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Proposed Rule2022-28590

Energy Conservation Program: Energy Conservation Standards for Distribution Transformers

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Published

January 11, 2023

Issuing agencies

Energy Department

Abstract

The Energy Policy and Conservation Act, as amended ("EPCA"), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including distribution transformers. EPCA also requires the U.S. Department of Energy ("DOE") to periodically determine whether more-stringent, standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking ("NOPR"), DOE proposes amended energy conservation standards for distribution transformers, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results.

Full Text

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<title>Federal Register, Volume 88 Issue 7 (Wednesday, January 11, 2023)</title>
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[Federal Register Volume 88, Number 7 (Wednesday, January 11, 2023)]
[Proposed Rules]
[Pages 1722-1859]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-28590]

[[Page 1721]]

Vol. 88

Wednesday,

No. 7

January 11, 2023

Part III

Department of Energy

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10 CFR Part 431

Energy Conservation Program: Energy Conservation Standards for
Distribution Transformers; Proposed Rule

Federal Register / Vol. 88, No. 7 / Wednesday, January 11, 2023 /
Proposed Rules

[[Page 1722]]

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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0018]
RIN 1904-AE12

Energy Conservation Program: Energy Conservation Standards for
Distribution Transformers

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

ACTION: Notice of proposed rulemaking and announcement of public
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including distribution
transformers. EPCA also requires the U.S. Department of Energy
(``DOE'') to periodically determine whether more-stringent, standards
would be technologically feasible and economically justified, and would
result in significant energy savings. In this notice of proposed
rulemaking (``NOPR''), DOE proposes amended energy conservation
standards for distribution transformers, and also announces a public
meeting to receive comment on these proposed standards and associated
analyses and results.

DATES: DOE will hold a public meeting via webinar on Thursday, February
16, 2023, from 1:00 p.m. to 4:00 p.m. See section VII, ``Public
Participation,'' for webinar registration information, participant
instructions and information about the capabilities available to
webinar participants.
Comments: DOE will accept comments, data, and information regarding
this NOPR no later than March 13, 2023.
Comments regarding the likely competitive impact of the proposed
standard should be sent to the Department of Justice contact listed in
the ADDRESSES section on or before February 10, 2023.
Interested persons are encouraged to submit comments using the
Federal eRulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a>. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit comments, identified by docket number EERE-2019-BT-STD-0018,
by any of the following methods:
Email: <a href="/cdn-cgi/l/email-protection#24604d5750564d4651504d4b4a7056454a5742564b494156571614151d7770601414151c6441410a404b410a434b52">[email&#160;protected]</a>. Include the
docket number EERE-2019-BT-STD-0018 in the subject line of the message.
Postal Mail: Appliance and Equipment Standards Program, U.S.
Department of Energy, Building Technologies Office, Mailstop EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-1445. If possible, please submit all items on a compact disc
(``CD''), in which case it is not necessary to include printed copies.
Hand Delivery/Courier: Appliance and Equipment Standards Program,
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant
Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445.
If possible, please submit all items on a CD, in which case it is not
necessary to include printed copies.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section IV of this document.
Docket: The docket for this activity, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at <a href="http://www.regulations.gov">www.regulations.gov</a>. All documents in the
docket are listed in the <a href="http://www.regulations.gov">www.regulations.gov</a> index. However, not all
documents listed in the index may be publicly available, such as
information that is exempt from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/docket/EERE-2019-BT-STD-0018">www.regulations.gov/docket/EERE-2019-BT-STD-0018</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket. See
section VII of this document for information on how to submit comments
through <a href="http://www.regulations.gov">www.regulations.gov</a>.
EPCA requires the Attorney General to provide DOE a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Division at <a href="/cdn-cgi/l/email-protection#f0959e95829789de8384919e9491829483b08583949f9ade979f86">[email&#160;protected]</a> on or
before the date specified in the DATES section. Please indicate in the
``Subject'' line of your email the title and Docket Number of this
proposed rule.

FOR FURTHER INFORMATION CONTACT:
Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 586-9870. Email: <a href="/cdn-cgi/l/email-protection#0d4c7d7d61646c636e685e796c63696c7f697e5c78687e796462637e4d686823696268236a627b">[email&#160;protected]</a>.
Mr. Matthew Ring, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-2555. Email: <a href="/cdn-cgi/l/email-protection#701d1104041815075e02191e173018015e141f155e171f06">[email&#160;protected]</a>.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: <a href="/cdn-cgi/l/email-protection#19586969757078777a7c4a6d78777d786b7d6a486c7c6a6d7076776a597c7c377d767c377e766f">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
1. Liquid-Immersed Distribution Transformers
2. Low-Voltage Dry-Type Distribution Transformers
3. Medium Voltage Dry-Type Distribution Transformers
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Distribution Transformers
C. Deviation From Appendix A
III. General Discussion
A. Equipment Classes and Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. 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. Scope of Coverage
a. Autotransformers
b. Drive (Isolation) Transformers
c. Special-Impedance Transformers
d. Tap Range of 20 Percent or More
e. Sealed and Nonventilated Transformers
f. Step-Up Transformers
g. Uninterruptible Power Supply Transformers
h. Voltage Specification
i. kVA Range
2. Equipment Classes

[[Page 1723]]

a. Pole- and Pad-Mounted Transformers
b. Submersible Transformers
c. Multi-Voltage-Capable Distribution Transformers
d. High-Current Distribution Transformers
e. Data Center Distribution Transformer
f. BIL Rating
g. Other Types of Equipment
3. Test Procedure
4. Technology Options
5. Electrical Steel Technology and Market Assessment
a. Amorphous Steel Market and Technology
b. Grain-Oriented Electrical Steel Market and Technology
6. Distribution Transformer Production Market Dynamics
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Representative Units
2. Efficiency Analysis
a. Design Option Combinations
b. Data Validation
c. Baseline Energy Use
d. Higher Efficiency Levels
e. Load Loss Scaling
f. kVA Scaling
3. Cost Analysis
a. Electrical Steel Prices
b. Scrap Factor
c. Other Material Costs
d. Cost Mark-Ups
4. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
1. Hourly Load Model
a. Hourly Per-Unit Load (PUL)
b. Joint Probability Distribution Function (JPDF)
2. Monthly Per-Unit Load (PUL)
3. Future Load Growth
4. Harmonic Content/Non-Linear Loads
F. Life-Cycle Cost and Payback Period Analysis
1. Equipment Cost
2. Efficiency Levels
3. Modeling Distribution Transformer Purchase Decision
a. Basecase Equipment Selection
b. Total Owning Cost (``TOC'') and Evaluators
c. Non-Evaluators and First Cost Purchases
4. Installation Costs
5. Annual Energy Consumption
6. Electricity Prices
a. Hourly Electricity Costs
7. Maintenance and Repair Costs
8. Equipment Lifetime
9. Discount Rates
10. Energy Efficiency Distribution in the No-New-Standards Case
11. Payback Period Analysis
G. Shipments Analysis
1. Equipment Switching
2. Trends in Distribution Transformer Capacity (kVA)
H. National Impact Analysis
1. Equipment Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
1. Utilities Serving Low Customer Populations
2. Utility Purchasers of Vault (Underground) and Subsurface
Installations
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
a. Material Shortages and Prices
b. Use of Amorphous Materials
c. Larger Distribution Transformers
4. Discussion of MIA Comments
a. Small Businesses
b. Capital Equipment
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual 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. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Competition
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 Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Liquid-Immersed
Distribution Transformers Standards
2. Benefits and Burdens of TSLs Considered for Low-Voltage Dry-
Type Distribution Transformers Standards
3. Benefits and Burdens of TSLs Considered for Medium-Voltage
Dry-Type Distribution Transformers Standards
4. Annualized Benefits and Costs of the Proposed Standards for
Liquid-Immersed Distribution Transformers
5. Annualized Benefits and Costs of the Proposed Standards for
Low-Voltage Distribution Transformers
6. Annualized Benefits and Costs of the Proposed Standards for
Medium-Voltage Distribution Transformers
7. Benefits and Costs of the Proposed Standards for All
Considered Distribution Transformers
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description of Reasons Why Action Is Being Considered
2. Objectives of, and Legal Basis for, Rule
3. Description on Estimated Number of Small Entities Regulated
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
5. Duplication, Overlap, and Conflict With Other Rules and
Regulations
6. 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. Information Quality
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Webinar
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

The EPCA,\1\ (42 U.S.C. 6291-6317, as codified) authorizes DOE to
regulate the energy efficiency of a number of consumer products and
certain industrial equipment. Title III, Part B \2\ of EPCA (42 U.S.C.
6291-6309, as codified), established the Energy Conservation Program
for ``Consumer Products Other Than Automobiles.'' Title III, Part C \3\
of EPCA (42 U.S.C.

[[Page 1724]]

6311-6317, as codified), added by Public Law 95-619, Title IV, section
411(a), established the Energy Conservation Program for Certain
Industrial Equipment. The Energy Policy Act of 1992, Public Law 102-
486, amended EPCA and directed DOE to prescribe energy conservation
standards for those distribution transformers for which DOE determines
such standards would be technologically feasible, economically
justified, and would result in significant energy savings. (42 U.S.C.
6317(a)) The Energy Policy Act of 2005, Public Law 109-58, amended EPCA
to establish energy conservation standards for low-voltage dry-type
distribution transformers. (42 U.S.C. 6295(y))
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\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was re-designated Part A.
\3\ For editorial reasons, upon codification in the U.S. Code,
Part C was re-designated Part A-1. While EPCA includes provisions
regarding distribution transformers in both Part A and Part A-1, for
administrative convenience DOE has established the test procedures
and standards for distribution transformers in 10 CFR part 431,
Energy Efficiency Program for Certain Commercial and Industrial
Equipment. DOE refers to distribution transformers generally as
``covered equipment'' in this document.
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A))
Furthermore, the new or amended standard must result in a significant
conservation of energy. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(B))
EPCA also provides that not later than 6 years after issuance of any
final rule establishing or amending a standard, DOE must publish either
a notice of determination that standards for the product do not need to
be amended, or a notice of proposed rulemaking including new proposed
energy conservation standards (proceeding to a final rule, as
appropriate). (42 U.S.C. 6316(a); 42 U.S.C. 6295(m))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for distribution transformers. The proposed standards, which are
expressed in efficiency as a percentage, are shown in Table I.1 of this
document. These proposed standards, if adopted, would apply to all
distribution transformers listed in Table I.1, Table I.2, and Table I.3
manufactured in, or imported into, the United States starting on the
date 3 years after the publication of the final rule for this
rulemaking.

Table I.1--Proposed Energy Conservation Standards for Low-Voltage Dry-Type Distribution Transformers
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Single-phase Three-phase
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kVA Efficiency (%) kVA Efficiency (%)
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15........................................ 98.84 15........................... 98.72
25........................................ 98.99 30........................... 98.93
37.5...................................... 99.09 45........................... 99.03
50........................................ 99.14 75........................... 99.16
75........................................ 99.24 112.5........................ 99.24
100....................................... 99.30 150.......................... 99.29
167....................................... 99.35 225.......................... 99.36
250....................................... 99.40 300.......................... 99.41
333....................................... 99.45 500.......................... 99.48
750.......................... 99.54
1,000........................ 99.57
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Table I.2--Proposed Energy Conservation Standards for Liquid-Immersed Distribution Transformers
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Single-phase Three-phase
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kVA Efficiency (%) kVA Efficiency (%)
----------------------------------------------------------------------------------------------------------------
10........................................ 98.96 15........................... 98.92
15........................................ 99.05 30........................... 99.06
25........................................ 99.16 45........................... 99.13
37.5...................................... 99.24 75........................... 99.22
50........................................ 99.29 112.5........................ 99.29
75........................................ 99.35 150.......................... 99.33
100....................................... 99.40 225.......................... 99.38
167....................................... 99.46 300.......................... 99.42
250....................................... 99.51 500.......................... 99.48
333....................................... 99.54 750.......................... 99.52
500....................................... 99.59 1,000........................ 99.54
667....................................... 99.62 1,500........................ 99.58
833....................................... 99.64 2,000........................ 99.61
2,500........................ 99.62
3,750........................ 99.66
5,000........................ 99.68
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[[Page 1725]]

Table I.3--Proposed Energy Conservation Standards for Medium-Voltage Dry-Type Distribution Transformers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Single-phase Three-phase
--------------------------------------------------------------------------------------------------------------------------------------------------------
BIL * BIL *
---------------------------------------- --------------------------------------
20-45 kV 46-95 kV >=96 kV 20-45 kV 46-95 kV >=96 kV
kVA ---------------------------------------- kVA --------------------------------------
Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency
(%) (%) (%) (%) (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
15........................................ 98.29 98.07 ............ 15........................... 97.74 97.45 ...........
25........................................ 98.49 98.30 ............ 30........................... 98.11 97.86 ...........
37.5...................................... 98.64 98.47 ............ 45........................... 98.29 98.07 ...........
50........................................ 98.74 98.58 ............ 75........................... 98.49 98.31 ...........
75........................................ 98.86 98.71 98.68 112.5........................ 98.67 98.52 ...........
100....................................... 98.94 98.80 98.77 150.......................... 98.78 98.66 ...........
167....................................... 99.06 98.95 98.92 225.......................... 98.94 98.82 98.71
250....................................... 99.16 99.05 99.02 300.......................... 99.04 98.93 98.82
333....................................... 99.23 99.13 99.09 500.......................... 99.18 99.09 99.00
500....................................... 99.30 99.21 99.18 750.......................... 99.29 99.21 99.12
667....................................... 99.34 99.26 99.23 1,000........................ 99.35 99.28 99.20
833....................................... 99.38 99.31 99.28 1,500........................ 99.43 99.37 99.29
2,000........................ 99.49 99.42 99.35
2,500........................ 99.52 99.47 99.40
3,750........................ 99.58 99.53 99.47
5,000........................ 99.62 99.58 99.51
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* BIL means basic impulse insulation level.

A. Benefits and Costs to Consumers

Table I.4 presents DOE's evaluation of the monetized impacts of the
proposed standards on consumers of distribution transformers, as
measured by the average life-cycle cost (``LCC'') savings and the
simple payback period (``PBP'').\4\ The average LCC savings are
positive for all equipment classes in all cases, with the exception of
representative unit 14, and the PBP is less than the average lifetime
of distribution transformers, which is estimated to be 32 years (see
section IV.F.8 of this document).
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\4\ The average LCC savings and simple PBP refer to consumers
that are affected by a standard and are measured relative to the
efficiency distribution in the no-new-standards case, which depicts
the market in the compliance year in the absence of new or amended
standards. The determination of the distribution of efficiencies in
the no-new-standards case is a function of the units selected from
the consumer choice model. (see section IV.F.3 of this document).
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In the context of this NOPR, the term consumer refers to different
populations that purchase and bear the operating costs of distribution
transformers. Consumers vary by transformer type; for medium-voltage
liquid-immersed distribution transformers the term consumer refers to
electric utilities; for low- and medium-voltage dry-type distribution
transformers the term consumer refers to commercial and industrial
entities.

Table I.4--Impacts of Proposed Energy Conservation Standards on Consumers of Distribution Transformers
----------------------------------------------------------------------------------------------------------------
Representative Average LCC Simple payback
Equipment class unit savings (2021$) period (years)
----------------------------------------------------------------------------------------------------------------
1......................................................... 1 72 16.0
1......................................................... 2 131 10.1
1......................................................... 3 1,029 12.2
2......................................................... 4 511 11.9
2......................................................... 5 1,543 13.8
2......................................................... 17 6,594 15.8
12........................................................ 15 * n.a. * n.a.
12........................................................ 16 * n.a. * n.a.
3......................................................... 6 147 11.7
4......................................................... 7 564 8.9
4......................................................... 8 722 11.8
6......................................................... 9 887 2.4
6......................................................... 10 653 11.4
8......................................................... 11 226 11.9
8......................................................... 12 3,051 1.1
8......................................................... 18 22,797 8.1
10........................................................ 13 228 12.4
10........................................................ 14 -2,856 26.1
10........................................................ 19 8,082 11.3
----------------------------------------------------------------------------------------------------------------
* No-new standards are currently being proposed for equipment class 12, ``n.a'' indicates that there are no
consumer savings.

[[Page 1726]]

DOE's analysis of the impacts of the proposed 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 (2022-2056). Using a real discount rate of
7.4 percent for liquid-immersed distribution transformers, 11.1 percent
for low-voltage dry-type (``LVDT'') distribution transformers, and 9.0
percent for medium-voltage dry-type (``MVDT'') distribution
transformers, DOE estimates that the INPV for manufacturers of
distribution transformers in the case without amended standards is
$1,384 million in 2021$ for liquid-immersed distribution transformers,
$194 million in 2021$ for LVDT distribution transformers, and $87
million in 2021$ for MVDT distribution transformers. Under the proposed
standards, the change in INPV is estimated to range from -18.1 percent
to -10.9 percent for liquid-immersed distribution transformers which
represents a change in INPV of approximately -$251.3 million to -$151.0
million; from -31.4 percent to -17.2 percent for LVDT distribution
transformers, which represents a change in INPV of approximately -$61.0
million to -$33.5 million; and -3.0 percent to -0.9 percent for MVDT
distribution transformers, which represents a change in INPV of
approximately -$2.7 million to -$0.8 million. In order to bring
products into compliance with amended standards, it is estimated that
the industry would incur total conversion costs of $270.6 million for
liquid-immersed distribution transformer, $69.4 million for LVDT
distribution transformers, and $3.1 million for MVDT distribution
transformers.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.

C. National Benefits and Costs \5\
---------------------------------------------------------------------------

\5\ All monetary values in this document are expressed in 2021
dollars.
---------------------------------------------------------------------------

1. Liquid-Immersed Distribution Transformers
DOE's analyses indicate that the proposed energy conservation
standards for liquid-immersed distribution transformers would save a
significant amount of energy. Relative to the case without amended
standards, the lifetime energy savings for liquid-immersed distribution
transformers purchased in the 30-year period that begins in the
anticipated year of compliance with the amended standards (2027-2056)
amount to 8.02 quadrillion British thermal units (``Btu''), or
quads.\6\ This represents a fleet savings of 36 percent relative to the
energy use of these products in the case without amended standards
(referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

\6\ 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.2 of this document.
---------------------------------------------------------------------------

The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for distribution transformers ranges
from 0.26 billion (2021$) (at a 7-percent discount rate) to 5.30
billion (2021$) (at a 3-percent discount rate). This NPV expresses the
estimated total value of future operating-cost savings minus the
estimated increased product costs for distribution transformers
purchased in 2027-2056.
In addition, the proposed standards for liquid-immersed
distribution transformers are projected to yield significant
environmental benefits. DOE estimates that the proposed standards would
result in cumulative emission reductions (over the same period as for
energy savings) of 256.27 million metric tons (``Mt'') \7\ of carbon
dioxide (``CO<INF>2</INF>''), 99.71 thousand tons of sulfur dioxide
(``SO<INF>2</INF>''), 403.57 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 1,846.56 thousand tons of methane
(``CH<INF>4</INF>''), 2.32 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.65 tons of mercury (``Hg'').\8\
---------------------------------------------------------------------------

\7\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\8\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2022 assumptions that effect air pollutant
emissions.
---------------------------------------------------------------------------

DOE estimates climate benefits from a reduction in greenhouse gases
(GHG) using four different estimates of the social cost of
CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of methane
(``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide (``SC-
N<INF>2</INF>O''). Together these represent the social cost of GHG (SC-
GHG). DOE used interim SC-GHG values developed by an Interagency
Working Group on the Social Cost of Greenhouse Gases (IWG),\9\ as
discussed in section IV.L. of this document. For presentational
purposes, the climate benefits associated with the average SC-GHG at a
3-percent discount rate are $8.66 billion. DOE does not have a single
central SC-GHG point estimate and it emphasizes the importance and
value of considering the benefits calculated using all four SC-GHG
estimates.\10\
---------------------------------------------------------------------------

\9\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021. <a href="https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf">https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf</a>.
\10\ On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a
result of the Fifth Circuit's order, the preliminary injunction is
no longer in effect, pending resolution of the federal government's
appeal of that injunction or a further court order. Among other
things, the preliminary injunction enjoined the defendants in that
case from ``adopting, employing, treating as binding, or relying
upon'' the interim estimates of the social cost of greenhouse
gases--which were issued by the Interagency Working Group on the
Social Cost of Greenhouse Gases on February 26, 2021--to monetize
the benefits of reducing greenhouse gas emissions. As reflected in
this rule, DOE has reverted to its approach prior to the injunction
and present monetized greenhouse gas abatement benefits where
appropriate and permissible under law.
---------------------------------------------------------------------------

DOE also estimates health benefits from SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions.\11\ DOE estimates the present
value of the health benefits would be $4.69 billion using a 7-percent
discount rate, and $15.57 billion using a 3-percent discount rate.\12\
DOE is currently only monetizing (for SO<INF>2</INF> and
NO<INF>X</INF>) PM<INF>2.5</INF> precursor health benefits and (for
NO<INF>X</INF>) ozone precursor health benefits, but will continue to
assess the ability to monetize other effects such as health benefits
from reductions in direct PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

\11\ DOE estimated the monetized value of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions associated with electricity
savings using benefit per ton estimates from the EPA. e. See section
IV.L.2 of this document for further discussion.
\12\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

Table I.5 summarizes the monetized benefits and costs expected to
result from the proposed standards for liquid-immersed distribution
transformers. In the table, total benefits for both the 3-percent and
7-percent cases are presented using the average GHG social costs with
3-percent discount rate, but the Department emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
cases. The estimated total net benefits using each of the four cases
are

[[Page 1727]]

presented in section V.B.8 of this document.

Table I.5--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Liquid-Immersed Distribution Transformers
(TSL 4)
------------------------------------------------------------------------
Billion
($2021)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 12.77
Climate Benefits *...................................... 8.66
Health Benefits **...................................... 15.57
Total Benefits [dagger]................................. 37.01
Consumer Incremental Product Costs [Dagger]............. 7.48
Net Benefits............................................ 29.53
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 4.28
Climate Benefits * (3% discount rate)................... 8.66
Health Benefits **...................................... 4.69
Total Benefits [dagger]................................. 17.63
Consumer Incremental Product Costs [Dagger]............. 4.02
Net Benefits............................................ 13.61
------------------------------------------------------------------------
This table presents the costs and benefits associated with distribution
transformers shipped in 2027-2056. These results include benefits to
consumers which accrue after 2056 from the products shipped in 2027-
2056.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate), as shown
in Table V.73, Table V.74, and Table V.75. Together these represent
the global social cost of greenhouse gases (SC-GHG). For
presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but
the Department does not have a single central SC-GHG point estimate.
See section. IV.L of this document for more details. On March 16,
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the
federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v.
Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth
Circuit's order, the preliminary injunction is no longer in effect,
pending resolution of the federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and present monetized
greenhouse gas abatement benefits where appropriate and permissible
under law.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V.69 for net benefits using all four SC-GHG
estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.

The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of the benefits of GHG and
NO<INF>X</INF> and SO<INF>2</INF> emission reductions, all
annualized.\13\ The national operating savings are domestic private
U.S. consumer monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of distribution
transformers shipped in 2027-2056. The benefits associated with reduced
emissions achieved as a result of the proposed standards are also
calculated based on the lifetime of liquid-immersed distribution
transformers shipped in 2027-2056.
---------------------------------------------------------------------------

\13\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2021, 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., 2030), and then discounted the present value from each year
to 2021. 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.
---------------------------------------------------------------------------

Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.6. The results under the primary
estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NOx and SO<INF>2</INF> emissions, and the
3-percent discount rate case for climate benefits from reduced GHG
emissions, the estimated cost of the standards proposed in this rule is
$424.8 million per year in increased equipment costs, while the
estimated annual benefits are $451.9 million in reduced equipment
operating costs, $497.4 million in climate benefits, and $495.3 million
in health benefits. In this case. The net benefit would amount to
$1,019.8 million per year.

[[Page 1728]]

Table I.6--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Liquid-Immersed
Distribution Transformers (TSL 4)
----------------------------------------------------------------------------------------------------------------
Million (2021$/year)
-------------------------------------------------------
Category Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 733.5 686.9 789.9
Climate Benefits *...................................... 497.4 478.9 519.5
Health Benefits **...................................... 894.3 860.5 934.8
Total Benefits [dagger]................................. 2,125.3 2,026.3 2,244.2
Consumer Incremental Product Costs [Dagger]............. 429.5 449.0 413.2
Net Benefits............................................ 1,695.8 1,577.3 1,831.0
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 451.9 425.7 482.2
Climate Benefits * (3% discount rate)................... 497.4 478.9 519.5
Health Benefits **...................................... 495.3 477.9 515.3
Total Benefits [dagger]................................. 1,444.7 1,382.5 1,517.0
Consumer Incremental Product Costs [Dagger]............. 424.8 442.1 409.9
Net Benefits............................................ 1,019.8 940.5 1,107.2
----------------------------------------------------------------------------------------------------------------
This table presents the costs and benefits associated with distribution transformers shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate), as shown in Table V.73, Table V.74, and Table V.75. Together
these represent the global social cost of greenhouse gases (SC-GHG). For presentational purposes of this
table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the
Department does not have a single central SC-GHG point estimate. See section. IV.L of this document for more
details. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal government's
emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana
v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary
injunction is no longer in effect, pending resolution of the federal government's appeal of that injunction or
a further court order. Among other things, the preliminary injunction enjoined the defendants in that case
from ``adopting, employing, treating as binding, or relying upon'' the interim estimates of the social cost of
greenhouse gases--which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on
February 26, 2021--to monetize the benefits of reducing greenhouse gas emissions. As reflected in this rule,
DOE has reverted to its approach prior to the injunction and present monetized greenhouse gas abatement
benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. The benefits are based on the
low estimates of the monetized value. DOE is currently only monetizing (for SOX and NOX) PM2.5 precursor
health benefits and (for NOX) ozone precursor health benefits but will continue to assess the ability to
monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of
this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table
V.69 for net benefits using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.

2. Low-Voltage Dry-Type Distribution Transformers
DOE's analyses indicate that the proposed energy conservation
standards for low-voltage dry-type distribution transformers would save
a significant amount of energy. Relative to the case without amended
standards, the lifetime energy savings for low-voltage dry-type
distribution transformers purchased in the 30-year period that begins
in the anticipated year of compliance with the amended standards (2027-
2056) amount to 2.47 quadrillion British thermal units (``Btu''), or
quads.\14\ This represents a fleet savings of 47 percent relative to
the energy use of these products in the case without amended standards
(referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

\14\ 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.2 of this document.
---------------------------------------------------------------------------

The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for low-voltage dry-type
distribution transformers ranges from 2.63 billion (2021$) (at a 7-
percent discount rate) to 9.63 billion (2021$) (at a 3-percent discount
rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased product costs for
low-voltage dry-type distribution transformers purchased in 2027-2056.
In addition, the proposed standards for low-voltage dry-type
distribution transformers are projected to yield significant
environmental benefits. DOE estimates that the proposed standards would
result in cumulative emission reductions (over the same period as for
energy savings) of 77.57 million metric tons (``Mt'') \15\ of carbon
dioxide (``CO<INF>2</INF>''), 92.81 thousand tons of sulfur dioxide
(``SO<INF>2</INF>''), 123.44 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 567.30 thousand tons of methane
(``CH<INF>4</INF>''), 0.70 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.19 tons of mercury (``Hg'').\16\
---------------------------------------------------------------------------

\15\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\16\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2022 assumptions that effect air pollutant
emissions.

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

[[Page 1729]]

DOE estimates climate benefits from a reduction in greenhouse gases
(GHG) using four different estimates of the social cost of
CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of methane
(``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide (``SC-
N<INF>2</INF>O''). Together these represent the social cost of GHG (SC-
GHG). DOE used interim SC-GHG values developed by an Interagency
Working Group on the Social Cost of Greenhouse Gases (IWG),\17\ as
discussed in section IV.L of this document. For presentational
purposes, the climate benefits associated with the average SC-GHG at a
3-percent discount rate are $2.77 billion. (DOE does not have a single
central SC-GHG point estimate and it emphasizes the importance and
value of considering the benefits calculated using all four SC-GHG
estimates.)
---------------------------------------------------------------------------

\17\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021. <a href="https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf">https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf</a>.
---------------------------------------------------------------------------

DOE also estimates health benefits from SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions.\18\ DOE estimates the present
value of the health benefits would be $1.53 billion using a 7-percent
discount rate, and $4.91 billion using a 3-percent discount rate.\19\
DOE is currently only monetizing (for SO<INF>2</INF> and
NO<INF>X</INF>) PM<INF>2.5</INF> precursor health benefits and (for
NO<INF>X</INF>) ozone precursor health benefits, but will continue to
assess the ability to monetize other effects such as health benefits
from reductions in direct PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

\18\ DOE estimated the monetized value of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions associated with electricity
savings using benefit per ton estimates from the EPA. See section
IV.L.2 of this document for further discussion.
\19\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

Table I.7 summarizes the monetized benefits and costs expected to
result from the proposed standards for low-voltage dry-type
distribution transformers. In the table, total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social
costs with 3-percent discount rate, but the Department emphasizes the
importance and value of considering the benefits calculated using all
four SC-GHG cases. The estimated total net benefits using each of the
four cases are presented in section V.B.8 of this document.

Table I.7--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Low-Voltage Dry-Type Distribution
Transformers (TSL 5)
------------------------------------------------------------------------
Billion
($2021)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 13.45
Climate Benefits *...................................... 2.77
Health Benefits **...................................... 4.91
Total Benefits [dagger]................................. 21.13
Consumer Incremental Product Costs [Dagger]............. 3.82
Net Benefits............................................ 17.31
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 4.69
Climate Benefits * (3% discount rate)................... 2.77
Health Benefits **...................................... 1.53
Total Benefits [dagger]................................. 8.99
Consumer Incremental Product Costs [Dagger]............. 2.05
Net Benefits............................................ 6.94
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with
distribution transformers shipped in 2027-2056. These results include
benefits to consumers which accrue after 2056 from the products
shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate), as shown
in Table V.73, Table V.74, and Table V.75. Together these represent
the global social cost of greenhouse gases (SC-GHG). For
presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but
the Department does not have a single central SC-GHG point estimate.
See section. IV.L of this document for more details. On March 16,
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the
federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v.
Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth
Circuit's order, the preliminary injunction is no longer in effect,
pending resolution of the federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and present monetized
greenhouse gas abatement benefits where appropriate and permissible
under law.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V.69 for net benefits using all four SC-GHG
estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.

[[Page 1730]]

The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of the benefits of GHG and
NO<INF>X</INF> and SO<INF>2</INF> emission reductions, all
annualized.\20\ The national operating savings are domestic private
U.S. consumer monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of low-voltage dry-
type distribution transformers shipped in 2027-2056. The benefits
associated with reduced emissions achieved as a result of the proposed
standards are also calculated based on the lifetime of low-voltage dry-
type distribution transformers shipped in 2027-2056.
---------------------------------------------------------------------------

\20\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2021, 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., 2030), and then discounted the present value from each year
to 2021. 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.
---------------------------------------------------------------------------

Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.8. The results under the primary
estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards
proposed in this rule is $216.9 million per year in increased equipment
costs, while the estimated annual benefits are $495.0 million in
reduced equipment operating costs, $159.2 million in climate benefits,
and $162.1 million in health benefits. In this case. The net benefit
would amount to $599.4 million per year.

Table I.8--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Low-Voltage Dry Type
Distribution Transformers (TSL 5)
----------------------------------------------------------------------------------------------------------------
Million (2021$/year)
-------------------------------------------------------
Category Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 772.1 716.9 831.3
Climate Benefits *...................................... 159.2 151.6 165.9
Health Benefits **...................................... 281.8 268.3 293.9
Total Benefits [dagger]................................. 1,213.1 1,136.7 1,291.1
Consumer Incremental Product Costs [Dagger]............. 219.3 228.7 208.7
Net Benefits............................................ 993.8 908.0 1,082.4
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 495.0 462.8 528.7
Climate Benefits * (3% discount rate)................... 159.2 151.6 165.9
Health Benefits **...................................... 162.1 154.9 168.2
Total Benefits [dagger]................................. 816.3 769.3 862.8
Consumer Incremental Product Costs [Dagger]............. 216.9 225.2 207.3
Net Benefits............................................ 599.4 544.1 655.5
----------------------------------------------------------------------------------------------------------------
This table presents the costs and benefits associated with distribution transformers shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate), as shown in Table V.73, Table V.74, and Table V.75. Together
these represent the global social cost of greenhouse gases (SC-GHG). For presentational purposes of this
table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the
Department does not have a single central SC-GHG point estimate. See section. IV.L of this document for more
details. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal government's
emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana
v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary
injunction is no longer in effect, pending resolution of the federal government's appeal of that injunction or
a further court order. Among other things, the preliminary injunction enjoined the defendants in that case
from ``adopting, employing, treating as binding, or relying upon'' the interim estimates of the social cost of
greenhouse gases--which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on
February 26, 2021--to monetize the benefits of reducing greenhouse gas emissions. As reflected in this rule,
DOE has reverted to its approach prior to the injunction and present monetized greenhouse gas abatement
benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. The benefits are based on the
low estimates of the monetized value. DOE is currently only monetizing (for SOX and NOX) PM2.5 precursor
health benefits and (for NOX) ozone precursor health benefits but will continue to assess the ability to
monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of
this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table
V.69 for net benefits using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.

3. Medium Voltage Dry-Type Distribution Transformers
DOE's analyses indicate that the proposed energy conservation
standards for medium-voltage dry-type distribution transformers would
save a significant amount of energy. Relative to the case without
amended standards, the lifetime energy savings for medium-voltage dry-
type distribution transformers purchased in the 30-year period that
begins in the anticipated

[[Page 1731]]

year of compliance with the amended standards (2027-2056) amount to
0.12 quadrillion British thermal units (``Btu''), or quads.\21\ This
represents a fleet savings of 24 percent relative to the energy use of
these products in the case without amended standards (referred to as
the ``no-new-standards case'').
---------------------------------------------------------------------------

\21\ 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.2 of this document.
---------------------------------------------------------------------------

The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for medium-voltage dry-type
distribution transformers ranges from 0.04 billion (2021$) (at a 7-
percent discount rate) to 0.21 billion (2021$) (at a 3-percent discount
rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased product costs for
medium-voltage dry-type distribution transformers purchased in 2027-
2056.
In addition, the proposed standards for medium-voltage dry-type
distribution transformers are projected to yield significant
environmental benefits. DOE estimates that the proposed standards would
result in cumulative emission reductions (over the same period as for
energy savings) of 3.71 million metric tons (``Mt'') \22\ of carbon
dioxide (``CO<INF>2</INF>''), 1.43 thousand tons of sulfur dioxide
(``SO<INF>2</INF>''), 5.93 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 27.29 thousand tons of methane
(``CH<INF>4</INF>''), 0.03 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.01 tons of mercury (``Hg'').\23\
---------------------------------------------------------------------------

\22\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\23\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO2022''). AEO2022 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2022 assumptions that effect air pollutant
emissions.
---------------------------------------------------------------------------

DOE estimates climate benefits from a reduction in greenhouse gases
(GHG) using four different estimates of the social cost of
CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of methane
(``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide (``SC-
N<INF>2</INF>O''). Together these represent the social cost of GHG (SC-
GHG). DOE used interim SC-GHG values developed by an Interagency
Working Group on the Social Cost of Greenhouse Gases (IWG),\24\ as
discussed in IV.L of this document. For presentational purposes, the
climate benefits associated with the average SC-GHG at a 3-percent
discount rate are $0.13 billion. (DOE does not have a single central
SC-GHG point estimate and it emphasizes the importance and value of
considering the benefits calculated using all four SC-GHG estimates.)
---------------------------------------------------------------------------

\24\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021. <a href="https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf">https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf</a>.
---------------------------------------------------------------------------

DOE also estimates health benefits from SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions.\25\ DOE estimates the present
value of the health benefits would be $0.07 billion using a 7-percent
discount rate, and $0.24 billion using a 3-percent discount rate.\26\
DOE is currently only monetizing (for SO<INF>2</INF> and
NO<INF>X</INF>) PM<INF>2.5</INF> precursor health benefits and (for
NO<INF>X</INF>) ozone precursor health benefits, but will continue to
assess the ability to monetize other effects such as health benefits
from reductions in direct PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

\25\ DOE estimated the monetized value of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions associated with electricity
savings using benefit per ton estimates from the EPA. See section
IV.L.2 of this document for further discussion.
\26\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

Table I.9 summarizes the monetized benefits and costs expected to
result from the proposed standards for medium-voltage dry-type
distribution transformers. In the table, total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social
costs with 3-percent discount rate, but the Department emphasizes the
importance and value of considering the benefits calculated using all
four SC-GHG cases. The estimated total net benefits using each of the
four cases are presented in section V.B.8 of this document.

Table I.9--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Medium-Voltage Dry-Type Distribution
Transformers (TSL 2)
------------------------------------------------------------------------
Billion
($2021)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 0.41
Climate Benefits *...................................... 0.13
Health Benefits **...................................... 0.24
Total Benefits [dagger]................................. 0.77
Consumer Incremental Product Costs [Dagger]............. 0.19
Net Benefits............................................ 0.58
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 0.14
Climate Benefits * (3% discount rate)................... 0.13
Health Benefits **...................................... 0.07
Total Benefits [dagger]................................. 0.35
Consumer Incremental Product Costs [Dagger]............. 0.10
Net Benefits............................................ 0.24
------------------------------------------------------------------------
This table presents the costs and benefits associated with distribution
transformers shipped in 2027-2056. These results include benefits to
consumers which accrue after 2056 from the products shipped in 2027-
2056.

[[Page 1732]]

* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate), as shown
in Table V.73, Table V.74, and Table V.75. Together these represent
the global social cost of greenhouse gases (SC-GHG). For
presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but
the Department does not have a single central SC-GHG point estimate.
See section. IV.L of this document for more details. On March 16,
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the
federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v.
Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth
Circuit's order, the preliminary injunction is no longer in effect,
pending resolution of the federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and present monetized
greenhouse gas abatement benefits where appropriate and permissible
under law.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V.69 for net benefits using all four SC-GHG
estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.

The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of the benefits of GHG and
NO<INF>X</INF> and SO<INF>2</INF> emission reductions, all
annualized.\27\ The national operating savings are domestic private
U.S. consumer monetary savings that occur as a result of purchasing the
covered equipment and are measured for the lifetime of medium-voltage
dry-type distribution transformers shipped in 2027-2056. The benefits
associated with reduced emissions achieved as a result of the proposed
standards are also calculated based on the lifetime of medium-voltage
dry-type distribution transformers shipped in 2027-2056.
---------------------------------------------------------------------------

\27\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2021, 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., 2030), and then discounted the present value from each year
to 2021. 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.
---------------------------------------------------------------------------

Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.10. The results under the primary
estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards
proposed in this rule is $10.8 million per year in increased equipment
costs, while the estimated annual benefits are $14.9 million in reduced
equipment operating costs, $7.6 million in climate benefits, and $7.8
million in health benefits. The net benefit would amount to $19.5
million per year.

Table I.10--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Medium-Voltage Dry-Type
Distribution Transformers (TSL 2)
----------------------------------------------------------------------------------------------------------------
Million (2021$/year)
-------------------------------------------------------
Category Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 23.3 22.2 25.8
Climate Benefits *...................................... 7.6 7.5 8.2
Health Benefits **...................................... 13.5 13.2 14.5
Total Benefits [dagger]................................. 44.4 42.9 48.5
Consumer Incremental Product Costs [Dagger]............. 11.0 11.7 10.7
Net Benefits............................................ 33.5 31.1 37.7
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 14.9 14.3 16.4
Climate Benefits * (3% discount rate)................... 7.6 7.5 8.2
Health Benefits **...................................... 7.8 7.6 8.3
Total Benefits [dagger]................................. 30.3 29.4 32.9
Consumer Incremental Product Costs [Dagger]............. 10.8 11.6 10.6
Net Benefits............................................ 19.5 17.9 22.2
----------------------------------------------------------------------------------------------------------------
This table presents the costs and benefits associated with distribution transformers shipped in 2027-2056. These
results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.

[[Page 1733]]

* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate), as shown in Table V.73, Table V.74, and Table V.75. Together
these represent the global social cost of greenhouse gases (SC-GHG). For presentational purposes of this
table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the
Department does not have a single central SC-GHG point estimate. See section. IV.L of this document for more
details. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal government's
emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana
v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary
injunction is no longer in effect, pending resolution of the federal government's appeal of that injunction or
a further court order. Among other things, the preliminary injunction enjoined the defendants in that case
from ``adopting, employing, treating as binding, or relying upon'' the interim estimates of the social cost of
greenhouse gases--which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on
February 26, 2021--to monetize the benefits of reducing greenhouse gas emissions. As reflected in this rule,
DOE has reverted to its approach prior to the injunction and present monetized greenhouse gas abatement
benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. The benefits are based on the
low estimates of the monetized value. DOE is currently only monetizing (for SOX and NOX) PM2.5 precursor
health benefits and (for NOX) ozone precursor health benefits but will continue to assess the ability to
monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of
this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table
V.69 for net benefits using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.

DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K and IV.L of this document.

D. Conclusion

DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. Specifically, with regards to
technological feasibility products achieving these standard levels are
already commercially available for all product classes covered by this
proposal. As for economic justification, DOE's analysis shows that for
each equipment class the benefits of the proposed standards exceed the
burdens of the proposed standards. Using a 7-percent discount rate for
consumer benefits and costs and NO<INF>X</INF> and SO<INF>2</INF>
reduction benefits, and a 3-percent discount rate case for GHG social
costs, the estimated annual cost of the proposed standards for
distribution transformers is $652.5 million per year in increased
distribution transformer costs, while the estimated annual benefits are
$961.8 million in reduced distribution transformer operating costs,
$664.2 million in climate benefits and $665.2 million in health
benefits. The net benefit amounts to $1,638.7 million per year.

Table I.11--Annualized Benefits and Costs of Proposed Energy Conservation Standards for All Distribution
Transformers at Proposed Standard Levels
----------------------------------------------------------------------------------------------------------------
Million (2021$/year)
-------------------------------------------------------
Category Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 1,528.9 1,426.0 1,647.0
Climate Benefits *...................................... 664.2 638.0 693.6
Health Benefits **...................................... 1,189.6 1,142.0 1,243.2
Total Benefits [dagger]................................. 3,382.8 3,205.9 3,583.8
Consumer Incremental Product Costs [Dagger]............. 659.8 689.4 632.6
Net Benefits............................................ 2,723.1 2,516.4 2,951.1
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 961.8 902.8 1,027.3
Climate Benefits * (3% discount rate)................... 664.2 638.0 693.6
Health Benefits **...................................... 665.2 640.4 691.8
Total Benefits [dagger]................................. 2,291.3 2,181.2 2,412.7
Consumer Incremental Product Costs [Dagger]............. 652.5 678.9 627.8
Net Benefits............................................ 1,638.7 1,502.5 1,784.9
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with distribution transformers shipped in 2027-2056.
These results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate), as shown in Table V.73, Table V.74, and Table V.75. Together
these represent the global social cost of greenhouse gases (SC-GHG). For presentational purposes of this
table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the
Department does not have a single central SC-GHG point estimate. See section. IV.L of this document for more
details. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the Federal government's
emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana
v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary
injunction is no longer in effect, pending resolution of the Federal government's appeal of that injunction or
a further court order. Among other things, the preliminary injunction enjoined the defendants in that case
from ``adopting, employing, treating as binding, or relying upon'' the interim estimates of the social cost of
greenhouse gases--which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on
February 26, 2021--to monetize the benefits of reducing greenhouse gas emissions. In the absence of further
intervening court orders, DOE will revert to its approach prior to the injunction and present monetized
benefits where appropriate and permissible under law.

[[Page 1734]]

**Health benefits are calculated using benefit-per-ton values for NOX and SO2. The benefits are based on the low
estimates of the monetized value. DOE is currently only monetizing (for SOX and NOX) PM2.5 precursor health
benefits and (for NOX) ozone precursor health benefits but will continue to assess the ability to monetize
other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this
document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table
V.69 for net benefits using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.

Table I.12--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for All Distribution Transformers at Proposed
Standard Levels
------------------------------------------------------------------------
Billion
($2021)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 26.63
Climate Benefits *...................................... 11.56
Health Benefits **...................................... 20.72
Total Benefits [dagger]................................. 58.91
Consumer Incremental Product Costs [Dagger]............. 11.49
Net Benefits............................................ 47.42
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 9.11
Climate Benefits * (3% discount rate)................... 11.56
Health Benefits **...................................... 6.29
Total Benefits [dagger]................................. 26.97
Consumer Incremental Product Costs [Dagger]............. 6.17
Net Benefits............................................ 20.79
------------------------------------------------------------------------
This table presents the costs and benefits associated with distribution
transformers shipped in 2027-2056. These results include benefits to
consumers which accrue after 2056 from the products shipped in 2027-
2056.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate), as shown
in Table V.73, Table V.74, and Table V.75. Together these represent
the global social cost of greenhouse gases (SC-GHG). For
presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but
the Department does not have a single central SC-GHG point estimate.
See section. IV.L of this document for more details. On March 16,
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the
Federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v.
Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth
Circuit's order, the preliminary injunction is no longer in effect,
pending resolution of the Federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. In the absence of further
intervening court orders, DOE will revert to its approach prior to the
injunction and present monetized benefits where appropriate and
permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V.69 for net benefits using all four SC-GHG
estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.

The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\28\ For
example, some covered products and equipment, including distribution
transformers, have substantial energy consumption occur during periods
of peak energy demand. The impacts of these products on the energy
infrastructure can be more pronounced than products with relatively
constant demand. Accordingly, DOE evaluates the significance of energy
savings on a case-by-case basis.
---------------------------------------------------------------------------

\28\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

As previously mentioned, the standards are projected to result in
estimated national energy savings of 10.60 quad. Based on the amount of
FFC savings, the corresponding reduction in GHG emissions, and need to
confront the global climate crisis, DOE has initially determined the
energy savings from the proposed standard levels are ``significant''
within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed
discussion of the basis for these tentative conclusions is contained in
the remainder of this document and the accompanying TSD.
DOE also considered more-stringent energy efficiency levels as
potential standards, and is still considering them in this rulemaking.
However, DOE has tentatively concluded that the potential burdens of
the more-stringent energy efficiency levels would outweigh the
projected benefits.
Based on consideration of the public comments DOE receives in
response to this document and related information collected and
analyzed during the course of this rulemaking effort, DOE may adopt
energy efficiency levels presented in this document that are either
higher or lower than the proposed

[[Page 1735]]

standards, or some combination of level(s) that incorporate the
proposed standards in part.

II. Introduction

The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
distribution transformers.

A. Authority

EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA (42 U.S.C. 6291-6309, as codified), established the Energy
Conservation Program for ``Consumer Products Other Than Automobiles.''
Title III, Part C of EPCA (42 U.S.C. 6311-6317, as codified), added by
Public Law 95-619, Title IV, section 411(a), established the Energy
Conservation Program for Certain Industrial Equipment. The Energy
Policy Act of 1992, Public Law 102-486, amended EPCA and directed DOE
to prescribe energy conservation standards for those distribution
transformers for which DOE determines such standards would be
technologically feasible, economically justified, and would result in
significant energy savings. (42 U.S.C. 6317(a)) The Energy Policy Act
of 2005, Public Law 109-58, amended EPCA to establish energy
conservation standards for low-voltage dry-type distribution
transformers. (42 U.S.C. 6295(y))
EPCA further provides that, not later than 6 years after the
issuance of any final rule establishing or amending a standard, DOE
must publish either a notice of determination that standards for the
product do not need to be amended, or a NOPR including new proposed
energy conservation standards (proceeding to a final rule, as
appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA specifically include
definitions (42 U.S.C. 6311; 42 U.S.C. 6291), test procedures (42
U.S.C. 6314; 42 U.S.C. 6293), labeling provisions (42 U.S.C. 6315; 42
U.S.C. 6294), energy conservation standards (42 U.S.C. 6313; 42 U.S.C.
6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6316; 42 U.S.C. 6296).
Federal energy efficiency requirements for covered equipment
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) 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
EPCA. (See 42 U.S.C. 6316(a) (applying the preemption waiver provisions
of 42 U.S.C. 6297))
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 equipment. (42
U.S.C. 6316(a), 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r))
Manufacturers of covered equipment must use the Federal test procedures
as the basis for: (1) certifying to DOE that their equipment complies
with the applicable energy conservation standards adopted pursuant to
EPCA (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)), and (2) making
representations about the efficiency of that equipment (42 U.S.C.
6314(d)). Similarly, DOE must use these test procedures to determine
whether the equipment complies with relevant standards promulgated
under EPCA. (42 U.S.C. 6316(a); 42 U.S.C. 6295(s)) The DOE test
procedures for distribution transformers appear at title 10 of the Code
of Federal Regulations (``CFR'') part 431, subpart K, appendix A.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered equipment, including distribution
transformers. Any new or amended standard for a covered product must be
designed to achieve the maximum improvement in energy efficiency that
the Secretary of Energy determines is technologically feasible and
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and
42 U.S.C. 6295(o)(3)(B)) Furthermore, DOE may not adopt any standard
that would not result in the significant conservation of energy. (42
U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain
products, including distribution transformers, 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. 6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a
proposed standard is economically justified, DOE must determine whether
the benefits of the standard exceed its burdens. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after
receiving comments on the proposed standard, and by considering, to the
greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products 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. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA 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. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) 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. 6316(a); 42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an

[[Page 1736]]

energy conservation standard for a covered product that has two or more
product classes. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6316(a); 42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products,
DOE must consider such factors as the utility to the consumer of the
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. 6316(a);
42 U.S.C. 6295(q)(2))

B. Background

1. Current Standards
In a final rule published on April 18, 2013 (``April 2013 Standards
Final Rule''), DOE prescribed the current energy conservation standards
for distribution transformers manufactured on and after January 1,
2016. 78 FR 23336, 23433. These standards are set forth in DOE's
regulations at 10 CFR 431.196 and are repeated in Table II.1, Table
II.2, Table II.3.

Table II.1--Federal Energy Conservation Standards for Low-Voltage Dry-Type Distribution Transformers
----------------------------------------------------------------------------------------------------------------
Single-phase Three-phase
----------------------------------------------------------------------------------------------------------------
kVA Efficiency (%) kVA Efficiency (%)
----------------------------------------------------------------------------------------------------------------
15......................................... 97.70 15................................ 97.89
25......................................... 98.00 30................................ 98.23
37.5....................................... 98.20 45................................ 98.40
50......................................... 98.30 75................................ 98.60
75......................................... 98.50 112.5............................. 98.74
100........................................ 98.60 150............................... 98.83
167........................................ 98.70 225............................... 98.94
250........................................ 98.80 300............................... 99.02
333........................................ 98.90 500............................... 99.14
750............................... 99.23
1,000............................. 99.28
----------------------------------------------------------------------------------------------------------------

Table II.2--Federal Energy Conservation Standards for Liquid-Immersed Distribution Transformers
----------------------------------------------------------------------------------------------------------------
Single-phase Three-phase
----------------------------------------------------------------------------------------------------------------
kVA Efficiency (%) kVA Efficiency (%)
----------------------------------------------------------------------------------------------------------------
10......................................... 98.70 15................................ 98.65
15......................................... 98.82 30................................ 98.83
25......................................... 98.95 45................................ 98.92
37.5....................................... 99.05 75................................ 99.03
50......................................... 99.11 112.5............................. 99.11
75......................................... 99.19 150............................... 99.16
100........................................ 99.25 225............................... 99.23
167........................................ 99.33 300............................... 99.27
250........................................ 99.39 500............................... 99.35
333........................................ 99.43 750............................... 99.40
500........................................ 99.49 1,000............................. 99.43
667........................................ 99.52 1,500............................. 99.48
833........................................ 99.55 2,000............................. 99.51
2,500............................. 99.52
----------------------------------------------------------------------------------------------------------------

Table II.3--Federal Energy Conservation Standards for Medium-Voltage Dry-Type Distribution Transformers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Single-phase Three-phase
--------------------------------------------------------------------------------------------------------------------------------------------------------
BIL BIL
------------------------------------------------- -----------------------------------------------
kVA 20-45 kV 46-95 kV >=96 kV kVA 20-45 kV 46-95 kV >=96 kV
------------------------------------------------- -----------------------------------------------
Efficiency (%) Efficiency (%) Efficiency (%) Efficiency (%) Efficiency (%) Efficiency (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
15............................... 98.1 97.86 ............... 15.................. 97.5 97.18 ..............
25............................... 98.33 98.12 ............... 30.................. 97.9 97.63 ..............
37.5............................. 98.49 98.3 ............... 45.................. 98.1 97.86 ..............
50............................... 98.6 98.42 ............... 75.................. 98.33 98.13 ..............
75............................... 98.73 98.57 98.53 112.5............... 98.52 98.36 ..............
100.............................. 98.82 98.67 98.63 150................. 98.65 98.51 ..............

[[Page 1737]]

167.............................. 98.96 98.83 98.80 225................. 98.82 98.69 98.57
250.............................. 99.07 98.95 98.91 300................. 98.93 98.81 98.69
333.............................. 99.14 99.03 98.99 500................. 99.09 98.99 98.89
500.............................. 99.22 99.12 99.09 750................. 99.21 99.12 99.02
667.............................. 99.27 99.18 99.15 1,000............... 99.28 99.2 99.11
833.............................. 99.31 99.23 99.20 1,500............... 99.37 99.3 99.21
2,000............... 99.43 99.36 99.28
2,500............... 99.47 99.41 99.33
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. History of Standards Rulemaking for Distribution Transformers
On June 18, 2019, DOE published notice that it was initiating an
early assessment review to determine whether any new or amended
standards would satisfy the relevant requirements of EPCA for a new or
amended energy conservation standard for distribution transformers and
a request for information (``RFI''). 84 FR 28239 (``June 2019 Early
Assessment Review RFI'').
On August 27, 2021, DOE published a notification of a webinar and
availability of a preliminary technical support document, which
announced the availability of its analysis for distribution
transformers. 86 FR 48058 (``August 2021 Preliminary Analysis'') The
purpose of the August 2021 Preliminary Analysis was to make publicly
available the initial technical and economic analyses conducted for
distribution transformers, and present initial results of those
analyses. DOE did not propose new or amended standards for distribution
transformers at that time. The initial technical support document
(``TSD'') and accompanying analytical spreadsheets for the August 2021
Preliminary Analysis provided the analyses DOE undertook to examine the
potential for amending energy conservation standards for distribution
transformers and provided preliminary discussions in response to a
number of issues raised by comments to the June 2019 Early Assessment
Review RFI. It described the analytical methodology that DOE used, and
each analysis DOE had performed.
On November 11, 2021, DOE published a notice reopening the comment
period an additional 30 days. 86 FR 63318.
DOE received comments in response to the August 2021 Preliminary
Analysis from the interested parties listed in Table II.4.

Table II.4--August 2021 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Commenter(s) Abbreviation Docket No. Commenter type
----------------------------------------------------------------------------------------------------------------
Electric Research and Manufacturing ERMCO..................... 45 Manufacturer.
Cooperative, Inc.
Powersmiths, Inc........................ Powersmiths............... 46 Manufacturer.
Copper Development Association.......... CDA....................... 47 Trade Organization.
Schneider Electric...................... Schneider................. 49 Manufacturer.
National Electrical Manufacturers NEMA...................... 50 Trade Organization.
Association.
Northwest Energy Efficiency Alliance.... NEEA...................... 51 Efficiency Organization.
Appliance Standards Awareness Project, Efficiency Advocates...... 52 Efficiency Organization.
American Council for an Energy-
Efficient Economy, Natural Resources
Defense Council.
Metglas, Inc............................ Metglas................... 53 Steel Manufacturer.
Carte International, Inc................ Carte..................... 54 Manufacturer.
Eaton Corporation....................... Eaton..................... 55 Manufacturer.
Edison Electric Institute............... EEI....................... 56 Utilities.
Cleveland-Cliffs Steel Corporation...... Cliffs.................... 57 Steel Manufacturer.
Greenville Electric Utility System...... GEUS...................... 58 Utilities.
Howard Industries, Inc.................. Howard.................... 59 Manufacturer.
----------------------------------------------------------------------------------------------------------------

A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\29\
---------------------------------------------------------------------------

\29\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for distribution transformers. (Docket
No. EERE-2019-BT-STD-0018, which is maintained at
<a href="http://www.regulations.gov">www.regulations.gov</a>). The references are arranged as follows:
(commenter name, comment docket ID number, page of that document).
---------------------------------------------------------------------------

C. Deviation From Appendix A

In accordance with section 3(a) of 10 CFR part 430, subpart C,
appendix A (``appendix A''), DOE notes that it is deviating from the
provision in appendix A regarding the NOPR stage for an energy
conservation standard rulemaking. Section 6(f)(2) of appendix A
specifies that the length of the public comment period for a NOPR will
vary depending upon the circumstances of the particular rulemaking, but
will not be less than 75 calendar days. For this NOPR, DOE is providing
a 60-day comment period, as required by EPCA. 42 U.S.C. 6316(a); 42
U.S.C. 6295(p). As stated previously, DOE requested

[[Page 1738]]

comment in the June 2019 Early Assessment Review RFI on the technical
and economic analyses and provided stakeholders a 45-day comment
period. 84 FR 28239. Additionally, DOE provided a 75-day comment period
for the August 2021 Preliminary Analysis. 86 FR 48058. DOE also
reopened the comment period for the August 2021 Preliminary Analysis
for an additional 30-days. 86 FR 63318. DOE has relied on many of the
same analytical assumptions and approaches as used in the preliminary
assessment presented in the TSD. Therefore, DOE believes a 60-day
comment period is appropriate and will provide interested parties with
a meaningful opportunity to comment on the proposed rule.

III. General Discussion

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

A. Equipment Classes and Scope of Coverage

When evaluating and establishing energy conservation standards, DOE
divides covered products into equipment classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility of the feature to the consumer and other factors
DOE determines are appropriate. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q))
The distribution transformer equipment classes considered in this
proposed rule are discussed in further detail in section IV.A.2 of this
document. This proposed rule covers distribution transformers which are
currently defined as a transformer that (1) has an input voltage of
34.5 kV or less; (2) has an output voltage of 600 V or less; (3) is
rated for operation at a frequency of 60 Hz; and (4) Has a capacity of
10 kVA to 2500 kVA for liquid-immersed units and 15 kVA to 2500 kVA for
dry-type units; but (5) The term ``distribution transformer'' does not
include a transformer that is an autotransformer, drive (isolation)
transformer, grounding transformer, machine-tool (control transformer,
nonventilated transformer, rectified transformer, regulating
transformer, sealed transformer, special-impedance transformer, testing
transformer, transformer with tap range of 20 percent or more;
uninterruptible power supply transformer; or welding transformer. 10
CFR 431.192
The scope of coverage of this proposed rule is discussed in further
detail in section IV.A.1 of this document.

B. Test Procedure

EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a))
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. DOE's
current energy conservation standards for distribution transformers are
expressed in terms of percentage efficiency at rated per-unit load
(PUL). (See 10 CFR 431.193; 10 CFR part 431, subpart K, appendix A
(``appendix A'').)
On September 14, 2021, DOE published a test procedure final rule
for distribution transformers that revised definitions for certain
terms, updated provisions based on the latest versions of relevant
industry test standards, maintained PUL for the certification of
efficiency and added provisions for representing efficiency at
alternative PULs and reference temperatures. 89 FR 51230 (``September
2021 TP Final Rule''). DOE determined that the amendments to the test
procedure adopted in the September 2021 TP Final Rule do not alter the
measured efficiency of distribution transformers or require retesting
or recertification solely as a result of DOE's adoption of the
amendments to the test procedure. Id. at 89 FR 51249.

C. Technological Feasibility

1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially available products or in working prototypes to be
technologically feasible. 10 CFR 431.4; 10 CFR part 430, subpart C,
appendix A, sections 6(b)(3)(i) and 7(b)(1) (``Process Rule'').
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; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies. 10
CFR 431.4; Sections 6(c)(3)(ii)-(v) and 7(b)(2)-(5) of the Process
Rule. Section IV.B of this document discusses the results of the
screening analysis for distribution transformers, particularly the
designs DOE considered, those it screened out, and those that are the
basis for the standards considered in this proposed rule. For further
details on the screening analysis for this proposed rule, see chapter 4
of the NOPR technical support document (``TSD'').
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1))
Accordingly, in the engineering analysis, DOE determined the maximum
technologically feasible (``max-tech'') improvements in energy
efficiency for distribution transformers, using the design parameters
for the most efficient products available on the market or in working
prototypes. The max-tech levels that DOE determined for this rulemaking
are described in section IV.C.2.e of this proposed rule and in chapter
5 of the NOPR TSD.

D. Energy Savings

1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to distribution transformer
purchased in the 30-year period that begins in the year of compliance
with the proposed standards (2027-2056).\30\ The savings are measured
over the entire lifetime of distribution transformers purchased in the
previous 30-year period.\31\ DOE

[[Page 1739]]

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 reflects how the market for a
product would likely evolve in the absence of amended energy
conservation standards.
---------------------------------------------------------------------------

\30\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
\31\ Savings are determined for equipment shipped over the 30-
year analysis period of 2027 through 2056. Distribution transformers
have a maximum lifetime of 60 years; therefore savings are
determined for equipment that survive, and accrue savings through
2115.
---------------------------------------------------------------------------

DOE used its national impact analysis (``NIA'') model to estimate
national energy savings (``NES'') from potential amended or new
standards for distribution transformers. The NIA model (described in
section IV.H of this document) calculates energy savings in terms of
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. DOE also calculates NES in terms of FFC energy savings.
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 conservation standards.\32\ DOE's approach is based on the
calculation of an FFC multiplier for each of the energy types used by
covered products or equipment. For more information on FFC energy
savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------

\32\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
To adopt any new or amended 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))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\33\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand.
---------------------------------------------------------------------------

\33\ The numeric threshold for determining the significance of
energy savings established in a final rule published on February 14,
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule
published on December 12, 2021 (86 FR 70892, 70906).
---------------------------------------------------------------------------

Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis, taking into account the significance of cumulative
FFC national energy savings, the cumulative FFC emissions reductions,
and the need to confront the global climate crisis, among other
factors. Based on the amount of FFC savings, the corresponding
reduction in emissions, and need to confront the global climate crisis,
DOE has initially determined the energy savings from the proposed
standard levels are ``significant'' within the meaning of 42 U.S.C.
6316(a); 42 U.S.C. 6295(o)(3)(B).

E. Economic Justification

1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII))) 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 amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. 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) 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 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 consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a 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. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(II)) 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 expense (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
or amended 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 or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.

[[Page 1740]]

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. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(III)) As discussed in section III.D of this document,
DOE uses the NIA models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards
proposed in this document would not reduce the utility or performance
of the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C. 6316(a); 42
U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to
determine the impact, if any, of any lessening of competition likely to
result from a proposed standard and to transmit such determination to
the Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy
of this proposed rule to the Attorney General with a request that the
Department of Justice (``DOJ'') provide its determination on this
issue. DOE will publish and respond to the Attorney General's
determination in the final rule. DOE invites comment from the public
regarding the competitive impacts that are likely to result from this
proposed rule. In addition, stakeholders may also provide comments
separately to DOJ regarding these potential impacts. See the ADDRESSES
section for information to send comments to DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VI)) The energy savings from the proposed 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 of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may affect these emissions, as discussed in section
IV.K; the estimated 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 of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant
information regarding economic justification that does not fit into the
other categories described previously, DOE could consider such
information under ``other factors.''
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the 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. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 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. 6316(a); 42 U.S.C.
6295(o)(2)(B)(i). The results of this analysis serve as the basis for
DOE's evaluation of the economic justification for a potential standard
level (thereby supporting or rebutting the results of any preliminary
determination of economic justification). The rebuttable presumption
payback calculation is discussed in section IV.F.11 of this proposed
rule.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
rulemaking with regard to distribution transformers. Separate
subsections address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a model that
calculates the LCC savings and PBP of potential amended or new energy
conservation standards. The national impacts analysis uses a second
model set that provides shipments projections and calculates national
energy savings and net present value of total consumer costs and
savings expected to result from potential energy conservation
standards. DOE uses the third spreadsheet tool, the Government
Regulatory Impact Model (``GRIM''), to assess manufacturer impacts of
potential standards. These tools are available in the docket for this
rulemaking: <a href="http://www.regulations.gov/docket/EERE-2019-T-STD-0018">www.regulations.gov/docket/EERE-2019-T-STD-0018</a>.
Additionally, DOE used output from the latest version of the Energy
Information Administration's (``EIA's'') Annual Energy Outlook
(``AEO''), a widely known energy projection for the United States, for
the emissions and utility impact analyses.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and

[[Page 1741]]

product classes, (2) manufacturers and industry structure, (3) existing
efficiency programs, (4) shipments information, (5) market and industry
trends; and (6) technologies or design options that could improve the
energy efficiency of distribution transformers. The key findings of
DOE's market assessment are summarized in the following sections. See
chapter 3 of the NOPR TSD for further discussion of the market and
technology assessment.

1. Scope of Coverage

The current definition for a distribution transformer codified in
10 CFR 431.192 is the following:
Distribution transformer means a transformer that--(1) Has an input
voltage of 34.5 kV or less; (2) Has an output voltage of 600 V or less;
(3) Is rated for operation at a 60 Hz; and (4) Has a capacity of 10 kVA
to 2500 kVA for liquid-immersed units and 15 kVA to 2500 kVA for dry-
type units; but (5) The term ``distribution transformer'' does not
include a transformer that is an--(i) Autotransformer; (ii) Drive
(isolation) transformer; (iii) Grounding transformer; (iv) Machine-tool
(control) transformer; (v) Nonventilated transformer; (vi) Rectifier
transformer; (vii) Regulating transformer; (viii) Sealed transformer;
(ix) Special-impedance transformer; (x) Testing transformer; (xi)
Transformer with tap range of 20 percent or more; (xii) Uninterruptible
power supply transformer; or (xiii) Welding transformer.
DOE received several comments regarding the definition of
``distribution transformer'' and the definitions of equipment excluded
from the definition. These detailed comments are discussed below.

a. Autotransformers

The EPCA definition of distribution transformer excludes ``a
transformer that is designed to be used in a special purpose
application and is unlikely to be used in general purpose applications,
such as . . . [an] auto-transformer . . .'' (42 U.S.C. 6291(35)(b)(ii))
In response to comments received as part of the June 2019 Early
Assessment Review RFI that suggested DOE include ``low-voltage
autotransformers'' within the scope of distribution transformers, DOE
noted that autotransformers do not provide galvanic isolation \34\ and
thus would be unlikely to be used in at least some general-purpose
applications. (August 2021 Preliminary Analysis TSD at p. 2-5) In the
August 2021 Preliminary Analysis TSD, DOE requested comment regarding
the potential use of autotransformers as substitutes for general-
purpose distribution transformers. Id.
---------------------------------------------------------------------------

\34\ i.e., autotransformers contain a continuous, current-
carrying electrical pathway that ``isolation'' transformers do not,
which is perceived as a safety compromise in some applications.
---------------------------------------------------------------------------

Schneider commented that while voltage conversion can be done with
an autotransformer, autotransformers cannot derive a neutral, lower
source impedance, or phase shift to remove triplen (i.e., multiples-of-
three) harmonics, meaning an autotransformer risks sacrificing power
quality if used in place of a general-purpose distribution transformer.
(Schneider, No. 59 at p. 2) Schneider added that because of these power
quality concerns, autotransformers would be unlikely to be used in
commercial buildings but could be used in some subsegments and smaller
commercial jobs--a possibility supported by manufacturers' adding
autotransformers to standard product catalogs. (Schneider, No. 49 at p.
2) Schneider commented that it recommends autotransformers in
subsegments that require wye-wye connections \35\ and that segment is
growing and will continue to grow if autotransformers remain exempt.
(Schneider, No. 49 at p. 2) Schneider commented that that are no
technical limitations for autotransformer to meet standards and
asserted that the exclusion was related to how efficiency was
calculated and tested. Schneider recommended subjecting them to the
current efficiency standards based on their nameplate kVA. (Schneider,
No. 49 at pp. 2-3) Schneider commented that in typical applications
(i.e., 480Y/277 and 208Y/120) autotransformers would be 60 percent the
size and 20-25 percent less expensive. In non-typical applications,
units would be 20 percent the size and 50 percent less expensive.
(Schneider, No. 49 at p. 3)
---------------------------------------------------------------------------

\35\ Wye connection refers to four distribution transformer
terminals, three of which are connected to one power phase and the
fourth connected to all three power phases.
---------------------------------------------------------------------------

NEMA commented that it is not aware of autotransformers being used
in place of distribution transformers. (NEMA, No. 50 at p. 3)
Stakeholder comments suggest that there may be certain applications
in which an autotransformer may be substitutable for an isolation
transformer. However, the comments also suggest such substitution is
limited to specific applications (e.g., wye-wye connections) and not
common enough to be regarded as general practice. Further, DOE did not
receive any feedback counter to its statement in the August 2021
Preliminary Analysis TSD that autotransformers do not provide galvanic
isolation and thus would be unlikely to be used in at least some
general-purpose applications. Based on this feedback, DOE is not
proposing to amend the exclusion of autotransformers under the
distribution transformer definition. DOE will monitor the market and
may reevaluate this exclusion if evidence exists to support growing use
of autotransformers based on lower purchase price than would be
warranted by technical considerations alone.

b. Drive (Isolation) Transformers

In the August 2021 Preliminary Analysis TSD, DOE noted that the
EPCA definition of distribution transformers excludes a transformer
that is designed to be used in a special purpose application and is
unlikely to be used in general purpose applications, such as a drive
transformer. (42 U.S.C. 6291(35)(b)(ii)) DOE stated that it did not
have any data indicating that ``drive isolation transformers'' were
being widely used in generally purpose applications and as such,
considered them statutorily excluded. DOE requested comment and data as
to the extent to which ``drive isolation transformers'' are used in
generally purpose applications. (August 2021 Preliminary Analysis TSD
at p. 2-6)
Schneider and Eaton commented that drive isolation transformers
have historically been sold with nonstandard low-voltage ratings,
corresponding to typical motor input voltages, and as such are unlikely
to be used in general-purpose applications. (Schneider, No. 49 at p. 3;
Eaton, No. 55 at p. 3) NEMA commented that drive isolation transformers
are not sold in great quantities and not widely used in general purpose
applications. (NEMA, No. 50 at p. 3)
Schneider and Eaton commented that recently there has been some
increase in drive isolation transformers specified as having either a
``480Y/277'' or ``208Y/120'' voltage secondary, making it more
difficult to ascertain whether these transformers are being used in
general distribution applications. (Schneider No. 49 at p. 3; Eaton,
No. 55 at p. 3) Schneider commented that only 6-pulse drive isolation
transformers \36\ can serve

[[Page 1742]]

general purpose applications. (Schneider, No. 49 at p. 4) Eaton added
that there is a minor concern that consumers will increasingly discover
that drive isolation transformers can be used in certain general-
purpose applications, putting manufacturers in the position of
suspecting but not being able to ascertain circumvention without being
sure of end use. (Eaton, No. 55 at p. 3) Eaton commented that a DOE
compliant general-purpose transformer would be 16 percent more
expensive than a drive isolation transformer that could be used in its
place, while the losses for the drive isolation transformer at 50
percent PUL were 55 percent greater. (Eaton, No. 55 at p. 3)
---------------------------------------------------------------------------

\36\ Drive-isolation transformers employ rectifier diodes to
mitigate drive harmonics by phase shifting secondary voltages. The
rectifier diode results in two pulses per phase. In a standard
three-phase, drive-isolation transformer, application of a rectifier
would result in 6-pulses, two per 120[deg] phase shift. If
additional harmonic mitigation is needed, additional secondary
windings are added with differing connections phase shifted from one
another. Manufacturers' sell drive-isolation transformers as 6-
pulse, 12-pulse, or 24-pulse.
---------------------------------------------------------------------------

Eaton commented that pulse count is somewhat hard to define as it
is generally more a function of the rectifier that the drive isolation
transformer is connected to than the transformer itself. (Eaton, No. 55
at p. 4) Eaton added that 12-pulse and 24-pulse drive isolation
transformers could, technically, be used in general purpose
applications but that it would be less likely due to higher cost.
(Eaton, No. 55 at p. 3-4)
Schneider commented that 6-pulse drive isolation transformers
should be included in the LVDT scope, as is required in Canada.
(Schneider, No. 49 at p. 4)
Commenters indicated that while some drive isolation transformers
could, in theory be used in general purpose applications, no evidence
exists suggesting this practice is common. As such, DOE has concluded
that drive isolation transformers remain an example of a transformer
that is designed to be used in special purpose applications and is
unlikely to be used in general purpose applications. Given that drive
isolation transformers are excluded by statute, including drive
isolation transformers would first require a finding that they are
being used in general purpose applications, which does not appear to be
the case at this time.
Schneider commented that drive isolation transformers should only
be permitted at standard motor voltages and not standard distribution
voltages. (Schneider, No. 49 at p. 3)
DOE tentatively finds, as supported by comments from Schneider and
Eaton, that certain distribution transformers that meet the current
criteria of a ``drive isolation transformers'' are likely to be used in
general-purpose applications based on their voltage rating. The
overwhelming majority of equipment in the US is designed to operate
using either 208Y/120 or 480Y/277 voltage, and therefore the
overwhelming majority of general-purpose distribution transformers have
a secondary voltage rating that is one of these standard voltage
ratings. Drive-isolation transformers, by contrast, are not designed to
power the majority of equipment. Rather, they are designed to work with
a specific motor drive to output a special purpose voltage, unique to
the application. As such, drive-isolation transformers with a rated
secondary voltage of 208Y/120 or 480Y/277 is considerably more likely
to be used in general purpose applications rather than special purpose
applications.
EPCA excludes from the definition of distribution transformer
certain transformers designed to be used in an application other than a
general-purpose application. Specifically, ``distribution transformer''
excludes a transformer that is ``designed to be used in a special
purpose application and is unlikely to be used in general purpose
applications, such as a drive transformer, rectifier transformer, auto-
transformer, Uninterruptible Power System transformer, impedance
transformer, regulating transformer, sealed and nonventilating
transformer, machine tool transformer, welding transformer, grounding
transformer, or testing transformer[.]'' (42 U.S.C. 6291(35)(b)(ii))
Drive (isolation) transformers are defined as ``a transformer that:
(1) Isolates an electric motor from the line; (2) Accommodates the
added loads of drive-created harmonics; and (3) Is designed to
withstand the additional mechanical stresses resulting from an
alternating current adjustable frequency motor drive or a direct
current motor drive.'' 10 CFR 431.192. In the product catalogs reviewed
by DOE, drive-isolation transformers are frequently listed at common
motor voltages such as ``460Y/266'' and ``230Y/133.''. The listing at
common motor voltages indicates that these drive-isolation transformers
are designed for use in special purpose applications (i.e., isolating
an electric motor from the line) and are unlikely to be used in general
purpose distribution applications, on account of not aligning with
general distribution voltages.
DOE has previously stated that it intends to strictly and narrowly
construe the exclusions from the definition of ``distribution
transformer.'' 84 FR 24972, 24979 (April 27, 2009). To the extent that
some transformers are marketed as drive-isolation transformers but with
rated output voltages aligning with common distribution voltages, DOE
is unable to similarly conclude that these transformers are used in
special purpose applications. Comments by Eaton and Schneider confirm
that while these transformers are not sold in great numbers, they are
significantly more likely to be used in general purpose distribution
applications. As such, DOE has tentatively determined that such
distribution transformers are not drive (isolation) transformers as
that term applies to the exclusions from the definition of
``distribution transformer.''
In order to limit the definition of drive isolation transformers to
distribution transformers designed for use in special purpose
applications and not likely to be used in general purpose applications,
DOE proposes to amend the definition to include the criterion that
drive isolation transformers have an output voltage other than 208Y/120
or 480Y/277. DOE may consider additional voltage limitations in the
definition of ``drive isolation transformer'' should DOE determine such
voltages indicate a design for use in general purpose applications.
DOE requests comment on the proposed amendment to the definition of
drive (isolation) transformer. DOE requests comment on its tentative
determination that voltage ratings of 208Y/120 and 480Y/277 indicate a
design for use in general purpose applications. DOE also requests
comment on other voltage ratings or other characteristics that would
indicate a design for use in general purpose applications.

c. Special-Impedance Transformers

Impedance is an electrical property that relates voltage across and
current through a distribution transformer. It may be selected to
balance voltage drop, overvoltage tolerance, and compatibility with
other elements of the local electrical distribution system. A
transformer built to operate outside of the normal impedance range for
that transformer's kVA rating, as specified in Tables 1 and 2 of 10 CFR
431.192 under the definition of ``special-impedance transformer,'' is
excluded from the definition of ``distribution transformer.'' 10 CFR
431.192.
In the August 2021 Preliminary Analysis TSD, DOE requested feedback
as to the number of nonstandard kVA transformers sold and how
manufacturers are currently interpreting the normal impedance range for
nonstandard kVA values. (August 2021 Preliminary Analysis TSD at p. 2-
8)
NEMA and Eaton recommended that the impedance values in Tables 1
and 2 of 10 CFR 431.192 under the definition of ``special-impedance
transformer'' be

[[Page 1743]]

listed as a kVA range, to remove what they stated is an ambiguity as to
the normal impedance of non-standard transformer capacities (i.e.,
capacities not explicitly included in the tables). (Eaton, No. 55 at p.
4; NEMA, No. 50 at p. 3-4) Eaton commented that there were very few
nonstandard kVA ratings for single-phase transformers and just under
one percent of three-phase transformers are rated for non-standard
kVAs. (Eaton, No. 55 at p. 4) Eaton added that nonstandard kVAs are
quite common in the currently exempted step-up transformers, making up
27 percent of three-phase step-up transformers. (Eaton, No. 55 at p. 4)
Eaton stated that it currently uses the impedance values of the
adjacent standard kVA ratings that result in the largest normal
impedance range and, equivalently, the narrowest excluded impedance
range. (Eaton, No. 55 at p. 5)
NEMA commented that many, but not all, customers specify the middle
of the normal impedance range. NEMA stated that some customers specify
a particular impedance to compliment an application, such as for
protection equipment or to match better with sensitive loads. (NEMA,
No. 50 at p. 4)
Schneider commented that it receives few requests for distribution
transformers outside the normal impedance range and few requests for
distribution transformers with nonstandard kVAs and therefore applied
energy efficiency regulations to special impedance transformers without
pursuing exemptions. (Schneider, No. 49 at p. 4) Schneider added that
the special impedance exemption could potentially be removed, and thus
reduce potential abuse or the normal range could be expanded for all
distribution transformers, regardless of kVA to be from 0.5 percent to
15 percent. (Schneider, No. 49 at p. 4) As another alternative,
Schneider recommended either setting the mid-range impedance as a
threshold or using a linear interpolation of the impedance values
immediately above and below that kVA rating, similar to how efficiency
standards are applied for non-standard kVA ratings. (Schneider, No. 49
at p. 4-5)
As DOE noted in the August 2021 Preliminary Analysis TSD, its
current values for normal impedance are based on NEMA TP 2-2005.
(August 2021 Preliminary Analysis TSD at p. 2-8) The current tables in
the ``special-impedance transformer'' definition do not explicitly
address how to treat nonstandard kVA values.
DOE is proposing to amend the definition of ``special-impedance
transformer'' to specify that ``distribution transformers with kVA
ratings not appearing in the tables shall have their minimum normal
impedance and maximum normal impedance determined by linear
interpolation of the kVA and minimum and maximum impedances,
respectively, of the values immediately above and below that kVA
rating.''. This proposed approach is consistent with the recommendation
from Schneider. Moreover, this approach is consistent with the approach
specified for determining the required efficiency requirements of
distribution transformers of nonstandard kVA rating (i.e., using a
linear interpolation from the nearest bounding kVA values listed in the
table). See 10 CFR 431.196.
DOE requests comment on its proposed amendment to the definition of
``special-impedance transformer'' and whether it provides sufficient
clarity as to how to treat the normal impedance ranges for non-standard
kVA distribution transformers.
Carte commented that one of its customers requires higher impedance
pole transformers, within the ``normal'' range, but in general the
larger coils and higher core losses associated with a higher impedance
can be disadvantaged in meeting efficiency standards. (Carte, No. 54 at
p. 1)
DOE relies on the current definition of ``special-impedance
transformer'' in its engineering analysis. DOE does not further
consider impedance aside from ensuring selectable models in the
analysis are within the ``normal impedance'' range as currently
defined. DOE's analyzed higher efficiency levels, including those using
amorphous steel, span a range of impedance values and therefore DOE has
not considered further separating distribution transformers based on
impedance.
d. Tap Range of 20 Percent or More
Transformers with multiple voltage taps, the highest of which
equals at least 20 percent more than the lowest, computed based on the
sum of the deviations of the voltages of these taps from the
transformer's nominal voltage, are excluded from the definition of
distribution transformers. 10 CFR 431.192. (See also, 42 U.S.C.
6291(35)(B)(i)) In the August 2021 Preliminary Analysis TSD, DOE
requested comment as to whether only full-power taps should count
toward the exclusion and how the choice of nominal voltage would impact
the exclusion. (August 2021 Preliminary Analysis TSD at p. 2-9)
In response, Schneider, NEMA and Eaton commented that only full-
power taps should be permitted for tap range calculations. (Eaton, No.
55 at pp. 5-6; Schneider, No. 49 at pp. 5-6; NEMA, No. 50 at p. 4)
Eaton commented that nominal voltage is selected by the consumer
but selecting one such that it excludes a product can result in 17
percent lower costs and 73 percent higher losses at 50 percent PUL.
(Eaton, No. 55 at p. 6) Schneider provided an example of how the
nominal voltage can impact whether a product is subject to standards.
(Schneider, No. 49 at p. 6) Eaton commented that of the three-phase
units it has built, only one unit was built as having a tap range of 20
percent or more while 112 units were built as DOE compliant but could
be moved out of scope based on the choice of nominal voltage. (Eaton,
No. 55 at pp. 6-7) Schneider added that another complication to using
nominal voltage is a new type of distribution transformer that has
multiple-nominal voltages. (Schneider, No. 49 at p. 6-8)
Eaton supported changing how the tap range is calculated to remove
potential incentives to circumvent standards. (Eaton, No. 55 at p. 6)
NEMA commented that it did not reach consensus as to how to calculate
tap range. (NEMA, No. 50 at p. 4) Schneider recommended DOE establish
all common system voltages as nominal and have manufacturers justify
tap ranges according to the relative function of each to the associated
nominal in the case of multiple nominals. (Schneider, No. 49 at p. 8)
Schneider added that if it is too difficult to establish what nominal
should be, the 20 percent tap range exclusion could be removed.
(Schneider, No. 49 at p. 8)
While the traditional industry understanding of tap range is in
percentages relative to the nominal voltage, stakeholder comments
suggest that such a calculation can be applied differently by different
manufacturers such that two physically identical distribution
transformers can be inside or outside of scope depending on the choice
of nominal voltage. To have a consistent standard for physically
identical distribution transformers, DOE proposes to modify the
calculation of tap range to only include full-power capacity taps and
calculate tap range based on the transformer's maximum voltage rather
than nominal voltage. The amended definition would classify
transformers with tap ranges of 20 percent or more as ``a transformer
with multiple full-power voltage taps, the highest of which equals at
least 20 percent more than the lowest, computed based on the sum of the
deviations of these taps from the transformer's maximum full-power
voltage.''. Such a

[[Page 1744]]

modification would ensure that all distribution transformers capable of
operating across a similar voltage range, regardless of what voltage is
considered nominal, are treated equally. Further, the proposed
modification removes ambiguity as to what customers are using as a
nominal voltage and removes incentives to change the nominal voltage to
move equipment into or out of scope of the standards.
DOE requests comment on its proposed definition for transformers
with a tap range of 20 percent or more.
e. Sealed and Nonventilated Transformers
As discussed, the statutory definition of distribution transformer
excludes transformers that are designed to be used in a special purpose
application and are unlikely to be used in general purpose
applications, such as a ``sealed and nonventilating transformers.'' (42
U.S.C. 6291(35)(b)(ii)) In the August 2021 Preliminary Analysis TSD,
DOE noted that the definition of sealed and nonventilating transformers
is applicable only to dry-type transformers. While liquid-immersed
transformers are technically also sealed, DOE has explicitly included
them in the definition of a distribution transformer. 10 CFR 431.92.
(August 2021 Preliminary Analysis TSD at p. 2-7)
In response, NEMA recommended DOE add the words ``dry-type'' to the
definition of sealed and nonventilated transformers. (NEMA, No. 50 at
p. 3)
DOE agrees that the proposed clarification would help clarify the
scope of the sealed and nonventilated transformer exclusion and has
proposed to amend the definition as such.
DOE requests comment on its proposed amendments to the definitions
of sealed and nonventilated transformers.
f. Step-Up Transformers
For transformers generally, the term ``step-up'' refers to the
function of a transformer providing greater output voltage than input
voltage. Step-up transformers primarily service energy producing
applications, such as solar or wind electricity generation, and input
source voltage, step-up the voltage in the transformer, and output
higher voltages that feed into the electric grid. The definition of
``distribution transformer'' does not explicitly exclude transformers
designed for step-up operation.
However, most step-up transformers have an output voltage larger
than the 600 V limit specified in the distribution transformer
definition. See 10 CFR 431.192. (See also 42 U.S.C. 6291(35)(A)(ii))
DOE has acknowledged it is technically possible to operate a step-
up transformer in a reverse manner, by connecting the high-voltage to
the ``output'' winding of a step-up transformer and the low-voltage to
the ``input'' winding of a step-up transformer, such that it functions
as a distribution transformer. 78 FR 2336, 23354. However, DOE
previously had not identified this as a widespread practice. Id. In the
August 2021 Preliminary Analysis TSD, DOE requested feedback as to what
the typical efficiency is of step-up transformers, what fraction are
being used in traditional distribution transformer applications, and
what are the typical input and output voltages of step-up transformers.
(August 2021 Preliminary Analysis TSD at p. 2-18)
NEMA commented that efficiency of step-up transformers is dictated
by customers and is sometimes above and sometimes below DOE efficiency
levels for distribution transformers. NEMA added that they are not
aware of step-up transformers being used in distribution applications
and they are concerned that subjecting step-up transformers to
regulation may negatively constrain design flexibility. (NEMA, No. 50
at p. 5)
Eaton commented that step-up transformers are almost exclusively
used in renewable energy applications where low-voltages (typically
less than 700 volts) are stepped up to medium-voltage distribution
applications (typically up to 34.5 kV). Eaton added that virtually all
step-up transformers are three-phase and there are maybe a dozen
single-phase step-up transformers per year which may or may not be
possible circumvention scenarios. (Eaton, No. 55 at p. 9) Eaton
commented that some step-up transformer customers specify total owning
cost, maximum losses, or efficiency and provided a table of average
efficiency of three-phase liquid-immersed step-up transformers which
showed the average efficiency of step-up transformers tended to be
below DOE efficiency standards. (Eaton, No. 55 at p. 9) Eaton noted
that many solar photovoltaic inverter manufacturers have been using
higher input voltages that often require non-standard voltages or
winding configurations and may decrease likelihood of a step-up
transformer being used in a distribution application. (Eaton, No. 55 at
p. 9) Eaton stated that 31 percent of their three-phase step-up
transformers had common distribution low-voltages, that could more
easily be used in distribution applications, but Eaton had no knowledge
that step-up transformers were being used in traditional distribution
applications. (Eaton, No. 55 at p. 9) Eaton stated that step-up
voltages with common distribution high and low-voltages could possibly
be operated in reverse in distribution transformer applications.
(Eaton, No. 55 at p. 9)
The comments received support DOE's prior statements. While step-up
transformers could, in theory, be used in distribution applications,
DOE does not have any data to indicate that this is a common or
widespread practice. Eaton's comments underscore that step-up
transformers serve a separate and unique application, often in the
renewable energy field where transformers designs may not be optimized
for the distribution market but rather are optimized for integration
with other equipment, such as inverters. Therefore, DOE is not
proposing to amend the definition of ``distribution transformer'' to
account for step-up transformers. DOE may reevaluate this conclusion in
a future action if evidence arises to suggest step-up transformers are
being used in distribution functions.
g. Uninterruptible Power Supply Transformers
``Uninterruptible power supply transformer'' is defined as a
transformer that is used within an uninterruptible power system, which
in turn supplies power to loads that are sensitive to power failure,
power sags, over voltage, switching transients, line noise, and other
power quality factors. 10 CFR 431.192. An uninterruptable power supply
transformer is excluded from the definition of distribution
transformer. 42 U.S.C. 6291(35)(B)(ii); 10 CFR 431.192. Such a system
does not step-down voltage, but rather it is a component of a power
conditioning device and it is used as part of the electric supply
system for sensitive equipment that cannot tolerate system
interruptions or distortions, and counteracts such irregularities. 69
FR 45376, 45383. DOE has clarified that uninterruptable power supply
transformers do not ``supply power to'' an uninterruptible power
system, rather they are ``used within'' the uninterruptible power
system. 72 FR 58190, 58204. This is consistent with the reference in
the definition to transformers that are ``within'' the uninterruptible
power system. 10 CFR 431.192. Distribution transformers at the input,
output or bypass that are supplying power to the uninterruptible power
system are not uninterruptable power supply transformers.

[[Page 1745]]

In the August 2021 Preliminary Analysis TSD, DOE requested comment
regarding how manufacturers are applying the definition of
uninterruptable power supply transformer and whether amendments are
needed. (August 2021 Preliminary Analysis TSD at p. 2-10)
In response, NEMA commented that manufacturers are applying the
definition appropriately and clarification is not needed. (NEMA, No. 50
at p. 4) Schneider recommended DOE explicitly state that transformers
at the input, output, or by-pass of an uninterruptible power system are
not part of the uninterruptible power system and as such are not
excluded. (Schneider, No. 49 at p. 8).
DOE agrees that explicitly stating that transformers at the input,
output, or bypass of a distribution transformer are not a part of the
uninterruptable power system would further clarify the definition. As
such, DOE is proposing to amend the definition to make these
clarifications.
DOE requests comment on its proposed amendment to the definition of
uninterruptable power supply transformers.
Carte asked if network transformers are considered uninterruptible
power supply transformers as the network grid cannot go down. (Carte,
No. 54 at p. 2) DOE notes that the need for a reliable operation does
not make a distribution transformer an uninterruptible power supply
transformer. As stated, uninterruptible power supply transformers are
used within uninterruptable power systems as a power conditioning
device, not as a distribution transformer.
h. Voltage Specification
As stated, the definition of ``distribution transformer'' is based,
in part, on the voltage capacity of equipment, i.e., has an input
voltage of 34.5 kV or less; and has an output voltage of 600 V or less.
10 CFR 431.192. (42 U.S.C. 6291(35)(A)) Three-phase distribution
transformer voltage may be described as either ``line'', i.e., measured
across two lines, or ``phase'', i.e., measured across one line and the
neutral conductor. For delta-connected \37\ distribution transformers,
line and phase voltages are equal. For wye-connected distribution
transformers, line voltage is equal to phase voltage multiplied by the
square root of three.
---------------------------------------------------------------------------

\37\ Delta connection refers to three distribution transformer
terminals, each one connected to two power phases.
---------------------------------------------------------------------------

DOE notes that it has previously stated that the definition of
distribution transformer applies to transformers having an output
voltage of 600 volts or less, not having only an output voltage of less
than 600 volts. 78 FR 23336, 23353. For example, a three-phase
transformer for which the wye connection is at or below 600 volts, but
the delta connection is above 600 volts would satisfy the output
criteria of the distribution transformer definition. DOE's test
procedure requires that the measured efficiency for the purpose of
determining compliance be based on testing in the configuration that
produces the greatest losses, regardless of whether that configuration
alone would have placed the transformer at-large within the scope of
coverage. Id. Similarly with input voltages, a transformer is subject
to standards if either the ``line'' or ``phase'' voltages fall within
the voltage limits in the definition of distribution transformers, so
long as the other requirements of the definition are also met. Id.
Eaton commented that DOE flipped the usage of wye and delta in its
example where one voltage complies and the other does not because wye
voltage should be less than delta voltage. (Eaton, No. 55 at p. 8) DOE
has updated its language above to correct this.
Schneider commented that the industry interpretation of input and
output voltage is likely line voltage but using phase encompasses a
larger scope and DOE should clarify in the regulatory text. (Schneider,
No. 49 at p. 8) NEMA commented that DOE should clarify the
interpretation of voltage in the regulatory text. (NEMA, No. 50 at p.
4) Eaton commented that using phase voltage would deviate from industry
convention, but if DOE is choosing to interpret language this way, it
should explicitly say so in the regulatory text. (Eaton, No. 55 at pp.
7-8)
DOE notes that the voltage limits in the definition of distribution
transformer established in EPCA do not specify whether line or phase
voltage is to be used. 42 U.S.C. 6291(35). DOE has previously stated
that a distribution transformer is required to comply if either line or
phase voltage is within the scope of the distribution transformer
definition. 78 FR 23336, 23353. Upon further evaluation, DOE notes that
the distribution transformer input voltage limitation aligns with the
common maximum distribution circuit voltage of 34.5 kV.38 39
This common distribution voltage aligns with the distribution line
voltage and implies that the intended definition of distribution
transformer in EPCA was to specify the input and output voltages based
on the line voltage. DOE has tentatively determined that applying the
phase voltage, as DOE cited in the April 2013 Standards Final Rule,
would cover products not traditionally understood to be distribution
transformers and not intended to be within the scope of distribution
transformer as defined by EPCA. For example, a transformer with a line
voltage of 46 kV, which is commonly considered in industry to be a
subtransmission voltage (i.e., higher than a distribution voltage),
would have a phase voltage less than 34.5 kV if sold in a wye-
connection. Despite this transformer not being considered a
distribution transformer by industry, interpreting DOE's definition as
either a line or phase voltage would mean that a 46 kV wye-connection
is considered a distribution transformer. As noted by stakeholders,
such an interpretation would be out of step with common industry
practice and out of step with the intended coverage of EPCA.
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\38\ Pacific Northwest National Lab and U.S. Department of
Energy (2016), ``Electricity Distribution System Baseline Report.'',
p. 27. Available at <a href="http://www.energy.gov/sites/prod/files/2017/01/f34/Electricity%20Distribution%20System%20Baseline%20Report.pdf">www.energy.gov/sites/prod/files/2017/01/f34/Electricity%20Distribution%20System%20Baseline%20Report.pdf</a>.
\39\ U.S. Department of Energy (2015), ``United States
Electricity Industry Primer.'' Available at <a href="http://www.energy.gov/sites/prod/files/2015/12/f28/united-states-electricity-industry-primer.pdf">www.energy.gov/sites/prod/files/2015/12/f28/united-states-electricity-industry-primer.pdf</a>.
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DOE notes that the common distribution transformer voltages have
both line and phase voltages that are within DOE's scope, and therefore
the proposed change is not expected to impact the scope of this
rulemaking aside from select, unique transformers with uncommon
voltages. In this NOPR, DOE is proposing to modify the definition of
distribution transformer to state explicitly that the input and output
voltage limits are based on the ``line'' voltage and not the phase
voltage. This amendment, while a slight reinterpretation relative to
the April 2013 Standards Final Rule, better aligns with industry
practice, minimizes confusion, and does not impact any of the commonly
built distribution transformer designs.
DOE requests comment as to whether its proposed definition better
aligns with industries understanding on input and output voltages.
Further, DOE requests comment and data on whether the proposed
amendment would impact products that are serving distribution
applications, and if so, the number of distribution transformers
impacted by the proposed amendment.

[[Page 1746]]

i. kVA Range
The EPCA definition for distribution transformers does not include
any capacity range. In codifying the current distribution transformer
capacity ranges in 10 CFR 431.192, DOE noted that distribution
transformers outside of these ranges are not typically used for
electricity distribution. 71 FR 24972, 24975-24976. Further, DOE noted
that transformer capacity is to some extent tied to its primary and
secondary voltages, meaning that the EPCA definitions has the practical
effect of limiting the maximum capacity of transformers that meet those
voltage limitations to approximately 3,750 to 5,000 kVA, or possibly
slightly higher. Id. However, DOE further stated the inclusion of
capacity limitations in the definition of ``distribution transformers''
in 10 CFR 431.192 does not mean that DOE has concluded that the EPCA
definition of ``distribution transformer'' includes such limitations
and stated that DOE intends to evaluate larger and smaller capacities
than those included in the definition. Id.
DOE's current definition of distribution transformer specifies a
capacity of 10 kVA to 2,500 kVA for liquid-immersed units and 15 kVA to
2,500 kVA for dry-type units. 10 CFR 431.192. The kVA ranges are
consistent with NEMA publications in place at the time DOE adopted the
range, specifically NEMA TP-1 standard. 78 FR 23336, 23352. DOE cited
these documents as evidence that its kVA scope is consistent with
industry understanding (i.e., NEMA TP-1 and NEMA TP-2), but noted that
it may revise its understanding in the future as the market evolves. 78
FR 23336, 23352. Subsequent to the April 2013 Standards Final Rule,
establishing the current energy conservation standards, NEMA TP-1
standard was rescinded.
As noted above, the voltage limitations included in EPCA
practically limit the size of distribution transformers. However,
several industry sources suggest that those limitations may be greater
than the current 2,500 kVA limit included in DOE's definition in 10 CFR
431.192. For example, Natural Resources Canada (``NRCAN'') regulations
include three-phase dry-type distribution transformers with a nominal
power of 15 to 7,500 kVA.\40\ The European Union (``EU'') Ecodesign
requirements specify maximum load losses and maximum no-load losses for
three-phase liquid-immersed distribution transformers up to 3,150
kVA.\41\ IEEE C57.12.90 and C57.12.91 cite similar short circuit tests
for three-phase distribution transformers up to 5,000 kVA.
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\40\ See NRCAN dry-type transformer energy efficiency
regulations at <a href="http://www.nrcan.gc.ca/energy-efficiency/energy-efficiency-regulations/guide-canadas-energy-efficiency-regulations/dry-type-transformers/6875">www.nrcan.gc.ca/energy-efficiency/energy-efficiency-regulations/guide-canadas-energy-efficiency-regulations/dry-type-transformers/6875</a>.
\41\ Official Journal of the European Union, Commission
Regulation (EU) No. 548/2014, May 21, 2014, Available online at:
<a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2014.152.01.0001.01.ENG">https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2014.152.01.0001.01.ENG</a>.
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In the August 2021 Preliminary Analysis TSD, DOE requested comment
regarding the quantity and efficiency of distribution transformers
outside of the kVA range of the definition of distribution transformer
but with input and output voltages that meet the voltage criteria in
said definition. (August 2021 Preliminary Analysis TSD at p. 2-11)
Regarding dry-type distribution transformers, Schneider commented
that units below 15 kVA are typically sealed or non-ventilated and as
such would be excluded from the definition of distribution
transformers. (Schneider, No. 49 at p. 9) Eaton commented that single-
phase liquid immersed distribution transformers less than 10 kVA were
less than 1 percent of shipments. (Eaton, No. 55 at p. 8)
DOE has not received any data or information suggesting that
expanding the scope of the standards below 10 kVA for liquid-immersed
distribution transformers or below 15 kVA for dry-type distribution
transformers would lead to significant energy savings. As such, DOE is
not proposing any changes to the lower capacity limit in the
distribution transformer definition.
Regarding sales of distribution transformers beyond the 2,500 kVA
scope, NEMA commented that while there are sales of models over 2,500
kVA, they are not sold in significant numbers as compared to in-scope
products and energy savings would be limited. (NEMA, No. 50 at p. 5)
Eaton commented that 19.6 percent of their three-phase liquid-immersed
transformers have input and output voltage in-scope, but kVAs above
2500 kVA. (Eaton, No. 55 at p. 8) Eaton provided average efficiencies
for these larger kVA distribution transformers. (Eaton, No. 55 at p. 8)
In interviews, manufacturers commented that many of the larger
distribution transformers are serving renewable applications as step-up
transformers and would therefore be outside the scope of the standards
regardless of the upper capacity of the definition of distribution
transformer.
However, while many larger transformers may be step-up
transformers, stakeholder comments suggest that there are also general
purpose distribution transformers sold above 2,500 kVA with primary and
secondary voltages that would still be within the criteria of the
definition of distribution transformer. While NEMA suggested sales of
models above 2,500 kVA are small, Eaton's comments suggest that at
least for some manufacturers or markets they could be notable. Further,
some manufacturers in interviews expressed concern that in the presence
of amended energy conservation standards, there may be increased
incentive to build distribution transformers that are just above the
existing scope (e.g., 2,501 kVA).
As such, it is appropriate for DOE to consider all distribution
transformers that are serving general purpose distribution
applications, even if the capacity of those distribution transformers
is larger than the common unit. DOE is considering multiple possible
upper limits for distribution transformer capacity. IEEE C57.12.00-2015
lists the next three preferred continuous kVA ratings above 2,500 kVA
as 3,750 kVA, 5,000 kVA, and 7,500 kVA. Eaton's comments suggest that
the upper end of their distribution capacity is 3,750 kVA. In a prior
rulemaking, stakeholders commented that their product lines include
medium voltage dry-type models up to around 5,000 kVA.\42\ Further,
NRCAN regulations cover dry-type distribution transformers up to 7,500
kVA but exclude distribution transformers with low-voltage line
currents of 4,000 amps or more.
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\42\ See Federal Pacific comment on Docket No. EERE-2006-STD-
0099-0105. Available at <a href="http://www.regulations.gov/comment/EERE-2006-STD-0099-0105">www.regulations.gov/comment/EERE-2006-STD-0099-0105</a>.
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Taken together, these points suggest there are some sales of
general purpose distribution transformers above 2,500 kVA, such as at
3,750 kVA and 5,000kVA. DOE does not have any data or evidence that
general purpose distribution transformers are being sold above 5,000
kVA and does have prior public comment of 5,000 kVA transformers with
distribution voltages being sold. Therefore, DOE is proposing to expand
the scope of the definition of ``distribution transformer'' in 10 CFR
431.192 for both liquid-immersed distribution transformers and dry-type
distribution transformers to include distribution transformers up to
5,000 kVA. DOE is also considering other upper limits on the scope of
distribution transformer, including 3,750 kVA and 7,500 kVA.
DOE requests comment and data as to whether 5,000 kVA represents
the upper end of what is considered distribution

[[Page 1747]]

transformers or if another value should be used.
DOE has also estimated potential energy savings associated with
expanding coverage of distribution transformers between 2,500 and 5,000
kVA within scope. DOE relied on public comments and confidential data
sources to estimate shipments between 2,500 kVA and 5,000 kVA. Further,
DOE has scaled its engineering analysis to encompass these larger
units. Although the number of units shipped is estimated to represent a
fraction of a percentage of total covered shipments, DOE has designed
these scaled models as new representative units on account of starting
from an unregulated baseline, as compared to the rest of the market,
for which the baseline transformer complies with existing energy
conservation standards. For liquid-immersed distribution transformers,
representative unit 17 corresponds to a three-phase 3,750 kVA unit. For
medium-voltage dry-type distribution transformers, representative units
18 and 19 correspond to a three-phase 3,750 kVA unit with a BIL of 46-
95 kV and greater than 96 kV, respectively.
DOE has estimated the distribution transformer efficiency by
assuming these out-of-scope units are purchased based on lowest first
cost and would rely on similar grades of electrical steel as the
distribution transformers that are currently in-scope units but would
not currently be meeting any efficiency standard.
DOE requests comment and data as to the number of shipments of
three-ph

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