Electric and Hybrid Vehicle Research, Development, and Demonstration Program; Petroleum-Equivalent Fuel Economy Calculation

DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 474

[Docket No. EE-RM-99-PEF]

[RIN: 1904-AA40]

Electric and Hybrid Vehicle Research, Development, and

Demonstration Program; Petroleum-Equivalent Fuel Economy Calculation

AGENCY: Department of Energy.

ACTION: Notice of Proposed Rulemaking and Withdrawal of Previous Notice

of Proposed Rulemaking.

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SUMMARY: In response to public comments, the Department of Energy (DOE)

revises its proposal to amend its regulations on electric and hybrid

vehicles to provide a petroleum-equivalency factor (PEF) and procedures

for calculating the petroleum-equivalent fuel economy of electric

vehicles. The petroleum-equivalent fuel economy values of an automobile

manufacturer's electric vehicles may then be included in the

calculation of that manufacturer's corporate average fuel economy

(CAFE) according to regulations prescribed by the Environmental

Protection Agency and the Department of Transportation.

DATES: To ensure your comments are considered, we must receive 7 copies

of your comments on or before September 13, 1999.

You may present oral views, data, and arguments at the public

hearing which will be held in Washington, DC, on Tuesday, August 17,

1999 beginning at 9:30 a.m. If you would like to speak at this hearing,

contact Ms. Andi Kasarsky, (202) 586-3012, by Friday, August 13, 1999.

In addition, you may request an opportunity to speak at the hearing

itself. Each oral presentation is limited to 10 minutes. The hearing

will last as long as there are persons requesting an opportunity to

speak. The notice of proposed rulemaking published in the Federal

Register on February 4, 1994 (59 FR 5336) is withdrawn as of July 14,

1999.

ADDRESSES: Send written comments to: Mr. Rogelio Sullivan, U.S.

Department of Energy, EE-32, Docket No. EE-RM-99-PEF, 1000 Independence

Avenue, SW, Washington, DC 20585. Questions concerning submitting

written comments should be addressed to Ms. Andi Kasarsky, (202) 586-

3012. We will hold a public hearing at the following address: U.S.

Department of Energy, Room 1E-245, 1000 Independence Avenue, SW,

Washington, DC. Please bring seven copies of the prepared oral

statement to the hearing.

You may read and copy written comments received, a copy of the

public hearing transcript, technical reference materials mentioned in

this notice, and any other docket material received as a result of this

notice at the DOE Freedom of Information Reading Room. The current

docket material will be filed under ``EE-RM-99-PEF.'' Copies of the

hearing transcript and written comments received regarding the February

4, 1994 proposed rule are filed under Docket No.

EE-RM-94-101. Earlier materials related to the calculation of the

PEF are contained in Docket No. EE-RM-93-301 and are also available at

the DOE Freedom of Information Reading Room, room 1E-190, (202) 586-

3142, between the hours of 9:00 a.m.-4:00 p.m., Monday through Friday

except Federal holidays.

For more information concerning public participation in this

rulemaking proceeding, see section III of this notice of proposed

rulemaking (Opportunities for Public Comment).

FOR FURTHER INFORMATION CONTACT:

Mr. Rogelio Sullivan, U.S. Department of Energy, Office of

Transportation Technologies, Office of Advanced Automotive

Technologies, EE-32, 1000 Independence Avenue SW, Washington, DC 20585,

(202) 586-8042

Mr. Eugene Margolis, U.S. Department of Energy, Office of General

Counsel, GC-72, 1000 Independence Avenue SW, Washington, DC 20585,

(202) 586-9526

SUPPLEMENTARY INFORMATION:

I. Background

II. Discussion

A. Requirements of the Motor Vehicle Information and Cost

Savings Act, as amended

B. PEF Development Process

C. Test Procedures

D. Calculation Procedures

1. General Form of the PEF Equation

2. Gasoline-Equivalent Energy Content of Electricity Factor

3. ``Fuel Content'' Factor

4. Petroleum-Fueled Accessory Factor

5. Driving Pattern Factor

6. Use of the PEF

7. Sample Calculations

III. Opportunities for Public Comment

A. Participation in Rulemaking

B. Written Comment Procedures

C. Public Hearing

1. Request to Speak Procedures

2. Conduct of the Hearing

IV. Procedural Requirements

A. Environmental Protection Agency Review

B. National Environmental Policy Act Review

C. Regulatory Review

D. Regulatory Flexibility Act

E. Federalism Review

F. ``Takings'' Assessment Review

G. Review Under Executive Order 12988

H. Review Under the Unfunded Mandates Reform Act of 1995

I. Review Under the Treasury and General Government

Appropriations Act, 1999

[[Page 37906]]

I. Background

In an effort to conserve energy through improvements in the energy

efficiency of motor vehicles, Congress passed the Energy Policy and

Conservation Act (Pub. L. 94-163) in 1975. Title III of the Energy

Policy and Conservation Act amended the Motor Vehicle Information and

Cost Savings Act by mandating fuel economy standards for automobiles

produced in, or imported into, the United States. (The Act's provisions

appeared initially in the United States Code at 15 U.S.C. 1901 et seq.

In 1994, Pub. L. 103-272 codified the Act's provisions in Title 49,

U.S.C., Subtitle VI, Part C.) This statute, as amended, requires that

every manufacturer or importer meet a corporate average fuel economy

standard for the fleet of vehicles produced or imported in any model

year. Although electric vehicles are included under the definition of

the term ``automobile'' in the Motor Vehicle Information and Cost

Savings Act, they do not consume ``fuel'' as defined in the Act.

Therefore, calculation of an electric vehicle manufacturer's corporate

average fuel economy is impossible without a petroleum equivalency

value.

On January 7, 1980, the President signed the Chrysler Corporation

Loan Guarantee Act of 1979 (Pub. L. 96-185). Section 18 of the Chrysler

Corporation Loan Guarantee Act of 1979 added a new paragraph (2) to

section 13(c) of the Electric and Hybrid Vehicle Research, Development,

and Demonstration Act of 1976 (Pub. L. 94-413). Part of the new section

13(c) added subsection (a)(3) to section 503 of the Motor Vehicle

Information and Cost Savings Act. That subsection, which has been

codified at 49 U.S.C. 32904(a)(2), directs the Secretary of Energy to

determine petroleum-equivalent fuel economy values for various classes

of electric vehicles. The intent of the legislation is to provide an

incentive for vehicle manufacturers to produce electric vehicles by

including the expected high equivalent fuel economy of these vehicles

in their corporate average fuel economy calculation. This will help to

accelerate the early commercialization of electric vehicles.

Section 18 of the Chrysler Corporation Loan Guarantee Act of 1979

further amended the Electric and Hybrid Vehicle Research, Development

and Demonstration Act of 1976 by adding a new paragraph (3) to section

13(c) which directed the Secretary of Energy, in consultation with the

Secretary of Transportation and the Administrator of the Environmental

Protection Agency, to conduct a seven-year evaluation program of the

inclusion of electric vehicles in the calculation of average fuel

economy. In May 1980, as required by section 503(a)(3) of the Motor

Vehicle Information and Cost Savings Act, DOE proposed a method of

calculating the petroleum-equivalent fuel economy of electric vehicles.

The rule was finalized in April 1981 (46 FR 22753). The seven-year

evaluation program was completed and the calculation of the annual

petroleum equivalency factors was not extended past 1987.

DOE published a proposed rule for a permanent PEF for use in

calculating petroleum-equivalent fuel economy values on February 4,

1994, (59 FR 5336) and obtained oral and written comments from

interested parties. Following consideration of the reviewers' comments,

DOE's own internal re-examination of the assumptions underlying the

proposed rule, and existing regulations for other classes of

alternative fuel vehicles, DOE decided to modify the approach proposed

in 1994 with several changes. DOE believes that the approach presented

today is simpler, more consistent with the regulatory treatment of

other alternative fuel vehicles, and better embodies the Congressional

intent.

Administrative responsibilities for the corporate average fuel

economy program are assigned to the Department of Transportation and

the Environmental Protection Agency under the Motor Vehicle Information

and Cost Savings Act. The Secretary of Transportation is responsible

for prescribing the corporate average fuel economy standard and

enforcing the penalties for failure to meet these standards. The

Administrator of the Environmental Protection Agency is responsible for

calculating a manufacturer's corporate average fuel economy value. DOE

is responsible for developing and promulgating the petroleum

equivalency factor, the key component in the calculation of petroleum-

equivalent fuel economy values for electric vehicles.

II. Discussion

A. Requirements of the Motor Vehicle Information and Cost Savings Act,

as Amended

Section 503(a)(3) of the Motor Vehicle Information and Cost Savings

Act (49 U.S.C. 32904(a)(2)) requires DOE to determine the petroleum-

equivalent fuel economy values for electric vehicles, taking into

account the following parameters:

(i) The approximate electric energy efficiency of the vehicles

considering the vehicle type, mission, and weight;

(ii) The national average electricity generation and transmission

efficiencies;

(iii) The need of the Nation to conserve all forms of energy, and

the relative scarcity and value to the Nation of all fuel used to

generate electricity; and

(iv) The specific driving patterns of electric vehicles as compared

with those of petroleum-fueled vehicles.

Section 503(a)(3) also provides for revision of such values if

necessary.

B. PEF Development Process

When DOE published a proposed rule for a permanent PEF in 1994,

many of the comments criticized one of the key factors of the proposed

PEF: An intermediate factor that used a complex approach to quantify

the relative scarcity and value of all fuels used to generate

electricity in the U.S., which was referred to as the ``scarcity

factor.'' This proposed scarcity factor was based on estimates of the

U.S. share of world reserves of fossil fuels and estimated rates of

depletion of world reserves. In general, the criticisms of this

approach were more ``philosophical'' than specific. The comments,

however, led DOE to reexamine the issue in greater detail. DOE

concluded that faulty assumptions and calculations were present in some

of the steps in the development of the scarcity factor.

For example, the number of years until exhaustion of fossil fuel

reserves was estimated by using forecast energy consumption growth

rates to estimate the length of time needed to deplete the Energy

Information Administration-reported ``proved reserves'' of each fuel.

This is misleading because ``proved reserves'' are defined based on

current economic and technical conditions, and have in fact been

observed to grow over time. In a subsequent step, the calculation

summed the years-to-depletion values for each individual fuel into a

total years-to-depletion value. This too, is misleading because once

the least-abundant fuel is totally consumed, energy needs will have to

be met by increasing the consumption rates of the remaining fuels. In

addition, since the scarcity of nuclear and renewable fuels could not

be determined by this method (because their ``reserves'' are

essentially unlimited), arbitrary scarcity values were assigned to

these fuels. Several other questionable mathematical operations were

subsequently performed during the calculation of the scarcity factor.

DOE therefore decided to

[[Page 37907]]

replace the scarcity factor rather than attempt to refine it.

DOE then considered alternative approaches to the determination of

suitable factors for quantifying scarcity and value. These included

both modifications of the reserves-based approach, as well as market

price (of the fuels used to generate electricity) approaches. DOE

determined, however, that such approaches were highly sensitive to the

assumptions used, and that many possible assumptions were contradictory

or highly subjective. Other approaches evaluated included: Factoring in

the national average price of electricity; quantifying and comparing

the total fuel cycle greenhouse gas emissions from petroleum, and those

of electricity generating fuels; and applying an arbitrary scaling

factor to the electricity to gasoline conversion. Upon careful

examination, each of these approaches was found to have shortcomings of

a technical or policy nature, or internal inconsistencies.

In light of the number of criticisms related to the scarcity

factor, DOE elected to perform an additional search of the literature

regarding reserves of the fuels used to generate electricity. This

research led to a very significant conclusion: Although reserves of all

fossil fuels are obviously finite, fuels used to produce electricity

are in fact widely available from diverse sources at relatively low

prices. DOE carefully considered the scarcity of these fuels, as

required by Congress, but determined that the fuels used to produce

electricity, including renewables, are quite abundant rather than

scarce. Thus, scarcity does not appear to be a concern, and should not

be a guiding factor in the rulemaking at this time.

DOE then examined existing law (49 U.S.C. 32905 (a) and (c)) that

specifies procedures for determining the petroleum-equivalent fuel

economy of other types of alternative fuel vehicles. 49 U.S.C. 32905

(a) states that ``the fuel economy measured for [post-1992 dedicated

alternative fuel vehicles] shall be based on the fuel content of the

alternative fuel used to operate the automobile. A gallon of liquid

alternative fuel used to operate a dedicated automobile is deemed to

contain 0.15 gallon of fuel.'' Two of the most common liquid

alternative fuels are M85 (85 percent methanol and 15 percent unleaded

gasoline by volume) and E85 (85 percent ethanol and 15 percent unleaded

gasoline by volume). The petroleum equivalent fuel economy of E85 and

M85 powered vehicles is then determined by dividing the measured fuel

economy value by 0.15.

Section 32905(c) extends this approach to gaseous fueled vehicles,

stating that ``[the fuel economy of dedicated gaseous fueled vehicles

shall be based on the fuel content of the gaseous fuel used to operate

the automobile. One hundred cubic feet of natural gas is deemed to

contain 0.823 gallon equivalent of natural gas. . . . A gallon

equivalent of gaseous fuel is deemed to have a fuel content of 0.15

gallon of fuel.'' Since gaseous fueled vehicles do not store their fuel

in liquid form, a conversion factor must be applied to express the

volume of gas consumed as an equivalent liquid volume of gasoline. This

factor is based on the volume of natural gas that contains the same

chemical energy as a gallon of gasoline. To determine the petroleum-

equivalent fuel economy of a gaseous fueled vehicle, the vehicle's

gaseous fuel consumption is measured directly (for example, in units of

miles per 100 standard cubic feet of gas), and then the conversion

factor of 0.823 gasoline-equivalent gallons per 100 standard cubic feet

of natural gas is applied. Finally, the result is divided by 0.15 to

obtain the petroleum equivalent fuel economy.

Unlike the case of M85 and E85 powered vehicles, the factor of 0.15

serves a different function in the case of gaseous fueled vehicles,

since natural gas contains no gasoline whatsoever. The true energy

efficiency of both liquid and gaseous fueled alternative fuel vehicles

is intentionally and substantially overstated by the methods specified

in 49 U.S.C. 32905, since only 15 percent of their actual energy

consumption is accounted for in determining their petroleum-equivalent

fuel economy. The use of the 0.15 factor for both types of vehicles

provides a similar regulatory treatment to both types of alternative

fuel vehicles.

DOE proposes to use an approach similar to that in 49 U.S.C. 32905

for calculating petroleum-equivalent fuel economy values for electric

vehicles. DOE proposes to adopt the 0.15 factor to be applied in a

manner similar to that prescribed for natural gas vehicles. This

approach has the following advantages:

(i) It is consistent with existing regulatory and statutory

procedures for other types of alternative fuel vehicles,

(ii) It provides a similar treatment to manufacturers of all types

of alternative fuel vehicles, including electric vehicles,

(iii) It is relatively simple and straightforward to apply,

compared to other approaches considered.

C. Test Procedures

The Environmental Protection Agency is responsible for specifying

the test procedures and calculations used to derive the fuel economy

values to be used in all CAFE determinations. The energy efficiency

values used in CAFE calculations are determined using the test cycles

commonly referred to as the ``city'' and ``highway'' test cycles

described in the Environmental Protection Agency's regulations at 40

CFR Parts 86 and 600. The number of replications of these driving

cycles needed to adequately determine the energy efficiency of each

vehicle will depend upon the type of storage devices (e.g., lead-acid

batteries).

The electrical systems of each vehicle may require special tools

and/or measuring equipment to satisfactorily measure the energy

consumed during testing. The Environmental Protection Agency has

promulgated the ``Special Test Procedures'' provisions of 40 CFR

86.090-27 to accommodate any such special needs.

D. Calculation Procedures

The proposed PEF is conceptually based on the previously described

regulatory approach at 49 U.S.C. 32905 (c) for determining the

petroleum-equivalent fuel economy of gaseous fueled vehicles. The

proposed PEF converts the measured electrical energy consumption of an

electric vehicle into a raw gasoline-equivalent fuel economy value, and

then divides this value by 0.15 to arrive at a final petroleum-

equivalent fuel economy value which may then be included in the

calculation of the vehicle manufacturer's corporate average fuel

economy. Two additional factors are present in the equation, but these

will normally have a value of unity and thus will not influence the

value of the PEF in most cases. The terms comprising the PEF and the

procedure for applying the PEF are described in greater detail below.

1. General Form of the PEF Equation

The general form of the PEF equation is:

PEF = Eg * 1/0.15 * AF * DPF

Where:

Eg=Gasoline-equivalent energy content of electricity factor

1/0.15=``Fuel content'' factor

AF=Petroleum-fueled accessory factor

DPF=Driving pattern factor

The development of these factors is described below.

2. Gasoline-Equivalent Energy Content of Electricity Factor

When comparing the fuel economy of two gasoline vehicles to one

another, it

[[Page 37908]]

is sufficient to measure the quantity of fuel consumed and the distance

each vehicle can travel on that fuel. Since the same fuel is used to

power both vehicles, useful comparisons of the relative energy

efficiency of the two vehicles can be made without considering the

efficiency of the process of getting the fuel to the vehicles.

When comparing gasoline vehicles with electric vehicles, however,

it is essential to consider the efficiency of the respective

``upstream'' processes in the two fuel cycles. A full description of

the differences in the processes is beyond the scope of this

rulemaking, but the critical difference is that a gasoline vehicle

burns its fuel on-board the vehicle, and an electric vehicle burns its

fuel (the majority of electricity in the U.S. is generated at fossil

fuel burning powerplants) off-board the vehicle. In both cases, the

burning of fuels to produce work is the least efficient step of the

respective energy cycles. If one considers only the energy supplied as

gasoline to the gasoline vehicle (from refueling), or as electricity to

the electric vehicle (from recharging), then this inefficient step is

counted against the gasoline vehicle but not against the electric

vehicle. The result is that the fuel economy of the electric vehicle

will be substantially overstated.

For these reasons, the PEF includes a term for expressing the

relative energy efficiency of the full energy cycles of gasoline and

electricity. This term, the gasoline-equivalent energy content of

electricity factor, abbreviated as Eg, is defined as:

[GRAPHIC] [TIFF OMITTED] TP14JY99.000

Where:

Tg=U.S. average fossil-fuel electricity generation

efficiency = 0.328

Tt=U.S. average electricity transmission efficiency = 0.924

Tp=Petroleum refining and distribution efficiency = 0.830

C=Watt-hours of energy per gallon of gasoline conversion factor=33,440

Wh/gal

[GRAPHIC] [TIFF OMITTED] TP14JY99.001

Note that Tg and Tt are included in order to

satisfy a requirement from Congress (49 U.S.C. 32904(a)(2)(B)) as well

as for the technical reasons given above.

The derivation of these values is straightforward but lengthy and

is therefore not discussed in this notice. Details on the assumptions,

calculations, and data sources (primarily monthly and annual

statistical reports from the Energy Information Administration) used to

derive these values are described in materials contained in Docket No.

EE-RM-99-PEF which may be reviewed at the DOE Freedom of Information

Reading Room, at the address and times stated in the ADDRESSES section

of this notice of proposed rulemaking.

3. ``Fuel Content'' Factor

The fuel content factor has a value of 1/0.15 and is included in

the PEF for the reasons described in section II.B and summarized as

follows:

(i) Consistency with existing regulatory and statutory procedures,

(ii) Provision of similar treatment to manufacturers of all types

of alternative fuel vehicles,

(iii) Simplicity and directness.

The fuel content factor value of 1/0.15 is equivalent to a multiple

of 6.67.

4. Petroleum-Fueled Accessory Factor

Some electric vehicles, particularly those that may be operated in

colder climates, may be equipped with auxiliary petroleum-fueled cabin

heater/defroster systems. DOE considered the possible use of such

petroleum-fueled accessories in the PEF calculations by incorporating

an Accessory Factor (AF). This factor has been assigned a usage factor

that reduces the PEF by approximately ten percent per accessory, and it

is assumed that no vehicle will ever be equipped with more than two

such accessories. The majority of electric vehicles are expected to

have no petroleum-fueled accessories installed. This results in 3

possible accessory factor values:

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

Accessory

Number of petroleum-fueled accessories factor (AF)

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

0....................................................... 1.00

1....................................................... 0.90

2....................................................... 0.81

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

DOE recognizes that this is a crude accounting of the impact of the

petroleum-fueled accessories. However, because this approach penalizes

electric vehicles equipped with petroleum-fueled accessories, it

provides an incentive for manufacturers to develop vehicles with more-

desirable all-electric climate control systems.

Interested persons should also be aware that the definition of an

electric vehicle (Zero Emission Vehicle) codified in 40 CFR Part

88.104(g) places certain restrictions on the fuel, operation, and

emissions from fuel fired heaters. The definition of ``electric

vehicle'' in section 474.2 of this part incorporates these

restrictions.

5. Driving Pattern Factor

One of the factors that DOE must consider in determining petroleum-

equivalent fuel economy values for electric vehicles is the relative

driving patterns of electric and petroleum-fueled vehicles (49 U.S.C.

32904(a)(1)(B)(iv)). The purpose of the driving pattern factor (DPF) is

to recognize the fact that electric vehicles may be used differently

than gasoline vehicles, primarily due to their shorter range and longer

``refueling'' times. However, existing EPA regulations do not make

driving-pattern-based adjustments to the fuel economy of various

classes of gasoline vehicles when calculating a manufacturer's CAFE,

even though gasoline-powered vehicles are also used in a large variety

of different ways. Therefore, DOE proposes that for now the DPF be

assigned a value of unity (1.00). The driving pattern factor term would

be retained in the PEF equation, however,

[[Page 37909]]

to allow this value to be adjusted if doing so is warranted in the

future.

6. Use of the PEF

The value of the PEF is equal to the product of the values of the

gasoline-equivalent energy content of electricity (Eg), the

fuel content factor of 1/0.15, the petroleum-fueled accessory factor

(AF), and the driving pattern factor (DPF):

PEF=Eg * 1/0.15 * AF * DPF substituting values,

PEF=(12,211 Wh/gal)* 1/0.15 * (1.00 or 0.90 or 0.81) * (1.00)

or,

PEF=81,407 Wh/gal (zero petroleum-fueled accessories)

PEF=73,266 Wh/gal (one petroleum-fueled accessory)

PEF=65,940 Wh/gal (two petroleum-fueled accessories)

Dividing the PEF by the combined (city and highway) energy

consumption of an electric vehicle yields the petroleum-equivalent fuel

economy of that electric vehicle in miles per gallon:

mpg=PEF (Wh/gal) combined [electrical] energy consumption (Wh/

mile)

Care should be taken to distinguish the assigned petroleum-equivalent

fuel economy value from the actual energy-equivalent fuel economy.

7. Sample Calculations

DOE includes sample calculations of the petroleum-equivalent fuel

economy of hypothetical electric vehicles in the Appendix of this

proposed rule. DOE intends to include these sample calculations as an

Appendix to 10 CFR Part 474.

III. Opportunities for Public Comment

A. Participation in Rulemaking

The Department encourages public participation in this rulemaking.

Individual vehicle manufacturers, fuel producers and providers, trade

groups, associations, vehicle owners and operators, States or other

governmental entities, and other affected or interested parties are

urged to submit written comments on the proposal.

The Department has established a period of 60 days following

publication of this notice for persons to comment on this notice of

proposed rulemaking. You may review all public comments and other

docket material in the DOE Freedom of Information Reading Room at the

address shown at the beginning of this notice. The materials will be

filed under docket number EE-RM-99-PEF.

B. Written Comment Procedures

Interested persons and organizations are invited to participate in

this rulemaking by submitting data, views, or comments with respect to

the proposed rulemaking. Please provide seven copies of your comments

to the address indicated in the ADDRESSES section of this notice.

Please include the designation ``Inclusion of Electric Vehicles in

Corporate Average Fuel Economy Calculation--Notice of Proposed

Rulemaking'' (Docket No. EE-RM-99-PEF) on the outside of the envelope

and on individual documents submitted. DOE will consider all timely-

submitted comments and other relevant information before issuing a

final rule.

If you are submitting information you believe to be confidential

and that may be exempt by law from public disclosure, you should submit

one complete copy along with three copies from which you have removed

the confidential information. DOE will make its own determination

regarding any claim that information submitted be exempt from public

disclosure. Our procedures regarding confidential information are in 10

CFR Part 1004.11.

C. Public Hearing

1. Request To Speak Procedures

The time and place of the public hearing are indicated in the DATES

and ADDRESSES sections of this notice. The Department invites any

person or organization having an interest in the proposed rulemaking to

request to make an oral presentation. Your request should be directed

to DOE at the address indicated in the ADDRESSES section of this

notice. You should bring seven copies of your statement to the hearing.

In the event that you cannot provide seven copies, contact Ms. Kasarsky

at the number indicated in the ADDRESSES section in advance of the

hearing to make alternative arrangements.

2. Conduct of the Hearing

DOE will designate an official to preside at the hearing. This will

not be an evidentiary or judicial-type hearing but will be conducted in

accordance with 5 U.S.C. 553 and section 501 of the Department of

Energy Organization Act, 42 U.S.C. 7191. Only those conducting the

hearing may ask questions. At the conclusion of all initial oral

statements, each person who has made an oral statement will be given

the opportunity, if he or she so desires, to make a rebuttal or

clarifying statement. The statements will be given in the order in

which the initial statements were made and will be subject to time

limitations.

DOE will prepare a transcript of the hearing. DOE will retain the

transcript and other records of this rulemaking and make them available

for public inspection at the DOE Freedom of Information Reading Room as

provided at the beginning of this notice. Any person may purchase a

copy of the transcript from the transcribing reporter.

The presiding officer will announce any further procedural rules

needed for the proper conduct of the hearing.

IV. Procedural Requirements

A. Environmental Protection Agency Review

Pursuant to section 7(a) of the Federal Energy Administration Act

of 1974 (15 U.S.C. 766(a)), DOE submitted a copy of this notice to the

Administrator of the Environmental Protection Agency for the

Administrator's concurrence. The Administrator has concurred.

B. National Environmental Policy Act Review

This rulemaking has been reviewed in accordance with the

requirements of the DOE National Environmental Policy Act Final Rule as

published in 10 CFR Part 1021. This rulemaking amends 10 CFR Part 474

so that electric vehicles receive similar treatment to what Congress

has required for other alternative fuel vehicles under 49 U.S.C. 32905.

The Department has determined that this rule is covered by Categorical

Exclusion in paragraph A5 to subpart D, 10 CFR Part 1021 (rulemaking,

interpreting or amending an existing regulation, no change in

environmental effect). Accordingly, neither an Environmental Assessment

or an Environmental Impact Statement is required.

C. Regulatory Review

Today's proposed rule has been determined not to be a ``significant

regulatory action,'' as defined in section 3(f) of Executive Order

12866, ``Regulatory Planning and Review.'' 58 FR 51735 (October 4,

1993). Accordingly, this action was not subject to review under the

Executive Order by the Office of Information and Regulatory Affairs in

the Office of Management and Budget.

D. Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires that an

agency prepare an initial regulatory flexibility analysis to be

published at the time the proposed rule is published. This requirement

(which appears in section 603) does not apply if the agency certifies

that the rule will not, if promulgated, have a ``significant economic

impact on a substantial number of small entities.''

DOE certifies that this action will not have a significant economic

impact on

[[Page 37910]]

a substantial number of small entities. It is directed at vehicle

manufacturers that will be concerned with a mix of petroleum and

electric fueled vehicles in their annual production. None of these

manufacturers is a small entity.

E. Federalism Review

Executive Order 12612 (52 FR 41685, October 30, 1987) requires that

regulations or rules be reviewed for any substantial direct effects on

States, on the relationship between the national government and the

States, or on the distribution of power and responsibilities among

various levels of government. If there are sufficient substantial

direct effects, then Executive Order 12612 requires preparation of a

federalism assessment to be used in all decisions involved in

promulgating such a regulation or rule.

This action and 10 CFR Part 474 serve only to provide a method of

interpreting 40 CFR Part 600 (Fuel Economy of Motor Vehicles) for

electric vehicles. The action does not involve any substantial direct

effects on States or other considerations stated in Executive Order

12612. Hence, no federalism assessment is required.

F. ``Takings'' Assessment Review

It has been determined that pursuant to Executive Order 12630 (52

FR 8859, March 18, 1988), this proposed regulation, if adopted, would

not result in any takings which might require compensation under the

Fifth Amendment to the United States Constitution.

G. Review Under Executive Order 12988

With respect to the review of existing regulations and the

promulgation of new regulations, section 3(a) of Executive Order 12988,

``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on

Executive agencies the general duty to adhere to the following

requirements: (1) Eliminate drafting errors and ambiguity; (2) write

regulations to minimize litigation; and (3) provide a clear legal

standard for affected conduct rather than a general standard and

promote simplification and burden reduction. With regard to the review

required by section 3(a), section 3(b) of Executive Order 12988

specifically requires that Executive agencies make every reasonable

effort to ensure that the regulation: (1) Clearly specifies the

preemptive effect, if any; (2) clearly specifies any effect on existing

Federal law or regulation; (3) provides a clear legal standard for

affected conduct while promoting simplification and burden reduction;

(4) specifies the retroactive effect, if any; (5) adequately defines

key terms; and (6) addresses other important issues affecting clarity

and general draftsmanship under any guidelines issued by the Attorney

General. Section 3(c) of Executive Order 12988 requires Executive

agencies to review regulations in light of applicable standards in

section 3(a) and section 3(b) to determine whether they are met or it

is unreasonable to meet one or more of them. DOE has completed the

required review and determined that, to the extent permitted by law,

this proposed rule meets the relevant standards of Executive Order

12988.

H. Review Under the Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-

4) requires each Federal agency to prepare a written assessment of the

effects of any Federal mandate in a proposed or final agency rule that

may result in the expenditure by State, local, and tribal governments,

in the aggregate, or by the private sector, of $100 million in any one

year. The Act also requires a Federal agency to develop an effective

process to permit timely input by elected officers of State, local, and

tribal governments on a proposed ``significant intergovernmental

mandate,'' and requires an agency plan for giving notice and

opportunity to timely input to potentially affected small governments

before establishing any requirements that might significantly or

uniquely affect small governments. The proposed rule published today

does not contain any Federal mandate, so these requirements do not

apply.

I. Review Under the Treasury and General Government Appropriations Act,

1999

Section 654 of the Treasury and General Government Appropriations

Act, 1999 (Pub. L. No. 105-277) requires Federal agencies to issue a

Family Policymaking Assessment for any proposed rule or policy that may

affect family well-being. Today's proposal would not have any impact on

the autonomy or integrity of the family as an institution. Accordingly,

DOE has concluded that it is not necessary to prepare a Family

Policymaking Assessment.

The notice of proposed rulemaking published in the Federal Register

on February 4, 1994 (59 FR 5336) is withdrawn as of July 14, 1999.

List of Subjects in 10 CFR Part 474

Electric power, Energy conservation, Motor vehicles, Research.

Issued in Washington, DC, on June 10, 1999.

Dan W. Reicher,

Assistant Secretary, Energy Efficiency and Renewable Energy.

For the reasons set forth in the preamble, DOE proposes to revise

Part 474 of Chapter II of Title 10 of the Code of Federal Regulations

as set forth below:

PART 474--ELECTRIC AND HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND

DEMONSTRATION PROGRAM; PETROLEUM-EQUIVALENT FUEL ECONOMY

CALCULATION

Sec.

474.1 Purpose and scope.

474.2 Definitions.

474.3 Petroleum-equivalent fuel economy calculation.

474.4 Test procedures.

474.5 Review and update.

Appendix to Part 474--Sample Petroleum-Equivalent Fuel Economy

Calculations

Authority: 49 U.S.C. 32901 et seq.

Sec. 474.1 Purpose and scope.

This part contains procedures for calculating a value for the

petroleum-equivalent fuel economy of electric vehicles, as required by

49 U.S.C. 32904(a)(2). The petroleum-equivalent fuel economy value is

intended to be used by the Environmental Protection Agency in

calculating corporate average fuel economy values pursuant to

regulations at 40 CFR Part 600--Fuel Economy of Motor Vehicles.

Sec. 474.2 Definitions.

For the purposes of this part, the term:

Combined energy consumption value means the weighted average of the

Urban Dynamometer Driving Schedule and the Highway Fuel Economy Driving

Schedule energy consumption values (weighted 55% / 45%, respectively),

as determined by the Environmental Protection Agency in accordance with

40 CFR Parts 86 and 600.

Electric vehicle means a vehicle that is powered by an electric

motor drawing current from rechargeable storage batteries or other

portable electrical energy storage devices, provided that:

(1) Recharge energy must be drawn from a source off the vehicle,

such as residential electric service; and

(2) The vehicle must comply with all provisions of the Zero

Emission Vehicle definition found in 40 CFR 88.104(g).

Highway Fuel Economy Driving Schedule energy consumption value

means the average number of watt-hours of electrical energy required

for an electric vehicle to travel one mile of the Highway Fuel Economy

Driving Schedule, as determined by the Environmental Protection Agency.

[[Page 37911]]

Petroleum equivalency factor means the value specified in section

474.3(b), which incorporates the parameters listed in 49 U.S.C.

32904(a)(2)(B) and is used to calculate petroleum-equivalent fuel

economy.

Petroleum-equivalent fuel economy means the value, expressed in

miles per gallon, that is calculated for an electric vehicle in

accordance with Sec. 474.3(a), and reported to the Administrator of the

Environmental Protection Agency for use in determining the vehicle

manufacturer's corporate average fuel economy.

Petroleum-powered accessory means a vehicle accessory (e.g., a

cabin heater, defroster, and/or air conditioner) that:

(1) Uses gasoline or diesel fuel as its primary energy source; and

(2) Meets the requirements for fuel, operation, and emissions in 40

CFR 88.104(g).

Urban Dynamometer Driving Schedule energy consumption value means

the average number of watt-hours of electrical energy required for an

electric vehicle to travel one mile of the Urban Dynamometer Driving

Schedule, as determined by the Environmental Protection Agency.

Sec. 474.3 Petroleum-equivalent fuel economy calculation.

(a) The petroleum-equivalent fuel economy for an electric vehicle

is calculated as follows:

(1) Determine the electric vehicle's Urban Dynamometer Driving

Schedule energy consumption value and the Highway Fuel Economy Driving

Schedule energy consumption value in units of watt-hours per mile;

(2) Average the Urban Dynamometer Driving Schedule energy

consumption value and the Highway Fuel Economy Driving Schedule energy

consumption value using a weighting of 55% urban/45% highway to

determine the combined energy consumption value of the electric vehicle

in units of watt-hours per mile; and

(3) Calculate the petroleum-equivalent fuel economy by dividing the

appropriate petroleum equivalency factor for the number of petroleum-

powered accessories installed (see paragraph (b) of this section) by

the combined energy consumption value, and round to the nearest 0.01

miles per gallon.

(b) The petroleum-equivalency factors for electric vehicles are as

follows:

(1) If the electric vehicle does not have any petroleum-powered

accessories installed, the value of the petroleum equivalency factor is

81,407 watt-hours per gallon.

(2) If the electric vehicle has one petroleum-powered accessory

installed, the value of the petroleum equivalency factor is 73,266

watt-hours per gallon.

(3) If the electric vehicle has two petroleum-powered accessories

installed, the value of the petroleum equivalency factor is 65,940

watt-hours per gallon.

Sec. 474.4 Test procedures.

(a) The electric vehicle energy consumption values used in the

calculation of petroleum-equivalent fuel economy under Sec. 474.3 will

be determined by the Environmental Protection Agency using the Highway

Fuel Economy Driving Schedule and Urban Dynamometer Driving Schedule

test cycles at 40 CFR parts 86 and 600.

(b) The ``Special Test Procedures'' provisions of 40 CFR 86.090-27

may be used to accommodate any special test procedures required for

testing the energy consumption of electric vehicles.

Sec. 474.5 Review and update.

The Department will review this part [five years after the date of

publication as a final rule] to determine whether any updates and/or

revisions are necessary. The Department will publish the results of

this review in the Federal Register.

Appendix to Part 474--Sample Petroleum-Equivalent Fuel Economy

Calculations

Example 1:

An electric vehicle is tested in accordance with Environmental

Protection Agency procedures and is found to have an Urban

Dynamometer Driving Schedule energy consumption value of 265 watt-

hours per mile and a Highway Fuel Economy Driving Schedule energy

consumption value of 220 watt-hours per mile. The vehicle is not

equipped with any petroleum-powered accessories. The combined

electrical energy consumption value is determined by averaging the

Urban Dynamometer Driving Schedule energy consumption value and the

Highway Fuel Economy Driving Schedule energy consumption value using

weighting factors of 55% urban, and 45% highway:

Combined electrical energy consumption value = (0.55 * urban) +

(0.45 * highway) = (0.55 * 265) + (0.45 * 220) = 244.75 Wh/mile

Since the vehicle does not have any petroleum-powered

accessories installed, the value of the petroleum equivalency factor

is 81,407 watt-hours per gallon, and the petroleum-equivalent fuel

economy is:

(81,407 Wh/gal) (244.75 Wh/mile) = 332.61 mpg

Example 2:

The vehicle from Example 1 is equipped with an optional diesel-

fired cabin heater/defroster. For the purposes of this example, it

is assumed that the electrical efficiency of the vehicle is

unaffected.

Since the vehicle has one petroleum-powered accessory installed,

the value of the petroleum equivalency factor is 73,266 watt-hours

per gallon, and the petroleum-equivalent fuel economy is:

(73,266 Wh/gal) (244.75 Wh/mile) = 299.35 mpg

[FR Doc. 99-17786 Filed 7-13-99; 8:45 am]

BILLING CODE 6450-01-P