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Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Rules and Regulations
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TABLE IV.16SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS Continued Inputs
Source/method
Discount Rates
Compliance Date

Developed a distribution of discount rates for the commercial, industrial, and outdoor stationary sectors.
2025.

References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the final determination TSD.

1. Equipment Cost To calculate customer equipment costs, DOE multiplied the MSPs developed in the engineering analysis by the markups described previously along with sales taxes. DOE used different markups for baseline equipment and higher-efficiency equipment, because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency equipment. See section IV.D for further details.
2. Installation Cost Installation cost is the cost to install the fixture such as the labor, overhead, and any miscellaneous materials and parts needed. DOE used the installation costs from the 2014 MHLF final rule, but inflated to 2020$ using the GDP
price deflator.15

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3. Annual Energy Consumption For each sampled customer, DOE
determined the energy consumption for an MHLF at different efficiency levels using the approach described previously in section IV.E of this document. For this final determination, DOE based the annual energy use inputs on sectoral operating hour distributions commercial, industrial, and outdoor stationary sectors, with the exception of a discrete value approximately 770
hours per year for the 1,500 W
equipment class that is primarily limited to sports lighting. DOE used operating hour and, by extension, energy use distributions to better characterize the potential range of operating conditions faced by MHLF
customers.
4. Energy Prices Because marginal electricity price more accurately captures the incremental savings associated with a change in energy use from higher efficiency, it provides a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE applied average electricity prices for the energy use of the product purchased in the no-new15 U.S. Bureau of Economic Analysis BEA. Table 1.1.9. Implicit Price Deflators for Gross Domestic Product. U.S. Department of Commerce:
Washington, DC. www.bea.gov/iTable/.

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standards case, and marginal electricity prices for the incremental change in energy use associated with the other efficiency levels considered in this final determination.
DOE derived annual electricity prices in 2019 for each census division using data from the Edison Electric Institute EEI Typical Bills and Average Rates reports.16 Marginal prices depend on both the change in electricity consumption and the change in monthly peak-coincident demand. DOE used the EEI data to estimate both marginal energy charges and marginal demand charges.
DOE calculated weighted-average values for average and marginal price for the 13 census divisions and large states for the commercial, industrial, and outdoor stationary sectors.
To estimate energy prices in future years, DOE multiplied the average regional energy prices by a projection of annual change in national-average commercial and industrial energy prices in the Reference case of Annual Energy Outlook 2021 AEO 2021. 17 AEO 2021
has an end year of 2050. DOE assumed regional electricity prices after 2050 are constant at their 2050 price.
5. Replacement Costs Replacement costs include the labor and materials costs associated with replacing a ballast or lamp at the end of their lifetimes and are annualized across the years preceding and including the actual year in which equipment is replaced. The costs are taken from the 2014 MHLF final rule but inflated to 2020$ using the GDP price deflator. For the LCC and PBP analysis, the analysis period corresponds with the fixture lifetime that is assumed to be longer than that of either the lamp or the ballast. For this reason, ballast and lamp prices and labor costs associated with lamp or ballast replacements are included in the calculation of operating costs.
16 Edison Electric Institute. Typical Bills and Average Rates Report. 2019. Winter 2019, Summer 2019: Washington, DC.
17 U.S. Energy Information Administration.
Annual Energy Outlook 2021 with Projections to 2050. 2021. Washington, DC. Last accessed March 18, 2021. www.eia.gov/outlooks/aeo/.

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The CA IOUs suggested that DOE
update the MHLF cost data for lamps, ballasts, and housings, rather than using the costs from the 2014 MHLF final rule.
CA IOUs, No. 14 at p. 2 DOE notes that replacement costs for ballasts come directly from this final determination engineering analysis see section IV.C.
However, DOE has continued to use the replacement lamp costs from the 2014
MHLF final rule but inflated to 2020$.
The CA IOUs acknowledged that MHLFs are a legacy lighting technology, and NEMA stated that there has been an 80 percent decline in the MHLFs market from 20082018. CA IOUs, No. 14 at pp. 12; NEMA, No. 12 at p. 2 Given this recent substantial decline in the MHLFs market, it is unlikely that prices would have changed appreciably due to price learning since the 2014 MHLF
final rule analysis was conducted.
Therefore, DOE has only applied inflation to the MHLF replacement lamp prices since the 2014 MHLF final rule analysis.
6. Equipment Lifetime DOE defined equipment lifetime as the age when a fixture, ballast, or lamp is retired from service. For fixtures in all equipment classes, DOE assumed average lifetimes for indoor and outdoor fixtures of 20 and 25 years, respectively.
DOE also assumed that magnetic ballasts had a rated lifetime of 50,000
hours and electronic ballasts had a rated lifetime of 40,000 hours. DOE used manufacturer catalog data to obtain rated lifetime estimates in hours for lamps in each equipment class. DOE
accounted for uncertainty in the fixture, ballast, and lamp lifetimes by applying Weibull survival distributions to the components rated lifetimes.
Furthermore, DOE included a residual value calculation for lamps and ballasts to account for the residual monetary value associated with the remaining life in the lamp and ballast at the end of the fixture lifetime. As stated in the 2020
NOPD, DOE based all assumptions for estimating equipment lifetime from the 2014 MHLF final rule. 85 FR 47472, 47494.
7. Discount Rates The discount rate is the rate at which future expenditures are discounted to
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