopted 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 and use. DOE conducts an emissions analysis to estimate how potential new standards may affect these emissions, as discussed in section IV.K; the emissions impacts are reported in section V.B.6 of this document. DOE also estimates 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).) To the extent interested parties submit any relevant information regarding economic justification that does not fit into the other categories described above, DOE could consider such information under “other factors.”

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 effect potential new or amended energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) 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 results are discussed in section V.B.1.c of this final rule.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE performed for this rulemaking. Separate subsections address each component of DOE's analyses.

DOE used four analytical tools to estimate the impact of the standards adopted in this document. 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 projections and 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. These three spreadsheet tools are available on the DOE Web site for this rulemaking:

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

. 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 final rule 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, capacity, or other performance-related features that would justify a different standard from that which would apply to other equipment classes. In the NOPR, DOE proposed to divide pumps into equipment classes based on the following three factors:

1. Basic pump equipment category,

2. Configuration, and

3. Nominal design speed.

In the NOPR, DOE also noted 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 final rule, DOE specifies that any pump sold with, or for use with, a driver other than an electric motor would be rated as a bare pump.

Therefore, in the NOPR, 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.C.1.

As discussed in section III.B, there were five pump equipment categories considered in NOPR, each of which form the basis for the individual equipment classes; these categories are:

• End suction close coupled;

• End suction frame mounted/own bearings;

• In-line;

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

• Submersible turbine.

In the NOPR, DOE proposed to define a pump's configuration 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), 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).

The CIP Working Group also recommended separate energy efficiency standards for equipment categories at the nominal speeds for two- and four-pole motors. (See EERE-2013-BT-NOC-0039-0092, p. 4, Recommendation No. 9.) In its NOPR analysis, DOE found that across the market, pumps at each nominal speed demonstrate distinctly different energy-related performance. For the same load point (flow and head), 2-pole pumps were typically found to be less efficient than 4-pole pumps. Their higher operating speeds, however, allow a 2-pole pump serving the same load as a 4-pole pump to be significantly smaller in size. The smaller size is a consumer utility to consumers who face space constraints in their installation location.

To account for the variability in efficiency between 2- and 4-pole pumps, in the NOPR, DOE proposed that for both constant load and variable load pumps, the equipment classes should also be differentiated on the basis of nominal design speed. Therefore, within the scope of the NOPR, pumps were to 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 category, nominal design speed, and configuration, DOE proposed the following twenty equipment classes in the NOPR:

• 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.

DOE received no comments regarding their proposed equipment classes and associated methodology; consequently, DOE has maintained these equipment classes in this final rule. Chapter 3 of the final rule TSD provides further detail on the definition of equipment classes.

As noted in section III.C and specified in the test procedure final rule, CL equipment classes are rated with the PEI

metric, and VL equipment classes are rated with the PEI

metric. In the NOPR, however, DOE relied on available data for bare pumps. DOE received no comment regarding the use of bare pump data to represent all equipment classes, as such, DOE's final rule analysis is based on equipment category and nominal design speed only—reported results do not use a “.CL” or “.VL” designation. Separate CL and VL equipment classes are maintained because CL and VL pumps have distinctly different utilities to the consumer (constant vs. variable load systems) and as a result require different metric and testing methods.

2. Scope of Analysis and Data Availability

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

DOE again notes that all analyses are based on data for bare pumps. This data is broken out by equipment category and nominal design speed only. As such the “.CL” or “.VL” designations are not listed.

• 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:

• RS-V.1800;

• RS-V.3600; and

• VT-S.1800.

a. Radially Split, Multi-Stage, Vertical, in-Line Diffuser Casing

In the NOPR, DOE used available information to identify baseline and the maximum technologically feasible efficiency levels for this class. DOE identified these efficiency levels based on a review of the efficiency data for RSV pumps in a database generated using market research and confidential manufacturer information, and that included models offered for sale in the United States by three major manufacturers of RSV pumps. DOE found no models 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. 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.) Additionally, both HI and Wilo commented in agreement with this conclusion (HI, No. 45 at p. 3; Wilo, No. 44 at p. 4). As a result, in this final rule, DOE is setting the baseline and max-tech levels equivalent to those established in Europe. Specifically, the baseline is the European minimum efficiency standard,

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

Note that this final rule 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.

Available data did not support the development of a cost-efficiency relationship or additional efficiency levels for RSV equipment. As a result, in this final rule DOE is specifying 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 final rule TSD provides complete details on RSV data availability and the development of the baseline efficiency level.

b. Submersible Turbine, 1800 RPM

In the NOPR DOE proposed to set the energy conservation standard level for VTS.1800 at the same C-values as those for the VTS.3600 equipment based on a preliminary consensus of the CIP working group. DOE and the working group pursued this approach due to limited availability of performance data for the VTS.1800 equipment class; the mechanical similarity between VTS.1800 and VTS.3600 equipment; and a concern that because of the mechanical similarity, bare VTS.1800 pumps (which are identical to bare VTS.3600 pumps) could be sold into the market as unregulated equipment, if DOE set a standard only for VTS.3600 equipment. However, at the time of consensus, working group members were asked to perform research on their four-pole VTS product lines and provide feedback on the proposed C-values. (See EERE-2013-BT-NOC-0039-0105 at pp. 300-308; EERE-2013-BT-NOC-0039-0106 at pp. 38-40, 62-67) In the NOPR, DOE requested 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.

In response, Wilo commented that duplicated C-values could be eliminated and DOE could use data from only 3600

rpm (2-pole) pumps, which would set the minimum standards at a slightly lower efficiency. (Wilo, No. 44 at p. 4) Wilo's comment implies that 1800 rpm (4-pole) pumps, in general, are typically more efficient than analogous 3600 rpm models; this implication agrees with the preliminary consensus reached by the CIP Working Group.

HI commented that the submersible turbines as defined in this regulation are designed for 2-pole speeds and that C-values derived for submersible turbines in the April 2015 proposed rule are valid only for those pumps with 2-pole motors, and not those with four-pole motors. (HI, No. 45 at p. 3).

DOE considered HI and Wilo's comments in establishing an energy conservation standard for VTS.1800 equipment. Per Wilo's comment, DOE recognizes that in other analyzed equipment categories, pumps using 4-pole motors are generally more efficient than an equivalent pump using a 2-pole motor at a given flow and specific speed. However, insufficient data exists to confirm that 4-pole VTS pumps are more efficient than equivalent 2-pole versions. DOE also notes that it did not use any data from four-pole pumps to establish the C-values for 2-pole VTS pumps.

DOE agrees with HI that submersible turbines in the scope of this rulemaking are primarily designed for 2-pole speeds. In the NOPR, DOE stated that every 4-pole based model is constructed from a bare pump that was originally designed for use with a 2-pole motor. DOE also acknowledged that total shipments for the VTS.1800 equipment are estimated to be less than 1-percent of VTS.3600 equipment. While the C-values were derived from pumps with 2-pole motors, as discussed previously, the C-values were set equal for VTS.1800 and VTS.3600 due to lack of data for VTS.1800 and concerns that bare VTS.1800 pumps (which are identical to bare VTS.3600 pumps) could be sold into the market as unregulated equipment, if DOE set a standard only for VTS.3600.

Upon further review, DOE concludes that setting standards only for pumps that have bowl diameters less than or equal to 6 inches limits the possibility that manufacturers would design VTS pumps for use with 4-pole motors. Specifically, submersible pumps with 6 inch or less bowl diameter are primarily designed for wells. Reducing the speed of the motor would require additional bowl assemblies that would significantly increase the cost of the pump.

For these reasons, DOE updated its analysis of the VTS.1800 equipment class. In this final rule, DOE maintained its approach in identifying baseline and max-tech levels for VTS.1800, utilizing data from VTS.3600 equipment. Specifically, DOE established the baseline and max-tech levels for VTS.1800 at a C-value equivalent to the VTS.3600 baseline and max-tech levels. Available data did not support the development of a cost-efficiency relationship, or additional efficiency levels for VTS.1800 equipment. As a result, after consideration of working group and additional stakeholder input, DOE is setting an energy conservation standard for VTS.1800 pumps at the baseline level. DOE will continue to monitor VTS products in the market and may consider revisions in future rulemakings.

3. Technology Assessment

Throughout DOE's NOPR analyses, DOE considered technologies that may improve pump efficiency. DOE received no comments regarding additional technologies to consider; accordingly, DOE has made no changes to its considered technologies for the final rule. Chapter 3 of the final rule TSD details each of these technology options, which include:

• 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.

a. Applicability of Technology Options to Reduced Diameter Impellers

In the NOPR, DOE proposed setting 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. DOE did not receive any comments related to full impeller diameter testing. As such, DOE's analyses of technology options have been made with respect to the full diameter model. In setting 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.

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

In the NOPR, 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 for which standards are being considered or does not significantly improve efficiency across the entire scope of each equipment class; and (c) efficiency improvements from the technology degrade quickly.

Furthermore, in the NOPR, DOE found that most of the considered technology options 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 did not receive any comments related to the elimination of technology options due to low energy savings potential. DOE discusses the elimination of all of these technologies in section III.B.

B. Screening Analysis

In the NOPR, DOE used four screening factors to determine which technology options are suitable for further consideration in a standards rulemaking. If a technology option failed to meet any one of the factors, it was 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

DOE did not receive any comments related to the technology options that were screened out in the NOPR. As such, the conclusions of DOE's screening analysis are unchanged from the NOPR. The following subsections

outline DOE's screening methodology and conclusions.

Improved Surface Finish on Wetted Components

DOE observed through analysis that 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. 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 in this rule. Consequently, DOE screened this technology option out. Chapters 3 and 4 of final rule 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 final rule TSD provide further details on these methods for surface finish improvement, and justification for screening out each one.

Reduced Running Clearances

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 eliminated this technology option because of the concerns about reliability and quick degradation of efficiency improvements. For additional details on the screening of reduced running clearances, see chapter 4 of the final rule 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 final rule 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 final rule TSD.

Addition of a Variable Speed Drive (VSD)

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 eliminated the use of VSDs from the list of technology options. For additional details, see chapters 3 and 4 of the final rule TSD.

Improvement of VSD Efficiency

Because DOE has eliminated the use of VSDs as a technology option, improvement of VSD efficiency was screened out as technology option. For additional details, see chapters 3 and 4 of the final rule TSD.

Reduced VSD Standby and Off Mode Power Usage

Although improving VSD efficiency and standby/off mode power may help improve overall pump efficiency, DOE concluded that not all pumps for which DOE is considering standards in this rule would benefit from the use of a VSD. As such, DOE screened out 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 final rule TSD.

2. Remaining Technologies

In the NOPR, DOE concluded that only improved hydraulic design met all four screening criteria (

i.e.,

practicable to manufacture, install, and service and no adverse impacts on consumer utility, product availability, health, or safety). Furthermore, DOE concluded that improved hydraulic design is technologically feasible, as there is equipment currently available in the market that has utilized this technology option. As such, DOE considered improved hydraulic design as a design option in the engineering analysis. 80 FR 17826, 17843 (April 2, 2015)

In response to DOE's conclusions, HI commented that hydraulic redesign towards higher efficiency may impact suction performance, which subsequently may cause issues with increased cavitation, as well as reduced mechanical seal and bearing life. (HI, No. 45 at p. 6). In response, DOE notes in the NOPR DOE established and analyzed market-based efficiency levels. This means that for all analyzed efficiency levels, a full range of equipment already exists in the market. Specifically, the standard level proposed in the NOPR and established in this final rule was selected by the CIP Working Group and determined to be technologically feasible. Therefore, DOE concludes that improved hydraulic design, as analyzed, does not have a negative impact on utility. For additional details, see chapter 4 of the final rule 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 associated increases in 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 final rule TSD.

1. Representative Equipment for Analysis

a. Representative Configuration Selection

For the NOPR engineering analysis, DOE directly analyzed the cost-efficiency relationship for all equipment classes specified in in section IV.C.8, 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.

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. 80 FR 17826, 17844 (April 2, 2015) DOE received no comments regarding its approach to representative units; consequently, DOE utilized the same representative unit configurations in this final rule. 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. In the NOPR, DOE directly analyzed the cost-efficiency relationship over the full range of pump sizes; as such, in the NOPR, 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. In the NOPR, DOE established baseline configurations by reviewing available manufacturer performance and sales data for equipment manufactured at the time of the analysis. 80 FR 17826, 17844 (April 2, 2015) DOE received no comments regarding baseline configurations; consequently, DOE has maintained this methodology in this final rule. Chapter 5 of the final rule 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, DOE considered hydraulic redesign as a design option in the final rule engineering analysis.

3. Available Energy Efficiency Improvements

In the NOPR, DOE assessed the available energy efficiency improvements resulting from a hydraulic redesign for each equipment class. 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. 80 FR 17826, 17844 (April 2, 2015) DOE received no comments regarding this assessment; consequently, DOE maintained this methodology in this final rule. Section IV.C.6 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 for the NOPR. Each level corresponds to a specific C-value, as shown in Table IV.2. 80 FR 17826, 17844 (April 2, 2015)

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

Equipment class

EL 0

Baseline

EL 1

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.

DOE did not receive any comments related to ESCC, ESFM, IL, or RSV pumps and has maintained the same efficiency levels for these equipment categories in this final rule. DOE received feedback related to VTS pumps and has accordingly updated efficiency levels for the VTS.3600 and VTS.1800 equipment classes. DOE calculated new C-values for each efficiency level based on updated data for submersible motors submitted by HI. (See EERE-2013-BT-TP-0055-0008 at pp. 19-20) More detailed discussion of this data can be found in the pumps test procedure final rule. Additionally, based on feedback from HI suggesting that standards for 2-pole VTS pumps (

i.e.

VTS.3600) should not apply to 4-pole VTS pumps (

i.e.

VTS.1800), DOE analyzed baseline and max-tech efficiency levels for the VTS.1800 equipment class. This feedback was previously discussed in section IV.A.2.b. In the final rule, DOE updated efficiency levels for VTS pumps based on stakeholder feedback. The final rule efficiency levels and corresponding C-values are shown in Table IV.2. (See section III.C for more information about C-values and the related equations.)

Table IV.2—Final Rule 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 *

138.78

N/A

127.15

VTS.3600

138.78

136.92

134.85

131.92

129.25

127.15

* For RSV and VTS.1800 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.2, represents the maximum technologically feasible (“max-tech”) efficiency level for the ESCC, ESFM, IL, RSV, and VTS 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.

DOE determined during the NOPR stage, 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. Based on this analysis, and as a result of the wide range of pumps in each equipment class (1-200 hp), DOE established a max-tech level for each equipment class at the 70th efficiency percentile. This max-tech level was set so that there are existing pumps available in the market that both meet this level and have varying shaft input powers over the entire range of 1-200 hp. As a result, for each equipment class, the max-tech level is representative of the maximum efficiency achievable for pumps that is inclusive of the entire horsepower range. A preliminary version of this analysis was provided to the CIP

Working Group during the April 29-30, 2014 meetings, and DOE did not receive feedback on any alternative max-tech efficiency levels. (EERE-2013-BT-NOC-0039-0051, pp. 17-32) DOE incorporated the 70th efficiency percentile as the highest TSL level evaluated in the NOPR (80 FR 17826, 17845 (April 2, 2015)) and received no further comments. DOE therefore maintained these max-tech efficiency levels in this final rule. Chapter 5 of final rule TSD provides complete details on DOE's market-based max-tech analysis and results.

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

5. Manufacturers Production Cost Assessment Methodology

a. Changes in MPC Associated With Hydraulic Redesign

In the NOPR, DOE performed an analysis for each equipment class to determine the change in manufacturer production cost (MPC), if any, associated with a hydraulic redesign. 80 FR 17826, 17845 (April 2, 2015) 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).

In the NOPR, DOE acknowledged 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. DOE did not receive any comments on changes in MPC. Consequently, in this final rule, DOE maintains its conclusions that hydraulic redesign is not expected to increase the MPC of the representative pump configuration used for analysis. Chapter 5 of the final rule TSD provides complete details on DOE's MPC-efficiency analysis and results.

b. Manufacturer Production Cost (MPC) Model

In the NOPR, 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 NOPR MPC model was developed using data supplied by both HI and individual manufacturers. 80 FR 17826, 17845 (April 2, 2015) This data set includes information on the MSP, manufacturer markup, shipments volumes, model performance and efficiency, and various other parameters. DOE did not receive any comments on the MPC model. Consequently, DOE utilized the same MPC model in this final rule. Chapter 5 of the final rule 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.

In the NOPR, DOE used a bottom-up approach to evaluate the magnitude of the product and capital conversion costs the pump industry would incur to comply with new energy conservation standards. 80 FR 17826, 17845-17846 (April 2, 2015) 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.

DOE used a pump model database, containing various performance parameters, to model the distribution of unique pump models that would require redesign at each efficiency level. The database is comprised of a combination of data supplied by HI and data that DOE collected independently from manufacturers. For the ESCC, ESFM, IL, and VTS equipment classes, the database is of suitable size to be representative of the industry as a whole. Table IV.3 presents the resulting product and capital conversion costs for each equipment class, at each efficiency level.

DOE received comments that were consistent with the conversion costs presented in the NOPR, as discussed in section IV.J.3. Consequently, DOE is maintaining the same product and capital conversion costs in this final rule. However, DOE adjusted conversion costs for the VTS.1800 class, as DOE could not establish intermediate efficiency levels due to lack of data, as discussed in section IV.A.2.b. As a result, in Table IV.3, VTS.3600 and VTS.1800 are listed separately, as different efficiency levels were established for each of these equipment classes. Complete details on the calculation of industry aggregate

product and capital conversion costs are found in chapter 5 of the final rule TSD.

Table IV.3—Total Conversion Cost at Each Efficiency Level

All values in millions of 2014 dollars

EL 0

EL 1

EL 2

EL 3

EL 4

EL 5

ESCC/ESFM *

12.6

50.1

112.2

213.5

349.8

5.1

20.3

46.0

89.5

146.1

VTS.3600 ††

2.6

9.5

19.4

38.4

62.2

VTS.1800 ††

N/A **

Data Not Available †

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.

** Intermediate efficiency levels were not established for VTS.1800 and RSV equipment classes. Please see section IV.A.2 for further detail.

† Although max-tech efficiency levels were established for VTS.1800 and RSV equipment classes, the available data was insufficient to establish a cost-efficiency relationship at max-tech. Please see section IV.A.2 for further detail.

†† VTS.3600 and VTS.1800 are listed separately as different efficiency levels have been established for each equipment class. Please see section IV.A.2 for more details.

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 set forth 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.

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

In the NOPR, 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. 80 FR 17826, 17846 (April 2, 2015) DOE did not receive any comments on these industry-average markups and used the same markups in this final rule.

b. Individual Manufacturer Markup Structures

In the NOPR, DOE concluded that within an equipment class, each manufacturer maintains a flat markup, based on data and information gathered during the manufacturer interviews. 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. 80 FR 17827, 17846 (April 2, 2015) DOE received no comments regarding these individual manufacturer markup structure conclusions. Consequently, DOE has carried through these conclusion into their final rule analysis.

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 in the NOPR that when analyzed as whole, the industry exhibits a relationship between manufacturer markup and efficiency. 80 FR 17827, 17846-17847 (April 2, 2015) 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 manufacturer interviews and working group comments, manufacturers stated 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 in the NOPR analysis, the development of the markup-efficiency relationship was based on data from the IL equipment class. In the NOPR phase, DOE, with support of the CIP Working Group, concluded that the markup structure of the IL equipment class is representative of the ESCC, ESFM, and VTS equipment classes.

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.

Based on comments previously discussed in section IV.A.2.b, DOE has concluded that available data do not support the development of a cost-efficiency relationship for the VTS.1800 equipment class. Beyond the removal of the VTS.1800 equipment class from the analysis, DOE did not receive any additional comments on the IL markup-efficiency relationship or the general

methodology presented in the NOPR. Consequently, in this final rule, DOE applied the industry-wide IL markup-efficiency relationship to only the ESCC, ESFM, and VTS.3600 equipment classes. Chapter 5 of the final rule TSD provides complete details the markup-efficiency relationship analysis and results.

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 NOPR 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. 80 FR 17827, 17847 (Apr. 2, 2015) 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. DOE did not received any additional comments on these two cost recovery scenarios. Consequently, DOE has maintained its methodology and scenarios in the analysis of this final rule. The scenarios are described in further detail in the following paragraphs.

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 (

i.e.,

resulting in the fewest benefits) for consumers and the most positive case for manufacturers (

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 NOPR, DOE used 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). 80 FR 17826, 17847 (April 2, 2015). In response to the NOPR, Wilo agreed that the market distribution channels included all appropriate intermediate steps, and the estimated market share of each channel. (Wilo, No. 44 at p. 4) DOE received no additional comments on this topic. Therefore, DOE maintained these distribution channels for this final rule.

In the NOPR, 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. 80 FR 17826, 17847 (April 2, 2015).

U.S. Census Bureau (2007).

Economic Census Manufacturing Industry Series (NAICS 33 Series) 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). www.census.gov/wholesale/index.html

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

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. (

Id.

)

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

DOE did not receive any comments on the markups or sales tax and has maintained this approach for the final rule.

Chapter 6 of the final rule TSD provides details on DOE's development of markups for pumps.

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual energy consumption of pumps at different efficiency levels and to assess the energy savings potential of increased pumps efficiency. The energy use analysis estimates the range of energy

use of pumps in the field (

i.e.,

as they are actually used by consumers). The energy use analysis provides the basis for other analyses DOE performed, particularly assessments of the energy savings and the savings in consumer operating costs that could result from adoption of amended or new standards.

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

For the NOPR, 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. 80 FR 17826, 17848 (Apr. 2, 2015). DOE did not receive any comments and has maintained this approach in the final rule.

2. Pump Sizing

For the NOPR, 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 the NOPR analysis, the BEP offset was assumed to be uniformly distributed between −0.25 (

i.e.,

25% less than BEP flow) and 0.1 (10% more than BEP flow). 80 FR 17826, 17848 (April 2, 2015). DOE did not receive any comments on pump sizing and has maintained this approach in the final rule.

3. Operating Hours

For the NOPR, 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. 80 FR 17826, 17848 (April 2, 2015). In response to the NOPR, Wilo commented that the average operating hours for the different pump equipment classes and applications in the scope of this rulemaking are based on assumptions and are not well documented in engineering resources. (Wilo, No. 44 at p. 4) Because operating hours are not well documented in engineering resources, DOE developed statistical distributions in the NOPR. DOE maintained its estimate on operating hours based on feedback from the CIP Working Group.

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-0039-0109, pp. 139-152.

4. Load Profiles

Considering the range of all applications of the pump equipment classes for which DOE considered standards, in the NOPR 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. In the NOPR, based on discussion in the CIP Working Group, 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. 80 FR 17826, 17848 (April 2, 2015). In response to the NOPR, Wilo commented that there are no established typical load profiles for pumps within U.S. engineering standards. (Wilo, No. 44 at p. 5) HI recommended that the equally weighted load profiles initially proposed during the CIP Working Group negotiations be used in the consumer sample. (HI, No. 45 at p. 3) After considering comments from HI and Wilo, and in the absence of established typical load profiles for pumps, DOE maintains the four distinct load profiles and weights outlined in the NOPR to define the range of applications available for pumps on the market.

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. 80 FR 17826, 17849 (April 2, 2015). DOE received no comment on this approach and maintains it in this final rule.

5. Equipment Losses

Using the duty point, load profile, and operating 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. In the NOPR, DOE took 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. DOE used existing minimum motor efficiency standards in calculating annual energy use as well as the proposed default submersible motor efficiency values. DOE did not consider VFDs in the LCC analysis. 80 FR 17826, 17849 (April 2, 2015).

DOE received no comments on the use of these equipment losses in its energy use analysis. However, based on comments on the test procedure NOPR, DOE revised the default submersible motor efficiency values in the test procedure final rule. For the energy use analysis, DOE updated its submersible motor efficiency values to reflect those values.

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 working group, that only 1-2% of pumps in scope are driven by non-electric drivers. Therefore, in the NOPR, DOE accounted for the energy use of all pumps as electricity use and did not account for fuel use in its analysis. DOE requested 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. 80 FR 17826, 17849 (April 2, 2015).

DOE did not receive any input that would allow it to conduct this side analysis. HI agreed that non-electric drivers represent a very small percentage of drivers used with pumps and does not believe further evaluation on non-electric drivers is needed. (HI, No. 45 at p. 4) Consistent with HI's suggestion and lack of any additional input or data during public review, DOE did not include energy savings from non-electric drivers in the final rule. As in the NOPR, DOE accounted for the energy use of all pumps, including those used in agricultural applications with non-electric drivers, as electricity use.

Chapter 7 of the final rule TSD provides details on DOE's energy use analysis for pumps.

F. Life-Cycle Cost and Payback Period Analysis

DOE conducts the life-cycle cost (LCC) and payback period (PBP) analysis to estimate the economic impacts of potential new 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 that compliance is required with the standard. 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 new 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 final rule TSD.

See

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 adopted 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 no-new-standards 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 no-new-standards case also includes an estimate of the distribution of equipment efficiencies. In the NOPR, DOE developed a no-new-standards 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. 80 FR 17826, 17850 (April 2, 2015). DOE received no comment on these assumptions and has maintained them for this final rule. Out of this distribution, DOE assigns a pump efficiency based on the relative weighting of different efficiencies. Chapter 8 of the final rule TSD contains details regarding the no-new-standards case efficiency distribution.

At each efficiency level, the pump assigned in the no-new-standards 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 no-new-standards case and the standard does not impact that user. If the pump would not meet the standard at a given efficiency level, the no-new-standards 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 no-new-standards 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 no-new-standards 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 no-new-standards 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 no-new-standards case revenue from failing units. This approach ensures that (1) the conversion costs are recovered from the sale of redesigned units and (2) the conversion costs are distributed across the different representative units in proportion to the amount of revenue each representative unit generates in the no-new-standards case.

In the second stage, DOE calculates a new selling price for each redesigned representative unit,

i.e.,

for each of the combined power and flow bins. In the no-new-standards case, each bin contains a set of pumps with varying efficiencies and varying prices. However, all pumps that fail at an effici

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