## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 1 CUAC/CWAF ASRAC Working Group Meeting

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Thursday, May 21, 2015

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Department of Energy 950 L'Enfant Plaza 7th Floor Washington, D.C. 20585

AUDIO TRANSCRIBED BY KYLIE S. SHEPHERD

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 2 1 A P P E A R A N C E S 2 Edward D. Bantle 3 James Battaglia 4 Pete Cochran 5 Katie Coughlin 6 John Cymbalsky 7 Adam Darmington 8 Andrew deLaski 9 Jeff del Toro 10 Paul L. Doppel 11 Chandara Gollapudi 12 Eileen Barkas Hoffman 13 Jill C. Hootman 14 Marshall Hunt 15 John Hurst 16 Christopher Lau 17 Michael J. McCabe 18 Charlie McCrudden 19 Karen Meyers 20 Nicholas Mislak 21 Mike Ray 22 Greg Rosenquist

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 3 1 A P P E A R A N C E S (Continued) 2 Harvey Sachs, Ph.D. 3 Michael E. Shows - via webinar 4 Louis Starr 5 Mark Terzigni 6 Rusty Tharp 7 Meg Waltner - via webinar 8 Detlef Westphalen 9 Robert J. Whitwell 10 Alison Williams 11 Linda Wilson 12 Dave Winningham 13 Xing Xu 14 Sami Zendah 15 16 17 18 19 20 21 22

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 4 1 P R O C E E D I N G S 2 MR. BANTLE: Okay. Good morning, everybody. 3 Ted Bantle from FMCS. 4 We'll get started now. We do have quorum at 12 5 people. So the first thing we'll do as always is we'll 6 take attendance. We're a little comfortable in this 7 room, so let's do the main table first, and then we'll do 8 the working group members to my left, and then we can do 9 the Navigant and the DOE individuals. 10 So I'll start off: Ted Bantle from FMCS. 11 MR. CYMBALSKY: John Cymbalsky, DOE. 12 MS. WALTNER: Meg Waltner, NRDC. 13 MR. SHOWS: Mike Shows, UL. 14 MR. THARP: Rusty Tharp with Goodman. 15 MR. WINNINGHAM: Dave Winningham, Allied Air. 16 MR. HUNT: Marshall Hunt, Pacific Gas and 17 Electric. 18 MR. WHITWELL: Bob Whitwell, Carrier. 19 MR. DOPPEL: Paul Doppel, Mitsubishi Electric. 20 MS. MEYERS: Karen Meyers, Rheem. 21 MR. SACHS: Harvey Sachs, ACEEE. 22 MS. HOOTMAN: Jill Hootman, Trane.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 5 1 MR. ZENDAH: Sami Zendah of Emerson. 2 MR. McCABE: Michael McCabe, consultant to 3 Trane. 4 MR. HURST: John Hurst, Lennox. 5 MR. COCHRAN: Pete Cochran, DOE. 6 MR. BATTAGLIA: James Battaglia, Navigant. 7 MR. WESTPHALEN: Detlef Westphalen, Navigant. 8 MS. COUGHLIN: Katie Coughlin, Lawrence Berkeley 9 Lab. 10 MR. ROSENQUIST: Greg Rosenquist, LBNL. 11 MR. BANTLE: Jeremiah, anybody on the webinar? 12 MALE SPEAKER: Charlie McCrudden actually just 13 joined, but I (inaudible). 14 MR. BANTLE: Okay. Thank you. Good morning, 15 Charlie. 16 MR. McCRUDDEN: Good morning. Can you hear me? 17 MR. BANTLE: Yeah. 18 FEMALE SPEAKER: Sure can. 19 MALE SPEAKER: Pretty good. 20 MR. McCRUDDEN: All right. Well, I'll be there 21 soon. I'm in my car. 22 MR. BANTLE: No problem. Thank you.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 6 1 Anybody else, Jeremiah? 2 MALE SPEAKER: We have Christopher Lau, Jeff del 3 Toro, Linda Wilson, and Mike Ray. 4 MR. BANTLE: Okay. Thank you. You want to 5 start with any comments? 6 MR. CYMBALSKY: Yeah. There's no mics like 7 usual in the room, so some of us have loud voices, some 8 of us don't, but I think if we all speak to this volume, 9 he'll pick it up and the webinar will pick us up. 10 MR. BANTLE: There are some mics. 11 MR. CYMBALSKY: There are? Oh, there are. 12 Okay. But not the usual, you know, hit the button kind 13 of mic. So just try to speak loud so everyone can hear 14 you. 15 So yesterday I think we made really good 16 progress. We voted a few things out in terms of the 17 analysis. We have one last piece to go through, which is 18 the shipments, but before we dive into that, we figured 19 is there any other issue from yesterday people slept on 20 and feel they need to discuss before we head into 21 shipments? 22 We had three more members walk through the door

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 7 1 and another facilitator, so we're going to let them get 2 settled and introduce themselves before we turn it over 3 to Katie for the shipments. 4 MR. WHITWELL: I think, John -- this is Bob 5 Whitwell with Carrier. So this may fall into the 6 category of things like, does it really matter or not, I 7 don't know, but just reflecting back on the discussions 8 of the diffusers. 9 One of -- one of -- actually, it was Jim del 10 Toro who's on the phone -- took a look at that study and 11 found that while at -- the study said that it's 65 12 degrees supply air temperature, all the diffusers worked 13 okay down to a certain level. 14 At 55, there were a couple of those diffusers 15 that were not acceptable according to the criteria that 16 was set in the report. And BAB equipment typically does 17 run at 55-degree supply air temperature. 18 So it's just a -- not sure that we can -- you 19 know, that we can say that all BAB equipment or all 20 constant volume buildings can work with BAB equipment 21 without having the diffusers replaced. Okay. So that's 22 a question in my mind.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 8 1 The other thing, I'm still looking at the 2 mapping equipment design to CAV and BAB building slides. 3 And it's not clear to me -- there's some CAV buildings 4 that are listed as having SAV designs in there, and in 5 our definitions that we had talked about earlier -- and I 6 think that we had set -- SAV would run down to 60 or 66 7 percent of full load. And yesterday -- and then the BAB 8 can run down farther. 9 Yesterday, Greg, you talked about some of those 10 SAV designs that are running down lower than the 11 60 percent. So again, it's just a little unclear to me 12 whether, you know, should we be looking at those? I 13 mean, we're talking about SAB designs that are running 14 down lower. Are those really BAB designs and have we 15 characterized the cost properly? 16 So, again, I don't know whether this is going to 17 make a big issue. I just, you know, it's just one of the 18 things that I noticed after looking at it some more last 19 night. 20 MR. ROSENQUIST: I can comment on that just for 21 some clarification that for seven-and-a-half tons, none 22 of the equipment designs got below 67 percent staged

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 9 1 airflow, so just want to clarify that. On 15 tons, only 2 EL-4 went to a staged airflow that was below 60 percent, 3 it got -- 4 MR. WHITWELL: And I think it was 40 percent you 5 said yesterday. 6 MR. ROSENQUIST: 40 percent for EL-4. EL-5 7 actually had a variable compressor that only went down to 8 67 percent. 9 MR. McCRUDDEN: The statements in the EL-4. So 10 let's -- 167, 40. 11 MR. ROSENQUIST: 160. And then for 30 tons, 12 anything that's BAV -- well, actually really doesn't 13 matter because you have a constant air value equipment 14 design at EL-2.5. 15 But at EL-3, that's a variable air volume you 16 have which gets airflow down to, I think, 25 percentage 17 or something like that. 18 So this is information really that I think the 19 design -- I mean, the efficiency levels that are relevant 20 here are EL-4 for seven-and-a-half tons, and then EL-3 21 for -- EL-4 for 15 tons, and EL-3 and beyond for 30 tons. 22 MR. WHITWELL: Right. That's why I say I don't

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 10 1 know whether it's a big -- how much it's going to impact 2 us because there's only a few that have this case where 3 maybe there should be some additional cost data for 4 diffuser tank. Which -- I mean, it could be substantial. 5 I think it's in the order of several thousand dollars; 6 right? 7 MR. ROSENQUIST: Yeah. 8 MR. WHITWELL: So again, just something that we 9 may need to come back to. It depends on how things go 10 moving forward. 11 MR. WESTPHALEN: I was just going to say, like 12 for those units where we're talking about the three 13 stages of airflow, that's the one that went down to the 14 40 percent. We would have included additional costs 15 within the equipment cost. 16 MR. WHITWELL: For the control? 17 MR. WESTPHALEN: For the control. 18 MR. WHITWELL: So you really have included the 19 cost for like a BAV unit, but it doesn't have the 20 diffusers? 21 MR. WESTPHALEN: I think you're talking about 22 the down -- the field installation costs.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 11 1 MR. WHITWELL: Yes, yes. So we're missing that 2 extra field installation cost for the diffusers there. 3 MR. STARR: This is Louis with NEEA. So one 4 thing to note on the supply air temperature, it has three 5 stages. So typically the discharge air as you stage down 6 to lower airflows, your air temperature is no longer 55. 7 It's not 65 -- I'll agree with that -- but it stages down 8 to a lower temperature. 9 But that's actually kind of a question I was 10 asking yesterday with the manufacturers is at those 11 different stages in your three-stage equipment of 167 -- 12 well, and actually is this even three-stage equipment 13 within the BAB system or it's the 167 and 40 percent that 14 we're talking about possibly having diffusers with; is 15 that correct? 16 MR. ROSENQUIST: Yeah. We are working under the 17 assumption the previous week that any time you get below 18 60 percent, you're at a place where that diffuser 19 wouldn't be able to accommodate -- 20 MR. STARR: So if the manufacturers knew what 21 the discharge air temperatures were off that equipment. 22 That equipment typically -- whoever has that three-stage

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 12 1 equipment, that would help you understand? Because if 2 the discharge air -- I don't think it's at 55, I'm pretty 3 sure that at light load, you typically want to -- you set 4 your air temperature up because you have a lighter load 5 at your design flow when you have, you know, it's 100 6 degrees outside and you produce 55 air. Whether that is 7 a stage up, it typically stage up to warmer air such that 8 the air coming out of the diffuser is not, you know, 9 super cold and it's going to dump. 10 But that would be something -- kind of something 11 to think about there. So what the manufacturer could do 12 is look at their units and see what their typical 13 discharge air temperature is and see how that matches up 14 with the study. 15 MR. BANTLE: Just because I think we did have 16 four working group members join us in the room and one 17 facilitator, if you could all introduce yourselves just 18 for the record. While we -- those who just joined? 19 MR. MISLAK: Nick Mislak, AHRI. 20 MR. deLASKI: Andrew deLaski, Appliance 21 Standards Awareness Project. 22 MR. STARR: Louis Starr with NEEA.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 13 1 MR. TERZIGNI: Mark Terzigni with SMACNA. 2 MS. HOFFMAN: And Eileen Hoffman, the 3 facilitator. 4 MR. BANTLE: Okay. Thank you. 5 We'll turn it back over to John. One thing I do 6 want to just remind everybody, we don't have the sight 7 lines like we did in the last room, so please state your 8 name before you speak. 9 We did have a few open items that we tabled 10 yesterday, so let's keep those on your mind and we'll get 11 back to that. 12 MR. CYMBALSKY: Okay. So I think we're going to 13 dive into the shipments, and we'll turn it over to Katie 14 to go through that. I think this is -- 15 MALE SPEAKER: Yeah, this is your -- would you 16 like a chair? 17 MS. COUGHLIN: Yeah, I think so. Thank you. 18 Okay. Shipments analysis. So here's the 19 chevron diagram showing the shipments. So this is -- we 20 take the energy use, essentially the operating cost and 21 installation cost out of the -- essentially it goes 22 through the LCC and into the shipments, and this

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 14 1 determines any changes that might occur under a standard. 2 Shipments are then input in the National Input Analysis 3 and then also into the Manufacturer Impact Analysis. 4 So the basic concept with the shipments model -- 5 this is just a review to wake everybody up -- the goal 6 here is to estimate the shipments over the 30-year 7 analysis period and figure out: What is the impact on 8 shipments of the standard? 9 So there's two changes that occur. One is there 10 may be a change in total shipments because of a price 11 increase. And the second one is that the actual units 12 shipped change in efficiency because of the post 13 standard. So those few things are fed into the National 14 Impact Analysis to determine the overall costs and 15 benefits associated with a pro standard. 16 So for this product, we use a stock accounting 17 model to track shipments. So we try to build a picture 18 of the commercial building population, how many units are 19 in that population, and watch the turnover of the stock, 20 and how that -- new shipments coming in are changed by 21 the standard. 22 So there's a change here from the NOPR. So we

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 15 1 went through with the NOPR analysis in an attempt to 2 explicitly calculate this repair/replace decision, and 3 I'll get into this more later. But for now, I just want 4 to say that, overall, the problem there is that you end 5 up with -- because the data quality is not good, you 6 really cannot parameterize the decision correctly so you 7 end up with something that's extremely sensitive to small 8 changes in price. That's the only thing you can sort of 9 match the data, and the data are not that good to begin 10 with. 11 So for this version of the analysis, it's not a 12 different conceptual model, it's sort of a different 13 implementation. But we're just reverting to something 14 that's much simpler and more transparent where we just do 15 the shipments change based on a price elasticity. So I 16 will get into that a little more. 17 So essentially what this means is that you look 18 at a price increase and you say, "Okay. There's a 19 certain fraction of the population that are not going to 20 be willing to pay that price." And implicitly, we assume 21 that instead of buying a new unit, that's a repair. So 22 the overall saturation does not change.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 16 1 So I'm going to go through a little bit of the 2 mechanics because I -- I mean, I sense that people are 3 trying to understand how the shipments model are affected 4 by the lifetime and that sort of thing. So I'm going to 5 go through a little bit of that because there's really 6 just a couple of points you need to know. 7 So the first thing is that the total equipment 8 stock is just defined essentially as a saturation 9 parameter times the floor space. So that saturation is a 10 key parameter. And when we do the shipments modeling, 11 what we're trying to do is build up this picture of total 12 equipment stock for each equipment class is in each year 13 of the analysis, we have that stock and it's distributed 14 across a bunch of age categories. 15 So that's our variable, "U," is a function of 16 the year, "Y," and the age, "A." And in each year we add 17 a new branch to the stock, which is the age zero, which 18 is the shipments. And then as we go through the model, 19 we retire units and add new units. 20 So we can separate the shipments into three 21 channels: There's the new installations that go into new 22 buildings, there's the -- what we call existing buildings

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 17 1 installation, so new units going into existing buildings, 2 this only occurs if the saturation is changing over time. 3 And there's the replacement installations where you have 4 a unit in the building that is broken and it's going to 5 be replaced. 6 And when we try -- when we do the calculation of 7 the replacement stock, we use this Weibull Distribution 8 to figure out -- so the Weibull tells you, "What's the 9 probability of a unit failing at exhibit age?" So we 10 just use that times the stock distributed across ages to 11 count up the number of broken units. 12 So this is -- let's see -- I actually have a 13 picture of a Weibull Distribution just because. Because 14 I know, again -- I mean, our lifetime -- our mean 15 lifetime is fairly long, but I wanted to emphasize that 16 the Weibull Distribution is actually pretty wide. 17 So what I have here is the -- this is the 18 probability distribution function associated with the 19 Weibull. So this is essentially the probability of 20 failure as a function of the unit age. And over here, 21 this is the cumulative distribution functions. This is 22 just fraction units that fail as a function of age.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 18 1 And with the parameters we're using now, we 2 have -- you can see here, this is the cumulative 3 distribution is the function of the age on the X axis. 4 So we have 22 percent of the stock failing by age 12. So 5 even though their median lifetime is quite high, we still 6 have -- because this distribution is sort of fat, we have 7 a fair amount of stock turnover even at earlier ages. 8 And the two parameters that define this distribution are 9 the scale parameter and the shape parameter. 10 So the shape parameter actually determines the 11 shape here. And the scale parameter, you can think of it 12 as just -- if I change the scale parameter, I'm just 13 going to change the scale of the axis; doesn't change the 14 shape. So it can move this in or out. And if I go and 15 change the shape parameter here, if I make it smaller, I 16 get a fatter distribution; if I make it larger, I get a 17 skinnier distribution. 18 So there is a -- you know, there's sort of some 19 data on component failure, things like compressors and 20 valves and those sorts of things. And well, you can look 21 at some information on these shape parameters, but 22 there's nothing, you know, specific to air conditioning.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 19 1 So we use the compressor failure, which is about 2, for 2 the shape parameter as our shape here. 3 MR. STARR: So this is Louis Starr of NEEA. So 4 what -- does the .03, does that mean anything in the 5 physical -- 6 MS. COUGHLIN: .03? 7 MR. STARR: Yeah, on your PDF. Yeah, that .03 8 doesn't practically mean anything. So .03 at 10 years or 9 12 years, does that have anything to do with the mean or 10 is that just -- it's not related at all? 11 MS. COUGHLIN: No, it's not really -- I mean, 12 this is just normalized so that the area under the curve 13 is 1. So that's -- 14 MR. STARR: So the Y axis is just the fact that 15 the shapes -- it basically changes the shape of the 16 curve, but it doesn't have any relation to something that 17 exists in reality necessarily? 18 MS. COUGHLIN: Well, this you would give you, 19 you know, if you add exactly 10 years, this was roughly 3 20 percent of the units would fail in exactly 10 years. 21 MR. STARR: Okay. That's what I was looking 22 for.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 20 1 MS. COUGHLIN: And that's what this kind of 2 says. 3 MR. SACHS: This is Harvey. And the other thing 4 I just wanted to call out is on the data table to the far 5 left, the median unit is lasting somewhere between 16.8 6 and 19.2 years, and that's an illustrative data point if 7 I'm reading your data tables right. 8 MS. COUGHLIN: You mean you're looking at where 9 this crosses 50 percent? Is that what you're looking at? 10 MR. SACHS: Well, actually, I was looking at the 11 data table as well on the graph. So we get a .44 at 16.8 12 years, assuming that (coughing) is age. 13 MS. COUGHLIN: Yeah. So yeah, but this is not 14 the parameters -- I'm just changing the parameters to 15 show you what this thing looks like. This is not 16 actually the parameters that we have in the current -- 17 MR. SACHS: Oh, okay. 18 MS. COUGHLIN: So this is just to give you kind 19 of an intuitive sense of how this works, right. So you 20 change the shape parameter, you'll get the same median, 21 just going to make a distribution even fatter, you're 22 going to get more units failing across.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 21 1 Or we can -- and then as I was saying, if I go 2 over here and change the scale parameter, it just -- 3 essentially everything looks the same, but you rewrite 4 the numbers on the -- essentially on those axes. 5 So we have -- I will show you what we have for 6 parameters and why we have them, and then we can kind of 7 talk about it, you know. 8 MR. STARR: One last question. So this is Louis 9 with NEEA. 10 So -- so I don't know that much about 11 statistics. So the Weibull Distribution, why are you 12 choosing that one as a typical failure mode for -- 13 MS. COUGHLIN: It is the standard distribution 14 for mechanical failure, yeah. I'm not entirely sure why, 15 but that's the sort of -- 16 MR. SACHS: Katie, this is Harvey. And I think 17 it comes out of mortality studies for people. I'm not 18 positive of that, but that's my memory. 19 MR. CYMBALSKY: Sounds deadly. 20 MR. SACHS: And Joe has just confirmed it. 21 MS. COUGHLIN: Yeah. 22 MS. MEYERS: So you said the shape you're

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 22 1 matching is based on data of the failures on 2 your choosing the -- 3 MS. COUGHLIN: There's a compilation that I 4 found on the web for shape parameters for different 5 things. And really, we know it's either 1 or 2 or 1.5 or 6 whatever. And (coughing) small things like valves and 7 that sort of thing, it tends to be 1. And for larger 8 things: Pumps, compressors, that sort of thing, tends to 9 be 2. 10 MR. CYMBALSKY: And min and max, where did that 11 come from? I might have missed it. 12 MS. COUGHLIN: The min and max, well -- 13 MR. CYMBALSKY: Well, do you set a maximum? I 14 noticed the 6 is always there (inaudible). 15 MS. COUGHLIN: Oh, that's just for my plot. 16 Actually, what we do in the shipments model is we cut it 17 off at 40. So you have this long tail here that we just 18 cutoff, we figure, at 40 is the economic lifetime that we 19 would impose. 20 But yeah, this thing has a very long tail. It 21 essentially goes out arbitrarily large, and so 22 practically we just put it in an economic lifetime

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 23 1 cutoff. I think it's 40, yeah. It's -- so that's on 2 here. 3 So again, this just repeats what I said earlier. 4 So we have these three channels: New installations, 5 existing buildings, and replacements. New installations 6 is just a market saturation parameter times new floor 7 space. So when we take the new floor space projection 8 out of the EO, existing buildings getting new units is a 9 change in saturation. If a saturation is constant -- 10 which it pretty much is in our analysis period -- then 11 this is a very small component of the shipments. 12 And then we have the replacement installations 13 which we calculate by looking at the broken stock, 14 multiplying by this probability which is equal to the 15 failure at age A times the stock distributed across the 16 ages. So the total broken stock is, you know, not 17 necessarily at 100 percent replaced; some fraction of it 18 will be repaired. 19 So there's no way with the existing data to 20 figure out what we call the background repair rate in the 21 base-case. You just match to the actual shipments, that 22 includes the fact that some people are going to be

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 24 1 repairing their units when they break. 2 But when you go to the standards case we use the 3 price elasticity to get the drop in shipments, and that 4 kind of looks -- that picks out the extra repairs that 5 are occurring purely because of the price increase. 6 So there's a difference between the economic 7 lifetime that you get from matching the shipments and 8 just the failure rate. The economic lifetime includes 9 this kind of background repair. And again, in the NOPR, 10 we try to separate those out and it's basically -- just 11 doesn't really work. 12 MR. SACHS: Katie, this is Harvey. And 13 conceptually, it seems to be a fourth term that's not up 14 there, I don't think. And that's the -- and you may have 15 it as a negative in your second term -- but that's the 16 demolition of significant parts to this stock, 17 particularly in this strip mall type. 18 MS. COUGHLIN: Yeah, we have them in the model. 19 I just didn't -- yeah. But, yes, we take the demolitions 20 out of the floor space. 21 MR. WHITWELL: So does that include what Joel 22 spoke about yesterday where a building owner

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 25 1 would completely -- Bob Whitwell from Carrier -- would 2 completely renovate their building, redo the roof, and 3 replace all the equipment on the roof? Is that included 4 in here somehow? 5 MS. COUGHLIN: That's a replacement, 6 essentially. So we don't really look at -- I mean, 7 again, we're calibrating to total shipments. So if 8 that's in the total shipments, that's implicitly included 9 here. 10 And so when I say we use a price elasticity to 11 estimate the shipments changed, the little expression on 12 the red there, essentially that just means that the 13 relative change in shipments is equal to this elasticity 14 time, the relative change in price. 15 And this, again, if you do all the arithmetic, 16 this is consistent with the more formal low jet model, 17 it's just a similar representation of it. Let's just -- 18 let's see -- look at the calibration process. So we have 19 the data that we submitted for the 2005 rule which gives 20 us historic shipments from 1980 to 2001. 21 MR. SACHS: Katie, excuse me, please, on that 22 page before I miss something. Harvey Sachs. P, delta P

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 26 1 over P. P is the price? 2 MS. COUGHLIN: Yeah, it's actually the total 3 install cost, yes. 4 MR. SACHS: Thank you. 5 MS. COUGHLIN: So we have added the data 6 submitted by AHRI, too, with the economic census to 7 create sort of a long historical series. And the reason 8 why we need this -- we want to have a reasonably good 9 distribution of the stock as a function of age in the 10 start year of our analysis. 11 So we try to sort of go back in time and look at 12 the historic shipments coming in while the market 13 saturation is actually growing over time. So that -- and 14 that's where -- that's essentially the calibration 15 process where we try to fit the cumulative shipments in 16 the model to what's in the data. And that's where the 17 plots are that we will get to. 18 And again, in a very general sense, when you fit 19 this distribution of lifetimes, you know, the most 20 important kind of numerical factor is that the total 21 shipments is proportional to one over the lifetime. 22 Right?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 27 1 You can imagine, if I take the lifetime, it was 2 20 years and I make it 10 years, I'm going to have to 3 increase the shipments all other things being equal 4 because more things are being broken and need to be 5 replaced. So overall, the shipments are proportional to 6 the market saturation and they're proportional to one 7 over the lifetime, and everything else is kind of minor. 8 Those two parameters really are what dominate the fitting 9 process. 10 So the market saturations, we take them out of 11 the CBECS surveys. They gave us an estimate of the floor 12 space that is cooled by packaged equipment, then we have 13 to kind of do some inference to figure out how much of 14 that packaged equipment is covered by the rule and then 15 distribute that across the size categories. So it's not 16 the most precise calculation. 17 MR. STARR: So this is Louis Starr of NEEA. So 18 the saturation is giving you the number of units out 19 there that are installed. Is that what that's doing? 20 MS. COUGHLIN: Yeah, it's sort of giving you the 21 potential market for this type of equipment. 22 MR. STARR: Okay. And then you know the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 28 1 lifetime, and so then you know you have to replace that 2 group of units so often based upon the lifetime that sets 3 up the shipments per year that you have to do in order to 4 meet that quantity. And then you add on probably with a 5 EO, your predicted growth of maybe new units into that 6 market. In other words, they build new markets, new 7 populations. 8 MS. COUGHLIN: Right. And there's a sort of -- 9 for any equipment, there's a limited potential market 10 penetration, just -- very large buildings won't use 11 certain types of equipment. That sort of thing. 12 MR. STARR: Okay. 13 MS. COUGHLIN: So the saturation also tells you 14 kind of what's the upper bound -- 15 MR. WHITWELL: So Katie -- sorry, you probably 16 said this and I just missed it. But the saturation is 17 really the number of buildings that have -- that are 18 conditioned; right? It's a -- the floor space of the 19 building -- 20 MS. COUGHLIN: Right, we do the floor space. 21 And it's specifically by packaged equipment. 22 MR. WHITWELL: By packaged equipment.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 29 1 MS. COUGHLIN: Yeah. And this also includes 2 heat pumps. You know, when we do this model we have to 3 put everything in the floor space. And again, CBECS has 4 information on which buildings have this type of 5 equipment, but it's not that precise. So in terms of the 6 calibration, it's a sort of -- we jointly estimate both 7 the saturation and the lifetime. 8 So if the lifetime is too short or too long, it 9 means the saturation is too high or too low; they kind of 10 go together. So there's a bound on how much we want 11 to -- we can sort of change the lifetime. Because then 12 if you push the saturation too far away from what's in 13 CBECS, it's not credible. 14 But the other point I want to make is that even 15 if both parameters are not quite right, we match the 16 shipments. And since you're always matching the data, 17 the projection of future shipments is pretty stable. So 18 that's -- 19 MR. SACHS: If I could ask another question -- 20 Harvey Sachs. If I think back -- and I can't remember 21 the granularity of the CBECS that worked with the old 22 CBECS -- but seems to me which I think back to the air

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 30 1 conditioning a quarter century ago, it seemed to be a lot 2 of offices that were using new air conditioners, a lot of 3 buildings that were using perhaps more than we have today 4 using ptacks. So it seemed -- I feel there's been a 5 shift toward RTUs. And within that, a shift toward a 6 higher fraction of much larger RTUs. 7 And I'm not sure about that, but the real 8 question is whether the granularity of CBECS allows us to 9 see the actual trends from the RTUs that are a topic here 10 as opposed to all this other noise. You mentioned that 11 we have -- 12 MS. COUGHLIN: No, not really. That's why we 13 actually try to calibrate, too, the saturation and rather 14 than just fixing at a CBECS value. Because CBECS 15 distinguishes packaged equipment from, say, roomier or 16 residential style or chillers, but it does not subdivide 17 packaged equipment any further. 18 MR. SACHS: But that's not full as is. Not 19 throwing the ptacks and room air conditioners and water 20 source heat pumps are still a pretty small thing. 21 MS. COUGHLIN: Right, heat pumps are a separate 22 category as well, so yeah.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 31 1 MR. SACHS: Thank you. 2 MS. COUGHLIN: So I have some output -- so this 3 is now we're talking -- this is the current model. And 4 we have here, the upper graph is the shipments, and the 5 lower graph is the cumulative shipments. 6 So again, because of all of the -- there's a lot 7 of wiggles in the data due to construction booms and that 8 sort of thing. And we're, for the purposes of 9 projecting, it's better to try to match a smooth signal. 10 So that's why we actually calibrate to the cumulative 11 shipments, which is the lower graph. And as you can see, 12 the fit is really very good. 13 And as I was saying, you know, if we want to 14 change the lifetime -- and I'm not saying that we 15 shouldn't, you know, because I think it's likely that the 16 saturations are somewhat overestimated from CBECS. So if 17 they're overestimated, it means the lifetime is 18 overestimated. But what -- we sort of have to change 19 both parameters and we're still going to get the same 20 fit. So we're essentially still going to get the same 21 cumulative shipments, but the lifetime in the LCC might 22 be different.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 32 1 MR. STARR: So this is Louis with NEEA. So on 2 this chart, can you kind of tell me what the -- what 3 colors are what, and sort of -- 4 MS. COUGHLIN: Yes. 5 MR. STARR: -- a practical. 6 Do these things in any way add together -- 7 MS. COUGHLIN: Yes. 8 MR. STARR: -- like two of these things add 9 together sort of a blue line or something? 10 MS. COUGHLIN: So the blue line is total 11 shipments. The green line is the new construction 12 component. 13 MR. STARR: So the dark green line? 14 MS. COUGHLIN: The dark green line, yeah, at the 15 bottom. The red line is the new -- is this SE, the new 16 equipment in existing buildings. So that was during the 17 period when the market saturation was increasing, you 18 were taking existing buildings and putting the units in 19 for the first time. 20 MR. STARR: So the green one is new 21 construction, the red ones are replacements? 22 MS. COUGHLIN: No, the red one is the new units

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 33 1 in existing buildings. 2 MR. STARR: Okay. 3 FEMALE SPEAKER: Renovation. 4 MS. COUGHLIN: So you take a building that did 5 not have this type of equipment and you add the equipment 6 to it. 7 MALE SPEAKER: Could be a conversion 8 (simultaneous speaking). 9 MS. COUGHLIN: A conversion, yeah. So it's sort 10 of when your new product is coming into the market, it 11 doesn't just go into new buildings, it goes into old 12 buildings as well. So that's what that red line is, and 13 that pretty much goes back to zero because the market is 14 pretty saturated for C. And then that pale blue line or 15 pale green is the replacement market. 16 So over time when the market becomes saturated, 17 you're not getting -- everybody who wants one of these 18 units has one, and your stock is essentially the new 19 construction piece and the replacement market. 20 MR. STARR: So in this chart, the red line is 21 basically showing by, I guess, the number of shipments? 22 It's hard to tell. But basically you've saturated the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 34 1 market by 20/20, everybody that wants one got one. Is 2 that what that says? 3 MS. COUGHLIN: Yes. 4 MR. STARR: So everybody got this new unit and 5 they're replacing older systems. What were the older 6 systems they're replacing? 7 MS. COUGHLIN: The same equipment. 8 MR. STARR: Same equipment? 9 MS. COUGHLIN: Yeah. So the same replacement is 10 our stock model and our Weibull Distribution and just -- 11 the units break and you get the same type of unit. 12 And then in the bottom here, this is the -- just 13 the total shipments over time. So we're not counting the 14 broken stock; we're just counting total shipments. 15 MR. STARR: So the three lines: The red, the 16 green, and the blue or the light -- whatever that color 17 is, light blue or Sienna, I don't know, those add up to 18 the dark blue; is that right? 19 MS. COUGHLIN: That's right. 20 MR. STARR: For each -- and any individual year, 21 those three things, they add up to equal the blue line? 22 MS. COUGHLIN: Yes, yes. And the black

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 35 1 triangles are the data. 2 MR. WHITWELL: From -- and the source for that? 3 MS. COUGHLIN: Is the AHRI -- basically the 2005 4 rule, the data that we received for that rule. 5 MR. WHITWELL: Okay. But I see there's some -- 6 I thought that's what it was, but I see there's some in 7 2010 -- 8 MS. COUGHLIN: Yeah, we used the census data to 9 try to extend that past 2001. 10 MR. WHITWELL: So that's the census data? 11 MS. COUGHLIN: That's the census. So it's a 12 little hard to map them one-to-one. 13 MR. ROSENQUIST: 2002 and 2010 data is what was 14 derived from the census. So I'm assuming it's less 15 accurate than the data that was submitted from AHRI from 16 1980 to 2001? 17 MR. THARP: What was the number for 2010 -- 18 Rusty Tharp -- is that 110,000? 120,000? Do you know a 19 specific value? 20 MS. COUGHLIN: It looks like about 120, about 21 120. So this is the seven-and-a-half ton, and then here 22 is the 15-ton, and 30-ton. The 30-ton is a little harder

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 36 1 to fit, partly because we don't really have -- again, we 2 have to try to infer how many buildings have the 30-ton 3 equipment, it's not really that obvious. But still, the 4 fit is not bad. 5 MR. DOPPEL: Paul Doppel of Mitsubishi. So the 6 max life number seems very high. What impact does that 7 have? 8 MS. COUGHLIN: Yeah, I think this is actually 9 wrong. I think it was 40. 10 But basically -- so we have that long tail on 11 the distribution. And in the model, if a lifetime 12 exceeds this maximum, we just set it equal to the 13 maximum. So it's a -- 14 MR. DOPPEL: Even 40, especially for 15 seven-and-a-half ton, that seems extremely high. 16 MS. COUGHLIN: Yeah, but again, if you think of 17 that distribution, the number of units that you have on 18 that -- 19 MALE SPEAKER: Could you go back and look at 20 that? 21 MS. COUGHLIN: Sure. It's -- so yeah, around 22 here, this long tail. So basically I'm taking everything

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 37 1 beyond some maximum here and just giving it a value here. 2 FEMALE SPEAKER: Chopping it off. 3 MS. COUGHLIN: Sorry. So there's not -- there's 4 very few units up there. So it really doesn't affect the 5 answer. I mean, it gives you sort of about a 1 percent 6 change in the answer, essentially, because there's so few 7 units that are lingering in that long tail. 8 MR. DOPPEL: That just seems to be a very, very 9 long time. 10 MS. COUGHLIN: Yes. 11 MR. DOPPEL: I mean, I can't -- I can't think of 12 a rooftop -- I can't imagine a rooftop unit, especially 13 seven-and-a-half ton, being out there. 14 MS. HOOTMAN: It's a rust bucket at that point. 15 MS. COUGHLIN: Yeah. I mean, we can move it 16 in -- it's really -- again, these things actually don't 17 make a difference because the bulk of the market is here. 18 So this is just sort of a long tail. 19 But this is -- again, this is the standard 20 distribution shape to use. I think there -- there may be 21 a small segment of the market where people are not using 22 the equipment very heavily, and for whatever reason it's

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 38 1 just sort of carrying on, but -- 2 MR. STARR: Katie, this is Louis. So 3 essentially past 40 you look at the .05 the probability 4 that any unit exists. Isn't that one over .05? I don't 5 know what that number is, but it's 200 -- 1 out of 200 6 chances is essentially what it's saying? Or that's 7 right -- the shape factor. The .05 in 40 years, does 8 that mean anything if you look at the curve? 9 MS. COUGHLIN: Well, let me -- so if you want to 10 look at that, we've got to go back to our actual 11 parameters. 12 So this cumulative distribution is a little more 13 reasonable number to look at. So 40 years we have .3 -- 14 .4 percent of the stock is enduring past 40 years. So 15 that's the amount that gets sort of pushed into just a 16 40-year lifetime. 17 MR. STARR: So less than 1 percent. So that's a 18 very small number. 19 MS. COUGHLIN: Yes. 20 MR. STARR: Okay. Less than half of 1 percent. 21 MS. HOOTMAN: So Jill from Trane. So I can see 22 what Paul's saying, and I understand that there might be

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 39 1 abandoned buildings that are not being used and it has 2 some piece of equipment up there. But that's the point: 3 It's not being used. There's no energy being used, it's 4 an abandoned building for sale or for whatever; right? 5 MS. COUGHLIN: Yeah. I mean, again, we're 6 talking about 0.4 percent of the stock. So I can take it 7 off. I don't care, you know. It's not that big of a 8 deal. 9 MS. HOOTMAN: When you said 40, I cut -- that's 10 what I thought you were doing was at 40, you cut. 11 MS. COUGHLIN: That's what we do. 12 MS. HOOTMAN: Oh, okay. So that curve -- that 13 really would be mean and then (inaudible). 14 MS. COUGHLIN: There's a real spike in 15 (inaudible) and that little spike is about a half a 16 percent of the total stock. 17 MR. STARR: I mean, we are talking 1 in 200 18 units, or 1 in 40. And I can tell you, I've been to some 19 places where there's more than that. I mean, I can come 20 off of a campus back in 2010 and we had 1980 Carrier 21 units on there. And I came off a military base which had 22 even older stuff on there and some was abandoned. But on

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 40 1 her shipment stuff, she took out the abandoned buildings 2 or the ones that are going to be demolished, but -- 3 MR. ZENDAH: When was the peak -- Sami Zendah of 4 Emerson. What was the least they could (inaudible) 5 probably at 15. 6 MS. COUGHLIN: That is at 18. 7 MR. ZENDAH: So it's 18 plus a normal 8 distribution at each side. So I don't know, why would 9 you need the 40? That's what this is saying; right? 10 MR. DOPPEL: Well, I think my point goes to 11 more -- Paul Doppel with Mitsubishi (coughing) 30 should 12 be a max. 13 MR. ZENDAH: So if you cut it off -- 14 MR. DOPPEL: So if you look at the numbers for 15 30. I mean, that's over a little more significant 16 number. 17 MR. STARR: Well, but it's such a small number, 18 I mean, so -- 19 MS. HOOTMAN: I understand what you're saying; 20 it's not going to change it. It's not going to change a 21 thing, the normal distribution. 22 MR. ZENDAH: So normal distribution would be at

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 41 1 18. And no matter what she does -- 2 MS. COUGHLIN: Yes. 3 MR. SACHS: It's not a guessing function. That 4 doesn't make any difference (simultaneous speaking). 5 MR. CYMBALSKY: So I agree with Sami. So what 6 we should be focused on really is what this peak point is 7 of when you're getting 4 to 5 percent retiring in each 8 year; that's the meat of the matter. Don't worry about 9 this stuff. 10 MR. STARR: I think what he's suggesting is that 11 you should move that whole distribution back so where 12 you're at 60 is at 30. So I think that's what he's 13 getting at, but it's not a typical -- yeah. 14 MR. CYMBALSKY: But, see, when we get those new 15 shipments and fit those new shipments, this is going to 16 change maybe. 17 MS. COUGHLIN: Maybe. Yeah, again, I mean, the 18 long tail is just a feature of the Weibull. It's just 19 the way it's designed or set-up. So if you want to cut 20 it off at 30, we can cut it off at 35, but you want to 21 use the Weibull because this is supposed to be the right 22 shape for mechanical failure.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 42 1 MR. CYMBALSKY: And again, go back to your slide 2 where you showed the cumulative stock. Yeah, that one. 3 I mean, this is what's important; right? 4 MS. COUGHLIN: Right. 5 MR. CYMBALSKY: Once we fit all the data -- 6 MS. COUGHLIN: I agree. 7 MR. CYMBALSKY: -- you've got to say, "Look, 8 what we've done fits the actual data and case closed 9 about everything else." 10 MR. deLASKI: So then -- this is Andrew. What 11 we're waiting -- so then you guys have the data -- a new 12 data source about to be handed over to you, and next time 13 we meet we'll have a new -- 14 MS. COUGHLIN: Well, I mean, again, we're going 15 to replace what we have -- I mean, ideally we'll replace 16 those from 2000 onwards with the more accurate data, and 17 we'll see if we came up with a reasonable projection. 18 But we do have a very good fit all the way across this 19 period, so I doubt it's going to change a huge amount, 20 but it might change somewhat. 21 MR. CYMBALSKY: All it's going to change are 22 these stocks here; right?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 43 1 MS. COUGHLIN: Yeah. 2 MR. CYMBALSKY: And so based on those new dots, 3 you know, so all this data already exists and has a lot 4 of influence on that future line. 5 MR. deLASKI: And we're going to have a few more 6 data points, too; right? 7 MS. COUGHLIN: Right, we're going to go further 8 and see how much it changes. 9 MR. deLASKI: The recovery period? 10 MR. SACHS: Well, this is Harvey. And it seems 11 to me that we've beat this horse as hard as we can with 12 the data we have. 13 MR. CYMBALSKY: Oh, you'd be surprised. 14 (Laughter.) 15 MR. SACHS: I'm talking Bob -- 16 MR. CYMBALSKY: It's still two weeks away. 17 (Laughter.) 18 MS. HOOTMAN: Oh, so true. 19 MS. COUGHLIN: So again, when we do this -- when 20 we look at this standard coming in, it's 2019 is our 21 current assumption about the year. So 2019 forward, we 22 get a drop in the shipments by applying this price

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 44 1 elasticity to the price change. So we have those 2 numbers. I just, here, plotted the cumulative shipments. 3 So essentially the -- this number here, we're 4 going up to 2048. So this number here is the total 5 cumulative shipments, and this is showing us all three 6 equipment classes. These are unit counts, and this is 7 the three different channels. 8 So the gray bars on the top are the replacements 9 which dominate the total shipments. There's the small 10 slice of orange here is the expanding market share of the 11 larger units. And then the blue section is just the new 12 construction market. 13 So we don't assume that the new construction is 14 elastic. We assume if you're building a building and 15 it's standard to put a rooftop unit on that building, 16 you're going to put that on no matter what the price 17 change. So the elasticity just goes into the replacement 18 units. 19 MR. HUNT: Katie, this is Marshall Hunt from 20 PG&E. In the future, I would really like to have the 21 numbers on the bars. I'm a numbers freak and it's sort 22 of hard to look at. So if you could put a number on top

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 45 1 of those bars, that would be great. 2 MS. COUGHLIN: Right, uh-huh. 3 MALE SPEAKER: We can give you the whole 4 spreadsheet. 5 MS. COUGHLIN: Yeah, you can have as many 6 numbers as you would like. I'm not sure if I put the 7 tables here, but this is what we have currently. I guess 8 yeah -- 9 MALE SPEAKER: What year is this? Is this 2000? 10 MS. COUGHLIN: This is the whole period. So it 11 goes from 2019 to 2048. Since we are changing these 12 numbers to some extent, you know, we don't need to dwell 13 too much on this. This is just kind of giving you a 14 picture of how the model works. Again, this is -- again, 15 going back to the shipments itself and you see the 16 relative drops at the different ELs. 17 So it's schematic at the high end, and let's see 18 if I have -- yeah, so this is the percentage drop for 19 each product class by each EL. So this is our current 20 estimates based on the data. 21 MR. CYMBALSKY: So that's in cumulative 22 shipments?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 46 1 MS. COUGHLIN: That's cumulative shipments over 2 the analysis period. 3 MR. CYMBALSKY: So this was the question I 4 raised to kind of debate was, if we're really talking 5 about compressor replacement repair, right, versus 6 replacement units? 7 MS. COUGHLIN: That's right. 8 MR. CYMBALSKY: When we do that. 9 So the question in my mind -- so let's look at 10 EL-3, right, that's right in the middle. So we're saying 11 for 40 -- that's interesting the numbers don't formula -- 12 well, anyway. 13 So at the seven-and-a-half ton, you get a 10 14 percent reduction in shipments. But if the cost of 15 repairing is -- 80 percent I think is the number I threw 16 out -- of replacement, I mean, is 10 percent the right 17 number? 18 So if it's $10,000, someone's paying $8,000 19 instead of $10,000 to extend the life. I don't know, 20 mark positive seven-and-a-half years. I think we have 21 10. 22 MR. THARP: 80 percent may be -- Rusty Tharp.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 47 1 80 percent may be a good number for split system 2 products, but definitely not for single package. 3 MS. HOOTMAN: 80 percent of what? 4 MR. THARP: Of -- 80 percent of the cost. So 5 10,000 units -- 6 MS. HOOTMAN: That's what we had yesterday is 7 the amount of the compressor cost change, that was around 8 80 percent of replacing a whole unit. And when you 9 started to talk about that 30-ton, you need to skip lift, 10 you need -- you know, it's a heavy compressor. You know, 11 you need two people. It's at least a day to purge the 12 system, you know. I'm going to tell you, the 30-ton, I 13 would agree, it is. 14 15, it depends on what size compressor you've 15 got in there, you know. It's a day work for two guys for 16 sure. Get it to the roof, it might be too heavy to get 17 it to the roof. You might need a crane to get it to the 18 roof. So I started -- seven-and-a-half, maybe not, maybe 19 not. 20 MR. ZENDAH: I agree with that. 21 MR. CYMBALSKY: So I mean, the real question is: 22 Is the 20 percent sort of carrot dangling out there

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 48 1 enough to substantiate 10 percent not doing it? That's 2 the question I have in my head. 3 MS. HOOTMAN: 10 percent not doing -- 4 MR. CYMBALSKY: The replacement on the unit. 5 MS. HOOTMAN: -- the replacement? 6 MR. CYMBALSKY: Based on 20 percent cost 7 differential. 8 MS. HOOTMAN: So I think what also happens in 9 there and that could be very valid in 10 percent, these 10 are a lot of times leased spaces. When faced with that, 11 average building owner might -- or a renter might -- and 12 I'm sorry, Jill Hootman from Trane -- they might 13 literally move to another space. So because they're not 14 going to pay the price either way. 15 MR. CYMBALSKY: But are they responsible for 16 paying it if they're leasing the space? If they're 17 not -- because isn't the building owner -- 18 MALE SPEAKER: Depends on the building owner. 19 MS. HOOTMAN: Depends on the building and on the 20 lease, a net lease -- or a net lease or, you know -- 21 MR. CYMBALSKY: My understanding was that would 22 be --

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 49 1 MS. HOOTMAN: You're looking at an average strip 2 center, and I think of the nail salon and the dry cleaner 3 and, you know, right? All these little, five-, 4 seven-and-a-half ton kind of units, you know. 5 I think you see when they go, "Okay. We've got 6 no air conditioning and I'm not going to pay for that 7 replacement. I'm going to go lease somewhere else. I 8 can go lease over here. And I'm going to move my 9 business." And I think that's in that 10 percent. 10 MR. SACHS: This is Harvey. Jill, there's an 11 old saying in the commercial sector that -- how does it 12 go? Two moves equal a fire? 13 MS. HOOTMAN: Something like that, yes. 14 MR. SACHS: The cost of a move in business 15 disruption is so high that it's hard for me to imagine 16 that the dry cleaners can move without a broken air 17 conditioner. 18 MS. HOOTMAN: It is for -- it depends on the 19 type of business. 20 MR. SACHS: It depends on the type of business, 21 but -- 22 MS. HOOTMAN: A hair salon and a beauty salon,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 50 1 it's not. They move around all the time. 2 MR. deLASKI: But if they -- this is Andrew. 3 But if they move, someone owns the building and they have 4 a broken air conditioner and they're probably going to 5 renovate and replace it. 6 MS. HOOTMAN: Probably could get at least 7 (inaudible). 8 MR. deLASKI: And it's probably going to 9 increase the likelihood that it gets replaced because 10 they have to prepare the units for a new tenant. 11 MR. SACHS: And the market because it uses half 12 the energy. 13 MR. STARR: So this is Louis -- 14 MS. HOOTMAN: Let's not market that way. 15 MR. STARR: -- I talked to a mechanical 16 contractor about this, they design and build around town. 17 His side was doing the repair and whatever, not doing 18 construction. So it's all (inaudible) so I ask him -- 19 this was a while back -- how do people make decisions? 20 So the one that Bill's talking about was one of 21 the things that happens. So what they usually do, one: 22 They could move out. But what they usually do is

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 51 1 depending on -- it also depends a lot on how the lease is 2 written. 3 But on ones where the tenant's responsible for 4 the equipment -- so the owner's been kind of clever and 5 shifted that responsibility down on them -- it becomes a 6 time to renegotiate your lease because -- 7 MS. HOOTMAN: That, too. 8 MR. STARR: -- you don't have to build new walls 9 and everything else. 10 But what you can do is say, "I'll be here 11 another five years. If you've paid for that unit, then I 12 will stay." And maybe, you know, you get another tenant 13 for five -- the owner knows he's got someone there for 5 14 years, the person that's in the hair salon or whatever 15 gets a new RTU so they don't have to move to the next 16 building which may have the exact same problem. 17 When you're really price-driven, you're going to 18 have very cheap -- 19 MS. HOOTMAN: But they will negotiate, too. 20 MR. STARR: -- you're going to move to a 21 building that is probably not Class A or Class B or C, 22 and it would be like the same thing when you buy an old

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 52 1 car, "Hey, this one's great now." But when you buy a new 2 old car so it won't break down. Well, you see the 3 fallacy in that. 4 MR. CYMBALSKY: I guess my point is that these 5 things -- forget about the standard for a second, let's 6 just talk about what goes on every day, what we're 7 describing here happens now. 8 These things are expensive to begin with. So 9 we're talking about the delta, right, so it's the 20 10 percent of the delta, not -- the standard's really not 11 the main driver of the cost here. It's just to buy 12 anything right now is very expensive to someone whose got 13 a Superclips or whatever -- 14 MS. HOOTMAN: A low profit margin. 15 MR. CYMBALSKY: So to me, it's -- is what 16 we're -- is the imposition of the standard really going 17 to cause the 10 percent, or is this somehow baked into a 18 reference case where these things are $10,000 anyway? 19 MS. WALTNER: This is 10 percent more repairs. 20 MR. CYMBALSKY: Right. 21 MS. WALTNER: This strikes me as a high number. 22 MR. CYMBALSKY: Right. So I think to some

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 53 1 extent what you're really seeing, that 10 percent, it's 2 not the people making that decision, it's not a smart 3 business decision no matter where you're at. Whether 4 you're a hair salon or you're the guy that owns the 5 building -- if you're the guy that owns the building, it 6 makes absolutely no sense -- or you're the hair salon 7 that's moving so you don't really have to repair, it also 8 doesn't really make any business sense. 9 So and that being said, I would say 10 percent 10 of the market is not rational. So you're probably 11 right -- 12 MS. HOOTMAN: Well, if you're the building 13 owner -- if you're the building owner, what -- and I 14 don't know, I have to say -- but isn't there more tax 15 incentive to do the repairs on their taxes for that 16 building and their taxes then to actually do a capital 17 outlay? 18 I believe they can write off their expenses a 19 whole lot more that they can write off their capital 20 outlays. So I would say that they're more motivated by 21 repair to get it to the next -- 22 MR. CYMBALSKY: But you also have unhappy

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 54 1 clients and things like that that move out. But if 2 you're in for the long-term, there may be tax breaks. 3 But you're really -- I also talked to the sales 4 guy about -- he's a sales guy, but he also repairs. But 5 they're always trying to up-sell to the newer equipment 6 and everything else because they can guarantee it and a 7 whole bunch else. 8 If they repair things like a compressor, chances 9 are they're going to be back there and the guy's going to 10 be pissed off because he just worked on it last year and 11 it's like your service is bad. So they always try to 12 sell a new unit; there's always a good business case for 13 selling it, but it's really just the guy that's super 14 cheap doesn't want to buy it. 15 I think there's always a good business case -- a 16 really good business case for buying that new unit. 17 MS. HOOTMAN: I would have a hard time to answer 18 your question, John. 11 percent is probably on the 19 30-ton. 20 MS. COUGHLIN: That's just based on the price 21 change that we have. So this really -- just one 22 parameter for the elasticity. And then this is driven by

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 55 1 the price change. 2 MR. deLASKI: So I have a question on that. So 3 Katie, the price elasticity does not take into -- it 4 doesn't take into account the alternative the customer 5 faces. 6 In other words, is it taking into account how do 7 you derive the price (inaudible)? 8 MS. COUGHLIN: We guess. 9 (Laughter.) 10 MALE SPEAKER: This is why we're having this 11 debate because -- 12 MS. COUGHLIN: We have (simultaneous speaking). 13 MR. deLASKI: You're guessing at it, and part 14 of -- 15 MS. COUGHLIN: So you can look historically if 16 you just -- you look at the data a different way, you can 17 see, we have a measure of business income per square 18 foot. So that goes up and down over time, and sheets go 19 up and down over time. 20 And you can kind of say, "Well, rather than a 21 price increase, a drop in income has the same effect on 22 the finances." So if you sort of see the economic ups

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 56 1 and downs and periods where people are making less money, 2 they buy fewer units. You can kind of infer a range of 3 price elasticities from that and it's around, you know, 4 minus point something. 5 So we're using I think minus .7 right now. 6 Which the data is really not that constrained, it's 7 around minus .5, maybe a little bit lower, maybe a little 8 bit higher. So that's really the only thing we've been 9 able to do. 10 Now, another thing we can do is if we get a 11 better distribution of shipments by efficiency and price 12 by efficiency, we can also infer price elasticity there 13 to try to constrain it a little bit. But it's a very -- 14 like Greg was saying yesterday, it's the holy grail of 15 these things. There's very little information on price 16 elasticity for the commercial sector. 17 MR. deLASKI: But I guess what I would say, I 18 guess the question -- I threw it back to you guys which I 19 can't answer, but is there in the literature more broadly 20 what you're inferring? So you're saying that there's 21 some literature on price elasticity for a commercial 22 business decision?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 57 1 MS. COUGHLIN: No, there's almost none. 2 MR. deLASKI: Almost none? 3 MS. COUGHLIN: Yeah, we haven't found anything. 4 MR. ROSENQUIST: A lot on automobiles, some on 5 residential products. 6 MALE SPEAKER: For businesses, their 7 decisions -- 8 MS. COUGHLIN: No, it's all or nothing. 9 MR. deLASKI: This is a pretty unusual one. 10 Because of what John's saying, because of the 11 alternative -- the alternative is -- because of the 12 alternative of being 80 percent of the cost of 13 replacement, any data you would be able to find would 14 typically not have that kind of comparison? 15 MR. SACHS: I wonder -- this is Harvey. I 16 wonder if there's another proxy variable that you hinted 17 at that's very large effect for the smaller equipment in 18 particular and that's basically the fraction of vacant 19 retail space in that metropolitan area year. But that's 20 usually variable with the -- in the cycle. 21 And if there's a lot of vacant stores around my 22 strip mall or a closed mall or anything else, I need this

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 58 1 to decide what that would sit because the hopes of 2 renting that space are low. 3 MS. COUGHLIN: Yeah. 4 MR. SACHS: So I might do a neither repair nor 5 replace for a year or two. 6 MS. HOOTMAN: Do they have the incentive to 7 literally let it sit there abandoned, shall I say? 8 MR. SACHS: Because the loss of rental is also 9 tax-deductible. 10 MS. HOOTMAN: Yeah, the loss of rental, yeah. 11 MR. SACHS: So I think this is basically an area 12 where -- when you struggle mightily, but you've probably 13 done the best that can be done. 14 MR. CYMBALSKY: Is there any chance -- I don't 15 know if we have compressor people in the room, but -- 16 MALE SPEAKER: We do. 17 MR. CYMBALSKY: I'll put my lawyer hat on for a 18 second. I knew the answer to that question. 19 I'm just curious if there was a way to map 20 compressor shipments separate from what's going into the 21 equipment. 22 So there's a million compressor shipments at

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 59 1 800,000 that go into the equipment. Well, lo and behold, 2 where are these other ones going? I don't know. Just 3 thinking out loud. 4 MR. ZENDAH: So you're thinking service versus 5 solely on shipments? 6 MR. SACHS: I believe -- Harvey -- residential 7 sites on 2006. 8 MR. ZENDAH: I can try to get a percentage, I 9 just don't know off the top of my head. I mean, we have 10 ways based on our billable material to tell which one is 11 going into service. Do they get uses in that fashion? I 12 can guarantee you I don't know. Some use what we call 13 OEMs (inaudible) service, but at least we can look at 14 that and just get a percentage if that helps. 15 MR. deLASKI: This is Andrew again. The other 16 factor that occurs to me, because now we're speculating 17 on what decisions -- what are the features -- factors 18 that are affecting the decision-maker which might be a 19 building owner, might be a tenant, you know, the other 20 factor is the quality of the service; right? 21 So how many small buildings have you been in 22 where the service isn't very good in the HVAC system? So

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 60 1 you know, and just -- if your decision is 80 percent of 2 the cost to put a compressor in your existing system that 3 you may be not very satisfied with versus putting in a 4 new system that you would hope would be better, I think 5 there's a pretty -- it's not just a cost issue here, it's 6 a quality of the service. 7 And I think if you had data on the quality of 8 the service, you might -- you knew that X percent of 9 people think that this -- you said I think there's 10 another motivator here that new equipment is generally 11 better than equipment that's installed today. 12 MR. ZENDAH: Sami Zendah of Emerson again. So 13 to do that, I think we're talking commercial three-phase 14 equipment, 6-ton and above. So the assumption, either 15 start at 6 -- I mean, the 6-ton could have 3-ton 16 compressors, so that's the issue here. 17 I mean, if I start including the residential 18 single phase, I mean, it's going to offset the data. So 19 we can look at it both ways: 3-ton ways or 6 tons and 20 above, it depends on the group. 21 MR. CYMBALSKY: So again, it would be hard 22 because, you're right, 20-ton, some may be using 4, 5

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 61 1 types of compressors. 2 MS. HOOTMAN: Yes. 3 MR. ZENDAH: So we can look at it from 3-ton and 4 above 3 phase. 5 MR. SACHS: This is Harvey. And reinforcing 6 Andrew's argument, I remember Frank from Trane saying 7 something to the effect that compressors don't die, 8 they're killed. 9 MR. ZENDAH: Thank you. Usually other 10 components would kill the compressor -- 11 (Laughter.) 12 MS. HOOTMAN: The practices may be -- 13 MR. ZENDAH: They're designed to live 15 years. 14 MR. SACHS: But other issues -- and what I'm 15 trying to say is, that service contractor or a smart 16 owner is going to understand that if he doesn't know the 17 reason that compressor quit working, he doesn't know if 18 it died or was killed, and that is a factor that can be 19 used to tilt his decision, I speculate. But I think that 20 makes people less inclined to replace compressors in 21 larger equipment. 22 MR. STARR: So this is Louis. You know, I was

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 62 1 just -- so Mark, here, I actually asked his contractors 2 the same questions. And right now, basically on 10- to 3 15-year-old equipment, 80 percent will replace a new 4 unit. And so one would think if the equipment comes more 5 expensive in the future, it probably isn't the same 6 percent that some would decide to, "Hey, I'm going to 7 keep the old unit." 8 But if you think about halfway between 9 80 percent and that, maybe it's some number like 10 10 percent, and that seems like in the middle. Where 10 11 percent more instead of being 80 percent, maybe less 12 would move it and maybe we can find some number like that 13 where, you know, it would move down a little bit, but not 14 much. 15 MR. TERZIGNI: Mark Terzigni with SMAC. So as 16 Louis said, I asked the question in one of my now 17 semi-famous polls: "If the compressor is bad, what 18 percentage of customers decide to replace the entire unit 19 instead of replacing just the compressor?" 20 I got a couple of different types answers. One 21 was 50 percent; you've got a 50/50 shot. They didn't 22 break it down by tonnage or size of unit.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 63 1 Another answer that's a little bit more divided 2 out is the unit is between zero and five years, 5 3 percent. If the unit is between 5 and 10 years, 35 4 percent. And if the unit is 10 to 15 years, 80 percent 5 of your customers would buy a new unit as opposed to 6 replacing. 7 MR. deLASKI: And these are 5-ton and greater? 8 MR. TERZIGNI: The whole poll was based on 9 package unit, seven-and-a-half ton, 15-ton, 30-ton. 10 So I define that 30 goes all the way up to the 11 62, or what -- so -- 12 MR. STARR: Do you have a sense of how -- if the 13 equipment became more expensive, do you have a sense of 14 how those numbers might change? 15 I actually don't really care so much about the 16 zero to five and five to ten; it's more the older ones. 17 MR. TERZIGNI: So what -- 18 MS. HOOTMAN: That's Louis. 19 MR. STARR: Louis. 20 MR. TERZIGNI: I'm probably going to say it's a 21 function of how well the salesperson is, you know -- is 22 convincing the customer, "Are you going to get a return?"

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 64 1 (Inaudible) hypothesizing (inaudible), "Am I going to see 2 a benefit at this point?" And that's what it's going to 3 be. And that's going to vary from person to person. 4 You have some people that will buy at the 5 absolute minimum (inaudible). You have some people that, 6 if it's a company that tends to market -- that they're 7 green and they're going to buy the high-end, they see a 8 marketing value regardless of the equipment (inaudible). 9 MALE SPEAKER: (Inaudible) market for comfort? 10 MR. TERZIGNI: (Inaudible) it all depends on the 11 past history. 12 MR. CYMBALSKY: So here, this is the slide. So 13 the real question is, in my mind, so the outlay has to be 14 almost 9,000 when the person -- in today's world; right? 15 So what we're saying is: What would the extra 3,000 over 16 the 9 cost for that 10 percent? 17 And then we had a comment from Arthur Kahn, so 18 his comment is that the standard may change the footprint 19 of the box. And so maybe that impacts -- 20 MALE SPEAKER: The cost? 21 MR. CYMBALSKY: Well, it impacts the 22 repair/replace decision --

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 65 1 MS. HOOTMAN: Sure. 2 MR. CYMBALSKY: -- as well, maybe. So that's 3 his comment. 4 MS. HOOTMAN: Yeah, it does. 5 MS. COUGHLIN: So that will -- when we settle on 6 our method for treating the conversion, that will go into 7 the total installed cost. So you could have the same 8 elasticity parameter, but you just have larger costs and 9 that's going to drop your new shipments. 10 MR. WHITWELL: Right. Katie, this is Bob 11 Whitwell from Carrier, and I apologize if I zoned out and 12 missed it, but on the elasticity slide, the -- there was 13 a significant difference on the 15-ton compared to the 14 seven-and-a-half and the 30-ton. 15 MS. COUGHLIN: Right. And the parameters don't 16 change, so it's the cost. 17 MALE SPEAKER: It's the cost. 18 MS. COUGHLIN: So the cost increment -- the 19 percentage cost increment is lower for the 15-ton. 20 That's essentially what's driving that. 21 MR. WHITWELL: So behavior's the same, but -- 22 MS. COUGHLIN: Yeah. I mean, we could use a

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 66 1 different parameter for the different classes. But, 2 we -- again, since we have so little information, we just 3 use the same parameter for all of them. 4 MR. STARR: So this is Louis. I was kind of 5 wondering, so is essentially the simple payback, would 6 that be the business decision that you would make between 7 repair and replace? 8 I mean, in other words, would the salesman be 9 saying, for example, he'd say -- EL-3s the standard for 10 example. He'd say, "Your payback is going to be 3.9 11 years." Is that how you sell it? 12 MS. COUGHLIN: You're asking the wrong person. 13 MALE SPEAKER: Depends on the customer, and 14 that's only if -- those tend to be the folks that are 15 buying high-end that would ask that kind of a question. 16 MR. STARR: But I meant that just from a 17 straight business case. Let's just assume it was 18 (simultaneous speaking) so what's that number going to 19 be? How are you coming up with return on investment? 20 Because I guess you could do it two ways, you 21 could just look at it as a straight business case here. 22 You can make an assumption about what the relationship,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 67 1 the owner that owns a building, he's making a decision on 2 whether to repair or replace and see what that number is, 3 and then see -- you know, make some decisions based on 4 some other things after that. 5 MR. CYMBALSKY: What happens to the efficiency 6 of the unit when you just replace the compressor? I 7 assume you might get a better compressor, no? 8 (Simultaneous speaking) so it will just maintain 9 whatever -- 10 MR. WHITWELL: Yeah, it would be the same. 11 MR. CYMBALSKY: It would be the same? Okay. 12 MALE SPEAKER: (Simultaneous speaking) 90 13 percent lower than new to begin with because the rest of 14 it is -- (simultaneous speaking). 15 MR. WHITWELL: Yeah, because of a dirty coil -- 16 MALE SPEAKER: It's going to be less than new, 17 anyway. 18 MR. deLASKI: Well, Bob, you raised that 19 question, Bob. You would say it would be the same if 20 it's not still available? 21 MR. WHITWELL: Yeah, I mean it's not -- if that 22 compressor's not available anymore, then that's something

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 68 1 that would have to be addressed. 2 MR. deLASKI: So if the compressor's not 3 available that was -- is the replacement -- how does 4 that -- is that going to make -- 5 MALE SPEAKER: The replacement compressor would 6 be more efficient. 7 MR. WHITWELL: Could be, could be, probably. 8 MS. HOOTMAN: Could be. 9 MR. WHITWELL: And probably, but -- 10 MALE SPEAKER: I would say probably. Based on 11 my experience, probably would be -- 12 MS. HOOTMAN: So -- 13 MR. THARP: Well, yeah (simultaneous speaking) 14 because the older compressors are typically obsoleted, so 15 when a generation of new compressors comes out, you 16 typically say replace a CRKF with a CRK-6 on that 17 residential site. 18 MS. HOOTMAN: Right. 19 MALE SPEAKER: K-6 is more efficient. 20 MS. HOOTMAN: Right, but there is -- you know, 21 you still will -- this is Jill from Trane, and I'm also a 22 compressor manufacturer.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 69 1 So the other thing you'll do is if that 2 fittings, you know, et cetera, had changed significantly, 3 you'll still make the old one if that fit-up is an issue. 4 So you could still be making some of the old compressors 5 for a fit-up issue (simultaneous speaking) -- 6 MR. THARP: It would be a like for like? 7 MS. HOOTMAN: Yeah. 8 MR. ZENDAH: So if it's dropped in -- 9 MALE SPEAKER: So what do you do -- 10 (simultaneous speaking). 11 MS. HOOTMAN: So one of things we've also -- 12 Sami and I have been talking about, too, and I can 13 certainly look at our compressor shipment stuff. You 14 have to realize, compressors for service. I don't know 15 where they go. And I use the very same compressor in an 16 air cooled chiller as I do a package unit. 17 MALE SPEAKER: You could chill a piece of -- 18 MS. HOOTMAN: So in OEM, I know where I ship it 19 to an OEM in my original, but I do not know when service 20 stock work goes. 21 MR. ZENDAH: So some OEMs have (inaudible) based 22 on what you're saying?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 70 1 MS. HOOTMAN: Getting some of these numbers can 2 be shaded a little bit. Obviously unitary is bigger than 3 air-cooled shipment, air-cooled chillers, but there's 4 multiples of these compressors in air-cooled chillers. 5 They go up to 600 tons and there's, you know, like 10 6 tons in those things, so -- 7 MR. ZENDAH: I agree. Same as when we ship to 8 an OEM, they have their own service organization. So 9 when we ship it to them, they make rooftop chillers, 10 everything -- it's the same exact -- the same compressor, 11 just used in a different -- 12 MS. HOOTMAN: So while we can get it, all I'm 13 saying is, I don't know if it's going to show data that 14 you want to show. 15 MR. CYMBALSKY: Well, look. You know, I'm the 16 last one who wants to create more work for anyone. So it 17 sounds like it might be a wild goose chase, so I'm happy 18 to take a different tack here. And maybe, you know, if 19 we do a sensitivity with no elasticity, what would the 20 numbers look like? And bound it. 21 MS. HOOTMAN: Yeah. 22 MR. CYMBALSKY: Is that easier and more -- you

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 71 1 know, just look at the numbers and say, where it really 2 comes in for us is -- and more for you guys is the MIA. 3 So the drop in shipments is going to hit the Manufacturer 4 Impact Analysis, and that's really where it shakes. 5 MR. TERZIGNI: Can you (inaudible) elasticity in 6 the other direction, too? I mean -- 7 MALE SPEAKER: I doubt that. I mean, to me, 10 8 percent's a big number already. Based on a 20 percent 9 increment, I don't think we want to go the other way. 10 MR. SACHS: Well, for the seven-and-a-half ton, 11 it's not a 20, it's about 15 percent. 12 MR. CYMBALSKY: So what I'm saying is that the 13 compressor cost is 80 percent of the replacement. 14 MALE SPEAKER: That's not -- that's not the 15 case. 16 MS. HOOTMAN: Which one are you looking at, what 17 slide? 18 MALE SPEAKER: He was looking at for the 19 seven-and-a-half ton, it's slide 67. 20 MR. CYMBALSKY: I don't think you can tell. 21 MALE SPEAKER: 4,000 versus 8- to 9,000. 22 MS. HOOTMAN: This one?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 72 1 MALE SPEAKER: Yeah. 2 MS. HOOTMAN: So -- 3 MALE SPEAKER: What are you at? 4 MR. SACHS: The compressor replacement cost 5 there -- 6 MS. HOOTMAN: Is 4,000 -- 7 MR. SACHS: $4,000 versus a new installation. 8 MS. HOOTMAN: Which is 8 -- 9 MR. SACHS: 8. So it's not the 80 percent 10 number may have been high or may be reasonable for a 11 30-ton, but that's not the number for the smaller -- the 12 smaller equipment. 13 The other question I had is a lot of this 14 equipment has multiple compressors, some of them smaller. 15 What was your assumption around -- I mean, are you 16 changing all the compressors? Are you changing -- if the 17 system has up to four compressors, what's your assumption 18 and what's included in that cost? 19 MS. COUGHLIN: So again, we don't really -- 20 we're not trying to model the decision process. So yeah, 21 we're trying to kind of simplify the model because we 22 know we can't model all these details.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 73 1 So it's really just -- first of all, I want to 2 emphasize in the base-case, people are making these 3 decisions, right? That's implicit. So we're just trying 4 to model: What is the impact of the additional price 5 increase on a new unit? 6 And just using the price elasticity. So we 7 don't know what fails or why it fails or how easy it is 8 to fix or anything. We just have an estimate of, if the 9 price of a new unit goes up X percent, there's going to 10 be this fraction of people who will not buy it. And then 11 in the -- in the -- I don't know in the repair. 12 MR. ROSENQUIST: I was going to say, for 13 seven-and-a-half tons, I believe it's one compressor 14 replacement. But I'm not clear on 15 and 30. 15 MS. COUGHLIN: We're sort of -- you know, 16 conceptually it's sort of -- it has to be what we call a 17 "life-extending repair." So if you didn't do a major 18 investment, it wouldn't work anymore. But beyond that, I 19 can't -- I don't know what to say. 20 I mean, I don't know how likely it is that more 21 than one compressor would fail simultaneously, so, you 22 know, that's --

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 74 1 MR. ZENDAH: Sami Zendah. To this point, it 2 could be a unit to conversion unit, the other is fine. 3 (Inaudible) That kind of scenario, how you capture it 4 here. 5 MS. COUGHLIN: Greg, this is one compressor 6 replacement. 7 MR. ROSENQUIST: I know, for seven-and-a-half 8 tons. Again, I'd like to say 15 and 30 as well, but I 9 just don't know for certain. 10 MR. SACHS: As you go up in the capacity, you 11 may or may not -- you know -- 12 FEMALE SPEAKER: The independent -- 13 MR. SACHS: -- you know, it's going to be 14 separate circuits. And it could be the same size 15 compressor as far as the seven-and-a-half and the 15 is 16 just two seven-and-a-half ton compressors. 17 FEMALE SPEAKER: May. 18 MALE SPEAKER: One of them -- may -- I just 19 would like to understand what would make those sums. 20 MR. ZENDAH: See, there are uneven circuitries. 21 I mean, there's all kind of stuff. I just don't know how 22 much you want to get into it.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 75 1 MR. deLASKI: It strikes me, John, that your 2 expression of bounding it with a sensitivity would be 3 helpful. 4 MR. CYMBALSKY: Yeah, just to see what the zero 5 is. And to me, this strikes me as high. But, you 6 know -- 7 MR. deLASKI: Yeah. And I guess the other 8 problem with this is that we're trying to, as we all 9 know, sort of model a dynamic situation. 10 So the manufacturers all have a lot of incentive 11 to sell new units, right, so they're going to be doing 12 their best to arm their salespeople with the tools to go 13 out and say, "You don't want to repair these things. You 14 want to go out and buy a new one." So that's what the 15 market would like to do, at least the folks who sell new 16 units. And they're going to differentiate why the new 17 unit's better. 18 But going back to Mark's point, which is every 19 situation is different and can you do that. But I think 20 they're going to be -- so we're kind of tinkering around. 21 Is it 10 percent? Is it -- that's why you do a 22 sensitivity.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 76 1 MR. SACHS: This is Harvey. And I also like 2 John's suggestion. Louis was hinting at but didn't 3 express, one of the other parameters which is 2019 which 4 might be roughly when it would take effect. The youngest 5 of the R-22 systems will be nine years old. And that's 6 likely to be yet another -- 7 MS. HOOTMAN: R-22? 8 MALE SPEAKER: Made in 2002. 9 MS. HOOTMAN: Yeah. Okay. 10 MR. SACHS: That was 2010, wasn't it? 11 MS. HOOTMAN: Yeah. 12 MR. SACHS: So that's yet another factor that 13 which we have a lot of uncertainty. We don't know -- 14 MS. HOOTMAN: Of the R-410 systems. 15 MR. deLASKI: No, she's right. 16 MR. SACHS: The last -- the youngest -- since we 17 phased out or turned to a new equipment January 1st, 18 2010. 19 MS. HOOTMAN: Wouldn't it be 10 years? Really, 20 it was made somewhere in 2009. 21 MALE SPEAKER: Because there's a lot of stock. 22 MR. CYMBALSKY: You want to do a sensitivity

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 77 1 whether it's 9 or 10? 2 (Laughter.) 3 MS. HOOTMAN: We weren't allowed to make it 4 after 1/1/2010 is all I'm saying. 5 MR. SACHS: I'm only -- we're all on the same 6 page, ma'am. I'm just trying to establish that there are 7 other variables in this that will have a real impact on 8 the repair versus replace. 9 MR. THARP: And especially with EPA with the ban 10 on R-22 production after 2020; right? 11 MR. STARR: You won't be able to repair the 12 compressor is what he's saying. The R-22 won't be 13 available -- you'll go out -- actually, I'm thinking 14 about this on my house. I have a 1996 Trane. If that 15 thing ever fails, I'm going to be getting a new split 16 system because I won't be able to get the equipment to 17 replace it (simultaneous speaking). 18 (Laughter.) 19 MR. SACHS: In other words, John's suggestion 20 is -- 21 MS. HOOTMAN: I mean, we can get him an R-22 22 right now.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 78 1 MR. STARR: I would also say -- 2 MS. HOOTMAN: He wouldn't let that happen. 3 MR. STARR: I would say my unit is 20 years old, 4 by the way. It's a Trane, it's 20 -- 5 MS. HOOTMAN: I'm not making a comment on the 6 record. (Simultaneous speaking). 7 MR. SACHS: (Inaudible) the court reporter -- 8 MR. CYMBALSKY: We're not going to talk about 9 dry shift R-22 (simultaneous speaking). Not on my dime, 10 we're not. 11 MR. SACHS: I'm only trying to make a point 12 that's it's so dynamic that we can't do much better than 13 John's effort (simultaneous speaking). 14 MR. CYMBALSKY: I agree, Harvey. So I was 15 thinking out loud with the compressor shipments. 16 Obviously these guys talked me out of that idea. So I 17 think the sensitivity is the best way to kind of just to 18 see how sensitive the answers are to this. 19 MR. SACHS: There's horses at least prostrate. 20 Can we move to a slightly different question? 21 MR. CYMBALSKY: Is everyone comfortable for -- I 22 mean, everybody good?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 79 1 MALE SPEAKER: Just checking the room. Not a 2 formal vote, yeah. Okay. 3 MR. SACHS: I'm struck -- this is Harvey -- 4 struck comparing slides 83 and 84 that particularly for 5 the 65 to 135 category. 6 MS. HOOTMAN: Those -- that's what he's talking 7 about (speaking under breath). 8 MR. SACHS: The current analysis shows roughly 9 20 percent higher shipments than the NOPR analysis did, 10 and much less falloff at higher EL levels. And I just 11 wanted to get some sort of an intuitive sense of -- 12 MS. COUGHLIN: Yeah. I mean, they're not -- 13 they're not that different. 14 MR. SACHS: Well, the 135, it's 5 million versus 15 4 million. 16 MS. COUGHLIN: Okay. So the base-case shipments 17 are not that different. Yes, the falloff is very 18 different because this has the lifetime thing that we 19 don't want to talk about anymore. We shouldn't have done 20 it, so -- 21 MR. SACHS: So that's all that lifetime 22 artifact?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 80 1 MS. COUGHLIN: Yep. 2 MR. SACHS: Thank you. That's what I was trying 3 to get at. 4 MR. BANTLE: Any more questions on the shipment 5 stuff taking into account the sensitivity that will be 6 done? And we have to roll in the new data, so -- so 7 those are the two (simultaneous speaking). 8 MS. HOOTMAN: And the new data will be ready 9 when? 10 FEMALE SPEAKER: Tomorrow; right? 11 MALE SPEAKER: Oh, I thought it was today. 12 (Simultaneous speaking). 13 (Laughter.) 14 MALE SPEAKER: (Inaudible) could we do a 15 sensitivity analysis on that? 16 MR. CYMBALSKY: (Simultaneous speaking) I always 17 say, "My diet starts tomorrow," and I never get there. 18 MALE SPEAKER: Yes, but you can get half the 19 distance to it. 20 MR. CYMBALSKY: Yeah, getting closer and closer. 21 So I think back to you -- so that's it on 22 shipments?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 81 1 MALE SPEAKER: Right. 2 MALE SPEAKER: We'll take a -- take 15 and -- 3 MR. CYMBALSKY: Take 15 and we'll be back at 4 9:45. 5 MR. deLASKI: Is there coffee somewhere that you 6 would advise us to do or is it too far? 7 MALE SPEAKER: Go down to the food court. 8 MR. SACHS: Go down to the food court at this 9 time. 10 MR. deLASKI: And we can get back in? 11 MR. CYMBALSKY: Yeah, make sure you bring your 12 badge (simultaneous speaking). 13 (Recess taken.) 14 MR. BANTLE: Let's go back on the record. 15 I think we are -- we do have Nick and John, they 16 can come in. Okay. I will pass it over to you, John. 17 Now we're back on the webinar, as well. 18 MR. CYMBALSKY: Okay. So we've kind of 19 completed the formal presentation that we prepared for 20 these two days. I know we're going to go back and 21 recover some -- some ground that we brought up that I 22 don't think we've had complete clarification on -- at

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 82 1 least in our minds. So Detlef, why don't you talk about 2 the COP/IEER mapping. 3 MR. WESTPHALEN: Yeah, one thing -- this is 4 Detlef Westphalen from Navigant -- we had some discussion 5 early on about efficiency levels and, you know, for most 6 of the discussion that we've had since then, we've 7 focused on electric heat or no heat air conditioners. 8 And obviously there are other aspects of other types of 9 equipment that are in the rule and, you know, during the 10 NOPR phase we established what we would be suggesting 11 going forward with -- for the efficiency levels for those 12 other equipment types. 13 And so that's something that's on the table that 14 really should be resolved before we go much further. And 15 I know there was some discussion of what DOE perhaps 16 should do in order to address those other equipment 17 types. So we have the IEERs for those other equipment 18 types: The gas units, and also the heat pumps, and then 19 the COP for the heat pumps. 20 MS. HOOTMAN: And something else I want to make 21 sure because, Nick, this kind of goes back to those 22 numbers and make sure we clarify what's in the numbers

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 83 1 and not in the numbers. 2 So -- also this covers split systems 5 through 3 20 tons, split air conditioning. We keep talking about 4 rooftop, rooftop, rooftop, rooftop, those were split 5 systems that are covered by 5 and 20 tons as well. Not 6 that I'm saying it's a different efficiency metric 7 necessarily. But when we talk about you want package 8 data, you want rooftop data, guess what? It doesn't 9 include shipping support. Now, I think the totals do. 10 MR. ROSENQUIST: Yeah, the totals do. 11 MS. HOOTMAN: But when you were asking for all 12 this BAB and all this other kind of stuff. First of all, 13 economizers don't go in split systems -- well, they can, 14 but it doesn't come from us. It's a real build-up 15 system, they do that. And you don't have on split 16 cooling shipments is always done by just the compressor 17 bearing units or the outdoor unit. 18 We don't track shipments for the air handlers. 19 So that's, you know, in the CV/VAV stuff that we did, 20 those are almost all CV; there's no VAV in split systems. 21 But they're also not necessarily -- I will tell you that 22 I can -- that I didn't supply that data. I didn't put

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 84 1 splits in there. 2 MR. WHITWELL: So I think -- Bob Whitwell from 3 Carrier. The question is, so the shipment data that we 4 were looking at just prior to this was that just for the 5 rooftops or did that include the splits and other types 6 of product that are included in this? 7 MR. ROSENQUIST: Yeah, I think it includes 8 splits. But, you know, off the top of my head, I 9 honestly can't -- 10 MS. HOOTMAN: Because the cost data doesn't 11 because I -- because they are different costs, and I'll 12 tell you that we've been giving it more packaging cost 13 stuff. 14 MR. WESTPHALEN: Yeah. And, you know, this has 15 been a fast-moving series of meetings. And so we put the 16 focus on the rooftop versus the air conditioners with 17 electric or no heat. 18 And so at some point very soon we have to come 19 to some understanding of how would the group like to deal 20 with all those other metrics and the different equipment 21 types? 22 MS. HOOTMAN: Right.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 85 1 MR. WESTPHALEN: And if that means back to the 2 drawing board, you know, obviously, you know -- 3 MS. HOOTMAN: I don't know it does. I'm 4 wondering if we can figure out scale, you know, X amount 5 of percent less -- X of cost, X amount percent less and 6 percent or (coughing). 7 MALE SPEAKER: Or -- 8 MS. HOOTMAN: We're looking at cost of the comps 9 or costs of the splits. 10 MR. CYMBALSKY: Or we have what we have in the 11 NOPR. 12 MR. WESTPHALEN: In the NOPR we have -- we have 13 applied set efficiency levels where there are 14 differentials for the gas heat. 15 MALE SPEAKER: Right, right, et cetera. 16 MS. HOOTMAN: Right. I was more thinking of the 17 actual costs. 18 MR. WHITWELL: So speaking of that, though -- 19 this is Bob Whitwell -- 20 MR. CYMBALSKY: So if you change these costs, 21 are you saying can we apply scale -- 22 MS. HOOTMAN: Yeah.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 86 1 MR. CYMBALSKY: -- to the other one? 2 MR. deLASKI: But I guess the question is: Do 3 you need to go through that exercise or do you do what we 4 did in the NOPR which is just, you make some engineering 5 judgment as to what the difference -- for any given 6 standard what the difference is for that if you're 7 choosing given EL, okay. And that's the adjusted to the 8 IEER to this equipment was the question. 9 MS. HOOTMAN: Right. And I guess back to Katie 10 in shipment data, you're not distinguishing what 11 buildings and heat pumps, what buildings are package 12 rooftops, what buildings -- 13 MS. COUGHLIN: We do split out buildings from 14 heat pumps. 15 MS. HOOTMAN: Okay. 16 MS. COUGHLIN: But we don't subdivide them any 17 further. 18 MR. SACHS: This is Harvey. And I guess I'm 19 curious how big a beast I'm hunting. Are these -- 20 this -- the -- other than resistance or none, it's a big 21 animal. What about the splits? Are these 5 percent of 22 the market? 2 percent of the market? In the 5 to 20.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 87 1 MS. HOOTMAN: In the 5 to 20, yeah (simultaneous 2 speaking). 3 MR. SACHS: 10, 20? 4 MS. HOOTMAN: 20, yes, probably. 5 MR. SACHS: So at 20-ish there's -- and you 6 always see that, as well, in the other firms? 7 MS. HOOTMAN: 15 and 20? I think it was around 8 15. 9 MR. SACHS: No, I'm sorry. The splits leaving 10 out the heat pumps out, what fraction is not packaged but 11 are part splits? 12 MALE SPEAKER: Yeah, I'd have to check. I don't 13 have that off the top of my head. 14 MR. WESTPHALEN: I guess one suggestion was: 15 Look at a different cost. But then, I guess -- you know, 16 the other suggestions, you know, look at the 17 differentials. We have done some looking at that, and we 18 didn't put it in the presentation -- the IEER 19 differential for gas heat versus no heat, for instance. 20 Or for heat pump versus AC. 21 And looking at a lot of variation -- but I'm 22 looking at that data, it would suggest that on the IEER

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 88 1 that the differentials that were in (inaudible) are 2 reasonable. 3 MR. SACHS: Can you remind us -- this is 4 Harvey -- can you remind us how a map against the 90.1 5 differentials? 6 MR. WESTPHALEN: We used exactly the 90.1 7 differentials. 8 MR. SACHS: So you came out with a strong 9 feeling that the 90.1 differentials are reasonable? 10 MR. WESTPHALEN: That was my recollection of the 11 data. 12 MS. HOOTMAN: It is. 13 MR. WHITWELL: Between the NOPR phase and now we 14 had somebody look at all the data very closely, and the 15 .2 for the gas heat, you know, the averages are .1 to 16 .25, that kind of thing if you look at like one with gas, 17 one without. 18 For the heat pumps, my recollection is that it's 19 similar to -- I think it's more like .5 differential or 20 maybe a 1 differential at the high levels to get numbers 21 exactly. 22 MR. SACHS: But again, consistent with the 90.1?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 89 1 MALE SPEAKER: Yeah, yeah. 2 MR. SACHS: 6.8/1.12. 3 MR. deLASKI: And we're talking about IEER now. 4 But we did negotiate those levels as part of the 2005 5 negotiation, a differential been done before? 6 MALE SPEAKER: Two times. 7 MS. HOOTMAN: Yeah. 8 MALE SPEAKER: Two times before. 9 MR. WHITWELL: So for gas heat unit and also for 10 heat pumps on the EER, and that's actually what that is 11 today the 90.1 split as well the differential, that's 12 what was in the NOPR as well. 13 MR. SACHS: So does anyone in the room consider 14 himself or herself smarter than Detlef and 90.1? 15 (Laughing.) 16 MS. HOOTMAN: No, I'm not -- 17 (Laughing.) 18 MALE SPEAKER: Let me think about that. Off the 19 record (simultaneous speaking). 20 MR. SACHS: So I'm hearing that nobody strongly 21 objects to using values developed by consultants and 22 consistent with 90.1 for those IEER differentials --

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 90 1 MR. HUNT: I second that motion, Marshall. 2 MR. THARP: Sorry, I was trying to look up some 3 data. 4 What was the comment on the IEER delta's .2 is 5 the comment has been made is basically the fan power 6 that's going to take this relatively consistent -- even 7 though you're going up -- I think that when you get to 8 the higher efficiencies, a slightly higher delta -- the 9 fan power is a higher delta of total power. 10 MS. HOOTMAN: Oh, I see what you're saying. 11 MR. THARP: So I think at some point -- I don't 12 know which EL level it will be -- but at some point I 13 think the .2 delta should go to .3 delta just because 14 that fan power to get over the gas heat exchangers -- 15 MS. HOOTMAN: Yeah, another tier, good point 16 (simultaneous speaking). 17 MR. deLASKI: Maybe we should circle back to 18 this when we get to levels? 19 MALE SPEAKER: I think so. Right. 20 MR. deLASKI: And you guys can look over -- you 21 look at any given level, you're going to look at your 22 products like you guys did and everybody would have to do

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 91 1 at that point. 2 MR. WESTPHALEN: But -- this is Detlef again -- 3 remember that the energy use is inversely proportional to 4 the IEER. So that .2 at a 14 is less energy contribution 5 than at a 12. 6 MR. THARP: Depending on how the manufacturer 7 chooses to get the IEER level. 8 MR. WESTPHALEN: I'm just saying theoretically, 9 forget about a .2 out of 12 is more than the .2 out of 10 14. And it's the inverse of the IEER that gives you your 11 energy use. And I understand your point. 12 MR. THARP: Right. 13 MR. WESTPHALEN: But, you know, the question is: 14 Does that already scale up as you go up in IEER? We can 15 look at the map and potentially look at the designs and 16 see if that (inaudible). 17 MR. THARP: I mean, as we look at it with our 18 products, that is where we estimated that at some point 19 it ought to go to a .3 delta. 20 MR. SACHS: Okay. Not ready for thumbs up? 21 MR. BANTLE: Yeah, so we can hold up a vote on 22 that one, but it's something that the manufacturers will

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 92 1 keep looking into. 2 MR. STARR: I have -- this is Louis Starr, and I 3 have a question. Is there any concern about if we agree 4 on certain EL levels that that would affect products 5 moving over in split systems in lieu of (inaudible) or no 6 concern about that at all? Meaning they would not buy 7 your rooftop might be a better option. 8 MALE SPEAKER: Something cheaper -- 9 MR. STARR: Or the standard levels or stuff 10 so -- 11 MR. SACHS: Well, a split inherently takes 12 inside the storage space and requires new duct work. 13 MR. WHITWELL: So your changing from RTU to 14 split I don't think is not going to change very much. 15 MR. SACHS: Maybe in marginal construction, but 16 this is not an RTU issue. 17 MS. HOOTMAN: What? 18 MALE SPEAKER: Changing split to rooftop or vice 19 versa. 20 MS. HOOTMAN: Changing what to where? 21 MALE SPEAKER: Somebody make a decision on it 22 and typically a replacement, whether you're going to

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 93 1 use (simultaneous speaking) almost always. 2 MS. HOOTMAN: Almost always. So you have a 3 major renovation up there, because if they didn't have a 4 roof structure before, they didn't have a roof -- 5 MR. THARP: (Simultaneous speaking) yeah, and 6 they might be looking for features of a rooftop that you 7 don't get with a split. 8 MR. CYMBALSKY: So is the only question we're 9 struggling with here is what the mapping is the .2 versus 10 the .3? Or is there, based on that mark, that leads to 11 our analysis? 12 I heard two different things, so we're asking 13 because we want to make sure we don't have to do any more 14 work. And then I heard, well, it's just -- "We could 15 pick whatever the differential is when we get down to 16 negotiating." So which one is it? 17 MR. WHITWELL: I think it -- from my perspective 18 on the manufacturers side -- we have to look at -- we 19 have to look at what the fan power percentage is going to 20 be of the total power as you get up into the higher EL 21 levels. And, see, if the .2 or the .3 differential is, 22 you know, if we've got to go from .2 to a .3 at some

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 94 1 point. I think that is what -- I think that's what we 2 need to do. 3 MR. CYMBALSKY: Okay. And the other 4 consideration -- 5 MR. WHITWELL: I think that's what you were 6 implying. 7 MALE SPEAKER: Yes. 8 MR. WESTPHALEN: With the question to the SAV 9 and BAV, I think that split would push you in the other 10 direction. 11 MR. WHITWELL: Well, the SAV and BAV, it doesn't 12 do anything for heat performance because you're 13 actually -- you wouldn't want to go to lower fan speeds. 14 If you do, you're going to reduce the efficiency because 15 you're going to have less air over the -- what's now the 16 condenser at a heat pump. 17 MALE SPEAKER: But this is the IEER which would 18 be the cooling movement. 19 MALE SPEAKER: Okay. Fair enough. Right 20 (inaudible) so state your question again. 21 MR. WESTPHALEN: I guess, you know, these levels 22 are typically pushing, and 90.1 is pushing the designs to

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 95 1 SAV for cooling load and the IEER is very much weighted 2 on the 75 percent and lower load points where you have 3 the staging of the airflow. So that -- you know, the 4 question would be, you know: Would that mitigate the 5 push up to a .3 differential, the higher level? 6 Something to consider. I don't know. 7 MR. WHITWELL: A heat pump BAV -- I don't think 8 we have E-pump BAVs. Do we have E-pump up BAVs? 9 MS. HOOTMAN: Nope. 10 MR. WHITWELL: Stage their value -- 11 MR. WESTPHALEN: Well, I thought you were 12 talking about E-pumps, but I thought we were talking 13 about the .2 for the gas. 14 MR. WHITWELL: Okay. I was thinking .2 for gas. 15 MR. WESTPHALEN: Well, for heat pump that's 16 greater than .2 at most of these higher levels. I don't 17 have the table in front of me, but it's more like .7 to 18 1, depending on the class. 19 MS. HOOTMAN: Well, you realize that nobody 20 notes them above except me, and I just happen to have one 21 that's at like 240-plus capacity. There's nothing else 22 besides that.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 96 1 MALE SPEAKER: Would you want to hold that heat 2 pump into the large class so that we don't have to have a 3 very large class? 4 MS. HOOTMAN: We'll have to see where these end 5 up, what positions these end up, and what we will have to 6 do. That may be a totally redesigned cabinet now. I 7 can't tell you what we'll do with it. 8 MR. WESTPHALEN: I guess, going to John's 9 question, I mean, what we could do is for next time or 10 even if it makes sense to try to package some of our 11 research, you know, to send it to the group, you know, in 12 the next few days, say, that could help in your thinking 13 about -- 14 MS. HOOTMAN: And that's different than the TSD; 15 Yes? No? Or was what you put into the TSD stuff? 16 MR. WESTPHALEN: What we did is we went back to 17 the AHRI database and tried to look at -- 18 MS. HOOTMAN: Oh, okay. 19 MR. WESTPHALEN: -- you know, comparable units 20 to what's the differential. And, you know, in 21 retrospect -- plus we're so busy trying to put everything 22 together for today that we did. But in retrospect, it

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 97 1 would have been helpful to prepared that representative. 2 But, I mean, we can certainly think those kind 3 of package together (inaudible) you know, I'm just trying 4 to think of, you know, what do I need to do to make this 5 process move forward so that we can get to the end fall. 6 And if there's something that, you know, you can tell me 7 now that, "All right. Well, this would help." 8 MR. WHITWELL: So let me make sure that I 9 understand Detlef. So you said you've gone through the 10 AHRI database and you've done -- you've taken a look at 11 the gas heat units and versus the cooling units and done 12 a comparison of the IEER-graded IEER (inaudible). 13 MR. WESTPHALEN: Right. Correct. 14 MR. WHITWELL: And also the same for the heat 15 pumps; right? 16 MR. WESTPHALEN: Yeah, with the heat pumps. 17 With the heat pumps it's a little bit harder -- 18 MR. WHITWELL: Right, it's a little bit harder. 19 MR. WESTPHALEN: A little bit harder to see. 20 MR. WHITWELL: Okay. So that -- yeah, if you've 21 got that data, that would be helpful to look at and it 22 would save us (inaudible) to do that. I mean, it would

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 98 1 help us to see what it looks likes across the whole AHRI 2 database. 3 MR. WESTPHALEN: Yeah. I'm not sure we have it 4 for every last unit and every last manufacturer, and 5 so -- but I guess I'll take an action item to look at 6 that and make sure it's, you know, ready to send out and 7 by the end of Friday, say, so that you have a nice long 8 weekend. 9 (Laughter.) 10 I mean, I think that's -- you know, that would 11 be a reasonable goal so that you could start thinking 12 about that aspect. 13 And you mentioned the split systems, you know, 14 it has always been our understanding that if we do an 15 analysis for single package, that that would be 16 sufficiently representative of the economics. 17 MS. HOOTMAN: In a -- yes, I would agree that on 18 the economics, it probably is. I just wanted a caution 19 that it's probably what we have to put words around what 20 data we're going to give you in shipments and what it 21 does include, what it doesn't include. 22 So that's more what I was just trying to make

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 99 1 sure we, you know, explain and don't explain because it 2 doesn't have anything to do with economizers. So how we 3 derived economizer shipments, it didn't have anything to 4 do with it. It doesn't have anything to do with CV/VAV 5 splits because they're all -- I don't mean splits in that 6 sense -- but the percentage splits, you know, they're all 7 counts of volume. 8 MR. WESTPHALEN: Yeah, I just wanted to be sure 9 that you're not suggesting that what we really need to go 10 back and do a whole analysis. 11 MS. HOOTMAN: No, that was not what I meant. 12 MR. WESTPHALEN: Okay. 13 MS. HOOTMAN: The cost of the package unit is at 14 least that expensive. 15 MR. WESTPHALEN: Yeah. Okay. 16 MS. HOOTMAN: Split system could be less, 17 technically. 18 MR. WESTPHALEN: All right. 19 So that covers the split equipment, covers the 20 differentials, and IEER. Maybe the more tricky one -- 21 MS. HOOTMAN: But the one thing you might need 22 to remind us of is what did you -- the package heat

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 100 1 pumps. Okay? What are you -- what's the cost difference 2 between one differential and all these costs? So -- 3 MR. WESTPHALEN: Well, we haven't been looking 4 specifically at heat pumps, you know, from the 5 perspective of the cost differentials. 6 MS. HOOTMAN: Okay. 7 MR. WESTPHALEN: And, you know, the approach has 8 been that if we select the right differential there that 9 that would be an appropriate way, too (inaudible). 10 MS. HOOTMAN: So if the building stock has 10 11 percent, let's say, heat pumps and they're more 12 expensive. To me, we should be looking at 10 percent of 13 the stock being more expensive. 14 MR. WESTPHALEN: And that the differential cost, 15 even though you're not going quite as high in efficiency, 16 would then make the economics look different. 17 MS. HOOTMAN: Yeah. What would they do to them? 18 Since you're also probably giving the benefit on the 19 heating side as well more efficient for the heating side, 20 more efficient then, I guess, on the heating side. 21 MR. WESTPHALEN: You don't have to go quite as 22 high in IEER, so maybe the challenges that you have with

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 101 1 heat pumps are mitigated by that (inaudible) then you may 2 have higher cost differential because heat pump cost more 3 and you're making less of them and they -- you know, 4 economics of scale don't play out as well. But then -- 5 MS. HOOTMAN: It's more coil surface, that's why 6 they're expensive. 7 MR. WESTPHALEN: Yeah, but then you're saving 8 more potentially, so -- 9 MS. HOOTMAN: In energy savings you could. 10 MR. WESTPHALEN: Exactly, that's what I'm 11 saying. So in a perfect world, we would have thoroughly 12 analyzed those as well. 13 MS. HOOTMAN: But you say there probably is a 14 wash in this? 15 MR. WESTPHALEN: I mean, that has been the 16 approach that we've taken and John mentioned that, you 17 know, when we initially were comparing to the NOPR, it 18 was the (inaudible) saying NOPR by the end of the year. 19 So it was a time crunch then; it's a time crunch now. 20 MS. HOOTMAN: So I guess in the future, we need 21 to make sure that that's analyzed. 22 MR. SACHS: Yeah. Joe, this is Harvey. And I

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 102 1 may be missing something, so that we're saying that the 2 heat pump is being the more expensive item, there's air 3 conditioning performance is less good than the comparable 4 resistance or (inaudible) but on the other hand, it's 5 cost per function -- 6 MS. HOOTMAN: It's getting heating better 7 performance than your gas or you're (speaking under 8 breath). 9 MR. SACHS: So we have to give a portion, a part 10 of that implemental cost to this heating function. So I 11 think that's where the question is: Does this come out 12 as a wash? 13 MS. HOOTMAN: Yeah, but that -- since I didn't 14 analyze it and we don't know, I think we're just going by 15 what we think our educated guesses were going to go. 16 MR. SACHS: I just want to make sure that if 17 we're looking at the penalties, we're also looking at the 18 benefits. 19 MS. HOOTMAN: Yeah. 20 MR. SACHS: And I'm sure you do, too. 21 MS. HOOTMAN: Uh-huh. 22 MR. WESTPHALEN: Well, that gets us into the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 103 1 discussion of COP, which certainly has been a topic of 2 comments that -- 3 MS. HOOTMAN: The IEER is the COP? 4 MR. WESTPHALEN: Well, if you look at the 5 correlation of COP to EER, that's not any good, either. 6 MS. HOOTMAN: Yeah. Agreed. 7 MR. WESTPHALEN: And so in the NOPR, the 8 efficiency levels established had a very modest COP 9 increase as the IEER increased. 10 If you do a correlation, the R-squared value for 11 that is not very good. You know, there's the discussion 12 of looking at the benefits on the heating side. Well, 13 if -- if we don't consider increasing COP, there will be 14 no benefits. 15 MR. SACHS: This is Harvey. And it seems to me 16 that even more speculative is that we've had a fair 17 amount of discussion about the shift to IEER means that 18 in the time frame when this rule becomes effective, we'll 19 already be seeing redesigns for IEER optimization, rather 20 than EER optimization. 21 So the question is -- arises to me as an 22 outsider: What are the signals that make sense in terms

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 104 1 of getting good heating performance out of that redesign 2 cycle rather than looking just at today's products? 3 I don't have an answer, but I sure would like to 4 frame it that way so we don't have sudden surprises when 5 everybody says, "Gee, we left a lot of stuff on the table 6 with COP at the last round. What should we do now, even 7 though everybody will have to redesign" -- 8 MR. WHITWELL: So when we think about it, the 9 things that we would do -- Bob Whitwell from Carrier -- 10 to increase IEER its compressor staging and fan staging, 11 which, unfortunately, don't do anything for heat pump 12 efficiency. So for heat pump efficiency, you know, what 13 do you do? 14 Basically, I guess, you would look at making the 15 evaporator coil bigger, which is not necessarily the way 16 to help to get better IEER. 17 MR. SACHS: And remind me, please -- this is 18 Harvey of the -- 19 MR. WHITWELL: I said evaporating. I mean 20 indoor coil. 21 MR. SACHS: Yeah, the ratio of heat pump to gas 22 pack?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 105 1 MR. WHITWELL: It's probably -- heat pump to gas 2 pack, probably 20 percent. 3 MR. SACHS: So that I've apportioned mine 4 (simultaneous speaking). 5 MR. WHITWELL: And that's -- it's all at the 6 smaller -- 7 MS. HOOTMAN: It's all at the smaller. 8 MR. WHITWELL: The small and the large, and the 9 very large, there's -- 10 MS. HOOTMAN: Yeah, since I'm the only one here. 11 MR. WHITWELL: So one. 12 MS. HOOTMAN: One. 13 MR. WHITWELL: One unit. 14 MS. HOOTMAN: One unit is in the very large. 15 MR. SACHS: And you're going to fix that? 16 MS. HOOTMAN: Maybe, maybe not. I don't know. 17 I mean, that cabinet's pretty frickin' long. I don't 18 know what's going to happen as the week goes on. 19 MR. WESTPHALEN: All you have to do is going 20 from 240 to 239; right? 21 MS. HOOTMAN: It is a lower level up there. 22 FEMALE SPEAKER: Have we answered Detlef's

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 106 1 questions? 2 MALE SPEAKER: No. 3 MS. HOOTMAN: No. 4 MR. SACHS: We did not answer Detlef's 5 questions, but we've scaled its importance. 6 If the heat pump is much less frequent than the 7 gas pack, then we have less -- I personally have less 8 interest in having COP drive design decisions for 9 something that's such a relatively small fraction of the 10 energy used in the machine -- 11 MR. WHITWELL: Sorry, Harvey. I didn't mean 12 to interrupt you. 13 MR. SACHS: No, not at all. 14 MR. WHITWELL: So I mean, the other thing to 15 think about is, if we look at a heat pump unit, it's 16 still going to be running most of its time in the 17 (inaudible) just because of the way commercial buildings 18 run. 19 MALE SPEAKER: Possible exceptions are smaller 20 units in the northern quadrants. 21 MALE SPEAKER: But, I mean, if you look at it 22 overall, it's -- you're going to be running a lot more

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 107 1 hours in cooling than you are in heating. 2 And then the heating is only going to be 3 (coughing) gets to a certain point and if it's a really 4 cold place, they probably have -- they're probably using 5 gas (simultaneous speaking). 6 MS. HOOTMAN: Package heat pump or a split heat 7 pump? 8 MR. SACHS: Case in being the heat pump in 9 Minnesota. 10 MALE SPEAKER: Correct. 11 MR. CYMBALSKY: I would have guessed the 12 opposite, that it would be somewhere in the more 13 temperate climate? 14 MS. HOOTMAN: Well, you could get it in the 15 north, but you could get it in Portland, Washington, 16 because they don't have those low -- 17 MR. CYMBALSKY: I think -- I guess when I think 18 north versus south, those guys are more temperate than -- 19 I always think mid-Atlantic above. 20 MR. WESTPHALEN: But maybe we should ask Greg if 21 Greg knows from the NOPR analysis, say, how much of the 22 savings calculated at different levels were associated

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 108 1 with COP increase with the heat pumps. 2 MR. ROSENQUIST: Well, very little. All right? 3 I mean, we used correlations from that most recent AHRI 4 database at that time. 5 MS. HOOTMAN: Yeah, for you are two thousand -- 6 MR. ROSENQUIST: Yeah, and there's no change in 7 COP with IEER, not -- so there no savings at all from the 8 heating side. 9 On the small class, the 7.5-ton, you know, from 10 the baseline to the max tech it went from 3.3 to 3.7. 11 And so, you know, you've got on average around 300 12 kilowatt hours a year or per unit. So again, it's 13 dominated by the cooling side. 14 So if we go with a similar approach for what we 15 used on the proposed rule, I'm expecting that we'll get 16 similar results. 17 MALE SPEAKER: So -- so -- 18 MS. HOOTMAN: In the outlook period, though, I 19 will say that there's going to be some switching of types 20 in California because of low nox level that they're going 21 to go to. It's going to be hard to make designs at those 22 low nox levels, so we're going to be forced into heat

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 109 1 pumps, I think. 2 And we're not -- again, we're likely not going 3 to make every design we have in those low nox levels, so 4 maybe one of those or they start to pick things. But 5 right now, those low nox levels are only down there at 6 the 5-tonnish range and below; right? 175,000 BTUs and 7 something of heating and whatever. I mean, we're only 8 talking about going in the commercial arena. 9 MR. WHITWELL: Yeah, they've started that 10 effort. 11 MS. HOOTMAN: I'm only speculating where that 12 would go. 13 MR. WINNINGHAM: But in the time frame that 14 we're talking about (inaudible) it's likely that that 15 will happen? 16 FEMALE SPEAKER: The commercial sides, yes. 17 They're definitely talking commercial regulation here, 18 because I go to that 14 anagram. And I don't want to go 19 and change each design. 20 MR. WESTPHALEN: One would hope that would be a 21 second order effect that I'm sure Katie isn't interested 22 in trying to integrate that (inaudible).

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 110 1 (Laughter.) 2 MR. ROSENQUIST: Unless you have a cross press 3 elasticity; right? 4 MS. HOOTMAN: Well, I think 40 is a large 5 market. So just by its nature, it's a big market. So 6 biggest air conditioning market. 7 MR. WESTPHALEN: Understood. I imagine it is in 8 effect there, but is it -- you know, recommending that we 9 consider that? 10 MS. HOOTMAN: I don't know what it would do to 11 what he was saying on the energy usage stuff. If all of 12 a sudden those were all gas electrics in California, and 13 they all switched to heat pumps, would that change? I 14 don't know. 15 MR. WESTPHALEN: I mean, ultimately the question 16 on COP is, number 1: Should we consider increases in the 17 COP? And then, number 2: If we do, how will we, you 18 know, work through -- 19 MS. HOOTMAN: Yeah. 20 MR. WESTPHALEN: -- figuring that out? Do an 21 analysis? Do it based on a negotiation? 22 MS. HOOTMAN: Right.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 111 1 MR. WHITWELL: I mean, just thinking about it 2 quickly here, and I haven't -- I mean, there's 3 certainly -- I'm not -- I don't have designs for this. 4 But Greg, you said at the higher EL levels you're 5 thinking there was an analysis that included heat pumps 6 going from 3.3 to 3.7 COP? 7 MR. ROSENQUIST: Yeah, for the seven-and-a-half 8 ton plus. 9 MR. WHITWELL: So I mean, I'm thinking that when 10 that -- if that were to happen, will the designs between 11 a cooling unit and a heat pump unit are going to 12 diverge -- 13 MS. HOOTMAN: Diverge. 14 MR. WHITWELL: So today while a heat pump is 15 very similar to a cooling unit, some changes. 16 MS. HOOTMAN: Yeah. 17 MR. WHITWELL: But as you start looking at that 18 where you're designing a unit to optimize IEER, and then 19 another one that's going to have to hit a higher COP, 20 then those designs are going to be far wider apart today 21 than -- in the future than what they are today. 22 MR. CYMBALSKY: So how far in the future is this

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 112 1 nox thing you're talking about? 2 MS. HOOTMAN: Well, the nox for the 5-ton and 3 lower is right now. 4 MR. CYMBALSKY: Right. But the ones that you're 5 saying -- 6 MR. WHITWELL: Well, it's October 2016. And 7 they've already started working on -- they've started 8 looking at a road map to move that -- the commercial 9 equipment to that same 17 -- 10 MS. HOOTMAN: They don't give you a lot of a 11 great timing on this. They're not into a process rule 12 and regulatory scheme. 13 MR. WHITWELL: They've started -- they're 14 saying -- their assumptions -- 15 MR. CYMBALSKY: You say we're doing things good 16 here? 17 (Laughter.) 18 MS. HOOTMAN: Don't get too excited. There was 19 a rule that you didn't follow. 20 MR. CYMBALSKY: Everything's relative, trust me. 21 Everything's relative. 22 MR. WHITWELL: Their assumption is that the same

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 113 1 technology can be used for commercial equipment as 2 residential. There's no residential equipment that has 3 the technology to do that today. 4 MS. HOOTMAN: Yeah. 5 MR. WHITWELL: And that's the issue because -- 6 MR. CYMBALSKY: The only reason that I bring 7 that up is because, you know, we're here today on this 8 one; and six years later, there will be another one. And 9 I'm saying, well, is it the next one where we worry 10 about -- 11 MR. WHITWELL: We may already be there. I don't 12 know. 13 MR. CYMBALSKY: I don't know either, that's why 14 I asked the question. 15 MS. HOOTMAN: That's why I said there's no 16 loosey-goosey -- they have this -- they're very -- 17 MR. THARP: And within two years they could say, 18 "Oh, we want it next year." 19 MS. HOOTMAN: Yeah -- 20 MR. WHITWELL: It's not like DOE where you have 21 three years -- 22 MALE SPEAKER: Minimum time frame (simultaneous

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 114 1 speaking) it could be any time. 2 MS. HOOTMAN: (Simultaneous speaking) so air 3 quality boards in each one of the areas: The Bay Area -- 4 yeah, those guys. 5 MALE SPEAKER: It's true about EPA requirements 6 for -- 7 MS. HOOTMAN: Yeah, they're container -- 8 MR. CYMBALSKY: Yeah, I was just trying to ask a 9 question to see -- 10 MR. WINNINGHAM: Probably a three-ish, yeah. 11 MS. HOOTMAN: It could very well be in this 12 contract. 13 MR. CYMBALSKY: I mean, I don't know how to 14 resolve the issue. 15 MR. WHITWELL: Yeah, I don't know that there's 16 anything we can do. 17 MR. CYMBALSKY: I don't know if there's a 18 resolution here. I mean, we can identify the issue, but 19 I don't see how to resolve it, frankly. 20 MS. HOOTMAN: No, I don't, either. I'm just 21 kind of saying that that looms out there and we might 22 have switching. But I don't know how to tell you when

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 115 1 that switching will happen. I don't know. 2 MR. HUNT: This is Marshall Hunt -- 3 FEMALE SPEAKER: Did we answer Detlef's 4 question? 5 MR. CYMBALSKY: We're getting closer. 6 MR. HUNT: Marshall Hunt from PG&E. So if I'm 7 concerned about peak demand and I can't get my second 8 variable, the EER, at least with the heat pumps I can 9 have a higher COP and have a better compressor size at B. 10 MS. HOOTMAN: You could, Marshall. But just as 11 he just described, they start diverging. It's a low 12 volume product, we're going to go out of the marketplace. 13 I mean, I'm not saying that that's going to be 14 those kind of economic decisions when I have to put 15 product development dollars into something and push comes 16 to shove, those are going to start to go -- oh, maybe I 17 won't put -- so do you want to get rid of a class? 18 MALE SPEAKER: Not if we need the nox solution 19 in this south coast basis. 20 MR. WINNINGHAM: And again, this is Dave from 21 Allied. Marshall, you know, COP was at 47, heat pumps -- 22 you're probably not going to see a peak collectible

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 116 1 demand in those conditions. 2 MR. HUNT: Well, I was thinking that that heat 3 pump is going to optimize the refrigeration size. 4 MR. WINNINGHAM: Optimizes differently in 5 heating than in cooling. 6 MR. HUNT: And so maybe it would get me a better 7 EER in cooling. 8 MS. HOOTMAN: It's not. 9 MALE SPEAKER: Well, the correlation 10 (simultaneous speaking). 11 MR. HUNT: But I'll consider that. Thank you. 12 MR. WESTPHALEN: So I guess, you know, from the 13 perspective of what the contractors need to do to support 14 the process, I'm not hearing much in terms of what -- I 15 mean -- you know, certainly putting on my engineer's hat, 16 you know, I would be very interested in thinking deeply 17 into, you know, the differences in how you make the heat 18 pump better versus the analytical -- put on my analytical 19 hat to say. Okay. 20 Well, you know, does it make sense if we split 21 the products? Where does this go? Where does that go? 22 What's cost effective for a heat pump? But we don't have

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 117 1 any of that time. 2 MS. HOOTMAN: I agree. 3 MR. WHITWELL: So should we do a sensitivity -- 4 sorry, go ahead. 5 MR. deLASKI: What I was going to say is, yeah 6 that's what you should do, right? If we had a lot of 7 time. 8 So when do you have a lot of time is when the 9 next time when we go back to this rule, whenever that is, 10 we would want maybe to include that in the terms sheet. 11 MS. HOOTMAN: Sure. Yeah. 12 MR. deLASKI: Maybe the next time there should 13 be a full analysis of the heat pump given what we -- I'm 14 hearing here that we expect the market to grow. And 15 maybe only 10 percent of square footage today these 16 last -- I don't know what the square footage of the heat 17 pumps compared to you know -- but it may grow; right? 18 MALE SPEAKER: Yeah, it can't be more than 10. 19 MR. deLASKI: So operating hours about 10 20 percent of the total operating hours of the equipment of 21 this is our number. So we're saying our property point. 22 Okay.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 118 1 So we chose not by a virtue of time and virtue 2 of a relative size, we can't focus on that this time. 3 Let's do it next time because we think it's going to grow 4 because of the California recs, because of the safe 5 decarbonization of the building stock. 6 MR. WESTPHALEN: So has it become a 7 negotiated -- 8 MR. deLASKI: So the other question I would 9 ask -- what's that? 10 MR. WESTPHALEN: So I guess -- I think what 11 you're leading to is -- 12 MS. HOOTMAN: Negotiate. 13 MR. deLASKI: What the (inaudible) should be. 14 And what I would ask the manufacturers, the point that 15 Harvey's making is to the extent that you guys are 16 looking for -- you want to redesign -- what I heard 17 earlier was you want to redesign once, you want to know 18 the road map. 19 So the extent that you want a road map on COP, 20 you know, we're looking to you guys for, you know, how do 21 we come up with numbers that would give you time, you 22 know, so that, you know, maybe you'll -- what makes sense

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 119 1 to you looking at your desire for a road map? 2 And because the data doesn't give us -- you're 3 telling us that the data doesn't give us any correlation, 4 we can't just look at the sales and say, "Well, if IEER 5 doesn't do it," you're saying that engineering doesn't 6 support doing correlation, so -- 7 MR. WHITWELL: Right, not with IEER. 8 MR. deLASKI: So lacking analysis, I don't have 9 anything; right? I don't have correlation. I don't have 10 engineering and analysis. 11 MR. WHITWELL: Would it be worth doing a 12 sensitivity to say whatever the keep on -- the COP were 13 to stay the same, you know, what's the difference in 14 energy? 15 MR. ROSENQUIST: Again, we analyzed heat pumps 16 in the shipments in IA, right, by making assumptions 17 about what the relationship is between the IEER for AC 18 versus heat pump, right. And so we can -- and then we 19 calculated that roughly speaking at nine-and-a-half 20 percent of total shipments are heat pumps. 21 So from there, we can get cooling side energy 22 savings through the heat pumps and add that into a

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 120 1 national area savings total. So in the proposed rule we 2 did that; right? And what I just told you before is that 3 very, very little of that national area savings came from 4 the heating side. 5 MR. WHITWELL: Heating side, right. That's what 6 I recall. 7 MR. ROSENQUIST: And basically, it was a case 8 where we didn't have any savings (speaking under breath). 9 MR. WHITWELL: With an increase in IEER. 10 MR. ROSENQUIST: With an increase in IEER, so -- 11 MR. WHITWELL: Well, you had an increase in COP 12 there. 13 MR. ROSENQUIST: I mean, we had the IEER 14 covered, but the COP only -- 15 MR. WHITWELL: (Simultaneous speaking) so we can 16 play with a COP, but there's not going to be a big 17 benefit. 18 MR. ROSENQUIST: Yeah, it didn't contribute 19 hardly anything to the national energy savings 20 (inaudible). 21 MR. deLASKI: And how did you come up with the 22 COP increases?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 121 1 MR. ROSENQUIST: Again, we're using the AHRI 2 database and just plotting (simultaneous speaking) a 3 poorly correlated way, but -- 4 MR. deLASKI: But that was only in the small 5 tonnage; right? In the medium and large there was no 6 correlation. So you had no savings -- 7 MR. ROSENQUIST: No savings whatsoever. 8 MR. deLASKI: So in the small units, you've 9 got correlation so we could look at that correlation and 10 we can decide if that makes sense to adopt that as the 11 level? 12 MR. WHITWELL: Yeah, but the correlation doesn't 13 make sense; right? 14 MR. deLASKI: Okay. I get it. 15 MR. ROSENQUIST: Yeah, I don't have the 16 correlation coefficient here, but -- 17 MR. WHITWELL: But you did do an independent 18 correlation, you're saying, at a higher COP levels and 19 the savings was minimal? 20 MR. ROSENQUIST: Yeah. So at the level that was 21 proposed, it was -- yeah, it was less than -- well, it 22 was around 100 kilowatt hours per year, per unit, right,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 122 1 so I don't know what that translates to in terms of 2 quads. 3 MR. SACHS: But with five heat pumps, you can 4 save about as much energy as a very efficient 5 refrigerator uses in a year. 6 MR. CYMBALSKY: That's a standard number, not an 7 official -- 8 MR. SACHS: Yeah. So we really are talking 9 about something in this context that's pretty small given 10 the small fraction. 11 MR. CYMBALSKY: Yeah. I mean, I would suggest 12 we keep -- I mean, we've got a lot of other things that I 13 think are bigger. And then at the end, when we're 14 negotiating with the COP out on the table and whatever 15 the group comes up with. 16 Are we good with that, Marshall? 17 MR. SACHS: So there's one other reason -- 18 MR. CYMBALSKY: Because I don't think the 19 numbers are going to actually give us a path. 20 MR. deLASKI: A number, right, we've got to hear 21 from you guys because I'm not going to have a number. 22 MR. SACHS: Another -- this is Harvey. And I'd

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 123 1 suggest there's one other reason for leaving that right 2 now, and it ties to some of Marshall's interests, and it 3 ties into Andrew's proposal of putting this in the term 4 sheet for work for the next round. Because between now 5 and then, there's opportunity for utilities that have a 6 substantial interest in making that fuel switch or in -- 7 or in other -- other things to explore the market 8 opportunities to their incentives. So it gives us an 9 additional potential data stream if there's real interest 10 in this that would support the next round of work. 11 So for that reason, also, I'm -- I'm pretty 12 comfortable with letting that dog lie. 13 MR. HUNT: This is Marshall Hunt with California 14 PG&E, and I just made a note to myself to bring this up 15 to our state-wide group, get ahead of it. 16 That sounds really good, Harvey. 17 MR. CYMBALSKY: Does anyone disagree with this 18 path we've laid out? 19 MS. HOOTMAN: Thumbs up? 20 MR. CYMBALSKY: That's great. 21 MR. SACHS: Hey, Ted, you're looking at thumbs. 22 MR. WESTPHALEN: I guess, just reiterating what

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 124 1 I heard on the IEER differentials, I'll distribute some 2 information and then everybody will think about it and 3 discuss what the differentials are, and then perhaps will 4 be a negotiation topic rather than an additional analysis 5 other than what I'll send. And then on the COP, that 6 will just be a negotiation topic as well. 7 MR. CYMBALSKY: Okay. Great. 8 The other issue, again, we talked about the dual 9 duct units earlier. And I know AHRI hasn't had a chance 10 to put together a proposed definition of what these would 11 be. 12 But -- I mean, I'd hate to put you on the spot, 13 Bob, but you're the only other guy who kind of has these 14 things. Could you propose a definition of -- I mean, if 15 we wanted to propose to exclude these from this current 16 rulemaking and carve it out, what would be a locked-box 17 definition? 18 MR. WHITWELL: Yeah. Okay. I'll come back next 19 time and then -- 20 MR. CYMBALSKY: Okay. Great. 21 MR. SACHS: On a cleaner capacity. 22 MR. WHITWELL: Yeah, I mean, right now it's a

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 125 1 very -- at least from my perspective -- ours is -- goes 2 to like 8 tons (speaking under breath). 3 MR. CYMBALSKY: Okay. And we'll look at -- look 4 at what we know, as well. 5 MR. WHITWELL: I think we're talking about two 6 models, you know. 7 MR. CYMBALSKY: Right. Okay. So that's that. 8 And then the other things we still had to do 9 were, I think, the curve. 10 MR. WESTPHALEN: Yeah. So for curve adapters, 11 the first question is really, you know, I went through 12 description of how we could introduce a distribution, 13 different levels of use of adapter curves or curve 14 adapters at the different levels considered. Should we 15 introduce that, you know, throughout the downstream 16 analysis? 17 MS. COUGHLIN: So for -- to make this into 18 something that can be practically completed by next week, 19 what we would is for each of our -- for each row in our 20 analyses sample, it would be an average of with the curve 21 and without the curve. 22 So it would average the energy use and the costs

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 126 1 and that weighting of the with and without curves would 2 change with EL according to the distribution that Detlef 3 developed. So this approach is going to give you the 4 correct average LCC results, which is what most people 5 focus on, and it will give you -- us the correct average 6 numbers which get exported into the shipments in the NIA 7 and the MIA. 8 It will not give us the correct distribution of 9 net cost, net benefit because we're -- in reality, 10 nobody's a hybrid of a curving and no curve; they're one 11 way or the other. However, I think if we make this 12 compromise, we can actually do this reliably for the next 13 round. 14 And I'm not -- I don't think having -- the 15 alternative would be to try to restructure the LCC 16 spreadsheet, which creates a lots of potential for bugs 17 that we won't be able to find by the next two days. I 18 mean, we will, over the longer term, implement it fully. 19 But to move forward next week, I think if we just do the 20 averaging we'll -- like I said, we'll get reliable 21 results. The average LCC in downstream analyses. So 22 that's the proposal on the downstream conversion curve.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 127 1 MR. SACHS: This is Harvey. And that certainly 2 sounds reasonable. And you're in -- Katie, but I'm not 3 quite as sure how certain we'll be of Detlef's 4 contribution on the -- on the curves, and I wondered if 5 you could explain a little bit more. What are you 6 providing to Katie? 7 MR. WESTPHALEN: What I would be providing is, 8 you know, we have the distribution. 9 MALE SPEAKER: Do you remember which slide -- 10 MS. HOOTMAN: 30. 11 MR. deLASKI: 31. So this was your presentation 12 yesterday; right? 13 MS. HOOTMAN: The blue bars is what we're -- 14 MALE SPEAKER: You'll look at page 30. 15 MR. deLASKI: It's 32 up there. 16 MR. WESTPHALEN: 32. This one. 17 MALE SPEAKER: Okay. Sorry. 18 MR. WESTPHALEN: So on the pressure drop side, 19 you're using a three-quarter, or a 1.25 inches if you 20 want to call them, for the air distribution. You add 21 something for the curve. Now, if you -- the curve 22 adapter -- if you don't have the adapter, what you add is

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 128 1 zero. If you do have the adapter, you add whatever 2 number that will be part of our next discussion as to 3 what we agreed the number should be. 4 And then for all of those replacements where, 5 you know, say if you have, you know, 31 percent of 6 80 percent, you know, roughly, say, 35 percent or 7 whatever that is of the replacements having the curve 8 adapters, you would apply that percent to that pressure 9 drop. And that's -- and then we would calculate the 10 appropriate fan powers and capacity we're all trying to 11 associate it with that for that efficiency level. 12 Then, as that percentage of use of the 13 conversion curves increases, you know, that fraction of 14 the pressure drop will be increased. So as the ELs go 15 higher, the total static that they would use in their 16 analysis would increase. Likewise, the applied cost of 17 the conversion curve would be ratioed in that fashion. 18 MS. COUGHLIN: So you can think of these blue 19 bars as like a weighting between how many people have a 20 conversion curve and how many people don't. 21 So the blue bar is the fraction of people that 22 have one. So right now what we have in the analysis is

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 129 1 essentially it's zeros up to 3, and then it jumps to 80 2 percent and stays flat. So this way, we'll wait in the 3 base-case will be 30/70 and we'll sort of move up higher 4 weightings to higher ELs, so it will sort of smooth out 5 the penalties associated with the conversion curve. 6 MR. SACHS: I like it. 7 MR. deLASKI: I mean, it reflects the data that 8 you checked with us yesterday. 9 MALE SPEAKER: Yeah, and then the next topic 10 is -- inputs to that analysis. 11 MR. deLASKI: Right. But it reflects what you 12 showed us in terms of those plots. 13 MALE SPEAKER: Right. 14 MR. BANTLE: So as far as a plan, can we use the 15 Navigant model applying the averages from that Katie 16 discussed? 17 Can we take a show of hands on that? Any hands 18 down? Nope? Okay. 19 MR. CYMBALSKY: Now the harder part. What 20 numbers do we average? 21 MR. WESTPHALEN: So I guess one of the numbers 22 is what is the right pressure drop to apply.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 130 1 MS. COUGHLIN: Again, we've got .2 currently for 2 seven-and-a-half and 15, and we have .35 currently for 3 the 30-ton. 4 MR. WESTPHALEN: And then we have different 5 information coming from the two vendors that we 6 discussed. 7 MS. HOOTMAN: What were those numbers, again? 8 MS. COUGHLIN: .2 for the seven-and-a-half and 9 the 15, and .35 for the 30. And then the new numbers 10 are -- 11 MR. WESTPHALEN: Sorry, the information from the 12 curve vendors, one curve vendor said .05 for a small, up 13 to .2 for a very large, and .1, I believe, it was for a 14 large. For the other vendor, the average number that I 15 came up with for commercial size was .26. 16 MS. HOOTMAN: But that one wasn't stair set 17 .26 -- 18 MR. WESTPHALEN: I didn't try to split that. It 19 only went up to 10,000 CFM, which -- high 20s. 20 MS. HOOTMAN: Yeah. 21 MR. WHITWELL: So -- sorry, what was the first 22 one again? The first (inaudible) --

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 131 1 MR. WESTPHALEN: .05 for small, .1 for large, .2 2 for very large. 3 MR. WHITWELL: What's "very large" for the -- 4 MS. HOOTMAN: Those are for like line cabinet to 5 line cabinet. 6 MS. COUGHLIN: 30 tons? 7 MR. WESTPHALEN: Yeah, the 30 tons represent our 8 very large in our -- 9 MS. COUGHLIN: It's on slide 24, I think -- 23, 10 24, depending on the -- one more. 11 MALE SPEAKER: Found it. 12 MS. COUGHLIN: Yeah. 13 MR. WESTPHALEN: Yeah. I didn't put -- remember 14 the parenthesis large should be very large, then. 15 MS. HOOTMAN: So if we left it the way it is, we 16 don't have to recalculate this? You don't have to apply 17 those averages; is that correct? 18 MS. COUGHLIN: Well, I'm going to have to 19 recalculate anyway for other reasons, but -- so that's 20 not a problem. 21 MS. HOOTMAN: I'm trying to save you some -- 22 MR. STARR: What would be the -- this is Louis

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 132 1 with NEEA -- what would be the middle of the range of 2 numbers between -- 3 MS. HOOTMAN: .26 -- 4 MR. STARR: -- for your higher and lower and for 5 the small? It seems your seven-and-a-half and 15-ton is 6 probably going to be the same number either way. Is that 7 generally the concept, or are you -- would, perhaps, you 8 could provide an opinion on that. Would a 9 seven-and-a-half have one number? 15 have one number? 10 And a 30-ton have one number for the pressure drop across 11 the curve? Does that make sense? 12 MR. WESTPHALEN: Based on all the information 13 that I've looked at, there is not -- I would expect 14 there's not a whole lot of correlation with capacity, 15 which is something we discussed at the previous round of 16 meetings. It just happens -- 17 MR. STARR: Velocity. 18 MR. WESTPHALEN: It potentially would be 19 velocity and where you step up to the larger box size and 20 have more duct area. And the Vendor A numbers may be the 21 way they do their designs, it just so happens to go that 22 way.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 133 1 For the Vendor B information, it was actually 2 the midrange that had the highest pressure drop. The 3 high end had fairly low, and the very low end had fairly 4 low. So I don't think there's necessarily a good 5 correlation with capacity. 6 MR. STARR: So your original number was .2, and 7 that sort of get to where we started at -- I don't know. 8 I personally would be okay with leaving that number, 9 point -- 10 MALE SPEAKER: Across the board? 11 MR. STARR: What he says is based on velocity. 12 So yeah, I guess that would be across the board. 13 MR. BANTLE: So the suggestion of .2 is across 14 the board? 15 I think, Mark, did you also have information on 16 this from your informal survey? 17 MR. TERZIGNI: Yes, but probably the most 18 qualified and reliable source responded with, "No clue." 19 If you could tell me, I would love to know. 20 (Laughter.) 21 MALE SPEAKER: That response actually helps us. 22 MALE SPEAKER: Duly noted.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 134 1 MALE SPEAKER: Well, it's just -- it's very hard 2 to measure in a real world scenario -- 3 MS. HOOTMAN: Yes, it is -- 4 MALE SPEAKER: -- that's what we talked about 5 before. 6 Like if we measured it like a fitting in an 7 ideal situation, the lower number, especially if it's 8 just the -- not a portion to landscape type of deal, 9 those are possibly realistic. What that does to the 10 overall system, .2 is a reasonable -- it's reasonable, I 11 guess, is what I would say without actually taking real 12 measurements of -- 13 MR. BANTLE: Any objections to the taking a vote 14 on the .2? 15 MS. HOOTMAN: Across the board? 16 MR. BANTLE: .2. 17 MS. HOOTMAN: .2 across the board? 18 MR. BANTLE: Yes. Okay. 19 So let's show a show of thumbs -- not hands -- 20 on .2 across the board. The pressure drop across the -- 21 is that what we have? 22 MALE SPEAKER: For seven-and-a-half and 15.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 135 1 MS. HOOTMAN: The conversion curve. 2 MALE SPEAKER: So we drop it down to 3 (simultaneous speaking) it means for the curve 4 (simultaneous speaking). 5 MR. STARR: Is that your original thought? Does 6 that seem like a reasonable -- a reasonable -- if you 7 were making a decision on your own basis, would you come 8 up to that? 9 MR. WESTPHALEN: Yeah. If it was me, more than 10 .2, I'd really look at replacing the curve. But, you 11 know, I mean -- 12 MR. TERZIGNI: So in summation when you put a 13 conversion curve (coughing) would be a two-tenths 14 pressure drop to the system. I guess that's what the 15 question is, is that reasonable? 16 MR. BANTLE: I apologize for saying "across the 17 board." I misspoke. 18 MR. TERZIGNI: So no matter what the size is; 19 right? 20 MR. BANTLE: Yeah. 21 MR. TERZIGNI: So pressure drop is not usually a 22 function of -- it's a function of velocity for any

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 136 1 particular fitting. So velocities are fairly -- 2 MR. STARR: They design per deck board which -- 3 basically sizing it for velocity. So that's why the 4 pressure dropped. It's the same across -- 5 MS. HOOTMAN: So is this agreed to? 6 MR. BANTLE: Formal -- show of hands if 7 you've -- 8 MS. HOOTMAN: .2. 9 MR. BANTLE: Okay. 10 MS. COUGHLIN: Anyone against it? 11 MR. BANTLE: Are there any thumbs down? 12 MALE SPEAKER: You're not both voting, are you? 13 MS. COUGHLIN: Are we voting again on this? 14 MALE SPEAKER: Yeah, we had some more further 15 discussions, so I didn't (simultaneous speaking). 16 MS. HOOTMAN: We had one person stretching. 17 MR. BANTLE: Yeah, okay. I see no thumbs down. 18 MALE SPEAKER: Correct. 19 MR. BANTLE: Okay. Thank you. 20 (Off-the-record conversation.) 21 MR. McCRUDDEN: I would actually take a worst 22 case and best case, and the best case is going to be

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 137 1 pretty rough (simultaneous speaking). 2 FEMALE SPEAKER: And we can make sure 3 (simultaneous speaking.) 4 (Off-the-record conversation.) 5 MR. CYMBALSKY: All right. Well, from the DOE 6 point of view, we don't see any more questions that we 7 need answers to. So moving forward, that doesn't mean 8 that the group doesn't have issues in their mind that 9 they -- 10 MR. STARR: One comment from Louis. So this is 11 Louis with NEEA. So I had a chance to look at the 12 slides, and one of the things on the 30/10 units -- 13 MR. deLASKI: Which slide are you on? 14 MR. CYMBALSKY: What slide? 15 MR. STARR: Slide 47. 16 So I went back and I looked at those fan 17 energies, and I was trying to figure out -- so EL-3 is a 18 BAV system, pretty much all 3, 4, and 5 were all BAV 19 systems. 20 So I was looking at the fan energy numbers and 21 they didn't look like they were jibbing so much. So I 22 wanted to see what number did they use for the external

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 138 1 static pressure? 2 So if you look at the total -- at the very end, 3 that total column, those numbers I would expect to see a 4 little more difference between a constant air volume and 5 a BAV in terms of energy per unit. So one of my thoughts 6 is, I wanted to check and see what number did you use for 7 your external static pressure in the BAV? And I'm 8 assuming it's not 1.25. 9 MS. COUGHLIN: Well, the building is always the 10 same. And so -- and then I think the way the fan power 11 is calculated, that's -- I don't know -- 12 MR. STARR: Okay. All right. Good enough. 13 Thanks, that's it. 14 MS. COUGHLIN: Isn't that 1.25 number? Yeah, 15 it's either .75 or 1.25. 16 MR. STARR: All right. Nevermind. That's good. 17 It's just -- what I'm seeing the function is, is 18 of the IEER, I did one of the things where you just raise 19 and drop the IEER. It didn't -- if you took 10.6 to 13.5 20 and you ratioed 62 down, what should the number be 21 instead of 51? It should have been about 46. So I was 22 thinking there was something going on there.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 139 1 But what it is -- it's just, the IEER is maybe 2 not doing a good job of representing the real energy use 3 or else they chose models that are not representative 4 of -- you know, so this is an issue we've covered before 5 so we don't need to go over it any more. So I'm good. 6 Thanks. 7 MR. WHITWELL: This is Bob Whitwell from 8 Carrier. So I don't know if I want to open up -- don't 9 want to open up a can of worms again or anything, but I'm 10 just a little concerned or confused about the discussion 11 yesterday about economizers, that they only -- maybe I 12 misunderstood -- but they only save 3 percent energy? 13 MALE SPEAKER: 3 to 8. 14 MR. WHITWELL: Because there are others a lot -- 15 I mean, if that's the case -- pardon the pun -- but we're 16 spending -- we spend in the industry -- we spend a lot of 17 energy on economizers for what sounds like little return. 18 And I think there's a lot of other studies out there that 19 show that there's a lot bigger savings. 20 I'm not sure whether this is -- again, whether 21 this is something that really has a big impact here, but 22 it's a little troubling to me that there seems to be a

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 140 1 disconnect between what like the ASRAC studies show and 2 the pressure that is on the industry to put economizers 3 in equipment (coughing) and parts of the country and 4 savings in that single-digit area. 5 MS. COUGHLIN: There's a couple of reasons why 6 the insensitivity really is not directly comparable to 7 that. 8 So first of all, we have in the simulations, the 9 economizers were already simulated. And the issue was 10 whether or not that simulation was really, you know, 11 correctly estimating economized performance in a 12 lower-temperature regime. So what I did is, I just took 13 out the cool loads below 60 degrees in the buildings that 14 have economizers and make them zero. And that's what 15 gives you the 6 or 9 percent, whatever. 16 So you know, whether the economizer is lowering 17 the cooling load in higher temperatures, I didn't -- I 18 didn't adjust that because when we were having the 19 discussion with Nick, he was more concerned about what 20 was going on with the lower temperatures. He thought the 21 lower temperatures were not correct. 22 MR. WHITWELL: And I think that -- sorry, sorry.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 141 1 MS. COUGHLIN: So I zeroed out only the lower 2 temperatures. And then this is only 30 percent of the 3 population according to CBECS, so it's down by another 4 .3. So that's how you end up with these few, you know, 5 numbers there when you order 5 to 10 percent. 6 So if I took a real building and put an 7 economizer in it, then it would be a totally different 8 number. You really can't say anything about that from 9 this analysis. 10 MR. WHITWELL: So I guess now I wonder, so if 11 there was an issue with the way it was showing hours -- 12 cooling hours below a certain temperature and you took 13 those out, would there also be an issue in how it was in 14 the representation for the number of hours in cooling 15 operation above -- you know, at higher temperatures? It 16 could have been instead of a chemical cooling, it could 17 have been an economizer cooling. 18 MS. COUGHLIN: Well, again, I mean, the 19 economizers were simulated and we don't know the details 20 of how they were simulated. But in the discussion with 21 Dick Lord, he was mostly focusing on the lower 22 temperature hours, so that's what I looked at.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 142 1 MR. WHITWELL: Yeah, I think he was focusing 2 on -- because that's very visual; right? 3 MS. COUGHLIN: Right. 4 MR. WHITWELL: Because with an economizer, you 5 wouldn't get to have -- we came up with cooling down 6 there, and then any mechanical -- any mechanical cooling 7 in lieu of use of the economizer at the higher 8 temperature you wouldn't know. I mean -- 9 MS. COUGHLIN: Right. So we don't really have 10 any -- we don't know what to do about that at this 11 meeting. 12 MR. CYMBALSKY: I thought Dick pointed out that 13 the load matched up well at the higher -- 14 MS. COUGHLIN: Yeah, they didn't look bad. It 15 was more at the long tail at the low end, so -- 16 MR. CYMBALSKY: So that's why I think it wasn't 17 a concern to the group is because when you map those two 18 curves that he had, it was only the bottom. 19 MR. WHITWELL: Oh, okay. 20 MALE SPEAKER: Yeah, it was the building 21 shapes -- 22 MS. WALTNER: We do know that on a national

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 143 1 average basis, the buildings with economizers have 2 roughly 25 percent lower cooling loads than the buildings 3 without economizers, so -- 4 MR. WHITWELL: All right. 5 MS. WALTNER: -- the way they are is -- 6 MS. COUGHLIN: There is savings in there. That 7 was just the sensitivity of taking that; right? 8 MR. WHITWELL: All right. Thank you. 9 MS. WALTNER: The very low end, yes. 10 MS. HOOTMAN: We didn't probably -- 11 MR. WHITWELL: I've had four days of this, so 12 I -- 13 MS. HOOTMAN: I know. We probably didn't 14 describe it very well. 15 MR. STARR: Yeah, it 3.98 and 6 BTUs per square 16 foot, so that's the relative numbers that savings would 17 get. So it's like 25 percent. 18 MS. WALTNER: 3.98 and 5.36 (simultaneous 19 speaking). 20 MR. STARR: One-and-a-half, that's 45 percent. 21 That's interesting. 22 MR. WHITWELL: Okay. I feel better about

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 144 1 spending the energy on economizer design. 2 MR. STARR: Well, Dick should come to the 3 meeting since he's (speaking under breath). 4 MR. CYMBALSKY: Okay. So anybody else at this 5 point? 6 MR. deLASKI: I guess one comment that I would 7 make is just in terms of thinking about our overall 8 schedule here -- 9 MR. CYMBALSKY: Right. That was my next point. 10 MR. deLASKI: Maybe you were -- all right. 11 Well, I won't steal your thunder. 12 MR. CYMBALSKY: No. Well, it's not my -- it's 13 our thunder. So -- it's raining out, so I'll give it to 14 you. 15 MR. deLASKI: I'm looking at the schedule here. 16 So we're meeting again 6/1 and 6/2 is a week from Monday. 17 So at that time we are going to see a new -- 18 some revisions to the analyses that we've been looking 19 at, presumably that will be relatively quick because 20 we're just -- the number changes that you're making now 21 are smaller than they have been the last few times. 22 MR. CYMBALSKY: Right. I think the slide subset

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 145 1 shrinks considerably at this point. 2 MR. deLASKI: Right. And those changes will be 3 the ones we discuss plus the data on shipments, so it's 4 going to effect everything that we've seen. But, again, 5 the deck would be smaller and the additional plan is to 6 have additional discussions about standard levels at that 7 meeting. 8 MR. CYMBALSKY: We'll be presenting the National 9 Impact results on Monday, June 1. So you'll have those 10 numbers, energy savings and the -- 11 MR. deLASKI: Okay. 12 MR. ROSENQUIST: And, I don't know, you might 13 have our preliminary MIA, but I don't want to promise 14 that. I don't want to speak for Chris. 15 MR. WESTPHALEN: Well, Chris is on the webinar. 16 But I think the goal is to get initial MIA results, and 17 if that may not cover the full spectrum of the classes, 18 but I don't want to speak for Chris. 19 MR. ROSENQUIST: So if he's not here, we can 20 just -- 21 MR. STARR: So this is Louis. Is there any way 22 that we can, maybe ahead of the meeting, just get these

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 146 1 slides 72 -- those 72, 73, and 74, basically those simple 2 played back and -- 3 MR. deLASKI: Well, it would be nice. I mean, I 4 know -- I think the last time these guys were preparing 5 the slides the day before on Sunday, so -- 6 MR. CYMBALSKY: Generally, I get them at 11:00 7 o'clock the night before the meeting. So -- 8 MR. STARR: Can you get them to me at 12:00? 9 MR. CYMBALSKY: So I get them on the top of my 10 head and I go to sleep and I hope it all absorbs so that 11 when I wake up I have some comments. 12 MS. HOOTMAN: Are they amazing? 13 MR. CYMBALSKY: And if there's a hockey game on, 14 forget it. 15 (Laughter.) 16 No, but seriously, we will try our best but we 17 don't have a lot of time. It's a holiday weekend coming 18 up, and nobody's going to be working -- 19 MALE SPEAKER: You've got on extra workday. 20 MR. CYMBALSKY: So nobody's going to be working. 21 They're going to be eating. But we'll try, but I 22 think --

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 147 1 MR. deLASKI: The benefit of this is we've been 2 around this now a few iterations, so we -- 3 MR. CYMBALSKY: And things are converging. Like 4 you're saying that the change now aren't going like 5 this -- you know, we're not kind of just -- 6 MR. deLASKI: Right. And we're meeting at the 7 L'Enfant -- at the normal building? 8 MR. CYMBALSKY: Yeah, and then I think -- so an 9 update yesterday, we -- you know, we personally turned 10 the screw a little bit on the four questions. 11 MS. COUGHLIN: Yeah? 12 MR. CYMBALSKY: And so we're very hopeful we'll 13 have them next proceeding. 14 MS. COUGHLIN: Okay. 15 MR. CYMBALSKY: I can't promise, but -- you 16 know, we -- we did our best to kind of say, "This is very 17 important. We need them." 18 MR. SACHS: If you get them early, can you send 19 them out? 20 MS. HOOTMAN: It will possibly -- 21 MALE SPEAKER: There's going to be nothing in 22 writing, I can tell you (simultaneous speaking).

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 148 1 MR. deLASKI: I think we probably need to be 2 sure we have -- the next meeting we have caucus space. 3 MR. CYMBALSKY: We agree. And so -- 4 MR. deLASKI: We're going to need time to be 5 able to -- 6 MR. CYMBALSKY: I just want to say we're putting 7 our best foot in our effort to get those answers. 8 MR. deLASKI: Okay. 9 MS. HOFFMAN: And the times would be 9:45 and 10 then 8:00 to 3:00 again; right? 11 MR. deLASKI: I'm not sure that he heard that. 12 MS. HOOTMAN: I don't know that he heard that, 13 either, that we have caucus space June 1st and 2nd. You 14 know, we have space that we could go -- 15 MR. CYMBALSKY: Like the hallway? 16 MS. HOOTMAN: No, not the hallway. 17 MR. deLASKI: I'm not sure if that's a -- 18 MS. HOOTMAN: There's another room. 19 MR. CYMBALSKY: Well, there's the back room; 20 right? 21 MS. HOOTMAN: Right. 22 MR. CYMBALSKY: And then there's the courtyard

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 149 1 by Dunkin' Donuts. If it's not raining, we can go 2 outside. 3 MR. deLASKI: Okay. 4 MR. CYMBALSKY: Room space is -- let me tell 5 you -- it's not easy to get. 6 So -- so at this point, unless we can keep going 7 or we can call it a day. I mean, I've got nothing else. 8 MS. WALTNER: Would it be helpful to caucus 9 today over an early lunch and come back? Or is there -- 10 just to make sure there's no other -- 11 MR. CYMBALSKY: We can do that. 12 MS. WALTNER: I'm not sure. I don't know if we 13 can -- 14 MR. deLASKI: I don't have anything to come back 15 on, personally. 16 MR. CYMBALSKY: Yeah, we're done with those 17 numbers and I think we talked about looking for (speaking 18 under breath). 19 MS. HOOTMAN: We could. 20 MR. CYMBALSKY: Could take a four-hour lunch and 21 catch your flight or -- 22 MALE SPEAKER: Go to the Smithsonian.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 150 1 MS. WALTNER: It's really nice outside. I just 2 walked up the street, aka pouring rain. 3 MR. CYMBALSKY: Oh, it's raining? 4 MALE SPEAKER: Yeah, it's pouring. 5 MR. CYMBALSKY: Oh, that's not good. 6 Louis, you brought this weather with you; didn't 7 you? 8 MR. STARR: It doesn't rain so hard. It rains 9 lightly, you don't even need an umbrella. 10 MS. HOOTMAN: You don't have a lot of hair to 11 worry about. Okay? 12 (Laughter.) 13 MR. STARR: I got soaked here. I was totally -- 14 it rained -- it was like I stood in the shower. 15 MR. CYMBALSKY: I think we're done. 16 MS. HOOTMAN: So I guess we're done. 17 MR. BANTLE: Any final comments from the working 18 group? 19 MR. SACHS: Thank you. 20 MR. deLASKI: I guess what I would just say, 21 Bob, which is that we -- 22 MR. SACHS: Real quiet.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 151 1 MR. deLASKI: Guys, we as a -- my only thought 2 is that we should -- we, as the caucus that I work with, 3 will certainly be meeting in between this next meeting 4 and we'll be thinking about levels and I hope that others 5 do, as well. 6 MS. HOOTMAN: Oh, yes, we will be meeting. 7 MR. CYMBALSKY: And, again, I know we haven't 8 answered those four questions, but I know I said 9 yesterday that -- I mean, don't let that be a barrier to 10 what Andrew just talked about. I think you -- you 11 know -- 12 MR. deLASKI: Part of life, right. I want to 13 describe my historical experience that I want -- and I 14 hope people will think about that kind of responsibility. 15 Okay? 16 MR. BANTLE: Okay. I think Jeremiah has 17 attendance sheets. 18 And anybody from the public on the line, 19 Jeremiah, that we will offer time for public comment? 20 MALE SPEAKER: No. 21 MR. BANTLE: Okay. No? Nobody's left? Okay. 22 We'll see you all, not next week, but June 1st

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 152 1 and June 2nd. That's a Monday and Tuesday. 2 MALE SPEAKER: Is that back at the -- 3 MR. BANTLE: It will be back at the main 4 building, 8th floor, as always. 5 (Off-the-record conversation.) 6 (End of audio.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

### Meeting - Vol. II May 21, 2015 153 1 CERTIFICATE OF REPORTER 2 3 I, Kylie S. Shepherd, Certified Shorthand 4 Reporter, CERTIFY I was authorized to transcribe the 5 proceedings, and the foregoing transcript is a true and 6 accurate record. 7 I FURTHER CERTIFY that I am not a relative, 8 employee, attorney, or counsel of any of the parties, nor 9 am I a relative or employee of any of the parties' 10 attorney or counsel connected with the action, nor am I 11 financially interested in the action. 12 Dated this 25th day of May, 2015. 13 14 15 1 6 17 18 19 20 21 22



### 202-220-4158 Kylie S. Shepherd



### Henderson Legal Services, Inc. www.hendersonlegalservices.com

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 1 A abandoned

39:1,4,22 40:1 58:7 able 11:19

56:9 57:13 77:11,16 126:17 148:5 above60:14

60:20 61:4 95:20 107:19 141:15 absolute 64:5 absolutely

53:6 absorbs

146:10 AC87:20

119:17 acceptable

7:15 accommodate

11:19 according

7:15 126:2 141:3 account55:4,6

80:5 accounting

14:16 accurate 35:15

42:16 153:6 ACEEE4:21 across 16:14

17:10 20:22 23:15 27:15 42:18 98:1 132:10 133:10,12,13 134:15,17,20 134:20 135:16 136:4 action 98:5

153:10,11 actual 14:11 23:21 30:9 38:10 42:8 85:17 actually5:12

7:9 9:7,12 11:9,12 17:12,16 18:10 20:10 20:16 22:16 26:2,13 30:13 31:10 36:8 37:16 53:16 62:1 63:15 77:13 89:10 94:13 122:19 126:12 133:1 133:21 134:11 136:21 Adam2:7 adapter

125:13 127:22,22 128:1 adapters

125:10,14 128:8 add 16:16,19

19:19 28:4 32:6,8 33:5 34:17,21 119:22 127:20,22 128:1 added 26:5 additional

10:3,14 73:4 123:9 124:4 145:5,6 address 82:16 addressed

68:1 adjust 140:18 adjusted 86:7 adopt 121:10 advise81:6 affect37:4

92:4 affected 16:3 affecting

59:18 after8:18 67:4

77:4,10 again 8:11,16

10:8 17:14 23:3 24:9 25:7,15 26:18 29:3 31:6 36:1,16 37:16,19 39:5 41:17 42:1,14 43:19 45:14 45:14 59:15 60:12,21 66:2 72:19 74:8 88:22 91:2 94:20 108:12 109:2 115:20 119:15 121:1 124:8 130:1 130:7,22 136:13 139:9 139:20 141:18 144:16 145:4 148:10 151:7 against88:4

136:10 age 16:14,16

16:17 17:9 17:20,22 18:3,4 20:12 23:15 26:9 ages 17:10 18:7 23:16 ago30:1 agree 11:7

41:5 42:6 47:13,20 70:7 78:14 92:3 98:17 117:2 148:3 agreed 103:6

128:3 136:5 ahead 117:4

123:15 145:22 AHRI 12:19

26:6 35:3,15 96:17 97:10 98:1 108:3 121:1 124:9 air4:15 7:12

7:17 9:13,15 11:4,5,6,21 12:2,4,6,7,8 12:13 18:22 29:22 30:2 30:19 49:6 49:16 50:4 69:16 82:7 83:3,18 84:16 94:15 102:2 110:6 114:2 127:20 138:4 air-cooled

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115:21 allowed 77:3 allows 30:8 almost57:1,2

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71:8 91:14 103:19 112:7 113:11 140:9 also 14:3

28:13 29:1 48:8 51:1 53:7,22 54:3 54:4 56:12

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 2 58:8 68:21 69:11 76:1 78:1 82:18 83:2,21 89:9 97:14 100:18 102:17 123:11 133:15 141:13 alternative

55:4 57:11 57:11,12 126:15 always4:5

22:14 29:16 54:5,11,12 54:15 80:16 83:16 87:6 93:1,2 98:14 107:19 138:9 152:4 am 64:1 153:7

153:9,10 amazing

146:12 amount 18:7

38:15 42:19 47:7 85:4,5 103:17 anagram

109:18 analyses

125:20 126:21 144:18 analysis6:17

13:18 14:2,3 14:7,14 15:1 15:11 16:13 23:10 26:10 46:2 71:4 79:8,9 80:15 93:11 98:15 99:10 107:21 110:21 111:5 117:13 119:8 119:10 124:4 125:16 128:16,22 129:10 141:9 analytical

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123:3 animal 86:21 another7:1

29:19 48:13 51:11,12 56:10 57:16 60:10 63:1 76:6,12 90:15 111:19 113:8 122:22 141:3 148:18 answer 37:5,6

54:17 56:19 58:18 63:1 104:3 106:4 115:3 answered

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6:1 144:4 151:18 anymore67:22

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52:18 67:17 131:19 apart 111:20 apologize

65:11 135:16 Appliance

12:20 applied 85:13

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128:8 129:22 131:16 applying43:22

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105:3 approach

100:7 101:16 108:14 126:3 appropriate

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57:19 58:11 114:3 120:1 120:3 132:20 140:4 areas 114:3 aren't 147:4 arena 109:8 argument61:6 arises 103:21 arithmetic

25:15 arm 75:12 around 36:21

47:7 50:1,16 56:3,7 57:21 72:15 75:20 87:7 98:19 108:11 121:22 147:2 Arthur64:17 artifact79:22 ask29:19

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49:1 108:11 125:20,22 126:4,5,21 129:20 130:14 143:1 averages

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126:20 Awareness

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133:1 BAB7:16,19

7:20 8:2,7,14 11:13 83:12 back7:7 10:9

13:5,11 26:11 29:20

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 3 29:22 33:13 36:19 38:10 39:20 41:11 42:1 45:15 50:19 54:9 56:18 75:18 80:21 81:3 81:10,14,17 81:20 82:21 85:1 86:9 90:17 96:16 99:10 117:9 124:18 137:16 146:2 148:19 149:9 149:14 152:2 152:3 background

23:20 24:9 bad 36:4 54:11

62:17 142:14 badge81:12 baked 52:17 ban 77:9 Bantle2:2 4:2

4:3,10 5:11 5:14,17,22 6:4,10 12:15 13:4 80:4 81:14 91:21 129:14 133:13 134:13,16,18 135:16,20 136:6,9,11 136:17,19 150:17 151:16,21 152:3 bar 128:21 Barkas 2:12 barrier 151:9 bars44:8,21

45:1 127:13 128:19 base 39:21 base-case

23:21 73:2 79:16 129:3 based 15:15

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19:15 24:10 33:21,22 35:3 36:10 36:22 57:18 58:11 62:2 90:5 104:14 120:7 136:3 146:1 basis 115:19

135:7 143:1 Battaglia2:3

5:6,6 BAV9:12

10:19 94:9 94:11 95:7 137:18,18 138:5,7 BAVs95:8,8 Bay 114:3 bearing 83:17 beast86:19 beat43:11 beauty49:22 before6:18,20

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104:15 122:13 139:19 biggest 110:6 Bill's 50:20 billable 59:10 bit 16:1,5 56:7

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150:6 BTUs 109:6

143:15 bucket37:14 bugs 126:16 build 14:17

16:11 28:6 50:16 51:8 build-up83:14 building 8:2

14:18 17:4

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 4 24:22 25:2 28:19 33:4 39:4 44:14 44:14,15 48:11,17,18 48:19 50:3 51:16,21 53:5,5,12,13 53:16 59:19 67:1 100:10 118:5 138:9 141:6 142:20 147:7 152:4 buildings 7:20

8:3 16:22,22 17:1 23:5,8 28:10,17 29:4 30:3 32:16,18 33:1,11,12 36:2 39:1 40:1 59:21 86:11,11,12 86:13 106:17 140:13 143:1 143:2 bulk37:17 bunch 16:14

54:7 business 49:9

49:14,19,20 53:3,8 54:12 54:15,16 55:17 56:22 66:6,17,21 businesses

57:6 busy96:21 button 6:12 buy51:22 52:1

52:11 54:14 56:2 63:5 64:4,7 73:10 75:14 92:6 buying 15:21 54:16 66:15 C C2:1,13 3:1

4:1 33:14 51:21 cabinet 96:6

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105:17 calculate 15:2

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108:20 110:12 118:4 123:13 call 16:22 20:4

23:20 59:12 73:16 127:20 149:7 came 39:21

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97:2 103:1 111:3 116:15 127:1 151:3 CERTIFICATE

153:1 Certified 153:3 CERTIFY

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21:12 22:2 86:7 Chopping 37:2 chose 118:1

139:3 Chris 145:14

145:15,18 Christopher

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 5 2:16 6:2 circle 90:17 circuitries

74:20 circuits 74:14 clarification

8:21 81:22 clarify9:1

82:22 class 16:12

45:19 51:21 51:21 95:18 96:2,3 108:9 115:17 classes 44:6

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80:20 115:5 clue 133:18 coast 115:19 Cochran 2:4

5:5,5 coefficient

121:16 coffee81:5 coil 67:15

101:5 104:15 104:20 cold 12:9

107:4 collectible

115:22 color34:16 colors 32:3 column 138:3 come 10:9

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62:4 68:15 71:2 115:15 122:15 comfort64:9 comfortable

4:6 78:21 123:12 coming 12:8

14:20 26:12 33:10 43:20 66:19 130:5 146:17 comment8:20

64:17,18 65:3 78:5 90:4,5 137:10 144:6 151:19 comments 6:5

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14:18 49:11 56:16,21 60:13 106:17 109:8,16,17 112:8 113:1 130:15 company64:6 comparable

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57:14 97:12 compilation

22:3 complete

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61:10 compressor

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67:22 68:2 compressors

18:19 22:8 60:16 61:1,7 61:20 68:14 68:15 69:4 69:14 70:4 72:14,16,17 74:16 compromise 126:12 comps 85:8 concept 14:4

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18:22 30:1 49:6 83:3 102:3 110:6 conditions

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25:16 88:22 89:22 90:6 constant7:20

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31:7 32:11 32:21 33:19 44:12,13 50:18 92:15 consultant5:2 consultants

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114:7 context 122:9 Continued 3:1 contract

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91:4 127:4 control 10:16

10:17 converging

147:3 conversation

136:20 137:4 152:5 conversion

33:7,9 65:6 74:2 126:22

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 6 128:13,17,20 129:5 135:1 135:13 convincing

63:22 cool 140:13 cooled 27:12

69:16 cooling 83:16

94:18 95:1 97:11 107:1 108:13 111:11,15 116:5,7 119:21 140:17 141:12,14,16 141:17 142:5 142:6 143:2 COP 82:19

103:1,3,5,8 103:13 104:6 106:8 108:1 108:7 110:16 110:17 111:6 111:19 115:9 115:21 118:19 119:12 120:11,14,16 120:22 121:18 122:14 124:5 COP/IEER

82:2 correct 11:15

97:13 107:10 126:4,5,8 131:17 136:18 140:21 correctly 15:6

140:11 correlated 121:3 correlation

103:5,10 116:9 119:3 119:6,9 121:6,9,9,12 121:16,18 132:14 133:5 correlations

108:3 cost8:15 10:3

10:15,19 11:2 13:20 13:21 26:3 46:14 47:4,7 48:6 49:14 52:11 57:12 60:2,5 64:16 64:20 65:7 65:16,17,18 65:19 71:13 72:4,18 84:10,12 85:5,8 87:15 99:13 100:1 100:5,14 101:2,2 102:5,10 116:22 126:9 128:16 costs 10:14,22

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 7 52:4,15,20 52:22 53:22 58:14,17 60:21 64:12 64:21 65:2 67:5,11 70:15,22 71:12,20 75:4 76:22 78:8,14,21 80:16,20 81:3,11,18 85:10,20 86:1 93:8 94:3 107:11 107:17 111:22 112:4 112:15,20 113:6,13 114:8,13,17 115:5 122:6 122:11,18 123:17,20 124:7,20 125:3,7 129:19 137:5 137:14 142:12,16 144:4,9,12 144:22 145:8 146:6,9,13 146:20 147:3 147:8,12,15 148:3,6,15 148:19,22 149:4,11,16 149:20 150:3 150:5,15 151:7 D D2:2 4:1 D.C 1:13 dangling 47:22 dark32:13,14

34:18 Darmington

2:7 data 10:3 15:5

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96:17 97:10 98:2 108:4 121:2 Dated 153:12 Dave3:12 4:15

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106:4 115:3 127:3 developed

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 8 115:15 diagram 13:19 Dick 141:21

142:12 144:2 die61:7 died 61:18 diet80:17 difference

24:6 37:17 41:4 65:13 86:5,6 100:1 119:13 138:4 differences

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 13 historical 26:7

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 16 95:17,21 104:3 113:20 125:2 126:20 128:19 129:6 131:4 134:6 134:6 135:6 137:21 139:17 140:1 143:17 147:3 147:4 148:15 150:14 likelihood 50:9 likely31:15

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128:16 limited 28:9 Linda3:11 6:3 line32:9,10,11

32:13,14,15 33:12,14,20 34:21 43:4 131:4,5 151:18 lines 13:7

34:15 lingering 37:7 listed 8:4 literally48:13

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 17 81:1,2,7 85:7 85:15 87:12 89:1,6,8,18 90:19 92:8 92:18,21 94:7,17,19 96:1 106:2 106:19,21 107:10 108:17 113:22 114:5 115:18 116:9 117:18 127:9 127:14,17 129:9,13 131:11 133:10,21,22 134:1,4,22 135:2 136:12 136:14,18 139:13 142:20 146:19 147:21 149:22 150:4 151:20 152:2 mall 24:17

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28:5 41:16 41:17 47:18 47:18 51:12 56:7,7 62:9 62:11,12 64:19 65:2 70:18 88:20 90:17 92:15 99:20 100:22 105:16,16 107:20 109:4 115:16 116:6 117:10,12,15 118:22 139:1 139:11 144:10 145:22 McCabe2:17

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2:18 5:12,16 5:20 9:9 136:21 mean 8:13

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84:15 132:16 Meg 3:7 4:12 members 4:8

6:22 12:16 memory21:18 mentioned

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 18 30:10 98:13 101:16 method 65:6 metric 83:6 metrics 84:20 metropolitan

57:19 Meyers2:19

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5:6,7 82:4 129:15 necessarily

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118:7 negotiating

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 19

never80:17 Nevermind

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51:15 53:21 96:9,12 113:9,18 117:9,12 118:3 123:4 123:10 124:18 125:18 126:12,17,19 128:2 129:9 144:9 147:13 148:2 151:3 151:22 NIA 126:6 nice 98:7 146:3 150:1 Nicholas 2:20 Nick 12:19

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 20 151:15,16,21 151:21 old 29:21

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28:3 82:16 109:21 141:5 organization

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 21 117:15,20 119:20 128:5 128:6,6,8 129:2 139:12 140:15 141:2 141:5 143:2 143:17,20 percent's 71:8 percentage

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 22 115:15 production

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60:3 116:15 123:3 148:6 Q quadrants

106:20 quads 122:2 qualified

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91:20 98:6 real 30:7 39:14

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37:22 61:17 113:6 122:17 123:1,11 reasonable

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26:8 reasons

## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 23 131:19 140:5 recalculate

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28:1 42:15 42:15 50:5 58:5 61:20 62:3,18 66:7 67:2,6 68:16 77:8,17 replaced 7:21

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96:21,22 return 63:22 66:19 139:17 reverting

15:13 review 14:5 revisions

144:18 rewrite 21:3 Rheem 4:20 rid 115:17 right5:20 9:22

10:6 20:7,19 26:22 28:8 28:18,20 29:15 30:21 34:18,19 38:7 39:4 40:9 41:21 42:3,4,22 43:6,7 45:2 46:5,7,10,10 46:16 49:3 52:9,12,20 52:22 53:11 56:5 59:20 60:22 62:2 64:14 65:10 65:15 68:18 68:20 73:3 75:11 76:15 77:10,22 80:10 81:1 84:22 85:15 85:15,16 86:9 90:19 91:12 94:19 97:7,13,15 97:18 99:18 100:8 105:20 108:2 109:5 109:6 110:3 110:22 112:3 112:4 117:6 117:17 119:7 119:9,16,18

## Meeting - Vol. II May 21, 2015

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107:22 108:7 119:22 120:1 120:3,8,19 121:6,7,19 139:19 140:4 143:6,16 145:10 say7:19 9:22

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## Meeting - Vol. II May 21, 2015

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129:12 shower 150:14 showing 13:19

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 26 100:19,19,20 103:12 108:8 108:13 119:21 120:4 120:5 127:18 sides 109:16 Sienna 34:17 sight 13:6 signal 31:9 signals 103:22 significant

24:16 40:15 65:13 significantly

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146:1 simpler 15:14 simplify72:21 simulated

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 27 149:4 spaces 48:10 speak6:8,13

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## Meeting - Vol. II May 21, 2015

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 28 75:1,5 strip24:17

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## Meeting - Vol. II May 21, 2015

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## Meeting - Vol. II May 21, 2015

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## Meeting - Vol. II May 21, 2015

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