d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 1 U.S. DEPARTMENT OF ENERGY

+ + + + + FRAMEWORK PUBLIC MEETING FOR RESIDENTIAL REFRIGERATORS, REFRIGERATOR-FREEZERS, AND FREEZERS

+ + + + + MONDAY, SEPTEMBER 29, 2008

+ + + + + The Meeting convened at 9:00 a.m. in Room 8E-089 of the Forrestal Building of the U.S. Department of Energy, 1000 Independence Avenue, S.W., Washington, D.C., Doug Brookman, Facilitator, presiding.

PRESENT: DOUG BROOKMAN, Facilitator STEPHEN WITKOWSKI, Department of Energy RON LEWIS, Department of Energy MICHAEL KIDO, Department of Energy ERIC STAS, Department of Energy MICHAEL McCABE, Department of Energy GREGORY ROSENQUIST, Lawrence Berkeley National Laboratory DETLEF WESTPHALEN, Navigant Consulting, Inc. CONSTANTIN von WENTZEL, Navigant Consulting,

Inc. HEATHER LISLE, Navigant Consulting, Inc. MIKE RIVEST, Navigant Consulting, Inc. JENNIFER THORNE AMANN, American Council for an Energy Efficient Economy TIMOTHY BALLO, Earthjustice STEVEN BLANC, Baltimore Gas & Electric BILL A. BROWN, General Electric DEBRA K. BRUNK, Association of Home Appliance Manufacturersd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 2 PRESENT: LANE WESLEY BURT, Natural Resources Defense Council STEVEN C. CHURCH, Whirlpool KELLEY KLINE, General Electric SEAN MACKAY, Whirlpool JOSEPH McGUIRE, Association of Home Appliance Manufacturers EDWARD R. OSANN, American Council for an Energy Efficient Economy STEVEN J. ROSENSTOCK, Edison Electric Institute PAUL SIKIR, Sub-Zero Freezer Company JOHN TAYLOR, LG Electronics BELINDA CARR, Energetics, Inc. BRENDA EDWARDS, Department of Energy RONALD FOSTER, General Electric GREG HALL, W.C. Wood Corp., Ltd.

JACK HENRY-RHOADS, D&R International JOHN HODGES, Wiley Rein, LLP TIMOTHY McGRADY, LG Electronics USA, Inc. STEVE POLINSKI, Miele, Inc., Regulatory Affairs, Product Development Group CAROLINE M. TAYLOR, Association of Home Appliance Manufacturers, Manager, Government Relationsd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 3 TABLE OF CONTENTS Welcome and Preliminary Remarks . . . . . . . .4 Opening Remarks, Introductions, and Agenda Review, Doug Brookman . . . . . . . . . .8 Rulemaking and Analytical Methodology Overview, Stephen Witkowski . . . . . . . . . . . 12 Stakeholder Opening Statements. . . . . . . . 20

Text Procedure, Detlef Westphalen . . . . . . 22 Market and Technology Assessment, Detlef Westphalen . . . . . . . . . . . 51 Screening Analysis and Engineering Analysis, Detlef Westphalen . . . . . . . . . . . 76 Preliminary Manufacturer Impact Analysis, Constantin von Wentzel. . . . . . . . .119 Markups for Equipment Price Determination, Energy Use Determination, and Life-Cycle Cost and Payback Period Analysis, Gregory Rosequist . . . . . . . . . . .122 Shipments Analysis, National Impact Analysis, and LCC Subgroup Analysis, Gregory Rosenquist. . . . . . . . . . .159 Manufacturer Impact Analysis, Constantin von Wentzel. . . . . . . . .179 Utility Impact Analysis, Employment Impact Analysis, Environmental Assessment, and Regulatory Impact Analysis, Gregory Rosenquist. . . . . . . . . . .186

Other Issues and Comments/Closing Remarks . .197 Adjournd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 4 1 P R O C E E D I N G S

2 9:10 A.M.

3 FACILITATOR BROOKMAN: Good 4 morning, everybody and welcome. This is the 5 U.S. Department of Energy's Framework Public 6 Meeting for Residential Refrigerators, 7 Refrigerator-Freezers, and Freezers. Today is 8 Monday, September 29th. Welcome to all of you 9 and thank you for being here. 10 I'm Doug Brookman of Public 11 Solutions, Baltimore. 12 With no further ado, let me turn 13 it over to Ron Lewis, Supervisor for 14 Regulatory Affairs, DOE. 15 MR. LEWIS: Welcome, everybody, 16 today. Thanks for being here. I don't know - 17 - were any of you here last week for the 18 commercial refrigeration meetings? We're 19 having meetings on a pretty regular basis now. 20 We're actually putting out documents and 21 rulemakings at about 12 times the pace that we 22 were just two and a half years ago, so we'red5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 5 1 using these rooms quite a bit, and I'm glad 2 you can be here. We've put a lot of work into 3 trying to get things together, and have a 4 presentation that will be a starting point 5 with refrigerators here. 6 We hope you'll be giving us input, 7 dialogue, giving us your thoughts. We're 8 doing this to get your input, so we're glad 9 you're here, and we look forward to having an 10 engaging day, and you expressing your 11 viewpoints. And at the end of this, we will 12 have a transcript that will go up on our 13 website, and we'll have a comment period. If 14 you need some time to think about your 15 comments and get those into us, we look 16 forward to those, as well. 17 Thanks again for being here.

18 FACILITATOR BROOKMAN: It's our 19 tradition to provide an opportunity for each 20 person to introduce him or herself, so let's 21 do that now. And if you'd start by saying 22 your name and organizational affiliation,d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 6 1 we'll just work our way around the room. 2 MR. OSANN: Yes, my name is Ed 3 Osann. I'm here with -- I work with the 4 American Council for an Energy Efficient 5 Economy, which is a nonprofit organization 6 that does the initial policy work on energy 7 efficiency. I'm actually also coordinating 8 stakeholder involvement, NGO stakeholder 9 involvement for the Applied Standards 10 Awareness project. 11 MR. ROSENSTOCK: Steve Rosenstock, 12 Edison Electric Institute. 13 MS. BRUNK: Debra Brunk with the 14 Association of Home Appliance Manufacturers. 15 MR. McGUIRE: Joe McGuire, also 16 with AHAM. 17 MS. KLINE: Kelley Kline, with 18 General Electric Consumer and Industrial. 19 MR. BROWN: Bill Brown with G.E. 20 MR. TAYLOR: John Taylor, LG 21 Electronics. 22 MR. CHURCH: Steve Church,d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 7 1 Whirlpool Corporation. 2 MR. MACKAY: Sean Mackay, 3 Whirlpool Corporation. 4 MR. KIDO: Michael Kido, 5 Department of Energy, Office of General

6 Counsel. 7 MR. LEWIS: Ron Lewis, DOE. 8 MR. WITKOWSKI: Stephen Witkowski,

9 DOE. 10 MR. WESTPHALEN: Detlef Westphalen 11 with Navigant Consulting. 12 MR. ROSENQUIST: Gregory 13 Rosenquist, with Lawrence Berkeley National 14 Laboratory. 15 MS. LISLE: Heather Lisle, 16 Navigant Consulting. 17 MR. FOSTER: Ralph Foster with

18 G.E. 19 (Audience introductions.) 20 FACILITATOR BROOKMAN: Thank you. 21 I anticipate that a few more people will be 22 joining us as they clear through security, andd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 8 1 hopefully they'll get here soon. 2 All of you have received a copy of 3 the agenda for today, as well as a large 4 packet of information with the PowerPoint 5 slides that will be the basis of the 6 discussion today, or I should say, the 7 starting point for discussion, as well as the 8 Federal Register notice that accompanies it. 9 So I'm going to just run through the agenda 10 here briefly. 11 I'm going to change the order 12 slightly. You see the second item that's 13 listed there, stakeholder opening statements. 14 We're going to move that down two or three 15 slots, so I'm now doing the agenda review. 16 Stephen Witkowski is then going to provide an 17 overview on the rulemaking analytical 18 methodology. At that point, following 19 Stephen's remarks, there's an opportunity for 20 stakeholders to make brief summary remarks, 21 brief opening statements about the issues that 22 matter to them. Following that, we'll have ad5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 9 1 presentation on test procedure issues. 2 We'll take a break, mid-morning, 3 round about 10:30 or so. Following that, 4 we'll have a presentation followed by a 5 question and answer and comment on market and 6 technology assessment, and then screening 7 analysis and engineering analysis.

8 We'll break for lunch round about 9 noon or 12:15 or so, and following lunch, 10 preliminary manufacturer impact analysis, and 11 following that, markups for equipment price 12 determination, energy use determination, and 13 life-cycle cost and payback trade analysis. 14 And then shipments analysis, national impact 15 analysis, and LCC subgroup analysis. 16 We'll break mid-afternoon, 3 17 o'clock or so. Following the break, 18 manufacturer impact analysis, utility impact 19 analysis, employment impact analysis, 20 environmental assessment or regulatory impact 21 analysis, and we'll close out the day with an 22 opportunity once again for any of you to maked5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 10 1 summary comments, any other issues you wish to 2 raise, that would benefit you to do so. So 3 that's the plan for today. Questions and

4 comments about that? 5 I see none. How many of you are 6 new to these kinds of proceedings? Just a few 7 of you. So most of the rest of you have gone 8 through this kind of process previously. 9 I'd ask for your consideration if 10 you would please, please speak one at a time, 11 listen as an ally. I'm going to ask that you 12 try and keep your comments on point and brief 13 as possible. If you need to have a sidebar 14 conversation with someone, please take it out 15 of the room. We'll understand. That will be 16 acceptable to us, but we don't want to 17 distract people. 18 The acoustics in here are pretty 19 good. These microphones work pretty good, so 20 you can expect that what you say might end up

21 on the record. 22 We do have a court reporter here.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 11 1 There will be, as Ron said, a transcript of 2 this meeting available on the website 3 following this meeting. How long does it 4 typically take? 5 COURT REPORTER: I can't really 6 say sitting here. You'd have to call our 7 office. 8 FACILITATOR BROOKMAN: Okay, a 9 couple of weeks. 10 If you would, please, turn your 11 cell phones on to silent mode so that they 12 don't disrupt what we're doing here. 13 You probably already found the 14 restrooms. They're at the end of the hall, 15 both ends of the hall. As we get to the 16 coffee break, we'll talk about other 17 housekeeping items, and I think that's all 18 that I've got. 19 There are one or two individuals 20 that didn't get a chance to introduce 21 themselves. Why don't we do that now. Your 22 name, please?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 12 1 MR. BALLO: Tim Ballo with 2 Earthjustice. 3 FACILITATOR BROOKMAN: Thank you. 4 And I saw -- yes. 5 MS. THORNE-AMANN: Jennifer Thorne 6 Amann, American Council for an Energy 7 Efficient Economy. 8 FACILITATOR BROOKMAN: Thank you. 9 MR. BURT: Lane Burt, Natural 10 Resources Defense Council. 11 FACILITATOR BROOKMAN: Thank you. 12 Did I miss anybody else? Please. 13 MR. von WENTZEL: Constantin von 14 Wentzel, Navigant Consulting. 15 FACILITATOR BROOKMAN: Okay, so 16 then let's proceed. We're going to start off 17 then with Stephen making -- providing a brief 18 overview. 19 MR. WITKOWSKI: I'm basically 20 starting on Slide 6. This shows you what 21 we'll be doing today. You have all of this in 22 your agenda, and on the slides.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 13 1 And moving to Slide 7, the purpose 2 for the framework document public meeting, and 3 this is to present the procedural and 4 analytical approaches to evaluate energy 5 conservation standards for refrigerators, 6 refrigerator-freezers, and freezers; provide 7 a public forum for discussion of rulemaking 8 issues; and number three, encourage 9 stakeholders to submit added information and 10 written comments. The framework document 11 meeting is basically your first opportunity to 12 come together to discuss the issues, and then 13 provide information. We are basically seeking 14 information from the stakeholders at this 15 point. 16 Any comments on that? Yes, sir. 17 MR. OSANN: Is the slide deck that 18 was handed out in the foyer of this meeting 19 the same as was posted on the web earlier? 20 MR. WITKOWSKI: It should be very 21 close to it, the one that was sent out, and 22 yes.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 14 1 MR. OSANN: But there have been 2 some changes? 3 MR. WITKOWSKI: They're minor 4 changes, one I'm going to mention, and if you 5 need, if there are any updates, we will let 6 you know, and send those out, also. 7 Anything else? 8 (No response.) 9 Okay. Feedback is requested, and 10 here's the information as to how to get your 11 feedback to us. I think this is pretty 12 straight forward. You can do it by email, by 13 postal mail, or by courier. And the comment 14 period closes on October 20th, 2008. This is 15 where there may be one discrepancy. In some 16 of the earlier documents, I believe the date 17 was October 17th. The date is October 20th. 18 That's also the date that is shown in the 19 Federal Register. 20 And background, I'm not going to 21 go through every detail here, because I think 22 you can certainly read this, and most of youd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 15 1 are aware of the background, but we have the 2 Energy Conservation Policy Act that you all 3 know as ECPA of 1975, that established a major 4 conservation program for major household 5 appliances. 6 Then in 1987 came the amendments 7 to EPCA, which established performance energy 8 conservation standards for refrigerators, 9 refrigerator-freezers, and freezers, and that 10 amendment directed DOE to conduct two cycles 11 of rulemakings for these products to determine 12 if more stringent standards are justified. 13 And then here are a list of 14 previous rulemakings, a final rule published 15 in 1989, rule correction affecting the three 16 product classes, a second round of final rules 17 published in 1997, analyses were published in 18 October of 2005 to support priority setting 19 for additional refrigerator rulemakings, and 20 then, of course, the Energy Independence and 21 Security Act of 2007, or EISA, which required 22 publication of updated standards by Decemberd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 16 1 31, 2010 to take effect on the first of 2 January, 2014. 3 And this is basically a brief 4 diagram of the process itself, and based on 5 the EISA requirements, you see that where we 6 have the green, that's the framework document 7 which we have put together, and then will come 8 the advanced notice of proposed rulemaking, 9 and concurrently, we're working on a test 10 procedure, new test procedure for the 11 products; then the NOPR, and the final rule. 12 Again, the agenda for today. 13 We've been through that. 14 Okay, and then again, here are the 15 EPCA factors and the corresponding DOE 16 analyses, economic input on consumers and 17 manufacturers, lifetime operating cost savings 18 compared to the cost of the product, and again 19 on the right is the DOE analysis that takes 20 place for that particular factor. Total 21 projected energy savings, impact on utility 22 and performance, impact of any lessening ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 17 1 competition, need for national energy 2 conservation, and other factors that the 3 Secretary considers relevant. 4 Here is our timeline and 5 milestones. We're at the framework document 6 public meetings stage, obviously. And then we 7 will go through, and again, this is just a 8 timeline for what I showed you before, what 9 you saw before in the diagram of the framework 10 document ANOPR, NOPR, and final rule 11 processes. 12 And again, here's more information 13 about the framework document, and again, I14 stress that this is primarily an information15 gathering process. This is where we are 16 looking for input from the stakeholders so 17 that we can consider that as we progress 18 through the rulemaking. 19 And again, the diagrams start to 20 get a little bit more complex, but all we're 21 doing here is showing the particular analyses 22 that are taking place during each stage of thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 18 1 standards, and at this slide we show the ANOPR 2 stage, the Advanced Notice of Proposed 3 Rulemaking, and the corresponding analyses. 4 This is my favorite slide, and I'm 5 not going to take any time to go through it, 6 because most of you have seen it, but I think 7 it shows the complexity that's involved in the 8 process. 9 And again, the purpose of the 10 ANOPR -- not again, but excuse me, the purpose 11 of the ANOPR public meeting is to present 12 methodologies for the ANOPR analyses, and 13 characterize the results, to discuss specific 14 issues related to the ANOPR analyses, again, 15 to seek input from attendees on methodologies, 16 assumptions, and data sources, and to describe 17 upcoming analyses in the next step, and to 18 seek further input. 19 The requirement for the ANOPR and 20 the rulemaking, EISA has modified the process 21 to allow waivering of the ANOPR stage. DOE 22 believes that the ANOPR is an important stepd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 19 1 in the process, and that it should be retained 2 in the rulemaking process. 3 Then we go to the NOPR, and again, 4 the corresponding analyses. I think the 5 diagram is self-explanatory. 6 And another one of these spaghetti 7 charts for the NOPR and the final rule. And 8 again, everything that we go through, the 9 entire process for each of these stages is 10 shown in these diagrams. 11 And the purpose of the NOPR public 12 meeting: to hear the views of the 13 stakeholders on DOE's proposed standard level, 14 and to obtain input on any remaining issues 15 relating to the Notice of Proposed Rulemaking,

16 the NOPR. 17 Then the analyses for the final 18 rule, Slide 24. And any comments at this 19 point? 20 FACILITATOR BROOKMAN: So this 21 would be the place for individuals, anybody 22 here present that wishes to make openingd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 20 1 remarks. 2 MR. WITKOWSKI: Exactly. 3 FACILITATOR BROOKMAN: Okay. So 4 let's do that now. Ron Lewis, before we 5 proceed with that. 6 MR. LEWIS: Just a clarification 7 that EISA 2007 allowed us to not do ANOPRs in 8 rulemakings, and the statement that Steve just 9 made was for this rulemaking that, in trying 10 to get things through the process, and in an 11 expedited fashion, we're still looking for 12 ways to engage the stakeholders, but also take 13 advantage of some of the provisions that 14 Congress has given us. So his comment was 15 only for this rulemaking. 16 MR. WITKOWSKI: Thank you for that 17 clarification. It's important. 18 FACILITATOR BROOKMAN: So now is 19 an opportunity for anybody that wishes to make 20 brief summary remarks here at the outset to 21 emphasize an issue or two. 22 Debra, and please -- if you wouldd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 21 1 please say your name and organizational 2 affiliation.

3 MS. BRUNK: Debra Brunk from AHAM. 4 AHAM would just like to state its support for 5 continuing with the ANOPR in this rulemaking. 6 We believe it's an important opportunity for 7 all stakeholders to discuss with DOE the 8 results of the engineering analysis, and the 9 preliminary analysis for the NOPR. 10 FACILITATOR BROOKMAN: Thank you.

11 Other remarks here at the outset?

12 Yes? 13 MR. BALLO: Tim Ballo with 14 Earthjustice. I agree that the ANOPR presents 15 an important opportunity for stakeholders. 16 I'm just wondering if it might be possible to 17 do something that's similar to what you do 18 with the framework document where you just 19 publish the analysis on the website and make 20 it available, but don't actually publish the 21 entire thing in the Federal Register, if that 22 might speed up the process a little bit.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 22 1 FACILITATOR BROOKMAN: Yes, 2 Jennifer? 3 MS. THORNE-AMANN: Jennifer Thorne 4 Amann, at AEEE. Just to add to Tim's 5 suggestion, I think that would work well as 6 long as there's a public meeting so we could 7 all get together and talk about the results,

8 and trade feedback on the results of the 9 analysis, but it may be just by eliminating 10 the full Federal Register publication process 11 that could save some time.

12 FACILITATOR BROOKMAN: Other 13 comments here before we get into more detailed 14 presentation? 15 Okay, I see no additional 16 comments. Then let's proceed with a 17 description of the test procedure and 18 opportunity for comment and discussion.

19 Detlef? 20 MR. WESTPHALEN: Thanks, Doug. So 21 I'll be starting my morning talking about test 22 procedures. I guess the document that was ond5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 23 1 the website kind of goes into much more detail 2 than we will be able to here, but hopefully, 3 we'll be able to highlight some of the issues 4 that a modification of the test procedure will 5 address, and as Steve mentioned, there is an 6 intention to start a process for modification 7 of the test procedure. 8 We're aware that, just recently, a 9 new version of AHAM-HRF-1 2008 version was 10 made public, and that's obviously one of the 11 topics and test procedure that I think now the 12 current test procedure might be 29 years out 13 of date, and that's certainly on the table for 14 modification. 15 Final rule was published modifying 16 a test procedure to incorporate provision for 17 some new long-time defrost units, an approach 18 to save some energy by allowing the defrost to 19 start, not when the compressor turns off, but 20 to wait a while to allow the evaporator to 21 warm up, and a modification was made with the 22 final rule March 7th, 2003. Now there may bed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 24 1 some consideration given for other things that 2 might occur around defrost when some of the 3 newer units, which have electronic control, 4 they have capability to save energy in 5 different ways, or to utilize energy in 6 different ways. One thing in particular that 7 has come to our awareness is pre-cool prior to 8 a defrost. And that's something that we might 9 want to think about. 10 An exemption for automatic control 11 anti-sweat heaters was published on February 12 27th, 2008 and that's something that we would 13 consider bringing into the test procedure. 14 A couple of exemptions have led to 15 discussion of new product classes, one of them 16 for auto-defrost refrigerator-freezers with 17 bottom-mounted freezers with through-the-door 18 ice service, three exemptions. It's possible 19 that there's been another since the writing of 20 the framework document and this presentation, 21 but these are some of the key manufacturers22 involved, and also an exemption for autod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 25 1 defrost chest freezers for Electrolux, 2 September 13th, 2004. And consideration is 3 being given, and to some extent, this is 4 almost more of a rulemaking issue than a test 5 procedure issue, because it's establishing the 6 product classes. It's more of a rulemaking 7 issue. However, we're bringing it up here as 8 related to test procedure. 9 The electric refrigerator 10 definition was modified to specify temperature 11 level excluding wine coolers, and this brings 12 up the question of additional potential 13 product classes, and some of the comments, 14 requests for comments that appear later, and 15 appear in the framework document, talk about 16 whether that should be looked at a little bit 17 more closely. 18 MR. OSANN: Ed Osann. Could you 19 just elaborate a little bit on exemption in 20 this context, what it means, what the process 21 is, what the outcome is? 22 MR. WESTPHALEN: The process --d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 26 1 I'm not aware -- I'm not as familiar with the 2 legal process involved with an exemption. 3 However, these exemptions essentially allow 4 the manufacturers involved to manufacture this 5 product, and to have it test at an entry level 6 that is different from the typical energy 7 level associated, for instance, with a bottom

8 freezer. 9 MR. KIDO: Michael Kido, Office of 10 General Counsel. Typically, the process 11 that's involved is to go through our Office of 12 Hearing and Appeals, and to submit information 13 justifying why a particular exemption should 14 be made for a particular product. 15 Typically, there's a fair amount 16 of information that has to be submitted to 17 them. They've got a separate procedure that's 18 located within 10 CFR -- I believe it's 1004, 19 and that details all the different 20 requirements that have to be met when 21 submitting requests for any kind of exemption. 22 Was there a particular question?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 27 1 MR. LEWIS: Ron Lewis. The 2 mention of exemption was that the products 3 listed there did not fit the product classes 4 that were previously published, and those 5 companies went to OHA and said, we don't fit 6 any of those categories, those product 7 classes, so we don't believe that we can test 8 to those product classes, and certify that 9 we're in compliance with those product 10 classes. So a separate product class was 11 established for that. It wasn't that they 12 were exempt from doing that. A new product 13 class was established for that.

14 MR. OSANN: So what are the 15 operative test procedures for product that 16 applies for or gets an exemption? 17 MR. LEWIS: It's in the exemption. 18 It's spelled out in the exemption from OHA, 19 and we can handle that offline, I think. 20 There's a procedure -- 21 MR. OSANN: There's an alternative 22 or a work-around or something that's provided?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 28 1 MR. LEWIS: It's because what was 2 in place did not have a product class that fit 3 these particular products that came out after 4 the test procedure was established. So -- 5 MR. OSANN: But there is a test 6 procedure?

7 MR. LEWIS: Yes. 8 MR. KIDO: Just as an example, 9 Michael Kido. Just as an example, with 10 respect to those three exemptions that are 11 noted there for Maytag, well, actually two, 12 three, Maytag, LG, and Samsung, the Office of 13 Hearings and Appeals provided an exception for 14 these companies, but it came through the 15 energy efficiency equation that would be 16 required for each of those manufacturers. The 17 test procedure is still the same, so there's 18 no difference there. It's just that, if you 19 look at the requirements for that particular 20 product, you actually have to satisfy this 21 energy efficiency equation, and that equation 22 was adjusted to accommodate those threed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 29 1 companies with that particular product. 2 MR. WESTPHALEN: That's in 3 contrast to the second exemption, the second 4 bullet exemption listed there where a test 5 procedure, a modified test procedure approach 6 had to be developed in order to properly test 7 the product. 8 FACILITATOR BROOKMAN: That being

9 auto-defrost chest freezer?

10 MR. WESTPHALEN: That's correct.

11 Yes. 12 FACILITATOR BROOKMAN: Sorry, 13 that's automatic control anti-sweat heaters. 14 MR. WESTPHALEN: Moving on in test 15 procedures, some work done by the National 16 Institutes of Standards and Technologies 17 showed that, particularly for some compact 18 refrigerators, there are some inconsistencies 19 in test results, and some of the items 20 highlighted in this work have to do with the 21 clearance in the rear of the unit. 22 The HRF 1 procedure, which thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 30 1 current test procedure refers to, is not 2 specific in terms of -- not very clear in 3 terms of how much clearance behind the unit is 4 allowed, and often, the unit would be placed 5 in the middle of the floor, inconsistent with 6 how it would be used in an actual space. Some 7 of the updates of HRF 1 have specified 8 according to the manufacturer's instructions 9 as far as the clearance to the rear go. 10 That's something that reference to the 11 updated HRF 1 would resolve. 12 A couple of the other things 13 mentioned in that piece of work involve 14 tighter ambient temperature control and/or 15 temperature accuracy in the temperature 16 measurement, and there's one comment mentioned 17 in regard to the type of load used in the 18 manual defrost testing of units with manual 19 defrosts with the roll bond evaporator. So 20 those are some of the things that we would 21 potentially be looking at. 22 Circumvention of test procedured5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 31 1 intentions. That's kind of been a hot topic. 2 I think it's -- I'm not going to dwell on 3 that. I think a lot of people understand some 4 of the issues are essentially with 5 refrigerators that might detect when they're 6 in an energy test, and behave differently than 7 they would when used in the field. 8 Convertible bottom drawer 9 refrigerator-freezers tested, apparently in 10 Energy Star testing with the convertible 11 drawer operated as a fresh food compartment, 12 which is inconsistent with HRF 1, which 13 specifies use of the highest energy setting, 14 and that's something that obviously requires 15 a decision and/or some clarification. 16 Averaging of temperatures for 17 units with more than two compartments. There 18 isn't really any guidance given as to how the 19 average temperatures would be calculated for 20 two freezer compartments, and that might 21 become important if they might be two freezer 22 compartments of very different sizes. Thend5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 32 1 the Energy Independence and Security Act 2 highlighted standby energy use as something 3 that should be looked at with test procedures 4 and energy standards. And certainly that's 5 something that we're thinking about here. 6 However, the nature of the refrigerator and 7 freezer test procedure is such that, for the 8 most part, it is our understanding that any of 9 this standby energy use would be captured. We 10 welcome any comments in regards to how there 11 might be some features that wouldn't be 12 captured. 13 One of the things that has come up 14 through some of the work, certainly on the 15 international front, is looking at the 16 compartment temperatures, and whether they 17 should be changed, and I think some of the 18 impetus for this comes out of the work going 19 on internationally, and a desire to provide 20 harmonization of test procedures so that 21 manufacturers can test some of these products 22 once rather than five times for each differentd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 33 1 country that they're selling in. 2 And so these are the temperatures 3 that are being adopted for -- as far as they 4 understand, for IEC 62552, and have been 5 adopted for AHAM HRF 1. This applies 6 primarily to Appendix A1, the refrigerators 7 and refrigerator-freezers, since freezers are 8 already tested at 0 Fahrenheit. The changes 9 are essentially fresh food compartments, which 10 are currently tested at 45 Fahrenheit, would 11 be tested at 39 Fahrenheit, and that freezers 12 and refrigerator-freezers which are currently

13 tested at 5 would be tested at 0. For an all 14 refrigerator, the current test calls for 38, 15 and that would be raised one degree to 39. 16 And we'll talk more in the 17 engineering analysis about what this means, 18 and how we're going to deal with it when it 19 comes to the standard. You know, as far as 20 the test procedure goes, this is a very 21 straight-forward change.

22 FACILITATOR BROOKMAN: Let's taked5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 34 1 a question or two here now.

2 Steve Rosenstock. 3 MR. ROSENSTOCK: Thank you. Steve 4 Rosenstock, EEI. Obviously, this could have 5 an impact on the future energy ratings, and so 6 what is the timing to finalize this test 7 procedure? 8 MR. WESTPHALEN: That's a good 9 question. We had not -- there's still some 10 questions remaining, some things that have 11 been unresolved, and to some extent, we have 12 been waiting to hold this meeting to hear 13 initial comments on a lot of these issues in 14 order to guide the process in moving forward 15 on the test procedure. However, the intent

16 would be -- 17 FACILITATOR BROOKMAN: Ron Lewis.

18 MR. LEWIS: There are a lot of 19 issues. It's very dynamic, Steve, as you're 20 aware. So we chose to include this, even 21 though this is about the standard, this is the

22 framework document for the standard that we'ved5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 35 1 chosen to bring this up now. We've got a test 2 procedure that we're reviewing and starting to 3 look at, revision of that to be in lockstep 4 with the standard. So we've brought it up 5 here at this point that the test procedure 6 certainly will be finalized before the 7 standard is, but we're doing it in 8 synchronization with that, and we're trying to 9 raise the issue earlier here so we can get 10 input. 11 MR. ROSENSTOCK: Again, may I 12 follow up? Steve Rosenstock, EEI. Obviously, 13 you're talking about the ANOPR/NOPR and the 14 standard, and obviously the timing of the test 15 procedure could be critical in just the energy 16 analysis that you're doing, and all of the 17 other subsequent analyses just because these 18 look like significant changes. You're talking 19 about 5063s in some cases, and that could have 20 a significant impact on energy use profiles. 21 FACILITATOR BROOKMAN: Thank you. 22 Other comments about these two slides befored5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 36 1 we continue? Questions? Okay. 2 MR. WESTPHALEN: Just one slide 3 talking about bottom-freezer products with 4 through-the-door ice service. This is just 5 acknowledging some of the information that has 6 come out in regards to some of these units 7 that the DOE should be taking a closer look 8 at. As mentioned previously an exemption 9 established essentially establishing this 10 product class gives an energy allowance for 11 the through-the-door feature that's consistent 12 with top-freezer products. 13 However, the DOE energy test is 14 carried out with the icemaker turned off and 15 there is some evidence that energy use for the 16 products can be significantly higher than the 17 energy label when the icemaker is turned on. 18 Currently, DOE is investigating 19 this issue to understand the details of what's 20 going on here and what the discrepancies are 21 and DOE welcomes any information which will 22 enhance the understanding of that additionald5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 37 1 energy use with these products. 2 At this point we'll get into 3 request for comment -- 4 MR. LEWIS: Another point of 5 clarification. 6 FACILITATOR BROOKMAN: Ron Lewis. 7 MR. LEWIS: The phraseology on 8 that should have been, the icemaker should 9 have been inoperative, not turned off. 10 FACILITATOR BROOKMAN: Okay, yes. 11 So in this box on slide 31, you can see that 12 the Department of Energy specifically requests 13 your comment on five different things. Should 14 DOE revise its test procedure to measure the 15 performance of antisweat heater systems that 16 are controlled through temperature and 17 humidity sensing? Two, great combination, 18 wine storage freezer appliances and wine 19 coolers. Three, incorporate by reference the 20 most recent version of AHAM HRF-1 test 21 standard that includes revised test methods 22 for rating compact refrigerators. Four,d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 38 1 incorporate provisions to prevent 2 circumvention schemes. And five, rate3 convertible bottom drawer or refrigerator4 freezer models. 5 So comments on those items? Yes, 6 Steve first and then to Debra. 7 MR. ROSENSTOCK: Steve Rosenstock, 8 EEI. I am too -- perked my interest a little 9 bit just because of the fact that a wine 10 coolers or wine chillers, there's different 11 descriptions of them. As I recall, they 12 actually have red wine coolers and white wine

13 coolers from what I've seen and there's 14 different temperatures, significantly higher, 15 like either 55 or 60 degrees Fahrenheit 16 depending on the type of wine you're cooling. 17 So I guess it's kind of a bigger issue. Are 18 these products covered under this generic, 19 I'll say the generic umbrella of a 20 refrigerator-freezer. I know California has 21 efficiency standards for those products. It's 22 kind of a bigger picture. Are these productsd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 39 1 covered and if they are covered I think they 2 would have to have a separate test procedure 3 just because of the temperatures they put in, 4 the temperatures that they're set at are 5 significantly higher than what you're showing

6 here. 7 FACILITATOR BROOKMAN: Can you

8 answer that? 9 MR. WESTPHALEN: We haven't given 10 it serious consideration. 11 MR. LEWIS: You're asking for 12 information?

13 MR. WESTPHALEN: Yes. 14 MR. CHURCH: This is Steve Church 15 from Whirlpool. California's standard is 16 adopted at 55 degrees. It's also written into 17 HRF-1 to be interpreted in the same fashion as 18 California does and Canada also adopted the 19 icemaker standard to interpolate the same 20 temperature as California and the procedure 21 written in the AHAM document.

22 FACILITATOR BROOKMAN: Debra?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 40 1 MS. BRUNK: Debra Brunk with AHAM. 2 What I'll do is I'll just step through briefly 3 one through five. On item one, was the 4 performance of antisweat heater systems. AHAM 5 does support the incorporation of the 6 currently proposed test procedures. 7 Basically, those are the test procedures that 8 have been in the granting of waivers. 9 In terms of number two regarding 10 wine coolers, specifically which Steve Church 11 just referenced, we support inclusion of wine 12 coolers into the DOE test procedure, strongly 13 suggesting that DOE follow the California and 14 the Canadian procedures so that we have 15 harmonization between those test procedures. 16 In terms of wine storage and 17 freezer units which are also lumped into 18 number two, those are a little bit different. 19 We would consider those to be hybrid units. 20 We are not comfortable right now necessarily 21 with the procedure that is out there for 22 hybrid units. We do plan on addressing thatd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 41 1 in the next version of HRF-1, but do think

2 that there does need to be some work done on 3 that test procedure. 4 For item three, of course we 5 support incorporation of the most recent 6 version of HRF-1. Again, we just recently 7 published a 2008 version of that document. I 8 included in that document, as Detlef 9 mentioned, the temperature change which is 10 harmonized with the IEC standard. Also 11 incorporated into that document is a 12 simplified volume calculation method that does 13 have some impact on the maximum energy usage 14 levels. And finally, some additional 15 anticircumvention language that has been added 16 to that as well which leads me to point four. 17 We definitely support DOE 18 incorporating provisions to prevent 19 anticircumvention schemes. Again, the 2008 20 version of the standard does, we feel, provide 21 clarification on those points. However, we 22 have submitted positions to DOE on this tod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 42 1 make this modification hopefully sooner than 2 the 2014 date for this final rulemaking. 3 And then number five, finally,

4 AHAM does feel that the current standard does

5 address these bottom drawer models. 6 Basically, these models should be tested under 7 multiple configurations and then as stated in

8 both the DOE and of course the AHAM 9 procedures, rated at the highest energy use.

10 FACILITATOR BROOKMAN: So one 11 clarifying question. You said that the hybrid 12 units would be addressed in the new HRF-1 and

13 when would that be? 14 MS. BRUNK: That's a good 15 question. That would be something we would be 16 starting work on in 2009. I do not know how 17 that will work in parallel with DOE's -- 18 FACILITATOR BROOKMAN: Will it 19 take a couple of years to put out a new -- 20 MS. BRUNK: We did 2008 in one 21 year. So it is possible. I think if it was 22 something that we put a priority on, we couldd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 43 1 do it.

2 FACILITATOR BROOKMAN: So thank 3 you especially for addressing all five of 4 those points. 5 Additional questions, comments on 6 these issues? Yes, Kelley. 7 MS. KELLEY: I would just -- 8 Kelley Kline from G.E. I would just add from 9 our company's perspective we would very much 10 support the AHAM comment on the adoption of 11 HRF-1, particularly as it relates to the 12 circumvention measures in advance of the final 13 rulemaking. And support as well things like 14 certification, certification programs for 15 energy efficiency products. 16 FACILITATOR BROOKMAN: Thank you. 17 MR. BLANC: Steve Blanc with 18 Baltimore G & E. 19 We pretty much agree with AHAM on 20 the five points. I think that the points that 21 we're particularly concerned about, point two, 22 about the wine storage issue. We think thatd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 44 1 they need an expansion of classifications to 2 bring wine storage into the classifications 3 and make it more official.

4 FACILITATOR BROOKMAN: Isn't that

5 what CEC has done? 6 Beyond that? So if you could be -

7 - 8 MR. BLANC: From my point of view, 9 you've got two kinds of wine storage. We've 10 got red wine storage which the gentleman over 11 there mentioned and you've got white wine 12 storage which is a different temperature. 13 The wine storage freeze plants 14 I've never personally seen, but this, like a 15 lot of other things, has been proliferated. 16 I think that one of the issues that we have 17 along with that is the proliferation of 18 different appliances. The bottom drawer 19 freezer food, fresh food type of storage unit, 20 we're concerned about, but we're also

21 concerned about the bottom drawer 22 refrigerator-freezers with French doors andd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 45 1 through-the-door ice making because the ice 2 makers are in the door. And there is some 3 concern about how much power you're using 4 because of the ice maker being in the door. 5 I think the other major issues is 6 that we totally agree with AHAM about the need 7 for controlling circumvention. 8 FACILITATOR BROOKMAN: Thank you. 9 Yes, please, Bill. 10 MR. BROWN: Bill Brown from G.E. 11 I represent the U.S. on the international test 12 procedure committee for IEC along with Dr. 13 Ashar. The changes we're making in the 14 temperature --

15 FACILITATOR BROOKMAN: Please 16 bring the mic closer. 17 MR. BROWN: I represent the U.S. 18 on the IEC Committee. The temperature changes 19 that we're making here are in conjunction with 20 the new IEC standard, not the existing one, 21 just to clarify. So they're changing their 22 test procedure as we're changing ours also.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 46 1 The other thing I wanted to make 2 sure that we understand is in addition to the 3 changes in temperature, how that will affect 4 the energy reading, the new HRF-1 has a 5 different method for volume calculation and we 6 need to make sure that that is incorporated as 7 well when coming up with new standards. 8 We went from 35 pages of how to 9 calculate volume down to two pages, making a 10 much simpler calculation where everybody can 11 get the same number instead of having 12 different interpretations for what's a 13 feature, what's a function, what's included 14 and what's not included, very simple and a new 15 procedure. 16 So again, that is that along with 17 the test temperature changes need to be 18 considered when coming up with a new standard. 19 FACILITATOR BROOKMAN: Thank you. 20 Additional comments on Slide 31?

21 Ed.

22 MR. OSANN: Ed Osann. On behalfd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 47 1 of ASAP I want to say that we're supporting 2 the expansion test procedures to include wine 3 coolers and, when you get there, splitting 4 expansion product classes to include wine 5 coolers. With regards -- I've got a question 6 that pertains to this item five. 7 Was the exemption -- was the class 8 that was created as a result of the exemption 9 sought by Maytag, Samsung, and what was the 10 third one, LG, with the convertible bottom 11 drawer? Did that also -- was that also 12 particular for the French door configuration?

13 MR. MACKAY: That's not the same 14 product.

15 FACILITATOR BROOKMAN: Is that 16 Sean speaking? 17 MR. MACKAY: Sean Mackay, yes. 18 FACILITATOR BROOKMAN: Will you 19 just say it again. 20 MR. MACKAY: Sean Mackay with 21 Whirlpool. 22 FACILITATOR BROOKMAN: Thank you.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 48 1 MR. BLANC: I think you're 2 confusing separate issues of -- there's an 3 exemption for a bottom up French door 4 refrigerators. That's for units where the 5 bottom feature can be either a freezer or a 6 refrigerator and can be converted by the

7 consumer.

8 FACILITATOR BROOKMAN: Thanks for 9 that clarification. 10 Other questions? 11 MR. OSANN: Yes, one other. I 12 wanted to raise the possibility that there 13 might be -- you might want to call some 14 provision test procedure to address the French 15 door configuration and the moving seal, the 16 center post retractable seal as an additional

17 feature. 18 FACILITATOR BROOKMAN: Okay. Any 19 more comments on these five items, on 31 20 before we go on to 32? 21 (No response.) 22 MR. WESTPHALEN: Okay, now we'red5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 49 1 on page 32. I guess we have two items for 2 comment, one involving the temperature 3 changes.

4 FACILITATOR BROOKMAN: So these 5 are rather specific. So if you could respond 6 to these it would be helpful to the 7 Department. 8 Temperature changes under 9 discussion for IEC standard 62552 that AHAM 10 plans to adopt. And then understanding 11 additional energy use associated with bottom 12 freezer, refrigerator-freezers with TTEC 13 service.

14 Steve Rosenstock? 15 MR. ROSENSTOCK: Steve Rosenstock, 16 EEI. I guess for item 1-3, based on the 17 slides, is DOE asking for a specific, just for 18 that type of refrigerator that it should be 19 tested with the ice maker on? I guess I'm 20 kind of unclear. Energy use for the bottom 21 freezer, TTD service, with the ice maker 22 switch on, okay, yes, there's more energyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 50 1 usage. It's a matter of -- does this lead to 2 a separate test procedure for each product? 3 To me, it's not clear what DOE is asking for 4 in terms of actual test results in terms of 5 how much extra energy is used with the ice 6 maker or to have a specific test procedure 7 just for this product with the ice maker on.

8 FACILITATOR BROOKMAN: Debra? 9 MS. BRUNK: Debra Brunk with AHAM. 10 I will address item 1-3 first and perhaps 11 answer your questions, Steve, and then I'll go 12 back to item 1-2. 13 In terms of item 1-3, I believe

14 the AHAM HRF-1 2008 document does address 15 testing of these products in particular, but 16 all products. We have incorporated 17 definitions into the document around ice maker 18 harvesting, to try to get at some of the 19 different features regarding whether an ice 20 maker is active, inactive, that kind of thing. 21 Again, I would say that's not specific to 22 these particular types of products. It wouldd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 51 1 be applicable to all products manufactured. 2 And therefore would not be a separate test 3 procedure. 4 Regarding item 1-2, again AHAM 5 would again support the movement to the 6 different current temperatures or the new IEC 7 standard, and again, the 2008 version of that 8 document already does have the new 9 temperatures incorporated.

10 FACILITATOR BROOKMAN: And that's 11 consistent with temperatures that are listed 12 on Slide 29? 13 MS. BRUNK: Yes, it is. 14 FACILITATOR BROOKMAN: Okay, thank 15 you. 16 Additional comments on these 17 specific requests, item 1-2 and 1-3. So then 18 we're moving on. 19 MR. WESTPHALEN: So moving on, I 20 guess in the agenda we had a break here, but 21 I guess we can continue on. Moving on to the 22 ANOPR analyses, bring up the slide that Steved5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 52 1 showed earlier on the ANOPR analyses, we have 2 market and technology assessment, screening 3 analysis, and engineering analysis, perhaps 4 with a break in between. 5 First, the market and technology 6 assessment. Essentially, the purpose of this 7 piece of work is to characterize the markets, 8 get an understanding of what products are 9 being sold, what the industry -- characterize 10 the industry, what manufacturers are involved, 11 and then also take a look at the technology, 12 what's the current state of the technology and 13 where can the technology go to improve 14 efficiency? 15 The method involves identifying 16 the manufacturers, understanding a little bit 17 about them, how big they are, how many there 18 are, how segmented the market is, whether they 19 deal with niche products, etcetera. Estimate 20 shipments and trends in the market, look at 21 technologies, what's the current state of 22 technology, what are the technologies that cand5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 53 1 improve efficiency? And then also look at 2 some of the market and technical type of 3 questions associated with the regulatory and 4 non-regulatory initiatives which are intended 5 to improve the efficiency of the products such 6 as Energy Star, for instance, is an impetus 7 for efficiency improvement that is either in 8 addition to or outside the minimum efficiency

9 standards. 10 The relationship of the market and 11 technology assessment to the other analyses, 12 this isn't exhaustive. We can go back to that 13 very complicated, favorite slide of Steve's to 14 really get the picture here, but as part of 15 the market and technology assessment, the 16 product classes are identified and that feeds 17 into the engineering analysis where 18 engineering analyses are done specific to the 19 different product classes. 20 Also, the technology options 21 identified in the market and technology 22 assessment move on to the screening analysisd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 54 1 where there is screening done to weed out some 2 that might not be appropriate to move into the 3 engineering analysis. Other information from 4 the market and tech assessment like the 5 shipment numbers and things like that feed 6 into some of the other downstream analyses. 7 Here we have a request for 8 comment. This basically points to some of the 9 information requests that we'll be sharing 10 with the industries, specifically through AHAM 11 to try to get some of this information so per 12 se it's not so much an opportunity for 13 comment, but certainly if there is comment in 14 regard to the approach on the market and 15 technology assessment now would be the 16 appropriate time. 17 FACILITATOR BROOKMAN: Yes, Steve. 18 MR. BLANC: Steve Blanc, PG&E. I 19 wanted to offer up for your consideration a 20 report that was done for us, a study for 21 standards options for residential 22 refrigerators. We had it done two years agod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 55 1 for the State of California. Obviously, we 2 would have gotten an exemption to change the 3 regulations there, but we would like this 4 considered by DOE. 5 I have an electronic copy if you 6 care, or we can send it in. 7 MR. LEWIS: Please send that in 8 with your comments. 9 MR. BLANC: Okay. Do you want an 10 email? 11 MR. LEWIS: Yes, to the address 12 was there so it goes into a docket, the 13 official record. 14 MR. BLANC: No problem. 15 MR. LEWIS: Thank you. 16 FACILITATOR BROOKMAN: Thank you. 17 Other comments on this item 3-1 at this time, 18 noting that others might come forward later. 19 MR. WESTPHALEN: As mentioned, 20 part of the market and technology assessment 21 is defining product classes and we don't need 22 to dwell on what is an electric refrigeratord5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 56 1 and what is an electric refrigerator-freezer 2 unless somebody would like me to read through

3 that. 4 Freezer, essentially these are the 5 definitions that are in the CFR. And also 6 there are the compact refrigerators, 7 refrigerator-freezers, or freezers which are 8 less than 7 and three quarter cubic feet, less 9 than 36 inches in height. 10 FACILITATOR BROOKMAN: Any 11 comments on the definitions? 12 MR. WESTPHALEN: Equipment product 13 classes, I guess the bullet says DOE will 14 formulate a separate energy conservation 15 standard for product class. This is since 16 refrigerators have standards now and product 17 classes now, it's a little bit self-evident. 18 And the product classes which the 19 next few slides sort of list them out and 20 there isn't much change there beyond what has 21 been in the past. They've been divided up by 22 whether the product is a refrigerator,d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 57 1 refrigerator-freezer, or freezer. The size is 2 a factor, the type of defrost, whether they 3 have through-the-door ice service, and then 4 for some of these product classes whether the 5 freezer is on the top, bottom, or on the side. 6 FACILITATOR BROOKMAN: Questions? 7 MR. OSANN: On the previous slide, 8 the first two bullets, what's the distinction 9 between each product class in the first bullet 10 and each equipment class in the second bullet? 11 MR. WESTPHALEN: There probably 12 should not be any distinction there. 13 FACILITATOR BROOKMAN: So product 14 classes and equipment classes are equivalent?

15 MR. WESTPHALEN: Yes. 16 FACILITATOR BROOKMAN: Okay. 17 MR. WESTPHALEN: Within each 18 product class, there will be efficiency levels 19 considered as part of the subsequent 20 engineering analyses. 21 The proposed standard sized 22 product classes, these are the ten existingd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 58 1 standard size product classes plus it is 2 proposed to add the two product classes that 3 have been defined with the exemptions that 4 were mentioned previously. 5 And the proposed compact size 6 product classes are the same existing compact 7 size product classes. 8 MR. OSANN: On 42, are the two 9 product classes that have been identified in 10 the exemption on this? 11 MR. WESTPHALEN: Yes, 19 and 20. 12 Okay, so there are three items for comment 13 here. First on the proposed product classes 14 and the criteria used for establishing the 15 product classes. 16 FACILITATOR BROOKMAN: Yes, Debra. 17 MS. BRUNK: Debra Brunk, AHAM. 18 First of all, I just want to say that AHAM 19 does support the 20 product classes that are 20 listed, including the two new ones. We do 21 suggest, however, the inclusion of two 22 additional product classes. This kind ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 59 1 moves into actually item 3-3, but we do feel 2 that product classes should be established for 3 wine coolers in which case you would have one 4 for manual defrost and wine coolers with 5 automatic defrost. 6 FACILITATOR BROOKMAN: And since 7 we're on the subject, are you recommending 8 also differentiating between white and red? 9 (Laughter.) 10 I know my wife would, for example

11 -- 12 (Laughter.)

13 MS. BRUNK: I don't know. 14 Somebody else can help me out with that. I 15 would say no. 16 MR. CHURCH: This is Steve Church 17 from Whirlpool. I think what we would support 18 is a process similar to what California does 19 presently where they turn it down to 55 20 degrees. We already have the definition that 21 anything below 39 degrees is a refrigerator. 22 So if the wine cooler operated below 39d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 60 1 degrees it would essentially have to be 2 classified as a refrigerator. So I mean the 3 super-cold temperatures are already covered by 4 the standard as it's written, so 55 degrees 5 would take into consideration those products 6 that are operated to deal with the 7 temperature.

8 FACILITATOR BROOKMAN: I see a few 9 potential head nods. I think it's useful from 10 the Department's point of view if they feel as 11 though they've got more than one voice from 12 industry -- 13 MR. BROWN: Yes, this is Bill 14 Brown from G.E. We agree with Whirlpool. The 15 California and Canadian standards already 16 cover the wine chillers and the two product 17 classes that Debra mentioned from AHAM, the 18 automatic and manual defrost and to Steve's 19 point, below 39 degrees is already specified 20 like an electric refrigerator and there are 21 product classes that already cover that 22 product. The wine chillers again operate atd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 61 1 55 degrees and the energy is tested at 55. 2 FACILITATOR BROOKMAN: Are you on 3 this part or should I let Debra continue? 4 MR. SIKIR: Paul Sikir, Subzero 5 Freezer Company. We also support Whirlpool, 6 G.E., and the California and Canadian

7 standards. 8 FACILITATOR BROOKMAN: Thank you. 9 Thanks very much. 10 Debra, you're going to continue, I 11 think.

12 MS. BRUNK: No. 13 FACILITATOR BROOKMAN: No? Okay, 14 who did I miss, please do. 15 MR. SIKIR: Paul Sikir again, 16 Subzero. In addition, we will be in our 17 comments to DOE submitting comments relative 18 to establishing a new classification for 19 built-in refrigeration. Subzero supplies 20 built-in refrigeration. It's a small, unique 21 niche market. We're going to be providing 22 some of the rationale similar to what was usedd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 62 1 back in 2001 with compact refrigerators in the 2 area of -- we've provided distinct utility, 3 have a small production volume, manufacturing 4 impact and the small energy usage and some5 limited improvement potentials that the built6 in market has and we'll provide those in 7 comments in detail. So I just wanted to make

8 the DOE aware of that. 9 FACILITATOR BROOKMAN: Thank you. 10 Ron Lewis. 11 MR. LEWIS: Excuse me, are you 12 suggesting that we have a separate product 13 class established for built-ins? 14 MR. SIKIR: Yes, that's my 15 suggestion. Thank you. 16 FACILITATOR BROOKMAN: Thank you. 17 MR. MACKAY: Sean Mackay with 18 Whirlpool Corporation. On item 3-4, we would19 support that convertible or refrigerator20 freezers should be classified under 21 classification 19 on page 42. And also feel 22 that the convertible compartment should bed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 63 1 tested at its highest energy-using process. 2 FACILITATOR BROOKMAN: Thank you.

3 Other comments on 3-4?

4 Steve. 5 MR. BLANC: PG&E concurs with what 6 the gentleman just said on the item 3-4 that

7 that bottom drawer should be tested as a

8 freezer. 9 FACILITATOR BROOKMAN: Okay, thank 10 you. 11 MR. CHURCH: This is Steve Church 12 from Whirlpool. Just a clarification. As 13 Sean said it should be classified as 19, if 14 it's tested at 19. But if the convertible 15 compartment turns it into an all freezer, then 16 it would be tested as -- be classified as it's 17 tested. Hopefully, that makes sense. 18 FACILITATOR BROOKMAN: Bill? 19 MR. BROWN: Bill Brown, G.E. Just 20 one other thing to expand upon Steve's point, 21 you specifically mentioned right now the 22 department freezer with through-the-door iced5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 64 1 item 3-4 only talks about the convertible 2 compartment. So if it had a dispenser through 3 the door, does not have a dispenser, then it's 4 product class 5. 5 FACILITATOR BROOKMAN: Exactly. 6 MR. BROWN: Right. And again, if 7 it turns it into a freezer, then you have -- 8 then it's a different product class, it's the

9 all- freezer.

10 FACILITATOR BROOKMAN: So both 11 definitions, are they all in HRF-1? 12 MR. BROWN: Yes, and they're also 13 referenced also by reference at 10 CFR 430.

14 FACILITATOR BROOKMAN: So that was 15 Bill and his final comment. I was looking to 16 Debra also for confirmation. Yes? 17 MS. BRUNK: This is correct. 18 Thank you. 19 FACILITATOR BROOKMAN: Thank you, 20 okay. So we cleaned all that up. 21 MR. WESTPHALEN: Okay, now a 22 little bit more on product classes andd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 65 1 providing some insight as to plans for the 2 analyses that we'll be doing. There are 20 3 product classes and there's been a suggestion 4 made for additional product classes. The 5 intent is to try to narrow that down and not 6 do detailed analyses for all 20 and we have 7 selected seven product classes listed here 8 that will be subjected to detailed analyses 9 and they've been selected with in mind that 10 these are product classes that represent a 11 large proportion of the shipments and also a 12 large proportion of the energy use associated 13 with this general product category. 14 Starting with standard size15 refrigerators and refrigerator-freezers, top16 mounted freezers without through-the-door,17 water mounted freezers without through-the18 door and then side-by-sides with through-the19 door. Standard size freezers, the upright 20 freezers with automatic defrost and chest 21 freezers and all other freezers except for 22 compact freezers.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 66 1 And then we're planning to look at 2 in detail at two compact size product classes, 3 the compact size refrigerators and 4 refrigerator-freezers with manual defrost and 5 then compact size chest freezers. 6 And then the proposal is to extend 7 these analyses to the other product classes 8 and subsequent analysis. 9 FACILITATOR BROOKMAN: So this is 10 the specific query. Comments on extending what 11 is seven representative product classes, the 12 previous slide 45, extend the analyses to the 13 remaining 13.

14 Debra?

15 MS. BRUNK: Debra Brunk from AHAM. 16 We realize it's not realistic to evaluate all 17 20 product classes and we therefore support 18 DOE's proposal to evaluate the representative 19 product classes they have listed. We do 20 suggest, however, again adding wine coolers as 21 a separate class in that group for our 22 evaluation. Finally, just for clarificationd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 671 for product class 5 which is the refrigerator2 freezers and automatic defrost and automatic 3 freezer with through-the-door ice service -- 4 I'm sorry, without through-the-door ice 5 service, we do recommend evaluating a model 6 that has the highest energy heat leakage which

7 would be the French door model.

8 FACILITATOR BROOKMAN: Ed. 9 MR. OSANN: Could you restate the 10 last point that you made? 11 MS. BRUNK: Debra Brunk, AHAM. 12 What we wanted to suggest as DOE carries out 13 their representative analysis on product -- 14 I'm sorry on product class 5, which is the 15 automatic defrost with the automatic freezer 16 without through-the-door ice service, we are 17 suggesting that DOE actually evaluate models 18 that have the highest heat leakage which would 19 be a French door style model and use that to 20 move to the rest of your prior classes to 21 extrapolate. 22 FACILITATOR BROOKMAN: Okay.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 68 1 Additional comments on this specific request 2 for comment, item 3.5? 3 (No response.) 4 MR. WESTPHALEN: Okay, now moving 5 on to the technology part of the market and 6 technical assessment, the next few slides just 7 lay out a preliminary list of technology 8 options broken out by the specific areas in 9 the refrigerator that they deal with. 10 First of all, cabinet, some 11 insulation improvements have been pointed out, 12 improved resistivity of insulation, increased 13 insulation thickness, vacuum-insulated panels, 14 and also gas-filled panels. And the gasket 15 and door design, there are four listed here: 16 improved gaskets, double-door gaskets, i.e., 17 meaning two gaskets for the doors, improved 18 door face frame, and reduced heat load for 19 through-the-door feature. 20 Under antisweat heater, three 21 technology options have been highlighted: 22 condenser hot gas and by extension that wouldd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 69 1 include also one liquid antisweat. Electric 2 heater sizing, more careful sizing of the 3 heater so that it's not providing more heat 4 than necessary and also electric heater

5 controls. 6 Technology options under 7 consideration for the system include looking 8 at the compressor, improved compressor 9 efficiency, variable speed compressors, and 10 linear compressors as an option for improving 11 compressor efficiency. 12 Evaporator increased surface area 13 or improved heat exchange condenser, likewise, 14 increased surface area or improved heat 15 exchange. 16 And under fans and fan motor, 17 either better blades, better blade orifice 18 system or fan motor improvements and likewise

19 for the condenser fan. 20 Additional system-oriented 21 technology options improve expansion valves, 22 improve control solenoid valve to reduced5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 70 1 cycling losses, adjustments to the defrost 2 system, careful design of the defrost system 3 to reduce the energy required, adaptive 4 defrost, compressor cycling defrost and 5 condenser hot gas defrost. 6 Under control system improved 7 temperature control, this specifically refers 8 to use of electronic types of control to 9 improve the control and improve the air 10 distribution to provide better control of 11 temperature within cabinets. 12 And also a list of alternative 13 options are on the table here, alternative 14 refrigerants, component location and that 15 refers to placing the warm parts of the system 16 perhaps somewhere other than right underneath 17 the cabinet where maximum heat load can be 18 transferred to the cabinet. Alternative 19 refrigeration systems and cycles. There's a 20 number of these that involve dual compressors. 21 Some of these involve dual evaporators with a 22 single compressor and a valve, both of thosed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 71 1 intended to try to raise the evaporating 2 temperature for the fresh food side of the 3 refrigerator as it operates in order to reduce 4 energy. The ejector refrigerator involves no 5 moving parts, a component that will increase 6 the suction pressure and then there are 7 Stirling thermal electric and thermal acoustic 8 also on the list. 9 And so request for comment --- and 10 this slide maybe belongs in the screening 11 section which comes later, but we might as 12 well put it on the table here, whether there 13 are any technologies that should not be 14 considered because impacts on safety 15 performance and consumer utility or if there 16 are other things that should be considered.

17 FACILITATOR BROOKMAN: Debra. 18 MS. BRUNK: Debra Brunk with AHAM. 19 I first just want to mention an item 4-1, this 20 list is very comprehensive. We do believe 21 it's somewhat more realistic. Obviously 22 screening would fall into that. AHAM willd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 72 1 provide more specific comments on each one of 2 those technologies in our written comments as 3 we review those as an industry. 4 Item 4-2, we would suggest adding 5 alternative blowing agent under insulation as 6 a potential technology. 7 FACILITATOR BROOKMAN: Thank you. 8 So it's a pretty healthy list here. Any 9 comment on what we should not consider or 10 anything that is not listed that should be 11 listed? 12 Yes, Steve. 13 MR. CHURCH: This is Steve Church 14 with Whirlpool. Under alternate refrigerants, 15 I understand that R-600 is flammable and UL 16 has created some obstacles to using that in 17 the U.S. market. You can't use over 50 grams 18 in a product.

19 FACILITATOR BROOKMAN: So what are 20 you suggesting -- how should DOE treat that? 21 MR. CHURCH: You shouldn't go down 22 the path looking at that alternated5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 73 1 refrigerant, that one in particular, or any 2 flammable alternate refrigerant in the units

3 that would use excess of UL's recommended 4 required metals. 5 FACILITATOR BROOKMAN: Thank you. 6 Kelley. 7 MS. KELLEY: Yes, just to add to 8 that from G.E.'s perspective, the UL 9 requirements are appropriate or are important 10 to consider as you think about alternative 11 refrigerants, but DOE should also be cognizant 12 of the process that EPA has in place to 13 approve refrigerants such as R-600 or others 14 to, in essence, say they are safe for use as 15 alternative refrigerants. So there are 16 processes like that in place to ensure 17 refrigerants are appropriate for use as 18 alternatives.

19 FACILITATOR BROOKMAN: So comments 20 on the list and items that may not be on the 21 list. 22 I see no additional -- let's taked5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 74 1 a break at this point. It's by my -- is Greg 2 Hall here? Would you come up here and see 3 Steve Witkowski, please?

4 It's now 10:30 almost. Let's 5 resume at 10:45. Those of you who aren't 6 familiar with the building, on the ground 7 floor in that direction there is a coffee shop 8 and please don't leave the building because 9 you'll have to clear through security again 10 and we'll resume at 10:45. Please wear your 11 badges, your security badge while you're in 12 the building. 13 We'll see you back here in 15 14 minutes. 15 (Whereupon, the above-entitled

16 matter went off the record at 10:27 a.m. and 17 resumed at 10:49 a.m.) 18 FACILITATOR BROOKMAN: Okay, so

19 let's resume. We're ahead of schedule. 20 That's a good thing. And let's turn it back 21 to Detlef for screening analysis. 22 MR. WESTPHALEN: Okay, now we moved5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 75 1 on to the second step in ANOPR analyses, the 2 screening analysis. And this section will be 3 short, basically talking about what the 4 screening analysis is about for purposes to 5 screen out technology options that DOE will 6 not consider in the in-depth analysis, the 7 engineering analysis in particular. 8 And the method is DOE will 9 consider the following criteria: the 10 technological feasibility and part of that 11 involves the ability to verify confidently 12 that the technology will work as somebody 13 theorizes that it will work. Practicability 14 to manufacture, install, and service. Impacts 15 on product utility or availability to 16 consumers and also impacts on health or 17 safety. 18 I believe the only comment here is 19 the criteria listed of the appropriate ones in 20 carrying out the screening analysis.

21 FACILITATOR BROOKMAN: So these 22 criteria or others potentially. Yes, Debra.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 76 1 MS. BRUNK: Debra Brunk with AHAM. 2 We would just like to state that we believe 3 the criteria listed are appropriate. 4 FACILITATOR BROOKMAN: Thank you. 5 Any other comments on the criteria or others 6 that should be included?

7 That was short. 8 (Laughter.) 9 We'll stay ahead of schedule. 10 MR. WESTPHALEN: Now moving on to 11 the engineering analysis, the engineering 12 analysis essentially the whole point is 13 creating that curve that, for each product 14 class and potentially for different sizes of 15 the product class, determines how much money 16 you have to spend in the manufacturing 17 scenario in order to achieve higher efficiency

18 levels. 19 And this information feeds into 20 many of the downstream rule-making analyses, 21 the life-cycle cost and payback period, the 22 manufacturer impact analysis, the nationald5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 77 1 impacts, and then it becomes the basis for 2 eventually setting the standards. 3 So the next couple of slides kind 4 of say this in a little bit more detail. The 5 methodology for engineering analysis, what is 6 done? Well, first you establish what are 7 these baseline units? Now for refrigerators, 8 there have been standards in place, so the 9 baseline models are essentially products that 10 just minimally meet the energy efficiency 11 standards in place at the moment. 12 Then there is reverse engineering 13 done. This detailed look taking up the14 products, there's reverse engineering, tear15 down work, taking a look at how these products 16 are manufactured, models are put together to 17 estimate what are the costs of making the 18 product, what are the costs of making the more 19 efficient product. 20 One thing not explicitly mentioned 21 here is also energy use analysis in order to 22 improve the understanding of the technologyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 78 1 impacts and how they affect the energy use. 2 Then there's data collection and 3 interviews, essentially discussion with the 4 manufacturers and to try to number one, get 5 some additional feedback on some of the 6 details and also data collection in the form 7 of detailed requests for information, 8 consolidated infromation for different 9 efficiency levels within each product class, 10 what are the additional costs associated with

11 those. 12 And then finally, with all that 13 information, the engineering analysis curves 14 are developed, essentially the curve that was 15 illustrated in the previous chart. 16 This chart -- 17 MR. OSANN: Question. In the 18 second bullet it says the "green-field" model 19 of the subject unit and factory. Does that 20 suggest here you're modeling across building 21 a whole new plant to produce compliant product 22 and why would you make that assumption ford5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 79 1 your model? 2 MR. von WENTZEL: Constatin von 3 Wentzel with Navigant Consulting. We make4 that assumption with every rule-making tear5 down analysis. We always assume "green-field" 6 plant and this is for consistency sake. 7 FACILITATOR BROOKMAN: You go from 8 a model to extrapolating what the -- take into 9 scale what the actual factory will cost also?

10 MR. von WENTZEL: Correct. The 11 tear-down model incorporates all costs, 12 including the capital costs required to build 13 a factory and we then take a look at the 14 results that the cost model predicts in terms 15 of the depreciation versus what manufacturers 16 publish in their SEC 10-K forms or what have 17 you. 18 FACILITATOR BROOKMAN: Why is that 19 better than assuming retooling of an existing 20 factory? 21 MR. von WENTZEL: Because it's 22 pretty much impossible unless you're ad5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 80 1 demanufacturer to know what the retooling 2 costs would actually be, so like I said from 3 a consistency point of view, we feel we do 4 better if we just assume a fully new factory 5 with new tooling and everything else and then 6 we look at it in the GRIM stage later on in 7 the government regulatory impact stage as to 8 what the depreciation is for the industry 9 versus what we would predict it would be with 10 a new factory and keep in mind, some of these 11 retoolings are so extensive that it may 12 actually make more sense to build a whole new 13 factory. 14 FACILITATOR BROOKMAN: Thank you. 15 MR. WESTPHALEN: This slide kind 16 of combines the previous two with the graphic 17 of the curve and essentially is saying again 18 what I said in the previous slide, the reverse 19 engineering is done to define the 20 manufacturing costs associated with stepping 21 up in efficiency levels and then there is 22 discussion and information exchanged withd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 81 1 manufacturers in order to validate curves. 2 The next I think three slides 3 define the proposed baseline products for the 4 product classes and I'm not going to read 5 through all of these. These are essentially 6 the current efficiency standards. 7 FACILITATOR BROOKMAN: Of course, 8 comment would be welcome if we have any need 9 to comment on these baseline numbers. 10 Yes, Debra? 11 MS. BRUNK: Debra Brunk with AHAM. 12 We do support the baseline numbers and we do 13 support the format they're currently in and 14 the approach that's taken to get to these 15 baseline values. We want to recognize that 16 these provisions will change as soon as we 17 start incorporating the temperature changes 18 and our proposed volume changes that are in 19 the current standard that we're proposing for

20 the standard. 21 We do have one suggestion on the 22 format and that is that these equationsd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 82 1 actually be listed in English units only and 2 that it actually be the standard requirement 3 as when you convert to metric units, they can 4 alter the requirements slightly. 5 FACILITATOR BROOKMAN: Thank you. 6 Other comments on the baseline units? 7 I'm looking at Item 5.1. 8 MR. WESTPHALEN: This slide 9 addresses the issue of the new compartment 10 temperatures as regards to what -- how we will 11 address the fact that the energy use will be 12 different at the different temperatures. As 13 mentioned previously, the test procedures may 14 be modified for compartment temperatures which 15 are currently under consideration for IEC and 16 in the new AHAM test procedure. 17 And clearly, the efficiency 18 metric, the kilowatt hours per year will be 19 affected by the change. The approach that 20 we're proposing to take is based on an 21 assumption and understanding of vision that 22 the energy use based on the current andd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 83 1 proposed temperature levels can be related 2 with these test temperature adjustment factors 3 such that the energy measured with the new 4 temperatures will be equal to this TTAF 5 parameter, times the energy for the current 6 temperatures and that for each product class 7 there will be a different coefficient. 8 Establishing these factors would 9 be based on some of the data collected by AHAM 10 that we have had the privilege to see and we 11 probably will be requesting additional data 12 and that's part of what is in the draft 13 information tables. 14 Energy modeling will be carried 15 out and we'll address this issue as well to

16 take a look at whether some of the test data 17 are consistent with what the energy models 18 would suggest and then some energy testing 19 would be carried out for refrigerator-freezers 20 to help support establishing these 21 coefficients. 22 DOE intends to carry out thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 84 1 engineering analysis based on the current set 2 of temperatures, basically carrying out the 3 entire analysis and establishing kilowatt hour 4 per year values based on existing temperatures 5 and in parallel carry out the analysis of what 6 are these temperature adjustment factors. And 7 with the division that this equation here can 8 relate the two, after those kilowatt hour per 9 year values are established based on the 10 current temperatures, then those would just be 11 adjusted by these coefficients. And is the 12 proposed approach.

13 FACILITATOR BROOKMAN: Ed. 14 MR. OSANN: Ed Osann. This has to 15 do with the temperature -- I hadn't thought 16 through the arithmetic completely yet, but is 17 the multiplier that's used for the adjusted 18 volume of the freezer and refrigerator 19 compartments I think is 1.63 now, will that 20 change with -- similarly, will that change 21 with the adjusted temperatures that are 22 proposed here, the 1.63 conversion factor?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 85 1 MR. CHURCH: This is Steve Church, 2 Whirlpool. The adjustment factor would be 3 determined in accordance with the AMAM-HRF-1 4 and I think that precipitate change in the 5 adjustment factor. 6 MR. BROWN: This Bill Brown from 7 G.E. We agree with what Whirlpool said. 8 FACILITATOR BROOKMAN: Thank you, 9 that's good. Thank you. 10 MR. WESTPHALEN: Just a point of 11 clarification on that, are you suggesting that 12 say the 1.63 should be changed if the 13 temperatures are changed? 14 MR. CHURCH: This is Steve Church 15 again at Whirlpool. If you follow the HRF-1 16 standard there is a formula for that and when 17 you cut in the new temperatures it will change 18 the adjustment factors. 19 MR. WESTPHALEN: Okay.

20 FACILITATOR BROOKMAN: So I'll 21 just call your attention, if you would, please 22 to item 5.5 and 5.6, related to current setsd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 86 1 of compartment temperatures as specified in 2 the current test procedure and also on the 3 planned approach. I think we've already 4 receive some comment on that.

5 Debra?

6 MS. BRUNK: Debra Brunk from AHAM. 7 I'm going to comment first on item 5.6 and 8 then move into 5.5. In terms of the planned 9 approach through the TTAFs, we do believe that 10 for the purpose they're statistically valid, 11 however, I think we do prefer that the 12 analysis actually be completed by using the 13 new temperatures and the new volumes and going 14 back to 5.5 which addresses a procedure there, 15 I think we feel that's important to basically 16 set the baselines. We evaluate how the units 17 really work in terms of under these new 18 conditions and also we feel that it is a very 19 straight-forward and verifiable approach. 20 We're not dealing with conversion factors and 21 that kind of thing. 22 Once those numbers are obtained,d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 87 1 we would suggest comparing those results using 2 the new procedure to which we get with the 3 current because you still need to have that 4 comparison in order to set energy standards, 5 but that historical information does exist. 6 And then proposed new efficiency 7 levels would need to be based on temperatures 8 using an old procedure just to make sure that 9 we are consistent. But again, we do believe 10 that utilizing the new procedure for the 11 engineering analysis is important to set a new 12 baseline. 13 FACILITATOR BROOKMAN: Thank you.

14 Yes? 15 MR. BROWN: Bill Brown from G.E. 16 I will say that G.E. does agree with AHAM's 17 comments but want to further clarify that the 18 analysis on slide 63 must include the new 19 volumes. It cannot be done simply with just 20 a temperature jetted factor. It has to 21 incorporate the new volume calculations as

22 well.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 88 1 FACILITATOR BROOKMAN: Okay, thank 2 you. Other comments on these two specific 3 requests on 5.5 and 5.6? Thank you. 4 MR. WESTPHALEN: I guess getting 5 into the heart of developing the cost 6 efficiency curves, DOE proposes to use a 7 combined efficiency level design option 8 approach. We will seek incremental cost data 9 from manufacturers for different efficiency 10 levels for the different product classes and 11 that's included in some of the draft tables 12 for that information are included in the 13 Framework Document appendices. And then that 14 will be supplemented with stakeholder 15 interviews and also publicly available data. 16 The efficiency level analysis will 17 be supported by design option analysis. This 18 will be an in-depth analysis of seven product 19 classes. Reverse engineering for three 20 representative products of each of the seven 21 product classes represent in two different 22 capacities, volumes that is. And bothd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 89 1 baseline and enhanced deficiency products, so 2 three products, two different volumes, maybe 3 two Energy Star one standard, maybe two 4 standard one Energy Star.5 And then energy testing of auto6 defrost standard size refrigerator-freezers, 7 manufacturer cost modeling, based on reverse 8 engineering and then energy modeling based on 9 reverse engineering validated based on energy 10 label information and then some of these 11 energy tests that are being carried out and I 12 should mention that some of this work has 13 already been initiated and certainly we're 14 working with Dick Merriam who wrote the ERA 15 analysis to upgrade that analysis and we've 16 done some of this work already on looking at 17 the products and validating the energy model 18 and some of the work has already gotten 19 started on establishing the manufacturing 20 costs model. And so we certainly, as soon as 21 possible will seek to set up some of the 22 stakeholder interviews to try to have some ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 90 1 the information exchanged as well to support

2 that effort. 3 And then using this approach, the 4 cost efficiency curves will be generated from 5 incremental costs for each efficiency level 6 and the design option analysis will support 7 that, essentially two parallel analysis with 8 some information exchanged back and forth and 9 then sort of cross validating as we go along. 10 The reverse engineering 11 methodology, this applies specifically to the 12 manufacturing cost. The units used for the 13 tear-down are selected. There's a physical 14 tear-down which basically looks at all the 15 parts and how -- what fabrication processes 16 are required to put them all together. And 17 then put that together in the manufacturing 18 cost model. This is based on selection of 19 specific models, but then it is generalized so 20 that it can be used to represent manufacturing

21 costs also for other models that were not 22 specifically part of the physical tear-down.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 91 1 MR. OSANN: Question. Ed Osann. 2 Recalling the earlier question about the 3 "green-field" plant site and the modeling, 4 there's a fabrication process for some 5 materials and then assembly process. Which of 6 those locations would be a "green-field" site 7 in your modeling? 8 MR. WESTPHALEN: Mike? 9 MR. RIVEST: Mike Rivest, Navigant 10 Consulting. I'd like to take a step back and 11 just explain overall the methodology that 12 we're using here and why we're talking about 13 "green-field" modeling versus trying to model 14 the starting point from individual

15 manufacturers. 16 What we're interested in getting 17 are the incremental costs of two different 18 designs. So to be able to do that through the 19 physical tear-downs, we're able to see what 20 are the elements of today's commonly 21 constructed refrigerator and we look at 22 specific models from manufacturers, but reallyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 92 1 what we're looking for here in the tear-down 2 is not to come up with a number, but it's to 3 come up with an understanding of what is the - 4 - what are the designs input in the baseline

5 model. 6 The assumption about "green-field" 7 is simply to look at if you were to build this 8 baseline refrigerator with a new facility, 9 this is how much it would cost. If you were 10 to build this refrigerator, this more 11 efficient refrigerator with a new facility, 12 this is how much it would cost and focus on 13 the difference. So the reverse engineering is 14 gone in both cases for the baseline and the 15 standards case, assuming a brand new plant. 16 Thinking through the implications 17 of that, really what we're modeling is a best 18 case situation. Manufacturers don't start 19 with the ability to subtract out all their 20 previous investments from this new 21 requirement, so we take that into 22 consideration in the manufacturing impactd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 93 1 analysis in looking at those transferrable 2 those physical assets are looking at what the 3 stranded assets are and then adding in the 4 capital. 5 But for the engineering analysis 6 it's an idealized version where you assume 7 that everything they have now can be credited 8 back at full cost. Does that explain sort of 9 a high level, where you're trying to go? 10 MR. OSANN: Yes, but in response 11 to my question in this case it would be the 12 assembly process and fabrication. 13 FACILITATOR BROOKMAN: Thanks, 14 Mike.

15 Lane? 16 MR. BURT: Lane Burt, NRDC. I 17 would just point out that this and many other 18 things would be very helpful if we had some 19 sort of record or historical analysis to 20 evaluate how successful the Department has 21 modeled these and this has come up on other 22 dockets with other industries, agencyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 94 1 advocates, the industry folks have asked for 2 this. I think it's something that needs to be 3 brought up here. 4 FACILITATOR BROOKMAN: Thank you.

5 Steve? 6 MR. BLANC: Steve Blanc, PG&E. I 7 would like to second that agreement. We know8 there's been some issue about the over9 estimation of some costs and would like to see 10 that particularly not only do we do this, but11 we also look back in history in previous rule12 makings to see how those costs came out. 13 FACILITATOR BROOKMAN: Okay, thank 14 you. 15 MR. WESTPHALEN: As mentioned, 16 there will be information requested from the 17 industry and this slide sort of describes the 18 details of that. I don't know, Constantin, if 19 you want to elaborate a little bit on -- if 20 there's any intricacies here which need to be 21 highlighted? 22 MR. von WENTZEL: Constantin vond5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 95 1 Wentzel. 2 So as part of our cost submittal 3 process, we shipment weight submittals and we 4 also don't publish anything where we don't 5 have enough information to aggregate data 6 confidentially. I guess if anyone has any 7 questions -- 8 FACILITATOR BROOKMAN: Mike 9 Rivest. 10 MR. RIVEST: The intent here is to 11 have both DOE develop its own bottoms-up 12 estimate, if you will, and to the extent that 13 industry is willing, industry to supply its 14 own cost estimates and really how industry 15 decides to do that is up to industry and it's 16 not up to us, but you know we envision that 17 industry would provide sufficient information 18 so that it provides some insight into what 19 design pathways manufacturers are using to 20 improve that efficiency. 21 Ideally, what we'd like to see is 22 our internally developed curves and industryd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 96 1 curves overlay and if understanding the grave 2 difficulty in coming up with aggregating 3 enough data from enough manufacturers to 4 provide that confidentiality that you need, we 5 will try to through out own exercises be as 6 transparent as possible to the docket. So 7 again, how you develop your costs is more up 8 to you. 9 Just following on, what we're 10 providing here is some -- the intent of the 11 tear-down is not to create absolute cost 12 numbers for a bunch of refrigerators, but it's 13 to gain some insight into what design pathways 14 are currently being use to improve efficiency. 15 So here you have a listing of some 16 refrigerators that you either have or intend 17 to tear down to get some understanding about 18 typical features that are incorporated. It 19 allows us to validate our list of design 20 options. And then ultimately because we also 21 have these tested based on the test procedure, 22 we are able to calibrate our energy use modeld5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 97 1 so that we make sure that the model on which 2 the design option approach will be based will 3 have been -- we will have been able to 4 reproduce the energy use of these 5 refrigerators, assuming the same design 6 properties. It's not significant for specific 7 models because our goal is really to validate 8 the model at this time.

9 MR. WESTPHALEN: And the reason to 10 identify some of these models which are being 11 looked at in detail is basically to ask can 12 these be considered representative of the 13 types of product classes that they, you know, 14 that they are.

15 FACILITATOR BROOKMAN: These are 16 good examples. These are illustrative. 17 MR. WESTPHALEN: Additionally, in 18 this slide, we show the volumes and the 19 representativeness of the range of the total 20 volumes is also something that we want to put 21 at the table and try to get comment on. And 22 then the contact size.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 98 1 So three separate slides, standard 2 size refrigerator-freezers, and also the 3 compact size, so if you take a peek at those - 4 - so the request for comments address the 5 questions of how representative the volumes 6 chosen for the different product classes are, 7 how representative the specific products might 8 be for those product classes, and then also 9 requests on comment for the use of the 10 efficiency level approach supplemented by the 11 design option approach.

12 FACILITATOR BROOKMAN: Debra. 13 MS. BRUNK: Debra Brunk, AHAM. 14 Item 5-2 regarding the volumes. Certainly 15 looking at the tables just presented, they 16 appear representative. I would go back to the 17 table that is published in the Framework 18 Document. However, where it states that for 19 product class 5, DOE would look at 18 cubic 20 foot. Let me just note that that probably 21 isn't representative of that product class, 22 either 17 or 19, but I do notice in previousd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 99 1 tables it's listed as 19 cubic foot that is 2 listed. 3 Item 5-3, basically as AHAM has 4 done in the past we will supply as much 5 information regarding the technical 6 information on these basic models as we can. 7 We obtain that from our members and we do 8 aggregate, so if we cannot aggregate, we will 9 not be able to provide all the information. 10 And there are some product classes that we 11 already recognize that that would be a

12 concern. 13 And then finally AHAM on item 5-4, 14 we do support DOE's use of the efficiency 15 level approach and again to Mike Rivest's 16 comment earlier on incremental cost 17 determination, the industry does feel more 18 comfortable with providing incremental cost to 19 a specific energy level as opposed to 20 highlighting a particular design option. 21 FACILITATOR BROOKMAN: Thank you. 22 Some other comments related to this series ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 100 1 questions, whether the volumes are 2 representative, whether the specific products 3 listed are illustrative and the efficiency 4 level of approach supplemented by the design 5 option approach in 1, 2, and 3. 6 Any comments on those? I guess

7 not. 8 MR. WESTPHALEN: Now talking about 9 efficiency levels, this further clarifies some 10 of the requests for information. As 11 mentioned, we'll be focusing on -- in the 12 engineering analysis on all the product 13 classes and a set of for each product class we 14 choose two different volumes and efficiency 15 levels and basically it winds up being an 16 input table that is quite comprehensive, but 17 that's the level of data required to really 18 try to fill in these curves for all of these 19 product classes. 20 There is some discussion here 21 about "max tech" and I guess there's sometimes 22 some discrepancy between the maximumd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 101 1 efficiency commercially available and the 2 maximum technologically feasible. For this 3 product category I would think probably there 4 is a discrepancy there, but DOE seeks 5 stakeholder input in regards to this potential 6 discrepancy. That is, that you could probably 7 manufacture products that are technologically 8 feasible, but ridiculous in cost and those are

9 not on the market. 10 The next few slides discuss for 11 the different product classes the different 12 efficiency levels for which we would be13 requesting information for the refrigerator14 freezers with automatic defrost, top freezer, 15 bottom freezer, without through-the-door ice 16 and side-by-side with through-the-door ice. 17 We have the baseline efficiency level and then 18 five or four, potentially five, additional 19 efficiency levels. Those essentially align 20 with some of the non-mandatory efficiency 21 programs, voluntary efficiencies programs that

22 are out there.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 102 1 For the standard size freezers, 2 there's the baseline DOE standard, Energy 3 Star, and there are no particular voluntary 4 programs associated with some of the 5 additional energy reductions for which we're 6 requesting information. 7 And for compact refrigerators and 8 freezers, again, there's the DOE standard 9 level and then some of the voluntary program 10 efficiency levels.

11 FACILITATOR BROOKMAN: Debra? 12 MS. BRUNK: Just a quick comment. 13 I know there's been some discrepancy -- I'm 14 sorry, Debra Brunk, AHAM. 15 There's some discrepancy I think 16 in presentations and also in the Framework 17 Document. I think AHAM wants to make it clear 18 that Energy Star requirements have changed and 19 I think the way that this is listed in the 20 document that was actually on the website 21 states the correct values, basically the 22 current Energy Star level is at 20 percent asd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 103 1 opposed to 10 percent. I think that's

2 correct.

3 FACILITATOR BROOKMAN: You're 4 referring to slide 74 which is upright chest

5 freezers? 6 MS. BRUNK: Actually, I think it's 7 73. I apologize. This presentation is 8 correct. The document that was actually 9 published, the text is incorrect. So we just 10 want to make sure that we are consistent in 11 our Energy Star. 12 FACILITATOR BROOKMAN: So just to 13 confirm, the 15 percent listed in 73, that is

14 correct?

15 MS. BRUNK: Yes. 16 FACILITATOR BROOKMAN: Thank you. 17 MS. BRUNK: Secondly, I would just 18 like to note, I mentioned this earlier, but as 19 we look at the new test procedures in terms of 20 test procedures and volumes, that will 21 certainly have an impact on the equations and 22 we do believe that these percentages should bed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 104 1 applied to the current procedure as stated 2 here as opposed to the new procedure before we 3 determine the new proposed energy standards. 4 MR. WESTPHALEN: The efficiency 5 levels that are presented as percentages 6 because according to our vision for relating 7 the temperatures, a 10 percent according to 8 the old temperatures will be at 10 percent 9 according to the new.

10 MS. BRUNK: Debra Brunk from AHAM. 11 I think -- I mean we can get into more 12 discussions on that, but 10 percent on the old 13 and 10 percent on the new would be different 14 values. We need to look carefully at that.

15 MR. WESTPHALEN: There would be 16 different numerical values, but -- 17 MS. BRUNK: Understanding that the 18 baseline model is the baseline model that we 19 measure at the old or the new test procedure. 20 MR. WESTPHALEN: That is correct.

21 FACILITATOR BROOKMAN: Thanks for 22 that clarification.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 105 1 Are there comments -- there are 2 several things the Department I think would 3 seek comment on here, one of which is the "max 4 tech" level that you see and generally again 5 about the potential discrepancy. 6 Yes, please, Jennifer. 7 MS. THORNE-AMANN: Jennifer Thorne 8 Amann, ACEEE. With regard to the typical 9 standard size for refrigerator-freezer models, 10 we would be interested in seeing an analysis

11 done between the current 4 and 5 "max tech" at 12 35 percent. There are now products on the 13 market now and several categories that exceed 14 30 percent above that baseline and if there is 15 movement on tax credits for more efficient 16 models at the 30 percent level, we think there 17 will be more movement in the market there. So 18 we'd like to suggest an analysis of the 35 19 percent level and then "max tech" beyond that. 20 FACILITATOR BROOKMAN: Okay, so if 21 you have written comments, include those 22 specifics and that would be very helpful.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 106 1 MR. BLANC: Steve Blanc, PG&E. 2 I'd like to second what Jennifer said. We'd 3 like to see a 35 percent level in between the

4 30 and the "max tech." 5 FACILITATOR BROOKMAN: Thank you. 6 Yes, Ed? 7 MR. OSANN: Ed Osann. I've got a 8 question about the implications of where these 9 prior classes are aggregated in this display. 10 Are the analyses going to be carried out 11 separately, just taking the first matrix on 12 slide 73. Are the analyses going to be 13 carried through all the way through separately 14 for each of classes 3, 5, and 7 separately?

15 MR. WESTPHALEN: Yes. 16 MR. OSANN: So the possible 17 outcome is that a proposed efficiency level by 18 the time we get to the NOPR stage could be a 19 different level of improvement between, as 20 between say class 5 and class 7?

21 MR. WESTPHALEN: That's correct.

22 MR. OSANN: And all thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 107 1 justification for that would be in the record, 2 this aggregate?

3 MR. WESTPHALEN: I would assume 4 so, although I don't want to speak out of hand

5 here. 6 FACILITATOR BROOKMAN: Are you 7 interested in the -- and the desire would be 8 just by product class. 9 MR. WESTPHALEN: By product class, 10 since the analysis --

11 FACILITATOR BROOKMAN: -- 12 providing there's a large enough sample size, 13 I guess in the data, right? You could 14 aggregate them, right, and not violate any 15 confidentiality - 16 MR. OSANN: I'm talking about 17 disaggregated between classes, not within

18 classes.

19 FACILITATOR BROOKMAN: Debra?

20 MS. BRUNK: Debra Brunk of AHAM. 21 Again, certainly DOE obtains their own data. 22 AHAM gives support where we can. In the cased5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 108 1 of AHAM-supported data, we provide by-product 2 class when we can and again it is aggregated, 3 if we do end up with a product class that does 4 not have enough manufacturers to aggregate 5 that data, that information is not supplied to 6 DOE, although DOE can obtain that information 7 in other ways.

8 MR. WESTPHALEN: I would assume 9 that the analyses certainly would be carried 10 out separately for each product class, and I 11 would assume that they would be made public 12 for each product class. I just don't want to 13 speak for DOE if that's not entirely true. 14 MR. OSANN: We have DOE here, so -

15 - 16 MR. WITKOWSKI: Steve Witkowski, 17 I'll get back to you with an answer on that. 18 MR. OSANN: So is the question 19 clear or should I elaborate on it first? 20 MR. WITKOWSKI: I'd appreciate it 21 if you could give it to us in writing. 22 MR. OSANN: As a question?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 109 1 MR. WITKOWSKI: Yes, please. 2 MR. BALLO: Tim Ballo, 3 Earthjustice. Victor, can you turn to slide 4 72 for a second? It says in some cases DOE 5 defines the highest efficiency level based on 6 the maximum available efficiency currently on

7 the market. What would those -- what are 8 those cases, what are the situations in which

9 DOE does that? 10 FACILITATOR BROOKMAN: Mike 11 Rivest. 12 MR. RIVEST: "Max tech" is not a 13 recognition of cost effectiveness. "Max tech" 14 is simply the highest level that can be 15 achieved and has been proven at least in a 16 working prototype. Now it may be that there 17 is nothing demonstrated even in a prototype 18 that goes beyond the best product in the 19 market. That would be a situation that 20 applies here. 21 FACILITATOR BROOKMAN: Thank you. 22 Yes, Lane.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 110 1 MR. BURT: Lane Burt, NRDC. I 2 just wanted to point out in this standard, I 3 don't think it will become effective at the 4 point where it --

5 FACILITATOR BROOKMAN: Please move 6 the mic close to you. 7 MR. BURT: Lane Burt, NRDC. I 8 just wanted to point out that the standard 9 becomes effective in 2014 and what's on the 10 market today isn't necessarily what's going to 11 be on the market six years from now, so I12 point out and caution against over13 conservative assumptions here and also 14 encourage the Department to look at trends, 15 efficiency trends in the recent past so that 16 they can kind of take into account something 17 like Jim mentioned which is the tax credits 18 and other policies which are designed to move 19 the market so the Department doesn't set a 20 standard that's very low based on what's 21 currently out there. 22 FACILITATOR BROOKMAN: Miked5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 111 1 Rivest. 2 MR. RIVEST: Mike Rivest, 3 Navigant. In this particular situation, 4 because we will be doing design option 5 modeling using the ERA model, we will, in 6 fact, have values for "max tech" that probably 7 go well beyond what the market currently has, 8 but we have to identify a design pathway to be 9 able to model it, so to the extent that their 10 product does not incorporate commercial 11 designs that are technologically feasible, 12 we'll take that into account. 13 FACILITATOR BROOKMAN: Any 14 additional comments on this series of slides? 15 I don't want to cut this short. We're 16 referring to 72, 73, 74, and 75 here, I think. 17 MR. WESTPHALEN: That's right. 18 FACILITATOR BROOKMAN: Okay, yes? 19 MR. OSANN: The Department has 20 identified the seven product categories that 21 are going to be representative for the group. 22 If the test procedures are modified tod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 112 1 incorporate wine coolers and a product 2 category is established for wine coolers would 3 wine coolers become an eighth product 4 category, be evaluated or would they be 5 -- they're not going to be close enough to be 6 clearly extrapolated from these seven? 7 MR. WESTPHALEN: That is true. I 8 think if the decision is made to incorporate 9 wine coolers as a product class, then we have 10 to then consider what methodology we use to 11 address them appropriately in the engineering 12 analysis and that has not yet been done and 13 not yet been presented. But obviously, it 14 will have to be done if and when that decision 15 is made.

16 FACILITATOR BROOKMAN: Yes? 17 MR. BROWN: This is Bill Brown 18 from G.E. I believe Debra Brunk already made 19 that comment for AHAM that if -- 20 FACILITATOR BROOKMAN: I'm sorry, 21 apparently the microphones are not working all 22 that great. Please speak up, Bill.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 113 1 MR. BROWN: Bill Brown from GE. I 2 believe that Debra Brunk already made, from 3 AHAM, already made the comment that if wine 4 chillers becomes one of the product classes, 5 that it should be included with those seven to 6 become a baseline for the new product class. 7 FACILITATOR BROOKMAN: Thank you. 8 Sorry about the mics. Included within the

9 seven. 10 MR. BROWN: No, in addition to the 11 seven, like you were saying.

12 FACILITATOR BROOKMAN: We'll 13 expect clarification. Other comments on this 14 series? 15 MR. WESTPHALEN: I guess there's a 16 few more slides here dealing with some 17 additional issues associated with engineering 18 analysis, the first on proprietary designs. 19 And so there may be proprietary designs that 20 can be used to achieve a higher level of 21 efficiency than other 22 technology options, and DOE will evaluate alld5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 114 1 of those design options that are commercially 2 available or are present in a working 3 prototype. 4 However, if proprietary designs 5 lead to a higher efficiency level than other 6 technologies, then there's an issue with 7 considering them as the basis for setting a 8 standard. So there's this issue and 9 basically, there's only one way to get there 10 and that will be taken into consideration in 11 setting a standard. Obviously, the 12 confidentiality will be maintained if we get 13 information that is deemed intellectual 14 property. 15 I guess the question here, request 16 for comment on whether there are proprietary 17 designs of technology of which DOE should be

18 aware and to some extent some of the 19 information gathering through AHAM, there may 20 be information for efficiency levels which 21 include some proprietary designs and that's 22 something that obviously we should be maded5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 115 1 aware of. 2 And there's the question of if 3 it's important to consider some of these 4 designs how would DOE acquire the cost data 5 necessary for evaluating them.

6 FACILITATOR BROOKMAN: Debra.

7 MS. BRUNK: Debra Brunk from AHAM. 8 I would say at this point we're not aware of 9 any proprietary designs. I think, as I 10 mentioned earlier, we certainly are willing to 11 collect cost information and aggregate it. We 12 tend to do that again on an efficiency level 13 and not delving into the specifics of the 14 designs that it would take to get to that 15 efficiency level. We would, however, suggest 16 that DOE approach manufacturers able to join 17 to talk about those designs. 18 FACILITATOR BROOKMAN: Additional 19 comments on proprietary designs, technologies 20 and potentially gathering the cost data? 21 MR. WESTPHALEN: Another aspect 22 potentially affecting the engineering analysisd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 116 1 is outside regulatory changes. An example is 2 the phase out of CFCs in past rulemakings and 3 the phase out of HCFC blowing agents. At this 4 point, DOE does not expect any similar 5 significant regulatory change to affect 6 current rulemaking, i.e., making some 7 technology options invalid or causing 8 potential significant shift in a different 9 aspect of the design that is not currently in 10 play in the analysis that we would be carrying 11 out based on today's products. 12 And so the comment is whether 13 there are other regulatory issues that DOE 14 should consider such as the CFC and HCFC phase 15 outs that affect past rulemakings.

16 FACILITATOR BROOKMAN: Debra?

17 MS. BRUNK: Debra Brunk from AHAM. 18 Two comments. I think we've touched on them 19 briefly earlier, one is regarding alternative 20 refrigerants that we expect to come out as a 21 result of the pending climate change 22 legislation. We believe this is going to bed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 117 1 a pretty substantial regulatory burden for 2 manufacturers. Unfortunately, we can't say 3 much more than that because the legislation 4 has not been finalized, but we do recognize 5 that it's probably going to be a pretty big 6 impact. 7 Whatever the legislation is we 8 recognize that it will be a phase out of HFCs 9 over time. We just need to understand what 10 that time frame is, as the legislation moves

11 forward.

12 And the second comment was also 13 made earlier in terms of regulation of 14 chemicals by EPA. And then also the quantity 15 of restraints by safety organizations on 16 hydrocarbons do limit the viable alternatives 17 for refrigerants in the future at this time. 18 FACILITATOR BROOKMAN: Thank you. 19 Are there other comments on other regulatory 20 issues and developments that DOE should 21 consider?

22 Lane?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 118 1 MR. BURT: Lane Burt, NRDC. I 2 just wanted to point out as was previously 3 mentioned that coming climate change 4 legislation some time before 2014 is extremely 5 likely and that has an effect on the value of 6 this standard to the nation to consider it and 7 to the industry and that needs to be taken 8 into account. 9 FACILITATOR BROOKMAN: Would you 10 suggest how they take it into account? 11 MR. BURT: I suggest that they -- 12 we have suggested that they take it into 13 account through monetizing the value of carbon 14 dioxide and other issues that will come up 15 during climate change legislation and take 16 into account in the economic analysis, the 17 life-cycle cost analysis and the present value 18 analysis. 19 FACILITATOR BROOKMAN: Okay, thank 20 you. 21 Other comments on regulatory and - 22 - other regulatory issues? No additional.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 119 1 Okay. 2 MR. WESTPHALEN: And at this point 3 we move into the preliminary manufacturer 4 impact analysis which Constantin von Wentzel 5 will discuss.

6 FACILITATOR BROOKMAN: On the 7 agenda it was suggested we would pause for 8 lunch now, but we're going to keep going for 9 say another half an hour or so and then we'll 10 pause for lunch. 11 MR. von WENTZEL: Thank you. As 12 you can see the preliminary manufacturer 13 impact analysis is a supporting effort for the 14 engineering analysis as part of the -- before 15 the ANOPR process. 16 As you can see, there are seven 17 factors that EPCA provides and the MIA touches 18 on two of them. The rest of them are listed 19 on page 14 and specifically we focus on the 20 economic impact of standards on manufacturers 21 and impacts of any lessening of competition in 22 the industry. So these interviews that wed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 120 1 have with manufacturers are really qualitative 2 and focus on the issues that they face at this 3 stage where we haven't really quantified 4 anything and really understand more than 5 anything else what their largest concerns are 6 and then we report that MIA data as part of 7 the ANOPR, and specifically focusing on 8 anticipated conversion capital to your point 9 and bi-efficiency level and the impacts on 10 employment. 11 And as you can see, there are 12 three phases to the MIA and this is obviously 13 just phase number one. And discussed this 14 already. 15 So in these interviews we discuss, 16 among other things, shipment projections for 17 the industry, conversion costs for existing 18 facilities, the product mix that a 19 manufacturer makes and the profitability 20 thereof to better establish the impacts on 21 them, market shares and industry 22 consolidation, cumulative regulatory burdend5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 121 1 and we don't have a cost efficiency curve yet 2 to discuss, but we might discuss things like 3 the cost of input factors for raw materials, 4 for example. And so we basically use all of 5 that information to create a very detailed 6 industry profile. 7 FACILITATOR BROOKMAN: People are 8 familiar with this slide, I think. You might 9 just take a peek at 85 to make sure you're 10 comfortable with what's there. 11 MR. von WENTZEL: Any questions?

12 FACILITATOR BROOKMAN: Ed?

13 MR. OSANN: Ed Osann. Are all the 14 manufacturers that will be interviewed, are 15 they U.S. based or how do you interact with 16 overseas manufacturers in the MIA? 17 MR. von WENTZEL: Do you want to 18 take that, Mike? 19 FACILITATOR BROOKMAN: Mike 20 Rivest. 21 MR. RIVEST: I think -- Mike 22 Rivest, Navigant Consulting. Certainly ourd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 122 1 approach has been to interview as many 2 manufacturers as are willing to talk to us, so 3 there's no -- in this age, it's very difficult 4 to really differentiate, if you will, other 5 than U.S.-owned, U.S. manufacturing base. 6 There's just a whole different set of

7 manufacturers out there.

8 So there's no effort to screen out 9 anyone. We're trying to get the broadest view 10 what the impacts on manufacturers are and then 11 to report them in the interview back from the 12 interview summaries in the notice. 13 Of course, part of the interview 14 focuses on U.S. jobs so those impacts will be 15 recorded separately, but in terms of the 16 overall challenges or the cost of achieving 17 standards we do that at the industry level.

18 FACILITATOR BROOKMAN: So then -- 19 go ahead. 20 MR. von WENTZEL: I believe Greg, 21 you're on now. 22 MR. ROSENQUIST: Hello. My named5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 123 1 is Gregory Rosenquist from Lawrence Berkeley 2 National Laboratory. And I'll be taking you 3 through the rest of the analyses in the ANOPR 4 analysis and it consists of the markups, 5 energy use determination, LCC, and payback 6 period analysis, the shipments analysis and 7 the national impact analysis. 8 And I'll be starting off with the 9 markups. The purpose of this analysis is to 10 convert the engineering cost data from the 11 engineering analysis into consumer retail 12 prices. And we do that by first 13 characterizing how those products are being 14 distributed from the manufacturer to the

15 consumer. 16 And we've done a little bit of

17 work here and we've seen to the AHAM Fact Book 18 that well over 90 percent of shipments or 19 sales, that is, are sent through appliance 20 retailers. So we intend to basically 21 characterize how they are distributed to 22 consumers by this one retail, retailer priced5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 124 1 chain, that is from manufacturer to appliance 2 retailer to the consumer. 3 So we'll develop a markup for the 4 manufacturers and we'll develop a markup for 5 appliance retailers. We'll be calculating 6 manufacturing markups by looking at 10-K 7 reports filed with the Securities and Exchange 8 Commission for publicly-traded manufacturers. 9 And for the retailer markups, we'll be looking 10 at U.S. Census Bureau business expenditure 11 survey data. 12 We also may collect some internet 13 retail prices as a way to validate the prices 14 we get from our markup analysis. And as part 15 of that also we'll look at the variability in 16 the retail prices for baseline products as 17 well as more efficient products. 18 So at this point I welcome any 19 comment or input on the proposed approach to 20 develop consumer retail prices. 21 MR. OSANN: This is similar to a 22 comment that was made earlier, but it might bed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 125 1 useful from a retrospective standpoint to see 2 how well the DOE methodology has predicted 3 retail prices in previous rulemakings in the 4 past.

5 FACILITATOR BROOKMAN: Other 6 comments on markups for price determination? 7 MR. ROSENQUIST: So now I'll move 8 on to the next analytical step which is the 9 energy use determination. And the purpose of 10 this analysis is to characterize the annual 11 energy consumption of these products and when 12 they're coupled along with electricity prices 13 that gives you the annual operating costs. 14 And again, this information is fed into the 15 life-cycle cost and payback period analysis. 16 The method relies on using the 17 Energy Information Administration's 18 residential energy consumption survey or RECS. 19 And RECS consists of a large household sample, 20 around 5,000 household records that's 21 representative of the entire households in the 22 United States, over 100 million households ind5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 126 1 the United States. 2 And so what we'll do is we'll 3 select particular households from this sample4 that have the different types of refrigerator5 freezers and freezers that we want to analyze. 6 So we'll have a unique household sample again 7 for each product that's being analyzed in the 8 engineering analysis. And these are those 9 seven primary product classes: three for 10 standard size refrigerator-freezers, two for 11 standard size compact freezers, one for 12 compact refrigerator-freezers and then one for 13 compact freezers. 14 And again, I just want to 15 emphasize now that we'll be using these 16 household samples and each household record 17 will have one of these types of products which 18 we'll be establishing the annual energy 19 consumption for. 20 This slide goes into a little bit 21 more detail on exactly how we will be using 22 RECS to determine the annual energyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 127 1 consumption for refrigerator-freezer for a 2 particular household record. And what we do 3 is we start with the unit age, the equipment 4 age and its value and, again, we'll get those 5 two things from RECS and we use those two6 things to come up with a tested or rated, DOE7 rated energy consumption on that particular 8 refrigerator in that particular household. 9 Now RECS also provides to us the field-based10 energy consumption of the refrigerator11 freezer. 12 So what we can do then is by 13 dividing the field-based energy consumption 14 out of RECS, by the tested energy consumption 15 that we calculate based upon other RECS 16 variables, we come up with this usage 17 adjustment factor or UAF. And this accounts 18 for things like consumer behavior, different 19 operating conditions, and other product 20 features that either add to or subtract from 21 the rated energy consumption of the product. 22 And then we take that UAF for that particulard5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 128 1 household and couple that with the energy 2 consumption data that we're getting from the 3 engineering analysis, the tested energy 4 consumption from the engineering analysis to 5 come up with a field-based energy consumption 6 value for that particular household based 7 upon, again, the data that we're getting from 8 the engineering analysis. 9 So if you're talking about one 10 household sample for a particular product 11 class, what we end up with is a distribution 12 of field-based energy consumption values for 13 the baseline level and then for every single 14 candidate standard level that we intend on 15 analyzing. 16 And having this distribution of 17 energy use values will be very handy in terms 18 of the life-cycle cost payback period analysis 19 because it's a key input to establishing what 20 percentage of consumers are benefitting or 21 being burdened by a particular standard. 22 So this is asking for comment ond5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 129 1 this basic approach of using the residential 2 energy consumption survey to come up with 3 annual energy consumption.

4 FACILITATOR BROOKMAN: Debra?

5 MS. BRUNK: Debra Brunk from AHAM. 6 We're concerned about using the RECS data for 7 a few reasons. One is its latest publication 8 is 2001 and it skips out on some pretty major 9 product categories, one in particular would be 10 your bottom mount type configuration which has 11 had significant growth in the last few years. 12 It's just not a very dynamic 13 database. We would invite DOE to use our 14 consumer data. We did complete a study in 2006 15 covering 8,000 representative households that

16 collected the same data that the RECS looks at 17 regarding product class, unit, age, and volume 18 and then also the energy consumption. 19 We will take a look at that and 20 make that available to you as an alternative. 21 MR. ROSENQUIST: That sounds 22 great. That sounds great.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 130 1 FACILITATOR BROOKMAN: Steve? 2 MR. BLANC: Steve Blanc, BG&E. I 3 think one thing has been overlooked here and 4 that is the impact on demand. Demand, of 5 course, is rather important to us utility 6 people because we have to be able to size 7 wires, pipes, generators, whatever we've got 8 out there to make it. It is becoming more 9 imperative to look at residential loads from 10 a demand point of view because of the 11 proliferation of electronics in the 12 residential sphere. And we want to make sure 13 that as DOE goes through the processes to 14 develop these standards that we can get an 15 understanding of what the demand impacts are 16 for future planning. 17 FACILITATOR BROOKMAN: Thank you.

18 Lane? 19 MR. BURT: Lane Burt. I just want 20 to second what was just said, demand impacts 21 are a major input into what should be 22 considered a standard level.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 131 1 FACILITATOR BROOKMAN: Thank you. 2 Okay. Additional comments on this rather 3 detailed slide? 4 MR. ROSENQUIST: I just wanted to 5 add, follow on to Debra, your comment about 6 offering up that data. Is that something that 7 you'll be providing with your written

8 comments?

9 MS. BRUNK: I'll have to take a 10 look and see what we need to put together, but 11 it will certainly be within the next few

12 months. 13 MR. ROSENQUIST: And one other 14 point of information is that RECS is updating 15 to a more recent survey based upon 2005, but 16 again, if you have specific data that's 17 looking at household appliance use that has 18 8,000 records, that would probably be a better 19 source of information.

20 MS. BRUNK: Debra Brunk from AHAM 21 again. You'll have both to look at and 22 hopefully they're consistent. And again, ourd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 132 1 point in doing this was to include a lot of 2 the new products that are out there because 3 the 2000 RECS data do not incorporate those.

4 FACILITATOR BROOKMAN: Lane. 5 MR. BURT: Lane Burt, NRDC. Just 6 a general comment that whenever the Department 7 notices that easily available data is not 8 realistic or does not jive with reality, they 9 should modify that in a realistic way because 10 getting close to the right answer is better 11 than just taking a wrong answer and that goes 12 for this or the EIA, AEO electricity price

13 forecasts. 14 FACILITATOR BROOKMAN: So if you 15 had comments about your expectations on those 16 price forecasts, I'm certain the Department 17 would appreciate receiving those from any of 18 you. 19 MR. ROSENQUIST: This next slide 20 talks about the rebound effect. And this is 21 the situation where the consumer has a more 22 efficient appliance and they know that theyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 133 1 have it, that they'll use it more frequently, 2 and thus negate some of the energy savings 3 that you would realize from having a more 4 efficient product. 5 From the literature, from the 6 research that's been conducted and doing a 7 little bit of a literature survey on that, for 8 home appliance, generally it says that there 9 isn't a rebound effect, but they do talk about 10 the possibility of consumers knowing that it's 11 more efficient maybe would buy a larger 12 refrigerator-freezer or something that has 13 more features and thus use more energy 14 consumption. 15 So this next comment or request 16 from stakeholders for input is on whether a 17 rebound effect does exist for this particular 18 product and if one does exist, what sort of 19 effect is it? How much energy savings would 20 be negated if it were to be applied to this 21 particular product?

22 FACILITATOR BROOKMAN: Debra?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 134 1 MS. BRUNK: Debra Brunk with AHAM. 2 I just mention from the industry that again we 3 would agree that there doesn't seem to be 4 anything specific for refrigerator-freezers in 5 terms of the consumer actually using it more. 6 It's pretty set in how it's going to be used 7 in terms of how you may set your temperatures 8 and that kind of thing. 9 I think the other thing that we 10 would note is most consumers do have a fixed 11 space for a refrigerator-freezer and they're 12 not going to be able to necessarily get a huge 13 unit in to a space that is for a smaller one. 14 I think the other thing that we would note in 15 terms of things like capacity of a 16 refrigerator-freezer, not only the fixed 17 space, but it is somewhat more dependent on 18 lifestyle or life stage than the actual 19 efficiency of the unit.

20 FACILITATOR BROOKMAN: Other 21 comments particularly on these assumptions 22 regarding rebound effect?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 135 1 MR. ROSENQUIST: Okay, the next 2 analysis is life-cycle costs. This is going 3 to take us probably maybe another 15 minutes 4 to get through and it's 12 o'clock now. Are 5 people okay with going ahead and do that? 6 FACILITATOR BROOKMAN: I was going 7 to suggest it's now 12. Fifteen minutes on 8 life-cycle costs on the agenda, and then we'll 9 have perhaps another hour of stuff to cover. 10 Let's evaluate how we feel on 15 minutes. 11 Maybe if we're making good progress, we could 12 even consider just keep working on through and 13 not pause for lunch. Let's just see how far 14 we get, how fast. Maybe we'll take a read at 15 12:30, see how far we are. Is that okay? No 16 one is objecting strenuously to this. Okay. 17 MR. ROSENQUIST: So the next 18 analytical step is life-cycle cost and payback 19 period analysis. And the purpose of this 20 analysis is to look at how life-cycle costs of 21 the product and the payback periods are 22 impacted by these different energy efficiencyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 136 1 levels to the consumer. 2 The life-cycle cost equals the 3 consumer price or the first cost, plus any 4 installation costs that might exist, plus the 5 annual lifetime operating cost, that are, of 6 course, discounted with a discount rate to a 7 particular base year. 8 Again, this evaluation for the LCC 9 and payback period is done from the consumer's 10 perspective, and we do this analysis in a 11 spreadsheet tool for transparency purposes. 12 And we use Microsoft Excel to do that. 13 The results are always expressed 14 as a difference between a particular candidate 15 standard level and the baseline level and with 16 regard to the LCC what we're doing is 17 calculating the LCC at that standard level and 18 then also at the baseline level and taking the 19 difference to get whatever the LCC impact is. 20 And for the simple payback, what 21 we're doing is just calculating that as a 22 change in total installed cost divided by thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 137 1 change in first year's operating expenses to 2 determine that again for the consumer. 3 The approach that we use is this 4 statistical sampling technique called Monte 5 Carlo simulation, and the reason why we use 6 that is because there are several input 7 variables into the analysis that are highly 8 uncertain or highly variable and so we can 9 characterize all these various input variables 10 with what we call as probability 11 distributions. 12 It also is a nice approach that 13 when you use it to couple it with the RECS 14 household samples or whatever type of 15 household samples we're using. Because these 16 household samples are fairly large, what can 17 be done with the Monte Carlo relation 18 technique is to sample each one -- each 19 individual household record from that 20 particular household sample. A couple of 21 things that we're getting from these household 22 samples are energy use, energy price, so evend5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 138 1 though the particular household might have a 2 unique and distinct value, over the wide range 3 of the entire household sample we're capturing 4 the variability in the energy use and in the 5 energy price. 6 The other -- again, the other 7 inputs to the analysis like the discount rate, 8 the lifetime, those are characterized with 9 probability distributions. Other inputs like 10 the manufacturing cost typically recently have 11 been characterized with single point values, 12 but of course if there's any variability on 13 those inputs we capture with that as well. 14 So what we're doing here then is 15 we're using this Monte Carlo simulation 16 technique on each household sample for each 17 product class. And when this is coupled then 18 with the engineering analysis, we can generate 19 these life-cycle cost impacts again using that 20 data to determine again what the life-cycle 21 cost impacts are and the payback periods are. 22 Another key input to this analysisd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 139 1 is what are called the base case efficiency 2 distributions. And this characterizes the way 3 in which consumers today are currently 4 purchasing these products. And so in other 5 words, by incorporating how consumers 6 currently purchase products today and bringing 7 that into the analysis it avoids overstating 8 the particular benefits from a standard level 9 again by taking into account those consumers 10 are actually buying more efficient products 11 today. 12 This slide shows the type of 13 information we're looking for in terms of 14 these base case-efficiency distributions. 15 We'll be going to the industry particularly 16 for this type of information. What you see 17 here is an example for standard size 18 refrigerator-freezers. And again, we're 19 looking for what percentage of the market is 20 purchased at each one of these baseline and 21 efficiency levels. And you'll notice that 22 these efficiency levels match up with thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 140 1 levels that are being analyzed in the 2 engineering analysis. 3 Again, this is an example specific 4 to standard size refrigerator-freezers, but 5 again we're going to be looking for this 6 information for the other four primary product 7 classes that the engineering analysis is going 8 to be analyzing. 9 So this is a place where we're 10 looking for comment from stakeholders on this 11 approach to use Monte Carlo simulation 12 analysis in the LCC and payback period 13 analysis. And also to repeat our request for 14 these base case efficiency distributions to 15 characterize how consumers are currently 16 purchasing these products, so we don't 17 overstate the benefits from the particular 18 candidate standard level.

19 FACILITATOR BROOKMAN: Debra? 20 MS. BRUNK: I was just going to 21 reiterate -- Debra Brunk, AHAM. IMA-2 that we 22 will provide these data. Again, we will notd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 141 1 be able to provide it for all product classes, 2 but we will be able to provide it for a

3 subset. 4 FACILITATOR BROOKMAN: Thank you. 5 Jennifer? 6 MS. THORNE-AMANN: Jennifer Thorne 7 Amann, ACEEE. I have a question about in 8 looking at the base case efficiency 9 distributions and also looking at the 10 candidate standard levels. Will you be making 11 the same assumptions about people purchasing 12 above the standard level in the new case? 13 MR. ROSENQUIST: Yes, yes, we will 14 be. If stakeholders feel like we should have 15 a different assumption about that, we 16 definitely would like to hear that. 17 FACILITATOR BROOKMAN: Yes, Lane. 18 MR. BURT: Lane Burt, NRDC. I 19 just wanted to point out that the demand 20 effects are appropriate here as well as the 21 benefits to reduce demand are felt by 22 consumers who did not purchase a newd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 142 1 refrigerator as well as the consumer who did, 2 and conversely, in the absence of a standard, 3 consumers that don't purchase a more efficient 4 refrigerator, the cost of that is not solely 5 associated with that consumer but spread 6 across all electricity users. 7 FACILITATOR BROOKMAN: Thank you. 8 Comments on these two slides, the approach of 9 the LCC and the base case efficiency 10 distributions? 11 Yes, Ed.

12 MR. OSANN: Ed Osann. Just to 13 follow up on the point just made by Lane, does 14 the present methodology have a mechanism for 15 capturing benefits to consumers who are not -- 16 in any given year who are not purchasing a new 17 refrigerator? 18 MR. ROSENQUIST: That type of 19 analysis wouldn't be conducted in a life cycle 20 cost and payback period analysis. Again, in 21 this analysis, we're looking at the consumers 22 of the type of product we're talking aboutd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 143 1 here, which are refrigerators and 2 refrigerator-freezers and freezers. So the 3 type of effect I think Lane is talking about 4 is, again, what happens to all the rest of the 5 consumers in terms of reduced electricity 6 prices, for example, from the standard and 7 that, again, could be captured in other 8 analyses with different analytical tools. 9 This gives you an overview of how 10 all the inputs for the LCC and payback period 11 analysis are used to finally come up with a 12 life-cycle cost and payback period. To 13 quickly go over this, we start with the 14 engineering cost data which gives us baseline 15 manufacturing costs and standard level 16 manufacturing costs. Then we use markups from 17 the markups analysis, specifically the 18 manufacturer markup, consumer retail price 19 markup, and the sales tax to come up with an 20 equipment price. That's indicated in that 21 green box. Then we couple that with any 22 installation costs to arrive at the totald5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 144 1 installed cost to the consumer. 2 The bottom sets of inputs pertain 3 to the operating expenses and with these, we 4 start out with the annual energy use again 5 which we get from our energy use determination 6 analysis. We're determining that again for 7 the baseline for each one of these different 8 candidates standard levels. We couple that 9 with energy prices, in our case electricity 10 prices, to come up with the annual energy 11 expense to the consumer. Then we take repair 12 costs and maintenance costs, add that to that 13 to come up with annual operating expenses. 14 Then we use lifetime discount rates and energy 15 price trends and transform that into lifetime 16 operating expenses. And then when you add 17 that to the total installed cost, that's what 18 gives you the life-cycle cost. The change in 19 total installed cost for a particular standard 20 level divided by the change in annual 21 operating expenses is what gives you the 22 payback period.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 145 1 With regard to electricity prices, 2 what we plan to do here is use data from the 3 Energy Information Administration's 861, Form 4 861 data. And what this data provides is the 5 sales and revenues of all of the U.S. electric 6 utilities that serve residential consumers. 7 So for a particular utility, we can just 8 divide the sales by the revenues to get the 9 average electricity price and then because the 10 data also provides to us the number of 11 consumers that are being served by the 12 utility, we can come up with customer weighted 13 average electricity prices for different 14 regions in the country. 15 What we plan to propose here is to 16 develop regional electricity prices for 13 17 regions. Those are the nine Census divisions 18 in the four large states: California, Texas, 19 New York, and Florida. 20 What this allows us to do is 21 capture at least at this level of regionality, 22 the regional variability in the electricityd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 146 1 prices. We'll plan to use energy price 2 projections, the Annual Energy Outlook, and we 3 plan to use three types of projections, one

4 for the reference case and there's two others 5 for high and low growth economic scenario

6 cases. 7 And finally, we'll consider any 8 other price projections that stakeholders 9 provide to estimate future electricity prices.

10 FACILITATOR BROOKMAN: Steve. 11 MR. BLANC: Again, I want to beat 12 on the whole demand pricing drum because I 13 think that's a critical element here. It's 14 becoming more critical for most utilities, 15 particularly in the State of California and 16 secondarily, if you want something from us, 17 I'll give you lots of projections on 18 electricity prices, and I'm pretty sure we can 19 get them from our fellow utilities for 20 California. 21 MR. ROSENQUIST: The reason why 22 we're proposing to use average electricityd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 147 1 prices from this data set is because 2 refrigerators are typically a fairly flat 3 load, and although every end use contributes 4 to demand, there are other end uses, 5 particularly air conditioning that has more of

6 an effect on demand. 7 So when it comes to refrigerating 8 and saving energy on refrigerators, again, 9 although it has an effect on demand, it

10 doesn't have as much as an effect. And so the 11 contribution to demand from a refrigerator 12 energy efficiency standard would probably be 13 very low. 14 FACILITATOR BROOKMAN: Additional 15 comments on DOE's proposed approach to 16 electricity prices?

17 Ed. 18 MR. OSANN: Ed Osann, two 19 comments. One is we would recommend that 20 through the course of this multi-year process 21 that you update -- use the most current AEO 22 that's available, all the way through thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 148 1 process. 2 MR. ROSENQUIST: That's typically 3 what the Department does. 4 FACILITATOR BROOKMAN: Thank you. 5 MR. OSANN: And the other is a 6 question about whether the average -- whether 7 the average consumer energy cost really get at 8 the incremental benefit of a reduction that 9 might result from standard. The average cost 10 may not reflect the marginal price of 11 electricity on the typical retail rate 12 structure, typical block rate structure. 13 Does the methodology incorporate a 14 way of capturing the value of the marginal 15 block that's experienced by the average

16 consumer? 17 MR. ROSENQUIST: We've done those 18 type of analyses in the past where we've 19 looked at, for example, the RECS data does 20 have actual bill data in it, and from it, we 21 could derive a marginal electricity price for 22 a particular household. Again, that'sd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 149 1 straight from the billing data, so it's not 2 looking at a utility tariff, for example. But 3 we've also done those type of analyses in the 4 past as well by actually looking at the 5 tariffs, themselves, and trying to determine 6 what the electricity price is. 7 Again, when it comes to an end use 8 like refrigerators though, the -- again, the 9 marginal price for it is probably not going to 10 be significantly different. And actually it 11 could even be lower than the average 12 electricity price. So again, based upon past 13 work, I think it's probably fairly 14 representative to use an average electricity 15 price. 16 MR. BALLO: Tim Ballo, 17 Earthjustice. The possibility or extremely 18 likelihood, rather, of climate legislation has 19 been brought up in a couple of other contexts. 20 I think this is the area where -- this is one 21 area where we are likely to see very 22 significant impacts on electricity prices fromd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 150 1 climate legislation. The Energy Information 2 Administration has done an analysis of 3 Lieberman-Warner, the likely starting point 4 for a future climate bill and come up with 5 projections of emissions allowance prices out 6 to, I believe, 2030. It seems like it should 7 be fairly straight forward to take those 8 projections for emissions allowance prices and 9 using information on the carbon content of 10 each kilowatt hour generated to come up with 11 a projection for the future price of 12 electricity that encompasses projected carbon 13 emissions allowance values. Thank you. 14 FACILITATOR BROOKMAN: Yes, Lane. 15 MR. BURT: Just to second what Tim 16 said. This is Lane Burt, NRDC. The AEO is 17 explicitly forbidden to consider coming 18 legislation or regulation. But that is not 19 only applied to climate change legislation. 20 It also applies to this very standard making 21 process. The price forecast would develop no 22 new standards which we know is false. We'red5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 151 1 undergoing this rulemaking right now. And 2 also the AEO assumes rates for more efficient 3 equipment stay constant throughout the 4 projections and for, I'm not sure it is for 5 refrigerators, but just for example, for 6 residential A/C it's 13 percent. So these are 7 significant impacts that this rulemaking is 8 trying to address. So many of the other 9 Department's programs are trying to address 10 and it should be taken into account that this 11 forecast explicitly does not consider those 12 things. The Department should have to account 13 for that when they're setting the standard. 14 FACILITATOR BROOKMAN: Okay, thank 15 you. 16 Additional comments on this 17 series, electricity prices? Okay. 18 MR. ROSENQUIST: The set of inputs 19 are the maintenance, repair, and installation 20 costs. The installation costs are the costs 21 to install the piece of equipment for 22 refrigerator-freezers. There may not be muchd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 152 1 of an installation cost, but again, we try to 2 capture it. 3 The repair costs are meant to 4 capture the cost for any components that need 5 replacement due to a failure and the 6 maintenance costs are associated with just 7 keeping the refrigerator running that don't 8 include actual repair or replacement of 9 components that have failed. 10 We currently don't have any data 11 to really indicate how these repair costs and 12 maintenance costs will change with more 13 efficient products, but we tend to think now 14 that there won't be much of a change. And for 15 installation costs, we think there only would 16 be a significant change if the products got 17 significantly heavier or larger. 18 So what we're looking for 19 stakeholder input on is whether this 20 assumption of these costs not changing 21 appreciably is a reasonable assumption and/or 22 whether some other type of assumption or setd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 153 1 of data is available that can help us 2 establish how these costs change with 3 efficiency.

4 FACILITATOR BROOKMAN: Steve. 5 MR. BLANC: Steve Blanc, BG&E. 6 Having spent a large part of my career 7 sticking my hands in refrigeration equipment, 8 homeowners don't do maintenance refrigerators. 9 And I think -- I got a few smiles around the 10 table. Everybody knows this. My comment 11 would be maybe you change the assumption there 12 a little bit and ask if required new 13 technology is more sensitive to that lack of 14 maintenance than present technology because 15 one of the problems that we have in promoting 16 energy efficiency is the fact that consumers 17 are very sensitive to the service they are 18 getting from that particular appliance or 19 electronic device. When it does not give them 20 the same service that their perception was of 21 their previous device, they're going to reject 22 it.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 154 1 FACILITATOR BROOKMAN: Okay, thank 2 you. 3 MR. ROSENQUIST: And that's just 4 the type of thing we want to try to get after. 5 FACILITATOR BROOKMAN: Additional 6 thoughts on maintenance, repair, and 7 installation costs? 8 MR. ROSENQUIST: Next are the 9 product lifetimes. For the analyses that DOE 10 plans to conduct, plan to use the same product 11 lifetime for the baseline product as for more 12 efficient products. And in past DOE 13 rulemaking analysis, a lifetime of 19 years 14 has been used. Again, the last rulemaking 15 that was conducted on refrigerator-freezers 16 ended in 1998, so we're looking for any 17 additional data sources that may help us 18 update this 19-year product lifetime value.

19 FACILITATOR BROOKMAN: No 20 additional data or experience for that matter. 21 So I guess that assumption -- 22 MR. ROSENQUIST: We'll move on tod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 155 1 discount rates. These are used to convert 2 those future operating costs that happen 3 during the life of an appliance back to a 4 present value, and the approach that we'll try 5 to use here is the same as what we've used in 6 other residential product rulemakings, that 7 is, to determine the discount rate based upon 8 the finance cost of purchasing the product. 9 That finance cost is based upon 10 basically two things, either any debt that's 11 incurred to purchase the appliance, for 12 example, if someone uses a credit card or a 13 home equity loan or the interest rate 14 associated with the opportunity cost of money 15 pulled from equity, like savings accounts, 16 money market funds, stocks, bonds, that type 17 of thing. 18 So again, there's two types of 19 forms that we typically look at to try to come 20 up with this discount rate. And all this 21 information or most of this information is 22 found in the Federal Reserve Board's Survey ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 156 1 Consumer Finances. And there's one that's 2 probably going to be released very, very soon 3 and what we do is we look at all the past 4 survey of consumer finances to see how this 5 change in debt and equity purchases changes 6 over time, so that's captured in the analysis. 7 So we're looking for any input on 8 this planned approach for determining discount

9 rates.

10 FACILITATOR BROOKMAN: We almost 11 always get comments on discount rates. Any 12 comments at this time on discount rats? 13 Do you all need to have lunch now? 14 (Laughter.) 15 I would like to provide another 16 opportunity for any comments on discount rates 17 and then we'll assess where we are with the 18 agenda. 19 Okay. So then, it's 12:20 about. 20 Just so we know, Greg, you're supposed to 21 proceed with shipments analysis next. How 22 long do you think the shipments analysisd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 157 1 segment would take? 2 MR. ROSENQUIST: Probably, you 3 know, a half an hour. 4 FACILITATOR BROOKMAN: Half hour, 5 okay. And then comes manufacturer impact 6 analysis. That's listed as 15. Do you think 7 that's realistic? 8 MR. ROSENQUIST: Yes.

9 FACILITATOR BROOKMAN: And then 10 following that, utility and the investment 11 needed, another 15 to a half an hour there? 12 MR. ROSENQUIST: Yes.

13 FACILITATOR BROOKMAN: So we have 14 an hour and 15 minutes of work left ahead of 15 us before we complete what's scheduled in the 16 agenda and then closing remarks after that. 17 So I'm going to suggest we break for lunch. 18 It's almost 12:25. Let's go and break now, 19 and we will resume at 1:25. This room will be 20 locked, so you can leave your stuff, and 21 please, as I said before, wear your badges 22 while you're in the building. Please don'td5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 158 1 leave the Forrestal Building because you won't 2 make it back on time, and we will resume at

3 1:25. 4 There's a large cafeteria across 5 the street. You need to go down to the ground 6 level and there will be a whole host of people 7 heading in that direction, so you can all head 8 together down and have lunch and we'll see you

9 back here at 1:25. We've covered a lot of 10 ground already today, thanks so much. We'll 11 continue to do that when we return. 12 (Whereupon, at 12:23 p.m., the 13 framework public meeting was recessed, to 14 reconvene at 1:32 p.m.)

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### Page 159 1 A F T E R N O O N P R O C E E D I N G S

2 1:32 P.M.

3 FACILITATOR BROOKMAN: Thanks for 4 being back here on time so we continue with 5 the meeting. 6 So where we left off was, I 7 believe, with Greg and about to embark upon 8 shipments analysis, correct? 9 MR. ROSENQUIST: That is right.

10 FACILITATOR BROOKMAN: That would 11 be Slide 106 for those of you that are 12 tracking this slide by slide. 13 MR. ROSENQUIST: I'll start up and 14 as Doug said, I'm going to be talking next 15 about the shipments analysis. It's the second 16 to last step in the analyses that are

17 conducted for the ANOPR. 18 The purpose, the main purpose of 19 the shipments analysis is to determine the 20 effect of standards on product shipments under 21 the base case, that is the case without 22 standards. We rely on various data sources tod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 160 1 develop a shipments model in order to forecast 2 these shipments and the impact of standards on 3 them. One of the key inputs to the model, of 4 course, is the historical shipments data 5 because part of developing the model is 6 calibrating it to actual real shipments data. 7 The model again is developed to 8 cover only those products that are covered by 9 this rule-making, that is, refrigerators or 10 refrigerator-freezers and freezers. And again 11 it does two primary things, the shipments 12 model, it forecasts shipments and over the 13 forecast period that we're looking at and it 14 also does a stock inventory of the units that 15 come into the housing stock and it also tracks 16 the vintage or age of that equipment. And the 17 reason why that's important is that because 18 several of the inputs to the national impact 19 analysis which comes after the shipments 20 analysis are dependent upon the age of the 21 equipment. 22 So again, the first part of thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 161 1 shipments analysis is to develop what we call 2 base case shipments forecasts and again, these 3 are the shipments forecast under the situation

4 where there are no new standards. What 5 happens in the base case is that we account 6 for in the case of refrigerator-freezers two 7 primary markets. One are the sales to new 8 construction and the other are sales for 9 replacements for failed units. 10 For new construction, the way we 11 basically calculate that is by taking new 12 housing starts and multiply them by product 13 saturation rates in new housing and we get 14 those new housing starts from the Energy 15 Administration's Annual Energy Outlook and we 16 get the product saturation data from the 17 residential energy consumption survey and also 18 the AHAM Fact Book does offer up some 19 information on this as well. 20 For replacements, what we do there 21 is we got the stock of units that we're 22 tracking in our shipments model and we applyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 162 1 these retirement functions to them to figure 2 out when the equipment fails. Those 3 retirement functions are based upon lifetime 4 estimates done for the life-cycle cost and 5 payback period analysis. 6 Again, one of the key parts of 7 this whole shipments analysis is calibrating 8 them to historical shipments. And so what we 9 do is we look at how our model is forecast in 10 historical values, that is the backcasts and 11 again we calibrate them to the historical12 shipments by in the case of refrigerator13 freezers will probably be using early 14 replacements. So by tallying up again the 15 shipments that were forecasting to new 16 construction and replacements, we compare that 17 to the historical shipments values and any 18 discrepancy we'll probably attribute to early 19 replacements. 20 Now what we're going to do and the 21 plan for the base case forecasts is to develop 22 shipments forecast for four primaryd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 163 1 categories. The first are standard size 2 refrigerator-freezers. The second is standard 3 size freezers. The third is compact 4 refrigerator-freezers and the fourth are 5 compact freezers. After we've developed the 6 base case shipments forecasts for each one of 7 these categories, we'll then disaggregate them 8 into their specific product classes. And what 9 we're hoping to obtain from stakeholders and 10 particularly the industry is product class 11 market share data so we can again disaggregate 12 these shipments in these four product 13 categories to each one of the product classes. 14 And this slide shows you the type 15 of data that we're hoping to obtain from the 16 industry. Again, the AHAM Fact Book and the 17 plant's magazine gives us historical shipments 18 data for the four primary categories here, but 19 what it doesn't give us is the product 20 shipments by product class. So again, what 21 we're looking for is again the percentage of 22 shipments that are allocated to each one ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 164 1 these product classes. 2 This is a stopping point because 3 item 91 is on here, just to note that again. 4 We're going to be looking for that type of 5 information from the industry. 6 After developing our base case 7 shipments forecast, we then develop shipments 8 for the standards case, that is the case when 9 standards are in place. And we use the exact

10 same data that we used for the base case 11 shipments forecast to estimate standards case 12 shipments forecast with the important 13 difference in that we're going to be trying to 14 take into account the purchase price increases 15 due to standards, as well as the standards 16 impact on operating cost savings, again, 17 trying to estimate how consumer purchase 18 decisions are affected when you have an 19 increase in purchase price and when you have 20 operating cost savings. 21 Now this is a fairly difficult 22 thing to do and there's not much literature ond5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 165 1 the subject of how consumers react to 2 increases in purchase prices and decreases in 3 operating costs. 4 So DOE may conduct this analysis by just using 5 scenarios, that is, estimating what would 6 happen to the shipments as a result of 7 implementing a standard. 8 Another thing that we try to9 consider as well are the impact from market10 pull programs, that is, things like tax 11 credits and Energy Star. And so we'll be 12 looking for information on market-pull 13 programs to see how they might change in the 14 future to influence standards case shipments. 15 Which leads us to the first -- 16 next request for comment in the shipments 17 analysis and item 92 speaks to, again, this 18 impact of standards on shipments. And as part 19 of the preliminary manufacture impact 20 analysis, DOE will be looking for input from 21 manufacturers on this particular topic. We'll 22 also be welcoming any input that any otherd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 166 1 stakeholders may provide. 2 And then the next item talks about 3 the information on market-pull programs that 4 we'd like to try to receive. Again, what will 5 happen in the future with things like Energy 6 Star and tax credits and how they might 7 influence future shipments of these products 8 when a standard is developed.

9 FACILITATOR BROOKMAN: So comments 10 on those two questions? 11 Yes, Ed.

12 MR. OSANN: Ed Osann. Your 13 request to comment on 93, is that in the 2014 14 and beyond time frame or is that between now

15 and 2014? 16 MR. ROSENQUIST: We'd like to try 17 to estimate what those programs would do when 18 the standard becomes effective, after it 19 becomes effective. Of course, one way of 20 doing that is to see what sort of impact 21 they're currently having, so -- 22 FACILITATOR BROOKMAN: So maybed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 167 1 there's some more generalizable information 2 starting at market-pull just for example. 3 So maybe we shouldn't have taken

4 lunch. 5 (Laughter.) 6 Just kidding. I know we needed 7 it. 8 We have two questions on the table here, 92 9 and 93. The impact of standards on shipments 10 and also market-pull programs. Thoughts on 11 those two items? 12 (No response.) 13 MR. ROSENQUIST: We'll move on 14 then to the last analysis that's conducted for 15 the ANOPR which is the national impact 16 analysis. The purpose of this analysis is to 17 estimate the national energy savings and the 18 national economic impacts that you get from 19 these particular standard levels that we'll be 20 analyzing. 21 The basic method is to calculate 22 these national energy savings on annual basisd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 168 1 on the national economic impacts on annual 2 basis over the forecast period that we'll be 3 analyzing and then accumulating that into 4 total savings and total impacts. 5 Again, we'll be using a model, a 6 spreadsheet model that as its basis will be 7 the shipments model. And again, that 8 shipments model accounts for the stock of 9 units that are coming into the housing stock, 10 again, keeping track of the vintage of that 11 stock because many of the input variables to 12 this analysis are dependent upon the age of 13 the equipment. 14 We utilize a lot of these inputs 15 from the life-cycle cost analysis, for 16 example, we take the per unit energy 17 consumption data to estimate national energy 18 savings and we take the per unit installed 19 cost and operating cost data to estimate the 20 national Net Present Value. 21 We report national energy savings 22 in quads or quadrillion BTUs and rather thand5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 169 1 calculating things at the site as is done in 2 the life-cycle cost analysis, we do things at 3 the source. That is, we take into account the 4 transmission and distribution of the 5 electricity, as well as the power plant 6 efficiency, to get the source energy 7 consumption. 8 With regard to economic impacts 9 for the Net Present Value, we do that and 10 calculate that in dollars and again, because 11 these costs are occurring over this forecast 12 period we use discount rates to bring that 13 back to a present value. 14 This is a diagram, a flow chart, 15 if you will, to demonstrate how the national 16 energy savings are determined and I'll to go 17 over this real quickly. We start with the 18 shipments analysis which gives us our base

19 case and standards case forecasts of 20 shipments. In the case of the base case 21 again, we're calculating the base case annual 22 energy consumption on an annual basis from thed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 170 1 assumed effective date of the standard, 2014, 2 all the way out 30 years to the end of the 3 forecast period. 4 Again, since our shipments model 5 keeps track of the stock in the housing stock, 6 we're able to calculate the annual energy 7 consumption due to all of the refrigerators in 8 the stock. We do that again for the base case 9 situation without standards and the standards 10 case situation with standards. 11 We then apply site-to-source 12 energy conversion factors to take that site 13 energy consumption and convert it to source 14 energy consumption. And then we cumulate the 15 energy consumption in the base case and in the 16 standards case and then taking the difference 17 gives us the national energy savings. 18 This flow chart goes over what 19 again, quickly, what we do to determine the 20 National Net Present Value and again it's 21 similar in looking to what we do with the 22 national energy savings. Again, we start withd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 171 1 the shipments analysis which gives us our base

2 case and standards case forecasts of 3 shipments. And in the case of the base case 4 what we're doing rather than calculating 5 energy consumption as we were doing for the 6 national energy savings, we're calculating the 7 energy costs, the maintenance and repair costs 8 and the equipment costs of all of the 9 refrigerators in the housing stock annually 10 from 2014, the assumed effective date of the 11 standard, all the way out for 30 years to the 12 end of the forecast period. 13 Again, we do that for both the 14 base case and the standards case, since again 15 this is a forecast or a time series of values. 16 We apply discount rates to convert that back 17 to a present value. We cumulate the energy 18 costs, maintenance, and repair costs into 19 operating costs for the base case. We do the

20 same for the standards case and we take the 21 difference between those two which gives us 22 the cumulative operating cost savings due tod5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 172 1 the standard. 2 We do the exact same thing on the 3 equipment cost which gives us a cumulative 4 total equipment cost increase, and then we 5 look at the difference between those two 6 values. If the operating cost savings are 7 greater than the equipment cost increases, 8 then we have a benefit to the nation from the 9 standard. If it's the other way around, we 10 have a burden to the nation due to the 11 standard, an economic burden. 12 Now as I told you before, many of 13 the inputs to the analysis are dependent upon 14 the efficiency of the products that we assume 15 and again, a key component to this analysis is 16 a shipment weighted efficiency of these 17 products over time. Again, as I've said 18 before, the per unit annual energy consumption 19 is a function of efficiency and it's used to 20 generate the national energy savings and the 21 retail price and per unit annual operating 22 costs are again used to develop the NPV andd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 173 1 again, both of those are dependent upon 2 efficiency. 3 Now we do have historical trends 4 of product efficiency from the AHAM fact book, 5 but it's for all refrigerator-freezers and 6 what we can do with that is looking at that 7 trend of data we can try to forecast what 8 might happen into the future. And that's what 9 we'll probably end up doing when we try to 10 estimate what happens to these shipment 11 weighted efficiencies under the base case, 12 that is the case without standards. 13 But ideally, we'd like to do this 14 on a product class level, but we're hoping to 15 get the same type of shipment weighted 16 efficiency data not only for all 17 refrigerators, but disaggregated down to a 18 product class level. 19 And that's what this slide speaks 20 to. It speaks to again the requests we're 21 going to be making to the industry for 22 shipment weighted efficiency data for as manyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 174 1 of the product classes as possible and I know 2 this is a lot of information, but again, we're 3 hoping to get as much information as 4 available.

5 FACILITATOR BROOKMAN: Debra? 6 MS. BRUNK: Debra Brunk, AHAM. 7 Really, just to reiterate a couple of comments 8 from earlier, certainly AHAM is willing to 9 provide this information, although for a 10 limited number of product classes, we cannot 11 do it for all because we do not collect 12 information for all. And also, it will be a 13 limited number of years, certainly, going back 14 to 1990 isn't going to be realistic. 15 Strictly our data that we keep 16 just day-to-day retention and all that is 17 about 2005. And in our comments, we can let 18 you know more specifically which product 19 classes we can provide you information. 20 MR. ROSENQUIST: The next slide 21 talks about how to estimate, again, how 22 standards affect these shipment weightedd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 175 1 efficiencies and we do that by looking at 2 market share efficiency data. And this is the 3 same thing as the base case efficiency 4 distributions that I was describing back in 5 the life-cycle cost analysis. And what these 6 distributions or these market share efficiency 7 data tell us is how consumers are currently 8 purchasing these products and therefore 9 yielding a distribution of product 10 efficiencies. 11 Again, this gives us insight as to 12 how possibly a standard would impact the 13 efficiency of products and in the past, DOE 14 has typically used a roll-up scenario where a 15 standard may -- when a standard is applied, 16 all the products below that standard roll up 17 to that efficiency level and all the products 18 above that efficiency level are unaffected. 19 We then recalculate then the shipment weighted 20 energy efficiency from that redone 21 distribution and then we forecast that out 22 into the future, typically, with the same sortd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 176 1 of efficiency trend that we use in the base

2 case. 3 Again, this is all important 4 because again, we use the shipment weight 5 efficiency trends, both in the base case and 6 in the standards case to estimate how these 7 different energy consumption and costs change 8 over the time period, over this forecast 9 analysis period. 10 So this slide comes back to our 11 request, again reiterating our request for 12 historical shipment weighted efficiency data 13 as well as this market share efficiency data 14 or base case efficiency distribution data. 15 And again, we're trying to get this data for 16 as many of the product classes as possible. 17 And the last item here talks about 18 just any general comments you might have on 19 this approach to calculating national impacts. 20 FACILITATOR BROOKMAN: So you can 21 see the request for comment there. 22 MR. OSANN: May I make a comment?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 177 1 FACILITATOR BROOKMAN: Please, Ed. 2 MR. OSANN: Ed Osann. This would 3 probably point to item 10-2 to observe the 4 points that were made earlier, that the 5 national impact analysis does not have 6 consideration of price mitigation effects of

7 standards and does not have -- does not 8 capture any benefits for consumers who are not 9 purchasing new refrigerators. Those would be 10 worthwhile additions. 11 FACILITATOR BROOKMAN: Thank you. 12 Other comments on these two queries? 13 MR. ROSENQUIST: Okay, that brings 14 us to the end of the analyses that are

15 conducted for the ANOPR and now we'll be 16 turning the rest of the presentation over to 17 the analyses that are conducted for the NOPR. 18 And this is a flow diagram that 19 you saw at the beginning of the day which20 outlines the steps in the standards rule21 making process and again, we're focusing here 22 on the NOPR analyses which consist ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 178 1 revisions to the ANOPR analyses based upon 2 stakeholder comment and input. Then in 3 addition to that, life-cycle cost subgroup 4 analysis, a manufacturer impact analysis, 5 utility impact analysis, employment impact 6 analysis, environmental assessment, and 7 regulatory impact analysis. 8 I'll be focusing now next on the 9 life-cycle cost subgroup analysis. 10 The main purpose of this analysis 11 is to look at particular subgroups of 12 consumers who may be disproportionately 13 impacted by a standard. And the way we do 14 that is basically using the same analytical 15 tools that we use for the general population, 16 but hone it down to only those populations 17 that could be disproportionately impacted. 18 And in the past, DOE has looked at low-income 19 consumers and senior-only households as 20 different consumer subgroups. 21 So the request here from 22 stakeholders -- I must have gone too far.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 179 1 This is not the appropriate item 2 box. It doesn't look like it at least, but 3 what it's supposed to request is any input 4 from stakeholders on particular subgroups that 5 the Department should focus in on when 6 conducting this analysis.

7 FACILITATOR BROOKMAN: And 8 particularly any that they haven't noted so

9 far. 10 MR. ROSENQUIST: Right.

11 FACILITATOR BROOKMAN: Consumer 12 subgroups. 13 MR. ROSENQUIST: Okay, with that, 14 I'm going to give the stage over here to 15 Constantin von Wentzel to talk about the 16 manufacturer impact analysis.

17 MR. von WENTZEL: Good afternoon. 18 So in the NOPR phase the manufacture impact 19 analysis focuses on the impacts on 20 manufacturers and delves into a great deal 21 more detail than it did in the preliminary

22 MIA.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 180 1 One of the tools we use for that 2 is the government regulatory impact model 3 which basically is a cash-flow model which 4 looked at the impacts that standards have on 5 manufacturers in terms of investment outlays, 6 development costs, what have you, and the best 7 ways in which manufacturers can recoup those 8 investments through higher prices or what not 9 as equipment becomes more expensive, 10 potentially. So it involves interviews with 11 manufacturers and as you will see, a great 12 deal of detail on the next slide after this

13 one. 14 So this is basically phase two and 15 three of the MIA and so we start off with a 16 straw man government regulatory impact model 17 which we present to manufacturers and 18 basically it contains manufacturer prices, 19 shipment forecasts, what not. Those are these 20 detailed spreadsheets with cost versus 21 efficiency curves and what have you and we 22 have a number of interview topics as you cand5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 181 1 see that basically center around the actual 2 implementation of standards. 3 And those obviously -- the 4 conversion costs are going to be very 5 important. The consolidation impacts on 6 employees, what have you. 7 And then in phase three, we have 8 another set of manufacturing interviews which 9 basically focus on the implementation which is 10 to say if manufacturing facilities have to be 11 retooled in order to manufacture more 12 efficient equipment, what the impacts are in 13 manufacturers and other investments they have 14 to make. And we also focus on subgroups of 15 manufacturers that might be disproportionately 16 affected because let's say they only make 17 refrigerators. That's all they do and they're 18 very focused on manufacturing refrigerators 19 and they have other competitors which are much 20 more diverse in terms of the product portfolio 21 and therefore not have the same kinds of 22 impacts facing them.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 182 1 So the cumulative regulatory 2 burden is another large topic in these 3 discussions, as you can see. There have been 4 a number of different standards have affected 5 manufacturers in the refrigeration business 6 and so this is just a quick list of them. So 7 we seek comment regarding any manufacturer 8 subgroups that you feel we should analyze 9 separately in our manufacturer impact 10 analysis. And item 12.2, what regulations 11 that we didn't cover in the previous law that 12 we should also consider in our MIA.

13 FACILITATOR BROOKMAN: As the 14 Department considers regulatory burden. 15 Additional comments or I should 16 say comments on 12.1 and 12.2?

17 Debra? 18 MS. BRUNK: Debra Brunk with AHAM. 19 All I would reiterate on item 12-2 is what we 20 had said earlier regarding some regulation, 21 would be alternative refrigerants, a new 22 climate change and then also any regulation ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 183 1 chemicals by the EPA. 2 FACILITATOR BROOKMAN: Thank you. 3 Other pending regulations that 4 people would reference here for the 5 Department?

6 Ed? 7 MR. OSANN: Ed Osann. Can anyone 8 comment on the anti-circumvention rule-making, 9 what form that's likely to take, what form 10 content timetable, anything? 11 MR. STAS: Ed Stas, DOE. I really 12 can't comment on the final form of the 13 document. It is undergoing internal review 14 within the Department so it's moving along. 15 FACILITATOR BROOKMAN: What is 16 that anti-circumvention thing? 17 MR. STAS: Rule-making that would 18 address, I guess, how manufacturers comply 19 with the test procedures. Is that the best 20 way that they're meeting the intent and spirit 21 of the procedures and not, I guess, to try to 22 eliminate loopholes is the bestd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 184 1 characterization. 2 MR. OSANN: Apologies if I missed 3 this, but has there been a draft published or 4 are we still in the predraft stage? 5 FACILITATOR BROOKMAN: Eric? 6 MR. STAS: Is it a final rule or

7 not? 8 FACILITATOR BROOKMAN: Michael

9 McCabe. 10 MR. McCABE: Michael McCabe, 11 Department of Energy. This was strictly 12 prerule status. A draft has been prepared 13 being reviewed within the Department. There 14 have been some significant discussions on it 15 and which will affect schedules at this point 16 in time. We do not have a date as to when a 17 proposed rule will be published. 18 MR. OSANN: Is it specific for 19 refrigerators, refrigerator-freezers, or is it20 more general, generally applicable to NAECA21 covered products? 22 MR. McCABE: Michael McCabe.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 185 1 Looking at general rules that would apply to 2 our products that are covered in 10 CFR part 3 430 which are the residential or consumer 4 products as well as the commercial industrial 5 products that are covered in 10 CFR part 431. 6 MR. LEWIS: Ron Lewis, DOE. 7 That's not to be confused with -- we certainly 8 would be looking at that specific to 9 refrigerators in this activity on 10 refrigerators that we're doing as well, but 11 there's a broader-scoped document that's in 12 preparation that you'll hear more about later. 13 MR. CHURCH: This is Steve Church 14 from Whirlpool. I understand you don't have 15 a specific date. Do you have a time frame? 16 Can you say a month, three months? 17 MR. McCABE: Michael McCabe. I 18 wish I could say because every time we come up 19 with a date for -- often when we come up with 20 a target date for rule-makings for one reason 21 or another we miss some. There were a number 22 of rule-makings that we have on the tabled5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 186 1 right now. We have a -- we're looking at a 2 change in Administration. We're looking at 3 budgets. We're looking at staff changes. 4 There are a variety of factors that will5 likely affect the schedules for all the rule6 makings, priorities being juggled and the 7 like. At this point, I can't come up with a 8 time frame. I'm hoping that we can address 9 the issues internally and get this thing out 10 as quickly as possible. 11 FACILITATOR BROOKMAN: Thank you, 12 Michael. 13 So are there questions or comments 14 on these two issues, manufacturer subgroups 15 and issues, regulations, issues and related to 16 cumulative regulatory burden. 17 MR. von WENTZEL: Okay, Greg, back 18 to you. 19 MR. ROSENQUIST: Okay, in the next 20 analysis is the utility impact analysis. The 21 purpose of this is to estimate the impacts of 22 standards on energy supply and suppliers. Ind5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 187 1 the case of refrigerator-freezers it would be 2 restricted to electricity suppliers.

3 The tool that DOE has used to 4 conduct this analysis is EIA's national energy 5 modeling system or NEMS. And this is used by 6 EIA to develop all the annual energy forecasts 7 that it's produced. 8 Again, like I said before, this is 9 a tool that we've used for past rule-makings, 10 maybe extending almost to 20 years. Outputs 11 of the utility analysis are to include 12 forecasts of electricity prices and sales, as 13 well as to install -- as well as install 14 generation capacity, that is, how the standard 15 affects the electricity demand for electricity 16 in the United States. 17 And the way we conduct the 18 analysis is that we'll be inputting the 19 national energy savings we get from the 20 national impact analysis into the NEMS model 21 and then compare what happens to these 22 forecasts in this standards case run asd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 188 1 compared to the reference or base case. 2 So the first comment we're looking 3 for is basically how do people feel about us 4 continuing to use the NEMS model to conduct 5 this analysis and second, whether or not there 6 are any alternatives out there for conducting 7 this analysis. 8 FACILITATOR BROOKMAN: Okay, Ed. 9 MR. OSANN: Can you describe a 10 little bit how NEMS would roll up energy 11 savings to give you a peek into savings

12 forecast? 13 MR. ROSENQUIST: Yes, one of the 14 lines in NEMS, like I said before, sales which 15 is basically terawatt-hours and then another 16 line is install generation capacity basically 17 in gigawatts. So we can determine with NEMS 18 how the installed generation capacity changes 19 on an annual basis so for every year we can 20 see how many less gigawatts are needed to 21 provide electricity to the country due to the

22 standard.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 189 1 This would be done by trial 2 standard level, so it would include -- this 3 would be for the entire product. It would 4 include all product classes. We would be 5 estimating the effect of standards for all 6 product classes.

7 FACILITATOR BROOKMAN: Other 8 comments on NEMS and other approaches, other

9 than NEMS BT? 10 MR. ROSENQUIST: Okay, our next 11 analysis is the employment impact analysis and 12 the purpose of this analysis is to assess how 13 standards impact the overall national 14 employment in the United States and just to 15 clarify, things here, when we talk about 16 employment impacts, we talk about both direct 17 and indirect impacts. The direct impacts are 18 determined in the manufacturer impact 19 analysis. These are the direct impacts to 20 manufacturers who manufacture these products. 21 The indirect employment impacts 22 are resulting from shifting consumerd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 190 1 expenditures for different types of goods and 2 services and how that ripples its way through 3 the economy and changes the way employment is 4 affected by these standards. 5 The method that DOE plans to use 6 is a tool, is by marrying this with a tool 7 called ImSET. And this is a model that's been 8 prepared the Pacific Northwest National 9 Laboratory. Prior versions of it were called 10 IMBUILD. And again, we've used this tool for 11 the last several standards rule-makings that 12 the Department has conducted. And again, this 13 is a basic input/output spreadsheet model that 14 looks at how these changes in standards affect 15 different sectors of the U.S. economy. 16 Again, we're looking for any input 17 on this approach using ImSET to estimate 18 indirect employment impacts.

19 I'll move on then to the 20 environmental impact analysis or what's also 21 called the environmental assessment and the 22 purpose of this analysis is to estimate howd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 191 1 standards will impact the airborne emissions 2 coming out of power plants that generate 3 electricity in the United States. And the 4 intention here is to use the same tool that we 5 use for the utility impact analysis, that is, 6 that's NEMS. NEMS again, in addition to 7 providing forecasts of electricity sales and 8 installed generation capacity, it also 9 provides forecasts of different airborne 10 emissions from power plants, including carbon 11 dioxide, sulphur dioxide, nitrogen oxides, and 12 mercury. 13 Again, so for carbon dioxide 14 again, NEMS can be used to assess exactly how 15 these standards are going to impact these 16 airborne emissions. And DOE is also going to 17 be considering how to monetize these emissions 18 for the analysis. For sulphur dioxide, there 19 have been caps in place that cap emissions 20 from power plants since 1993 through Clean Air

21 Act amendments. So standards won't have 22 really any measurable impact on emissions ofd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 192 1 SO2. What they do have an impact on is the 2 SO2 trading price or allowance price. So 3 that's something that could also be considered 4 in the analysis. 5 Then you have nitrogen oxides and 6 recently there's been court actions to vacate 7 what was called the Clean Air Interstate rule 8 which would have capped on nitrogen oxide 9 emissions in 28 states and the District of 10 Columbia. Now that that has been vacated, DOE 11 is looking into input as to how to address 12 nitrogen oxide emissions in this analysis. 13 And the same goes for mercury. 14 Again, there the court's vacated the clean air 15 mercury rule which would have capped mercury 16 emissions nationwide and again the Department 17 is looking for input as to how to estimate the 18 impacts of standards on these types of 19 emissions. 20 And this just goes down the list 21 of issues that DOE is looking for input on. 22 The first is any input on how to monetize CO2d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 193 1 emissions.

2 FACILITATOR BROOKMAN: And then 3 moving on from there. 4 MR. ROSENQUIST: The next is 5 again, like I mentioned, how the Clean Air 6 Interstate rule has been vacated. Any input 7 on how the Department should address nitrogen 8 oxides in this analysis and 15.3 talks about 9 the same thing but for mercury because of the 10 fact that the clean air mercury rule has been

11 vacated. 12 Next item just talks about the 13 general -- we're looking for general input 14 about using NEMS to conduct this analysis. 15 Are there any other approaches besides NEMS 16 that the Department should look into for 17 example and finally, are there any other 18 environmental factors that DOE should consider 19 besides the four types of airborne emissions 20 that were listed previously.

21 FACILITATOR BROOKMAN: So the 22 whole issue of monetization and you can seed5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 194 1 the four of them listed and the other 2 environmental factors to be considered. 3 MR. ROSENQUIST: Finally, we come 4 to the last step which is the regulatory 5 impact analysis. 6 MR. OSANN: Can I ask a question? 7 On the environmental impact analysis -- this 8 is Ed Osann. In some other rule-makings, DOE 9 has applied a discount rate to non-monetary 10 units including environmental -- including 11 emissions, I believe. Is there any intention 12 to apply a discount rate to anything other 13 than financial metrics in this rulemaking and 14 if so, what would it be?15 MR. ROSENQUIST: In the past rule16 makings, DOE used the 7 percent discount rate 17 in compliance with OMB guidelines. I don't 18 know if DOE will continue to discount physical 19 emissions for this rule-making. 20 MR. OSANN: What's the purpose of 21 the application of applying a discount rate to 22 non-monetary elements of analysis?d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 195 1 MR. ROSENQUIST: I guess I'm 2 speaking for DOE here, but it's just another 3 way to value those emissions. I mean rather 4 than using a dollar value, DOE is actually 5 applying the discount rate directly to the 6 emissions themselves. 7 MR. LEWIS: Ron Lewis, DOE. I 8 think at this point if you've got suggestions 9 or something that you want to make, we'll take 10 them, but as far as what we're going to do,11 this is the kickoff of starting this rule12 making and we're not here to dialogue what the 13 final resolution is. If you've got 14 recommendations we would be happy to receive

15 them. 16 MR. CHURCH: This is Steve Church 17 from Whirlpool. Quick question. How does 18 mercury emissions play into refrigeration

19 standards? 20 MR. ROSENQUIST: It's strictly 21 from the power plants that are generating the22 electricity for refrigerators and so coald5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 196 1 fired power plants emit mercury. 2 So the regulatory impact analysis, 3 the last analytical step and again the purpose 4 of this analysis to look at non-regulatory 5 alternatives to mandatory efficiency standards 6 and some of these non-regulatory alternatives 7 are market-pull programs like Energy Star or 8 tax credits, both manufacturer and consumer 9 test credits. And again, the idea here is to 10 try to assess what those potential national 11 energy savings and any potential financial 12 impacts to the country would be due to these 13 non-regulatory alternatives and they compare 14 them to the mandatory standards. 15 When trying to evaluate the impact 16 of these market-pull programs, we actually 17 would want to try to use recent historical 18 experiences as to what sort of effect these 19 different regulatory, non-regulatory 20 alternatives could have on the market. 21 And that's it for the NOPR 22 analyses.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 197 1 FACILITATOR BROOKMAN: So then 2 this is another opportunity for any of you 3 that wishes to make additional comments, final 4 comments, raise other issues for the 5 Department's consideration and want to provide 6 that opportunity now.

7 Debra. 8 MS. BRUNK: Debra Bruck with AHAM. 9 First of all, I want to thank the Department 10 of Energy for the opportunity to present 11 comments here today and for the work of 12 Navigant Consulting with putting all this 13 together and the work that they will be doing. 14 We have just a couple of comments. 15 I think in general we're a little bit 16 concerned with how late this has come out and 17 just from an industry standpoint I want to 18 make sure that we recognize that there's a lot 19 of work here and I think it's good work and 20 it's all things that need to be looked at to 21 ensure that this rule-making is thorough as 22 possible. We will provide as much informationd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 198 1 as we can certainly, but we do just want to 2 make sure that we do follow the process as 3 much as possible, recognizing that there are 4 multiple rule-makings ongoing and that kind of 5 thing. 6 I think the other thing that we 7 would very much appreciate, I think all of us 8 are in the same boat on this, but once we do 9 have some idea I think of what DOE's schedule 10 is on this rule-making and others, because 11 there's so much going on, I think if we could 12 get a sense of that, that would be very 13 helpful. 14 Thank you. 15 FACILITATOR BROOKMAN: Thank you. 16 Other comments? Closing remarks? 17 Ed, please. 18 MR. OSANN: Ed Osann. I think 19 this is close to what AHAM was moving to. We 20 had several ASAP partners who were not able to 21 attend this workshop because of the lateness 22 of the announcement relative to the meetingd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 199 1 date. Barely two weeks as I recall, which is 2 difficult for some people, particularly, 3 people who are public employees to make 4 arrangements for travel. 5 We certainly don't want to hold up 6 compliance with any of the mandatory 7 deadlines, but there really does need to be 8 better advanced notice of public meetings. 9 FACILITATOR BROOKMAN: Thank you. 10 Other closing remarks or issues people wish to 11 raise? 12 So then from my perspective, I'm 13 going to turn it back to Ron Lewis and in your 14 stack of papers, there's an evaluation form. 15 Please take the time to fill it out. The 16 Department tries very hard to do their best 17 for these meetings so that we can continue to 18 improve them. 19 Ron Lewis. 20 MR. LEWIS: Just a couple of 21 responses to the last comments here. One is 22 we apologize for short notice. It certainlyd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 200 1 is not our preference to give short notice.

2 There are an awful lot of documents and we're 3 the technical program that does the analysis 4 and so much used to -- did come through the 5 Federal Register process and give you the 6 notice. It's a huge task to try to get all 7 these fit in and available and we're not 8 trying to by any means give you short notice. 9 We're trying to get them done in the time that 10 we've allowed this particular rule-making as 11 a statutory time that Congress gave us. That 12 is not what we would have chosen ourselves. 13 It's being worked in with many, many other 14 rule-makings that are going on simultaneously. 15 So the schedule, the one thing 16 that is set that we need to comply with is 17 December 31, 2010 is the time it has to hatch 18 as being the final rule and the time to get 19 input, the reason we have these framework 20 document meetings is that's the starter's gun 21 saying okay, we're ready, here are our 22 thoughts here's what we've got already thatd5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 201 1 we've collected from our standpoint to frame 2 this out and scope it out. We've got a very 3 limited amount of time to do this. 4 And in that regard, in putting 5 this together, just in the time since we put 6 it together, there's discussions under way and 7 unfortunately I didn't catch it in these 8 slides in advance, but the discussion about an 9 ANOPR, even looking at if there's not a more 10 streamline version of having interaction, 11 getting the input, having the dialogue with 12 stakeholders, with something other than an 13 ANOPR in the process. 14 We've got such a limited amount of 15 time. We've got numerous requests for adding 16 additional analyses, doing all kinds of other 17 considerations, adding new product classes, 18 trying to get that all done is extremely 19 difficult, so we're working hard. I guarantee 20 you that. We're giving you as much notice as 21 we could possibly work out with getting this 22 out of the process and getting it published.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 202 1 We really appreciate your being 2 here today and we appreciate all the input and 3 the sense of urgency. Everybody has got an 4 input of get it done quicker, get everything 5 done, give us as much advance notice. Well, 6 on the same thought pattern we need time too. 7 So if you've got input, you've got data. We 8 sure could use it real quick. There's barely 9 enough time to do it once without having to go 10 back and redo it. So we really appreciate 11 your consideration there too on the sense of 12 urgency and this is the starting point. It's 13 taken us a while to get together this so we 14 could call this meeting and have everybody 15 come in. We've got a long way to go before 16 it's a final rule. This is an important and 17 a complex rule-making and we need your input 18 to get it right. We want to make sure we give 19 it full consideration, all the issues at hand. 20 So please get those in your comments and be -- 21 just consider the time that we've got to get 22 it done as well.d5054fbc-10e2-4344-a54b-6e8cef178ef5 202-234-4433 Neal R. Gross and Co., Inc. 

### Page 203 1 Thanks for being here and stay 2 tuned because we've got a lot of these 3 meetings going on. We had commercial 4 refrigeration last week. We've got this one. 5 We've got a whole schedule of these popping 6 up. So we hope to see you at the next one. 7 (Whereupon, at 2:19 p.m., the 8 meeting was concluded.)

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