# Date: April 13, 2015

**Case:** The Energy Conservation Standards for Residential Furnaces

Ace-Federal Reporters, Inc. Phone: 202-347-3700 Fax: 202-737-3638 Email: info@acefederal.com Internet: www.acefederal.comThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## U.S. DEPARTMENT OF ENERGY PUBLIC MEETING THE ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL FURNACES

U.S. Department of Energy 1000 Independence Ave. SW Washington, DC 20585 Room No. 8E-089

April 13, 2015

9:00 A.M.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## Appearances for Department of Energy Meeting 2 3 

## John Cymbalsky, DOE 4 

## Ashley Armstrong, DOE 5 

## Dan Cohen, DOE 6 

## Eric Stas, DOE 7 

## Francine Pinto, DOE 8 

## Johanna Hariharan, DOE 9 

## Doug Brookman, Public Solutions, -- Moderator 10 

## Donald M. Brundage, Southern Company 11 

## Adam Darlington, Navigant 12 

## Andrew deLaski, ASAP 13 

## S. Craig Drumheller, NAHB 14 

## Rachel Feinstein, HPBA 15 

## Victor Franco, Lawrence Berkeley National Laboratory 16 

## John Hodges, Wiley Rein 17 

## Daniel Lapato, American Public Gas Association 18 

## Michael J. McCabe 19 

## Samuel McClive, Navigant 20 

## Charles McCrudden, ACCA 21 

## Michael Rivest, Navigant 22 

## Steven J. Rosenstock, Edison Electric InstituteThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## APPEARANCES (CONTINUED:) 2 3 

## Aniruddh Roy, Goodman 4 

## Dave Schryver, American Public Gas Association 5 

## Caroline Davidson-Hood, AHRI 6 

## Frank Stanonik, AHRI 7 

## Kathryn Clay, American Gas Association 8 

## Mark Krebs, LACLEDE Group 9 

## Jim Moore, LaClede Gas 10 

## Christopher Lau, Navigant 11 

## Everett Shorey, Shorey Consulting, Inc. 12 

## Gregory J. Stunder, Philadelphia Gas Works 13 

## Constantin Von Wentzel, Navigant 14 

## Dave Winningham, Allied Air Enterprises 15 

## Alex Lekov, Lawrence Berkeley National Laboratory 16 

## Larry Dale, Lawrence Berkeley National Laboratory 17 18 19 20 21 22The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## P R O C E E D I N G S 2 

## (9:30 a.m.) 3 

## MR. BROOKMAN: Good morning, everyone. 4 

## Welcome. This is a continuation of the Energy 5 

## Conservation Standards Notice of Proposed Rulemaking 6 

## meeting for furnaces. Today is April 13, 2015, here 7 

## in the Forrestal Building in Washington, D.C. 8 

## My name is Doug Brookman, Public Solutions 9 

## Baltimore. We started this meeting on March 27th, 10 

## 2015. We got through a great deal of material. We 11 

## had a lot of very positive and useful commentary, so 12 

## we didn't complete it all on that date, and that's 13 

## the reason we're here today. 14 

## We're going to start with welcoming 15 

## remarks and perhaps some overview from John 16 

## Cymbalsky. 17 

## MR. CYMBALSKY: Welcome back everybody to 18 

## finish our meeting here on non-weatherized and mobile 19 

## home gas furnaces. 20 

## We are going to pick up -- you see the 21 

## slide up there -- we are going to pick up back where 22 

## we left off with the life-cycle cost subgroupThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### analysis, and we're going to take a little deeper dive 2 

### into this as we start the meeting. But we're going 3 

### to go around and do introductions. 4 

### MR. BROOKMAN: Yes. 5 

### MR. CYMBALSKY: So, I'm John Cymbalsky, 6 

### program manager for Appliance Standards. 7 

### (Introductions were made.) 8 

### MR. BROOKMAN: Okay. Thank you. And 9 

### thanks to all of you for being here this morning. 10 

### Nice to see you. Apologies to those of you joining 11 

### us online; there was a little bit of technical difficulty 12 

### getting going here this morning. 13 

### Just to be clear, at our last meeting, we 14 

### got through a lot of material. If you look at the 15 

### agenda and your slides, we went through the overview. 16 

### We talked about scope and the engineering analysis. We 17 

### covered the life-cycle cost analysis. We were on subgroup 18 

### analysis when we stopped, and that's where we will 19 

### resume today. 20 

### Following the subgroup analysis, we will 21 

### *go directly into shipments model, NIA National Impact 22 

### Analysis, RIA Regulatory Impact Analysis, and thenThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### discuss the MIA Manufacturer Impact Analysis, and then as we 2 

### move towards the end of this meeting, environmental, 3 

### employment and additional research/side research. An 4 

### opportunity,again, at the end of this meeting for anybody 5 

### that wishes to raise additional issues, supplemental 6 

### issues, issues that you don't think have been covered 7 

### sufficiently for this important meeting. 8 

### I'd ask for your consideration to please speak 9 

### one at a time. If everyone can make sure their 10 

### phones are muted right now, please take a peak and 11 

### make sure the little green light is not illuminated 12 

### so that we don't have any feedback in the room. 13 

### And those of you that are joining us via 14 

### the web, welcome. We hope to have you participate in 15 

### this meeting as best we can. If using the software 16 

### provided, if you raise your hand to speak, we will 17 

### unmute you in the room, and we should be able to hear 18 

### you, and you can chime in. 19 

### I'd also ask, as there will be a complete 20 

### record of this meeting and a transcript available, 21 

### please say your name each time you speak, and you can 22 

### get used to turning these microphones both on andThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## off. 2 

## And I think that's the bulk of the 3 

## preliminary stuff. John Cymbalsky. 4 

## MR. CYMBALSKY: Thank you, Doug. And this 5 

## is John Cymbalsky again from DOE. 6 

## So up here, we have the slide we kind of 7 

## ended with last time which showed the subgroup 8 

## analysis for this rulemaking. And as you can see 9 

## here, what we presented a couple weeks back was that 10 

## the low-income subgroup would relatively not win as 11 

## much as the general population. So over the past few 12 

## weeks, we've actually dug deeper into the theory 13 

## behind the economic -- the economic theory behind say 14 

## rental markets, things like that. How people pay for 15 

## the equipment that are low income, how renters versus 16 

## home owners pay for equipment and receive the benefit 17 

## long-term over their energy bills. So, based on that, 18 

## we're going to probably rethink the numbers that you 19 

## see here because I think there's a competing theory 20 

## that would suggest low-income people actually would 21 

## do better than the general population. And so today 22 

## what I've done, I've handed out some additionalThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## slides we'll put in the docket later, but we're going 2 

## to go through this. And I've asked Dr. Larry Dale 3 

## from Lawrence Berkeley National Lab to kind of walk 4 

## through the economic theory behind sort of the split 5 

## incentive theory, the theory behind rental markets, 6 

## and why actually we think low-income consumers could 7 

## be made better off through this regulation. 8 

## So I'll ask Larry to come up to the 9 

## podium, and Emily, if she could put the other slide 10 

## deck up that we loaded this morning. 11 

## MR. BROOKMAN: Do you have a 12 

## question/comment here, Mark? 13 

## MR. KREBS: Well, you had mentioned if 14 

## anybody wanted to make opening statements and then we 15 

## just got right into the meeting. 16 

## MR. BROOKMAN: We already made opening 17 

## statements at our last meeting and there will be an 18 

## opportunity at the end of this meeting to make any 19 

## remarks that you wish to make. 20 

## So these are the new slides; correct? 21 

## DR. DALE: Yes. 22 

## MR. BROOKMAN: And Larry can advance them?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## DR. DALE: Yes. 2 

## (Pause.) 3 

## DR. DALE: Can you all hear me? 4 

## Can you hear me? 5 

## So I want to talk about the impacts of 6 

## efficiency standards on low-income households. And I 7 

## spent the last week thinking about this issue, 8 

## talking with experts at U.C. Berkeley and have put 9 

## together these slides trying to illustrate what I 10 

## think is the key part of the problem. 11 

## Currently, as you saw from the last slide, 12 

## DOE treats low-income consumers pretty much like 13 

## everyone else, discount rates differ a little bit. 14 

## But the main point is, they're treated like a typical 15 

## household, whereas most low-income households are 16 

## living in apartments or they don't own their 17 

## households, so they may pay the energy bills, but 18 

## they don't buy the more-efficient equipment. 19 

## So right from the start, you can see 20 

## there's a possibility that if they're not buying the 21 

## equipment, nothing happens. Then they would get the 22 

## advantage of lower energy bills, but they're notThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## having to pay the higher costs of more-efficient 2 

## equipment. So that's really maybe the key point to 3 

## keep in mind. 4 

## What economists like myself will tell you 5 

## is that things will start changing from that point. 6 

## There's a possibility that some households with lower 7 

## energy bills will be more attractive to renters, so 8 

## the demand for those households, for those apartments, 9 

## would rise, and that could increase the rent. That 10 

## would be one way that low-income households living in 11 

## apartments might face a higher cost from standards. 12 

## But in fact, anybody who has looked for apartments 13 

## knows you almost never check energy bills when you're 14 

## looking for apartments. All you really see as you're 15 

## going from apartment to apartment, is what the rent is 16 

## going to be. 17 

## Low-income households, high-income 18 

## households that are renting, they all pretty much do 19 

## the same thing; they're not aware of potential energy 20 

## savings, and so it's not reflected in higher rents. 21 

## The other possibility is landlords who 22 

## have to buy the more-efficient equipment that costs aThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## little more are going to try to raise the rents. And 2 

## that is a real possibility. They will try to do that, 3 

## but as I will try to show in these three slides, 4 

## that's fairly difficult to do, or it's constrained at 5 

## any rate by the slopes of the demand and supply 6 

## curve. 7 

## So here from the slide you see, I'm saying 8 

## renters are unaware of energy savings. And actually, 9 

## a recent study by somebody funded by the Resources 10 

## for the Future group and work under the direction of 11 

## Severn Bornstein at U.C. Berkeley, they've done a very 12 

## clever study and actually showed, in fact it's true, 13 

## even though this seems like intuition, it is in fact 14 

## backed up by the data. Renters are not aware of 15 

## energy savings. So renters don't raise rents in 16 

## apartments just because the apartments have lower 17 

## energy bills. 18 

## Landlords are aware of higher energy 19 

## costs. This is also apparently the case, and while 20 

## they pay the higher cost of equipment, and they will 21 

## attempt to raise rates, standard economic theory is 22 

## going to suggest they're going to have a lot ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## trouble doing this in the few apartments every year 2 

## that are buying more-efficient equipment. 3 

## The implications from these findings are: 4 

## tenants benefit from lower energy bills; rent 5 

## increases may not, and I would say almost certainly 6 

## do not, cover the higher equipment costs. So overall, 7 

## tenants (meaning largely low-income households in 8 

## this case, or rather the other way around, low-income 9 

## households that are largely tenants) are probably 10 

## better off than suggested by our LCC analysis. 11 

## Sorry to bore you early in the morning 12 

## with the supply and demand curve, but this is from 13 

## your ECON 101, you might remember. This is sort of a 14 

## typical analysis showing what happens when, in this 15 

## case, the supply curve costs go up because it's now 16 

## more expensive to provide an apartment because you 17 

## have to buy more-efficient equipment and that costs 18 

## something more. You can see the supply curve 19 

## dropping from the dash line S-1 to the solid line S-2 20 

## which is S-1 plus the higher equipment costs. 21 

## The intersection of demand and supply is 22 

## giving you the price. This line is showing you theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## higher cost of the equipment, but you can see between 2 

## the two dotted lines the actual price. In this case, 3 

## the rent for the apartment is going up much less than 4 

## the increase in the apartment cost. 5 

## So the point of all this is that landlords 6 

## are going to be constrained by how much they raise 7 

## rents. And in general, they can't raise rents as much 8 

## as the increase in equipment costs. They are 9 

## particularly constrained in urban areas where the 10 

## demand curve is going to be fairly elastic because 11 

## we're talking about relatively few households at any 12 

## one time, and the supply curve is relatively 13 

## inelastic. Hence urban areas, even though rents may 14 

## go down or the ability to capture rents may go down, 15 

## it's very hard to take apartments off the market or 16 

## increase apartments in the market. So the price is 17 

## constrained that way. In that case, the increase in 18 

## rents that would accompany a rise in costs would be 19 

## much less than the rise in costs. 20 

## Here's a few statistics. Low-income 21 

## households, about 60 percent of them, are in public 22 

## housing or renting. Their incomes are lower than forThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## typical owners. And here's a summary of the impacts 2 

## of what I've just been talking about. Impacts on 3 

## energy bill, the tenants get the full savings of the 4 

## lower-cost energy bills. The impact of the first 5 

## cost, the increased cost of the equipment. It's 6 

## going to be a partial increase for public housing and 7 

## renters and a full increase for owners. 8 

## So in sum, for most of the low-income 9 

## households, we think the LCC analysis is 10 

## underestimating benefits of standards, whereas for 11 

## owners, which is a smaller part of the low-income 12 

## population, it's probably getting it about right. So 13 

## those are the slides I have to describe. Do I stand 14 

## up here for questions? I'm not quite sure. 15 

## MR. BROOKMAN: Stay right there. 16 

## Steve Rosenstock. Let me ask you, 17 

## apparently the polygon system is working well, so 18 

## every time you shuffle papers or click your pen, 19 

## everybody on line can hear it. So if we can be as 20 

## quiet as possible. Steve Rosenstock. 21 

## MR. ROSENSTOCK: Steve Rosenstock, Edison 22 

## Institute. Quick question. On the first slide, youThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### talked about assumptions -- renters aware of energy 2 

### savings. If they're paying their bill, they're 3 

### paying their electric and gas bills, right? 4 

### DR. DALE: Yeah, that's right. 5 

### MR. ROSENSTOCK: So why wouldn't they be 6 

### aware of their energy savings? 7 

### DR. DALE: Well, they will after they get 8 

### the apartment, but the determination of rent is 9 

### right when they get the apartment. 10 

### MR. ROSENSTOCK: It's also a year after. 11 

### It's every year afterwards when there's a rent 12 

### increase, correct? 13 

### DR. DALE: It can be. It's true. 14 

### MR. ROSENSTOCK: Right. And was that 15 

### accounted for? 16 

### DR. DALE: It is. In the study I'm 17 

### referencing at the bottom here, this Erica Meyers 18 

### study -- 19 

### MR. ROSENSTOCK: Right. Yeah, that none of us has 20 

### seen 21 

### until today. 22 

### DR. DALE: Yeah, I know, I'm sorry. It isThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## certainly accounted for, but it is also the case, and 2 

## it's a much lower impact. 3 

## MR. ROSENSTOCK: Okay. And the question 4 

## also I have is, in many areas, haven't rents been 5 

## faster than the rate of inflation, rental increases 6 

## in apartments? 7 

## DR. DALE: Where housing is tight, rents 8 

## are going up. I actually can't tell you what's going 9 

## on inside of inner-cities, but I don't think that's 10 

## the case in much of the northeast, which is the reason 11 

## we're talking about it. 12 

## MR. ROSENSTOCK: And I remember you saying 13 

## you talked to experts at University of California 14 

## Berkeley. 15 

## DR. DALE: Yes. 16 

## MR. ROSENSTOCK: Did you talk to experts 17 

## at the Apartment Owners and Building Association or 18 

## National Multi-Housing Council for this study? 19 

## DR. DALE: I have not. 20 

## MR. ROSENSTOCK: Okay. Thank you. 21 

## MR. BROOKMAN: Yes, please, Catherine? 22 

## MS. CLAY: Good morning, thanks for theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## presentation. I did have a couple of questions. 2 

## First of all, so in this new analysis, are you 3 

## assuming that in every case that the landlord would 4 

## actually put in the more-energy-efficient appliances, 5 

## more-energy-efficient furnace? 6 

## So what I'm getting at is, in some cases, 7 

## it's physically impossible or at least because of 8 

## code restrictions or the like, to put in the more9 

## efficient condensing furnace. So in those cases 10 

## where the alternative would be to put in a less11 

## efficient alternative, does that -- was that captured 12 

## in this at all? 13 

## DR. DALE: Yeah, I should be a little 14 

## clearer. This is not really a study of the situation 15 

## at hand. This is a study of how of information 16 

## available to tenants and landlords and what the 17 

## impacts will be of changes in energy bills and energy 18 

## costs on rents and how rapidly they're passed 19 

## through. 20 

## The question you're asking is, I think, 21 

## how -- is in fact the cost of equipment higher in 22 

## apartments or the cost of maintenance higher inThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## apartments or in typical households? 2 

## MS. CLAY: No. 3 

## DR. DALE: So that that -- I'm sorry. 4 

## MS. CLAY: No. No, no, no. The problem 5 

## is that with condensing furnaces, you may not be able 6 

## to actually put in the more-energy-efficient option. 7 

## DR. DALE: Oh, I see, it may not happen at 8 

## all? 9 

## MS. CLAY: It may not happen. 10 

## DR. DALE: As I said, I haven't -- this is 11 

## not something that -- 12 

## MS. CLAY: No, no. You could actually 13 

## push people towards choices that are less energy 14 

## efficient. 15 

## MR. CYMBALSKY: This is John from DOE. 16 

## Let me jump in here. So what Catherine is asking 17 

## about is more like a fuel switching scenario. So all 18 

## this is saying here is that if a condensing furnace 19 

## is installed in an apartment which will be required 20 

## upon replacement sometime in the future if the 21 

## standard goes into effect, what we're saying is we 22 

## think the low-income people will possibly be madeThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## better off based on this. Whether or not they switch 2 

## to a pump or no an electric furnace is a different 3 

## case. 4 

## MR. BROOKMAN: Dave. 5 

## MR. WOOD: This is Dave Wood, Allied. And 6 

## maybe this is getting a little bit too far into the 7 

## weeds, but was the cost to convert the venting 8 

## systems and drains considered as part of this? 9 

## MR. CYMBALSKY: Yes, that's all in the 10 

## life-cycle cost analysis that we presented at the last 11 

## meeting. 12 

## MS. CLAY: I just want to -- 13 

## MR. BROOKMAN: Catherine follow on, yes. 14 

## MS. CLAY: I just want to follow up. I 15 

## guess I'm also just confused about the purpose of 16 

## this that's being presented. Is this going to mean 17 

## that DOE is going to amend its technical support 18 

## document? Are you pointing out that some of the 19 

## figures in the TSD are somewhat arbitrary? 20 

## MR. CYMBALSKY: That remains to be seen. 21 

## But basically, we are presenting some information that 22 

## we think is relevant to the low-income subgroupThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## analysis, and we're still looking at it. We're 2 

## presenting ideas here for comment. 3 

## MR. BROOKMAN: Aniruddh. 4 

## MR. ROY: So to Catherine's point, when 5 

## there is fuel switching, let's say that occurs, if a 6 

## landlord chooses a fuel switching option that is less 7 

## efficient compared to a furnace, that analysis then 8 

## would impact adversely the low-income housing 9 

## subgroup, right? Because the decision is ultimately 10 

## the landlord's. 11 

## MR. BROOKMAN: Steve Rosenstock? 12 

## MR. ROSENSTOCK: Steve Rosenstock, EEI. 13 

## The other option for the landlord is to keep 14 

## repairing that thing as long as possible and never 15 

## replace, correct? 16 

## And that's a lowest-cost option to the 17 

## landlord and so -- 18 

## MR. CYMBALSKY: So no impact to the 19 

## consumer from the standard. 20 

## MR. ROSENSTOCK: Well -- 21 

## MR. CYMBALSKY: Because they're using the 22 

## same exact furnace they had.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. ROSENSTOCK: Yeah, but there might be 2 

### an efficiency degradation with that same piece of 3 

### equipment. 4 

### MR. CYMBALSKY: Well, how could that be? 5 

### MR. ROSENSTOCK: Some pieces of equipment, 6 

### they start out at 80 percent of efficiency. Over 7 

### time, for whatever reason, even though they're 8 

### maintained, there might be a slight degradation -- 9 

### MR. CYMBALSKY: They're repaired and that makes 10 

### it less efficient, is that what you're saying? 11 

### MR. ROSENSTOCK: Yes. Just over time. 12 

### MR. CYMBALSKY: Okay. 13 

### MR. ROSENSTOCK: Sometimes that happens 14 

### over pieces of equipment. So as a result of the 15 

### standard, the landlord -- 16 

### (Simultaneous conversation.) 17 

### MR. CYMBALSKY: We have a lot of 18 

### manufacturers in the room that can talk to how their 19 

### equipment degrades over time. 20 

### Okay. 21 

### MR. ROSENSTOCK: I'm saying, well past the 22 

### normal life.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. KREBS: Mark Krebs, Laclede Group. For 2 

### the speaker, this paper at the bottom -- 3 

### MR. BROOKMAN: Is your microphone on? 4 

### MR. KREBS: This paper at the bottom, this 5 

### is something that you relied on in coming up with the 6 

### TSD? 7 

### PARTICIPANT: No. 8 

### MR. KREBS: Not at all. Okay. We have 9 

### yet to -- you know, if it were, I guess I'd say we 10 

### need a hyperlink and this needs to be vetted in order 11 

### to discuss it further. 12 

### MR. BROOKMAN: Ashley Armstrong? 13 

### MS. ARMSTRONG: This is Ashley from DOE. 14 

### I think what we're doing here is . . . for the last public 15 

### meeting, we presented our analysis for the LCC 16 

### subgroup, and there are several commenters that raised 17 

### some questions or extra, I would say, considerations 18 

### with regards to the LCC subgroup throughout the day. 19 

### So one of the things we were trying to do, and the 20 

### Department is trying to be pretty responsive in 21 

### saying, well, here are some ideas. This is an 22 

### economic theory that's out there. There are someThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## studies. It was not considered in our analysis, but 2 

## what do you guys think about it. And if we were to 3 

## consider it, this is what we think the impact would 4 

## be on the LCC subgroup analysis. So it's just extra 5 

## information. We're going to put it in the TSD. The 6 

## link is going to be in the TSD, in case you want to 7 

## review it, but that's the purpose. 8 

## MR. KREBS: And it makes it hard to 9 

## discuss it, you know, when it's just been dropped on 10 

## us. 11 

## DR. DALE: I'll just jump in for a second 12 

## though. I think although that's true, you haven't 13 

## seen the study, the study is really just supporting 14 

## what I think has been sort of common assumptions in a 15 

## lot of papers that have been written for a long time. 16 

## This paper is just supporting some of those 17 

## assumptions that have been made in the past. 18 

## MR. BROOKMAN: Hang on, Steve. Don 19 

## Brundage, did you wish to comment? 20 

## MR. BRUNDAGE: Don Brundage, Southern 21 

## Company. The Department has made similar studies 22 

## like this in the past related to the impact ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### renters, and they always choose these short-term 2 

### impacts at the time of the implementation of the new 3 

### standard. You're not going to permanently extract 4 

### economic rent from landlords from now until the end 5 

### of time. There will be a lag, but eventually rents 6 

### will keep up. You will not be able to permanently 7 

### reduce the rate of return for landlords, or there will 8 

### be fewer landlords, and that will balance out. 9 

### My point is that these are short-term 10 

### effects. Long-term effect: rents will balance, and the 11 

### proper way to approach it is to not look at whose 12 

### winners and losers of parties, but look at the 13 

### societal impact as you do with other things. 14 

### In the end, long-term, the renters are 15 

### going to be experiencing the same economics as non-renters. 16 

### Thank you. 17 

### MR. BROOKMAN: Thank you. Do you wish to 18 

### comment? Maybe you could just get close. 19 

### MR. DRUMHELLER: Craig Drumheller, National 20 

### Association of Home Builders. There's a couple 21 

### problems that I have with this that Don kind of 22 

### touched on a little bit. One is, you're saying thatThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### the renters are going to save money, but it's going 2 

### to be free to them, right? There's no impact to 3 

### them. And so what happens is that, if they can't 4 

### raise their rates, then the value of the rental 5 

### properties go down because they don't get the return 6 

### on investment that they expect to get. 7 

### And then to take that even further, now 8 

### when they're going to do an analysis -- when you 9 

### build apartments, it's a financial decision, it's a 10 

### business decision, can I get return on this money? 11 

### If I can't, I'm an investor. I'm not a rental person 12 

### per se, I can go invest in the stock market. I can go 13 

### do whatever. I don't necessarily have to be in the 14 

### housing industry. So they're not going to build new 15 

### units, and go back to your supply and demand. Now, 16 

### they're not keeping up with supply. The demand is 17 

### going to go up. Rents go up, and we haven't saved any 18 

### energy, so you have to be really careful when you do 19 

### this. 20 

### I'm not an economist, but I've been 21 

### involved in these types of discussions in the past. 22 

### So I think this is a very one-sided, very short-sightedThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## approach. So I'd be careful to try to play this up 2 

## too much. 3 

## DR. DALE: Thanks. 4 

## MR. CYMBALSKY: Can I comment? 5 

## MR. BROOKMAN: Please do. 6 

## MR. CYMBALSKY: Well, there's a couple 7 

## thoughts about that. One is, it's true, we're not 8 

## talking about what happens to landlords, and it's 9 

## reciprocal. The tenants are better off and the 10 

## landlords are a little worse off, equally worse off. 11 

## But these supply and demand curves that I've shown 12 

## here, these are actually drawn reflecting long-term 13 

## demand and supply elasticities in the literature. 14 

## And it's very hard to come up with supply and demand 15 

## curves that are relevant here that would suggest 16 

## landlords are going to be able to raise the rent as 17 

## much as the cost of the equipment. And then if most 18 

## low-income renters are in inner cities, then the 19 

## supply curves are even more elastic than usual, and so 20 

## it would be yet harder than is suggested here with 21 

## this set of supply and demand curves. 22 

## MR. BROOKMAN: Frank Stanonick.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. STANONICK: Frank Stanonick, AHRI. A 2 

## couple things. First of all, we're talking about 3 

## low-income consumers, and maybe I'm the only one that 4 

## sees things so black and white here, but, this is an 5 

## efficiency standard addressing furnaces, the 6 

## manufacturing of furnaces, okay? And so the consumer 7 

## is the purchaser of the product being regulated. And 8 

## yet we're talking about a situation where the 9 

## purchaser of the equipment -- we're doing a life-cycle 10 

## analysis or life-cycle cost analysis where the 11 

## purchaser of the equipment is potentially getting no 12 

## benefit, and we're looking at the benefit to someone 13 

## who didn't buy the equipment. I'm just a little 14 

## concerned we've kind of distorted what life-cycle cost 15 

## analysis is supposed to be in this TSD. I mean, I 16 

## recognize that is an issue of the people who can 17 

## least afford high energy bills end up having high 18 

## energy bills. I don't want to be unsympathetic to 19 

## that. But more to the point really is, okay, so what 20 

## percentage -- we had an idea of what percentage of 21 

## low-income consumers are renters, and then what's the 22 

## numbers -- what percentage of those renters pay theirThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## utility bill as opposed to having it included in the 2 

## rent. 3 

## MR. BROOKMAN: John Cymbalsky. 4 

## MR. CYMBALSKY: So, John from DOE. Sorry, 5 

## Victor can chime in with the numbers, but back to the 6 

## original thought. I agree with that, but at the last 7 

## meeting, as Ashley mentioned, there was a lot of 8 

## concern, and we had a statement right at the beginning 9 

## about the impact on low-income consumers. We all 10 

## know, and you just stated so eloquently that 11 

## low-income consumers' energy bills are a larger 12 

## proportion of their monthly income than the general 13 

## population. And so if we can connect the dot that 14 

## these particular people will actually save money on a 15 

## monthly basis, that has a multiplier effect on their 16 

## monthly income relative to the general population 17 

## because there percentage of their monthly income is 18 

## bigger for energy bills than it is for the general 19 

## population. So this is the theory we're putting out 20 

## there for comment, and so before anyone else chimes 21 

## in, Victor, please with the statistics. 22 

## MR. FRANCO: So let me give you a littleThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## bit of statistics. So about 20 percent are in -- 2 

## this is non-weatherized gas furnaces in RECS, 3 

## people having non-weatherized gas furnaces where 4 

## they're living at. 20 percent are in public housing; 5 

## about 40 percent are in other rental situations, so 6 

## that's about 60 percent are rental. Of those in the 7 

## public housing fraction, 40 percent pay for their 8 

## bills; 60 percent don't; and the rental is about 20 9 

## percent don't pay their bills, 80 percent pay their 10 

## bills of the rental fraction. 11 

## MR. CYMBALSKY: So let me see if I can 12 

## clear this up. So 80 percent of people in non-public 13 

## housing which represents 40 percent pay for their 14 

## energy bills; 20 percent do not. In public housing, 15 

## which is 20 percent, 60 percent do not pay their 16 

## energy bills. 17 

## MR. BROOKMAN: I didn't know that. Find a 18 

## microphone and speak right into it. 19 

## MR. SHOREY: This may have been answered 20 

## the last time. When you did the life-cycle costs, did 21 

## you stratify the sample on installation costs 22 

## relative to -- okay, I'm seeing an answer.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### 1 

## MR. BROOKMAN: And your name again? 2 

## MR. SHOREY: Everett Shorey. 3 

## MR. BROOKMAN: Thank you. 4 

## MR. ROSENSTOCK: Steve Rosenstock. Thank 5 

## you for those numbers. So again, because you were 6 

## reading really fast, okay, 20 percent are in public 7 

## housing; 40 percent in other rentals, so they could 8 

## be single-family homes or townhouses or something 9 

## like that where they're renting a non-apartment and 10 

## the other 40 percent are where? 11 

## MR. FRANCO: The other 40 percent are 12 

## owners. 13 

## So owners of single-family mostly, but 14 

## they could be multi-family situations. 15 

## MR. ROSENSTOCK: So in terms of the 16 

## technical support document, and they all say "see 17 

## slide" that was just up on slide 83, for those 40 18 

## percent that are owners, nothing should change, 19 

## correct? 20 

## (No audible response.) 21 

## MR. ROSENSTOCK: Okay. So that's one 22 

## thing in terms of the slides. So these numbers,The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### again, don't change, and you're seeing the 8.3 to 11.7 2 

### year payback depending on what you're assuming here. 3 

### The ones that are paying -- okay, the ones that are 4 

### other rental, if they're in single-family homes, as 5 

### someone who was -- whoops, sorry. Yeah, okay, as a 6 

### former renter in a single-family home, I do remember 7 

### that we were responsible for all the energy bills, and 8 

### we were responsible for maintenance, and for certain 9 

### appliances. If something happened to that appliance, we 10 

### were responsible for replacing the appliance. 11 

### Now, granted, it didn't cover heating or 12 

### cooling, or water heating, but everything else. And 13 

### in a lot of the cases, there might be situations where 14 

### they're responsible for the maintenance. So if 15 

### there's increased maintenance costs, the renter is 16 

### going to be responsible for it too. Was that 17 

### accounted for in this study? 18 

### MR. BROOKMAN: So we've had new material 19 

### presented. I thought it was a good, pretty darn clear 20 

### explanation there. We have additional questions 21 

### and comments here. Andrew deLaski? Because we're 22 

### about to move on.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. deLASKI: I just want to applaud the 2 

## Department for doing this analysis. This is actually 3 

## a point that we made repeatedly over the years that 4 

## the analysis for renters has been incomplete. I think 5 

## now is a fantastic time to raise it because it is 6 

## coming up in this docket in a very -- it's been 7 

## raised by many stakeholders. It was raised at the 8 

## last meeting, so I applaud you for coming back today 9 

## with a description. And what I hear is a commitment, 10 

## what I take from this is an intention to do a more 11 

## robust analysis of the impact on low-income 12 

## consumers. And I think that makes sense, and you've 13 

## gotten some good feedback today from different 14 

## stakeholders. And I think that will lead to a more 15 

## complete and robust analysis of how low-income 16 

## families are affected by the standard. So thank you 17 

## for doing that. 18 

## MR. BROOKMAN: Okay. Thank you. Kathryn? 19 

## MS. CLAY: Yeah, I want to underscore 20 

## Andrew's remarks. We agree as well. This is a 21 

## critical community that should be given due 22 

## consideration in the analysis. And if this is a stepThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## in that direction and this is not the end point, we 2 

## fully support it. 3 

## I wonder if we could get that commitment 4 

## from the Department that there is going to be a more 5 

## robust analysis, not simply this small piece that 6 

## we've been presented today? 7 

## MR. CYMBALSKY: So this is John from DOE. 8 

## Absolutely. So I think that what you've seen here is 9 

## our first set of thinking to try to really refresh 10 

## and make more robust this analysis. I think your 11 

## organization and others have brought it to our 12 

## attention that this rule in particular could have 13 

## some impacts positive or negative that we should 14 

## really take a very careful look at. So this is the 15 

## first step, and you'll see more as we go through. 16 

## And, of course, we would like lots of 17 

## comments on this issue so we can build it into the 18 

## record and go forward with the analysis based on your 19 

## comments. 20 

## MR. KREBS: Mark Krebs. At this point, I 21 

## just want to stress that it could indeed be positive 22 

## or negative. You know, we don't know yet. IThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## understand this is your first blush attempt, and while 2 

## that's appreciated, you know, this has to have time 3 

## to be looked at and vetted completely. 4 

## MR. BROOKMAN: Okay. So then we're going 5 

## to move on, and I presume we're going to pick up where 6 

## we left off, which is slide 83. If we can -- how can 7 

## we advance the slides to there? 8 

## Thank you, Emily. And we're going to hear 9 

## from Victor Franco. 10 

## (Pause.) 11 

## MR. BROOKMAN: Frank Stanonik, before we 12 

## get started here. 13 

## MR. STANONIK: Since we ended on slide 83, 14 

## could I actually get you to go back to that slide? 15 

## And if my memory has failed me, it's very possible, 16 

## but at the end of the last meeting, I did ask the 17 

## question that seemed to me to be an oddity that the 18 

## life-cycle cost savings for senior-only category was 19 

## in fact higher than just for all consumers. And 20 

## looking at it further, I now see that for the better 21 

## than minimum condensing furnace, the 92s and the 95s, 22 

## in fact, the life-cycle cost savings for a senior inThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## the rest of the country is in fact better than in the 2 

## north. And that seems very counterintuitive to me 3 

## from just the idea that, first of all, the heating 4 

## season is significantly less than the rest of the 5 

## country, and I guess, again, I don't know the full -- 6 

## let's say the full demographics of senior-only, but 7 

## you tend to think of smaller residences, generally 8 

## less use. Is there kind of a quick explanation to 9 

## that, or did you give it to me already, and I forgot? 10 

## MR. FRANCO: No, not at all. This is 11 

## Victor Franco. No, we didn't go over that last time. 12 

## It mainly has to do with a combination of factors. 13 

## So it is where the senior are living. They're mostly 14 

## living in a little bit higher, places with higher 15 

## heating loads, and also the energy prices. We can 16 

## give more details to that in the next version of the 17 

## TSD. 18 

## So, good morning. I'm Victor Franco 19 

## again, from Lawrence Berkeley National Laboratory. 20 

## Next, I'll be presenting the shipments model, national 21 

## impact analysis, and regulatory impact analysis. The 22 

## shipment analysis is an input to the national impactThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### analysis, and this is what I'll be focused on the next 2 

### few slides. 3 

### The purpose of the shipments model is to 4 

### forecast non-weatherized gas furnaces and mobile home 5 

### gas furnaces that would be expected to be shipped 6 

### between the analysis period, the 30-year period between 7 

### 2021 and 2050, with and without energy conservation 8 

### standards. The shipment model considers three market 9 

### segments: new construction, existing furnace owners 10 

### replacements, and new owners. I'll be talking in more 11 

### detail about these in the next slide. 12 

### Similar to the LCC analysis, DOE also took 13 

### into account product switching of owners of 14 

### non-weatherized gas furnaces which may choose to 15 

### replace an existing non-weatherized gas furnace with 16 

### another type of space-heating product such as an 17 

### electric furnace or heat pump. If the non-weatherized 18 

### gas furnace efficiency standard is amended, the 19 

### fraction of products decreases over the analysis 20 

### period. I'll be talking in the subsequent slides in 21 

### more detail. 22 

### The shipments model also disaggregatesThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## shipments by different market segments including 2 

## product classes and weatherized gas furnaces and 3 

## mobile home gas furnaces, residential and commercial 4 

## applications, and north and rest of country regions 5 

## as defined in Chapter 9. You may recall that there's 6 

## this 5,000 heating grade criteria. Chapter 9 7 

## includes details about that. 8 

## In addition, the shipments analysis helps 9 

## develop the base-case and standard-case efficiency 10 

## distributions. 11 

## So let me go into more details about the 12 

## shipments model in this next slide. This flow chart 13 

## shows the overall three market segments and the 14 

## inputs to calculate those. The first one is the new 15 

## construction which is here labeled new installations. 16 

## The two main inputs are projected new housing starts, 17 

## which come from AEO 2014 projections, and the 18 

## historical new construction saturations. Then, there 19 

## are the new owners. 20 

## New owners are defined as the existing 21 

## buildings that acquired furnaces for the first time 22 

## during the analysis period. The new owners primarilyThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## consist of households that during a major remodel add 2 

## or switch to non-weatherized gas furnaces. DOE 3 

## assumed that there were no new owners for mobile home 4 

## gas furnaces. 5 

## For non-weatherized gas furnaces, DOE 6 

## assumed that new owners correspond or is equal to 7 

## half of the new owners observed in the shipments 8 

## model from 2009 to 2013. This represents about 7.5 9 

## percent of the overall projected shipments. 10 

## And I forgot to mention, new construction 11 

## represents about 25 percent of non-weatherized gas 12 

## furnaces, where it represents 50 percent of mobile 13 

## home gas furnaces. 14 

## Replacements are defined as existing 15 

## buildings with furnaces installed. They are 16 

## calculated using historical shipments, as shown here, 17 

## and the retirement function. 18 

## DOE also took into account demolitions, 19 

## houses removed from the housing stock, by tracking 20 

## year-by-year changes in the projected housing stock 21 

## in the AEO 2014 projections. 22 

## Overall, 67.7 -- 67.5 percent ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## non-weatherized gas furnaces are replacements, and 50 2 

## percent of mobile home gas furnaces are replacements. 3 4 

## MR. BROOKMAN: Steve Rosenstock? 5 

## MR. ROSENSTOCK: Steven Rosenstock, Edison 6 

## Electric Institute. I'm going to ask a question 7 

## about the first asterisk there. Because I'm looking 8 

## at U.S. Department -- U.S. Census data that shows, 9 

## especially in the northeast, oil was used for a 10 

## significant amount of new home heating systems in the 11 

## northeast for many years, as much as anywhere -- 12 

## until 2005 when it started really dropping off. But 13 

## from 1971 until 2005, the number of homes -- new 14 

## homes with oil-fired equipment ranged from 11,000 up 15 

## to 57,000. So especially new homes, especially in 16 

## the northeast, now it's dropped off a lot over the 17 

## last several years. 18 

## MR. FRANCO: Those are the yearly totals. 19 

## MR. ROSENSTOCK: Those are the yearly 20 

## totals for new single-family homes completed from the 21 

## U.S. Census Bureau. And my question, and I asked it 22 

## last time, is, why weren't other types of competingThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### heating technology considered for the fuel switching 2 

### analysis, especially with the long history of their 3 

### use in new homes, especially in the northeast, in the 4 

### heating-dominated climates? 5 

### MR. FRANCO: Thank you very much for that 6 

### comment, and please submit that in your written 7 

### comments more detail. 8 

### For this analysis, the shipments take into 9 

### account a lot of these changes already. The 10 

### projections do not take into account further market changes 11 

### because the oil market seemed to be fairly low, but 12 

### please submit your comment so we can potentially 13 

### review that in more detail. 14 

### MR. ROSENSTOCK: Okay. I thank you very 15 

### much, but, again, for this analysis, again, and we're 16 

### going to go into it later on, it seems like it 17 

### makes it like it's either gas or electric when other 18 

### technologies are available and have been used, 19 

### whether they're central systems, whether they're zone 20 

### systems, there's a whole array of technologies that 21 

### could be used to heat homes. 22 

### MR. FRANCO: Okay.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. ROSENSTOCK: Hold on, hold on. And I 2 

## believe, again, I'm going to say this, is right now 3 

## in my view the analysis is incomplete because you're 4 

## only looking at one option when there's multiple 5 

## options. I can't stress that enough. Thank you. 6 

## MR. CYMBALSKY: This is John from DOE. I 7 

## think we went through this at the last meeting, but 8 

## if you have data to support the switch from gas to 9 

## oil or wood or whatever, other things you're thinking 10 

## about -- 11 

## MR. ROSENSTOCK: The chart is right here. 12 

## MR. CYMBALSKY: Okay. That has the fuel 13 

## switching? Can I see that? 14 

## MR. ROSENSTOCK: Yeah, it shows the wide 15 

## variety of installations by year based on gas, 16 

## electricity, or oil. 17 

## MR. CYMBALSKY: And it shows switching? 18 

## MR. ROSENSTOCK: No, this is just for new 19 

## homes. This is new homes, what they've chosen to 20 

## install in new homes and the wide variety -- 21 

## (Simultaneous conversation.) 22 

## MR. CYMBALSKY: Well, that's in theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## baseline. The market shares are developed -- 2 

## MR. ROSENSTOCK: But it shows there's been 3 

## fuel switching back and forth based on multiple 4 

## conditions in the marketplace. 5 

## MR. CYMBALSKY: That shows fuel switching? 6 

## Can I see that, please? 7 

## (Pause.) 8 

## MR. ROSENSTOCK: It doesn't say 9 

## "switching." It shows installation, but it shows the 10 

## wide up and down of the different technologies used 11 

## in new homes based on the decision of the home 12 

## builders over the years. 13 

## MR. CYMBALSKY: It shows the market 14 

## disposition in new construction of heating? 15 

## MR. ROSENSTOCK: Correct. 16 

## MR. CYMBALSKY: We're very aware of that 17 

## data. 18 

## MR. ROSENSTOCK: And in the future these 19 

## technologies are not going away. It's not just 20 

## electric -- 21 

## MR. CYMBALSKY: And they're in the 22 

## baseline.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. BROOKMAN: Frank Stanonik. 2 

## MR. STANONIK: Frank Stanonik, AHRI. You 3 

## went a little too quick. What was the percentage you 4 

## estimate is replacement furnaces? 5 

## MR. FRANCO: Replacement furnaces is 67.5 6 

## percent of non-weatherized gas furnaces. 7 

## MR. STANONIK: Right. Okay. All right. 8 

## That seems a little low, but be that as it may. And 9 

## just the other point, I want to maybe take a little 10 

## different way. 11 

## So the new owners as an existing 12 

## structure, if you will, that for the first time has a 13 

## gas furnace installed? 14 

## MR. FRANCO: That is correct. 15 

## MR. STANONIK: So that would include 16 

## whatever number of conversions have occurred in 17 

## recent years from oil to gas? 18 

## MR. FRANCO: That is correct. And that's 19 

## what we try to model in that number. And just to 20 

## clarify, we do use the data Edison Electric pointed 21 

## to which is the Census data to come up with the 22 

## saturations for the new construction. We'll go overThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## those numbers. What we used is the last five years 2 

## average, and then we project that as being the future. 3 

## MR. BROOKMAN: Victor, thanks for that 4 

## clarification. 5 

## Mark Krebs. 6 

## MR. KREBS: Mark Krebs, Laclede Group. 7 

## First of all, Steve Rosenstock, could you give us the 8 

## source of that document so we could check it out? 9 

## MR. ROSENSTOCK: Steve Rosenstock, yeah, 10 

## U.S. Census Bureau Housing -- I got it, Housing 11 

## Report, Annual Housing Report. It's online. I'm 12 

## happy to send it to you. 13 

## MR. KREBS: Forward me the link. 14 

## MR. CYMBALSKY: It simply shows the share 15 

## of heating fuel in new construction. It does not 16 

## make any statements about fuel switching or anything 17 

## like that. 18 

## MR. KREBS: I trust Steve that it's worth 19 

## looking at. 20 

## (Laughter.) 21 

## MR. KREBS: Next question. Total 22 

## shipments, I'm going to use this as an opportunity toThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## ask Frank Stanonik a question. I see where you're 2 

## going with this, but I would really still like to 3 

## compare what you -- you know, total shipments with 4 

## AHRI data, you know, raw unadulterated data. I asked 5 

## this at the last meeting. I want to ask it again. I 6 

## need it to be able to make comparisons. And, Frank, 7 

## please feel free to explain, you know, why you don't 8 

## do this anymore. A couple of years ago, you pretty 9 

## much stopped. I don't know why that is. I know AGA 10 

## has been beating on you for it, and I'm going to 11 

## continue. But, can you -- why is it so difficult to 12 

## get that? 13 

## MR. STANONIK: Frank Stanonik, AHRI. I 14 

## welcome the opportunity because in fact -- well, just 15 

## because I do. There's no way around it. We do what 16 

## our members tell us to do, and in this case, a 17 

## decision was made that the shipment information on 18 

## furnaces would no longer be -- or some of the 19 

## detailed information would not be -- made publicly 20 

## available. I can tell you right now that's being 21 

## reevaluated, and granted, recognizing my initial 22 

## statement, I still have a pretty high level ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### confidence that we will be able to fill in the gap. 2 

### Because if you notice up until 2009, it was our data, 3 

### right? And so I think we will be able to fill that 4 

### in. 5 

### But, you know, anybody who thinks I get to 6 

### tell the members what they need to do, you're just 7 

### wrong. 8 

### MR. BROOKMAN: Frank, thanks for those 9 

### comments. And I'm certain everyone in this room 10 

### would appreciate it if your members do agree for you 11 

### to follow up and provide that data. That will provide 12 

### a lot of clarity. I didn't get your name at the 13 

### outset. 14 

### MR. MURPHY: Richard Murphy, AGA. 15 

### MR. BROOKMAN: Make sure you've got the 16 

### microphone on. It's not on yet, I don't think. 17 

### MR. MURPHY: You had indicated that for 18 

### the new market and the conversions from oil to gas, 19 

### you used a period of five years, the last five years, 20 

### and projected that going forward. The last five 21 

### years has seen an aggressive number of conversions from 22 

### oil to gas, so would you anticipate that continuingThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## at that same pace in this analysis? 2 

## MR. FRANCO: That's what we assumed in the 3 

## analysis, and the market share is significantly 4 

## less. The market share is constant, so it wouldn't 5 

## vary from that. That's our assumption. 6 

## MR. BROOKMAN: Charlie. 7 

## MR. McCRUDDEN: Charlie McCrudden, ACCA. 8 

## I'm still confused on the difference between a new 9 

## owner and, I guess, a replacement. A new owner is -- 10 

## this is going to sound like I'm thinking way too 11 

## basic. You're not suggesting that that's a structure 12 

## that has no heat, that has been existing without heat 13 

## and you're putting something in, a furnace for the 14 

## first time, are you? 15 

## MR. FRANCO: Not exactly. So it could be, 16 

## for example, that they might have had like oil 17 

## equipment. That's one possibility. 18 

## MR. McCRUDDEN: Okay. 19 

## MR. FRANCO: Another possibility and it 20 

## was for a time, as they became part of the market, 21 

## they probably didn't have a centralized heating 22 

## system. They might have had direct heating, someThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### other type of heating system, and they did a major 2 

### remodel. 3 

### MR. McCRUDDEN: And it looks at both 4 

### condensing and non-condensing non-weatherized gas 5 

### furnaces? 6 

### MR. FRANCO: This is correct. This is 7 

### primarily for the base case which is the current standard, 8 

### and 9 

### it does look at both condensing and non-condensing furnaces. 10 

### MR. McCRUDDEN: Thanks. 11 

### MR. FRANCO: So moving on to the next 12 

### slide, this presents the inputs, the actual 13 

### references. And so this has some of the references 14 

### that we discussed, and further details about these 15 

### references are available in the TSD. The links and 16 

### the full references are available there. 17 

### Let's first discuss the two main inputs 18 

### for the retirement function for the retirement shipments, 19 

### replacement shipments, which include the historical 20 

### annual shipments, and the retirement function. 21 

### Before going into too much more detail about that, 22 

### because that was a question about the shipments, theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## total shipments that we used in terms of doing our 2 

## projections are based on AHRI up to the last year 3 

## that we have data. 4 

## The disaggregated shipments between 5 

## south/north and between condensing and non-condensing, 6 

## we only have data up to 2009, and that's the latest 7 

## data that we have that on. 8 

## First, we started looking at Appliance 9 

## Magazine furnace shipments from 1961 to 2012. 10 

## Those match, for the most part, AHRI numbers that 11 

## we've gotten at various times from 1972 to 2005. The 12 

## primary source for the shipments from Appliance 13 

## Magazine was AHRI, so that makes sense that they 14 

## would match. After that, AHRI did provide from 2005 15 

## to 2009 this aggregated north and south values for 16 

## that time period. 17 

## After that, we're just using total values 18 

## from Appliance Magazine and AHRI, which they match 19 

## from 2009 to 2012. 20 

## It's important to clear up that the numbers 21 

## that we got from AHRI are actually combined, 22 

## non-weatherized gas furnace and mobile home gasThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### furnaces, so we have to disaggregate those, and we 2 

### used this method of disaggregating them. Based on new 3 

### construction data for mobile home gas furnaces, based 4 

### on the lifetime that we assume for mobile home gas 5 

### furnaces, and the saturation of mobile home gas furnaces 6 

### from the American Housing Survey, we come up with 7 

### what we think are the shipment -- historical 8 

### shipments for mobile home gas furnaces which range 9 

### between 2 to 3 percent, historically, maybe a little bit 10 

### higher up to 4 percent of total shipments. 11 

### The last time we discussed the lifetime, 12 

### based on the lifetime from the LCC analysis, we come 13 

### up with a retirement function. 14 

### Now, let's talk about the other inputs to 15 

### the new construction market. The new construction 16 

### market uses the saturations for the characteristics 17 

### of new housing data from the U.S. Census Bureau, which 18 

### was the source that we've been discussing before. We 19 

### also use data from RECS 2009 to come up with 20 

### saturations. 21 

### In terms of projections, we use data 22 

### that's available from AEO 2014 to project the actualThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## housing starts in the future. 2 

## Lastly, the product switching comes into 3 

## play in terms of the standard cases, and that's based 4 

## on the consumer choice model in the LCC analysis. 5 

## If there are any questions, we'll stop 6 

## here. 7 

## This next slide shows both the historical 8 

## and projected numbers. So, as you can see, the 9 

## historical numbers are shown here. They match 10 

## exactly the data that's been provided by AHRI. That's 11 

## important in terms of total shipments, and also the 12 

## Appliance Magazine numbers. 13 

## Further details about these numbers are 14 

## available in Appendix 9B of the TSD with appropriate 15 

## references. 16 

## The second part of this chart shows our 17 

## projected numbers. Our projected numbers range from 18 

## a little bit more than three million to almost about 19 

## four million by 2050. 20 

## MR. BROOKMAN: Question real quick? 21 

## MR. ROSENSTOCK: Steve Rosenstock, EEI. 22 

## For the projected, what is your -- for new homes,The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### what's your projected rate for new homes completed 2 

### by, I'll say 2017? What's your -- because I see how 3 

### it really jumps up quite dramatically, I'll say, in 4 

### 2017 or so? I'm just kind of curious. Again, I was 5 

### looking through -- what is the -- does that bump up 6 

### because of the huge rise in new home construction? 7 

### MR. FRANCO: That is correct. AEO 2014 8 

### projects that new homes will rise to an average, more 9 

### or less historical, level of about 1.5 to two million new 10 

### homes per year. This is in single-family -- 11 

### MR. ROSENSTOCK: Single-family new homes? 12 

### (Simultaneous conversation.) 13 

### MR. FRANCO: And it levels out, yes, and 14 

### is constant over time, pretty much. 15 

### MR. ROSENSTOCK: You say 1.5 to two 16 

### million because -- Steve Rosenstock -- I'm looking 17 

### at, again, the Census Data in the American Housing 18 

### Survey, and the only years when it was, at least for 19 

### single-family homes, when it was 1.5 million were in 20 

### the boom years of 2005 -- 2004 through 2006. All 21 

### other years, it was around a million, and in 2013, it 22 

### said 569,000. So they're assuming that the rate ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## new construction is going to basically triple by 2 

## 2017. Is that right? 3 

## MR. FRANCO: I actually misspoke. That's 4 

## the total including multi-family and mobile homes. 5 

## MR. ROSENSTOCK: Oh, okay. 6 

## MR. FRANCO: Sorry. 7 

## MR. ROSENSTOCK: So that's including 8 

## multi-family? 9 

## MR. FRANCO: Yeah. 10 

## MR. ROSENSTOCK: Okay. Got you. So 11 

## you're saying 1.5 million including multi-family. 12 

## MR. FRANCO: Yes. 13 

## MR. ROSENSTOCK: Thank you. 14 

## MR. FRANCO: This chart shows the 15 

## distribution in terms of the different market 16 

## segments that I talked about. So this includes new 17 

## owners, new construction replacements, and it also 18 

## includes the north versus the rest of the country. 19 

## So, again, this relates also to the fractions that I 20 

## mentioned earlier in terms of fraction of new 21 

## construction, fraction of the owners, and fraction of 22 

## replacements.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. DRUMHELLER: So this is assuming that 2 

### this goes through, right? That there's a 92-percent 3 

### requirement north and south effective January 2021? 4 

### Is that -- 5 

### MR. FRANCO: Let me clarify. This is 6 

### actually the base case which I forgot to mention. This is 7 

### the base case. This is without amended standards. 8 

### MR. DRUMHELLER: All right. 9 

### MR. BROOKMAN: So that was Craig speaking 10 

### there. 11 

### MR. DRUMHELLER: Craig Drumheller, 12 

### National Association of Home Builders. 13 

### MR. BROOKMAN: Thank you. Frank Stanonik. 14 

### MR. STANONIK: Frank Stanonik. It's 15 

### clearly not the major thing driving this chart. But 16 

### I think it's the new owners, okay? It seems to me 17 

### that the population of new owners is by definition an 18 

### ever decreasing base, okay? And so I really question 19 

### the fact that it looks to me like your new owner 20 

### lines in this graph seem to be pretty much equal as 21 

### we go forward. And, again, we're really talking 22 

### about whether you want to look at it simply as let'sThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## say being a little -- bad joke here -- being a little 2 

## crude, but assuming every oil customer was a 3 

## potential switchover, okay, and also the folks who 4 

## don't have central heating, okay, both of those 5 

## populations are kind of fixed. They're not going to 6 

## be steady. So I think at least part of that, the 7 

## assumption that those would be constant through the 8 

## succeeding years, is, I think, a little bit of an 9 

## overstatement. 10 

## Now, again, as I said, I realize that's a 11 

## small piece here, but I think it's a little far. 12 

## MR. CYMBALSKY: This is John from DOE. 13 

## But I guess, Frank, all the new construction that's 14 

## going in place in the intervening years that have 15 

## electric fall into that pool as well. 16 

## MR. FRANCO: Thank you. 17 

## So now we're going to be talking about the 18 

## fuel switching aspect. So now we're talking about 19 

## the standards case. In the standard cases, we're 20 

## considering potential for fuel switching. This table 21 

## presents the actual percentage of switching from 22 

## potential for non-weatherized gas furnaces to otherThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## equipment, for example, electric furnaces and heat 2 

## pump. As you can see from this chart, these fractions 3 

## are disaggregated between north, replacement and new 4 

## construction, rest of country, replacement and new 5 

## construction. 6 

## I'll give you a second to ask questions. 7 

## MR. ROSENSTOCK: Steve Rosenstock, EEI. 8 

## Again, you heard what I said before, and I believe 9 

## that this chart is incomplete without looking at 10 

## other technologies that are available and on the 11 

## market that are especially in the new construction 12 

## area. I'm just looking at the Census Bureau data 13 

## again, and I remember that in 2005, there were record 14 

## wholesale gas prices. I believe it got up to $15 per 15 

## million BTUs as a result of the hurricanes, and by 16 

## December that year, it was staring to be a cold 17 

## winter, the gas prices -- they were just record gas 18 

## prices. Okay. That year and next year there were 19 

## over one million homes built with gas heat, even in a 20 

## time of record gas prices. 21 

## Okay. So I mean, even in a time of record 22 

## prices when people aren't switching and now gasThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## prices are very, very steady, very low at about $2.70 2 

## cent per million BTUs the last time I looked on the 3 

## Henry Hub, and if gas price projections are pretty 4 

## much flat, or very, very steady, or very slow 5 

## increasing, I think a lot of these numbers, as much 6 

## as I would like to -- a lot of my members would like 7 

## to see this, I don't see these numbers as happening. 8 

## I'm sorry. Thank you. 9 

## MR. BROOKMAN: Okay. Thank you. 10 

## Keep going, Victor. 11 

## MR. CYMBALSKY: Can I ask a question. So 12 

## thank you for that comment. That's the kind of 13 

## comments we like to hear, like a definitive 14 

## statement. 15 

## Do you have a sense? So we're saying here 16 

## that, you know, switching is about, say 20 percent in 17 

## the south and looks like 11 percent in the 18 

## replacement markets, do you have a different 19 

## percentage in mind if a 92 percent standard were to 20 

## come into effect? Do you think it's half that, a 21 

## quarter that? 22 

## MR. ROSENSTOCK: Steve Rosenstock. I wishThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## I had that data. I don't have that data. All I can 2 

## say is I'm just looking at some of the historical 3 

## data when the gas prices were very high, and there was 4 

## an economic driver to even look at other new 5 

## appliances, and it didn't seem to make a difference. 6 

## Now, 2008 was another year of record high 7 

## gas prices, also right in the middle of the recession, 8 

## so everything was going downhill everywhere. But all 9 

## I can say is, in my view, of course, it's all about 10 

## theories and everything. In my view, I wish I had a 11 

## number. I don't have a number. I believe that, you 12 

## know, all I can say is, the home builders would have 13 

## a better idea of all the technologies that builders 14 

## are looking at, not just the electric. It's not just 15 

## the one or the other. And, you know, oil furnaces 16 

## are an option for these builders. They exist. They 17 

## are an option, especially in new construction, and if 18 

## their prices are lower than the gas furnace or 19 

## electric heating system, I'm guessing that a certain 20 

## percentage of builders will look at that option 21 

## because they're out there, and there might be other 22 

## things like wood, you know, there might be woodThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### systems or solar systems they might look at because 2 

### of tax incentives. They're out there. So I don't 3 

### know how much less the fraction is, but this is a 4 

### personal view. I don't have a study. I wish I had 5 

### some data. I don't. But in my personal view, I 6 

### believe the fraction is less. I can't tell you how 7 

### much less. 8 

### Thank you. 9 

### MR. BROOKMAN: Yeah, Andrew deLaski. 10 

### MR. deLASKI: I was sorry I had to leave 11 

### last time before we got to the fuel switching 12 

### discussion, so I think you went through the methodology 13 

### for that at the end of the last meeting that was 14 

### discussed, so I don't want to bring us back to that 15 

### discussion. 16 

### MR. BROOKMAN: Andrew, get close to that 17 

### microphone, please. 18 

### MR. deLASKI: But I do want to pile on 19 

### Frank a little bit. 20 

### So I was just thinking out loud here, and 21 

### I'm wondering, Frank, to the extent the AHRI members 22 

### are able to provide data on heat pump shipments asThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## well if that would help, if that would be instructive 2 

## to the Department in helping us to understand the 3 

## relative shipments of the two competing technologies 4 

## in electric furnaces as well, because, again, these 5 

## are the same manufacturers making these products by 6 

## and large. To the extent that we had time series 7 

## data on the shipments of all the competing 8 

## technologies, that would be, I think, a big assist to 9 

## the Department in helping to validate. I think you 10 

## have a good methodology that you laid out last time. 11 

## I think it predicts more switching than I would 12 

## expect. I think the market is probably a lot more 13 

## sticky than you have predicted, that people do what 14 

## they've done before, and there's a lot of inertia in 15 

## markets and that you've not captured inertia. And I 16 

## would expect -- what I would look to, so thinking 17 

## about data sources, is the AHRI shipping data seems to 18 

## me would be a very valuable resource to you. 19 

## So, Frank, as you're talking to your 20 

## members and you're optimistic about getting data for 21 

## furnaces, I hope you would do the same for heat pumps 22 

## and for electric furnaces as well.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. CYMBALSKY: This is John from DOE. So 2 

## since there's some AGA folks in the room, back in my 3 

## former profession, AGA used to do a fuel switching 4 

## study actually mapping which fuel they switched from 5 

## and to. It was mostly to gas at the time. So this 6 

## was circa 2000, 2002. Unfortunately, when I switched 7 

## jobs, I gave up my right to keep the survey, but, 8 

## they did have a very nice survey about what fuel 9 

## switching actually occurred in their member 10 

## companies. I'm not sure they do that particular 11 

## survey anymore, but it was very helpful in the 12 

## development of the NEMS model for EIA that I did in 13 

## my former position to actually try to project fuel 14 

## switching. But what I can tell you, counter to what 15 

## Steve is kind of thinking about, switching to oil or 16 

## wood or whatever, that just didn't happen. You know, 17 

## homes that are built in New England, in particular, 18 

## they'll be built with oil because they don't have gas 19 

## lines available. It is a more -- it's cheaper than 20 

## propane per BTU, and they will do that. 21 

## Now, if the gas line is there, they're not 22 

## going to bury an oil tank. I hate to tell you, it'sThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## not going to happen. So I don't know if AGA does 2 

## that study anymore, but that was a very valuable data 3 

## source to look at in terms of fuel switching. Other 4 

## than that, I can tell you, there's not too much out 5 

## there in terms of real data. 6 

## You can make inferences from shipments, 7 

## but it's very difficult. 8 

## MR. BROOKMAN: Yeah. So, Rick, can you 9 

## comment here? 10 

## MR. MURPHY: Yes, John, I'm not familiar 11 

## with that study back at the time that you're 12 

## referring to. But I believe it had to do with the 13 

## customers that converted from an alternative fuel to 14 

## natural gas, not the other way. 15 

## As you know, we did try to improve the 16 

## level of intelligence that we have on the switching 17 

## going the other direction by going out and speaking 18 

## with contractors and builders about a year and a half 19 

## ago to give them -- the question is, how would you 20 

## react to a national standard that required condensing 21 

## equipment? And we have the results of that study 22 

## that we share with yourself and other stakeholderThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## groups that actually showed that it was actually a 2 

## higher percentage of switching than this indicates. 3 

## We realized that we did not get the level 4 

## of response that we would have liked to across the 5 

## country. However, we did get a significant amount of 6 

## responses that indicated that because of their 7 

## experience in the pricing associated with the 8 

## condensing of equipment, that a certain percentage of 9 

## the market and a certain percentage of new installs, 10 

## they would actually move away from a natural gas 11 

## furnace. 12 

## MR. BROOKMAN: Okay. Rachel, comment here? 13 

## MS. FEINSTEIN: Rachel Feinstein, Hearth 14 

## Patio and Barbecue Association. With regard to 15 

## wood-fueled furnaces, or wood, forced-air furnaces, 16 

## usually there are two different sizes, a smaller size 17 

## and a larger size, and they're usually used to -- 18 

## they're connected to an existing gas or propane, or 19 

## oil-fueled furnace to give an extra supplemental 20 

## energy to the system to kind of what we say, turbo 21 

## boost the home system. And it's usually in addition 22 

## to the gas or oil or propane-fueled systems and notThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### a replacement. It's mostly very rural areas, 2 

### northwest, Midwest. Wood, forced-air furnaces are 3 

### sold in like the Midwest, northwest and not very 4 

### urban areas. 5 

### MR. BROOKMAN: Do you all have data on 6 

### that? 7 

### MS. FEINSTEIN: Not -- we do not because 8 

### there are just not many sold. It's a very small 9 

### market. It's also a newly regulated category by the 10 

### EPA as well, wood, forced-air furnaces. 11 

### MR. BROOKMAN: John Cymbalsky? 12 

### MR. CYMBALSKY: I just want to say thanks 13 

### to both Rick and HPBA for providing that information. 14 

### It's helpful, and I know we looked at the study, and 15 

### we used the study, and as we said in the last meeting, 16 

### actually the results overall -- 17 

### MR. ROSENSTOCK: What happened to those ground 18 

### rules? 19 

### (Laughter.) 20 

### MR. CYMBALSKY: My, oh, my. But I think 21 

### what we shared last time is that the AGA switching 22 

### and the DOE switching, actually, percentage-wise, areThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## roughly the same. There are differences in where 2 

## they switch and some of the other things we went 3 

## through. We're not going to revisit it, but, we do 4 

## thank you for that study and thank HPBA for that 5 

## information as well. 6 

## MR. BROOKMAN: Yes, please, Jim. 7 

## MR. MOORE: Jim Moore with Laclede. One 8 

## of our concerns is with this switching, and using the 9 

## DOE data, we're seeing a huge switch to electric in 10 

## particular places like Arizona. And yet we believe 11 

## you're including the -- that's an economic decision. 12 

## They would have switched without this rule. But, 13 

## yet, all those savings are included in your LCC 14 

## calculations, and that's a concern for us. We think 15 

## you're overestimating the LCC savings in that case. 16 

## And then again to Frank, I understand the 17 

## proprietary nature of your data and that you don't 18 

## want to give up all that. What I would be interested 19 

## in seeing is just the breakdown between condensing 20 

## and non-condensing, because I firmly believe that 21 

## we're already there. That DOE is required to look at 22 

## whether or not we should -- what happens without thisThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### rule. And I believe the market is doing its job, and 2 

### we're already there, and I think your data can prove 3 

### that. 4 

### Thank you. 5 

### MR. BROOKMAN: When you say "already there," 6 

### be more specific. 7 

### MR. MOORE: I don't remember the exact 8 

### data point, but if you look in the chart on 8I where 9 

### there's a huge drop off, because we don't have AHRI 10 

### data and we switched to EPA and then EPA switched the 11 

### rules in the middle of the game, and so we have this 12 

### huge drop. I believe the starting point of that 13 

### curve is much higher than it is. 14 

### MR. BROOKMAN: Okay. 15 

### MR. MOORE: Did that answer your question? 16 

### MR. BROOKMAN: Yes. 17 

### MR. MOORE: Thank you. 18 

### MR. BROOKMAN: Steve Rosenstock? 19 

### MR. ROSENSTOCK: Again, Steve Rosenstock, 20 

### EEI. I said this before, but again on the record, as 21 

### I recall with the previous rulemakings for electric 22 

### heat pumps, I don't remember any fuel switchingThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### analysis being done by this Department. And now heat 2 

### pumps are going up from 10 SEER to 13 SEER, to 14 SEER in 3 

### the last nine years, so there might be some fuel switching 4 

### the other way. To totally ignore that in the context 5 

### of this analysis, I believe, is another way of -- it's 6 

### just not complete because what about the impact of 7 

### that technology going the other way? And I guess 8 

### I'll ask from now on for any space heating system, 9 

### for any space heating analysis, are you going to do a 10 

### fuel switching for every product from now on? 11 

### Because to do it for one product and not other 12 

### products just seems inconsistent. 13 

### MR. BROOKMAN: So all your written comments 14 

### on these points will be very, very helpful to the 15 

### Department. 16 

### Frank Stanonik? 17 

### MR. STANONIK: Frank Stanonik, AHRI. And 18 

### I'm glad you got this one because the slide we were 19 

### looking at was just non-weatherized gas furnaces, and I 20 

### was just curious if you've looked at the potential 21 

### fuel switching impact on mobile homes from the 22 

### perspective, particularly of new mobile homes?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## Because that really is in the hands of the builder 2 

## and I mean, not that I have direct contact with those 3 

## manufacturers of the manufactured homes, my 4 

## understanding, it is already a very price-driven kind 5 

## of industry and who isn't, and on top of that, if you 6 

## will, there's no way around it, it's a lot easier to 7 

## cite a, if you will, all electric manufactured home 8 

## than one that needs a secondary fuel whether it's 9 

## gas, oil, or whatever. I just wonder if that's been 10 

## looked at. What, you know, maybe just talking to 11 

## those manufacturers or what happened if their only 12 

## option was a condensing furnace. 13 

## MR. FRANCO: Thank you for that comment. 14 

## We did approach experts, and we did approach people in 15 

## that area, especially in the new construction. That 16 

## was something that we were looking at. 17 

## One of the primary things to consider in 18 

## the consideration of what things potentially would be 19 

## switching is the installation costs, and, for this 20 

## equipment, the installation costs between a 21 

## non-condensing and condensing is not very significant 22 

## for the mobile home. It's primarily due to the shortThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### venting length. Usually if you look at a mobile home 2 

### furnace, it sits in a kind of closet area, and it's primarily 3 

### vented vertically, so it's only one story. It's very 4 

### short, and so it's not a huge installation cost 5 

### differential. It's mainly the equipment costs, so 6 

### that was the primary concern. So please provide your 7 

### comments so we can take a look at that further. 8 

### MR. BROOKMAN: Victor has cued the comment 9 

### slide here. As I look at these three, and Victor, I 10 

### invite you to call out ones for which you would like 11 

### to receive additional comment. We've begun to 12 

### address all of these three, I believe, but is there 13 

### anything else you wish to seek or emphasize? 14 

### MR. FRANCO: The first one I haven't heard 15 

### anything about specifically just the fraction of 16 

### commercial applications. In our analysis, we assumed 17 

### 3 percent of residential furnaces are used in 18 

### commercial applications. Any additional feedback 19 

### would be appreciated. 20 

### MR. BROOKMAN: Craig Drumheller? 21 

### MR. DRUMHELLER: Craig Drumheller, 22 

### National Association of Home Builders. I just wantedThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## to kind of go a little bit further with the 2 

## methodology. One, I know you have to determine what 3 

## the difference is going to be in shipments both 4 

## before and after this rule may or may not be in 5 

## place. And when you do your cost analysis, your cost 6 

## analysis includes the ones that were shipped that 7 

## were switching anyway to the higher-efficiency 8 

## equipment. So they're the ones that have already 9 

## determined that it's cost-effective, and said, you 10 

## know what, we're going to go ahead and do this 11 

## because it makes sense for us. 12 

## I would be very interested in an analysis 13 

## that goes after that delta, the people that are now 14 

## forced to switch that would not have switched 15 

## otherwise, because a lot of them are doing it and 16 

## because it doesn't make economic sense. And it might 17 

## be a retrofit. It might be a specific location. 18 

## There might be other reasons why they're not doing 19 

## the switch, and I think you're going to find a huge 20 

## difference in the cost effectiveness when you parse 21 

## it for that delta of the people that didn't intend to 22 

## switch because it didn't make sense for them. And IThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## think that's a very important distinction to be able 2 

## to do that because when you group them altogether, it 3 

## pulls -- the people that it already made sense for 4 

## overwhelm the ones that it doesn't make sense for. 5 

## And I think we need to let the market kind of dictate 6 

## the way that this needs to move forward. 7 

## MR. BROOKMAN: Thank you. 8 

## MR. CYMBALSKY: So that's already done in 9 

## the analysis. Those are the no impacted people that 10 

## already did it. 11 

## MR. BROOKMAN: Thank you, John. Dave. 12 

## MR. WINNINGHAM: This is Dave with Allied 13 

## Air. In the NOPR, it says DOE has concluded that a 14 

## repair option really wasn't considered in this. In 15 

## other instances where we've seen increased product 16 

## costs, we see an increase in repair versus replace. 17 

## Can you elaborate on how you came to that conclusion? 18 

## MR. FRANCO: For this analysis, our primary 19 

## focus was on the equipment switching. We saw that as 20 

## the -- building that model. Once we built that model, 21 

## it was inconsistent with how we presently do what 22 

## you're referring to which is the repairing of theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## equipment, which is based on the price elasticity. At 2 

## this time, we haven't been able to reconcile both 3 

## methods. We assume that a fraction of the people 4 

## that we're assuming currently are doing the product 5 

## switching, potentially would do the repair, and it 6 

## would be a similar impact, or it might be slightly 7 

## more advantageous potentially to do the repair. So 8 

## we think that we're -- at this point we're 9 

## conservative in that regard, but we would like your 10 

## feedback to look at that in more detail. 11 

## MR. BROOKMAN: Is that in the TSD, Victor? 12 

## MR. FRANCO: That's in the TSD. 13 

## MR. BROOKMAN: Let me see, Rick? 14 

## MR. MURPHY: John, I'd just like to go 15 

## back to something you just mentioned just so I 16 

## understand it correctly. You said that the customers 17 

## who do fuel switching, because it makes economic 18 

## sense, are included in the no-impact section of the 19 

## -- I need to understand that. 20 

## MR. CYMBALSKY: So the baseline shipments 21 

## already include sort of the market of switching that 22 

## happens naturally without any standards. So theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### shipments forecast builds that in. Okay. That's 2 

### baked in. What we're looking at is the marginal 3 

### analysis to when you impose the standards, and so 4 

### what I was addressing from the NAHB gentleman is that 5 

### the people who switched to the higher-efficient 6 

### furnace are the no-impacted people. He was saying, 7 

### how many people think this is a good thing to do 8 

### anyway, right? That's in the model. 9 

### MR. MURPHY: Thats in the model, but its included 10 

### in the 11 

### no-impact group? 12 

### MR. CYMBALSKY: Correct. Because they're 13 

### doing it anyway without the standard. The people who 14 

### switch fuels, naturally occurring switching, that's 15 

### in the baseline shipment data. So that's baked into 16 

### the baseline as well. So we're only looking at what 17 

### happens, the delta above that level. 18 

### MR. MURPHY: And if that's the case, why 19 

### does -- if you choose the selection for no fuel 20 

### switching in the LCC that the life-cycle cost benefits 21 

### actually go down? 22 

### MR. FRANCO: The life-cycle -- this ifThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## Victor Franco. The life-cycle cost benefits in the 2 

## switching situation or the non-switching situation? 3 

## MR. MURPHY: Non-switching. 4 

## MR. FRANCO: Non-switching situation. So, 5 

## in the non-switching situation, you're assuming that 6 

## these households that have very large installation 7 

## costs don't switch. Those households when you do the 8 

## switching do switch and capture those benefits of not 9 

## having to have those large installation costs. 10 

## MR. CYMBALSKY: So this is the inertia 11 

## that Andrew brought up. So they face high costs to 12 

## go to the condensing, and they pay it. So they're 13 

## impacted, they didn't switch. So those are the 14 

## impacted set of people. 15 

## MR. BROOKMAN: Thank you, John. Mark 16 

## Krebs. 17 

## MR. KREBS: Mark Krebs. I want to chime 18 

## in with Allied Air's consideration that, you know, 19 

## the market is a very innovative device, and I believe 20 

## it is probable that as a result of this rule of 21 

## banning non-condensing furnaces, that you will 22 

## unwittingly develop a cottage industry of firms thatThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## go around repairing non-condensing furnaces. And 2 

## that should be -- that potential should probably be 3 

## considered by DOE in this rule. 4 

## MR. BROOKMAN: Okay. Thank you. Frank 5 

## Stanonik. 6 

## MR. STANONIK: Victor, the second box, the 7 

## projection of future shipments, one of the earlier 8 

## slides was, you know, clearly there was a -- I'll 9 

## call it an artificial peak in the relationship of 10 

## condensing versus non-condensing in slide 69 driven 11 

## by -- I think driven primarily by tax credits, but 12 

## other incentives probably. It was in the years like 13 

## probably '09 to '12. So in terms of -- okay, so 14 

## that's there. Those are now in the field, that, you 15 

## know, huge jump there. And so, again, my simplistic 16 

## view, let's say they were installed in 2010, okay. 17 

## So I look at that, and I say, okay, in 2010, if I go 18 

## out about 20 years, I'm going to have this huge blip 19 

## that needs to be replaced, and I would argue that if 20 

## the person has already bought a condensing furnace, 21 

## they're going to replace it with a condensing furnace 22 

## or whatevers equal to that in 20 years, and then inThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## another 20 years, you've got another blip. So my 2 

## question is, is your straight line there factoring in 3 

## that blip, or does it not? That's a technical term 4 

## "blip" by the way. 5 

## (Laughter.) 6 

## MR. FRANCO: Thank you so much for that 7 

## comment. So actually, when we did the furnace fan 8 

## analysis, the actual shipments were decided between 9 

## non-condensing and condensing, and there, we actually 10 

## did two projections of shipments by non-condensing 11 

## and condensing, and you could see kind of those more 12 

## clear blips. 13 

## This is a little bit of simplification. 14 

## It does match the overall shipments, but it does not 15 

## include what we could call those blips. And we 16 

## appreciate a comment in that regard, and we can look 17 

## at that further. 18 

## MR. CYMBALSKY: I think the distribution 19 

## of the way it retires actually will serve to flatten 20 

## out the blip, right? 21 

## MR. STANONIK: No, no, no. Absolutely. 22 

## Yeah, it would be spread out over the years, but IThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## guess I was trying to get a sense of to what extent 2 

## it gets rolled into that. 3 

## MR. BROOKMAN: Yes, Charlie? 4 

## MR. McCRUDDEN: Charlie McCrudden, ACCA. 5 

## Your first request for comment box references the 6 

## number of furnaces used in commercial applications. 7 

## This is sort of the first, I think, that that concept 8 

## has been brought up in these slides. Can you sort of 9 

## give us some sense of what you think perhaps it is 10 

## for 3 percent? And that's in the TSD somewhere? 11 

## MR. FRANCO: That is correct. That's 12 

## based on -- the methodology is based on looking at 13 

## CBECS and RECS data in terms of what we think if they 14 

## have a commercial or residential furnace, looking at 15 

## those saturations, then we come up with 3 percent. 16 

## MR. McCRUDDEN: Thank you. 17 

## MR. BROOKMAN: Is it John? 18 

## MR. HERSE: Yes, John Herse with Lennox. 19 

## Going back to the previous chart that shows the 20 

## future projections, no, the other one. No, not that 21 

## one. 22 

## MR. BROOKMAN: The one that --The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. HERSE: The one that we were just on. 2 

## The blip chart. 3 

## MR. BROOKMAN: Sixty-three or something. 4 

## PARTICIPANT: Sixty-nine. 5 

## MR. HERSE: So speaking as a manufacturer, 6 

## and one of those entities that I have it on 7 

## relatively good authority that the new information 8 

## will be released for furnaces. But just an 9 

## observation, our experience was that precipitous drop 10 

## wasn't as steep as you show, and our belief, based on 11 

## prior history, is that that curve is flatter than it 12 

## should be. We see adoption through a tax incentive, 13 

## but it doesn't drop below. There is actually -- it 14 

## moves consumer adoption higher, and I think the data 15 

## will show that. So it would be interesting to recast 16 

## that with better input data. 17 

## MR. FRANCO: That would be really 18 

## appreciated. Thank you so much for your comment. 19 

## MR. BROOKMAN: Everyone welcomes that. 20 

## Thank you very much. 21 

## Okay. Final comments on these issue 22 

## boxes. We're about due for a break.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## Yes, Greg. 2 

## MR. MOORE: Jim Moore from Laclede Group. 3 

## Just echoing what Frank said, if you go to the 4 

## historical and projected case shipments, the blue 5 

## slide, you have a big dip in the '08, '09, '10 6 

## timeframe, which is understandable, and likewise 20 7 

## years out, you're going to see another dip again. 8 

## Now, it might not be as deep, but it's going to be 9 

## out there as people go to replace those furnaces. 10 

## Just an observation. 11 

## MR. BROOKMAN: Okay. Thank you. 12 

## Let's take a break. It's now 10:52. Let 13 

## me see. Let's resume at 10 minutes after 11 here in 14 

## this room. Please make sure to wear your badge. 15 

## There are restrooms at both ends of the hall. 16 

## (Whereupon, at 10:52 a.m., a brief recess 17 

## was taken.) 18 

## (Record resumes at 11:14 a.m.) 19 

## MR. BROOKMAN: I've received a note. We're 20 

## starting back up folks, here we go. 21 

## Apparently Neal Leslie who is joining us 22 

## on-line has a comment and a question. Neal, youThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## should be now unmuted, please speak. 2 

## (Pause.) 3 

## MR. BROOKMAN: Haven't heard you yet. 4 

## Yeah, okay, Neal, you're not coming through here in 5 

## the room. So maybe we can figure out what's going on, 6 

## and we can try you back later. 7 

## We're going to resume where we left off, 8 

## and we're going to hear from Victor Franco. 9 

## MR. FRANCO: Hi, this is Victor Franco 10 

## again. We just finished the shipments analysis, the 11 

## primary input to the national impact analysis, which 12 

## will be the next topic. The national impact analysis 13 

## estimates the national impacts of energy conservation 14 

## standards for non-weatherized gas furnaces and mobile 15 

## home gas furnaces shipped between 2021 and 2050, this 16 

## 30-year analysis period. There's two primary outputs 17 

## of this analysis. One is the national energy 18 

## savings, or NES, which calculates the primary energy 19 

## savings, and then net present value or NPV, which 20 

## calculates the difference between the net present 21 

## value of annual energy expenditures and the present 22 

## value of annual equipment expenditures.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## The method is to calculate for each 2 

## product class in each of the standard cases, 3 

## calculate the per-unit cost increase and per-unit 4 

## energy savings. In addition, calculate the number of 5 

## units in the stock used between 2021 and 2050 and 6 

## combine to determine the NES and NPV. The next few 7 

## flow charts will show this approach. 8 

## Let's start with the NES or national 9 

## energy savings. So the shipments analysis is 10 

## one of the primary inputs. Here on this chart, we have 11 

## on the right side the base-case projections and on 12 

## the left side, the standards-case projections. We 13 

## combine the shipments analysis with the base-case 14 

## annual energy consumption to come up with the base15 

## case cumulative energy use. From the standards-case 16 

## we do the same. We combine the standards-case annual 17 

## energy consumption to come up with the standards-case 18 

## cumulative energy use. Then, we use site to source 19 

## energy conversion factors to come up with the final 20 

## national energy savings. 21 

## In terms of the net present value, again, 22 

## we start with the shipment analysis numbers. WeThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### combine them with inputs -- with inputs for energy 2 

### costs, maintenance and repair costs, and total 3 

### installed costs for both the base-case projections and 4 

### standards-case projections to come up with cumulative 5 

### operating 6 

### costs. We combine energy costs and maintenance and 7 

### repair costs both for the base case and standards 8 

### cases. To come up with the cumulative total consumer 9 

### costs, we combine the total installed costs of both the 10 

### base case and standards cases. We then use discount 11 

### rates to come up with the net present value. 12 

### This table summarizes all the different 13 

### inputs that go into the analysis. More details are 14 

### available in Chapter 10 of the TSD. 15 

### A lot of these inputs come from the LCC 16 

### analysis. One of the primary inputs is the annual 17 

### unit energy consumption which is an average value 18 

### that comes from the LCC analysis. It's both for the 19 

### product class, but for this rulemaking it's actually 20 

### also provided for different market segments that we 21 

### discussed earlier. It's provided for new 22 

### construction and replacements, and it's also providedThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### for commercial and residential and for the regions we 2 

### are considering -- north and rest of country. 3 

### For the shipments we have discussed earlier, 4 

### the product stock is determined as the yearly stock 5 

### using the annual shipments and lifetime of each of 6 

### the product classes. For this rulemaking, we consider 7 

### the rebound effect. It's a 15 percent rebound effect 8 

### for this rule. 9 

### Base-case efficiency distributions I'll 10 

### discuss in further detail in the next slide. 11 

### The site-to-source conversion factors come 12 

### from AEO 2014 data. We also add full-fuel-cycle 13 

### conversion factors that actually also come up from 14 

### AEO 2014 data. 15 

### The total unit cost -- the total installed 16 

### cost per unit and total operating cost per unit come 17 

### from the LCC analysis as well and are designated by 18 

### the market segments. 19 

### Finally, we come up with -- we use two 20 

### discount rates that are used by OMB -- 7 percent and 3 21 

### percent. 22 

### Let me discuss in more detail the base-The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### case projections and distributions. As we discussed 2 

### earlier in the LCC analysis, we come up with base3 

### case market shares for 2021 and project that into the 4 

### future. The distributions are shown here at the 5 

### national level, 55 percent in the baseline, 5 percent 6 

### level one, 17 percent level two, and 23 percent level 7 

### three. For each of the trial standard levels, we come 8 

### up with different market shares as well depending on 9 

### whether the standard will require condensing or not. 10 

### For some of the trial standard levels, since it's a 11 

### regional standard, there will be a mixture. 12 

### For example, for trial standard two, there 13 

### is not applicable for -- up to the third, since it's the 14 

### standard for the north will be condensing. For the 15 

### other market shares, non-condensing is still 16 

### applicable for the south. 17 

### The distribution over time is shown in the 18 

### graph for all of the product classes in the base 19 

### case. The standards-case distribution is available in 20 

### Chapter 10 of the TSD. 21 

### MR. BROOKMAN: Andrew DeLaski? 22 

### MR. DeLASKI: I'm not sure when a goodThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### time to raise this is. Maybe now is a good moment. 2 

### Victor, in many dockets, the Department will also 3 

### model what you typically call a shift scenario which 4 

### would typically look at some shift. You know, for 5 

### example in this scenario, if the market shifts to a 6 

### 95-percent standard, for example, manufacturers have 7 

### an incentive to be able to offer an approved product 8 

### and to sell out, right. The markets typically 9 

### exhibit a good, better, best kind of structure, and 10 

### that would typically drive a distribution of 11 

### efficiency above a new standard level. 12 

### So I'm curious . . . in this case, you elected 13 

### not to model a shift scenario, and what was the 14 

### thinking there? 15 

### MR. FRANCO: Thank you so much for that 16 

### clarification. It's actually a mixture of -- this is 17 

### not reflected in this. It's actually both a rollup 18 

### and a shift depending on what was considered. One 19 

### example is -- for example, if we're going for the 20 

### standard at 90 percent, there is actually a shift to 21 

### some of the market going instead of just rolling up 22 

### to 90 percent, some of the market actually going toThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## 92 percent. The consideration there and the details 2 

## are in Chapter 10. The consideration there was that 3 

## the equipment price differential between 90 and 92 is 4 

## small enough that consumers -- that some fraction of 5 

## consumers would elect to go directly to 92. 6 

## For other potential standards, there's a 7 

## certain part of the market that because of this 8 

## improved -- because manufacturers want to have a 9 

## better/best scenario in terms of the product 10 

## segmentations, there will be a slightly higher, for 11 

## example, 98 percent efficiency because that will be 12 

## the best model that they could potentially offer into 13 

## the market. 14 

## So if you look at the TSD, you can 15 

## actually see, instead of the market share of 98 16 

## percent in TSL three, four, or five -- three or four, 17 

## sorry, you would actually, instead of being, pretty 18 

## much flat around 0 to 1 percent, it actually would 19 

## grow over time to say 5 percent or even higher 20 

## depending on what TSL level. The details are in the 21 

## TSD. 22 

## MR. deLASKI: Okay. Thank you. I'llThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## look for that. Chapter 10 you said? 2 

## MR. FRANCO: Yes. Thank you. 3 

## So I kind of jumped ahead of myself 4 

## because I did talk about the trial standard levels 5 

## without discussing how they were developed. So 6 

## here's the development that DOE considered for -- the 7 

## criteria that DOE considered for the trial standard 8 

## levels. DOE considered five trial standard levels, 9 

## two of them have a regional standard, and three of 10 

## them have a national standard, TSL three, four, and 11 

## five. 12 

## DOE is currently considering TSL three. 13 

## TSL five has the max-tech efficiency levels. TSL 14 

## four yields the maximum NPV at 7 percent for which 15 

## the percentage of LCC winners is higher than the 16 

## percent of LCC losers. That's the criteria. 17 

## TSL three is 92 percent AFUE for both 18 

## non-weatherized and mobile home gas furnaces. And TSL 19 

## two is a mixture. As I mentioned earlier, 95 percent 20 

## for the north, and baseline or 80 percent for the 21 

## rest of the country. 22 

## TSL one would provide a 90 percent for theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## north, and 80 percent for the rest of the country. 2 

## MR. ROSENSTOCK: Steven Rosenstock. I 3 

## guess a very quick question. Looking over these 4 

## numbers again, for TSL one, why was it the choice to 5 

## make different numbers for the north for mobile home 6 

## versus non-weatherized? Why is the mobile home number 7 

## higher compared to the other? 8 

## MR. FRANCO: Thank you so much for that 9 

## question. That's a great question. I passed over 10 

## that. The baseline condensing that was considered in 11 

## terms of the efficiency levels for mobile homes, the 12 

## baseline was 92 percent since there are currently no 13 

## models at 90 percent. 14 

## MR. ROSENSTOCK: There's no models a 91% 15 

## either? 16 

## MR. FRANCO: No. 17 

## MR. ROSENSTOCK: Just 92%, that's the first 18 

## one? Okay. 19 

## MR. FRANCO: That's the first one. 20 

## MR. ROSENSTOCK: Okay. 21 

## MR. BROOKMAN: Okay. Thank you. Aniruddh? 22 

## MR. ROY: Aniruddh Roy, Goodman. Just aThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## question on the discount rate. So, the real discount 2 

## rate used in this analysis is 6.4 percent, whereas in 3 

## the 2011 direct final rule it was 8 percent. I'm 4 

## just curious to know what caused that change from the 5 

## 2011 analysis to now. 6 

## MR. FRANCO: Thank you for that question. 7 

## We do use different discount rates in our analysis. 8 

## I'm not sure which one you're referring to, so I'll 9 

## just clarify first the different discount rates that 10 

## we use. We do use a discount rate in the LCC 11 

## analysis which we described in the previous meeting. 12 

## That's around 4 to 5 percent, and that's used in the 13 

## consumer model LCC analysis. For the NIA, as long as 14 

## I can remember, we've been using 3 to 7 percent, two 15 

## discount rates to kind of give the range, and that 16 

## hasn't changed for many, many years. So those are 17 

## the ones that are currently used -- 3 percent and 7 18 

## percent. The results are presented with those two 19 

## discount rates. We'll look at those results in a 20 

## little bit. 21 

## MR. BROOKMAN: Mark Krebs. 22 

## MR. KREBS: Mark Krebs. I am familiarThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## with OMB Circular A-4 that you cited, and there's a 2 

## footnote in that that -- footnote 8 that says 3 

## Circular A-94 also recommends using other discount 4 

## rates to show the sensitivity of the estimates to the 5 

## discount rate assumption. 6 

## From my understanding of discount rates, 7 

## it is a number that you use to assume a risk factor 8 

## in the lifecycle costs. You can't have a different 9 

## number, you know, for one group than another, or for 10 

## different years. It has to be one number. And 11 

## considering that the economy is not rebounding or at 12 

## least using that assumption that it could naturally 13 

## get much worse, and, you know, considering all these 14 

## groups, I would say that using much higher discount 15 

## rates is appropriate. You know, and I know I talked 16 

## about this during the last meeting, and I reiterate 17 

## that the Georgetown University -- George Washington 18 

## University weighed in with some very good comments by 19 

## a woman there, Sophie Miller, for the furnace fan 20 

## rule who ran a lot of different discount rates to 21 

## look at that furnace fan rule. And it really changed 22 

## the whole life-cycle savings, you know, in a majorThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## way. 2 

## And so, again, I think that DOE, according 3 

## to the OMB, is required to look at vastly different 4 

## scenarios than just three and seven, three and seven, 5 

## three and seven. 6 

## MR. BROOKMAN: Thanks, Mark. Aniruddh? 7 

## MR. ROY: Aniruddh Roy. So, Victor, thank 8 

## you for pointing that out on the discount rates. 9 

## Actually just to clarify, this discount rate pertains 10 

## to the INPV analysis, or maybe Navigant can answer 11 

## that question whenever we get to that section again. 12 

## MR. FRANCO: Oh, yes, that relates to the 13 

## MIA which will be coming up later. 14 

## MR. ROY: Yes. So just to clarify, it was 15 

## 8 percent in the 2011 rulemaking for the same 16 

## product, but 6.4 for this analysis. So I'm just 17 

## curious to understand what caused that change? 18 

## MR. FRANCO: Thank you, yeah. That will 19 

## be coming up in a little bit. 20 

## So, now let's discuss the trial standards 21 

## for standby mode and off mode. These are the 22 

## different TSLs that were developed. Essentially, itThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### maps the efficiency levels. These are the power 2 

### watts for each of them, and DOE is proposing TSL three 3 

### for the proposed standard. 4 

### We . . . in the engineering analysis, we went 5 

### over the technologies and the power for these. So 6 

### now, let's go over the results. So this shows the 7 

### national energy savings, the primary energy savings, 8 

### and the fuel cycle energy savings for both of the 9 

### prior classes, as well as the total. DOE is currently 10 

### proposing TSL three. As you can see, the primary 11 

### energy savings are 2.25 quads for primary, and for the full 12 

### fuel-cycle energy savings, it's 2.78 quads. 13 

### Again, the net present value is presented 14 

### with two different discount rates, one at 3 percent 15 

### and another at 7 percent. At 3 percent at TSL three, 16 

### the total NPV is $16 billion. At 7 percent, the total 17 

### NPV is $ 3.1 billion. 18 

### MR. STANONIK: Frank Stanonik. Just -- 19 

### you don't have to go back to the slide, but on your 20 

### estimates of national energy savings, does the TSD 21 

### have information on separating that out by north and 22 

### the rest of the country?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. FRANCO: Yes, we do provide as much 2 

## details as possible. Additional details are in the 3 

## analysis tools. 4 

## MR. MOORE: Jim Moore from Laclede Group. 5 

## You said that in that chart that you've converted 6 

## source to site -- or site to source, I'm sorry, and 7 

## I've been going through the NIA spreadsheet, and I'm 8 

## just not seeing it. Can you tell me what number you 9 

## used? You know, standard numbers like three on going 10 

## from site to source. Or did you use some other kind 11 

## of analysis? Because my analysis isn't jiving with 12 

## yours, and I actually show CO2 going up, not down. 13 

## MR. FRANCO: Thank you so much for that 14 

## question. This is a very important clarification 15 

## question. The actual total and primary energy 16 

## savings of full-fuel-cycle are provided in a 17 

## different tool which is called the NIA plus. Those 18 

## numbers are available in that spreadsheet. 19 

## MR. MOORE: That's what I'm looking at 20 

## right now. 21 

## MR. FRANCO: Yes, and those numbers vary 22 

## over time. The primary resource for that is AEO 2014,The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### which calculates those values. I don't exactly know, 2 

### but at the beginning of the trend, it probably is 3 

### close to three, but further over time it decreases 4 

### over time. 5 

### MR. MOORE: Okay. Thank you for that. 6 

### And a follow up on EIA's release of AEO 2015 7 

### tomorrow. Is DOE going to look at that and see if 8 

### changes are in order? 9 

### MR. FRANCO: Yes. Thank you for that 10 

### comment. Definitely are. 11 

### PARTICIPANT: You will? 12 

### MR. FRANCO: Yes. 13 

### MR. MOORE: Thank you. 14 

### MR. BROOKMAN: Steve? 15 

### MR. ROSENSTOCK: Steve Rosenstock. For 16 

### this, you know, EPA is going to be coming out with 17 

### their final rule, the Clean Power Plan by June or 18 

### July, which will have a huge impact on the electric side. 19 

### The Mercury Rule has already had impact. I'll talk 20 

### about that later, but, you know, that estimated ratio 21 

### is overstated for electricity significantly. And 22 

### will DOE do some sort of sensitivity analysis toThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## adjust for the probability of the impacts of the 2 

## Clean Power Plan? 3 

## MR. CYMBALSKY: This is John from DOE. So 4 

## the analysis you see here is based on current laws 5 

## and regulations. So if that becomes a current law 6 

## and regulation, we will incorporate it. If it stays 7 

## a proposed rule, it will not be incorporated. 8 

## MR. BROOKMAN: Aniruddh? 9 

## MR. ROY: Just a question on slide 99. 10 

## The 8.5 watts, that's specific to off mode and 11 

## standby, right? 12 

## MR. BROOKMAN: We can just barely hear you 13 

## down here? 14 

## MR. ROY: So it's 8.5 watts each, correct? 15 

## MR. FRANCO: That is correct. That would 16 

## be the maximum if that becomes a standard. That's 17 

## standby and off mode. 18 

## MR. ROY: Okay. Thank you, it came across 19 

## as just being a combined wattage for both, so I just 20 

## wanted to clarify that. 21 

## MR. FRANCO: Oh, thank you. Thank you for 22 

## that.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## Oh, yeah, sorry about that. So these are 2 

## the results for the standby. 3 

## MR. BROOKMAN: Before you move on, we have 4 

## some questions or comments from an individual joining 5 

## us online. The first is from Terry Small who says, 6 

## Manufactured housing or motor home housing gas 7 

## furnaces and their markets (new and replacement) is 8 

## very different from non-weatherized gas furnaces. It 9 

## does not appear to me you are really analyzing it 10 

## fairly on its own, rather automatically assuming it 11 

## is just like NWGF for your analysis ease. And 12 

## following up, Terry continues, It appears there is not 13 

## really solid justification for the MHGF to move to 92 14 

## percent. 15 

## Okay. Thank you. 16 

## MR. FRANCO: Thank you for those comments. 17 

## MR. ROSENSTOCK: Steve Rosenstock, EEI. 18 

## Again, on the standby and off mode, as I'm looking 19 

## through the technical support document in the NOPR, 20 

## you're saying the baseline is 11 watts and the 21 

## choices are 9.5 and 9.2 and 8.5 watts. And I asked 22 

## this before and if it was in the TSD, I should haveThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### brought that chapter, but what is the range in the 2 

### baseline? I know you're showing 11 watts, but what's 3 

### the range of what's out there right now? 4 

### MR. FRANCO: This would be in Chapter 8 5 

### which would have the base -- which would have the base6 

### case efficiency distributions, and actually, there's 7 

### an appendix related to that which would show a little 8 

### bit of the details. It depends on what type of motor 9 

### you're using because mobile home gas furnaces are -- 10 

### the furnace fan center does not require going to 11 

### higher technology such as X13 or ECM. A lot of them 12 

### already meet the standard, so most of the market is 13 

### already at that lower level. 14 

### In terms of non-weatherized gas furnaces, I 15 

### believe it's about 50/50 that would be at the 16 

### baseline versus the max -- 17 

### MR. ROSENSTOCK: 60/40 is what -- Steven 18 

### Rosenstock. I'm showing about 60/40, and I guess, you 19 

### know, when you're getting down to .3 watts for some 20 

### of these or .5 watts, it's like, you know, the 21 

### variations in technologies, you know, there could be 22 

### a technology that meets level one that is belowThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## what's in level two. And so you're not really saving 2 

## any energy. And, again, the reason I was asking 3 

## about the range was within each product category, if 4 

## the ranges are overlapping, are you always assuming 5 

## electricity savings even though they might overlap, 6 

## the technology choices overlap? 7 

## MR. FRANCO: So if the technology, for 8 

## example, is already below, it's higher than the max 9 

## step, there's no savings. So it's not impacted. If 10 

## there is potential savings regarding, for example, 11 

## from a baseline to higher efficiency, there would be 12 

## savings. 13 

## MR. ROSENSTOCK: Well, I guess if there's 14 

## a technology, let's say for a TSL one which you show, 15 

## you know, in slide 99, you know, the max is 9.5 16 

## watts, but what if the better ones out there are 17 

## actually at 9.0 watts, or 8.7 watts which are 18 

## actually below TSL two, how are you accounting for 19 

## that in the analysis? 20 

## MR. FRANCO: We account for the base-case 21 

## efficiency distribution. We came up with those 22 

## distributions based on a limited set of data that weThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### had in terms of models. We would request 2 

### manufacturers, if they have a better set of data, to 3 

### come up with those estimates. 4 

### MR. CYMBALSKY: The short answer is, the 5 

### same way we do it with the AFUE. So we know that a 6 

### percentage of the market is already there, similar in 7 

### standby. So, again, if they're already beyond what 8 

### the numbers indicate here, they don't -- you don't 9 

### see savings. 10 

### MR. FRANCO: Thanks, John. 11 

### So the next couple of slides are the same 12 

### results in terms of national energy savings and NPV 13 

### for standby mode and off mode. DOE is currently 14 

### proposing TSL three. The total energy savings for 15 

### primary is .26 quads, for full fuel-cycle is .77 quads. 16 

### In terms of net present value, TSL three 17 

### would yield at a 3-percent discount rate, $3.3 billion 18 

### and $1 billion at a 7-percent discount rate. 19 

### MR. ROSENSTOCK: Over the 30-year period, 20 

### correct? 21 

### MR. FRANCO: Over the 30-year period. 22 

### MR. ROSENSTOCK: Steve Rosenstock, EEI.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. BROOKMAN: Thank you. 2 

### MR. FRANCO: So moving on to the 3 

### regulatory impact analysis. DOE investigated 4 

### national impacts of regulatory alternatives to 5 

### mandatory amended energy conservation standards. 6 

### This is available in Chapter 17 of the TSD. To 7 

### conduct . . . that is, the method is using a modified 8 

### version of the NIA spreadsheet to evaluate different 9 

### non-regulatory alternatives including 10 

### no new regulatory action, consumer 11 

### rebates, consumer tax credits, manufacturer tax 12 

### credits, voluntary energy efficiency targets, and 13 

### government purchases. DOE identified 155 programs 14 

### from 65 organizations offering rebates ranging from 15 

### $50 to $800 to purchase condensing furnaces. 16 

### No alternative was found to be as beneficial 17 

### as the proposed energy conservation standards. 18 

### Again, further details are provided in Chapter 17, as 19 

### well as the results. 20 

### DOE requests comments on the 21 

### reasonableness of the value that DOE used to 22 

### characterize the rebound effect withThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## higher-efficiency non-weatherized gas furnaces and 2 

## mobile home gas furnaces. DOE currently uses a 15 3 

## percent rebound. 4 

## MR. BROOKMAN: Andrew deLaski. 5 

## MR. deLASKI: So I'll reiterate the 6 

## comments I made at the last public meeting, which is 7 

## we think this number is too high. The TSD and the 8 

## NOPR paper by Steve Nadel suggest that the range is 9 

## -- that 15 percent is the very high end of the range 10 

## and that the range, based on our examination of the 11 

## literature, is 1 to 15 percent and that you've 12 

## developed a very conservative estimate of this energy 13 

## savings because you've used probably the outer limit 14 

## of the rebound. And I'll refer you back to that 15 

## paper. 16 

## MR. BROOKMAN: Okay. Thank you. 17 

## MR. FRANCO: Thank you. 18 

## That actually concludes that section, the 19 

## NIA. 20 

## And if there are any comments regarding 21 

## the shipment -- 22 

## MR. STANONIK: Frank Stanonik, AHRI. I'mThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## back on slide 104. So you identified in the analysis 2 

## several different, let's say, non-regulatory 3 

## alternatives were identified. I'm trying to figure 4 

## what the right question is here. How did you factor 5 

## in these alternatives into the -- okay, so the 6 

## concept is that the analysis is supposed to look at 7 

## the effect of the standard, so the baseline versus 8 

## the market driven by the standard. So how did you 9 

## factor in these alternatives into your future 10 

## shipment projections? As an example, how would you 11 

## factor in -- okay, I mean, 155 programs -- let's take 12 

## the discussion, let's say there are currently 30 13 

## active utility programs pushing incentives for high 14 

## efficiency products. How does that get factored into 15 

## the future shipments? 16 

## MR. FRANCO: That's a good question. In 17 

## Chapter 17, the details will be provided there. You 18 

## can actually see the different market penetrations 19 

## that would be applied. So, for example, let's say 20 

## that we currently assume that the base case is 40 21 

## percent, going to condensing. Some of these might 22 

## increase it by a few percentage points and that wouldThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### be the impact of that program. 2 

### MR. CYMBALSKY: Well, the short answer is, 3 

### it's in the baseline market efficiencies that we 4 

### presented earlier. So we know that in all, as it states 5 

### here, there's 155 programs that are actually rebating 6 

### consumers. So the fact that 60 percent of the market 7 

### is already at condensing reflects the fact that these 8 

### programs are in fact helping to achieve that 60 9 

### percent. And so what the RIA does is it looks at 10 

### side scenarios for the rest of these types of things 11 

### and evaluates what the energy savings would be and 12 

### compares them to our standards case. 13 

### MR. BROOKMAN: Mark Bays, there's a 14 

### question. The question is, why so much weight is 15 

### being given to 90 percent furnaces compared to 90 16 

### percent? Pardon me, 92 percent. And he continues, 17 

### are these based on existing furnaces because the 18 

### electrical requirements will require a 95-percent 19 

### efficient furnace to meet? 20 

### MR. CYMBALSKY: So this is John from DOE. 21 

### I think the question seems to either have been 22 

### transcribed incorrectly or I'm not understanding.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## But actually, there's not a lot of weight given to the 2 

## 90-percent furnace because as our market share data 3 

## indicated, the market has moved beyond -- if it's 4 

## going to go condensing, it goes higher than 90%, and 5 

## we've seen that in the market data. So actually, 92% 6 

## and 95% get higher market shares than 90%, and I don't 7 

## understand the other question about the electrical 8 

## requirements. 9 

## MR. BROOKMAN: Okay. 10 

## Yes, Steve Rosenstock? 11 

## MR. ROSENSTOCK: Question real quick. You 12 

## know, going back to that blip slide, it showed that 13 

## condensing furnaces, you know, went up from like 40 14 

## to 60 percent primarily as a result of the tax 15 

## credits during the stimulus, as a result of the 16 

## stimulus bill. It's at slide 69. It took a huge bump 17 

## up. There it is, right there. Both, you know, in the 18 

## north and especially nationally, you see the huge 19 

## run up, and the tax rate was very generous at that 20 

## time. So for the RIA, again, I don't have it right 21 

## in front of me, what kind of tax credit was 22 

## considered in terms of that for that analysis? WasThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### it as generous as during the stimulus bill, or was it 2 

### a lot less? 3 

### MR. FRANCO: Thank you for that question. 4 

### It was actually a lot less. But the details are -- I 5 

### don't know the exact numbers, the details are in 6 

### Chapter 17. 7 

### MR. ROSENSTOCK: Again, Steve Rosenstock. 8 

### Thank you. Again, because we have this history here 9 

### of a generous tax credit, why wasn't that part of the 10 

### analysis? 11 

### MR. FRANCO: The analysis considers the 12 

### current kind of scenario of tax credits that are available. 13 

### The tax credit I think you are referring to are 14 

### the Federal tax credits? 15 

### MR. ROSENSTOCK: Yes. 16 

### MR. FRANCO: These are mainly utility 17 

### programs. 18 

### MR. ROSENSTOCK: Okay. 19 

### MR. FRANCO: This is the range between $50 20 

### and $800. 21 

### MR. ROSENSTOCK: Okay. But, again, I 22 

### guess there's a current Federal tax credit thatThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### expires -- I'll say $200 Federal tax credit, but 2 

### during the stimulus years, it was 1,000 or whatever, 3 

### and it shows a significant market response to that 4 

### tax credit as result of that. To not consider 5 

### it, seems, again, partially incomplete. 6 

### MR. BROOKMAN: Yes, Charlie. 7 

### MR. KREBS: Got a quick one, go ahead. 8 

### Mark Krebs. Going back to that same slide 9 

### that Steve was just talking about -- 10 

### MR. BROOKMAN: The famous blip slide. 11 

### MR. KREBS: Yeah. Yeah. There you are. 12 

### You know, you look up to about, oh, what is it, 2008 13 

### when President Obama went into office. Then you look 14 

### for the next few years, and, you know, the slope 15 

### changed, but really not totally. It wasn't night and 16 

### day. The slope increased; it got steeper, but not 17 

### that much steeper than it was from 2000 to 2008. So, 18 

### again, the reason I bring this up is just let's get 19 

### the raw data from AHRI, which as Frank said is forthcoming, 20 

### and then we can debate this in depth if there's -- of 21 

### course, there won't be any more meetings, so it's 22 

### kind of a moot point.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## The other point I'd like to make real 2 

## quick is just another issue about discount rates. 3 

## You know, what do you think 7 and 5 percent 4 

## represent? Then I'll tell you what I think they 5 

## represent. Do they represent average American -- 6 

## what is it? 7 

## MR. CYMBALSKY: You mean 7 and 3 percent? 8 

## MR. KREBS: Seven and 3. 9 

## MR. CYMBALSKY: The OMB? These are social 10 

## discount rates. So societal. But I think people are 11 

## confusing what is known as hurdle rates versus 12 

## discount rates. 13 

## MR. KREBS: No. No. That's not where I'm 14 

## coming from. What part of society does 3 and 7 15 

## represent? The homeowners or something broader? 16 

## MR. CYMBALSKY: I think, you know, if we 17 

## read the OMB Circular, we could read what they espouse 18 

## about what those mean. 19 

## MR. KREBS: Well, it just so happens that 20 

## I just did that. 21 

## MR. CYMBALSKY: Then you can read it for 22 

## the group.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. KREBS: I'm not going to read the 2 

### whole thing. It just goes back to that footnote 8 3 

### and that the Circular goes -- says that the DFR was 4 

### based on 1992 numbers for corporate capital. You 5 

### know, that was a long time ago, and we're not talking 6 

### corporate capital here. We're talking average American 7 

### consumers. 8 

### MR. BROOKMAN: Mark, what are you 9 

### suggesting it should be? 10 

### MR. KREBS: You should run a robust range 11 

### of discount rates. You know, and then we could pay a 12 

### little more attention to what it really should be for 13 

### this long period of time on the average for all 14 

### consumers. You know, I would say 10% is probably 15 

### still too low. It depends. You know, it really 16 

### depends on the type of consumer. If you're up 17 

### against the wall consumer, teetering on the edge of 18 

### going on welfare, you know, it's infinitely higher. 19 

### You know, it could be 100 percent. 20 

### MR. BROOKMAN: Jim Vershaw has a question 21 

### which is, from joining us online, For RIA, does DOE 22 

### include all other ongoing regulatory actions likeThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## commercial furnaces, commercial rooftops, standby 2 

## power on AC/HP's commercial fan and blowers as all 3 

## affect most OEMs or a subset of those? 4 

## MR. CYMBALSKY: This is John from DOE. So 5 

## that's more of an MIA question that -- 6 

## MR. BROOKMAN: Which we're about to get to 7 

## shortly. 8 

## MR. CYMBALSKY: That's our chief engineer 9 

## fixing the light. 10 

## (Laughter.) 11 

## MR. BROOKMAN: Okay. We're going to move 12 

## on. 13 

## Yes, Charlie, before we do. 14 

## MR. McCRUDDEN: So this is Charlie with 15 

## ACCA. So back to slide 104 and the regulatory impact 16 

## analysis. You looked at the consumer rebates and 17 

## utility programs, and I think I'm guessing most of 18 

## those utility programs are incenting the homeowner to 19 

## go to a condensing furnace. So when we go to a 20 

## condensing furnace, what happens to -- have you 21 

## looked at what happens to those incentives, and then 22 

## would they still essentially be effective? Or ifThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### they're not effective, then what impact does that 2 

### have on that sort of 2021 to 2050 regulatory 3 

### analysis? 4 

### MR. FRANCO: Just to clarify that 5 

### question, you mean after if it's kind of linear or if 6 

### it decreases over time? 7 

### MR. CYMBALSKY: Let me take a stab at it. 8 

### This is John from DOE. So I think what we do, and 9 

### Victor will throw something at me if I'm wrong, you 10 

### know, when we get to 2021, to keep that share of 11 

### condensing market share that we see, we're saying 12 

### that these programs still exist when we get to 2021. 13 

### What happens after that clearly, we've seen it in 14 

### other products like lighting, for example, when the 15 

### Federal standard came in, the CFL compact fluorescent 16 

### lamp rebates that were very widespread went away. 17 

### What will happen here is that our standard that we're 18 

### proposing keeps the good, better, best scenario for both 19 

### manufacturers and people -- programs who would like to keep 20 

### their rebate programs in place. They will just be rebating 21 

### at the 98% maybe instead of the 90% or 92% where they 22 

### may be doing it today.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. McCRUDDEN: Okay. I guess the 2 

### assumption is the rebates will remain. In your sort 3 

### of nonregulatory action -- 4 

### MR. CYMBALSKY: To maintain that level of 5 

### condensing. 6 

### MR. McCRUDDEN: Okay. 7 

### MR. BROOKMAN: Yes, Steve Rosenstock? 8 

### MR. ROSENSTOCK: Steve Rosenstock, Edison 9 

### Electric Institute. I'll just take on speaking as 10 

### somebody who's worked on a lot of DSN programs. 11 

### Whenever Federal standards have gone up, utility level 12 

### incentives change, and if they go up significantly, because 13 

### the delta has gone down between the baseline and the 14 

### higher-efficiency product, the incentives go down, and 15 

### they can go down significantly because there's less 16 

### energy to save. Therefore, that energy savings is 17 

### less. It's worth less to the utility to save that 18 

### small increment of energy. 19 

### MR. CYMBALSKY: This is John from DOE. So 20 

### the utility -- since the States still have their 21 

### standards in place for a lot of these regulated 22 

### utilities, what they will often do is look forThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### opportunities to get a similar bang for the buck. 2 

### Like, for example, they've switched from lighting to 3 

### maybe air conditioning because now the rebate dollars 4 

### that they were given for lighting, they're not 5 

### getting that anymore. The standards actually took 6 

### that opportunity away from them. But they still have 7 

### requirements. Certain States have requirements to 8 

### meet certain efficiency levels, and they have the 9 

### dollars to spend to get to those levels, so they will 10 

### explore new opportunities. 11 

### MR. BROOKMAN: We're about to move on to the 12 

### manufacturing impact analysis. Before we do, Neal 13 

### Leslie has a comment. Neal, let's try it again. 14 

### MR. LESLIE: Sorry I wasn't on before. 15 

### Can you hear me now? 16 

### MR. BROOKMAN: You sound good. 17 

### MR. LESLIE: And my apologies for not 18 

### being on when you called on me the first time. I was 19 

### unavailable. Anyway, my question has to do with 20 

### slide 80. Okay. So if slide 80 -- shows that the 21 

### average LCC savings jumped from $238 without fuel 22 

### switching up to $305 with fuel switching, which isThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## approximately 20 percent of the rule benefit accruing 2 

## due to fuel switching, my first question is, is that 3 

## statement a correct statement that I made? 4 

## MR. CYMBALSKY: That is correct, they are 5 

## higher LCC savings. Yeah. 6 

## MR. LESLIE: So then the next thing, 7 

## assuming that's true, is that I want to make sure I 8 

## understand this as well, carefully, and that is, if we 9 

## were to deal with what I'll call rational technology 10 

## switching to the 92 percent premise, it's my 11 

## understanding from your earlier discussion that those 12 

## folks are deemed to be not affected by this 13 

## rulemaking because that would have been considered as 14 

## part of the shipment data. Am I interpreting that 15 

## correctly? 16 

## MR. CYMBALSKY: In the baseline, there's a 17 

## natural level of switching that occurs without any 18 

## standard in place. Those are the unaffected -- those 19 

## are not part of the table that you're reading here. 20 

## MR. LESLIE: Okay. And I guess we -- 21 

## still an issue for me on that particular one -- I 22 

## want to make very sure I'm correct on that -- that I'mThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## not far off in the corner here and that is that those 2 

## folks who would have, without the rule, gone ahead 3 

## and put in a 92-percent furnace anyway are not in the 4 

## affected class -- 5 

## MR. CYMBALSKY: That's correct. Correct, 6 

## they're not affected. 7 

## MR. LESLIE: So, I'm sorry, I call those 8 

## rational technology switches, that's what I'm 9 

## categorizing them as. The other one that has given 10 

## me pause was the statement about what I would call 11 

## rational fuel switching and that is fuel switching 12 

## that is done to avoid the higher costs of a gas 13 

## furnace option and a fuel switch to, say, an electric 14 

## heat pump. What I would deem to be another part of 15 

## what a reasonable consumer would do absent the rule 16 

## and that is to make a fuel choice away from natural 17 

## gas technology toward electric technology absent the 18 

## rule. And what I heard this morning was that, at 19 

## least some of those are considered effective to avoid 20 

## the high cost of a furnace -- I'm not sure I have 21 

## that correctly. 22 

## MR. CYMBALSKY: The baseline shipmentsThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## reflect those people, so they're not part of this at 2 

## all. They're choosing electricity. They're choosing 3 

## electric in the baseline, so they're not part of this 4 

## at all. 5 

## MR. LESLIE: Okay. So anything in which 6 

## there would have been a really strong benefit to fuel 7 

## switching to avoid that high cost is considered to be 8 

## not affected? 9 

## MR. CYMBALSKY: Right. Because they're 10 

## doing it now, and they'll continue to do that, if that 11 

## in fact is true what you said. It's already 12 

## reflected in the shipments. 13 

## MR. LESLIE: So then my question is, given 14 

## that, how could there be positive benefits to fuel 15 

## switching caused by the rule? 16 

## MR. CYMBALSKY: Because the people who -- 17 

## (Simultaneous conversation.) 18 

## MR. LESLIE: A lot of people that would 19 

## rationally fuel switch and a lot of those potential 20 

## benefits that are not affected -- that's my -- 21 

## MR. CYMBALSKY: So I guess we'll step back 22 

## to let you consider these rational people who areThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### right now, currently today, how many people are 2 

### replacing their gas furnaces with some other form of 3 

### fuel in their house? What would you suggest that 4 

### percentage is? 5 

### MR. LESLIE: I'd have to go back and lean 6 

### on the fuel switching survey information that was 7 

### provided in 2014 to get a number. I do not have it 8 

### off the top of my head. 9 

### MR. CYMBALSKY: I would suggest that 10 

### number is single digits if that at all frankly. So 11 

### you're saying someone who . . . Let's say a household 12 

### comes in, and they have, let's say, a 78%-AFUE furnace. It 13 

### breaks tomorrow. Their choices are an 80%, a 90%, 92%, 14 

### 95%, 98%. You're saying nationwide there's a large 15 

### subset of people who will replace that gas furnace 16 

### with some other form of fuel? 17 

### MR. LESLIE: So that is ultimately the 18 

### question. 19 

### MR. CYMBALSKY: And I think if you look at 20 

### the shipment data -- 21 

### (Simultaneous conversation.) 22 

### MR. CYMBALSKY: Right. So we can look atThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### the shipment data and figure, you know, make some 2 

### rules of thumb, but frankly that number is very, very 3 

### small. Again, and people have mentioned it here 4 

### today, the price of natural gas today is a how low 5 

### can you go, kind of thing. But, we don't see a large 6 

### level of shipments of switching. So if you have 7 

### data, and, again, I pointed to that now 15-year-old 8 

### AGA study that I remember seeing that talked about 9 

### fuel switching. It was very helpful to look at. 10 

### Switching away from gas to a different fuel currently, 11 

### I don't think, is a big number. If you have 12 

### information to say that it is, we'd love to have it. 13 

### And then my next point is, so we think the 14 

### shipments reflect that. And what the table that you 15 

### pointed to is showing, and the reason LCC gets positive 16 

### is that those people who get into the situation where the 17 

### venting costs are very high, if they switch to the 18 

### electric, they do not lose -- you know, they are 19 

### definitely cutting down whatever loss that may have 20 

### been there with the high venting costs. So that's 21 

### why you get that difference. 22 

### MR. LESLIE: I guess the only issue isThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## whether those people should be considered affected or 2 

## not affected, and we'll just leave that for comments. 3 

## I just wanted to make sure I understood the 4 

## underlying logic and rationale for a positive LCC 5 

## benefit associated with fuel switching. 6 

## MR. CYMBALSKY: Right. 7 

## MR. LESLIE: That's pretty much -- what we 8 

## saw from the fuel switching survey that was done in 9 

## the 2014 timeframe was that those respondents did not 10 

## expect that to be a beneficial fuel switch. They 11 

## expected that to be a fuel switch that was driven not 12 

## in the consumer's best interest according to those 13 

## that were surveyed. 14 

## From my perspective, it's probably as good 15 

## as we have right now on the topic to determine 16 

## whether or not you have a distinction between what 17 

## people would do absent the rule and what people would 18 

## do with the rule. 19 

## MR. CYMBALSKY: And so it's important what 20 

## you said. So on your survey, you said that it was not 21 

## in the consumers' best interest to switch. So if 22 

## they're going to be worse off financially, why wouldThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## they switch? What is driving that switch then? 2 

## MR. LESLIE: There is a behavioral 3 

## economics question in play here that I don't know that 4 

## we want to get into here in the discussion today, but 5 

## it essentially -- the behavioral economics theory 6 

## allows that consumers make choices based on more than 7 

## just their economic wellbeing. 8 

## The cost of becoming better off comes into 9 

## play as well in their mind. You know, there are time 10 

## costs. There are other perceived costs within 11 

## behavior economics that drive consumers to behave in 12 

## a certain way, and that is what the fuel switching 13 

## survey information was intended to define. It is a 14 

## very challenging issue to deal with, but it does not 15 

## suggest that the end result of fuel switching was a 16 

## positive thing. I'm not sure how far we want to go 17 

## with this. 18 

## MR. BROOKMAN: Okay. Thank you for that. 19 

## Steve Rosenstock? 20 

## MR. ROSENSTOCK: Steve Rosenstock, Edison 21 

## Electric Institute. And with all due respect, part 22 

## of the reason that there's going to be positiveThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### economic impact is number one, the installation costs 2 

### or the equipment costs might be lower when they make 3 

### that choice depending on their situation, depending 4 

### on the contractor. Number two, it all really depends 5 

### on the local rates, local gas rates versus the local 6 

### electric rate. Typically electric rates are lower in 7 

### the wintertime than the summertime. And if they're 8 

### on a time use rate, you know, they're lower at night 9 

### than during the day typically. So, therefore, the cost 10 

### of heating during the coldest time period is going to 11 

### be lower. And, again, and the technical support 12 

### document just shows basically State by State all the 13 

### different prices they were using to run the scenario. 14 

### And third, you know, the heat pump technology has 8.2 15 

### HSPF or higher. If they were going not 8.5, 9 HSPF, 16 

### very high efficiency technologies, then that's also 17 

### lowering their costs of heating. 18 

### Thank you. 19 

### MR. BROOKMAN: Rick, do you have a comment 20 

### here? 21 

### Okay. Yes, Kathryn? 22 

### MS. CLAY: Yes, I fear I'm missingThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### something, so I appreciate the opportunity to 2 

### clarify. So if I understand correctly the 3 

### discussion, a consumer who say has a non-condensing 4 

### furnace today and then is able to fuel switch and so, 5 

### therefore, can avoid the extra costs of reventing, et 6 

### cetera, that they would otherwise have to pay by 7 

### going to a condensing furnace. But that's counted as 8 

### a benefit -- that their ability to avoid those venting 9 

### costs is counted as a benefit. And what troubles me 10 

### is, that is entirely a cost imposed by the rules. So 11 

### I don't understand how avoiding a cost that is 12 

### imposed by the rule can possibly be construed as a 13 

### benefit? 14 

### MR. CYMBALSKY: So there's costs, but it's 15 

### relative to what their other option is. So it's a 16 

### lesser cost to switch the fuel than to do the 17 

### venting, et cetera. So let's say the 80% furnace breaks, and 18 

### I 19 

### have to get a 95% furnace, and I have a difficult venting 20 

### situation, and it's going to cost $7,000. Or I can do 21 

### the heat pump, and it's only going to cost $5,000. 22 

### There're still costs, but it's $2,000 less costs inThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## scenario B. 2 

## MS. CLAY: But that choice scenario is 3 

## entirely caused by the rule. If it were not for the 4 

## -- so the proper way to evaluate whether the consumer 5 

## is better off or worse off is, what choices could 6 

## they have made if not for the rule? And if it would 7 

## be more economical to replace their furnace with a 8 

## non-condensing furnace, that's the -- that's the 9 

## number you should be comparing to, not the avoided 10 

## costs because they didn't purchase a condensing. 11 

## MR. deLASKI: What if non-condensing is 12 

## not available because the standard has made it not 13 

## available? 14 

## MS. CLAY: But that's what I'm saying. 15 

## We're counting a benefit here, but it's a circle. 16 

## We're saying that because the rule is making it 17 

## expensive for that person to replace -- making it 18 

## expensive because they've got to replace a 19 

## non-condensing with condensing. If they can fuel 20 

## switch and not pay that higher cost that's been 21 

## forced on them by the rule, it does -- you can't 22 

## count that as a credit. You can't say, well, IThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## jacked the prices up, but then I gave you a discount, 2 

## so you ended up with a net benefit. 3 

## MR. deLASKI: The question is, what this 4 

## is, is an electrical cost analysis. Right. So the 5 

## question is, is the electrical cost lower than it 6 

## would have been in the base case? 7 

## MS. CLAY: No, that's right. 8 

## MR. deLASKI: That's what this analysis is 9 

## evaluating. 10 

## MS. CLAY: It's what it should be 11 

## evaluating, but I think I heard that's not what it's 12 

## evaluating. It should be comparing the cost of that 13 

## consumer who replaced their condensing with a 14 

## non-condensing furnace to that consumer who then went 15 

## to an electric heat pump or other choice and then had 16 

## higher energy costs associated with that. 17 

## MR. BROOKMAN: John. 18 

## MR. CYMBALSKY: That's exactly what we do. 19 

## So the base case is without the standard, and 20 

## everything here is the cost differential relative to 21 

## what you just described. 22 

## MS. CLAY: So, again, I think I must haveThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## misunderstood because I thought that I heard that you 2 

## were counting the benefits a consumer would receive, 3 

## quote/unquote benefits of avoiding the costs of 4 

## reventing. 5 

## MR. CYMBALSKY: It is cheaper in that 6 

## scenario, and so, yes, there's less cost. 7 

## MS. CLAY: But you shouldn't be comparing 8 

## it to the scenario that is artificially constructed 9 

## by the rule. It should be what the consumer actually 10 

## does versus what they would have done in absence of 11 

## the rule. 12 

## MS. ARMSTRONG: This is Ashley from DOE. 13 

## So that's the difference between the with switching 14 

## and without switching scenarios, right? Because you 15 

## will see a higher estimated impact for if they had to 16 

## do these really hard installations with high cost of 17 

## the venting versus if you compare the delta between 18 

## those two, is what are you seeing it get cheaper for 19 

## the consumer. Both are compared to the base case, 20 

## the base case of them buying a new non-condensing 21 

## furnace. So we're doing exactly what you said. We've 22 

## done multiple scenarios though, one that takes intoThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### account all these different venting situations and 2 

### one that takes into account all these different 3 

### venting situations as well as the fuel switching. 4 

### MS. CLAY: Again, I think I have to try to 5 

### understand -- the way it's being presented, it sounds 6 

### very illogical. It sounds like the argument is, 7 

### because this could have imposed greater harm, we're 8 

### going to count that as the lack of greater harm as a 9 

### benefit which just defies logic. 10 

### MR. FRANCO: Hi, this is Victor Franco. I 11 

### just wanted to point out a number that might clarify 12 

### a little bit your questions. So, you see, the 13 

### percentage or fraction of people impacted, it doesn't 14 

### actually vary between the two scenarios. So people 15 

### are still impacted. As John and Ashley have pointed 16 

### out, they're impacted less compared to again 17 

### purchasing that 80 percent AFUE, if the standard 18 

### wasn't a higher efficiency. It's always compared to 19 

### them choosing being able to do what they can do in the base 20 

### case -- installing an 80 percent -- 21 

### MR. BROOKMAN: Ashley. 22 

### MS. ARMSTRONG: So there is a cost. It'sThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## not just calculating benefits without the cost. 2 

## There is a cost. But what we're saying is, that cost 3 

## is different if you consider fuel switching versus if 4 

## you don't. 5 

## MR. BROOKMAN: Mark Krebs. I want to move 6 

## on to MIA pretty quick here. 7 

## MR. KREBS: I'll make it quick. Actually, 8 

## not that I understand where these numbers come from, 9 

## but I am seeing, you know, an obvious economic 10 

## benefit from switching in these numbers on the chart. 11 

## And that might explain questions that we have had of 12 

## DOE going back to the preliminary spreadsheets, you 13 

## know, when I think it was a question 1A that had this 14 

## complicated table that compared 2011 determinations 15 

## with the present determinations. And, you know, so 16 

## like in the case of a 90-percent furnace, national 17 

## all installations average life-cycle savings went 18 

## from $87 to $236. So maybe, and there it is $236. I 19 

## don't know, it may be totally coincidental, but, you 20 

## know, this just underscores some basic questions that 21 

## we've been trying to get addressed and answered 22 

## clearly so we understand, and we're still quite a waysThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## from that obviously. 2 

## But I did go to the trouble of updating 3 

## the numbers from the preliminary spreadsheet values 4 

## to the ones that are the most recent ones, and I 5 

## brought copies to hand out. I'm going to hand them 6 

## out at this time. 7 

## MR. BROOKMAN: Okay. 8 

## MR. KREBS: And if I can get it posted on 9 

## regulation.gov. . . If youd pass them down that way, 10 

## please. 11 

## MR. BROOKMAN: And, Mark, will you state 12 

## what these are? 13 

## MR. KREBS: These compare the average 14 

## life-cycle savings and various scenarios from the 2011 15 

## DFR to the present 2015 numbers that were put on the 16 

## spread -- put in the spreadsheets on regulations.gov 17 

## this year. So, we see in the case of a 90-percent 18 

## furnace in 2011 an $87 savings and the same furnace 19 

## in 2015 a $236 savings, a change of 171 percent that 20 

## we'd like to understand how that happened. 21 

## MR. BROOKMAN: Okay. We're going to move 22 

## on now to manufacturer impact analysis.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## And we're going to hear from Chris Lau. 2 

## MR. LAU: Thank you, Doug. 3 

## My name is Christopher Lau, I'm with 4 

## Navigant. I'll be presenting the manufacturer impact 5 

## analysis today. 6 

## The prime purpose of the MIA is to assess 7 

## the impact of amended standards on furnace 8 

## manufacturers as an industry. The second purpose is 9 

## to identify and qualify impacts on manufacturer 10 

## subgroups such as small business manufacturers, and 11 

## the final portion of the MIA involves the discussion 12 

## of direct employment, potential capacity constraints, 13 

## and other Federal regulations that go into effect 14 

## around the compliance date of this rule. 15 

## In terms of methodology, the primary tool 16 

## used is the government regulatory impact model, also 17 

## known as the GRIM. It's a cash-flow model used to 18 

## represent the industry as a whole. The major output 19 

## of the model is the industry net present value or 20 

## INPV, a metric used to quantify impacts of the 21 

## standard on manufacturers. 22 

## We also conduct interviews to validate andThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## refine inputs to the GRIM and to better understand 2 

## qualitative issues. In general, we do our analysis 3 

## in three phases. In phase one, we build an industry 4 

## profile from publicly-available information including 5 

## Census data, SEC filings, manufacturer websites, and 6 

## product listings data. 7 

## In phase two, we use public data and inputs 8 

## from the engineering and shipments analyses to outline 9 

## the industry in the GRIM. And in phase three, key 10 

## inputs are validated with manufacturers and 11 

## qualitative issues are discussed in interviews. We 12 

## use this content to refine the GRIM. 13 

## I'll take a moment here to pause to 14 

## address an earlier question from Goodman about the 15 

## cost of capital. The discount rate used in the GRIM 16 

## is based off of SEC filing data, and so in the 2011 17 

## DFR, the data would have been based off of probably 18 

## data from roughly 2003 to 2008, whereas the data in 19 

## this rulemaking would have been based off of data 20 

## from 2007 to 2013. 21 

## That SEC filing -- from the SEC filing 22 

## data, we estimate a discount rate of roughly 7 percentThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### which is, you know, cost of capital from 2 

### manufacturers. And then through manufacturer 3 

### interviews, we revise that estimate downward to the 4 

### -- I think we said it was 6.4 percent in the model 5 

### today. 6 

### In interviews, you know, we heard several 7 

### common concerns raised across manufacturers. The key 8 

### issues raised -- we identified four key issues raised 9 

### by the industry. There was broad concern about 10 

### installation costs in the replacement market which 11 

### we've discussed at length, but in general, 12 

### manufacturers want to be sure that DOE properly 13 

### captured the potential range of installation costs in the 14 

### replacement market. There was concern about product 15 

### switching which we've just had a long discussion on. 16 

### I will not rehash this right now. 17 

### There's concern about regional standards 18 

### and enforcement of such, but that is not being 19 

### proposed today. And there's concern about reduced 20 

### product differentiation which we'll address through 21 

### markups, as I'll describe shortly. 22 

### These are some of the qualitative issuesThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### raised. There's also extensive quantitative feedback 2 

### which would have been incorporated into the GRIM. 3 

### Let me talk about that model a little bit. 4 

### To model the industry, we rely on contact from 5 

### several analyses we've already discussed today. That 6 

### includes financial and product data from the MTA 7 

### market/technology assessment, manufactured production 8 

### costs from the engineering analysis, and shipments 9 

### forecasts from the shipments analysis. These inputs 10 

### are essentially locked-in before we run our model. To 11 

### complete the model, we supplement manufacturer markups 12 

### and conversion costs. For this rule, the Department 13 

### modeled three different markup scenarios, and here 14 

### they are. 15 

### The preservation of gross margin 16 

### percentage markup scenario. Under this scenario, 17 

### manufacturers maintain the same gross margin 18 

### percentage before and after the standard goes into 19 

### effect. This implies that the manufacturers pass 20 

### through all cost compliance to their customers. 21 

### The preservation of operating profit 22 

### scenario. In this scenario, manufacturers are onlyThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## able to maintain the same per-unit operating profit 2 

## in absolute dollars after the standard goes into 3 

## effect. This means the markup decreases after MPCs 4 

## increase. In this scenario, manufacturers are not 5 

## able to pass on all costs of compliance as the level 6 

## of investments increase with the various trial 7 

## standard levels. 8 

## The final markup strategy model was called 9 

## the three tier. DOE models a good, better, best 10 

## markup. As the standard level increases, we see less 11 

## differentiation in the markets. Manufacturers are 12 

## not able to maintain the same premium markups. As a 13 

## result, premium markups erode with higher standards, 14 

## and we see a drop in industry profitability. 15 

## When we run these three options, what we 16 

## found was that the best case scenario or the upper 17 

## bound is the first one, the gross margin scenario. 18 

## And the lower bound is the three-tier market where we 19 

## see this compression and loss of premium markups for 20 

## the industry. 21 

## Here, we see the results. It's a fairly 22 

## dense table. I suppose I could walk through it.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### Here in the second row, what you see is the industry 2 

### net present value both for the base case and for the 3 

### five trial standard levels considered. For the 4 

### standards case, you will see there's a range of 5 

### values. That range is due to the markup scenarios. 6 

### At the lower end, the smaller number is the INPV based 7 

### on the three-tier. At the upper end, the higher 8 

### number is the INPV based on the preservation of gross 9 

### margin percentage scenario. 10 

### And the third row, you will see the 11 

### percent change in INPV relative to the base-case 12 

### value of roughly $1 billion. Also germane to the 13 

### change in INPV are the change in conversion costs, 14 

### both the R&D expenses, as well as the capital 15 

### expenditures, and here are the total conversion costs 16 

### required. 17 

### The total conversion costs come out to 18 

### roughly $5 million per manufacturer. This was based 19 

### on a top-down model where we took the feedback directly 20 

### from manufacturer interviews. However, you know, I 21 

### think this is probably the first time folks have seen 22 

### both the industry value and that rough average ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## $5 million per manufacturer. We would love to hear 2 

## some feedback on whether that's appropriate. 3 

## MR. BROOKMAN: Frank Stanonik. 4 

## MR. STANONIK: Well, I've got a different 5 

## question. 6 

## MR. BROOKMAN: Let's see if anybody -- this 7 

## is just a comment on the question, manufacturers 8 

## particularly reflecting on the figures that are up 9 

## here that Chris was just describing. 10 

## MR. LAU: And understanding that exact 11 

## figures may be hard to provide, I imagine 12 

## manufacturers look to their own operations to provide 13 

## a high/low, or at least a qualitative indicator. 14 

## MR. BROOKMAN: Yes, Aniruddh. 15 

## MR. ROY: Aniruddh Roy, Goodman. So this 16 

## is based on the interviews also? 17 

## MR. LAU: That is correct. 18 

## MR. BROOKMAN: Yes, please, Everett. Get 19 

## close to that microphone. 20 

## MR. SHOREY: Hi, this is Everett Shorey. 21 

## So in the GRIM analysis that you've done, you're 22 

## looking only at the furnace regulations?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. LAU: That is correct. 2 

### MR. SHOREY: So how do you handle the fact 3 

### that manufacturers have had to redesign their 4 

### furnaces for the furnace fan regulations and now have 5 

### to redesign them again for the furnace regulation? 6 

### MR. LAU: Sure. So the analysis focuses 7 

### on the impacts of this rule and not combined rules. 8 

### However, there are two things I would like to point out. 9 

### One, is in the years preceding 2019 which is the 10 

### effective date of the furnace fan rule, we have a 11 

### different MPC, a lower manufacturer production cost, 12 

### and then the manufacturer production costs increase 13 

### when the standard goes into effect. However, if you 14 

### wanted to look at the combined impacts of the two 15 

### rules, it would be possible to look at the drop in 16 

### INPV on the furnace rule which was, and I can -- 17 

### which was roughly $60 million and add that to the 18 

### drop in INPV of this rule. So if we're proposing TSL 19 

### three, it's roughly a drop of $80 million. 20 

### MR. SHOREY: Well, actually that's not 21 

### technically correct because the drop in INPV for the 22 

### furnace fan rule is based on the assumption that theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## life of that rule of that change is essentially 2 

## indefinite. And by turning the furnace fan rule into 3 

## a rule that only lasts for about three years, you 4 

## would have changed substantially the INPV in the 5 

## furnace fan regulation so that you don't really have 6 

## a question of looking back. 7 

## I will say that the person who first wrote 8 

## the GRIM made an assumption that a regulation would 9 

## last essentially forever because the next round would 10 

## occur at a natural cycle. And that may have been 11 

## short-sighted by the person who did that. People are 12 

## laughing. The person who did that was actually me. 13 

## (Laughter.) 14 

## MR. SHOREY: So the question is -- 15 

## MR. LAU: To defend that person, it can be 16 

## hard to forecast regulatory cycles. 17 

## MR. SHOREY: Oh, I'm well aware, but 18 

## what's happened is that there's no particular way of 19 

## looking back. Now to say what's the -- there's no 20 

## really good way of recapturing the fact that people 21 

## have made an investment and are now making an 22 

## incremental investment that was not -- that didn'tThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## particularly affect the furnace rulemaking but has 2 

## changed substantially the economics of the furnace 3 

## fan rulemaking. And we may get to the same thing as 4 

## we go forward with the air conditioning rulemaking 5 

## which may again change the indoor unit. So we may 6 

## need to rethink that set of assumptions. 7 

## MR. BROOKMAN: Okay. Thank you. 8 

## MR. LAU: It's an interesting intro to the 9 

## next slide, but I think there may be another comment 10 

## or two out there. 11 

## MR. BROOKMAN: Yeah, let's go to John 12 

## first. 13 

## MR. HURST: Yeah, John Hurst, with Lennox. 14 

## Just a question. On the three scenarios, do you know 15 

## what the blended markup would be for each scenario? 16 

## MR. LAU: Sure. So in the preservation of 17 

## gross margin scenario, the flat markup was roughly -- 18 

## it was 1.34 for non-weatherized gas furnaces and 1.27 19 

## for manufactured home furnaces. 20 

## In the preservation operating profit 21 

## scenario, give me one moment. 22 

## MR. HURST: Sure.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. LAU: Yeah, I'll solve it over break. 2 

### So for the three-tier, the good, better, best for 3 

### non-weatherized gas furnaces was 1.29, 1.37, and 1.45. 4 

### MR. HURST: Yeah, just to comment. You 5 

### know, you look at one of the concerns of the 6 

### manufacturers would be commoditization, you look at 7 

### the span of products that are out there today, the 8 

### bottom end 80 percent, the top end 98, that's an 18 point 9 

### AFUE spread. You compress that down to six. And so 10 

### from a differentiation standpoint, yeah, you could say 11 

### there's a good, better, best, but it's kind of a 12 

### best, better, better-er option. 13 

### (Laughter.) 14 

### MR. HURST: There's not a lot of -- it 15 

### doesn't give you a lot of marketing. 16 

### MR. LAU: Sure. Recognizing that there 17 

### are a lot of factors that manufacturers use to 18 

### justify premium products, among them is efficiency. 19 

### What we do is we do this good, better, best. And 20 

### where there are multiple levels, the lowest level was 21 

### good, the top level is best and then everything in 22 

### between was better.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## (Simultaneous conversation.) 2 

## MR. HURST: What were the other ones, just 3 

## out of curiosity? 4 

## MR. LAU: Say again? 5 

## MR. HURST: What are the other ones 6 

## besides efficiency? What color of gray you can get 7 

## it in? 8 

## MR. LAU: I mean, there's reputation, 9 

## warranty. 10 

## MR. HURST: I understand. I'm being a 11 

## little facetious. 12 

## (Laughter.) 13 

## MR. HURST: But it is very challenging 14 

## because that's, unlike automobiles, these things arent 15 

## sexy to drive. You can't put the top down and feel 16 

## better. That's all. 17 

## Thank you. 18 

## MR. LAU: I guess where I was going, I 19 

## think we tried very hard to capture that. And as the 20 

## number of efficiency levels dropped, there was less 21 

## and less ability to justify higher markups. In fact 22 

## at 95 percent, for example, there was only room for aThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### good and better, there was no premium markup. 2 

### MR. BROOKMAN: Frank Stanonik? 3 

### MR. STANONIK: All right. So I'm going to 4 

### get to my question. So standard level two was 90 5 

### something in the north and 80 rest of the country. 6 

### And the change in INPV in that case potentially is 7 

### very largely negatively, almost . . . What are those in 8 

### millions of dollars, right? $22 million almost? Oh, 9 

### percent. That's probably worse. 10 

### So yet when you go to trial standard level 11 

### three, so potentially at that second standard level, 12 

### again, looking at it somewhat simply, the 13 

### manufacturer in a sense really only has to address, 14 

### let's say, roughly half of his product line. Because 15 

### it's 80 in the south, right? 16 

### And yet that appears to have a much larger 17 

### potential negative effect on his value as opposed to 18 

### trial standard level three where essentially he has 19 

### certainly the potential to have to redo rough 20 

### numbers, probably at last 75 percent of his line. 21 

### How does that work? 22 

### MR. BROOKMAN: Mike Rivest?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. RIVEST: Frank, we've scratched our 2 

## head, and we asked ourselves exactly that question. 3 

## So really what's impacting, what's creating the 4 

## impacts here are the good, better, best assumptions 5 

## and the market shares of the various efficiencies 6 

## after standards. Not so much the investment numbers 7 

## because the investment numbers relative to the 8 

## revenues are not that large compared to the other 9 

## rules where I've seen investments of $400 million for 10 

## a $1 billion industry. Here, we're seeing investments 11 

## of $80 million for a 1.1 -- you know, for a $1 12 

## billion industry. 13 

## And if you think about the 92-percent AFUE 14 

## level, a lot of the R&D has been done and given -- 15 

## you know, we talked about earlier the cyclical, you 16 

## know, the boom-bust nature of the production. You 17 

## know, a lot of the production capacity is there. So 18 

## that's why those investment numbers are not 19 

## irrational. So what's driving this analysis right 20 

## now is the shipments assumptions and the shipment 21 

## distribution numbers. And what John was getting at 22 

## earlier, you know, we're continuing to assume theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### ability to do a good, better, best, and what I was 2 

### hearing in this comment is, well, maybe we'll get a 3 

### good, better, best, but the spread in margins won't 4 

### be as good as it was. So under a different set of 5 

### mark ups, for example, and looking under a different 6 

### set of shipments which I think we'll be getting as 7 

### well, you know, I think we'll be seeing more 8 

### differentiation between a national standard and a 9 

### regional standard for the impacts. 10 

### MR. BROOKMAN: Frank, keep going. 11 

### MR. STANONIK: Frank Stanonik. So, Mike, 12 

### and things are clicking in. So I guess I was ignoring 13 

### that standard level two in the north is 95%, which would 14 

### require investment. 15 

### MR. RIVEST: There's actually not much 16 

### difference on the manufacturing side from a 92% to a 17 

### 95%. A lot of the incentives right now are at 95%, 18 

### and if you look at the production costs, they're not 19 

### much different than 92%. What's really driving 20 

### investments is going to be 98% because that's a different 21 

### product. 22 

### MR. LAU: But at 95%, you see that loss ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### -- 2 

### MR. RIVEST: But there you're losing 3 

### margin. 4 

### MR. LAU: Yes. 5 

### MR. BROOKMAN: Thanks, Chris. Thanks a lot. 6 

### (Simultaneous conversation.) 7 

### MR. STANONIK: So in a sense, it is what it 8 

### is, so the fact is that one of the levels that wasn't 9 

### looked at was 92% in the north and 80% in the south. 10 

### We would have probably seen -- just at least on this 11 

### slide, we probably would have seen a change in net 12 

### present value more like either one or three? 13 

### MR. RIVEST: More like the 92s, you know. 14 

### MR. STANONIK: Okay. 15 

### MR. RIVEST: But, you know, it's based on 16 

### those stated assumptions and the shipments which, you 17 

### know, we all need to look at. 18 

### MR. BROOKMAN: Okay. Mike, thanks, that 19 

### was helpful. 20 

### Chris, keep going. 21 

### MR. LAU: Let's see. So here you can see 22 

### DOE proposes TSL three. It did consider -- theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## notice does say DOE strongly considered TSL four. 2 

## Contributing to the selection of TSL three is 3 

## cumulative regulatory burden and, in particular, the 4 

## overlap of the furnace fans rule on the residential 5 

## furnaces rule. 6 

## What's unique about such circumstance for 7 

## this rulemaking is that both rules take effect at a 8 

## similar timeframe, 2019 and 2021. The rules impact 9 

## design and manufacture of essentially the same 10 

## product, and as DOE understands it, the cost of the 11 

## two rules are additive with little overlap. And so 12 

## you're basically adding on -- you're combining the 13 

## variable cost increase and variable costs, as well as 14 

## increases in conversion costs. 15 

## Here, we see the impacts of the two rules. 16 

## Impacts with TSL four, impacts with TSL three, and 17 

## impacts from the furnace fan rule. What we see here 18 

## is the effective year, the incremental MPC, and then 19 

## the industry conversion costs. I guess Id like to 20 

## start by asking the industry whether that's a good 21 

## assumption, the costs are largely additive? I think 22 

## I saw some heads nodding earlier, and I see themThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### again. So, DOE's assumption there was good. 2 

### MR. BROOKMAN: Just for the record, I only see 3 

### one head nodding. 4 

### (Laughter.) 5 

### PARTICIPANT: I see two. 6 

### MR. BROOKMAN: Okay. Okay. Good. Thanks 7 

### for that silent confirmation. 8 

### MR. STANONIK: Frank Stanonik. I mean, 9 

### fan efficiency is clearly looking primarily at the 10 

### efficiency of the blower fan combination, or motor 11 

### blower combination which is primarily an electrical 12 

### consumption, and this really doesn't have a huge 13 

### effect on the AFUE. So, yeah, that's pretty 14 

### separate. 15 

### MS. ARMSTRONG: This is Ashley from DOE. 16 

### I think that's true. I think one of the issues that 17 

### we teed up in the NOPR specifically that we asked for 18 

### comment on was, is there any possible synergy? So 19 

### would there be one round of testing? Would there be 20 

### one round of marketing material changes? I mean, are 21 

### there things that doing these things together or 22 

### roughly at the same time would actually be helpful?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## Well, some of the costs and some of the design 2 

## differences may be separate in terms of the 3 

## investments. Are there other things in terms of 4 

## conversion costs that would actually be done 5 

## together? 6 

## MR. BROOKMAN: John? 7 

## MR. HODGES: There are synergies, but 8 

## don't accelerate the timing. 9 

## (Laughter.) 10 

## MR. BROOKMAN: Well, thanks for the comment 11 

## though. 12 

## Helpful. Okay. Any additional comments 13 

## on potential synergies or confirmations? 14 

## (No response.) 15 

## MR. BROOKMAN: Okay. We're going to move 16 

## on. 17 

## MR. LAU: Sure. We also looked at the 18 

## small business impact of the standard. DOE 19 

## identified three domestic small business 20 

## manufacturers of covered product, one of which was a 21 

## manufacturer of non-weatherized gas furnaces, and two 22 

## which were manufacturers of mobile home gas furnaces.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## DOE notes that the small non-weatherized 2 

## gas furnace manufacturer sells a condensing product 3 

## today; however, it does not have the same number or 4 

## proportion of offerings as large competitors. The 5 

## small mobile home furnace manufacturers, both of them, 6 

## neither offer -- do not offer a condensing product 7 

## today and probably need to undertake a development 8 

## effort to remain in the market. 9 

## We can invite comment on the number, 10 

## potential impacts, and severity of impacts on these 11 

## affected manufacturers. 12 

## MR. ROSENSTOCK: Steve Rosenstock, EEI, and 13 

## again I'm looking through the NOPR. I was wondering, 14 

## where was the estimated -- the impact on domestic 15 

## employment? Which table was that in the NOPR? 16 

## MR. LAU: So it would be in section five, 17 

## B(2), I believe. 18 

## MR. ROSENSTOCK: B(2)? 19 

## (Pause.) 20 

## MR. ROSENSTOCK: No, it's not there. 21 

## MR. BROOKMAN: We'll look it up. 22 

## MR. LAU: At the high level, roughlyThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## there's some small increase in employment due to 2 

## increased labor content at the high end. And then at 3 

## the low end, there's -- what we've seen is a trend of 4 

## production moving overseas from some manufacturers. 5 

## We extend that trend out. 6 

## MR. ROSENSTOCK: So your impact is a 7 

## negative domestic employment impact? 8 

## MR. LAU: Right. There's a range of very 9 

## negative to slight gain. 10 

## MR. ROSENSTOCK: Okay. I just wanted to 11 

## see what that range was. Thank you. 12 

## MR. HURST: A question to follow up on 13 

## that. Is that -- yeah, John Hurst, with Lennox, I'm 14 

## sorry. Is that assembly, or is that componentry as 15 

## well? 16 

## MR. LAU: What we take into account is 17 

## direct production labor of the folks with a compliance 18 

## burden, so it's just the manufacturers. 19 

## MR. HURST: Okay. 20 

## MR. LAU: So it's basically everyone who 21 

## touches a product. 22 

## MR. HURST: Thank you.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. BROOKMAN: Steve, go ahead. 2 

## MR. ROSENSTOCK: Steve Rosenstock, I found 3 

## it. It's Table V-20, and it says, potential changes, 4 

## domestic production workers in 2020 for TSL three, 5 

## negative 2,692 to 210. So basically as many as 2,692 6 

## job losses in the U.S. in 2020. 7 

## MR. LAU: That would be the lower -- 8 

## MR. ROSENSTOCK: The worst case. 9 

## MR. LAU: -- half -- 10 

## (Simultaneous conversation.) 11 

## MR. ROSENSTOCK: And in the best case, 12 

## there might be a 210 increase at the best case? 13 

## MR. LAU: That's correct. 14 

## MR. ROSENSTOCK: Thank you. 15 

## MR. LAU: Okay. Next is the results from 16 

## the standby mode. And we looked at standby mode 17 

## standards independent of the AFUE mode standard. On 18 

## the whole, the standby impacts are small relative to 19 

## the active mode standard, but we took into account 20 

## the engineering costs adders, conversion costs, and 21 

## changes in markups. However, we did not think that 22 

## there would necessarily be shipment changes givenThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## that the cost adders were $1 to $10 per unit. And so 2 

## as you can see, the impacts are much, much smaller 3 

## than for the active mode standard. 4 

## But we put that in here for completeness 5 

## sake. 6 

## MR. BROOKMAN: Yes, Andrew deLaski? 7 

## MR. deLASKI: So I just want to confirm 8 

## that for the manufactured impact analysis, the 9 

## analysis is looking at the net present value of the 10 

## furnace division of these companies? 11 

## MR. LAU: That's correct. 12 

## MR. deLASKI: Okay. Thank you. 13 

## MR. BROOKMAN: Dave, comment? Nope, Okay. 14 

## Okay. Yes. We're moving to the 15 

## environmental employment and addition -- 16 

## MR. LAU: We have one more question in the 17 

## back. 18 

## MR. BROOKMAN: Yes, please, Rick. 19 

## MR. MURPHY: (Off microphone.) 20 

## MR. BROOKMAN: Start again, Rick. 21 

## MR. MURPHY: Rick Murphy, AGA. Chris, you 22 

## had indicated you looked at a number of factors thatThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### were previously raised, one of which was installed 2 

### costs in the manufacturer impact analysis. How did 3 

### that come into play? 4 

### MR. LAU: It actually comes into play 5 

### through the shipments. So one of the things -- what 6 

### it was, it was a key issue that manufacturers raised in 7 

### interviews that they asked DOE to consider. And so as you 8 

### may recall, Victor went through an extensive 9 

### discussion of all the different venting types and 10 

### installation costs that were considered. So those 11 

### factors affected the shipments analysis and consumer 12 

### choices of what they purchased, and that flows into 13 

### our model in terms of what is bought and how that 14 

### affects manufacturer revenue. 15 

### MR. MURPHY: Okay. So in the lifecycle 16 

### cost analysis that Victor went through, we had a lot 17 

### of discussion about costs of equipment at the retail 18 

### level and costs of installation at the retail level. 19 

### And we had a discussion as to how did that bottoms-up 20 

### approach come up with a number? How is that 21 

### reconciled, or is there reasonable test to see what's 22 

### actually playing out in the market?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### Did you look at that? Because I believe 2 

### the answer to that back in the discussion was that 3 

### there is nothing that is done right now to do a 4 

### reasonableness test -- 5 

### MR. LAU: Right. In order to make the 6 

### analyses consistent, we used the exact same shipments 7 

### forecast as is used in the NIA. So we don't do anything 8 

### -- we do not use a different -- we don't use 9 

### different factors or different installation costs than 10 

### were considered previously. 11 

### MR. MURPHY: And I guess just one last 12 

### question if I could. John and Ashley mentioned at 13 

### the last meeting that we are trying to get more 14 

### information from the field as to what we're seeing as 15 

### far as equipment costs and installation costs. If 16 

### we're able to provide that information to you, how 17 

### will that actually be used in your work going 18 

### forward? 19 

### MS. ARMSTRONG: We would welcome any data 20 

### or information that you or any other stakeholder 21 

### could provide to help inform our analysis. So we 22 

### would take it and look at our analysis and revise ifThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## necessary and as appropriate. So we would appreciate 2 

## it. 3 

## MR. BROOKMAN: So that was Ashley, and we 4 

## have a comment or a question from Terry Small online. 5 

## We have found that a $6 cost increase going 6 

## from PSC to improved PSC is ridiculous, especially 7 

## where a BPM motor is required for a conditioned or a 8 

## conditional MHGF for furnace fan compliance regarding 9 

## slide 113. 10 

## MS. ARMSTRONG: All right. Thank you. 11 

## MR. BROOKMAN: Thanks for your comment, 12 

## Terry. 13 

## MS. ARMSTRONG: Yeah, if he wants to 14 

## comment in more detail, especially when he sends in 15 

## his written comments and/or through a confidential 16 

## nature since it has to do with specific costs, we 17 

## would welcome feedback on those costs. 18 

## MR. BROOKMAN: Okay. And everybody, I 19 

## think knows how to execute an NDA through Navigant. 20 

## Frank Stanonik? 21 

## MR. STANONIK: Frank Stanonik, pretty 22 

## quick question for DOE. Particularly with the GRIMThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## model, and going back to the meeting we had about 2 

## your analytical tools, and you mentioned certain 3 

## things are locked, would it be possible for us to get 4 

## a copy that would allow us and our consultants to 5 

## perhaps put in some different values for some of the 6 

## locked things? 7 

## MR. BROOKMAN: Ashley Armstrong? 8 

## MS. ARMSTRONG: So this is Ashley from 9 

## DOE. We'll take the request under advisement and get 10 

## back to you with a yes or a no. I think DOE's 11 

## position has been in the past that currently while 12 

## the GRIM has some locked cells, it doesn't have any 13 

## hidden cells, so you can actually see the equations 14 

## that are being implemented, you know. It's very 15 

## transparent in nature. They are locked for a reason, 16 

## because the model only works to calculate certain 17 

## types of cash flow and different scenarios. And if 18 

## you were to change things and put different shipments, 19 

## then it wouldn't necessarily be the GRIM as DOE has 20 

## created it and function in the same matter. It could 21 

## confuse things. So that's one of the reasons we do 22 

## lock certain cells, but we keep them -- we make sureThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### that they're unhidden so you can see everything and 2 

### to provide transparency, and all of our equations are 3 

### outlined in the TSD. So we'll take it under 4 

### advisement and get back to you. 5 

### MR. CYMBALSKY: And to follow on, this is 6 

### John from DOE. We'd be happy to do different 7 

### scenarios for you, so if you would like to provide 8 

### different numbers for those cells, we will run them 9 

### for you. In fact, the locked cell prevents that from 10 

### happening. 11 

### MR. BROOKMAN: Okay. Thank you. Thanks, 12 

### John. 13 

### Then we're going to move on to the next 14 

### segment. Victor Franco. 15 

### MR. CYMBALSKY: We're going to forego 16 

### lunch for an early dismissal for cherry blossom 17 

### viewing for those of you who are from out of town. 18 

### MR. BROOKMAN: At a peak right now. 19 

### MR. FRANCO: This is Victor Franco again. 20 

### I'll be going through the environmental/employment analysis. 21 

### First we do the emissions analysis. This 22 

### is in Chapter 13, the details. The purpose of theThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## emission analysis is to estimate the emissions 2 

## reductions resulting from amended standards. It 3 

## includes full-fuel-cycle emissions, including power 4 

## plant and upstream emissions. It includes fugitive 5 

## methane emissions. 6 

## The method for determining these emission 7 

## factors is using the output from the AEO 2014 8 

## reference and standard cases to assess marginal 9 

## emission factors. The results for this analysis you 10 

## will find in further detail in Chapter 13, but here 11 

## are the results for TSL three for both the AFUE and 12 

## standby and off mode. 13 

## MR. BROOKMAN: Steve Rosenstock? 14 

## MR. ROSENSTOCK: Steve Rosenstock. Some 15 

## people probably wish they had gone to lunch now when 16 

## I'm about to start talking here. There's significant 17 

## problems with this analysis, especially where it's 18 

## showing increase in emissions. When I've looked at 19 

## the impact, that's assuming that there's increase 20 

## from emissions on electric generation side from the 21 

## estimated electric increases from fuel switching. 22 

## This just really just goes against everything that'sThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## happened. On the institute side, emissions have been 2 

## regulated since 1990 under the Clean Air Act. 3 

## And the data that I got from our 4 

## environmental folks, electric use since 1990 to 2013 5 

## has gone up 35 percent. SO2 emissions absolute, not 6 

## per kilowatt hour or megawatt hour, but the absolute 7 

## SO2 emissions have gone down 80 percent. Even last 8 

## year with the polar vortex and some utilities having 9 

## to use oil rather than gas, emissions went down for 10 

## SO2 NOX, and CO2 nationally last year even with the 11 

## polar vortex. 12 

## Looking at mercury, the MATS rule goes 13 

## into effect on Thursday. A lot of utilities have 14 

## already put in controls on mercury. I've seen data, 15 

## basically mercury emissions from an NRDC document. 16 

## Mercury emissions for power plants decreased 51 17 

## percent since 2000, and according to the 18 

## environmental folks I talked to, most of the plants 19 

## have already been retrofitted. Some are going to be 20 

## retrofitted as of April next year. Then there's a 21 

## power plant retirement. The environmental people told 22 

## me that by next year, mercury emissions from powerThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## plants are going to go down another 80 percent from 2 

## this year -- from last year's level. 3 

## So when I see these numbers about, quote, 4 

## increasing in emissions, it's just -- I see what 5 

## they're doing in the analysis, but it's totally 6 

## ignoring the environmental regulations, the actual 7 

## impacts. 8 

## Now, you might say, well, wait a minute, 9 

## what if there is an increase? Well, when I look at 10 

## the numbers in here, and I'm seeing the potential, 11 

## they're saying that, well, there might be an increase 12 

## in power plant capacity. That's in the utility impact 13 

## analysis in Chapter 15. I'm seeing numbers like, you 14 

## know, that there's going to be an increase of 50 15 

## megawatts in coal-fired power plant capacity by 2050, 16 

## and that's just insane. That's not going to happen. 17 

## Coal plants are closing right and left, and this 18 

## analysis assumes there's going to be 50 megawatts of 19 

## new coal-fired generation in the U.S. as relative to 20 

## this standard. It's not going to happen. 21 

## MR. CYMBALSKY: So your point is well 22 

## taken on what's trending. Those trends will beThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## picked up both in the baseline and the standards 2 

## case. What we're trying to do here is just show that 3 

## all else is equal. And I mean, polar vortexes and 4 

## all that kind of good stuff, if you add -- and I'm 5 

## going to make up a number here, two million electric 6 

## heating devices versus not having those two million 7 

## heating devices. And everything else is the same. 8 

## Then you will have -- if you burn one lump of coal 9 

## more in that case, you will have greater SO2 10 

## emissions. That's a fact regardless of what is going 11 

## on in the trend in both of those cases. Your point 12 

## is well taken, but what we're looking at here is just 13 

## the difference in case A that has more electric 14 

## heating devices than case B that doesn't. And so all 15 

## else is equal. The trends that you see with coal 16 

## plants closing et cetera, et cetera, are in both of 17 

## those cases, so, that's just a fact. As for the 18 

## number of coal plants being built, is that an 19 

## artifact of the AEO or is that security -- 20 

## PARTICIPANT: This comes from everything 21 

## -- 22 

## MR. CYMBALSKY: SO that's what they'reThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### building in the 2014 baseline. I know someone 2 

### mentioned at the break that the AEO will be released 3 

### tomorrow, I believe, 2015, so we will pick up -- you 4 

### know, to the extent that those trends change based on 5 

### some other things that you've talked about, we will 6 

### pick them up in the next round of analysis. But it 7 

### still remains the fact that if you add two million 8 

### electric heating devices, all else equal, there is 9 

### going to be some coal generated at this point in time 10 

### to meet that extra demand. 11 

### MR. ROSENSTOCK: Steve Rosenstock, EEI. 12 

### Now it's getting in the weeds of . . . well, it depends on 13 

### which region of the country you're in and what is the 14 

### generation. And in terms of marginal generation, if 15 

### you look at some of the FERC or EIA data, for 16 

### example, in terms of "marginal," they put out 17 

### something today in Energy a little while ago saying 18 

### that about 13,000 megawatts of coal plants are going 19 

### to be retired this year, and the increase is going to 20 

### be 9,800 of wind, 2,200 of solar, 1122 in nuclear, 21 

### 471 of other renewables, and 4318 of gas. I mean, it 22 

### just --The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. CYMBALSKY: Are you saying no baseline 2 

## capacity will be used at all to service these extra 3 

## furnaces that we have in our standards case? 4 

## MR. ROSENSTOCK: No, I'm saying that the 5 

## base-load capacity is changing quite rapidly, and of 6 

## that base load capacity, they all have controls to 7 

## minimize their production of either SO2 or mercury. 8 

## MR. BROOKMAN: Steve, those details would 9 

## be especially helpful on your written comments. 10 

## MR. ROSENSTOCK: Okay. 11 

## MR. BROOKMAN: Okay. Thank you. 12 

## MR. FRANCO: Thank you so much. So let's 13 

## move on to the monetization of the emission 14 

## reductions. So based on the emission results from 15 

## Chapter 13 and Chapter 15, we provide the 16 

## monetization of emissions. The purpose of this is to 17 

## estimate the monetary benefits of reduced emissions 18 

## resulting from a proposed energy conservation 19 

## standard. 20 

## The method used is using the social cost 21 

## of carbon values as determined by interagency reviews. 22 

## The social cost of carbon is intended to be aThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### monetary measure of incremental damages resulting 2 

### from greenhouse gas emissions including, but not 3 

### limited to agriculture production losses, human 4 

### health effects, property damage from rising sea levels, 5 

### and changes in ecosystem. 6 

### The interagency estimates are 7 

### provided as part of the TSD Chapter Appendices 14A 8 

### and 14B. The values for the emissions are provided 9 

### here, and they're calculated in those reports. 10 

### DOE also estimated NOX emission reductions 11 

### resulting from the amended standards, and the values 12 

### are provided here as well. 13 

### DOE is still evaluating appropriate values 14 

### to use for monetized avoided SO2 and mercury 15 

### emissions. 16 

### MR. BROOKMAN: Jim? 17 

### MR. MOORE: Jim Moore. We would like the 18 

### last bullet point to consider actual cost from 19 

### trading markets. If you look at the EUC, the REGI 20 

### program, the California program, the voluntary 21 

### programs, they are all way lower than those numbers 22 

### there. They tend to be in the single digits. AndThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### we'd encourage you to look to markets for pricing as 2 

### opposed to the societal cost of carbon. Thank you. 3 

### MR. BROOKMAN: Thanks, Jim. Steve 4 

### Rosenstock? 5 

### MR. ROSENSTOCK: On your slide for the NOX 6 

### values, you say an OMB Report to Congress 2006, and 7 

### as I remember in that report that was -- I looked in 8 

### the technical support document that's on the 9 

### emissions impact not the monetization, but I believe 10 

### that report kind of looked at the studies from 11 

### 1990 through like 2004 in terms of what the estimate 12 

### was. So I was wondering, is DOE going to lock in 13 

### with those numbers from 20 years ago, or is DOE ever 14 

### going to try to look at maybe reanalyzing those 15 

### numbers to update them for 2015 maybe? 16 

### MR. FRANCO: Definitely. If any input comes 17 

### in that we could revise those values, definitely, 18 

### DOE will definitely consider that. 19 

### These are the results for the monetized 20 

### emission reductions. Again, DOE is proposing TSL 21 

### three. The values presented here are for CO2 and NOX at 3 22 

### percent and 7 percent discount rates.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## DOE seeks input on the approach of 2 

## collecting emissions analysis. DOE seeks input on 3 

## the approach for estimating the monetary benefits 4 

## associated with the emission reductions. 5 

## MR. BROOKMAN: Comments on these two 6 

## requests? 7 

## (No response.) 8 

## MR. BROOKMAN: Okay. 9 

## MR. FRANCO: In Chapter 15, DOE presents 10 

## the utility impact analysis. The purpose is to 11 

## assess the impacts on the electric installed capacity 12 

## and generation resulting from the adoption of 13 

## potential energy conservation standards. 14 

## The method is to model energy savings 15 

## impacts for each TSL using AEO 2014 to generate the 16 

## forecasts that deviate from the AEO referenced case. 17 

## The results are changes in total 18 

## electricity generation, changes in the mix of 19 

## electricity generation by fuel type, and changes in 20 

## total installed capacity. 21 

## The full description of this is available 22 

## in Chapter 15, as well as the results.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## MR. BROOKMAN: Steve. 2 

## MR. ROSENSTOCK: Steve Rosenstock, Edison 3 

## Electric Institute. It's a gas furnace standard, and 4 

## I was wondering why Chapter 15 doesn't talk about the 5 

## impact on gas utilities upstream? 6 

## MR. FRANCO: This is just looking in terms 7 

## of the utility of electricity. 8 

## MR. ROSENSTOCK: What about the utility of 9 

## the gas or the propane? That's a primary impact of 10 

## this standard. 11 

## (Simultaneous conversation.) 12 

## MR. BROOKMAN: Mark. Mark, please. 13 

## MR. KREBS: You know, way back when at the 14 

## table, you know, when they were setting up EPCA, you 15 

## know, I don't think AGA was quite as vociferous as 16 

## they could have been, you know, so maybe that 17 

## explains why they still today when they do utility 18 

## impact analysis don't consider gas utilities. 19 

## MR. BROOKMAN: Okay. Final comments on 20 

## utility impact analysis? 21 

## Jim? 22 

## MR. MOORE: Yeah, Jim Moore, Laclede. WeThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## believe there will be a substantial impact on gas -- 2 

## (off microphone) -- 3 

## MR. BROOKMAN: Jim, apparently it's not on. 4 

## MR. MOORE: Sorry, I thought I had turned 5 

## it on. I apologize. It's Jim Moore from Laclede. 6 

## And we believe that there will be a substantial 7 

## impact, especially in the south due to electric 8 

## switching on gas utilities in particular, and we would 9 

## like to see that addressed. 10 

## Additionally, I've done a lot of looking 11 

## at marginal rates, and we believe that the AEO data 12 

## grossly overestimates the marginal price for gas and 13 

## electric, and I'm hoping to see it fixed tomorrow in 14 

## the AEO 2015, but I have my doubts. I look back to 15 

## 1998, and they've consistently, almost every year, 16 

## underestimated electric rates and overestimated gas 17 

## rates for the past ten years. So I'm hoping they'll 18 

## fix it, but I have my doubts, and I would like to see 19 

## DOE consider true marginal prices when they do this 20 

## rulemaking. Thank you. 21 

## MR. BROOKMAN: Okay. Thank you. 22 

## MR. FRANCO: Thank you. The last part ofThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### the analysis is in Chapter 16, where we consider indirect 2 

### employment impact analysis. The purpose of this is 3 

### to assess the overall impact on indirect national 4 

### employment from the proposed energy conservation 5 

### standards, which results from shifting consumer 6 

### expenditure among goods and services and changing 7 

### product and energy costs. 8 

### To do this, DOE used the impact of sector 9 

### energy technologies, ImSET model, for the valuation of 10 

### indirect employment impacts. The results of this is 11 

### that DOE anticipates net labor impacts from the small 12 

### over time due to small magnitude of short-term 13 

### effects. See Chapter 16 of the TSD for further 14 

### details. 15 

### MR. BROOKMAN: Employment impact comments? 16 

### (No response.) 17 

### MR. CYMBALSKY: Okay. So the next two 18 

### slides talk about some additional research DOE has 19 

### funded in the area of venting. I know it's been a 20 

### big topic of conversation about the potential costs 21 

### of some tricky venting situations that might exist 22 

### when requiring condensing furnaces. So this slideThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## points out, and we had put this in the TSD, some links 2 

## to some research that we've done in the area of 3 

## venting. I just want to point out that this is side 4 

## research and shows what could be in the future. It 5 

## is not incorporated into the baseline numbers in the 6 

## analysis that we presented in the last two meetings. 7 

## If you go to the next slide, so this was 8 

## just some pictures of some venting solutions from M&G 9 

## DuraVent that have been also looking into different 10 

## potential solutions to venting strategy. So you can 11 

## see, the one on the left is certainly further up 12 

## along. It is a solution that is for sale now. It 13 

## has been UL listed, and so basically, it's a drop-in 14 

## approach to the B vents. And I'm not going to go 15 

## into detail. This is just to show you that sometime 16 

## in the future, it is our hope that there is a bigger 17 

## market for different retrofit technologies that could 18 

## go for venting and to make the venting a little less 19 

## costly than what we see in our analysis today. So 20 

## I'd point everybody to the documents that are listed 21 

## in the previous slide. 22 

## And then finally, that's really it onThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### that. If there are any comments on the venting 2 

### strategy, we will take them now, and then we'll move to 3 

### closing remarks. 4 

### MR. BROOKMAN: Thank you. Mark. 5 

### MR. KREBS: Mark Krebs, Laclede Gas. AGA 6 

### is the secretariat for I think it's the NFGC and -- 7 

### and I asked them to look into this, this DuraVent 8 

### thing, you know, what the status is, and I'm not going 9 

### to say you're wrong, but what I will try to do is get 10 

### you his analysis. 11 

### MR. CYMBALSKY: That's helpful. That's 12 

### exactly what we're looking for, and that's why we 13 

### threw this out here. 14 

### MR. BROOKMAN: Okay. So now Andrew 15 

### deLaski? 16 

### MR. deLASKI: Yeah, we did a little 17 

### looking at manufacturing websites, and these parts in 18 

### many cases are already approved by the manufacturers 19 

### for use with their products. So it's not in the 20 

### future; it's here today. So things that are here 21 

### today should be in today's analysis. So I would 22 

### certainly encourage the Department in revising itsThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## analysis to include venting technologies that are 2 

## approved by UL, recommended -- not recommended, but 3 

## also approved by the manufacturers for individual 4 

## products should be incorporated into the main 5 

## analysis to reflect the actual costs that consumers 6 

## are going to face. They're going to choose a 7 

## low-cost option for installation, so I think that's 8 

## an update that's needed for the analysis. 9 

## MR. BROOKMAN: Okay. Frank? Yes. 10 

## MR. STANONIK: Frank Stanonik, just maybe 11 

## to complete the loop on this. The complete standards 12 

## process that manufacturers have to deal with, yes, 13 

## they have to deal with the fuel gas code. Yes, 14 

## venting systems get approved as venting systems, but 15 

## there also needs to be appropriate or corresponding 16 

## requirements in the appliance equipment safety 17 

## standard that will be used to evaluate or determine 18 

## for which venting systems the equipment will be 19 

## listed. As an example, today, furnaces would be 20 

## listed for use with either type B vent or stainless 21 

## steel vent or PVC or so on. And so the fact that 22 

## this, at least on the one slide it's been UL Listed,The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### 1 

## that's kind of half the equation. And as far as I 2 

## know, we won't have the other part yet where the 3 

## equipment standards would recognize this system and 4 

## then also have that coverage that says, this 5 

## appliance can be installed on a venTing system that 6 

## looks like this. There's more to be done. It's not 7 

## fully there. 8 

## MR. BROOKMAN: Mark? 9 

## MR. KREBS: One short comment on that. 10 

## What that AGA briefing essentially concluded is, 11 

## yeah, this new DuraVent stuff, you know, it can be 12 

## installed, but it basically has to be done on a 13 

## case-by-case approval basis. I think that's a fair 14 

## summary of the status of it. And like I said, I'll 15 

## try to get that to you for the record. 16 

## MR. BROOKMAN: Okay. Thanks for doing 17 

## that. 18 

## So I think Andrew deLaski? 19 

## MR. deLASKI: I'll circle back with you, 20 

## Frank, but my recollection of that, I've seen the 21 

## DuraVent material approved by individual 22 

## manufacturers, you know, in their literature. So IThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### need to understand what that means. So maybe you and 2 

### I need to circle back off-line. 3 

### MR. BROOKMAN: Okay. Now, we wish to 4 

### receive any final comments. Oh, Ashley has a comment 5 

### before we go there. 6 

### MS. ARMSTRONG: So I just want to bring up 7 

### one issue that was brought up at the last public 8 

### meeting with regards to the engineering, just to let 9 

### you know kind of what's coming. 10 

### We had some questions with regards to how 11 

### the aggregated manufacturing production costs were 12 

### generated -- specifically some additional questions 13 

### about the cost model -- and we had previously described 14 

### generally how we got the cost in terms of the 15 

### aggregated MPCs in great detail, and obviously that's 16 

### well documented in the TSD. You know, they're based 17 

### generally at a high level on physical teardowns. 18 

### Then we use the manufacturing cost model. We've 19 

### aggregated MPCs, and we've gone through the 20 

### manufacturing interview process to go through 21 

### individual costs with the manufacturers themselves. 22 

### We've gotten feedback on those costs, componentThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### costs, material costs. We've incorporated that into 2 

### our analysis. We've aggregated it up, so we do intend 3 

### -- there was a request for some additional 4 

### information and if DOE could provide some additional 5 

### information underlying those aggregated MPCs. So DOE 6 

### does intend to place in the docket specifically in 7 

### response to those stakeholder requests some 8 

### additional info regarding the major subassemblies and 9 

### how they break down with regards to the manufacturing 10 

### production costs. We're also going to place a couple 11 

### of slides that kind of walk through that, so you'll 12 

### see that in the docket as well as the key material 13 

### prices. And obviously all that, as well as all the 14 

### other aspects of our engineering analysis, is open for 15 

### comment, and we would actually welcome your comment on 16 

### it. 17 

### So I just wanted to highlight that so you 18 

### can note to go to the docket. We'll send out an email blast 19 

### to let you know it's available, and that will be 20 

### there for you to look at. 21 

### MR. BROOKMAN: Okay. Thank you. 22 

### Closing remarks. Aniruddh?The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MR. ROY: Aniruddh Roy, Goodman. So I 2 

### have a question on the engineering analysis. If you can 3 

### go back to slide 19. 4 

### MR. BROOKMAN: Nineteen? 5 

### MR. ROY: Yeah. 6 

### (Laughter.) 7 

### PARTICIPANT: What are you doing? 8 

### MR. ROY: I had to do some of my homework 9 

### after the initial public meeting. 10 

### PARTICIPANT: I put all my stuff away. 11 

### (Laughter.) 12 

### (Pause.) 13 

### MR. ROY: So while they're pulling up the 14 

### slide, I'll just brief everyone on what's going on. 15 

### So the assumption here for non-weatherized gas furnace 16 

### is that the combustion system type will be a 17 

### two-stage as a baseline, whereas in Chapter 5, Table 18 

### 5.4.3 specifies the baseline being a single-stage 19 

### equipment. And then eventually, a cost adder of 20 

### $34.72 is being added to move from a single-stage to two21 

### stage. There is also a statement in the TSD which 22 

### says, following the 2014 furnace fan rulemaking, inThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### 2019, all non-weatherized gas furnace units will be 2 

### required to include multistage operation in addition 3 

### to higher-efficiency blower motors. For this reason, 4 

### DOE included the $34.72 cost adder to change from a 5 

### single-stage to a two-stage. 6 

### Now, the question I have is that when you 7 

### did the test procedure NOPR, there was a statement 8 

### made by Ingersoll Rand saying that the two-stage 9 

### operation will be affected based on the test 10 

### procedure improvements. So it looks to me in the 11 

### engineering analysis, single-stage is the only one 12 

### that has been tested, and then the $34.72 has been 13 

### applied as a cost adder. So, I guess, has DOE 14 

### evaluated the impact of the new test procedure on a 15 

### two-stage? That's the first question. 16 

### The second question being -- is that we feel 17 

### that the furnace fan rulemaking can be adhered to by 18 

### manufacturers using single-stage equipment. So my 19 

### question is, why was the assumption made that only 20 

### multi-stage operation can meet the 2019 levels? 21 

### MS. ARMSTRONG: So this is Ashley from 22 

### DOE. I'm going to address the first part, and thenThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### Adam is going to address the second part. With 2 

### regards to the test procedure, DOE did do some 3 

### testing with regard to the potential impact on the 4 

### proposed changes to the test procedure. DOE did talk 5 

### about that at the test procedure public meeting, and I 6 

### think, in an aggregate form, DOE found that the ratings 7 

### would not change. We came to a conclusion or at 8 

### least a tentative conclusion that the ratings -- the 9 

### AFUE ratings if they still existed would still be 10 

### valid under all of the proposed changes that we were 11 

### making. Some manufacturers commented with respect to 12 

### that, so obviously, we welcome your data. The data 13 

### that we have shows in an aggregated fashion that 14 

### those rating remain valid. 15 

### MR. BROOKMAN: Adam. 16 

### MR. DARLINGTON: This is Adam Darlington 17 

### from Navigant. So as to your question about the 18 

### assumptions in the engineering, basically what we 19 

### started from was what was done in the furnace fan 20 

### rule. So in the furnace fan rule, the assumptions 21 

### there were that to meet that standard, manufacturer would 22 

### have to implement two-stage designs and X-13 fanThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## motors, basically. So when we started out looking at 2 

## the analysis, you know, we did teardowns of single3 

## stage, two-stage, fully-modulating, ECMs, you know, 4 

## full-modulating ECMs, X-13s, PSCs, and everything in 5 

## between. And so we did all these combinations, and 6 

## basically, what we had in our baseline initially was 7 

## that single-stage PSC that's in the TSD. And then we 8 

## looked at the cost differential for what was going to 9 

## happen from the furnace fans rule and just sort of 10 

## added on so it's considered in the analysis. 11 

## Now, if you're going to be able to meet 12 

## the furnace fans rule with a single-stage, that would 13 

## be excellent information to know. And certainly we 14 

## would welcome those types of comments so we could 15 

## revise the assumptions about what's going to happen, 16 

## but we were just going off of what was done in the 17 

## furnace fans rule for what they would assume would 18 

## need to be done to meet that standard. 19 

## MR. BROOKMAN: Okay. Now, let's take 20 

## closing remarks. 21 

## Summary remarks here as we move towards 22 

## closure. Please Kathryn.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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### MS. CLAY: Thank you. This is Kathryn 2 

### Clay with the American Gas Association. I wanted to 3 

### take the opportunity as we conclude our many hours of 4 

### discussion to thank the Department for taking the 5 

### time to not only hold a public hearing but extend it 6 

### for this amount of time to give adequate opportunity 7 

### for all of our questions and to cover all of the 8 

### material. 9 

### I have to say I'm in some ways very 10 

### encouraged. I think we've made some very positive 11 

### steps in our conversation. Some of the things in 12 

### particular that I've heard as a response to some of 13 

### the questions we put to you include major new topics on the 14 

### table like the impact on low-income consumers, like 15 

### better transparency on the manufacturer costs and the 16 

### ability to get transparency there through greater 17 

### aggregation to protect proprietary information, and 18 

### also I've been encouraged, although this is not 19 

### within the Department's purview, but the encouraging 20 

### signs that we may be seeing better shipment data. 21 

### That gives us a better sense of the condensing and 22 

### non-condensing markets. So I think very, veryThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## encouraging things have come out of these two days 2 

## that we've all spent together. 3 

## And I think that we are moving towards 4 

## that more open, transparent process that, you know, is 5 

## so valuable. So just appreciation for that. 6 

## I have been -- I want to say though that I 7 

## believe we're still in a dialogue. We've gotten 8 

## those issues on the table, but they're big ones. 9 

## They're complicated. We're going to need some time to 10 

## iterate with you to understand how you put those 11 

## forward and to give you some honest feedback on how 12 

## things could be improved. I'll just touch briefly on 13 

## the conversation we had earlier about the lifecycle 14 

## cost benefits from fuel switching and the fact that in 15 

## the analysis the Department has presented, those 16 

## become positive. 17 

## I have a gut feeling that it's just a 18 

## mismatch of -- that the kind of analysis, it's a 19 

## valid analysis, but perhaps not in this context. I'm 20 

## thinking of the way that, you know, in accounting you 21 

## might enter your revenue and your liabilities and it 22 

## turns out to be a wash. I feel like there might beThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## something there going on. 2 

## But if we take a step back and think about 3 

## that one, at the moment if we leave that analysis as 4 

## it stands, we end up with the perverse result that 5 

## actually the more fuel switching that occurs under 6 

## this rule, the more cost beneficial this rule becomes. 7 

## And I think we all agree that that is not at all the 8 

## intention of this rule -- to move people away from 9 

## natural gas. 10 

## That says to me that there's a structural 11 

## problem with the analysis, but I think that it's 12 

## something that we can address together by finding the 13 

## appropriate way to capture those fuel-cycle impacts. 14 

## And given the responsiveness that you all have shown 15 

## on these other major issues, I'm confident that we 16 

## can keep working together in a positive way. 17 

## Having said all that, and I'm going to say 18 

## this as an informal request and reiterate what I had 19 

## said at the previous public hearing, I really think 20 

## we're going to need more time on the comment period. 21 

## And I will go back and check with my membership, but 22 

## I believe that you will be receiving a more formalThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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## request from AGA to extend the comment period given 2 

## these new issues that we've identified together and 3 

## the need to address them adequately. 4 

## Thank you very much. 5 

## MR. BROOKMAN: Thank you. Additional 6 

## comments here in closing. Frank -- pardon me, Mark. 7 

## MR. KREBS: I urge everybody to review the 8 

## Process Improvement Rule, particularly Part G, to use 9 

## transparent and robust analytical methods. I'm going 10 

## to read this real short part of it. "The Department 11 

## seeks to use qualitative and quantitative analytical 12 

## methods that are fully documented for the public and 13 

## that produce results that can be explained and 14 

## reproduced so that the analytical underpinnings for 15 

## policy decisions on standards are as sound and 16 

## well-accepted as possible." Well, that sets a really 17 

## high bar for the Department, and it's a lofty goal. 18 

## I'm not sure that we're exactly headed in that 19 

## direction, however, you know, and I think there are 20 

## some clear alternatives to all this that it would 21 

## help us cut to the chase that ought to be 22 

## seriously considered.The Energy Conservation Standards for Residential Furnaces April 13, 2015

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## You know, when I talked about it last 2 

## time, I talked about just going with that rough simple 3 

## payback criteria, you know, and getting away from all 4 

## this controversy of life-cycle costs, because, let's 5 

## face it, it's hard to predict the future. 6 

## The other thing that I want to bring up in 7 

## closing is that in every rule, every NOPR, there's a 8 

## section in the back where DOE has to jump through all 9 

## these different Executive Orders and things that you 10 

## know, we really didn't touch on in this series of 11 

## meetings. But one in particular, Executive Order 12 

## 12866, tells Federal agencies to look at all these 13 

## different alternatives and all -- you know, all these 14 

## different impacts, and, you know, in there, I guess 15 

## even, you know, you could probably -- the Secretary 16 

## could read into that that it also includes looking at 17 

## carbon emissions. But the last part of the last 18 

## sentence, it says, "to include the alternative of not 19 

## regulating." Okay. And that's why we want to look 20 

## at the shipment data, you know, to see if the markets 21 

## had merit in that trajectory, you know. Do we really 22 

## need this rule? And, you know, you're required byThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### Executive Order 12866 subchapter 1A to do it and, you 2 

### know, I realize it's pretty much anathema for a 3 

### regulator to not regulate, but nevertheless, that's 4 

### what this Executive Order calls for. 5 

### MR. BROOKMAN: Okay. Frank, do you have 6 

### comments? Oh, I thought you did. 7 

### John Cymbalsky, please. 8 

### MR. CYMBALSKY: This isn't my closing 9 

### remark, but I just wanted to address that we spent, I 10 

### think, a good half hour talking about the regulatory 11 

### impact analysis which included what you said. So, 12 

### one of our favorite Executive Orders is 12866. I can 13 

### tell you that flat out. But we did. However, your 14 

### point is well taken. I think once the AHRI data come in, 15 

### obviously, we will revise those analyses that are part 16 

### of the 12866 mandate. 17 

### MR. BROOKMAN: Yes, Charlie? 18 

### MR. McCRUDDEN: This is Charlie with ACCA. 19 

### One of my disappointments in looking at some of this 20 

### stuff was that there was no outreach to contractors 21 

### specifically. And I don't know if it's a PRA [Paperwork 22 

### Reduction Act] issue. I don't know if it's an antitrustThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### issue, but to me, the fact is that there was no outreach to 2 

### contractors specifically on a rule that does not only impact 3 

### contractors, but also impacts how the products would 4 

### be installed by those contractors. So maybe that's 5 

### something that we can work on in the future, but to 6 

### me, that's a real deficiency here. 7 

### MR. BROOKMAN: Okay. Final comments? 8 

### (No response.) 9 

### MR. BROOKMAN: So then I'm going to turn it 10 

### back to John Cymbalsky, and for my part, I thank all of 11 

### you. I think we really covered a lot of ground 12 

### and very constructive comments across the board. 13 

### John Cymbalsky. 14 

### MR. CYMBALSKY: Thanks, Doug. And thanks 15 

### everyone for participating in these two days of 16 

### public meetings on this topic. I think we've all 17 

### learned that this rule is complicated, analytically 18 

### and otherwise. But I think from what we've heard 19 

### from stakeholders and what I do believe to be true, I 20 

### think DOE has been very, very open and transparent 21 

### about all of its analytical processes, and we continue 22 

### to get as transparent as possible. I mean, that isThe Energy Conservation Standards for Residential Furnaces April 13, 2015

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### definitely a goal of ours. The more data we make 2 

### available, and the more data we get in response to 3 

### that, the better the rule. So we're going to 4 

### continue down that path. But, again, the comment 5 

### period I believe is June 10th currently, and I 6 

### understand we'll get an extension request. So we'll 7 

### consider that if and when that comes in, but let's 8 

### all keep June 10th in mind until you hear otherwise, 9 

### and please provide the data and comments as you see 10 

### fit. 11 

### If you're traveling, travel safe. If not, 12 

### you have the afternoon. It's nice out. Go out and see 13 

### the cherry blossoms, full bloom. I believe I'll be 14 

### strolling over there myself. 15 

### So thanks again. 16 

### MR. BROOKMAN: Thank you all. 17 

### (Whereupon, at 1:19 p.m., the meeting was 18 

### adjourned.) 19 20 21 22The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 186 **A A-4**  90:1 **A-94** 90:3 **a.m** 1:14 4:2 79:16 79:18 **ability** 13:14 121:8 139:21 142:1 178:16 **able** 6:17 18:5 24:6 26:16 45:6 46:1 ,3 59:22 71:1 72:2 85:7 121:4 125:19 132:1 ,5 ,12 152:16 177:11 **absence** 124:10 **absent** 114:15 ,17 118:17 **absolute** 132:2 157:5 ,6 **Absolutely** 33:8 76:21 **AC/HP's** 109:2 **ACCA** 2:20 47:7 77:4 109:15 183:18 **accelerate** 146:8 **accompany** 13:18 **account** 36:13 38:18 40:9,10 98:20 125:1 ,2 148:16 149:19 **accounted** 15:15 16:1 31:17 **accounting** 98:18 179:20 **accruing** 113:1 **achieve** 103:8 **acquired** 37:21 **Act** 157:2 183:22 **action** 100:10 111:3 **actions** 108:22 **active** 102:13 149:19 150:3 **actual** 13:2 48:12 50:22 55:21 76:8 93:15 158:6 162:18 170:5 **Adam** 2:11 176:1 176:15 ,16 **add** 38:1 83:12 135:17 159:4 160:7 **added** 174:20 177:10 **adder** 174:19 175:4 175:13 **adders** 149:20

150:1 **adding** 144:12 **addition** 37:8 63:21 81:4 150:15 175:2 **additional** 6:3 ,5 7:22 31:20 69:11 69:18 93:2 146:12 167:18 172:12 173:3 ,4,8 181:5 **Additionally** 166:10 **additive** 144:11 ,21 **address** 69:12 129:14 130:20 140:13 175:22 176:1 180:12 181:3 183:9 **addressed** 126:21 166:9 **addressing** 27:5 73:4 **adequate** 178:6 **adequately** 181:3 **adhered** 175:17 **adjourned** 185:18 **adjust** 95:1 **adoption** 78:12,14 164:12 **advance** 8:22 34:7 **advantage** 9:22 **advantageous** 72:7 **adversely** 20:8 **advisement** 154:9 155:4 **AEO** 37:17 38:21 50:22 52:7 83:12 83:14 93:22 94:6 156:7 159:19 160:2 164:15 ,16 166:11 ,14 **affect** 109:3 137:1 **afford** 27:17 **afternoon** 185:12 **AFUE** 87:17 99:5 125:17 138:9 141:13 145:13 149:17 156:11 176:9 **AGA** 45:9 46:14 61:2,3 62:1 64:21 117:8 150:21 165:15 169:5 171:10 181:1 **agencies** 182:12 **agenda** 5:15 **aggregate** 176:6 **aggregated** 49:15 172:11 ,15 ,19 173:2,5 176:13 **aggregation** 178:17 **aggressive** 46:21 **ago** 45:8 62:19 108:5 160:17 163:13 **agree** 28:6 32:20 46:10 180:7 **agriculture** 162:3 **ahead** 70:10 87:3 106:7 114:2 149:1 **AHRI** 3:5 ,6 27:1 43:2 45:4,13 49:2 49:10,13 ,14,18,21 51:10 59:21 60:17 66:9 67:17 101:22 106:19 183:14 **air** 3:14 71:13 112:3 137:4 157:2 **Air's** 74:18 **Alex** 3:15 **Allied** 3:14 19:5 71:12 74:18 **allow** 154:4 **allows** 119:6 **alternative** 17:10,11 62:13 100:16 182:18 **alternatives** 100:4,9 102:3 ,5 ,9 181:20 182:13 **altogether** 71:2 **amend** 19:17 **amended** 36:18 54:7 100:5 128:7 156:2 162:11 **American** 2:17 3:4 3:7 50:6 52:17 107:5 108:6 178:2 **amount** 39:10 63:5 178:6 **analyses** 129:8 131:5 152:6 183:15 **analysis** 5:1 ,16,17 5:18,20,22,22 6:1 7:8 12:10,14 14:9 17:2 19:10 20:1 ,7 22:15 23:1 ,4 25:8 27:10,10,15 32:2 32:4,11 ,15 ,22 33:5 ,10,18 35:21 35:21 ,22 36:1 ,6 36:12,19 37:8,22 40:2,8,15 41:3

47:1 ,3 50:12 51:4 67:1 ,5 ,9 69:16 70:5 ,6,12 71:9,18 73:3 76:8 80:10 80:11 ,12,16,17 81:9,13 ,22 82:13 82:16,18 83:17 84:2 89:2,5 ,7 ,11 89:13 91:10,16 92:4 93:3 ,11 ,11 94:22 95:4 96:11 98:19 100:3 102:1 102:6 104:22 105:10,11 109:16 110:3 112:12 123:4,8 127:22 128:5 129:2 131:8 131:9 134:21 135:6 141:19 150:8,9 151:2,11 151:16 152:21 ,22 155:20,21 156:1 ,9 156:17 158:5 ,13 158:18 160:6 164:2,10 165:18 165:20 167:1 ,2 168:6,19 169:10 169:21 170:1 ,5 ,8 173:2,14 174:2 175:11 177:2,10 179:15 ,18,19 180:3 ,11 183:11 **analytical** 154:2 181:9,11 ,14 184:21 **analytically** 184:17 **analyzing** 96:9 **anathema** 183:2 **and/or** 153:15 **Andrew** 2:12 31:21 59:9,16 74:11 84:21 101:4 150:6 169:14 171:18 **Andrew's** 32:20 **Aniruddh** 3:3 20:3 88:21 ,22 91:6,7 95:8 134:14,15 173:22 174:1 **annual** 44:11 48:20 80:21 ,22 81:14,16 82:16 83:5 **answer** 29:22 66:15 91:10 99:4 103:2 152:2 **answered** 29:19 126:21

**anticipate** 46:22 **anticipates** 167:11 **antitrust** 183:22 **anybody** 6:4 8:14 10:12 46:5 134:6 **anymore** 45:8 61:11 62:2 112:5 **anyway** 70:7 73:8 73:13 112:19 114:3 **apartment** 10:15 ,15 12:16 13:3 ,4 15:8 15:9 16:17 18:19 **apartments** 9:16 10:8,11 ,12,14 11:16,16 12:1 13:15 ,16 16:6 17:22 18:1 25:9 **apologies** 5:10 112:17 **apologize** 166:5 **apparently** 11:19 14:17 79:21 166:3 **appear** 96:9 **Appearances** 2:1 3:1 **appears** 96:12 140:16 **Appendices** 162:7 **appendix** 51:14 97:7 **applaud** 32:1 ,8 **appliance** 5:6 31:9 31:10 49:8,12,18 51:12 170:16 171:5 **appliances** 17:4 31:9 58:5 **applicable** 84:13 ,16 **applications** 37:4 69:16,18 77:6 **applied** 102:19 175:13 **appreciate** 46:10 76:16 121:1 153:1 **appreciated** 34:2 69:19 78:18 **appreciation** 179:5 **approach** 24:11 26:1 68:14,14 81:7 151:20 164:1 164:3 168:14 **appropriate** 51:14 90:15 134:2 153:1 162:13 170:15The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 187 180:13 **approval** 171:13 **approved** 85:7 169:18 170:2,3 ,14 171:21 **approximately** 113:1 **April** 1:12 4:6 157:20 **arbitrary** 19:19 **area** 56:12 68:15 69:2 167:19 168:2 **areas** 13:9,13 16:4 64:1 ,4 **arent** 139:14 **argue** 75:19 **argument** 125:6 **Arizona** 65:10 **Armstrong** 2:4 22:12,13 124:12 125:22 145:15 152:19 153:10,13 154:7 ,8 172:6 175:21 **array** 40:20 **artifact** 159:19 **artificial** 75:9 **artificially** 124:8 **ASAP** 2:12 **Ashley** 2:4 22:12,13 28:7 124:12 125:15 ,21 145:15 152:12 153:3 154:7 ,8 172:4 175:21 **asked** 8:2 39:21 45:4 96:21 141:2 145:17 151:7 169:7 **asking** 17:20 18:16 98:2 144:20 **aspect** 55:18 **aspects** 173:14 **assembly** 148:14 **assess** 128:6 156:8 164:11 167:3 **assessment** 131:7 **assist** 60:8 **associated** 63:7 118:5 123:16 164:4 **Association** 2:17 3:4 3:7 16:17 24:20 54:12 63:14 69:22 178:2 **assume** 50:4 72:3 90:7 102:20 141:22 177:17 **assumed** 38:3 ,6 47:2 69:16 **assumes** 158:18 **assuming** 17:3 31:2 52:22 54:1 55:2 72:4 74:5 96:10 98:4 113:7 156:19 **assumption** 47:5 55:7 90:5 ,12 111:2 135:22 136:8 144:21 145:1 174:15 175:19 **assumptions** 15:1 23:14,17 137:6 141:4,20 143:16 176:18 ,20 177:15 **asterisk** 39:7 **attempt** 11:21 34:1 **attention** 33:12 108:12 **attractive** 10:7 **audible** 30:20 **authority** 78:7 **automatically** 96:10 **automobiles** 139:14 **available** 6:20 17:16 40:18 45:20 48:15 48:16 50:22 51:14 56:10 61:19 82:14 84:19 93:18 100:6 105:12 122:12,13 164:21 173:19 185:2 **Ave** 1:7 **average** 44:2 52:8 82:17 107:5 108:6 108:13 112:21 126:17 127:13 133:22 **avoid** 114:12,19 115:7 121:5 ,8 **avoided** 122:9 162:14 **avoiding** 121:11 124:3 **aware** 10:19 11:14 11:18 15:1 ,6 42:16 136:17 **B B**  122:1 159:14 168:14 170:20 **B(2)** 147:17 ,18 **back** 4:17 ,21 7:9 25:15 28:5 32:8 34:14 42:3 59:14 61:2 62:11 72:15 77:19 79:20 80:6 92:19 101:14 102:1 104:12 106:8 108:2 109:15 115:21 116:5 126:12 136:6,19 150:17 152:2 154:1 ,10 155:4 165:13 166:14 171:19 172:2 174:3 180:2 180:21 182:8 184:10 **backed** 11:14 **bad** 55:1 **badge** 79:14 **baked** 73:2,15 **balance** 24:8,10 **Baltimore** 4:9 **bang** 112:1 **banning** 74:21 **bar** 181:17 **Barbecue** 63:14 **barely** 95:12 **base** 48:7 54:6,7 ,18 82:7 ,10 84:18 97:5 102:20 123:6 123:19 124:19,20 125:19 133:2 161:6 **base-** 81:14 83:22 84:2 97:5 **base-case** 37:9 81:11 ,13 82:3 83:9 98:20 133:11 **base-load** 161:5 **based** 7:17 19:1 33:18 41:15 42:3 42:11 49:2 50:2,3 50:12 51:3 72:1 77:12,12 78:10 95:4 98:22 101:10 103:17 108:4 119:6 129:16,17 129:19 133:6,8,18 134:16 135:22 143:15 160:4 161:14 172:16 175:9 **baseline** 42:1 ,22 72:20 73:15 ,16 84:5 87:20 88:10 88:12 96:20 97:2

97:16 98:11 102:7 103:3 111:13 113:16 114:22 115:3 159:1 160:1 161:1 168:5 174:17 ,18 177:6 **basic** 47:11 126:20 **basically** 19:21 53:1 120:12 144:12 148:20 149:5 157:15 168:13 171:12 176:18 177:1 ,6 **basis** 28:15 171:13 **Bays** 103:13 **beating** 45:10 **becoming** 119:8 **beginning** 28:8 94:2 **begun** 69:11 **behave** 119:11 **behavior** 119:11 **behavioral** 119:2,5 **belief** 78:10 **believe** 41:2 56:8,14 58:11 59:6 62:12 65:10,20 66:1 ,12 67:5 69:12 74:19 97:15 147:17 152:1 160:3 163:9 166:1 ,6,11 179:7 180:22 184:19 185:5 ,13 **beneficial** 100:16 118:10 180:6 **benefit** 7:16 12:4 27:12,12 113:1 115:6 118:5 121:8 121:9,13 122:15 123:2 125:9 126:10 **benefits** 14:10 73:20 74:1 ,8 115:14,20 124:2,3 126:1 161:17 164:3 179:14 **Berkeley** 2:15 3:15 3:16 8:3 9:8 11:11 16:14 35:19 **best** 6:15 85:9 86:12 110:18 118:12,21 132:9,16 138:2,11 138:12,19,21 141:4 142:1 ,3 149:11 ,12 **better** 7:21 8:7 12:10 19:1 26:9 34:20 35:1 58:13 78:16 85:9 98:16 99:2 110:18 119:8 122:5 129:1 132:9 138:2,11 ,12,19,22 139:16 140:1 141:4 142:1 ,3 178:15 ,20,21 185:3 **better-er** 138:12 **better/best** 86:9 **beyond** 99:7 104:3 **big** 60:8 79:5 117:11 167:20 179:8 **bigger** 28:18 168:16 **bill** 14:3 15:2 28:1 104:16 105:1 **billion** 92:16,17 99:17 ,18 133:12 141:10,12 **bills** 7:17 9:17 ,22 10:7 ,13 11:17 12:4 14:4 15:3 17:17 27:17 ,18 28:11 ,18 29:8,9 29:10,14,16 31:7 **bit** 5:11 9:13 19:6 24:22 29:1 35:14 50:9 51:18 55:8 59:19 70:1 76:13 89:20 91:19 97:8 125:12 131:3 **black** 27:4 **blast** 173:18 **blended** 137:15 **blip** 75:18 76:1 ,3 ,4 76:20 78:2 104:12 106:10 **blips** 76:12,15 **bloom** 185:13 **blossom** 155:16 **blossoms** 185:13 **blower** 145:10,11 175:3 **blowers** 109:2 **blue** 79:4 **blush** 34:1 **board** 184:12 **boom** 52:20 **boom-bust** 141:16 **boost** 63:21 **bore** 12:11 **Bornstein** 11:11 **bottom** 15:17 22:2,4The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 188 138:8 **bottoms-up** 151:19 **bought** 75:20 151:13 **bound** 132:17 ,18 **box** 75:6 77:5 **boxes** 78:22 **BPM** 153:7 **break** 78:22 79:12 138:1 160:2 173:9 **breakdown** 65:19 **breaks** 116:13 121:17 **brief** 79:16 174:14 **briefing** 171:10 **briefly** 179:12 **bring** 59:14 106:18 172:6 182:6 **broad** 130:9 **broader** 107:15 **Brookman** 2:9 4:3 ,8 5:4,8 8:11 ,16,22 14:15 16:21 19:4 19:13 20:3 ,11 22:3 ,12 23:18 24:17 26:5 ,22 28:3 29:17 30:1 ,3 31:18 32:18 34:4 34:11 39:4 43:1 44:3 46:8,15 47:6 51:20 54:9,13 57:9 59:9,16 62:8 63:12 64:5 ,11 65:6 66:5 ,14,16 66:18 67:13 69:8 69:20 71:7 ,11 72:11 ,13 74:15 75:4 77:3 ,17 ,22 78:3 ,19 79:11 ,19 80:3 84:21 88:21 89:21 91:6 94:14 95:8,12 96:3 100:1 101:4,16 103:13 104:9 106:6,10 108:8,20 109:6,11 111:7 112:11 ,16 119:18 120:19 123:17 125:21 126:5 127:7 ,11 ,21 134:3 134:6,14,18 137:7 137:11 140:2,22 142:10 143:5 ,18 145:2,6 146:6,10 146:15 147:21 149:1 150:6,13 ,18 150:20 153:3 ,11

153:18 154:7 155:11 ,18 156:13 161:8,11 162:16 163:3 164:5 ,8 165:1 ,12,19 166:3 166:21 167:15 169:4,14 170:9 171:8,16 172:3 173:21 174:4 176:15 177:19 181:5 183:5 ,17 184:7 ,9 185:16 **brought** 33:11 74:11 77:8 97:1 127:5 172:7 **Brundage** 2:10 23:19,20,20 **BTU** 61:20 **BTUs** 56:15 57:2 **buck** 112:1 **build** 25:9,14 33:17 129:3 **builder** 68:1 **builders** 24:20 42:12 54:12 58:12 58:13 ,16,20 62:18 69:22 **building** 4:7 16:17 71:20 160:1 **buildings** 37:21 38:15 **builds** 73:1 **built** 56:19 61:17 ,18 71:20 159:18 **bulk** 7:2 **bullet** 162:18 **bump** 52:5 104:16 **burden** 144:3 148:18 **Bureau** 39:21 44:10 50:17 56:12 **burn** 159:8 **bury** 61:22 **business** 25:10 128:10 146:18 ,19 **buy** 9:18 10:22 12:17 27:13 **buying** 9:20 12:2 124:20 **C C**  4:1 **calculate** 37:14 81:1 81:3 ,4 154:16 **calculated** 38:16 162:9

**calculates** 80:18,20 94:1 **calculating** 126:1 **calculations** 65:14 **California** 16:13 162:20 **call** 69:10 75:9 76:15 85:3 113:9 114:7 ,10 **called** 93:17 112:18 132:8 **calls** 183:4 **capacity** 128:12 141:17 158:12,15 161:2,5 ,6 164:11 164:20 **capital** 108:4,6 129:15 130:1 133:14 **capture** 13:14 74:8 139:19 180:13 **captured** 17:11 60:15 130:13 **carbon** 161:21 ,22 163:2 182:17 **careful** 25:18 26:1 33:14 **carefully** 113:8 **Caroline** 3:5 **case** 11:19 12:8,15 13:2,17 16:1 ,10 17:3 19:3 23:6 45:16 48:7 54:6,7 55:19 65:15 73:18 79:4 81:15 82:7 82:10 84:1 ,3 ,19 85:12 97:6 102:20 103:12 123:6,19 124:19,20 125:20 126:16 127:17 132:16 133:2,4 140:6 149:8,11 ,12 159:2,9,13 ,14 161:3 164:16 **case-by-case** 171:13 **cases** 17:6,9 31:13 51:3 55:19 81:2 82:8,10 156:8 159:11 ,17 169:18 **cash** 154:17 **cash-flow** 128:17 **categorizing** 114:9 **category** 34:18 64:9 98:3 **Catherine** 16:21 18:16 19:13

**Catherine's** 20:4 **caused** 89:4 91:17 115:15 122:3 **CBECS** 77:13 **cell** 155:9 **cells** 154:12,13 ,22 155:8 **Census** 39:8,21 43:21 44:10 50:17 52:17 56:12 129:5 **cent** 57:2 **center** 97:10 **central** 40:19 55:4 **centralized** 47:21 **certain** 31:8 46:9 58:19 63:8,9 86:7 112:7 ,8 119:12 154:2,16,22 **certainly** 12:5 16:1 140:19 168:11 169:22 177:13 **cetera** 121:6,17 159:16,16 **CFL** 110:15 **challenging** 119:14 139:13 **change** 30:18 31:1 89:4 91:17 111:12 127:19 133:11 ,13 133:13 136:1 137:5 140:6 143:11 154:18 160:4 175:4 176:7 **changed** 89:16 90:21 106:15 136:4 137:2 **changes** 17:17 38:20 40:9,10 94:8 145:20 149:3 149:21 ,22 162:5 164:17 ,18,19 176:4,10 **changing** 10:5 161:5 167:6 **chapter** 37:5 ,6 82:14 84:20 86:2 87:1 97:1 ,4 100:6 100:18 102:17 105:6 155:22 156:10 158:13 161:15 ,15 162:7 164:9,22 165:4 167:1 ,13 174:17 **characteristics** 50:16 **characterize** 100:22

**Charles** 2:20 **Charlie** 47:6,7 77:3 77:4 106:6 109:13 109:14 183:17 ,18 **chart** 37:12 41:11 51:16 53:14 54:15 56:2,9 66:8 77:19 78:2 81:10 93:5 126:10 **charts** 81:7 **chase** 181:21 **cheaper** 61:19 124:5 ,18 **check** 10:13 44:8 180:21 **cherry** 155:16 185:13 **chief** 109:8 **chime** 6:18 28:5 74:17 **chimes** 28:20 **choice** 51:4 88:4 114:16 120:3 122:2 123:15 **choices** 18:13 96:21 98:6 116:13 119:6 122:5 151:12 **choose** 24:1 36:14 73:19 170:6 **chooses** 20:6 **choosing** 115:2,2 125:19 **chosen** 41:19 **Chris** 128:1 134:9 143:5 ,20 150:21 **Christopher** 3:10 128:3 **circa** 61:6 **circle** 122:15 171:19 172:2 **Circular** 90:1 ,3 107:17 108:3 **circumstance** 144:6 **cite** 68:7 **cited** 90:1 **cities** 26:18 **clarification** 44:4 85:16 93:14 **clarify** 43:20 54:5 89:9 91:9,14 95:20 110:4 121:2 125:11 **clarity** 46:12 **class** 81:2 82:19 114:4The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 189 **classes** 37:2 83:6 84:18 92:9 **Clay** 3:7 16:22 18:2 18:4,9,12 19:12 19:14 32:19 120:22 122:2,14 123:7 ,10,22 124:7 125:4 178:1 ,2 **Clean** 94:17 95:2 157:2 **clear** 5:13 29:12 31:19 49:20 76:12 181:20 **clearer** 17:14 **clearly** 54:15 75:8 110:13 126:22 145:9 **clever** 11:12 **click** 14:18 **clicking** 142:12 **climates** 40:4 **close** 24:18 59:16 94:3 134:19 **closet** 69:2 **closing** 158:17 159:16 169:3 173:22 177:20 181:6 182:7 183:8 **closure** 177:22 **CO2** 93:12 157:10 163:21 **coal** 158:17 159:8 159:15 ,18 160:9 160:18 **coal-fired** 158:15 ,19 **code** 17:8 170:13 **Cohen** 2:5 **coincidental** 126:19 **cold** 56:16 **coldest** 120:10 **collecting** 164:2 **color** 139:6 **combination** 35:12 145:10,11 **combinations** 177:5 **combine** 81:6,13 ,16 82:1 ,6,9 **combined** 49:21 95:19 135:7 ,14 **combining** 144:12 **combustion** 174:16 **come** 8:8 26:14 37:17 43:21 50:6 50:12,19 57:20 77:15 81:14,17 ,19 82:4,8,11 ,15 83:11 ,13 ,16,19

84:2,7 99:3 126:8 133:17 151:3 ,20 179:1 183:14 **comes** 51:2 82:18 116:12 119:8 151:4 159:20 163:16 185:7 **coming** 22:5 32:6,8 80:4 91:13 ,19 94:16 107:14 172:9 **comment** 20:2 23:19 24:18 26:4 28:20 40:6,12 57:12 62:9 63:12 68:13 69:8,11 76:7 ,16 77:5 78:18 79:22 94:10 112:13 120:19 134:7 137:9 138:4 142:2 145:18 146:10 147:9 150:13 153:4,11 153:14 171:9 172:4 173:15 ,15 180:20 181:1 185:4 **commentary** 4:11 **commented** 176:11 **commenters** 22:16 **comments** 31:21 33:17 ,19 40:7 46:9 57:13 67:13 69:7 78:21 90:18 96:4,16 100:20 101:6,20 118:2 146:12 153:15 161:9 164:5 165:19 167:15 169:1 172:4 177:14 181:6 183:6 184:7 ,12 185:9 **commercial** 37:3 69:16,18 77:6,14 83:1 109:1 ,1 ,2 **commitment** 32:9 33:3 **commoditization** 138:6 **common** 23:14 130:7 **community** 32:21 **compact** 110:15 **companies** 61:10 150:10

**Company** 2:10 23:21 **compare** 45:3 124:17 127:13 **compared** 20:7 88:7 103:15 124:19 125:16,18 126:14 141:8 **compares** 103:12 **comparing** 122:9 123:12 124:7 **comparisons** 45:6 **competing** 7:19 39:22 60:3 ,7 **competitors** 147:4 **complete** 4:12 6:19 32:15 67:6 131:11 170:11 ,11 **completed** 39:20 52:1 **completely** 34:3 **completeness** 150:4 **compliance** 128:14 131:20 132:5 148:17 153:8 **complicated** 126:14 179:9 184:17 **component** 172:22 **componentry** 148:14 **compress** 138:9 **compression** 132:19 **concept** 77:7 102:6 **concern** 28:8 65:14 69:6 130:9,14,17 130:19 **concerned** 27:14 **concerns** 65:8 130:7 138:5 **conclude** 178:3 **concluded** 71:13 171:10 **concludes** 101:18 **conclusion** 71:17 176:7 ,8 **condensing** 17:9 18:5 ,18 34:21 48:4,9 49:5 62:20 63:8 65:19 68:12 68:21 74:12 75:10 75:20,21 76:9,11 84:9,14 88:10 100:15 102:21 103:7 104:4,13 109:19,20 110:11 111:5 121:7

122:10,19 123:13 147:2,6 167:22 178:21 **conditional** 153:8 **conditioned** 153:7 **conditioning** 112:3 137:4 **conditions** 42:4 **conduct** 100:7 128:22 **confidence** 46:1 **confident** 180:15 **confidential** 153:15 **confirm** 150:7 **confirmation** 145:7 **confirmations** 146:13 **confuse** 154:21 **confused** 19:15 47:8 **confusing** 107:11 **Congress** 163:6 **connect** 28:13 **connected** 63:18 **conservation** 1:2 4:5 36:7 80:13 100:5 ,17 161:18 164:13 167:4 **conservative** 72:9 101:12 **consider** 23:3 68:17 83:6 106:4 115:22 126:3 143:22 151:7 162:18 163:18 165:18 166:19 167:1 185:7 **consideration** 6:8 32:22 68:18 74:18 86:1 ,2 **considerations** 22:17 **considered** 19:8 23:1 40:1 71:14 75:3 85:18 87:6,7 87:8 88:10 104:22 113:13 114:19 115:7 118:1 133:3 144:1 151:10 152:10 177:10 181:22 **considering** 55:20 83:2 87:12 90:11 90:13 **considers** 36:8 105:11 **consist** 38:1

**consistent** 152:6 **consistently** 166:15 **constant** 47:4 52:14 55:7 **Constantin** 3:13 **constrained** 11:4 13:6,9,17 **constraints** 128:12 **constructed** 124:8 **construction** 36:9 37:15 ,18 38:10 42:14 43:22 44:15 50:3 ,15 ,15 52:6 53:1 ,17 ,21 55:13 56:4,5 ,11 58:17 68:15 82:22 **constructive** 184:12 **construed** 121:12 **consultants** 154:4 **Consulting** 3:11 **consumer** 20:19 27:6 51:4 78:14 82:8 89:13 100:10 100:11 108:16,17 109:16 114:15 121:3 122:4 123:13 ,14 124:2,9 124:19 151:11 167:5 **consumer's** 118:12 **consumers** 8:6 9:12 27:3 ,21 28:9 32:12 34:19 86:4 86:5 103:6 108:7 108:14 119:6,11 170:5 178:14 **consumers'** 28:11 118:21 **consumption** 81:14 81:17 82:17 145:12 **contact** 68:2 131:4 **content** 129:12 148:2 **context** 67:4 179:19 **continuation** 4:4 **continue** 45:11 115:10 184:21 185:4 **CONTINUED** 3:1 **continues** 96:12 103:16 **continuing** 46:22 141:22 **contractor** 120:4The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 190 **contractors** 62:18 183:20 184:2,3 ,4 **Contributing** 144:2 **controls** 157:14 161:6 **controversy** 182:4 **conversation** 21:16 41:21 52:12 115:17 116:21 139:1 143:6 149:10 165:11 167:20 178:11 179:13 **conversion** 81:19 83:11 ,13 131:12 133:13 ,15 ,17 144:14,19 146:4 149:20 **conversions** 43:16 46:18,21 **convert** 19:7 **converted** 62:13 93:5 **cooling** 31:12 **copies** 127:5 **copy** 154:4 **corner** 114:1 **corporate** 108:4,6 **correct** 8:20 15:12 20:15 30:19 42:15 43:14,18 48:6 52:7 73:12 77:11 95:14,15 99:20 113:3 ,4,22 114:5 114:5 134:17 135:1 ,21 149:13 150:11 **correctly** 72:16 113:15 114:21 121:2 **correspond** 38:6 **corresponding** 170:15 **cost** 4:22 5:17 10:11 11:20 13:1 ,4 14:5 14:5 17:21 ,22 19:7 ,10 26:17 27:10,14 34:18,22 69:4 70:5 ,5 ,20 73:20 74:1 81:3 83:15 ,16,16 114:20 115:7 119:8 120:9 121:10,11 ,16,20 121:21 122:20 123:4,5 ,12,20 124:6,16 125:22

126:1 ,2,2 129:15 130:1 131:20 135:11 144:10,13 150:1 151:16 153:5 161:20,22 162:18 163:2 172:13 ,14,18 174:19 175:4,13 177:8 179:14 180:6 **cost-effective** 70:9 **costly** 168:19 **costs** 10:1 ,22 11:19 12:6,15 ,17 ,20 13:8,18,19 17:18 29:20,21 31:15 68:19,20 69:5 71:16 74:7 ,9,11 82:2,2,3 ,6,6,7 ,9,9 90:8 114:12 117:17 ,20 119:10 119:10 120:1 ,2,17 121:5 ,9,14,22,22 122:10 123:16 124:3 130:10,13 131:8,12 132:5 133:13 ,15 ,17 135:12 142:18 144:13 ,14,19,21 146:1 ,4 149:20,20 151:2,10,17 ,18 152:9,15 ,15 153:16,17 167:7 167:20 170:5 172:11 ,21 ,22 173:1 ,1 ,10 178:15 182:4 **cottage** 74:22 **Council** 16:18 **count** 122:22 125:8 **counted** 121:7 ,9 **counter** 61:14 **counterintuitive** 35:2 **counting** 122:15 124:2 **country** 35:1 ,5 37:4 53:18 56:4 63:5 83:2 87:21 88:1 92:22 140:5 160:13 **couple** 7:9 17:1 24:20 26:6 27:2 45:8 99:11 173:10 **course** 33:16 58:9 106:21

**cover** 12:6 31:11 178:7 **coverage** 171:4 **covered** 5:17 6:6 146:20 184:11 **Craig** 2:13 24:19 54:9,11 69:20,21 **created** 154:20 **creating** 141:3 **credit** 104:21 105:9 105:13 ,22 106:1 ,4 122:22 **credits** 75:11 100:11 ,12 104:15 105:12,14 **criteria** 37:6 87:7 87:16 182:3 **critical** 32:21 **crude** 55:2 **cued** 69:8 **cumulative** 81:15 81:18 82:4,8 144:3 **curiosity** 139:3 **curious** 52:4 67:20 85:12 89:4 91:17 **current** 48:7 95:4,5 105:12,22 **currently** 9:11 72:4 87:12 88:12 89:17 92:9 99:13 101:2 102:12,20 116:1 117:10 154:11 185:5 **curve** 11:6 12:12,15 12:18 13:10,12 66:13 78:11 **curves** 26:11 ,15 ,19 26:21 **customer** 55:2 **customers** 62:13 72:16 131:20 **cut** 181:21 **cutting** 117:19 **cycle** 92:8 136:10 **cycles** 136:16 **cyclical** 141:15 **Cymbalsky** 2:3 4:16 4:17 5:5 ,5 7:3 ,4,5 18:15 19:9,20 20:18,21 21:4,9 21:12,17 26:4,6 28:3 ,4 29:11 33:7 41:6,12,17 ,22 42:5 ,13 ,16,21 44:14 55:12 57:11

61:1 64:11 ,12,20 71:8 72:20 73:12 74:10 76:18 95:3 99:4 103:2,20 107:7 ,9,16,21 109:4,8 110:7 111:4,19 113:4,16 114:5 ,22 115:9,16 115:21 116:9,19 116:22 118:6,19 121:14 123:18 124:5 155:5 ,15 158:21 159:22 161:1 167:17 169:11 183:7 ,8 184:10,13 ,14 **D D**  4:1 **D.C** 4:7 **Dale** 3:16 8:2,21 9:1 9:3 15:4,7 ,13 ,16 15:22 16:7 ,15 ,19 17:13 18:3 ,7 ,10 23:11 26:3 **damage** 162:4 **damages** 162:1 **Dan** 2:5 **Daniel** 2:17 **Darlington** 2:11 176:16,16 **darn** 31:19 **dash** 12:19 **data** 11:14 39:8 41:8 42:17 43:20 43:21 45:4,4 46:2 46:11 49:3 ,6,7 50:3 ,17 ,19,21 51:10 52:17 56:12 58:1 ,1 ,3 59:5 ,22 60:7 ,17 ,17 ,20 62:2,5 64:5 65:9 65:17 66:2,8,10 73:15 77:13 78:14 78:16 83:12,14 98:22 99:2 104:2 104:5 106:19 113:14 116:20 117:1 ,7 129:5 ,6,7 129:16,17 ,18,18 129:19,22 131:6 152:19 157:3 ,14 160:15 166:11 176:12,12 178:20 182:20 183:14 185:1 ,2,9

**date** 4:12 128:14 135:10 **Dave** 3:4,14 19:4,5 71:11 ,12 150:13 **Davidson-Hood** 3:5 **day** 22:18 106:16 120:9 **days** 179:1 184:15 **DC** 1:8 **deal** 4:10 113:9 119:14 170:12,13 **debate** 106:20 **December** 56:16 **decided** 76:8 **decision** 20:9 25:9 25:10 42:11 45:17 65:11 **decisions** 181:15 **deck** 8:10 **decreased** 157:16 **decreases** 36:19 94:3 110:6 132:3 **decreasing** 54:18 **deem** 114:14 **deemed** 113:12 **deep** 79:8 **deeper** 5:1 7:12 **defend** 136:15 **deficiency** 184:6 **defies** 125:9 **define** 119:13 **defined** 37:5 ,20 38:14 **definitely** 94:10 117:19 163:16,17 163:18 185:1 **definition** 54:17 **definitive** 57:13 **degradation** 21:2,8 **degrades** 21:19 **deLaski** 2:12 31:21 32:1 59:9,10,18 84:21 ,22 86:22 101:4,5 122:11 123:3 ,8 150:6,7 150:12 169:15 ,16 171:18 ,19 **delta** 70:13 ,21 73:17 111:13 124:17 **demand** 10:8 11:5 12:12,21 13:10 25:15 ,16 26:11 ,13 26:14,21 160:10 **demographics** 35:6The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 191 **demolitions** 38:18 **dense** 132:22 **Department** 1:1 ,6 2:1 22:20 23:21 32:2 33:4 39:8 60:2,9 67:1 ,15 85:2 131:12 169:22 178:4 179:15 181:10,17 **Department's** 178:19 **depending** 31:2 84:8 85:18 86:20 120:3 ,3 **depends** 97:8 108:15 ,16 120:4 160:12 **depth** 106:20 **describe** 14:13 130:21 **described** 89:11 123:21 172:13 **describing** 134:9 **description** 32:9 164:21 **design** 144:9 146:1 **designated** 83:17 **designs** 176:22 **detail** 36:11 ,21 40:7 40:13 48:21 72:10 83:10,22 153:14 156:10 168:15 172:15 **detailed** 45:19 **details** 35:16 37:7 37:11 48:14 51:13 82:13 86:1 ,20 93:2,2 97:8 100:18 102:17 105:4,5 155:22 161:8 167:14 **determination** 15:8 **determinations** 126:14,15 **determine** 70:2 81:6 118:15 170:17 **determined** 70:9 83:4 161:21 **determining** 156:6 **develop** 37:9 74:22 **developed** 42:1 87:5 91:22 101:12 **development** 61:12 87:6 147:7 **deviate** 164:16 **device** 74:19 **devices** 159:6,7 ,14 160:8 **DFR** 108:3 127:15 129:17 **dialogue** 179:7 **dictate** 71:5 **differ** 9:13 **difference** 47:8 58:5 70:3 ,20 80:20 117:21 124:13 142:16 159:13 **differences** 65:1 146:2 **different** 19:2 32:13 37:1 42:10 43:10 53:15 57:18 63:16 82:12,20 84:8 88:5 89:7 ,9 90:8 90:10,20 91:3 ,22 92:14 93:17 96:8 100:8 102:2,18 117:10 120:13 125:1 ,2 126:3 131:13 134:4 135:11 142:4,5 ,19 142:20 151:9 152:8,9,9 154:5 154:17 ,18 155:6,8 168:9,17 182:9,13 182:14 **differential** 69:5 86:3 123:20 177:8 **differentiation** 130:20 132:11 138:10 142:8 **difficult** 11:4 45:11 62:7 121:19 **difficulty** 5:11 **digits** 116:10 162:22 **dip** 79:5 ,7 **direct** 47:22 68:2 89:3 128:12 148:17 **direction** 11:10 33:1 62:17 181:19 **directly** 5:21 86:5 133:19 **disaggregate** 50:1 **disaggregated** 49:4 56:3 **disaggregates** 36:22 **disaggregating** 50:2 **disappointments** 183:19 **discount** 9:13 82:10 83:20 89:1 ,1 ,7 ,9 89:10,15 ,19 90:3 90:5 ,6,14,20 91:8 91:9 92:14 99:17 99:18 107:2,10,12 108:11 123:1 129:15 ,22 163:22 **discuss** 6:1 22:11 23:9 48:17 83:10 83:22 91:20 **discussed** 48:14 50:11 59:14 82:21 83:3 84:1 129:11 130:11 131:5 **discussing** 50:18 87:5 **discussion** 59:12,15 102:12 113:11 119:4 121:3 128:11 130:15 151:9,17 ,19 152:2 178:4 **discussions** 25:21 **dismissal** 155:16 **disposition** 42:14 **distinction** 71:1 118:16 **distorted** 27:14 **distribution** 53:15 76:18 84:17 ,19 85:10 98:21 141:21 **distributions** 37:10 83:9 84:1 ,4 97:6 98:22 **dive** 5:1 **division** 150:10 **docket** 8:1 32:6 173:6,12,18 **dockets** 85:2 **document** 19:18 30:16 44:8 96:19 120:12 157:15 163:8 **documented** 172:16 181:12 **documents** 168:20 **DOE** 2:3 ,4,5 ,6,7 ,8 7:5 9:12 18:15 19:17 22:13 28:4 33:7 36:12 38:2,5 38:18 41:6 55:12 61:1 64:22 65:9 65:21 71:13 75:3 87:6,7 ,8,12 91:2 92:2,9 94:7 ,22 95:3 99:13 100:3

100:13 ,20,21 101:2 103:20 108:21 109:4 110:8 111:19 124:12 126:12 130:12 132:9 143:22 144:1 ,10 145:15 146:18 147:1 151:7 153:22 154:9,19 155:6 162:10,13 163:12,13 ,18,20 164:1 ,2,9 166:19 167:8,11 ,18 173:4 173:5 175:4,13 ,22 176:2,4,6 182:8 184:20 **DOE's** 145:1 154:10 **doing** 12:1 22:14 27:9 32:2,17 49:1 66:1 70:15 ,18 72:4 73:13 110:22 115:10 124:21 145:21 158:5 171:16 174:7 **dollars** 112:3 ,9 132:2 140:8 **domestic** 146:19 147:14 148:7 149:4 **Don** 23:18,20 24:21 **Donald** 2:10 **dot** 28:13 **dotted** 13:2 **doubts** 166:14,18 **Doug** 2:9 4:8 7:4 128:2 184:14 **downhill** 58:8 **downward** 130:3 **Dr** 8:2,21 9:1 ,3 15:4 15:7 ,13 ,16,22 16:7 ,15 ,19 17:13 18:3 ,7 ,10 23:11 26:3 **drains** 19:8 **dramatically** 52:3 **drawn** 26:12 **drive** 85:10 119:11 139:15 **driven** 75:10,11 102:8 118:11 **driver** 58:4 **driving** 54:15 119:1 141:19 142:19 **drop** 66:9,12 78:9 78:13 132:14 135:15 ,18,19,21 **drop-in** 168:13 **dropped** 23:9 39:16 139:20 **dropping** 12:19 39:12 **Drumheller** 2:13 24:19,19 54:1 ,8 54:11 ,11 69:20,21 69:21 **DSN** 111:10 **due** 32:21 68:22 78:22 113:2 119:21 133:5 148:1 166:7 167:12 **dug** 7:12 **DuraVent** 168:9 169:7 171:11 ,21 **E E**  4:1 ,1 **earlier** 53:20 75:7 82:21 83:3 84:2 87:19 103:4 113:11 129:14 141:15 ,22 144:22 179:13 **early** 12:11 155:16 **ease** 96:11 **easier** 68:6 **echoing** 79:3 **ECM** 97:11 **ECMs** 177:3 ,4 **ECON** 12:13 **economic** 7:13 ,13 8:4 11:21 22:22 24:4 58:4 65:11 70:16 72:17 119:7 120:1 126:9 **economical** 122:7 **economics** 24:15 119:3 ,5 ,11 137:2 **economist** 25:20 **economists** 10:4 **economy** 90:11 **ecosystem** 162:5 **edge** 108:17 **Edison** 2:22 14:21 39:5 43:20 111:8 119:20 165:2 **EEI** 20:12 51:21 56:7 66:20 96:17 99:22 147:12 160:11The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 192 **effect** 18:21 24:10 28:15 57:20 83:7 83:7 100:22 102:7 128:13 131:19 132:3 135:13 140:17 144:7 145:13 157:13 **effective** 54:3 109:22 110:1 114:19 135:10 144:18 **effectiveness** 70:20 **effects** 24:10 162:4 167:13 **efficiencies** 103:3 141:5 **efficiency** 9:6 21:2,6 27:5 36:18 37:9 83:9 85:11 86:11 87:13 88:11 92:1 97:6 98:11 ,21 100:12 102:14 112:8 120:16 125:18 138:18 139:6,20 145:9,10 **efficient** 17:9,11 18:14 20:7 21:10 103:19 **effort** 147:8 **EIA** 61:12 160:15 **EIA's** 94:6 **either** 40:17 88:15 103:21 143:12 161:7 170:20 **elaborate** 71:17 **elastic** 13:10 26:19 **elasticities** 26:13 **elasticity** 72:1 **elect** 86:5 **elected** 85:12 **electric** 2:22 15:3 19:2 36:17 39:6 40:17 42:20 43:20 55:15 56:1 58:14 58:19 60:4,22 65:9 66:21 68:7 94:18 111:9 114:13 ,17 115:3 117:18 119:21 120:6,6 123:15 156:20,21 157:4 159:5 ,13 160:8 164:11 165:3 166:7 ,13 ,16 **electrical** 103:18 104:7 123:4,5 145:11

**electricity** 41:16 94:21 98:5 115:2 164:18 ,19 165:7 **eloquently** 28:10 **email** 173:18 **Emily** 8:9 34:8 **emission** 156:1 ,6,9 161:13 ,14 162:10 163:20 164:4 **emissions** 155:21 156:1 ,3 ,4,5 ,18,20 157:1 ,5 ,7 ,9,15 ,16 157:22 158:4 159:10 161:16,17 162:2,8,15 163:9 164:2 182:17 **emphasize** 69:13 **employment** 6:3 128:12 147:15 148:1 ,7 150:15 167:2,4,10,15 **encourage** 163:1 169:22 **encouraged** 178:10 178:18 **encouraging** 178:19 179:1 **ended** 7:7 34:13 123:2 **ends** 79:15 **energy** 1:1 ,2,6 2:1 4:4 7:17 9:17 ,22 10:7 ,13 ,19 11:8 11:15 ,17 ,18 12:4 14:3 ,4 15:1 ,6 17:17 ,17 18:13 25:18 27:17 ,18 28:11 ,18 29:14,16 31:7 35:15 36:7 63:20 80:13 ,17 ,18 80:21 81:4,9,14 81:15 ,17 ,18,19,20 82:1 ,6,17 92:7 ,7 ,8 92:11 ,12,20 93:15 98:2 99:12,14 100:5 ,12,17 101:12 103:11 111:16,16,18 123:16 160:17 161:18 164:13 ,14 167:4,7 ,9 **enforcement** 130:18 **engineer** 109:8 **engineering** 5:16 92:4 129:8 131:8 149:20 172:8

173:14 174:2 175:11 176:18 **England** 61:17 **enter** 179:21 **Enterprises** 3:14 **entirely** 121:10 122:3 **entities** 78:6 **environmental** 6:2 150:15 157:4,18 157:21 158:6 **environmental/e ...**  155:20 **EPA** 64:10 66:10,10 94:16 **EPCA** 165:14 **equal** 38:6 54:20 75:22 159:3 ,15 160:8 **equally** 26:10 **equation** 171:1 **equations** 154:13 155:2 **equipment** 7:15 ,16 9:18,21 10:2,22 11:20 12:2,6,17 12:20 13:1 ,8 14:5 17:21 21:3 ,5 ,14 21:19 26:17 27:9 27:11 ,13 39:14 47:17 56:1 62:21 63:8 68:20 69:5 70:8 71:19 72:1 80:22 86:3 120:2 151:17 152:15 170:16,18 171:3 174:19 175:18 **Eric** 2:6 **Erica** 15:17 **erode** 132:13 **especially** 39:9,15 39:15 40:2,3 56:11 58:17 68:15 104:18 153:6,14 156:17 161:9 166:7 **espouse** 107:17 **essentially** 91:22 109:22 119:5 131:10 136:1 ,9 140:18 144:9 171:10 **estimate** 43:4 101:12 129:22 130:3 156:1 161:17 163:11

**estimated** 94:20 124:15 147:14 156:21 162:10 **estimates** 80:13 90:4 92:20 99:3 162:6 **estimating** 164:3 **et** 121:5 ,17 159:16 159:16 **EUC** 162:19 **evaluate** 100:8 122:4 170:17 **evaluated** 175:14 **evaluates** 103:11 **evaluating** 123:9,11 123:12 162:13 **eventually** 24:5 174:19 **Everett** 3:11 30:2 134:18 ,20 **everybody** 4:17 14:19 153:18 168:20 181:7 **exact** 20:22 66:7 105:5 134:10 152:6 **exactly** 47:15 51:10 94:1 123:18 124:21 141:2 169:12 181:18 **examination** 101:10 **example** 47:16 56:1 84:12 85:5 ,6,19 85:19 86:11 98:8 98:10 102:10,19 110:14 112:2 139:22 142:5 160:16 170:19 **excellent** 177:13 **execute** 153:19 **Executive** 182:9,11 183:1 ,4,12 **exhibit** 85:9 **exist** 58:16 110:12 167:21 **existed** 176:9 **existing** 36:9,15 37:20 38:14 43:11 47:12 63:18 103:17 **expect** 25:6 60:12 60:16 118:10 **expected** 36:5 118:11 **expenditure** 167:6 **expenditures** 80:21 80:22 133:15 **expenses** 133:14 **expensive** 12:16 122:17 ,18 **experience** 63:7 78:9 **experiencing** 24:15 **experts** 9:8 16:13 ,16 68:14 **expires** 106:1 **explain** 45:7 126:11 **explained** 181:13 **explains** 165:17 **explanation** 31:20 35:8 **explore** 112:10 **extend** 148:5 178:5 181:1 **extension** 185:6 **extensive** 131:1 151:8 **extent** 59:21 60:6 77:1 160:4 **extra** 22:17 23:4 63:19 121:5 160:10 161:2 **extract** 24:3 **F face**  10:11 74:11 170:6 182:5 **facetious** 139:11 **fact** 10:12 11:12,13 17:21 34:19,22 35:1 45:14 54:19 103:6,7 ,8 115:11 135:2 136:20 139:21 143:8 155:9 159:10,17 160:7 170:21 179:14 184:1 **factor** 90:7 102:4,9 102:11 **factored** 102:14 **factoring** 76:2 **factors** 35:12 81:19 83:11 ,13 138:17 150:22 151:11 152:9 156:7 ,9 **failed** 34:15 **fair** 171:13 **fairly** 11:4 13:10 40:11 96:10 132:21 **fall** 55:15The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 193 **familiar** 62:10 89:22 **families** 32:16 **famous** 106:10 **fan** 76:7 90:19,21 97:10 109:2 135:4 135:10,22 136:2,5 137:3 144:17 145:9,10 153:8 174:22 175:17 176:19,20,22 **fans** 144:4 177:9,12 177:17 **fantastic** 32:5 **far** 19:6 55:11 114:1 119:16 152:15 171:1 **fashion** 176:13 **fast** 30:6 **faster** 16:5 **favorite** 183:12 **fear** 120:22 **Federal** 105:14,22 106:1 110:15 111:11 128:13 182:12 **feedback** 6:12 32:13 69:18 72:10 131:1 133:19 134:2 153:17 172:22 179:11 **feel** 45:7 139:15 175:16 179:22 **feeling** 179:17 **Feinstein** 2:14 63:13 ,13 64:7 **FERC** 160:15 **fewer** 24:8 **field** 75:14 152:14 **figure** 80:5 102:3 117:1 **figures** 19:19 134:8 134:11 **filing** 129:16,21 ,21 **filings** 129:5 **fill** 46:1 ,3 **final** 78:21 81:19 89:3 94:17 128:11 132:8 165:19 172:4 184:7 **finally** 83:19 168:22 **financial** 25:9 131:6 **financially** 118:22 **find** 29:17 70:19 156:10 **finding** 180:12 **findings** 12:3

**finish** 4:18 **finished** 80:10 **firmly** 65:20 **firms** 74:22 **first** 14:4,22 17:2 27:2 33:9,15 34:1 35:3 37:14,21 39:7 43:12 44:7 47:14 48:17 49:8 69:14 77:5 ,7 88:17 ,19 89:9 96:5 112:18 113:2 132:17 133:21 136:7 137:12 155:21 175:15 ,22 **fit** 185:10 **five** 44:1 46:19,19 46:20 86:16 87:8 87:11 ,13 133:3 147:16 **fix** 166:18 **fixed** 55:5 166:13 **fixing** 109:9 **flat** 57:4 86:18 137:17 183:13 **flatten** 76:19 **flatter** 78:11 **flow** 37:12 81:7 154:17 **flows** 151:12 **fluorescent** 110:15 **focus** 71:19 **focused** 36:1 **focuses** 135:6 **folks** 55:3 61:2 79:20 113:12 114:2 133:21 148:17 157:4,18 **follow** 19:13 ,14 46:11 94:6 148:12 155:5 **following** 5:20 96:12 174:22 **footnote** 90:2,2 108:2 **forced** 70:14 122:21 **forced-air** 63:15 64:2,10 **forecast** 36:4 73:1 136:16 152:7 **forecasts** 131:9 164:16 **forego** 155:15 **forever** 136:9 **forgot** 35:9 38:10 54:6

**form** 116:2,16 176:6 **formal** 180:22 **former** 31:6 61:3 ,13 **Forrestal** 4:7 **forth** 42:3 **forthcoming** 106:19 **forward** 33:18 44:13 46:20 54:21 71:6 137:4 152:18 179:11 **found** 100:16 132:16 149:2 153:5 176:6 **four** 51:19 86:16,16 87:10,14 130:8 144:1 ,16 **fraction** 29:7 ,10 36:19 53:20,21 ,21 59:3 ,6 69:15 72:3 86:4 125:13 **fractions** 53:19 56:2 **Francine** 2:7 **Franco** 2:15 28:22 30:11 34:9 35:10 35:11 ,18 39:18 40:5 ,22 43:5 ,14 43:18 47:2,15 ,19 48:6,11 52:7 ,13 53:3 ,6,9,12,14 54:5 55:16 68:13 69:14 71:18 72:12 73:22 74:1 ,4 76:6 77:11 78:17 80:8 80:9,9 85:15 87:2 88:8,16,19 89:6 91:12,18 93:1 ,13 93:21 94:9,12 95:15 ,21 96:16 97:4 98:7 ,20 99:10,21 100:2 101:17 102:16 105:3 ,11 ,16,19 110:4 125:10,10 155:14,19,19 161:12 163:16 164:9 165:6 166:22 **Frank** 3:6 26:22 27:1 34:11 43:1 ,2 45:1 ,6,13 46:8 54:13 ,14 55:13 59:19,21 60:19 65:16 67:16,17 75:4 79:3 92:18 101:22 106:19 134:3 140:2 141:1

142:10,11 145:8 153:20,21 170:9 170:10 171:20 181:6 183:5 **frankly** 116:10 117:2 **free** 25:2 45:7 **front** 104:21 **fuel** 18:17 20:5 ,6 40:1 41:12 42:3 ,5 44:15 ,16 55:18,20 59:11 61:3 ,4,8,13 62:3 ,13 66:22 67:3 ,10,21 68:8 72:17 73:19 92:8 112:21 ,22 113:2 114:11 ,11 ,13 ,16 115:6,14,19 116:3 116:6,16 117:9,10 118:5 ,8,10,11 119:12,15 121:4 121:16 122:19 125:3 126:3 156:21 164:19 170:13 179:14 180:5 **fuel-cycle** 92:12 99:15 180:13 **fuels** 73:14 **fugitive** 156:4 **full** 14:3 ,7 35:5 ,6 48:16 92:11 99:15 164:21 185:13 **full-fuel-cycle** 83:12 93:16 156:3 **full-modulating** 177:4 **fully** 33:2 171:7 181:12 **fully-modulating** 177:3 **function** 38:17 48:18,20 50:13 154:20 **funded** 11:9 167:19 **furnace** 17:5 ,9 18:18 19:2 20:7 20:22 34:21 36:9 36:15 ,17 ,18 43:13 47:13 49:9,22 58:18 63:11 ,19 68:12 69:2 73:6 75:20,21 76:7 77:14 90:19,21 97:10 103:19 104:2 109:19,20

114:3 ,13 ,20 116:12,15 121:4,7 121:17 ,19 122:7 ,8 123:14 124:21 126:16 127:18 ,18 128:7 134:22 135:4,5 ,10,16,22 136:2,5 137:1 ,2 144:4,17 147:2,5 150:10 153:8 165:3 174:15 ,22 175:1 ,17 176:19 176:20 177:9,12 177:17 **furnaces** 1:3 4:6,19 18:5 27:5 ,6 29:2,3 36:4,5 ,14 37:2,3 37:21 38:2,4,5 ,12 38:13 ,15 39:1 ,2 43:4,5 ,6 45:18 48:5 ,9 50:1 ,3 ,5 ,5 50:8 55:22 56:1 58:15 60:4,21 ,22 63:15 ,15 64:2,10 67:19 69:17 74:21 75:1 77:6 78:8 79:9 80:14,15 87:18 96:7 ,8 97:9 97:14 100:15 101:1 ,2 103:15 ,17 104:13 109:1 116:2 135:4 137:18 ,19 138:3 144:5 146:21 ,22 161:3 167:22 170:19 **further** 22:11 25:7 34:20 40:10 48:14 51:13 69:7 70:1 76:17 83:10 94:3 100:18 156:10 167:13 168:11 **future** 11:10 18:20 42:18 44:2 51:1 75:7 77:20 84:4 102:9,15 168:4,16 169:20 182:5 184:5 **G G**  4:1 181:8 **gain** 148:9 **game** 66:11 **gap** 46:1 **gas** 2:17 3:4,7 ,9,12The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 194 4:19 15:3 29:2,3 36:4,5 ,14,15 ,18 37:2,3 38:2,4,5 ,11 38:13 39:1 ,2 40:17 41:8,15 43:6,13 ,17 46:18 46:22 48:4 49:22 49:22 50:3 ,4,5 ,8 55:22 56:14,17 ,17 56:19,20,22 57:3 58:3 ,7 ,18 61:5 ,18 61:21 62:14 63:10 63:18,22 67:19 68:9 80:14,15 87:18 96:6,8 97:9 97:14 101:1 ,2 114:12,17 116:2 116:15 117:4,10 120:5 137:18 138:3 146:21 ,22 147:2 157:9 160:21 162:2 165:3 ,5 ,9,18 166:1 ,8,12,16 169:5 170:13 174:15 175:1 178:2 180:9 **general** 7:11 ,21 13:7 28:12,16,18 129:2 130:11 **generally** 35:7 172:14,17 **generate** 164:15 **generated** 160:9 172:12 **generation** 156:20 158:19 160:14,14 164:12,18,19 **generous** 104:19 105:1 ,9 **gentleman** 73:4 **George** 90:17 **Georgetown** 90:17 **germane** 133:12 **getting** 5:12 14:12 17:6 19:6 27:11 60:20 97:19 112:5 141:21 142:6 160:12 182:3 **give** 28:22 35:9,16 44:7 56:6 62:19 63:19 65:18 77:9 89:15 137:21 138:15 178:6 179:11 **given** 32:21 103:15 104:1 112:4 114:9 115:13 141:14 149:22 180:14 181:1 **gives** 178:21 **giving** 12:22 **glad** 67:18 **go** 5:3 ,21 8:2 12:15 13:14,14 25:5 ,12 25:12,15 ,17 ,17 33:15 ,18 34:14 35:11 37:11 40:16 43:22 54:21 70:1 70:10 72:14 73:21 74:12 75:1 ,17 79:3 ,9,20 82:13 86:5 92:6,19 104:4 106:7 109:19,19 111:12 111:14,15 116:5 117:5 119:16 127:2 128:13 137:4,11 140:10 149:1 158:1 168:7 168:14,18 172:5 172:20 173:18 174:3 180:21 185:12 **goal** 181:17 185:1 **goes** 18:21 54:2 70:13 104:4 108:2 108:3 131:18 132:2 135:13 156:22 157:12 **going** 4:14,20,21 5:1 5:2,12 7:18 8:1 10:15 ,16 11:1 ,22 11:22 13:3 ,6,10 14:6 16:8,8 19:16 19:17 23:5 ,6 24:3 24:15 25:1 ,1 ,8,14 25:17 26:16 31:16 33:4 34:4,5 ,8 39:6 40:16 41:2 42:19 44:22 45:2,10 46:20 47:10 48:21 53:1 55:5 ,14,17 57:10 58:8 61:22 62:1 ,17 ,17 65:3 67:2,7 ,9 70:3 ,10 70:19 75:18,21 77:19 79:7 ,8 80:5 80:7 ,8 85:19,21 85:22 93:7 ,9,12 94:7 ,16 97:10 102:21 104:4,12 106:8 108:1 ,18

109:11 118:22 119:22 120:10,15 121:7 ,20,21 125:8 126:12 127:5 ,21 128:1 139:18 140:3 142:10,20 143:20 146:15 152:17 153:5 154:1 155:13 ,15 155:20 157:19 158:1 ,14,16,18,20 159:5 ,10 160:9,18 160:19 163:12,14 168:14 169:8 170:6,6 173:10 174:14 175:22 176:1 177:8,11 ,15 177:16 179:9 180:1 ,17 ,20 181:9 182:2 184:9 185:3 **good** 4:3 16:22 31:19 32:13 35:18 60:10 73:7 78:7 84:22 85:1 ,9 90:18 102:16 110:18 112:16 118:14 132:9 136:20 138:2,11 138:19,21 140:1 141:4 142:1 ,3 ,4 144:20 145:1 ,6 159:4 183:10 **Goodman** 3:3 88:22 129:14 134:15 174:1 **goods** 167:6 **gotten** 32:13 49:11 172:22 179:7 **government** 100:13 128:16 **grade** 37:6 **granted** 31:11 45:21 **graph** 54:20 84:18 **gray** 139:6 **great** 4:10 88:9 172:15 **greater** 125:7 ,8 159:9 178:16 **green** 6:11 **greenhouse** 162:2 **Greg** 79:1 **Gregory** 3:12 **GRIM** 128:17 129:1 ,9,12,15 131:2 134:21

136:8 153:22 154:12,19 **gross** 131:15 ,17 132:17 133:8 137:17 **grossly** 166:12 **ground** 64:17 184:11 **group** 3:8 11:10 22:1 44:6 71:2 73:11 79:2 90:9 93:4 107:22 **groups** 63:1 90:14 **grow** 86:19 **guess** 19:15 22:9 35:5 47:9 55:13 67:7 77:1 88:3 97:18 98:13 105:22 111:1 113:20 115:21 117:22 139:18 142:12 144:19 152:11 175:13 182:14 **guessing** 58:19 109:17 **gut** 179:17 **guys** 23:2 **H half**  38:7 57:20 62:18 140:14 149:9 171:1 183:10 **hall** 79:15 **hand** 6:16 17:15 127:5 ,5 **handed** 7:22 **handle** 135:2 **hands** 68:1 **Hang** 23:18 **happen** 18:7 ,9 61:16 62:1 110:17 158:16,20 177:9 177:15 **happened** 31:9 64:17 68:11 127:20 136:18 157:1 **happening** 57:7 155:10 **happens** 9:21 12:14 21:13 25:3 26:8 65:22 72:22 73:17 107:19 109:20,21 110:13

**happy** 44:12 155:6 **hard** 13:15 23:8 26:14 124:16 134:11 136:16 139:19 182:5 **harder** 26:20 **Hariharan** 2:8 **harm** 125:7 ,8 **hate** 61:22 **head** 116:8 141:2 145:3 **headed** 181:18 **heads** 144:22 **health** 162:4 **hear** 6:17 9:3 ,4 14:19 32:9 34:8 57:13 80:8 95:12 112:15 128:1 134:1 185:8 **heard** 56:8 69:14 80:3 114:18 123:11 124:1 130:6 178:12 184:18 **hearing** 142:2 178:5 180:19 **Hearth** 63:13 **heat** 36:17 40:21 47:12,12 56:1 ,19 59:22 60:21 66:22 67:1 114:14 120:14 121:21 123:15 **heating** 31:11 ,12 35:3 ,15 37:6 39:10 40:1 42:14 44:15 47:21 ,22 48:1 55:4 58:19 67:8,9 120:10,17 159:6,7 ,14 160:8 **heating-dominated** 40:4 **help** 60:1 152:21 181:21 **helpful** 61:11 64:14 67:14 117:9 143:19 145:22 146:12 161:9 169:11 **helping** 60:2,9 103:8 **helps** 37:8 **Henry** 57:3 **Herse** 77:18 ,18 78:1 78:5The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 195 **Hi** 80:9 125:10 134:20 **hidden** 154:13 **high** 27:17 ,17 45:22 58:3 ,6 74:11 101:7 ,9 102:13 114:20 115:7 117:17 ,20 120:16 124:16 147:22 148:2 172:17 181:17 **high-income** 10:17 **high/low** 134:13 **higher** 10:1 ,11 ,20 11:18,20 12:6,20 13:1 17:21 ,22 34:19 35:14,14 50:10 63:2 66:13 78:14 86:10,19 87:15 88:7 90:14 97:11 98:8,11 104:4,6 108:18 113:5 114:12 120:15 122:20 123:16 124:15 125:18 132:13 133:7 139:21 **higher-efficiency** 70:7 101:1 111:14 175:3 **higher-efficient** 73:5 **highlight** 173:17 **historical** 37:18 38:16 48:19 50:7 51:7 ,9 52:9 58:2 79:4 **historically** 50:9 **history** 40:2 78:11 105:8 **Hodges** 2:16 146:7 **hold** 41:1 ,1 178:5 **home** 4:19 7:16 24:20 31:6 36:4 37:3 38:3 ,13 39:2 39:10 42:11 49:22 50:3 ,4,5 ,8 52:6 54:12 58:12 63:21 68:7 ,22 69:1 ,22 80:15 87:18 88:5 88:6 96:6 97:9 101:2 137:19 146:22 147:5 **homeowner** 109:18 **homeowners** 107:15 **homes** 30:8 31:4 39:13 ,14,15 ,20 40:3 ,21 41:19,19 41:20 42:11 51:22 52:1 ,8,10,11 ,19 53:4 56:19 61:17 67:21 ,22 68:3 88:11 **homework** 174:8 **honest** 179:11 **hope** 6:14 60:21 168:16 **hoping** 166:13 ,17 **hour** 157:6,6 183:10 **hours** 178:3 **house** 116:3 **household** 9:15 116:11 **households** 9:6,15 9:17 10:6,8,10,17 10:18 12:7 ,9 13:11 ,21 14:9 18:1 38:1 74:6,7 **houses** 38:19 **housing** 13:22 14:6 16:7 20:8 25:14 29:4,7 ,13 ,14 30:7 37:16 38:19,20 44:10,10,11 50:6 50:17 51:1 52:17 96:6,6 **HPBA** 2:14 64:13 65:4 **HSPF** 120:15 ,15 **Hub** 57:3 **huge** 52:6 65:9 66:9 66:12 69:4 70:19 75:15 ,18 94:18 104:16,18 145:12 **human** 162:3 **hurdle** 107:11 **hurricanes** 56:15 **Hurst** 137:13 ,13 ,22 138:4,14 139:2,5 139:10,13 148:12 148:13 ,19,22 **hyperlink** 22:10

**I Id**  144:19 **idea** 27:20 35:3 58:13 **ideas** 20:2 22:21 **identified** 100:13 102:1 ,3 130:8 146:19 181:2 **identify** 128:9 **ignore** 67:4

**ignoring** 142:12 158:6 **illogical** 125:6 **illuminated** 6:11 **illustrate** 9:9 **imagine** 134:11 **impact** 5:21 ,22 6:1 14:4 16:2 20:8,18 23:3 ,22 24:13 25:2 28:9 32:11 35:21 ,21 ,22 67:6 67:21 72:6 80:11 80:12 94:18,19 100:3 103:1 109:15 110:1 112:12 120:1 124:15 127:22 128:4,7 ,16 144:8 146:18 147:14 148:6,7 150:8 151:2 156:19 158:12 163:9 164:10 165:5 ,9,18 165:20 166:1 ,7 167:2,3 ,8,15 175:14 176:3 178:14 183:11 184:2 **impacted** 71:9 74:13 ,14 98:9 125:13 ,15 ,16 **impacting** 141:3 **impacts** 9:5 14:1 ,2 17:17 24:2 33:13 80:13 95:1 100:4 128:9,20 135:7 ,14 141:4 142:9 144:15 ,16,16,17 147:10,10 149:18 150:2 158:7 164:11 ,15 167:10 167:11 180:13 182:14 184:3 **implement** 176:22 **implementation** 24:2 **implemented** 154:14 **implications** 12:3 **implies** 131:19 **important** 6:7 49:20 51:11 71:1 93:14 118:19 **impose** 73:3 **imposed** 121:10,12 125:7

**impossible** 17:7 **improve** 62:15 **improved** 86:8 153:6 179:12 **Improvement** 181:8 **improvements** 175:10 **ImSET** 167:9 **incenting** 109:18 **incentive** 8:5 78:12 85:7 **incentives** 59:2 75:12 102:13 109:21 111:12,14 142:17 **include** 43:15 48:19 72:21 76:15 108:22 170:1 175:2 178:13 182:18 **included** 28:1 65:13 72:18 73:9 175:4 183:11 **includes** 37:7 53:16 53:18 70:6 131:6 156:3 ,4 182:16 **including** 37:1 53:4 53:7 ,11 65:11 100:9 129:4 156:3 162:2 **income** 7:15 28:12 28:16,17 **incomes** 13:22 **incomplete** 32:4 41:3 56:9 106:5 **inconsistent** 67:12 71:21 **incorporate** 95:6 **incorporated** 95:7 131:2 168:5 170:4 173:1 **incorrectly** 103:22 **increase** 10:9 13:4,8 13:16,17 14:6,7 15:12 71:16 81:3 102:22 132:4,6 135:12 144:13 148:1 149:12 153:5 156:18 ,19 158:9,11 ,14 160:19 **increased** 14:5 31:15 71:15 106:16 148:2 **increases** 12:5 16:5 132:10 144:14 156:21 **increasing** 57:5 158:4 **increment** 111:18 **incremental** 136:22 144:18 162:1 **indefinite** 136:2 **Independence** 1:7 **independent** 149:17 **indicate** 99:8 **indicated** 46:17 63:6 104:3 150:22 **indicates** 63:2 **indicator** 134:13 **indirect** 167:1 ,3 ,10 **individual** 96:4 170:3 171:21 172:21 **indoor** 137:5 **industry** 25:14 68:5 74:22 128:8 ,18,19 129:3 ,9 130:9 131:4 132:14,20 133:1 ,22 141:10 141:12 144:19,20 **inelastic** 13:13 **inertia** 60:14,15 74:10 **inferences** 62:6 **infinitely** 108:18 **inflation** 16:5 **info** 173:8 **inform** 152:21 **informal** 180:18 **information** 17:15 19:21 23:5 45:17 45:19 64:13 65:5 78:7 92:21 116:6 117:12 119:13 129:4 152:14,16 152:20 173:4,5 177:13 178:17 **Ingersoll** 175:8 **initial** 45:21 174:9 **initially** 177:6 **inner** 26:18 **inner-cities** 16:9 **innovative** 74:19 **input** 35:22 78:16 80:11 163:16 164:1 ,2 **inputs** 37:14,16 48:12,17 50:14 81:10 82:1 ,1 ,13 82:15 ,16 129:1 ,7The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 196 129:10 131:9 **INPV** 91:10 128:20 133:6,8,11 ,13 135:16,18,21 136:4 140:6 **insane** 158:16 **inside** 16:9 **install** 41:20 **installation** 29:21 42:9 68:19,20 69:4 74:6,9 120:1 130:10,13 151:10 151:18 152:9,15 170:7 **installations** 37:15 41:15 124:16 126:17 **installed** 18:19 38:15 43:13 75:16 82:3 ,9 83:15 151:1 164:11 ,20 171:5 ,12 184:4 **installing** 125:20 **installs** 63:9 **instances** 71:15 **institute** 2:22 14:22 39:6 111:9 119:21 157:1 165:3 **instructive** 60:1 **intelligence** 62:16 **intend** 70:21 173:2 173:6 **intended** 119:13 161:22 **intention** 32:10 180:8 **interagency** 161:21 162:6 **interest** 118:12,21 **interested** 65:18 70:12 **interesting** 78:15 137:8 **interpreting** 113:14 **intersection** 12:21 **intervening** 55:14 **interview** 172:20 **interviews** 128:22 129:11 130:3 ,6 133:20 134:16 151:7 **intro** 137:8 **introductions** 5:3 ,7 **intuition** 11:13 **invest** 25:12 **investigated** 100:3 **investment** 25:6 136:21 ,22 141:6,7 141:18 142:14 **investments** 132:6 141:9,10 142:20 146:3 **investor** 25:11 **invite** 69:10 147:9 **involved** 25:21 **involves** 128:11 **irrational** 141:19 **issue** 9:7 27:16 33:17 78:21 107:2 113:21 117:22 119:14 151:6 172:7 183:22 184:1 **issues** 6:5 ,6,6 129:2 129:11 130:8,8,22 145:16 179:8 180:15 181:2 **iterate** 179:10 **J J**  2:18,22 3:12 **jacked** 123:1 **January** 54:3 **Jim** 3:9 65:6,7 79:2 93:4 108:20 162:16,17 163:3 165:21 ,22 166:3 ,5 **jiving** 93:11 **job** 66:1 149:6 **jobs** 61:7 **Johanna** 2:8 **John** 2:3 ,16 4:15 5:5 7:3 ,5 18:15 28:3 ,4 33:7 41:6 55:12 61:1 62:10 64:11 71:11 72:14 74:15 77:17 ,18 95:3 99:10 103:20 109:4 110:8 111:19 123:17 125:15 137:11 ,13 141:21 146:6 148:13 152:12 155:6,12 183:7 184:10,13 **joining** 5:10 6:13 79:21 96:4 108:21 **joke** 55:1 **July** 94:18 **jump** 18:16 23:11 75:15 182:8 **jumped** 87:3 112:21 **jumps** 52:3

**June** 94:17 185:5 ,8 **justification** 96:13 **justify** 138:18 139:21 **K Kathryn**  3:7 32:18 120:21 177:22 178:1 **keep** 10:3 20:13 24:6 57:10 61:7 110:10,19 142:10 143:20 154:22 180:16 185:8 **keeping** 25:16 **keeps** 110:18 **key** 9:10 10:2 129:9 130:7 ,8 151:6 173:12 **kilowatt** 157:6 **kind** 7:6 8:3 24:21 27:14 35:8 52:4 55:5 57:12 61:15 63:20 68:4 69:2 70:1 71:5 76:11 85:9 87:3 89:15 93:10 104:21 105:12 106:22 110:5 117:5 138:11 159:4 163:10 171:1 172:9 173:11 179:18 **know** 15:22 22:9 23:9 28:10 29:17 33:22,22 34:2 35:5 45:3 ,4,7 ,9,9 46:5 57:16 58:12 58:15 ,22 59:3 61:16 62:1 ,15 64:14 68:10 70:2 70:10 74:18 75:8 75:15 85:4 89:4 90:9,13 ,15 ,15 ,22 93:9 94:1 ,16,20 97:2,19,20,21 98:15 ,15 99:5 103:4 104:12,13 104:17 105:5 106:12,14 107:3 107:16 108:5 ,11 108:14,15 ,18,19 110:10 117:1 ,18 119:3 ,9 120:8,14 126:9,13 ,15 ,19,20 130:1 ,6 133:20

137:14 138:5 141:11 ,15 ,16,17 141:22 142:7 143:13 ,15 ,17 154:14 158:14 160:1 ,4 165:13 ,14 165:15 ,16 167:19 169:8 171:2,11 ,22 172:9,16 173:19 177:2,3 ,13 179:4 179:20 181:19 182:1 ,3 ,10,13 ,14 182:15 ,20,21 ,22 183:2,21 ,22 **known** 107:11 128:17 **knows** 10:13 153:19 **Krebs** 3:8 8:13 22:1 22:1 ,4,8 23:8 33:20,20 44:5 ,6,6 44:13 ,18,21 74:16 74:17 ,17 89:21 ,22 89:22 106:7 ,8,11 107:8,13 ,19 108:1 108:10 126:5 ,7 127:8,13 165:13 169:5 ,5 171:9 181:7 **L Lab**  8:3 **labeled** 37:15 **labor** 148:2,17 167:11 **Laboratory** 2:15 3:15 ,16 35:19 **lack** 125:8 **LaClede** 3:8,9 22:1 44:6 65:7 79:2 93:4 165:22 166:5 169:5 **lag** 24:5 **laid** 60:10 **lamp** 110:16 **landlord** 17:3 20:6 20:13 ,17 21:15 **landlord's** 20:10 **landlords** 10:21 11:18 13:5 17:16 24:4,7 ,8 26:8,10 26:16 **Lapato** 2:17 **large** 60:6 74:6,9 116:14 117:5 141:8 147:4 **largely** 12:7 ,9 140:7

144:21 **larger** 28:11 63:17 140:16 **Larry** 3:16 8:2,8,22 **Lastly** 51:2 **lasts** 136:3 **latest** 49:6 **Lau** 3:10 128:1 ,2,3 134:10,17 135:1 ,6 136:15 137:8,16 138:1 ,16 139:4,8 139:18 142:22 143:4,21 146:17 147:16,22 148:8 148:16,20 149:7 ,9 149:13 ,15 150:11 150:16 151:4 152:5 **laughing** 136:12 **Laughter** 44:20 64:19 76:5 109:10 136:13 138:13 139:12 145:4 146:9 174:6,11 **law** 95:5 **Lawrence** 2:15 3:15 3:16 8:3 35:19 **laws** 95:4 **LCC** 12:10 14:9 22:15 ,18 23:4 36:12 50:12 51:4 65:13 ,15 73:20 82:15 ,18 83:17 84:2 87:15 ,16 89:10,13 112:21 113:5 117:15 118:4 **lead** 32:14 **lean** 116:5 **learned** 184:17 **leave** 59:10 118:2 180:3 **left** 4:22 34:6 80:7 81:12 158:17 168:11 **Lekov** 3:15 **length** 69:1 130:11 **Lennox** 77:18 137:13 148:13 **Leslie** 79:21 112:13 112:14,17 113:6 113:20 114:7 115:5 ,13 ,18 116:5 116:17 117:22 118:7 119:2The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 197 **less-** 17:10 **lesser** 121:16 **let's** 20:5 35:6 48:17 50:14 54:22 75:16 79:12,13 81:8 91:20 92:6 98:14 102:2,11 ,12,19 106:18 112:13 116:11 ,12 121:17 134:6 137:11 140:14 143:21 161:12 177:19 182:4 185:7 **level** 45:22 52:9 62:16 63:3 73:17 84:5 ,6,6,6 85:11 86:20 97:13 ,22 98:1 111:4,11 113:17 117:6 132:5 ,10 138:20 138:21 140:4,10 140:11 ,18 141:14 142:13 147:22 151:18 ,18 158:2 172:17 **levels** 52:13 84:7 ,10 87:4,8,8,13 88:11 92:1 112:8,9 132:7 133:3 138:20 139:20 143:8 162:4 175:20 **liabilities** 179:21 **life** 21:22 136:1 **life-cycle** 4:22 5:17 19:10 27:9,10,14 29:20 34:18,22 73:20,22 74:1 90:22 126:17 127:14 182:4 **lifecycle** 90:8 151:15 179:13 **lifetime** 50:4,11 ,12 83:5 **light** 6:11 109:9 **lighting** 110:14 112:2,4 **liked** 63:4 **likewise** 79:6 **limit** 101:13 **limited** 98:22 162:3 **line** 12:19,19,22 14:19 61:21 76:2 140:14,20 **linear** 110:5 **lines** 13:2 54:20 61:19

**link** 23:6 44:13 **links** 48:15 168:1 **listed** 168:13 ,20 170:19,20,22 **listings** 129:6 **literature** 26:13 101:11 171:22 **little** 5:1 ,11 6:11 9:13 11:1 17:13 19:6 24:22 26:10 27:13 28:22 35:14 43:3 ,8,9 50:9 51:18 55:1 ,1 ,8,11 59:19 70:1 76:13 89:20 91:19 97:7 108:12 125:12 131:3 139:11 144:11 160:17 168:18 169:16 **living** 9:16 10:10 29:4 35:13 ,14 **load** 161:6 **loaded** 8:10 **loads** 35:15 **local** 120:5 ,5 ,5 **location** 70:17 **lock** 154:22 163:12 **locked** 154:3 ,6,12 154:15 155:9 **locked-in** 131:10 **lofty** 181:17 **logic** 118:4 125:9 **long** 20:14 23:15 40:2 89:13 108:5 108:13 130:15 **long-term** 7:17 24:10,14 26:12 **longer** 45:18 **look** 5:14 24:11 ,12 33:14 48:9 54:22 58:4,20 59:1 60:16 62:3 65:21 66:8 69:1 ,7 ,9 72:10 75:17 76:16 85:4 86:14 87:1 89:19 90:21 91:3 94:7 102:6 106:12 106:13 111:22 116:19,22 117:9 134:12 135:14,15 138:5 ,6 142:18 143:17 147:21 152:1 ,22 158:9 160:15 162:19 163:1 ,14 166:14 169:7 173:20

182:12,19 **looked** 10:12 34:3 57:2 64:14 67:20 68:10 109:16,21 143:9 146:17 149:16 150:22 156:18 163:7 ,10 177:8 **looking** 10:14 20:1 27:12 34:20 39:7 41:4 44:19 49:8 52:5 ,16 56:9,12 58:2,14 67:19 68:16 73:2,16 77:12,14 88:3 93:19 96:18 134:22 136:6,19 140:12 142:5 145:9 147:13 150:9 157:12 159:12 165:6 166:10 168:9 169:12,17 177:1 182:16 183:19 **looks** 48:3 54:19 57:17 103:9 171:6 175:10 **loop** 170:11 **lose** 117:18 **losers** 24:12 87:16 **losing** 143:2 **loss** 117:19 132:19 142:22 **losses** 149:6 162:3 **lot** 4:11 5:14 11:22 21:17 23:15 28:7 31:13 39:16 40:9 46:12 57:5 ,6 60:12,14 68:6 70:15 82:15 90:20 97:11 104:1 105:2 105:4 111:10,21 115:18 ,19 138:14 138:15 ,17 141:14 141:17 142:17 143:5 151:16 157:13 166:10 184:11 **lots** 33:16 **loud** 59:20 **love** 117:12 134:1 **low** 7:15 40:11 43:8 57:1 108:15 117:4 148:3 **low-cost** 170:7 **low-income** 7:10,20 8:6 9:6,12,15 10:10,17 12:7 ,8 13:20 14:8,11 18:22 19:22 20:8 26:18 27:3 ,21 28:9,11 32:11 ,15 178:14 **lower** 9:22 10:6 11:16 12:4 13:22 16:2 58:18 97:13 120:2,6,8,11 123:5 132:18 133:6 135:11 149:7 162:21 **lower-cost** 14:4 **lowering** 120:17 **lowest** 138:20 **lowest-cost** 20:16 **lump** 159:8 **lunch** 155:16 156:15**M M**  2:10 **M&G** 168:8 **Magazine** 49:9,13 49:18 51:12 **magnitude** 167:12 **main** 9:14 37:16 48:17 170:4 **maintain** 111:4 131:17 132:1 ,12 **maintained** 21:8 **maintenance** 17:22 31:8,14,15 82:2,6 **major** 38:1 48:1 54:15 90:22 128:18 173:8 178:13 180:15 **making** 60:5 122:16 122:17 136:21 176:11 **manager** 5:6 **mandate** 183:16 **mandatory** 100:5 **manufacture** 144:9 **manufactured** 68:3 68:7 96:6 131:7 137:19 150:8 **manufacturer** 6:1 78:5 100:11 127:22 128:4,9 129:5 130:2 131:11 133:18 ,20 134:1 135:11 ,12 140:13 146:21

147:2 151:2,14 176:21 178:15 **manufacturers** 21:18 60:5 68:3 68:11 85:6 86:8 99:2 110:19 128:8 128:10,21 129:10 130:2,7 ,12 131:17 131:19,22 132:4 132:11 134:7 ,12 135:3 138:6,17 146:20,22 147:5 147:11 148:4,18 151:6 169:18 170:3 ,12 171:22 172:21 175:18 176:11 **manufacturing** 27:6 112:12 142:16 169:17 172:11 ,18 172:20 173:9 **mapping** 61:4 **maps** 92:1 **March** 4:9 **margin** 131:15 ,17 132:17 133:9 137:17 143:3 **marginal** 73:2 156:8 160:14,16 166:11 ,12,19 **margins** 142:3 **mark** 3:8 8:12 22:1 33:20 44:5 ,6 74:15 ,17 89:21 ,22 91:6 103:13 106:8 108:8 126:5 127:11 142:5 165:12,12 169:4,5 171:8 181:6 **market** 13:15 ,16 25:12 36:8 37:1 37:13 40:10,11 42:1 ,13 46:18 47:3 ,4,20 50:15 50:16 53:15 56:11 60:12 63:9 64:9 66:1 71:5 72:21 74:19 82:20 83:18 84:3 ,8,15 85:5 ,21 85:22 86:7 ,13 ,15 97:12 99:6 102:8 102:18 103:3 ,6 104:2,3 ,5 ,6 106:3 110:11 130:10,14 132:18 141:5The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 198 147:8 151:22 168:17 **market/technology** 131:7 **marketing** 138:15 145:20 **marketplace** 42:4 **markets** 7:14 8:5 57:18 60:15 85:8 96:7 132:11 162:19 163:1 178:22 182:20 **markup** 131:13 ,16 132:3 ,8,10 133:5 137:15 ,17 140:1 **markups** 130:21 131:11 132:12,13 132:19 139:21 149:21 **match** 49:10,14,18 51:9 76:14 **material** 4:10 5:14 31:18 145:20 171:21 173:1 ,12 178:8 **MATS** 157:12 **matter** 154:20 **max** 97:16 98:8,15 **max-tech** 87:13 **maximum** 87:14 95:16 **McCabe** 2:18 **McClive** 2:19 **McCrudden** 2:20 47:7 ,7 ,18 48:3 ,10 77:4,4,16 109:14 111:1 ,6 183:18 **mean** 19:16 27:15 56:21 68:2 102:11 107:7 ,18 110:5 139:8 145:8,20 159:3 160:21 184:22 **meaning** 12:7 **means** 132:3 172:1 **measure** 162:1 **meet** 97:12 103:19 112:8 160:10 175:20 176:21 177:11 ,18 **meeting** 1:1 2:1 4:6 4:9,18 5:2,13 6:2 6:4,7 ,15 ,20 8:15 8:17 ,18 19:11 22:15 28:7 32:8 34:16 41:7 45:5 59:13 64:15 89:11

90:16 101:6 152:13 154:1 172:8 174:9 176:5 185:17 **meetings** 106:21 168:6 182:11 184:16 **meets** 97:22 **megawatt** 157:6 **megawatts** 158:15 158:18 160:18 **member** 61:9 **members** 45:16 46:6,10 57:6 59:21 60:20 **membership** 180:21 **memory** 34:15 **mention** 38:10 54:6 **mentioned** 8:13 28:7 53:20 72:15 87:19 117:3 152:12 154:2 160:2 **mercury** 94:19 157:12,14,15 ,16 157:22 161:7 162:14 **merit** 182:21 **methane** 156:5 **method** 50:2 81:1 100:7 156:6 161:20 164:14 **methodology** 59:12 60:10 70:2 77:12 128:15 **methods** 72:3 181:9 181:12 **metric** 128:20 **Meyers** 15:17 **MHGF** 96:13 153:8 **MIA** 6:1 91:13 109:5 126:6 128:6 128:11 **Michael** 2:18,21 **microphone** 22:3 29:18 46:16 59:17 134:19 150:19 166:2 **microphones** 6:22 **middle** 58:7 66:11 **Midwest** 64:2,3 **Mike** 140:22 142:11 143:18 **Miller** 90:19 **million** 51:18,19 52:9,16,19,21 53:11 56:15 ,19 57:2 133:18 134:1 135:17 ,19 140:8 141:9,11 159:5 ,6 160:7 **millions** 140:8 **mind** 10:3 57:19 119:9 185:8 **minimize** 161:7 **minimum** 34:21 **minute** 158:8 **minutes** 79:13 **mismatch** 179:18 **missing** 120:22 **misspoke** 53:3 **misunderstood** 124:1 **mix** 164:18 **mixture** 84:11 85:16 87:19 **mobile** 4:18 36:4 37:3 38:3 ,12 39:2 49:22 50:3 ,4,5 ,8 53:4 67:21 ,22 68:22 69:1 80:14 87:18 88:5 ,6,11 97:9 101:2 146:22 147:5 **mode** 91:21 ,21 95:10,17 96:18 99:13 ,13 149:16 149:16,17 ,19 150:3 156:12 **model** 5:21 35:20 36:3 ,8,22 37:12 38:8 43:19 51:4 61:12 71:20,20 73:8,9 85:3 ,13 86:12 89:13 128:16,17 ,19 130:4 131:3 ,4,10 131:11 132:8 133:19 151:13 154:1 ,16 164:14 167:9 172:13 ,18 **modeled** 131:13 **models** 88:13 ,14 99:1 132:9 **Moderator** 2:9 **modified** 100:7 **moment** 85:1 129:13 137:21 180:3 **monetary** 161:17 162:1 164:3 **monetization**

161:13 ,16 163:9 **monetized** 162:14 163:19 **money** 25:1 ,10 28:14 **monthly** 28:12,15 28:16,17 **Moore** 3:9 65:7 ,7 66:7 ,15 ,17 79:2,2 93:4,4,19 94:5 ,13 162:17 ,17 165:22 165:22 166:4,5 **moot** 106:22 **more-** 17:8 **more-efficient** 9:18 10:1 ,22 12:2,17 **more-energy-effic ...**  17:4,5 18:6 **morning** 4:3 5:9,12 8:10 12:11 16:22 35:18 114:18 **motor** 96:6 97:8 145:10 153:7 **motors** 175:3 177:1 **move** 6:2 31:22 34:5 63:10 71:6 96:3 96:13 109:11 112:11 126:5 127:21 146:15 155:13 161:13 169:2 174:20 177:21 180:8 **moved** 104:3 **moves** 78:14 **moving** 48:11 100:2 148:4 150:14 179:3 **MPC** 135:11 144:18 **MPCs** 132:3 172:15 172:19 173:5 **MTA** 131:6 **multi-family** 30:14 53:4,8,11 **Multi-Housing** 16:18 **multi-stage** 175:20 **multiple** 41:4 42:3 124:22 138:20 **multiplier** 28:15 **multistage** 175:2 **Murphy** 46:14,14 46:17 62:10 72:14 73:9,18 74:3 150:19,21 ,21 151:15 152:11 **muted** 6:10 **N N**  4:1 **Nadel** 101:8 **NAHB** 2:13 73:4 **name** 4:8 6:21 30:1 46:12 128:3 **national** 2:15 3:15 3:16 5:21 8:3 16:18 24:19 35:19 35:20,22 54:12 62:20 69:22 80:11 80:12,13 ,17 81:8 81:20 84:5 87:10 92:7 ,20 99:12 100:4 126:16 142:8 167:3 **nationally** 104:18 157:10 **nationwide** 116:14 **natural** 62:14 63:10 113:17 114:16 117:4 136:10 180:9 **naturally** 72:22 73:14 90:12 **nature** 65:17 141:16 153:16 154:15 **Navigant** 2:11 ,19 2:21 3:10,13 91:10 128:4 153:19 176:17 **NDA** 153:19 **Neal** 79:21 ,22 80:4 112:12,13 **necessarily** 25:13 149:22 154:19 **necessary** 153:1 **need** 22:10 45:6 46:6 71:5 72:19 137:6 143:17 147:7 172:1 ,2 177:18 179:9 180:20 181:3 182:22 **needed** 170:8 **needs** 22:10 68:8 71:6 75:19 170:15 **negative** 33:13 ,22 140:17 148:7 ,9 149:5 **negatively** 140:7 **neither** 147:6 **NEMS** 61:12The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 199 **NES** 80:18 81:6,8 **net** 80:19,20 81:21 82:11 92:13 99:16 123:2 128:19 133:2 143:11 150:9 167:11 **never** 10:13 20:14 **nevertheless** 183:3 **new** 8:20 17:2 24:2 25:14 31:18 36:9 36:10 37:14,15 ,16 37:18,19,20,22 38:3 ,6,7 ,10 39:10 39:13 ,15 ,20 40:3 41:18,19,20 42:11 42:14 43:11 ,22 44:15 46:18 47:8 47:9 50:2,15 ,15 50:17 51:22 52:1 52:6,8,9,11 53:1 53:16,17 ,20 54:16 54:17 ,19 55:13 56:3 ,4,11 58:4,17 61:17 63:9 67:22 68:15 78:7 82:21 85:11 96:7 100:10 112:10 124:20 158:19 171:11 175:14 178:13 181:2 **newly** 64:9 **NFGC** 169:6 **NIA** 5:21 89:13 93:7 ,17 100:8 101:19 152:7 **nice** 5:10 61:8 185:12 **night** 106:15 120:8 **nine** 67:3 **Nineteen** 174:4 **no-impact** 72:18 73:11 **no-impacted** 73:6 **nodding** 144:22 145:3 **non-apartment** 30:9 **non-condensing** 48:4,9 49:5 65:20 68:21 74:21 75:1 75:10 76:9,10 84:15 121:3 122:8 122:11 ,19 123:14 124:20 178:22 **non-public** 29:12 **non-regulatory** 100:9 102:2

**non-renters** 24:15 **non-switching** 74:2 74:3 ,4,5 **non-weatherized** 4:18 29:2,3 36:4 36:14,15 ,17 38:2 38:5 ,11 39:1 43:6 48:4 49:22 55:22 67:19 80:14 87:18 88:6 96:8 97:14 101:1 137:18 138:3 146:21 147:1 174:15 175:1 **nonregulatory** 111:3 **Nope** 150:13 **NOPR** 71:13 96:19 101:8 145:17 147:13 ,15 175:7 182:7 **normal** 21:22 **north** 35:2 37:4 49:15 53:18 54:3 56:3 83:2 84:14 87:20 88:1 ,5 92:21 104:18 140:5 142:13 143:9 **northeast** 16:10 39:9,11 ,16 40:3 **northwest** 64:2,3 **note** 79:19 173:18 **notes** 147:1 **notice** 4:5 46:2 144:1 **NOX** 157:10 162:10 163:5 ,21 **NPV** 80:19 81:6 87:14 92:16,17 99:12 **NRDC** 157:15 **nuclear** 160:20 **number** 39:13 43:16,19 46:21 58:11 ,11 77:6 81:4 88:6 90:7 ,9 90:10 93:8 101:7 116:7 ,10 117:2,11 120:1 ,4 122:9 125:11 133:6,8 139:20 147:3 ,9 150:22 151:20 159:5 ,18 **numbers** 7:18 27:22 28:5 30:5 ,22 44:1 49:10,20 51:8,9 51:12,13 ,17 ,17 57:5 ,7 81:22 88:4 88:5 93:9,18,21 99:8 105:5 108:4 126:8,10 127:3 ,15 140:20 141:6,7 ,18 141:21 155:8 158:3 ,10,13 162:21 163:13 ,15 168:5 **NWGF** 96:11 **O O**  4:1 **Obama** 106:13 **observation** 78:9 79:10 **observed** 38:7 **obvious** 126:9 **obviously** 127:1 172:15 173:13 176:12 183:15 **occur** 136:10 **occurred** 43:16 61:9 **occurring** 73:14 **occurs** 20:5 113:17 180:5 **oddity** 34:17 **OEMs** 109:3 **off-line** 172:2 **offer** 85:7 86:12 147:6,6 **offering** 100:14 **offerings** 147:4 **office** 106:13 **oh** 18:7 53:5 64:20 91:12 95:21 96:1 106:12 136:17 140:8 172:4 183:6 **oil** 39:9 40:11 41:9 41:16 43:17 46:18 46:22 47:16 55:2 58:15 61:15 ,18,22 63:22 68:9 157:9 **oil-fired** 39:14 **oil-fueled** 63:19 **okay** 5:8 16:3 ,20 21:12,20 22:8 27:6,19 29:22 30:6,21 31:3 ,5 32:18 34:4 40:14 40:22 41:12 43:7 47:18 53:5 ,10 54:16,18 55:3 ,4 56:18,21 57:9

63:12 66:14 73:1 75:4,13 ,16,17 78:21 79:11 80:4 86:22 88:18,20,21 94:5 95:18 96:15 101:16 102:5 ,11 104:9 105:18 ,21 109:11 111:1 ,6 112:20 113:20 115:5 119:18 120:21 127:7 ,21 137:7 143:14,18 145:6,6 146:12,15 148:10,19 149:15 150:12,13 ,14 151:15 153:18 155:11 161:10,11 164:8 165:19 166:21 167:17 169:14 170:9 171:16 172:3 173:21 177:19 182:19 183:5 184:7 **OMB** 83:20 90:1 91:3 107:9,17 163:6 **on-line** 79:22 **once** 71:20 183:14 **one-sided** 25:22 **ones** 31:3 ,3 69:10 70:6,8 71:4 89:17 98:16 127:4,4 139:2,5 179:8 **ongoing** 108:22 **online** 5:11 44:11 96:5 108:21 153:4 **open** 173:14 179:4 184:20 **opening** 8:14,16 **operating** 82:5 83:16 131:21 132:1 137:20 **operation** 175:2,9 175:20 **operations** 134:12 **opportunities** 112:1 112:10 **opportunity** 8:18 44:22 45:14 112:6 121:1 178:3 ,6 **opportunity,again** 6:4 **opposed** 28:1 140:17 163:2 **optimistic** 60:20

**option** 18:6 20:6,13 20:16 41:4 58:16 58:17 ,20 68:12 71:14 114:13 121:15 138:12 170:7 **options** 41:5 132:15 **order** 22:10 94:8 152:5 182:11 183:1 ,4 **Orders** 182:9 183:12 **organization** 33:11 **organizations** 100:14 **original** 28:6 **ought** 181:21 **outer** 101:13 **outline** 129:8 **outlined** 155:3 **output** 128:18 156:7 **outputs** 80:16 **outreach** 183:20 184:1 **outset** 46:13 **overall** 12:6 37:13 38:9,22 64:16 76:14 167:3 **overestimated** 166:16 **overestimates** 166:12 **overestimating** 65:15 **overlap** 98:5 ,6 144:4,11 **overlapping** 98:4 **overseas** 148:4 **overstated** 94:21 **overstatement** 55:9 **overview** 4:15 5:15 **overwhelm** 71:4 **owner** 47:9,9 54:19 **owners** 7:16 14:1 ,7 14:11 16:17 30:12 30:13 ,18 36:9,10 36:13 37:19,20,22 38:3 ,6,7 43:11 53:17 ,21 54:16,17 **P P**  4:1 **p.m** 185:17 **pace** 47:1The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 200 **paper** 22:2,4 23:16 101:8,15 **papers** 14:18 23:15 **Paperwork** 183:21 **pardon** 103:16 181:6 **parse** 70:20 **part** 9:10 14:11 19:8 47:20 49:10 51:16 55:6 86:7 105:9 107:14 113:14,19 114:14 115:1 ,3 119:21 162:7 166:22 171:2 175:22 176:1 181:8,10 182:17 183:15 184:10 **partial** 14:6 **partially** 106:5 **PARTICIPANT** 22:7 78:4 94:11 145:5 159:20 174:7 ,10 **participate** 6:14 **participating** 184:15 **particular** 28:14 33:12 61:10,17 65:10 113:21 136:18 144:3 166:8 178:12 182:11 **particularly** 13:9 67:22 134:8 137:1 153:22 181:8 **parties** 24:12 **parts** 169:17 **pass** 127:9 131:19 132:5 **passed** 17:18 88:9 **path** 185:4 **Patio** 63:14 **pause** 9:2 34:10 42:7 80:2 114:10 129:13 147:19 174:12 **pay** 7:14,16 9:17 10:1 11:20 27:22 29:7 ,9,9,13 ,15 74:12 108:11 121:6 122:20 **payback** 31:2 182:3 **paying** 15:2,3 31:3 **peak** 6:10 75:9 155:18 **pen** 14:18

**penetrations** 102:18 **people** 7:14,20 18:13 ,22 27:16 28:14 29:3 ,12 56:22 60:13 68:14 70:13 ,21 71:3 ,9 72:3 73:5 ,6,7 ,13 74:14 79:9 107:10 110:19 115:1 ,16 115:18 ,22 116:1 116:15 117:3 ,16 118:1 ,17 ,17 125:13 ,14 136:11 136:20 156:15 157:21 180:8 **per-unit** 81:3 ,3 132:1 **perceived** 119:10 **percent** 13:21 21:6 29:1 ,4,5 ,6,7 ,8,9,9 29:12,13 ,14,15 ,15 30:6,7 ,10,11 ,18 38:9,11 ,12,22 39:2 43:6 50:9,10 57:16,17 ,19 69:17 77:10,15 83:7 ,20 83:21 84:5 ,5 ,6,6 85:20,22 86:1 ,11 86:16,18,19 87:14 87:16,17 ,19,20,22 88:1 ,12,13 89:2,3 89:12,14,17 ,18 91:15 92:14,15 ,15 92:16 96:14 101:3 101:9,11 102:21 103:6,9,15 ,16,16 104:14 107:3 ,7 108:19 113:1 ,10 125:17 ,20 127:19 129:22 130:4 133:11 138:8 139:22 140:9,20 157:5 ,7 ,17 158:1 163:22,22 **percentage** 27:20 27:20,22 28:17 43:3 55:21 57:19 58:20 63:2,8,9 87:15 99:6 102:22 116:4 125:13 131:16,18 133:9 **percentage-wise** 64:22 **period** 36:6,6,20 37:22 46:19 49:16 80:16 99:19,21

108:13 120:10 180:20 181:1 185:5 **permanently** 24:3 ,6 **person** 25:11 75:20 122:17 136:7 ,11 136:12,15 **personal** 59:4,5 **perspective** 67:22 118:14 **pertains** 91:9 **perverse** 180:4 **phase** 129:3 ,7 ,9 **phases** 129:3 **Philadelphia** 3:12 **phones** 6:10 **physical** 172:17 **physically** 17:7 **pick** 4:20,21 34:5 160:3 ,6 **picked** 159:1 **pictures** 168:8 **piece** 21:2 33:5 55:11 **pieces** 21:5 ,14 **pile** 59:18 **Pinto** 2:7 **place** 55:14 70:5 110:20 111:21 113:18 173:6,10 **places** 35:14 65:10 **Plan** 94:17 95:2 **plant** 156:4 157:21 158:12,15 **plants** 157:16,18 158:1 ,17 159:16 159:18 160:18 **play** 26:1 51:3 119:3 ,9 151:3 ,4 **playing** 151:22 **please** 6:8,10,21 16:21 26:5 28:21 40:6,12 42:6 45:7 59:17 65:6 69:6 79:14 80:1 127:10 134:18 150:18 165:12 177:22 183:7 185:9 **plus** 12:20 93:17 **podium** 8:9 **point** 9:14 10:2,5 13:5 20:4 24:9 27:19 32:3 33:1 33:20 43:9 66:8 66:12 72:8 106:22 107:1 117:13

125:11 135:8 138:8 158:21 159:11 160:9 162:18 168:3 ,20 183:14 **pointed** 43:20 117:7 117:15 125:15 **pointing** 19:18 91:8 **points** 67:14 102:22 168:1 **polar** 157:8,11 159:3 **policy** 181:15 **polygon** 14:17 **pool** 55:15 **population** 7:11 ,21 14:12 28:13 ,16,19 54:17 **populations** 55:5 **portion** 128:11 **position** 61:13 154:11 **positive** 4:11 33:13 33:21 115:14 117:15 118:4 119:16,22 178:10 179:16 180:16 **possibility** 9:20 10:6 10:21 11:2 47:17 47:19 **possible** 14:20 20:14 34:15 93:2 135:15 145:18 154:3 181:16 184:22 **possibly** 18:22 121:12 **posted** 127:8 **potential** 10:19 55:3 55:20,22 67:20 75:2 86:6 98:10 115:19 128:12 130:13 140:17 ,19 146:13 147:10 149:3 158:10 164:13 167:20 168:10 176:3 **potentially** 27:11 40:12 68:18 72:5 72:7 86:12 140:6 140:11 **power** 92:1 ,5 94:17 95:2 109:2 156:3 157:16,21 ,22 158:12,15 **PRA** 183:21

**preceding** 135:9 **precipitous** 78:9 **predict** 182:5 **predicted** 60:13 **predicts** 60:11 **preliminary** 7:3 126:12 127:3 **premise** 113:10 **premium** 132:12,13 132:19 138:18 140:1 **present** 80:19,20,21 81:21 82:11 92:13 99:16 126:15 127:15 128:19 133:2 143:12 150:9 **presentation** 17:1 **presented** 7:9 19:10 19:16 22:15 31:19 33:6 89:18 92:13 103:4 125:5 163:21 168:6 179:15 **presenting** 19:21 20:2 35:20 128:4 **presently** 71:21 **presents** 48:12 55:21 164:9 **preservation** 131:15 131:21 133:8 137:16,20 **President** 106:13 **presume** 34:5 **pretty** 9:12 10:18 22:20 31:19 45:8 45:22 52:14 54:20 57:3 86:17 118:7 126:6 145:13 153:21 183:2 **prevents** 155:9 **previous** 66:21 77:19 89:11 168:21 180:19 **previously** 151:1 152:10 172:13 **price** 12:22 13:2,16 57:3 72:1 86:3 117:4 166:12 **price-driven** 68:4 **prices** 35:15 56:14 56:17 ,18,20,22 57:1 58:3 ,7 ,18 120:13 123:1 166:19 173:13The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 201 **pricing** 63:7 163:1 **primarily** 37:22 48:7 68:22 69:2 75:11 104:14 145:9,11 **primary** 49:12 68:17 69:6 71:18 80:11 ,16,18 81:10 82:16 92:7 ,10,11 93:15 ,22 99:15 128:15 165:9 **prime** 128:6 **prior** 78:11 92:9 **probability** 95:1 **probable** 74:20 **probably** 7:18 12:9 14:12 47:21 60:12 75:2,12,13 94:2 101:13 108:14 118:14 129:17 133:21 140:9,20 143:10,11 147:7 156:15 182:15 **problem** 9:10 18:4 180:11 **problems** 24:21 156:17 **procedure** 175:7 ,10 175:14 176:2,4,5 **process** 170:12 172:20 179:4 181:8 **processes** 184:21 **produce** 181:13 **product** 27:7 36:13 36:16 37:2 51:2 67:10,11 71:15 72:4 81:2 82:19 83:4,6 84:18 85:7 86:9 91:16 98:3 111:14 129:6 130:14,20 131:6 140:14 142:21 144:10 146:20 147:2,6 148:21 167:7 **production** 131:7 135:11 ,12 141:16 141:17 142:18 148:4,17 149:4 161:7 162:3 172:11 173:10 **products** 36:19 60:5 67:12 102:14 110:14 138:7 ,18 169:19 170:4 184:3

**profession** 61:3 **profile** 129:4 **profit** 131:21 132:1 137:20 **profitability** 132:14 **program** 5:6 103:1 162:20,20 **programs** 100:13 102:11 ,13 103:5 ,8 105:17 109:17 ,18 110:12,19,20 111:10 162:21 **project** 44:2 50:22 61:13 84:3 **projected** 37:16 38:9,20 46:20 51:8,17 ,17 ,22 52:1 79:4 **projection** 75:7 **projections** 37:17 38:21 40:10 49:2 50:21 57:3 76:10 77:20 81:11 ,12 82:3 ,4 84:1 102:10 **projects** 52:8 **propane** 61:20 63:18 165:9 **propane-fueled** 63:22 **proper** 24:11 122:4 **properly** 130:12 **properties** 25:5 **property** 162:4 **proportion** 28:12 147:4 **proposed** 4:5 92:3 95:7 100:17 130:19 161:18 167:4 176:4,10 **proposes** 143:22 **proposing** 92:2,10 99:14 110:18 135:18 163:20 **proprietary** 65:17 178:17 **protect** 178:17 **prove** 66:2 **provide** 12:16 46:11 46:11 49:14 59:22 69:6 87:22 93:1 134:11 ,12 152:16 152:21 155:2,7 161:15 173:4 185:9 **provided** 6:16 51:10

82:20,21 ,22 93:16 100:18 102:17 116:7 162:7 ,8,12 **providing** 64:13 **PSC** 153:6,6 177:7 **PSCs** 177:4 **public** 1:1 2:9,17 3:4 4:8 13:21 14:6 22:14 29:4,7 ,14 30:6 101:6 129:7 172:7 174:9 176:5 178:5 180:19 181:12 184:16 **publicly** 45:19 **publicly-available** 129:4 **pulling** 174:13 **pulls** 71:3 **pump** 19:2 36:17 56:2 59:22 114:14 120:14 121:21 123:15 **pumps** 60:21 66:22 67:2 **purchase** 100:15 122:10 **purchased** 151:12 **purchaser** 27:7 ,9,11 **purchases** 100:13 **purchasing** 125:17 **purpose** 19:15 23:7 36:3 128:6,8 155:22 161:16 164:10 167:2 **purview** 178:19 **push** 18:13 **pushing** 102:13 **put** 8:1 ,9 9:8 17:4,8 17:10 18:6 23:5 114:3 127:15 ,16 139:15 150:4 154:5 ,18 157:14 160:16 168:1 174:10 178:13 179:10 **putting** 28:19 47:13 **PVC** 170:21 **Q quads**  92:11 ,12 99:15 ,15 **qualify** 128:9 **qualitative** 129:2,11 130:22 134:13 181:11 **quantify** 128:20

**quantitative** 131:1 181:11 **quarter** 57:21 **question** 14:22 16:3 17:20 34:17 39:6 39:21 44:21 45:1 48:22 51:20 54:18 57:11 62:19 66:15 76:2 79:22 88:3 ,9 88:9 89:1 ,6 91:11 93:14,15 95:9 102:4,16 103:14 103:14,21 104:7 104:11 105:3 108:20 109:5 110:5 112:19 113:2 115:13 116:18 119:3 123:3 ,5 126:13 129:14 134:5 ,7 136:6,14 137:14 140:4 141:2 148:12 150:16 152:12 153:4,22 174:2 175:6,15 ,16 175:19 176:17 **question/comment** 8:12 **questions** 14:14 17:1 22:17 31:20 51:5 56:6 96:4 125:12 126:11 ,20 172:10,12 178:7 178:13 **quick** 14:22 35:8 43:3 51:20 88:3 104:11 106:7 107:2 126:6,7 153:22 **quiet** 14:20 **quite** 14:14 52:3 126:22 161:5 165:15 **quote** 158:3 **quote/unquote** 124:3 **R R**  4:1 **R&D** 133:14 141:14 **Rachel** 2:14 63:12 63:13 **raise** 6:5 ,16 11:1 ,15 11:21 13:6,7 25:4 26:16 32:5 85:1 **raised** 22:16 32:7 ,7

130:7 ,8,8 131:1 151:1 ,6 **ran** 90:20 **Rand** 175:8 **range** 50:8 51:17 89:15 97:1 ,3 98:3 101:8,9,10 105:19 108:10 130:13 133:4,5 148:8,11 **ranged** 39:14 **ranges** 98:4 **ranging** 100:14 **rapidly** 17:18 161:5 **rate** 11:5 16:5 24:7 52:1 ,22 89:1 ,2,10 90:5 91:9 99:17 99:18 104:19 120:6,8 129:15 ,22 **rates** 9:13 11:21 25:4 82:11 83:20 89:7 ,9,15 ,19 90:4 90:6,15 ,20 91:8 92:14 107:2,10,11 107:12 108:11 120:5 ,5 ,6 163:22 166:11 ,16,17 **rating** 176:14 **ratings** 176:6,8,9 **ratio** 94:20 **rational** 113:9 114:8,11 115:22 **rationale** 118:4 **rationally** 115:19 **raw** 45:4 106:19 **react** 62:20 **read** 107:17 ,17 ,21 108:1 181:10 182:16 **reading** 30:6 113:19 **real** 11:2 51:20 62:5 89:1 104:11 107:1 181:10 184:6 **realize** 55:10 183:2 **realized** 63:3 **really** 10:2,14 17:14 23:13 25:18 27:19 30:6 33:9,14 39:12 45:2 52:3 54:18,21 68:1 71:14 78:17 90:21 96:9,13 98:1 106:15 108:12,15 115:6 120:4 124:16 136:5 ,20 140:13 141:3The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 202 142:19 145:12 156:22 168:22 180:19 181:16 182:10,21 184:11 **reanalyzing** 163:14 **reason** 4:13 16:10 21:7 98:2 106:18 117:15 119:22 154:15 175:3 **reasonable** 114:15 151:21 **reasonableness** 100:21 152:4 **reasons** 70:18 154:21 **rebate** 110:20 112:3 **rebates** 100:11 ,14 109:16 110:16 111:2 **rebating** 103:5 110:20 **rebound** 83:7 ,7 100:22 101:3 ,14 **rebounding** 90:11 **recall** 37:5 66:21 151:8 **recapturing** 136:20 **recast** 78:15 **receive** 7:16 69:11 124:2 172:4 **received** 79:19 **receiving** 180:22 **recess** 79:16 **recession** 58:7 **reciprocal** 26:9 **recognize** 27:16 171:3 **recognizing** 45:21 138:16 **recollection** 171:20 **recommended** 170:2,2 **recommends** 90:3 **reconcile** 72:2 **reconciled** 151:21 **record** 6:20 33:18 56:13 ,17 ,20,21 58:6 66:20 79:18 145:2 171:15 **RECS** 29:2 50:19 77:13 **redesign** 135:3 ,5 **redo** 140:19 **reduce** 24:7 **reduced** 130:19 161:17 **Reduction** 183:22

**reductions** 156:2 161:14 162:10 163:20 164:4 **reevaluated** 45:21 **refer** 101:14 **reference** 156:8 **referenced** 164:16 **references** 48:13 ,13 48:15 ,16 51:15 77:5 **referencing** 15:17 **referring** 62:12 71:22 89:8 105:13 **refine** 129:1 ,12 **reflect** 115:1 117:14 170:5 **reflected** 10:20 85:17 115:12 **reflecting** 26:12 134:8 **reflects** 103:7 **refresh** 33:9 **regard** 63:14 72:9 76:16 176:3 **regarding** 98:10 101:20 153:8 173:8 **regardless** 159:10 **regards** 22:18 172:8 172:10 173:9 176:2 **REGI** 162:19 **region** 160:13 **regional** 84:11 87:9 130:17 142:9 **regions** 37:4 83:1 **regulate** 183:3 **regulated** 27:7 64:9 111:21 157:2 **regulating** 182:19 **regulation** 8:7 95:6 135:5 136:5 ,8 **regulation.gov** 127:9 **regulations** 95:5 128:13 134:22 135:4 158:6 **regulations.gov** 127:16 **regulator** 183:3 **regulatory** 5:22 35:21 100:3 ,4,10 108:22 109:15 110:2 128:16 136:16 144:3 183:10

**rehash** 130:16 **Rein** 2:16 **reiterate** 90:16 101:5 180:18 **related** 23:22 97:7 **relates** 53:19 91:12 **relationship** 75:9 **relative** 28:16 29:22 60:3 121:15 123:20 133:11 141:7 149:18 158:19 **relatively** 7:10 13:11 ,12 78:7 **release** 94:6 **released** 78:8 160:2 **relevant** 19:22 26:15 **relied** 22:5 **rely** 131:4 **remain** 111:2 147:8 176:14 **remains** 19:20 160:7 **remark** 183:9 **remarks** 4:15 8:19 32:20 169:3 173:22 177:20,21 **remember** 12:13 16:12 31:6 56:13 66:7 ,22 89:14 117:8 163:7 **remodel** 38:1 48:2 **removed** 38:19 **renewables** 160:21 **rent** 10:9,15 12:4 13:3 15:8,11 24:4 26:16 28:2 **rental** 7:14 8:5 16:5 25:4,11 29:5 ,6,8 29:10 31:4 **rentals** 30:7 **renter** 31:6,15 **renters** 7:15 10:7 11:8,14,15 14:7 15:1 24:1 ,14 25:1 26:18 27:21 ,22 32:4 **renting** 10:18 13:22 30:9 **rents** 10:20 11:1 ,15 13:7 ,7 ,13 ,14,18 16:4,7 17:18 24:5 24:10 25:17 **repair** 71:14,16 72:5 ,7 82:2,7

**repaired** 21:9 **repairing** 20:14 71:22 75:1 **repeatedly** 32:3 **replace** 20:15 36:15 71:16 75:21 79:9 116:15 122:7 ,17 122:18 **replaced** 75:19 123:13 **replacement** 18:20 43:4,5 47:9 48:19 56:3 ,4 57:18 64:1 96:7 130:10,14 **replacements** 36:10 38:14 39:1 ,2 53:17 ,22 82:22 **replacing** 31:10 116:2 **report** 44:11 ,11 163:6,7 ,10 **reports** 162:9 **represent** 107:4,5 ,5 107:15 128:18 **represents** 29:13 38:8,11 ,12 **reproduced** 181:14 **reputation** 139:8 **request** 77:5 99:1 154:9 173:3 180:18 181:1 185:6 **requests** 100:20 164:6 173:7 **require** 84:9 97:10 103:18 142:14 **required** 18:19 62:20 65:21 91:3 133:16 153:7 175:2 182:22 **requirement** 54:3 **requirements** 103:18 104:8 112:7 ,7 170:16 **requiring** 167:22 **research** 6:3 167:18 168:2,4 **research/side** 6:3 **residences** 35:7 **residential** 1:3 37:3 69:17 77:14 83:1 144:4 **resource** 60:18 93:22 **Resources** 11:9 **respect** 119:21 176:11 **respondents** 118:9 **response** 30:20 63:4 106:3 146:14 164:7 167:16 173:7 178:12 184:8 185:2 **responses** 63:6 **responsible** 31:7 ,8 31:10,14,16 **responsive** 22:20 **responsiveness** 180:14 **rest** 35:1 ,4 37:4 53:18 56:4 83:2 87:21 88:1 92:22 103:10 140:5 **restrictions** 17:8 **restrooms** 79:15 **result** 21:14 56:15 74:20 104:14,15 106:4 119:15 132:13 180:4 **resulting** 156:2 161:18 162:1 ,11 164:12 **results** 62:21 64:16 89:18,19 92:6 96:2 99:12 100:19 132:21 149:15 156:9,11 161:14 163:19 164:17 ,22 167:5 ,10 181:13 **resume** 5:19 79:13 80:7 **resumes** 79:18 **retail** 151:17 ,18 **rethink** 7:18 137:6 **retired** 160:19 **retirement** 38:17 48:18,18,20 50:13 157:21 **retires** 76:19 **retrofit** 70:17 168:17 **retrofitted** 157:19 157:20 **return** 24:7 25:5 ,10 **reventing** 121:5 124:4 **revenue** 151:14 179:21 **revenues** 141:8 **review** 23:7 40:13 181:7The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 203 **reviews** 161:21 **revise** 130:3 152:22 163:17 177:15 183:15 **revising** 169:22 **revisit** 65:3 **RIA** 5:22 103:9 104:20 108:21 **Richard** 46:14 **Rick** 62:8 64:13 72:13 120:19 150:18 ,20,21 **ridiculous** 153:6 **right** 6:10 8:15 9:19 14:12,15 15:3 ,4,9 15:14,19 20:9 25:2 28:8 29:18 41:2,11 43:7 ,7 45:20 46:3 53:2 54:2,8 58:7 61:7 73:8 76:20 81:11 85:8 93:20 95:11 97:3 102:4 104:17 104:20 115:9 116:1 ,22 118:6,15 123:4,7 124:14 130:16 140:3 ,8,15 141:19 142:17 148:8 152:3 ,5 153:10 155:18 158:17 **rise** 10:9 13:18,19 52:6,8 **rising** 162:4 **risk** 90:7 **Rivest** 2:21 140:22 141:1 142:15 143:2,13 ,15 **robust** 32:11 ,15 33:5 ,10 108:10 181:9 **rolled** 77:2 **rolling** 85:21 **rollup** 85:17 **rooftops** 109:1 **room** 1:9 6:12,17 21:18 46:9 61:2 79:14 80:5 139:22 **Rosenstock** 2:22 14:16,20,21 ,21 15:5 ,10,14,19 16:3 ,12,16,20 20:11 ,12,12,20 21:1 ,5 ,11 ,13 ,21 30:4,4,15 ,21 39:4 39:5 ,5 ,19 40:14 41:1 ,11 ,14,18

42:2,8,15 ,18 44:7 44:9,9 51:21 ,21 52:11 ,15 ,16 53:5 53:7 ,10,13 56:7 ,7 57:22,22 64:17 66:18,19,19 88:2 88:2,14,17 ,20 94:15 ,15 96:17 ,17 97:17 ,18 98:13 99:19,22,22 104:10,11 105:7 ,7 105:15 ,18,21 111:7 ,8,8 119:19 119:20,20 147:12 147:12,18,20 148:6,10 149:2,2 149:8,11 ,14 156:13 ,14,14 160:11 ,11 161:4 161:10 163:4,5 165:2,2,8 **rough** 133:22 140:19 182:2 **roughly** 65:1 129:18 129:22 133:12,18 135:17 ,19 137:17 140:14 145:22 147:22 **round** 136:9 145:19 145:20 160:6 **row** 133:1 ,10 **Roy** 3:3 20:4 88:22 88:22 91:7 ,7 ,14 95:9,14,18 134:15 134:15 174:1 ,1 ,5 174:8,13 **rule** 33:12 65:12 66:1 70:4 74:20 75:3 83:8 89:3 90:20,21 94:17 ,19 95:7 113:1 114:2 114:15 ,18 115:15 118:17 ,18 121:12 122:3 ,6,16,21 124:9,11 128:14 131:12 135:7 ,10 135:16,18,22 136:1 ,2,3 144:4,5 144:17 157:12 176:20,20 177:9 177:12,17 180:6,6 180:8 181:8 182:7 182:22 184:2,17 185:3 **rulemaking** 4:5 7:8 82:19 83:6 91:15 113:13 129:19 137:1 ,3 ,4 144:7 166:20 174:22 175:17 **rulemakings** 66:21 **rules** 64:18 66:11 117:2 121:10 135:7 ,15 141:9 144:7 ,8,11 ,15 **run** 104:19 108:10 120:13 131:10 132:15 155:8 **rural** 64:1 **S S**  2:13 4:1 **S-1** 12:19,20 **S-2** 12:19 **safe** 185:11 **safety** 170:16 **sake** 150:5 **sale** 168:12 **sample** 29:21 **Samuel** 2:19 **saturation** 50:5 **saturations** 37:18 43:22 50:16,20 77:15 **save** 25:1 28:14 111:16,17 **saved** 25:17 **saving** 98:1 **savings** 10:20 11:8 11:15 14:3 15:2,6 34:18,22 65:13 ,15 80:18,19 81:4,9 81:20 90:22 92:7 92:7 ,8,11 ,12,20 93:16 98:5 ,9,10 98:12 99:9,12,14 101:13 103:11 111:16 112:21 113:5 126:17 127:14,18,19 164:14 **saw** 9:11 71:19 118:8 144:22 **saying** 11:7 16:12 18:18,21 21:10,21 22:21 24:22 53:11 57:15 73:6 96:20 110:11 116:11 ,14 122:14,16 126:2 158:11 160:17 161:1 ,4 175:8 **says** 71:13 90:2 96:5

108:3 149:3 171:4 174:22 180:10 182:18 **scenario** 18:17 85:3 85:5 ,13 86:9 105:12 110:18 120:13 122:1 ,2 124:6,8 131:16,16 131:22,22 132:4 132:16,17 133:9 137:15 ,17 ,21 **scenarios** 91:4 103:10 124:14,22 125:14 127:14 131:13 133:5 137:14 154:17 155:7 **Schryver** 3:4 **scope** 5:16 **scratched** 141:1 **se** 25:12 **sea** 162:4 **season** 35:4 **SEC** 129:5 ,16,21 ,21 **second** 23:11 51:16 56:6 75:6 128:8 133:1 140:11 175:16 176:1 **secondary** 68:8 **secretariat** 169:6 **Secretary** 182:15 **section** 72:18 91:11 101:18 147:16 182:8 **sector** 167:8 **security** 159:19 **see** 4:20 5:10 7:8,19 9:19 10:14 11:7 12:18 13:1 18:7 29:11 30:16 33:15 34:20 41:13 42:6 45:1 51:8 52:2 56:2 57:7 ,7 71:16 72:13 76:11 78:12 79:7 ,13 86:15 92:10 94:7 95:4 99:9 102:18 104:18 110:11 117:5 124:15 125:12 127:17 132:10,14,19,21 133:1 ,4,10 134:6 142:22 143:21 ,21 144:15 ,17 ,22 145:2,5 148:11 150:2 151:21

154:13 155:1 158:3 ,4 159:15 166:9,13 ,18 167:13 168:11 ,19 173:12 182:20 185:9,12 **seeing** 29:22 31:1 65:9,19 93:8 117:8 124:18 126:9 141:10 142:7 152:14 158:10,13 178:20 **seek** 69:13 **seeks** 164:1 ,2 181:11 **seen** 15:20 19:20 23:13 33:8 46:21 71:15 104:5 110:13 133:21 141:9 143:10,11 148:3 157:14 171:20 **SEER** 67:2,2,2 **sees** 27:4 **segment** 155:14 **segmentations** 86:10 **segments** 36:9 37:1 37:13 53:16 82:20 83:18 **selection** 73:19 144:2 **sell** 85:8 **sells** 147:2 **send** 44:12 173:18 **sends** 153:14 **senior** 34:22 35:13 **senior-only** 34:18 35:6 **sense** 32:12 49:13 57:15 70:11 ,16,22 71:3 ,4 72:18 77:1 77:9 140:13 143:7 178:21 **sensitivity** 90:4 94:22 **sentence** 182:18 **separate** 145:14 146:2 **separating** 92:21 **series** 60:6 182:10 **seriously** 181:22 **serve** 76:19 **service** 161:2 **services** 167:6The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 204 **set** 26:21 33:9 74:14 98:22 99:2 137:6 142:4,6 **sets** 181:16 **setting** 165:14 **seven** 91:4,4,5 107:8 **severity** 147:10 **Severn** 11:11 **sexy** 139:15 **share** 44:14 47:3 ,4 62:22 86:15 104:2 110:10,11 **shared** 64:21 **shares** 42:1 84:3 ,8 84:15 104:6 141:5 **shift** 85:3 ,4,13 ,18 85:20 **shifting** 167:5 **shifts** 85:5 **shipment** 35:22 36:8 45:17 50:7 73:15 81:22 101:21 102:10 113:14 116:20 117:1 141:20 149:22 178:20 182:20 **shipments** 5:21 35:20 36:3 ,22 37:1 ,8,12 38:7 ,9 38:16 40:8 44:22 45:3 48:18,19,20 48:22 49:1 ,4,9,12 50:8,10 51:11 59:22 60:3 ,7 62:6 70:3 72:20 73:1 75:7 76:8,10,14 79:4 80:10 81:9 81:13 83:3 ,5 102:15 114:22 115:12 117:6,14 129:8 131:8,9 141:20 142:6 143:16 151:5 ,11 152:6 154:18 **shipped** 36:5 70:6 80:15 **shipping** 60:17 **Shorey** 3:11 ,11 29:19 30:2,2 134:20,20 135:2 135:20 136:14,17 **short** 68:22 69:4 99:4 103:2 171:9 181:10 **short-sighted** 25:22 136:11

**short-term** 24:1 ,9 167:12 **shortly** 109:7 130:21 **show** 11:3 78:10,15 81:7 90:4 93:12 97:7 98:14 159:2 168:15 **showed** 7:7 11:12 63:1 104:12 **showing** 12:14,22 97:2,18 117:15 156:18 **shown** 26:11 38:16 51:9 84:4,17 180:14 **shows** 37:13 39:8 41:14,17 42:2,5 ,9 42:9,13 44:14 51:7 ,16 53:14 77:19 92:6 106:3 112:20 120:12 168:4 176:13 **shuffle** 14:18 **side** 81:11 ,12 94:18 103:10 142:16 156:20 157:1 168:3 **significant** 39:10 63:5 68:21 106:3 156:16 **significantly** 35:4 47:3 94:21 111:12 111:15 **signs** 178:20 **silent** 145:7 **similar** 23:21 36:12 72:6 99:6 112:1 144:8 **simple** 182:2 **simplification** 76:13 **simplistic** 75:15 **simply** 33:5 44:14 54:22 140:12 **Simultaneous** 21:16 41:21 52:12 115:17 116:21 139:1 143:6 149:10 165:11 **single** 116:10 162:22 **single-** 177:2 **single-family** 30:8 30:13 31:4,6 39:20 52:10,11 ,19 **single-stage** 174:18

174:20 175:5 ,11 175:18 177:7 ,12 **site** 81:18 93:6,6,10 **site-to-source** 83:11 **sits** 69:2 **situation** 17:14 27:8 74:2,2,4,5 117:16 120:3 121:20 **situations** 29:5 30:14 31:13 125:1 125:3 167:21 **six** 138:9 **Sixty-nine** 78:4 **Sixty-three** 78:3 **size** 63:16,17 **sizes** 63:16 **slide** 4:21 7:6 8:9 9:11 11:7 14:22 30:17 ,17 34:6,13 34:14 36:11 37:12 48:12 51:7 67:18 69:9 75:10 79:5 83:10 92:19 95:9 98:15 102:1 104:12,16 106:8 106:10 109:15 112:20,20 137:9 143:11 153:9 163:5 167:22 168:7 ,21 170:22 174:3 ,14 **slides** 5:15 8:1 ,20 9:9 11:3 14:13 30:22 34:7 36:2 36:20 75:8 77:8 99:11 167:18 173:11 **slight** 21:8 148:9 **slightly** 72:6 86:10 **slope** 106:14,16 **slopes** 11:5 **slow** 57:4 **small** 33:5 55:11 64:8 86:4 96:5 111:18 117:3 128:10 146:18 ,19 147:1 ,5 148:1 149:18 153:4 167:11 ,12 **smaller** 14:11 35:7 63:16 133:6 150:2 **SO2** 157:5 ,7 ,10 159:9 161:7 162:14 **social** 107:9 161:20 161:22

**societal** 24:13 107:10 163:2 **society** 107:14 **software** 6:15 **solar** 59:1 160:20 **sold** 64:3 ,8 **solid** 12:19 96:13 **solution** 168:12 **solutions** 2:9 4:8 168:8,10 **solve** 138:1 **somebody** 11:9 111:10 **somewhat** 19:19 140:12 **Sophie** 90:19 **sorry** 12:11 15:22 18:3 28:4 31:5 53:6 57:8 59:10 86:17 93:6 96:1 112:14 114:7 148:14 166:4 **sort** 8:4 12:13 23:14 72:21 77:7 ,8 94:22 110:2 111:2 177:9 **sound** 47:10 112:16 181:15 **sounds** 125:5 ,6 **source** 44:8 49:12 50:18 62:3 81:18 93:6,6,10 **sources** 60:17 **south** 49:15 54:3 57:17 84:16 140:15 143:9 166:7 **south/north** 49:5 **Southern** 2:10 23:20 **space** 67:8,9 **space-heating** 36:16 **span** 138:7 **speak** 6:8,16,21 29:18 80:1 **speaker** 22:2 **speaking** 54:9 62:17 78:5 111:9 **specific** 66:6 70:17 95:10 153:16 **specifically** 69:15 145:17 172:12 173:6 183:21 184:2 **specifies** 174:18 **spend** 112:9

**spent** 9:7 179:2 183:9 **split** 8:4 **spread** 76:22 127:16 138:9 142:3 **spreadsheet** 93:7 ,18 100:8 127:3 **spreadsheets** 126:12 127:16 **stab** 110:7 **stage** 174:21 177:3 **stainless** 170:20 **stakeholder** 62:22 152:20 173:7 **stakeholders** 32:7 32:14 184:19 **stand** 14:13 **standard** 11:21 18:21 20:19 21:15 24:3 27:5 32:16 36:18 48:7 51:3 55:19 57:19 62:20 73:13 81:2 84:7 ,9 84:10,11 ,12,14 85:6,11 ,20 87:4,7 87:8,9,10 92:3 93:9 95:16 97:12 102:7 ,8 110:15 ,17 113:18 122:12 123:19 125:17 128:21 131:18 132:2,7 ,10 133:3 135:13 140:4,10 140:11 ,18 142:8,9 142:13 146:18 149:17 ,19 150:3 156:8 158:20 161:19 165:3 ,10 170:17 176:21 177:18 **standard-case** 37:9 **standards** 1:2 4:5 5:6 9:6 10:11 14:10 36:8 54:7 55:19 72:22 73:3 80:14 82:7 ,10 86:6 91:20 100:5 100:17 103:12 111:11 ,21 112:5 128:7 130:17 132:13 133:4 141:6 149:17 156:2 159:1 161:3 162:11 164:13The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 205 167:5 170:11 171:3 181:15 **standards-case** 81:12,15 ,16,17 82:4 84:19 **standby** 91:21 95:11 ,17 96:2,18 99:7 ,13 109:1 149:16,16,18 156:12 **standpoint** 138:10 **stands** 180:4 **Stanonick** 26:22 27:1 ,1 **Stanonik** 3:6 34:11 34:13 43:1 ,2,2,7 43:15 45:1 ,13 ,13 54:13 ,14,14 67:16 67:17 ,17 75:5 ,6 76:21 92:18,18 101:22,22 134:3 ,4 140:2,3 142:11 ,11 143:7 ,14 145:8,8 153:20,21 ,21 170:10,10 **staring** 56:16 **start** 4:14 5:2 9:19 10:5 21:6 81:8,22 144:20 150:20 156:16 **started** 4:9 34:12 39:12 49:8 176:19 177:1 **starting** 66:12 79:20 **starts** 37:16 51:1 **Stas** 2:6 **state** 120:12,12 127:11 **stated** 28:10 143:16 **statement** 28:8 45:22 57:14 113:3 113:3 114:10 174:21 175:7 **statements** 8:14,17 44:16 **states** 103:4 111:20 112:7 **statistics** 13:20 28:21 29:1 **status** 169:8 171:14 **Stay** 14:15 **stays** 95:6 **steady** 55:6 57:1 ,4 **steel** 170:21 **steep** 78:10 **steeper** 106:16,17

**step** 32:22 33:15 98:9 115:21 180:2 **steps** 178:11 **Steve** 14:16,20,21 20:11 ,12 23:18 30:4 39:4 44:7 ,9 44:18 51:21 52:16 56:7 57:22 61:15 66:18,19 94:14,15 96:17 99:22 101:8 104:10 105:7 106:9 111:7 ,8 119:19,20 147:12 149:1 ,2 156:13 ,14 160:11 161:8 163:3 165:1 ,2 **Steven** 2:22 39:5 88:2 97:17 **sticky** 60:13 **stimulus** 104:15 ,16 105:1 106:2 **stock** 25:12 38:19 38:20 81:5 83:4,4 **stop** 51:5 **stopped** 5:18 45:9 **story** 69:3 **straight** 76:2 **strategy** 132:8 168:10 169:2 **stratify** 29:21 **stress** 33:21 41:5 **strolling** 185:14 **strong** 115:6 **strongly** 144:1 **structural** 180:10 **structure** 43:12 47:11 85:9 **studies** 23:1 ,21 163:10 **study** 11:9,12 15:16 15:18 16:18 17:14 17:15 23:13 ,13 31:17 59:4 61:4 62:2,11 ,21 64:14 64:15 65:4 117:8 **stuff** 7:3 159:4 171:11 174:10 183:20 **Stunder** 3:12 **subassemblies** 173:8 **subchapter** 183:1 **subgroup** 4:22 5:17 5:20 7:7 ,10 19:22 20:9 22:16,18 23:4

**subgroups** 128:10 **submit** 40:6,12 **subsequent** 36:20 **subset** 109:3 116:15 **substantial** 166:1 ,6 **substantially** 136:4 137:2 **succeeding** 55:8 **sufficiently** 6:7 **suggest** 7:20 11:22 26:15 101:8 116:3 116:9 119:15 **suggested** 12:10 26:20 **suggesting** 47:11 108:9 **sum** 14:8 **summarizes** 82:12 **summary** 14:1 171:14 177:21 **summertime** 120:7 **supplement** 131:11 **supplemental** 6:5 63:19 **supply** 11:5 12:12 12:15 ,18,21 13:12 25:15 ,16 26:11 ,13 26:14,19,21 **support** 19:17 30:16 33:2 41:8 96:19 120:11 163:8 **supporting** 23:13 23:16 **suppose** 132:22 **supposed** 27:15 102:6 **sure** 6:9,11 14:14 46:15 61:10 79:14 84:22 89:8 113:7 113:22 114:20 118:3 119:16 130:12 135:6 137:16,22 138:16 146:17 154:22 181:18 **survey** 50:6 52:18 61:7 ,8,11 116:6 118:8,20 119:13 **surveyed** 118:13 **SW** 1:7 **switch** 19:1 38:2 41:8 65:2,9 70:14 70:19,22 73:14 74:7 ,8,13 114:13 115:19 117:17 118:10,11 ,21

119:1 ,1 121:4,16 122:20 **switched** 61:4,6 65:12 66:10,10 70:14 73:5 112:2 **switches** 114:8 **switching** 18:17 20:5 ,6 36:13 40:1 41:13 ,17 42:3 ,5 ,9 44:16 51:2 55:18 55:20,21 56:22 57:16 59:11 60:11 61:3 ,9,14,15 62:3 62:16 63:2 64:21 64:22 65:8 66:22 67:3 ,10,21 68:19 70:7 71:19 72:5 72:17 ,21 73:14,20 74:2,8 112:22,22 113:2,10,17 114:11 ,11 115:7 115:15 116:6 117:6,9,10 118:5 118:8 119:12,15 124:13 ,14 125:3 126:3 ,10 130:15 156:21 166:8 179:14 180:5 **switchover** 55:3 **synergies** 146:7 ,13 **synergy** 145:18 **system** 14:17 47:22 48:1 58:19 63:20 63:21 67:8 171:3 171:5 174:16 **systems** 19:8 39:10 40:19,20 59:1 ,1 63:22 170:14,14 170:18 **T table**  55:20 82:12 113:19 117:14 126:14 132:22 147:15 149:3 165:14 174:17 178:14 179:8 **take** 5:1 6:10 13:15 25:7 32:10 33:14 40:8,10 43:9 69:7 79:12 102:11 110:7 111:9 129:13 144:7 148:16 152:22 154:9 155:3 169:2 177:19 178:3

180:2 **taken** 79:17 158:22 159:12 183:14 **takes** 124:22 125:2 **talk** 9:5 16:16 21:18 50:14 87:4 94:19 131:3 165:4 167:18 176:4 **talked** 5:16 15:1 16:13 53:16 90:15 117:8 141:15 157:18 160:5 182:1 ,2 **talking** 9:8 13:11 14:2 16:11 26:8 27:2,8 36:10,20 54:21 55:17 ,18 60:19 68:10 106:9 108:5 ,6 156:16 183:10 **tank** 61:22 **targets** 100:12 **tax** 59:2 75:11 78:12 100:11 ,11 104:14,19,21 105:9,12,13 ,14,22 106:1 ,4 **teardowns** 172:17 177:2 **technical** 5:11 19:17 30:16 76:3 96:19 120:11 163:8 **technically** 135:21 **technologies** 40:18 40:20 42:10,19 56:10 58:13 60:3 60:8 92:5 97:21 120:16 167:9 168:17 170:1 **technology** 40:1 67:7 97:11 ,22 98:6,7 ,14 113:9 114:8,17 ,17 120:14 **teed** 145:17 **teetering** 108:17 **tell** 10:4 16:8 45:16 45:20 46:6 59:6 61:14,22 62:4 93:8 107:4 183:13 **tells** 182:12 **ten** 166:17 **tenants** 12:4,7 ,9 14:3 17:16 26:9 **tend** 35:7 162:22The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 206 **tentative** 176:8 **term** 76:3 **terms** 30:15 ,22 49:1 50:21 51:3 ,11 53:15 ,20 62:3 ,5 75:13 77:13 81:21 86:9 88:11 97:14 99:1 ,12,16 104:22 128:15 146:2,3 151:13 160:14,16 163:11 165:6 172:14 **Terry** 96:5 ,12 153:4 153:12 **test** 151:21 152:4 175:7 ,9,14 176:2 176:4,5 **tested** 175:12 **testing** 145:19 176:3 **thank** 5:8 7:4 16:20 24:16,17 30:3 ,4 32:16,18 34:8 40:5 ,14 41:5 53:13 54:13 55:16 57:8,9,12 59:8 65:4,4 66:4,17 68:13 71:7 ,11 74:15 75:4 76:6 77:16 78:18,20 79:11 85:15 86:22 87:2 88:8,21 89:6 91:7 ,18 93:13 94:5 ,9,13 95:18 95:21 ,21 96:15 ,16 100:1 101:16,17 105:3 ,8 119:18 120:18 128:2 137:7 139:17 148:11 ,22 149:14 150:12 153:10 155:11 161:11 ,12 163:2 166:20,21 166:22 169:4 173:21 178:1 ,4 181:4,5 184:10 185:16 **thanks** 5:9 16:22 26:3 44:3 46:8 48:10 64:12 91:6 99:10 143:5 ,5 ,18 145:6 146:10 153:11 155:11 163:3 171:16 184:14,14 185:15 **Thats** 73:9 **theories** 58:10

**theory** 7:12,13 ,19 8:4,5 ,5 11:21 22:22 28:19 119:5 **thing** 10:19 20:14 30:22 54:15 73:7 108:2 113:6 117:5 119:16 137:3 169:8 182:6 **things** 7:14 10:5 22:19 24:13 27:2 27:4 41:9 58:22 65:2 68:17 ,18 103:10 135:8 139:14 142:12 145:21 ,21 146:3 151:5 154:3 ,6,18 154:21 160:5 169:20 178:11 179:1 ,12 182:9 **think** 6:6 7:2,19 8:6 9:10 14:9 16:9 17:20 18:22 19:22 22:14 23:2,3 ,12 23:14 25:22 32:4 32:12,14 33:8,10 35:7 41:7 46:3 ,16 50:7 54:16 55:6,8 55:11 57:5 ,20 59:12 60:8,9,11 60:12 64:20 65:14 66:2 70:19 71:1 ,5 72:8 73:7 75:11 76:18 77:7 ,9,13 78:14 91:2 101:7 103:21 105:13 107:3 ,4,10,16 109:17 110:8 116:19 117:11 ,13 123:11 ,22 125:4 126:13 130:4 133:21 137:9 139:19 141:13 142:6,7 144:21 145:16,16 149:21 153:19 154:10 165:15 169:6 170:7 171:13 ,18 176:6 178:10,22 179:3 180:2,7 ,11 180:19 181:19 183:10,14 184:11 184:16,18,20 **thinking** 9:7 33:9 41:9 47:10 59:20 60:16 61:15 85:14 179:20

**thinks** 46:5 **third** 84:13 120:14 133:10 **thought** 28:6 31:19 124:1 166:4 183:6 **thoughts** 26:7 **three** 11:3 36:8 37:13 51:18 69:9 69:12 84:7 86:16 86:16 87:9,10,12 87:17 91:4,4,5 92:2,10,15 93:9 94:3 99:14,16 129:3 ,9 131:13 132:9,15 135:19 136:3 137:14 140:11 ,18 143:12 143:22 144:2,16 146:19 149:4 156:11 163:21 **three-tier** 132:18 133:7 138:2 **threw** 169:13 **throw** 110:9 **thumb** 117:2 **Thursday** 157:13 **tier** 132:9 **tight** 16:7 **time** 6:9,21 7:7 13:12 14:18 21:7 21:11 ,19 23:15 24:2,5 29:20 32:5 34:2 35:11 37:21 39:22 43:12 47:14 47:20 49:16 50:11 52:14 56:20,21 57:2 59:11 60:6 60:10 61:5 62:11 64:21 72:2 84:17 85:1 86:19 93:22 94:3 ,4 104:20 108:5 ,13 110:6 112:18 119:9 120:8,10 127:6 133:21 145:22 160:9 167:12 178:5 ,6 179:9 180:20 182:2 **timeframe** 79:6 118:9 144:8 **times** 49:11 **timing** 146:8 **today** 4:6,13 5:19 7:21 15:21 32:8 32:13 33:6 110:22 116:1 117:4,4

119:4 121:4 128:5 130:5 ,19 131:5 138:7 147:3 ,7 160:17 165:17 168:19 169:20,21 170:19 **today's** 169:21 **told** 157:21 **tomorrow** 94:7 116:13 160:3 166:13 **tool** 93:17 128:15 **tools** 93:3 154:2 **top** 68:5 116:8 138:8,21 139:15 **top-down** 133:19 **topic** 80:12 118:15 167:20 184:16 **topics** 178:13 **total** 44:21 45:3 49:1 ,17 50:10 51:11 53:4 82:2,8 82:9 83:15 ,15 ,16 92:9,16,16 93:15 99:14 133:15 ,17 164:17 ,20 **totally** 67:4 106:15 126:19 158:5 **totals** 39:18,20 **touch** 179:12 182:10 **touched** 24:22 **touches** 148:21 **town** 155:17 **townhouses** 30:8 **tracking** 38:19 **trading** 162:19 **trajectory** 182:21 **transcribed** 103:22 **transcript** 6:20 **transparency** 155:2 178:15 ,16 **transparent** 154:15 179:4 181:9 184:20,22 **travel** 185:11 **traveling** 185:11 **treated** 9:14 **treats** 9:12 **trend** 94:2 148:3 ,5 159:11 **trending** 158:22 **trends** 158:22 159:15 160:4 **trial** 84:7 ,10,12 87:4 87:7 ,8 91:20 132:6 133:3 140:10,18 **tricky** 167:21 **tried** 139:19 **triple** 53:1 **trouble** 12:1 127:2 **troubles** 121:9 **true** 11:12 15:13 23:12 26:7 113:7 115:11 145:16 166:19 184:19 **trust** 44:18 **try** 11:1 ,2,3 26:1 33:9 43:19 61:13 62:15 80:6 112:13 125:4 163:14 169:9 171:15 **trying** 9:9 22:19,20 77:1 102:3 126:21 152:13 159:2 **TSD** 19:19 22:6 23:5 ,6 27:15 35:17 48:15 51:14 72:11 ,12 77:10 82:14 84:20 86:14 86:21 92:20 96:22 100:6 101:7 155:3 162:7 167:13 168:1 172:16 174:21 177:7 **TSL** 86:16,20 87:10 87:12,13 ,13 ,17 ,18 87:22 88:4 92:2 92:10,15 98:14,18 99:14,16 135:18 143:22 144:1 ,2,16 144:16 149:4 156:11 163:20 164:15 **TSLs** 91:22 **turbo** 63:20 **turn** 184:9 **turned** 166:4 **turning** 6:22 136:2 **turns** 179:22 **two** 13:2 37:16 48:17 52:9,15 60:3 63:16 76:10 80:16 83:19 84:6 84:12 87:9,19 89:14,18 92:14 98:1 ,18 120:4 124:18 125:14 129:7 135:8 ,14 137:10 140:4The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 207 142:13 144:11 ,15 145:5 146:21 159:5 ,6 160:7 164:5 167:17 168:6 179:1 184:15 **two-** 174:20 **two-stage** 174:17 175:5 ,8,15 176:22 177:3 **type** 36:16 48:1 97:8 108:16 164:19 170:20 174:16 **types** 25:21 39:22 103:10 151:9 154:17 177:14 **typical** 9:14 12:14 14:1 18:1 **typically** 85:3 ,4,8 85:10 120:6,9 **U U.C**  9:8 11:11 **U.S** 1:1 ,6 39:8,8,21 44:10 50:17 149:6 158:19 **UL** 168:13 170:2,22 **ultimately** 20:9 116:17 **unadulterated** 45:4 **unaffected** 113:18 **unavailable** 112:19 **unaware** 11:8 **underestimated** 166:16 **underestimating** 14:10 **underlying** 118:4 173:5 **underpinnings** 181:14 **underscore** 32:19 **underscores** 126:20 **understand** 34:1 60:2 65:16 72:16 72:19 91:17 104:7 113:8 121:2,11 125:5 126:8,22 127:20 129:1 139:10 172:1 179:10 185:6 **understandable** 79:6 **understanding** 68:4 90:6 103:22 113:11 134:10

**understands** 144:10 **understood** 118:3 **undertake** 147:7 **Unfortunately** 61:6 **unhidden** 155:1 **unique** 144:6 **unit** 82:17 83:15 ,16 83:16 137:5 150:1 **units** 25:15 81:5 175:1 **University** 16:13 90:17 ,18 **unmute** 6:17 **unmuted** 80:1 **unsympathetic** 27:18 **unwittingly** 74:22 **update** 163:15 170:8 **updating** 127:2 **upper** 132:16 133:7 **ups** 142:5 **upstream** 156:4 165:5 **urban** 13:9,13 64:4 **urge** 181:7 **use** 35:8 40:3 43:20 44:22 50:19,21 81:15 ,18,18 82:10 83:19 89:7 ,10,10 90:7 93:10 120:8 129:7 ,12 138:17 152:8,8 157:4,9 162:14 169:19 170:20 172:18 181:8,11 **useful** 4:11 **uses** 50:16 101:2 **usual** 26:19 **usually** 63:16,17 ,21 69:1 **utilities** 111:22 157:8,13 165:5 ,18 166:8 **utility** 28:1 102:13 105:16 109:17 ,18 111:11 ,17 ,20 158:12 164:10 165:7 ,8,17 ,20 **V V-20**  149:3 **valid** 176:10,14 179:19 **validate** 60:9 128:22

**validated** 129:10 **valuable** 60:18 62:2 179:5 **valuation** 167:9 **value** 25:4 80:19,21 80:22 81:21 82:11 82:17 92:13 99:16 100:21 128:19 133:2,12,22 140:17 143:12 150:9 **values** 49:15 ,17 94:1 127:3 133:5 154:5 161:21 162:8,11 ,13 163:6 163:17 ,21 **variable** 144:13 ,13 **variations** 97:21 **variety** 41:15 ,20 **various** 49:11 127:14 132:6 141:5 **vary** 47:5 93:21 125:14 **vastly** 91:3 **vent** 170:20,21 **vented** 69:3 **venting** 19:7 69:1 117:17 ,20 121:8 121:17 ,19 124:17 125:1 ,3 151:9 167:19,21 168:3 ,8 168:10,18,18 169:1 170:1 ,14,14 170:18 171:5 **vents** 168:14 **Vershaw** 108:20 **version** 35:16 100:8 **versus** 7:15 53:18 71:16 75:10 88:6 97:16 102:7 107:11 120:5 124:10,17 126:3 159:6 **vertically** 69:3 **vetted** 22:10 34:3 **Victor** 2:15 28:5 ,21 34:9 35:11 ,18 44:3 57:10 69:8,9 72:11 74:1 75:6 80:8,9 85:2 91:7 110:9 125:10 151:8,16 155:14 155:19 **view** 41:3 58:9,10 59:4,5 75:16

**viewing** 155:17 **vociferous** 165:15 **voluntary** 100:12 162:20 **Von** 3:13 **vortex** 157:8,11 **vortexes** 159:3 **W wait**  158:8 **walk** 8:3 132:22 173:11 **wall** 108:17 **want** 9:5 19:12,14 23:6 27:18 32:1 32:19 33:21 43:9 45:5 54:22 59:14 59:18 64:12 65:18 74:17 86:8 113:7 113:22 119:4,16 126:5 130:12 150:7 168:3 172:6 179:6 182:6,19 **wanted** 8:14 69:22 95:20 118:3 125:11 135:14 148:10 173:17 178:2 183:9 **wants** 153:13 **warranty** 139:9 **wash** 179:22 **Washington** 1:8 4:7 90:17 **wasn't** 71:14 78:10 105:9 106:15 112:14 125:18 143:8 **water** 31:12 **wattage** 95:19 **watts** 92:2 95:10,14 96:20,21 97:2,19 97:20 98:16,17 ,17 **way** 10:10 12:8 13:17 24:11 43:10 45:15 47:10 62:14 67:4,5 ,7 68:6 71:6 76:4,19 91:1 99:5 119:12 122:4 125:5 127:9 136:18 ,20 162:21 165:13 179:20 180:13 ,16 **ways** 126:22 178:9 **we'll** 8:1 43:22 51:5 89:19 115:21 118:2 130:20

142:2,6,7 147:21 154:9 155:3 169:2 173:18 185:6,6 **we're** 4:13 ,14 5:1 ,2 7:18 8:1 13:11 16:11 18:21 20:1 20:1 22:14 23:5 26:7 27:2,8,9,12 28:19 31:21 34:4 34:5 ,8 40:15 42:16 49:17 54:21 55:17 ,18,19 57:15 65:3 ,9,21 66:2 70:10 72:4,8,8 73:2,16 78:22 79:19 80:7 ,8 85:19 108:5 ,6 109:6,11 110:11 110:17 112:11 122:15 ,16 124:21 125:7 126:2,22 127:21 128:1 135:18 141:10,22 146:15 150:14 152:14,16 155:13 155:15 159:2,12 169:12 173:10 179:7 ,9 180:20 181:18 185:3 **we've** 7:12 27:14 31:18 33:6 49:11 50:18 69:11 71:15 89:14 104:5 110:13 124:21 126:21 130:11 ,15 131:5 141:1 148:3 168:2 172:18 ,19 172:22 173:1 ,2 178:10 179:2,7 181:2 184:16,18 **wear** 79:14 **weatherized** 37:2 **web** 6:14 **websites** 129:5 169:17 **weeds** 19:7 160:12 **week** 9:7 **weeks** 7:9,12 **weighed** 90:18 **weight** 103:14 104:1 **welcome** 4:4,17 6:14 45:14 152:19 153:17 173:15 176:12 177:14 **welcomes** 78:19The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 208 **welcoming** 4:14 **welfare** 108:18 **well-accepted** 181:16 **wellbeing** 119:7 **went** 5:15 41:7 43:3 59:12 65:2 92:4 104:13 106:13 110:16 123:14 126:17 151:8,16 157:9 **Wentzel** 3:13 **weren't** 39:22 **whatevers** 75:22 **white** 27:4 **wholesale** 56:14 **whoops** 31:5 **wide** 41:14,20 42:10 **widespread** 110:16 **Wiley** 2:16 **win** 7:10 **wind** 160:20 **winners** 24:12 87:15 **Winningham** 3:14 71:12 **winter** 56:17 **wintertime** 120:7 **wish** 8:19 23:19 24:17 57:22 58:10 59:4 69:13 156:15 172:3 **wishes** 6:5 **woman** 90:19 **wonder** 33:3 68:9 **wondering** 59:21 147:13 163:12 165:4 **wood** 19:5 ,5 41:9 58:22,22 61:16 63:15 64:2,10 **wood-fueled** 63:15 **work** 11:10 140:21 152:17 184:5 **worked** 111:10 **workers** 149:4 **working** 14:17 180:16 **works** 3:12 154:16 **worse** 26:10,10 90:13 118:22 122:5 140:9 **worst** 149:8 **worth** 44:18 111:17 **wouldn't** 15:5 47:4 154:19 **written** 23:15 40:6 67:13 153:15 161:9 **wrong** 46:7 110:9 169:9 **wrote** 136:7 **X X-13**  176:22 **X-13s** 177:4 **X13** 97:11 **Y yeah**  15:4,19,22 17:13 21:1 31:5 32:19 41:14 44:9 53:9 59:9 62:8 76:22 80:4 91:18 96:1 106:11 ,11 113:5 137:11 ,13 138:1 ,4,10 145:13 148:13 153:13 165:22 169:16 171:11 174:5 **year** 12:1 15:10,11 31:2 41:15 49:2 52:10 56:16,18,18 58:6 62:18 127:17 144:18 157:8,10 157:20,22 158:2 160:19 166:15 **year's** 158:2 **year-by-year** 38:20 **yearly** 39:18,19 83:4 **years** 32:3 39:11 ,17 42:12 43:17 44:1 45:8 46:19,19,21 52:18,20,21 55:8 55:14 67:3 75:12 75:18,22 76:1 ,22 79:7 89:16 90:10 106:2,14 135:9 136:3 163:13 166:17 **yield** 99:17 **yields** 87:14 **youd** 127:9 **Z zone**  40:19 **0 0**  86:18 **08** 79:5 **09** 75:13 79:5 **1**

**1** 86:18 99:18 101:11 133:12 141:10,11 150:1 **1,000** 106:2 **1.1** 141:11 **1.27** 137:18 **1.29** 138:3 **1.34** 137:18 **1.37** 138:3 **1.45** 138:3 **1.5** 52:9,15 ,19 53:11 **1:19** 185:17 **10** 67:2 79:5 ,13 82:14 84:20 86:2 87:1 150:1 **10%** 108:14 **10:52** 79:12,16 **100** 108:19 **1000** 1:7 **101** 12:13 **104** 102:1 109:15 **10th** 185:5 ,8 **11** 57:17 79:13 96:20 97:2 **11,000** 39:14 **11.7** 31:1 **11:14** 79:18 **1122** 160:20 **113** 153:9 **12** 75:13 **12866** 182:12 183:1 183:12,16 **13** 1:12 4:6 67:2 155:22 156:10 161:15 **13,000** 160:18 **14** 67:2 **14A** 162:7 **14B** 162:8 **15** 56:14 83:7 101:2 101:9,11 158:13 161:15 164:9,22 165:4 **15-year-old** 117:7 **155** 100:13 102:11 103:5 **16** 92:16 167:1 ,13 **17** 84:6 100:6,18 102:17 105:6 **171** 127:19 **18** 138:8 **19** 174:3 **1961** 49:9 **1971** 39:13 **1972** 49:11 **1990** 157:2,4 163:11

**1992** 108:4 **1998** 166:15 **1A** 126:13 183:1 **2 2**  50:9 **2,000** 121:22 **2,200** 160:20 **2,692** 149:5 ,5 **2.25** 92:11 **2.70** 57:1 **2.78** 92:12 **20** 29:1 ,4,8,14,15 30:6 57:16 75:18 75:22 76:1 79:6 113:1 163:13 **200** 106:1 **2000** 61:6 106:17 157:17 **2002** 61:6 **2003** 129:18 **2004** 52:20 163:11 **2005** 39:12,13 49:11 49:14 52:20 56:13 **2006** 52:20 163:6 **2007** 129:20 **2008** 58:6 106:12,17 129:18 **2009** 38:8 46:2 49:6 49:15 ,19 50:19 **2010** 75:16,17 **2011** 89:3 ,5 91:15 126:14 127:14,18 129:16 **2012** 49:9,19 **2013** 38:8 52:21 129:20 157:4 **2014** 37:17 38:21 50:22 52:7 83:12 83:14 93:22 116:7 118:9 156:7 160:1 164:15 174:22 **2015** 1:12 4:6,10 94:6 127:15 ,19 160:3 163:15 166:14 **2017** 52:2,4 53:2 **2019** 135:9 144:8 175:1 ,20 **2020** 149:4,6 **2021** 36:7 54:3 80:15 81:5 84:3 110:2,10,12 144:8 **2050** 36:7 51:19 80:15 81:5 110:2 158:15

**20585** 1:8 **210** 149:5 ,12 **22** 140:8 **23** 84:6 **236** 126:18 ,18 127:19 **238** 112:21 **25** 38:11 **26** 99:15 **27th** 4:9 **3 3**  50:9 69:17 77:10 77:15 83:20 89:14 89:17 92:14,15 97:19 107:7 ,8,14 163:21 **3-percent** 99:17 **3.1** 92:17 **3.3** 99:17 **30** 102:12 **30-year** 36:6 80:16 99:19,21 **305** 112:22 **34.72** 174:20 175:4 175:12 **35** 157:5 **4 4**  50:10 89:12 **40** 29:5 ,7 ,13 30:7 ,10 30:11 ,17 102:20 104:13 **400** 141:9 **4318** 160:21 **471** 160:21 **5 5**  84:5 86:19 89:12 97:20 107:3 133:18 134:1 174:17 **5,000** 37:6 121:21 **5.4.3** 174:18 **50** 38:12 39:1 100:15 105:19 158:14,18 **50/50** 97:15 **51** 157:16 **55** 84:5 **569,000** 52:22 **57,000** 39:15 **6 6**  153:5The Energy Conservation Standards for Residential Furnaces April 13, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509 Page 209 **6.4** 89:2 91:16 130:4 **60** 13:21 29:6,8,15 103:6,8 104:14 135:17 **60/40** 97:17 ,18 **65** 100:14 **67.5** 38:22 43:5 **67.7** 38:22 **69** 75:10 104:16 **7 7**  83:20 87:14 89:14 89:17 92:15 ,16 107:3 ,7 ,14 129:22 163:22 **7-percent** 99:18 **7,000** 121:20 **7.5** 38:8 **75** 140:20 **77** 99:15 **78%-AFUE** 116:12 **8 8**  89:3 90:2 91:15 97:4 108:2 **8.2** 120:14 **8.3** 31:1 **8.5** 95:10,14 96:21 120:15 **8.7** 98:17 **80** 21:6 29:9,12 87:20 88:1 112:20 112:20 125:17 ,20 135:19 138:8 140:5 ,15 141:11 157:7 158:1 **80%** 116:13 121:17 143:9 **800** 100:15 105:20 **83** 30:17 34:6,13 **87** 126:18 127:18 **8E-089** 1:9 **8I** 66:8 **9 9**  37:5 ,6 120:15 **9,800** 160:20 **9.0** 98:17 **9.2** 96:21 **9.5** 96:21 98:15 **9:00** 1:14 **9:30** 4:2 **90** 85:20,22 86:3 87:22 88:13 103:15 ,15 140:4 **90-percent** 104:2 126:16 127:17

**90%** 104:4,6 110:21 116:13 **91%** 88:14 **92** 57:19 86:1 ,3 ,5 87:17 88:12 96:13 103:16 113:10 **92-percent** 54:2 114:3 141:13 **92%** 88:17 104:5 110:21 116:13 142:16,19 143:9 **92s** 34:21 143:13 **95** 87:19 139:22 **95-percent** 85:6 103:18 **95%** 104:6 116:14 121:19 142:13 ,17 142:17 ,22 **95s** 34:21 **98** 86:11 ,15 138:8 **98%** 110:21 116:14 142:20 **99** 95:9 98:15 **9B** 51:14

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