Impact of the EISA 2007 backstop requirement on general service lamps

The Energy Policy and Conservation Act of 1975, as amended by the Energy Independence and Security Act of 2007 (EISA 2007), requires that the Secretary of Energy “shall prohibit the sale” of any general service lamp (GSL) that does not meet a minimum efficacy of 45 lumens per watt (lm/W) if the U.S. Department of Energy (DOE) fails to complete a rulemaking regarding GSLs in accordance with certain statutory criteria. This is referred to as the EISA 2007 backstop requirement. DOE recently proposed to interpret the EISA 2007 backstop as having been triggered. Based on its statutory authority, DOE also recently proposed to revise the definition of the term GSL to include certain lamps that were either previously excluded or not explicitly mentioned in the EISA 2007 definition. For this proposed definition of GSLs, we estimate the impacts of the EISA 2007 backstop in regard to annualized national economic costs and benefits to consumers. To estimate these impacts, we project the energy use, purchase price, and operating cost of representative lamps purchased during a 30-year analysis period, 2022-2051, for cases in which the EISA 2007 backstop does and does not take effect in 2022. We first consider the purchase price and energy use of those commercially-available GSLs that would be prohibited under the implementation of the EISA 2007 backstop and those more efficacious GSLs that would continue to be available. We then develop a shipments model to project GSL shipments for the cases in which the EISA 2007 backstop does and does not take effect. Shipments are estimated using a stock turnover model and market shares are estimated using a consumerchoice model sensitive to first cost, energy savings, lamp lifetime, the presence of mercury, and ability to dim. The shipments analysis also considers the impact of price learning on product price. Based on the shipments projections, we calculate the national consumer economic impacts of the 45 lm/W backstop, by comparing the total installed product costs and operating costs in the backstop case to the case in which the backstop does not take effect. We also analyze the reduction in several greenhouse gases and other pollutants that would result from the EISA 2007 backstop using emissions intensity factors representing the marginal impacts of the change in electricity consumption associated with the backstop. We consider the estimated monetary benefits from the reduction in emissions of CO2, N2O, CH4, NOX, and SO2 that are expected to result from a 45 lm/W efficacy requirement. The monetized value of the CO2, N2O, and CH4 reduction is calculated using interim estimates published in 2021 developed by an Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). The monetized value of NOX and SO2 emissions reductions is estimated based on analysis conducted by the US Environmental Protection Agency (EPA). DOE has determined that the estimates from the IWG’s 2021 TSD are based upon sound analysis and provide well founded estimates for DOE's analysis of the impacts of the reductions of emissions anticipated from the proposed rule. The time-series of costs and benefits are converted into annualized values based on the present value in 2021. The present value is calculated using discount rates of 3 and 7 percent for consumer costs and benefits, NOX, and SO2 reduction benefits and case-specific discount rates for the value of the other emissions (CO2, N2O, and CH4) reduction benefits. High and low benefits scenarios are analyzed using inputs from the High and Low Economic growth variants of DOE’s Annual Energy Outlook 2021 Reference case and different price learning rates for lamps with light emitting diodes (LEDs).