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DoE Changes Ruling on Rough Service Lamps

The Department of Energy is publishing a “final rule” relating to certain backstop requirements for rough service lamps and vibration service lamps that Congress prescribed in the Energy Policy and Conservation Act.  The DoE initially said it would not regulate the lamps due to sales numbers, but it has since decided the lamps did hit the sales threshold and will enforce the requirements.

The ruling says, “Pursuant to 42 U.S.C. 6295(l)(4) of the Energy Policy and Conservation Act of 1975 (EPCA), Public Law 94-163 (42 U.S.C. 6291-6317, as codified), DOE is required to collect unit sales data for calendar years 2010 through 2025, in consultation with the National Electrical Manufacturers Association (NEMA), for rough service, shatter-resistant, 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and vibration service lamps. For each of these five lamp types, DOE, in consultation with NEMA, must also construct a model based on coincident economic indicators that closely match the historical annual growth rates of each lamp type to provide a neutral comparison benchmark estimate of future unit sales. (42 U.S.C. 6295(l)(4)(B). Section 321(a)(3)(B) of the Energy Independence and Security Act of 2007 (EISA 2007) in part amends paragraph 325(l) of EPCA by adding paragraphs (4)(D) through (H), which direct DOE to initiate an accelerated rulemaking to establish an energy conservation standard for these lamps if the actual annual unit sales of any of the lamp types in any year between 2010 and 2025 exceed the benchmark estimate of unit sales by at least 100 percent (i.e., are greater than 200 percent of the anticipated sales). (42 U.S.C. 6295(l)(4)(D)-(H)) If the Secretary of Energy (Secretary) does not complete the accelerated rulemakings within one year from the end of the previous calendar year during which predicted sales were exceeded, there is a “backstop requirement” for each lamp type, which would establish, by statute, energy conservation standard levels and related requirements. Id. For 2,601-3,300 lumen general service incandescent lamps, this backstop is automatically imposed once the benchmark unit sales estimates are exceeded.

The practical effect of the backstop requirement is to remove rough and vibration service lamps over 40 watts from the market starting on January 25, 2018. DOE conducted an order of magnitude analysis to assess the likely costs associated with this action. As a first step, DOE looked at the revenue of the lamps above 40 watts that will no longer be generated by industry.

Because DOE was previously prohibited from collecting data regarding incandescent lamps, including the subject lamps, DOE does not have data regarding the percentage of lamps sold of both types above 40 watts. DOE estimates that about 80 percent of rough and vibration service lamps are over 40 watts and will therefore no longer be available. Based on a review of home center prices, DOE concluded that these lamps sell for an average of $1.95 per lamp. Using this average sales price of $1.95, at the volumes reported in 2015, the market for rough and vibration service lamps greater than 40 watts was just over $28 million, out of a total market value of just over $35 million for all rough and vibration service lamps.

In the absence of rough and vibration service lamps above 40 watts, DOE believes that all or most consumers of these lamps will purchase a replacement product because the demand for light bulbs is expected to remain constant and not diminish significantly as a result of certain products exiting the market, even though substitute bulbs may be more costly. Consumers have multiple replacement options presented in the following three scenarios: (1) Rough or vibration service lamps less than 40 watts, (2) shatter-resistant lamps greater than 40 watts or (3) LED lamps emitting equivalent lumens. DOE does not attempt here to account for the reasons behind a consumer’s choice to purchase a specific lamp type, hence a set of scenarios that represent lower and upper bounds of the incremental monetized cost of this final rule are presented. For rough and vibration service lamps less than 40 watts, consumers will pay more per unit via pass though costs due to the backstop packaging and shatterproof coating requirements. These costs are built into the three scenarios, but are detailed here for transparency.

For the cost of packaging and shatter proofing requirement of the backstop provisions, DOE estimates imposition of the required backstop standard would result in a modest market cost increase related to the new packaging requirements for vibration and rough service lamps, of approximately $0.02 per unit, and to the new shatterproof coating requirements for rough service lamps of approximately $1.31 per unit. For vibration service lamps, DOE estimates additional packaging costs to be roughly $28,000. For rough service lamps, DOE estimates additional packaging costs totaling $44,000. For rough service lamps, DOE estimates shatterproof coating costs to be about $2,852,000.”

 

 

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