### 202-234-4433 Neal R. Gross & Co., Inc. Page 1 U.S. DEPARTMENT OF ENERGY + + + + + EFFICIENCIES AND RENEWABLES ADVISORY COMMITTEE

+ + + + + LIQUID-IMMERSED AND MEDIUM VOLTAGE DRY-TYPE DISTRIBUTION TRANSFORMERS NEGOTIATED RULEMAKING WORKING GROUP

+ + + + +

PUBLIC MEETING

+ + + + + THURSDAY, SEPTEMBER 15, 2011 The Working Group met in Room 8E089, 1000 Independence Avenue, S.W., Washington, D.C., at 9:00 a.m., Richard Parker, Facilitator, presiding.

FACILITATOR: RICHARD PARKER, University of Connecticut Law School MEMBERS PRESENT: RICHARD ANDERSON, Manager of Electrical Engineering, Fayetteville Public Works Commission TIM BALLO, ESQ., Earthjustice SCOTT BECK, Product Engineering Manager, Lakeview Metals JOHN CASKEY, Assistant Vice President of Industry Operations, National Electrical Manufacturers Association JERRY CORKRAN, Staff Engineer, Cooper Power Systems

### 202-234-4433 Neal R. Gross & Co., Inc. Page 2 MEMBERS PRESENT (Continued): JOHN CYMBALSKY, Supervisory Operations Research Analyst, U.S. Department of Energy ANDREW DeLASKI, Executive Director, Appliance Standards Awareness Project THOMAS ECKMAN, Manager, Northwest Power and Conservation Council CARLOS GAYTAN, Manager of Engineering, Prolec GE ROBERT GREESON, Senior Electrical Design Engineer, Federal Pacific Company GERALD HODGE, Consulting Engineer, Howard Industries MICHAEL HYLAND, Senior Vice President, American Public Power Association DAVID MILLURE, Senior Vice President, Metglas, Inc. WES PATTERSON, Vice President of Technology, ABB, Inc. ERIC PETERSON, Director of Customer Services and Research, AK Steel Corporation RAY POLINSKI, General Manager of Grain- Oriented Electrical Steels, ATI- Allegheny Ludlum ART ROSENFELD, Ph.D., Lawrence Berkeley National Laboratory STEVE ROSENSTOCK, Manager of Energy Solutions, Edison Electric Institute ROBIN ROY, Director, National Resources Defense Council ROBERT SAINT, Principal Transmission and Distribution Engineering, National Rural Electric Cooperative Association CHUCK SIMMONS, Senior Engineer, Progress Energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 3 ALSO PRESENT: ROBERT BERMAN, Berman Economics DAVID FLATENFLATEN, Xcel Energy (via telephone) BRIAN COFFEY, Consultant, Navigant Consulting PATRICIA CORKRAN KATIE COUGHLIN, Lead Analyst, Lawrence Berkeley National Laboratory GREG COULTER, Prolec GE JIM CREEVY, Director of Government Relations, National Electrical Manufacturers Association CHARLIE DREXLER, Kentucky Association of Electric Co-ops CHUCK FOSTER, Edison Electric Institute JEREMIAH FREEMAN, Energy Analyst, New West Technologies PHIL HOPKINSON, HVOLT, Inc. ZHIMEI LUO, Consultant, Navigant Consulting BENJAMIN LONGSTRETH, ESQ., National Resources Defense Council KEVIN LOOBY, President, Lakeview Metals AARON MEYERS, Cooper Power Systems (via telephone) EMILY MARCHETTI, Program Support Specialist, Energetics Incorporated MATTHEW NARDOTTI, Navigant Consulting TOM PETROSINO, Consultant, Prolec GE MIKE RIVEST, Managing Director, Navigant Consulting JOHN ROSSETTI, Memphis Light, Gas, and Water (via telephone) PAUL RYAN, Hitachi Metals America MAHESH SAMPAT, EMS Consulting JERRY SCHOEN, Principal Engineer, Product Research and Applications Engineering, AK Steel Corporation MEG WALTNER, Energy Efficiency Advocate, Natural Resources Defense Council KENNETH WINDER, Manager of Engineering, Moon Lake Electric Association DANIEL YOUNG, Consultant, Pacific Gas & Electric

### 202-234-4433 Neal R. Gross & Co., Inc. Page 4 STAFF PRESENT: BRENDA EDWARDS, Program Support Specialist, U.S. Department of Energy DAN COHEN, ESQ., U.S. Department of Energy WAYNE GORDON, ESQ., U.S. Department of Energy TABLE OF CONTENTS

Presentation by Wayne Gordon, Chief Counsel's Office...............7 Introductions.............................16 Agenda....................................30 Ground Rules for Committee...............486 Discussion of Schedule and Location of Meetings...........................167

Overview of Navigant/LBL Analysis........209

Adjourn..................................322

### 202-234-4433 Neal R. Gross & Co., Inc. Page 5 1 P-R-O-C-E-E-D-I-N-G-S 2 (9:07 a.m.) 3 MR. PARKER: Welcome, everyone to 4 our first meeting of the Liquid-Immersed and 5 Medium Voltage Dry-Type Working Group 6 Negotiated Rulemaking Process. Thank you all 7 for coming out. It's great to see you. I 8 look forward to working with you over the next

9 few weeks. 10 My apologies, first, for the last 11 minute fire drill with getting you the rules 12 of procedure and the handouts for the meeting. 13 I hope everybody got the materials. If you 14 didn't, please let us know and we'll make sure 15 you get them. I will also display them on the 16 screen for people joining us for the webinar 17 and so forth. And we'll just try to work 18 through the agenda beginning with what is the 19 agenda as soon as possible. 20 We'll go around and do 21 introductions, but I'm told that we are 22 fortunate to have Mr. Wayne Gordon from

### 202-234-4433 Neal R. Gross & Co., Inc. Page 6 1 General Counsel's Office to talk with us about 2 the sort of law, the rules governing Federal 3 Advisory Committee Act committees which this 4 is. And he's here and he has a long day. 5 We're happy to have him for a few minutes so 6 that he can get in and out. 7 Why don't we just turn it over to 8 Mr. Gordon to make his presentation and then 9 we will start our work. 10 Mr. Gordon, thank you for coming. 11 MR. GORDON: Thanks very much. 12 Just briefly, as a subcommittee, you are all - 13 - you've all been appointed as representatives 14 to this subcommittee which is a smaller part 15 of the Energy Efficiency and Renewable Energy 16 Advisory Committee (ERAC) which is the parent 17 committee that you'll be reporting to and 18 basically all of your recommendations to the 19 Department regarding these rulemakings will go 20 through -- Mr. Rosenfeld is on the parent 21 committee and all of the recommendations that 22 you come up with in your final recommendations

### 202-234-4433 Neal R. Gross & Co., Inc. Page 7 1 regarding the rulemaking on the topic that 2 you're going to be doing this rulemaking, 3 negotiated rulemaking, all of that will flow 4 through the parent committee. 5 I just wanted to briefly tell you, 6 I'm the advisor, I'm the legal advisor to the 7 parent committee and I wanted to just briefly 8 go through with you some of the rules 9 regarding advisory committees. 10 As you have been appointed as 11 representative members and this is a 12 subcommittee, the full extent of Federal 13 Advisory Committee Act rules do not apply to 14 you. However, there's one specific area that 15 I wanted you to be aware of and that is as 16 representatives, you're here to represent the 17 interests and in terms of your appointment 18 letter, your appointment letter said you are 19 being appointed to represent these following 20 interests. And in that respect to the extent 21 that there are topics that come up that would 22 affect your own personal employers, you're not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 8 1 allowed to make recommendations or involve 2 yourselves in speeches that would affect those 3 people individually or specifically. 4 As I've looked through the agenda 5 and I've talked with Dan Cohen, who is the 6 program office attorney with regards to these 7 topics, I don't see that there are going to be 8 any topics that are going to come up that are 9 going to specifically affect and individually 10 affect any of your individual employers, but 11 that's one of the over-arching conflict of 12 interest rules that we want you to be aware

13 of. 14 So if anything really gets down in 15 the weeds in terms of rulemaking and you know 16 it's going to have a specific effect on your 17 particular employer, your particular company, 18 at that point I'd like you to talk to the 19 facilitator and to John and see whether or not 20 that's an area that we want to recuse you 21 from. We don't expect that that's going to 22 happen because the nature of rulemaking is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 9 1 that it's a matter of general applicability. 2 All of you in this room are going to be 3 affected. All of the groups that you're 4 representing are going to be affected equally 5 by the nature of the work that you're going to 6 do here. So from that perspective that's the 7 only thing that I wanted to bring across to 8 you. 9 If there are conflict of interest 10 issues that arise in your mind as you're going 11 through these discussions, by all means talk 12 to Richard, talk to John, and say should I get 13 some legal advice on this particular area that 14 we're going to be discussing in terms of 15 rulemaking. 16 When your decisions and when your 17 recommendations go up to the parent committee, 18 those will also be done in an open session, so 19 all of those things, like this is a public 20 meeting, when it comes to the parent committee 21 and they should be voting and recommending 22 putting that rulemaking forward to the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 10 1 Secretary for action, all of those things will 2 also be in a public forum. 3 Are there any questions right off 4 the bat? Go ahead, sir. 5 MR. ROSENSTOCK: Good morning. 6 This is Steve Rosenstock, Edison Electric 7 Institute. You talked about the ERAC being 8 the parent committee of this committee.

9 MR. GORDON: Correct.

10 MR. ROSENSTOCK: And I was not 11 aware that our recommendations would have to 12 be voted on by another committee. So what 13 exactly is the role and what is -- what if 14 their vote is -- I've looked at your ground 15 rules and there's a termination date for the 16 negotiations. And if our recommendations are 17 going to parent committee, can they make 18 changes to those recommendations? Can they 19 send it back to the subcommittee? What 20 exactly is their role? And what exactly, you 21 know -- there's no information about that part 22 of the process in any of these ground rules.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 11 1 MR. GORDON: Okay, the Federal 2 Advisory Committee Act says that when you're 3 going to have subcommittees do work on 4 particular narrow issues that might not be 5 appropriate for the full committee to look at, 6 when you do that, you need to use a 7 subcommittee process which this is. Those 8 subcommittee recommendations also have to have 9 and comply with all the aspects of the Federal 10 Advisory Committee Act which means open 11 hearings, the ability for public comment and 12 the ability for a discussion regarding what 13 ultimately comes back to the Department. 14 That's why Mr. Rosenfeld is here. We cannot 15 have subcommittees without at least one member 16 of the parent committee being on the actual 17 subcommittee. 18 So from that perspective, the 19 expectation is that the parent committee has 20 effectively been given a charge. They have 21 formed this group, this group of 22 representatives, and said investigate this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 12 1 charge, come up with recommendations for us 2 and then deliver those to us. 3 Realistically, the way that that 4 works is that you guys are all the experts. 5 You've been brought here to do that job for 6 us. And to the extent that that has to go 7 through the parent committee because of the 8 Federal Advisory Committee Act, my expectation 9 is that the advisory committee, it's not 10 necessarily a rubber stamp, but they've 11 actually put you guys here in the room to do 12 the work that they need to get done to respond 13 to their charges. 14 So the expectation is that they're 15 going to be looking at the work that you've 16 done, that they're going to take into account 17 the fact that you guys are the experts and the 18 representatives that have been appointed to 19 work on those issues. And to the extent that 20 the Federal Advisory Committee Act has to be 21 complied with, then there still is going to 22 have that open process at some later point in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 13 1 time. But it's not a process that I think 2 would be disruptive to the work that you guys 3 are going to be doing here. 4 MR. ROSENSTOCK: Thank you very 5 much. Again, Steve Rosenstock. However, 6 there is an issue of the deadlines, final 7 determination of deadlines for the 8 subcommittee and would that affect the parent 9 committee as well? 10 Understanding they might -- I 11 don't know how often they meet. They might 12 only meet once every few months. If we finish 13 our work in December, they might not address 14 the issue until March of next year. 15 MR. GORDON: My understanding is 16 that ERAC is cognizant of the fact that you 17 guys have time limits. ERAC doesn't do just 18 subcommittee work. They have their own broad 19 agenda of matters that they discuss and they 20 meet several times a year. 21 To the extent that you've got 22 questions about that, then what I would do is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 14 1 direct those, if you've got special concerns 2 about that, JoAnn Milliken is the DFO that 3 handles ERAC which is the parent committee. 4 And if you want to specifically address those 5 issues to her in terms of timing, that would 6 be the recommendation that I would make to 7 you. 8 Any other issues? Okay, thanks 9 very much for your time. 10 MR. CYMBALSKY: Hi, John 11 Cymbalsky, DOE. I want to welcome everybody 12 to our first negotiated rulemaking for 13 transformers, our first meeting here. 14 Just to address that last comment, 15 I'm not on the full ERAC Committee. Mr. 16 Rosenfeld is. I highly doubt that they would 17 not convene a meeting to discuss our work if 18 there's a deadline. We're not doing this for

19 our health that's for sure. 20 Let's see, the other issue I 21 wanted to address, I still have a bunch of 22 emails flying around about making you all pay

### 202-234-4433 Neal R. Gross & Co., Inc. Page 15 1 for meeting space. That was never intended to 2 be a public email. I'm really sorry about 3 that. We will not extract anything but a 4 pound of flesh at these meetings. 5 (Laughter.) 6 And we apologize. I didn't want 7 to get into the fray with that, but we will 8 not be charging you for admission to this. We 9 appreciate you actually being on the committee 10 and that's enough for us. 11 With that, back to Richard. 12 MR. PARKER: Okay, so why don't we 13 get started, beginning with just everybody -- 14 is it on now? Can you hear? All right. With 15 just introductions around the table and then -

16 -

17 MR. CYMBALSKY: Around the tables.

18 MR. PARKER: Around the tables and 19 chairs. I first just want to thank some of 20 the support staff who have made all this 21 possible. Of course, John, for hosting the 22 meeting and DOE and Dan Cohen, Zhimei Luo back

### 202-234-4433 Neal R. Gross & Co., Inc. Page 16 1 there will be taking minutes for the meeting. 2 She's with the Navigant team. She's been a 3 great resource for this. 4 Brian Coffey who you know back 5 there and Matt Nardotti from Navigant. Is 6 Katie -- we've talked on the phone, but if not 7 in the room, good to meet you, from LBNL, 8 providing analytical support. Emily Marchetti 9 who has helped us with this meeting space and 10 Tatiana over there. Their hard work makes all 11 of this possible. And Jeremiah Freeman in the 12 back there who has really done a tremendous 13 amount of work to bring this meeting together. 14 So I want to start off by just recognizing 15 and thanking them. 16 Let's just go around the table 17 now. Everybody probably knows each other, but 18 it would be good for me to know you and I'll 19 tell you a little bit about myself and then 20 we'll just get into our business. 21 Starting with you. 22 MR. ROSENFELD: Hi. I'm Art

### 202-234-4433 Neal R. Gross & Co., Inc. Page 17 1 Rosenfeld. I'm a member of the full 2 committee. My job here is to listen 3 attentively and hopefully get you prompt and 4 unadulterated recommendations to the 5 committee. 6 I do want to apologize in advance. 7 There was some confusion as to who was going 8 to represent the full committee here today. I 9 happen to be in Washington with some other 10 conflicting dates, so I'm double booked today. 11 I will try to be here for the majority of the 12 meeting and all of tomorrow morning. But if I 13 sneak out at 10:15, that's why, and I 14 apologize in advance. 15 MR. ECKMAN: I'm Tom Eckman with 16 the Northwest Power and Conservation Council. 17 I work on the energy efficiency activities of 18 the Council. We are a four-state body that 19 deals with integrated resource planning for 20 utilities in the Northwest, Oregon, 21 Washington, Idaho, and Montana. 22 MR. ANDERSON: I'm Rick Anderson

### 202-234-4433 Neal R. Gross & Co., Inc. Page 18 1 with the Fayetteville Public Works Commission. 2 I'm here with Mike Hyland, American Public 3 Power, and representing the interests of 4 municipal electric systems.

5 MR. ROSENSTOCK: Steven 6 Rosenstock, Edison Electric Institute. We're 7 the trade association for investor-owned 8 utilities. 9 MR. SAINT: Good morning. I'm Bob 10 Saint, with the National Rural Electric 11 Cooperative Association, NRECA. We represent 12 the rural electric cooperatives in the U.S. 13 MR. HYLAND: Mike Hyland with the 14 American Public Power Association, APPA. We 15 represent 2,000 municipally-owned electric 16 systems in the U.S. 17 MR. ROY: Robin Roy, Natural 18 Resources Defense Council. We're an 19 environmental organization with over one 20 million members and supporters. 21 MR. PETERSON: Good morning. I'm 22 Eric Peterson. I'm the Director of Research

### 202-234-4433 Neal R. Gross & Co., Inc. Page 19 1 and Customer Technical Services for AK Steel. 2 AK Steel is a company that's been in the 3 United States for about 110 years with 4 employees in Indiana, Ohio, Pennsylvania and 5 Kentucky. 6 MR. CREEVY: I'm Jim Creevy with 7 the National Electrical Manufacturers 8 Association. Today, I'm serving as an 9 alternate for John Caskey who has a happy 10 family event, probably occurring this morning. 11 He should probably be here this afternoon and 12 tomorrow, however. 13 NEMA is the trade association for 14 the electro industry manufacturers including

15 manufacturers of transformers. 16 MR. BECK: Scott Beck, Lakeview 17 Metals. I'm the sales and product engineering 18 manager and we are a core manufacturer.

19 MR. PATTERSON: Wes Patterson. 20 I'm with ABB, vice president of technology. 21 ABB is a manufacturer of transformers in the 22 U.S., among other things.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 20 1 MR. GAYTAN: My name is Carlos 2 Gaytan, Prolec GE. I am manager of 3 engineering of distribution transformers. 4 Prolec GE is a manufacturer of liquid-filled 5 distribution transformers. 6 MR. SIMMONS: Hello. My name is 7 Chuck Simmons. I'm with Progress Energy in 8 Raleigh, North Carolina. I deal with 9 distribution standards for distribution 10 transformers, regulators, among many other 11 devices, here as part of EEI. 12 MR. CORKRAN: Hello, I'm Jerry 13 Corkran. I've been a staff engineer for 14 Cooper Power for the last 40 years, IEEE

15 member. 16 MR. POLINSKI: Hello, Ray Polinski 17 from Allegheny Ludlum Steel Corporation, a 18 division of Allegheny Technologies. I'm our 19 general manager of our electrical steel 20 business unit that produces grain-oriented 21 electrical steel for transformer cores. 22 MR. HODGE: I'm Gerry Hodge from

### 202-234-4433 Neal R. Gross & Co., Inc. Page 21 1 Howard Industries. I'm a consultant engineer

2 for them. And we're a manufacturer of 3 distribution transformers. 4 MR. MILLURE: I'm Dave Millure, 5 the commercial leader for Metglas, 6 Incorporated. We're an electrical steel 7 manufacturer with a factory in South Carolina.

8 MR. GREESON: Robert Greeson. I'm 9 the engineering manager at Federal Pacific 10 Transformer in Bristol, Virginia. We 11 manufacture medium voltage dry-type 12 transformers as well as low voltage dry-type 13 distribution transformers. And so we 14 represent the manufacturing stakeholders. 15 MR. DELASKI: I'm Andrew DeLaski. 16 I'm the executive director of the Appliance 17 Standards Awareness Project. ASAP is a 18 coalition of energy efficiency proponents that 19 includes energy efficiency organizations, 20 consumer groups, environmental organizations, 21 utility companies, and state government 22 representatives.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 22 1 MR. COHEN: I'm Dan Cohen. I'm 2 with the General Counsel's Office here at the 3 Department of Energy. 4 MR. CYMBALSKY: John Cymbalsky, 5 supervisor of the Appliance Standards Program

6 here at DOE. 7 MR. PARKER: Let's go to the 8 seats. Why don't we start off with the back 9 row and just work our way forward? 10 MS. COUGHLIN: I'm Katie Coughlin. 11 I work at Lawrence Berkeley National Lab. I 12 worked on the energy use analysis. 13 MR. RAYMOND: Jim Raymond, 14 Department of Energy. 15 MR. NARDOTTI: Matt Nardotti, 16 Navigant Consulting. 17 MR. COFFEY: Brian Coffey, 18 Navigant Consulting. 19 MR. COULTER: Greg Coulter, I'm 20 with Prolec GE. 21 MR. SCHOEN: Jerry Schoen, AK 22 Steel, Division of Research.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 23 1 MR. FOSTER: Chuck Foster, Edison 2 Electric Institute. 3 MS. WALTNER: Meg Waltner, Natural 4 Resources Defense Council. 5 MR. LONGSTRETH: Ben Longstreth, 6 Natural Resources Defense Council. 7 MS. CORKRAN: Patricia Corkran.

8 MR. WINDER: Ken WINDER. 9 MR. SAMPAT: Mahesh Sampat, EMS 10 Consulting. 11 MR. LOOBY: Kevin Looby, 12 alternate, Lakeview Metals. 13 MR. RYAN: Paul Ryan, alternate 14 for Hitachi Metals Metglas. 15 MR. BERMAN: Robert Berman, Berman 16 Economics.

17 MR. PARKER: Great. 18 MR. BALLO: Tim Ballo, 19 Earthjustice. 20 MR. PARKER: Thank you. Welcome, 21 everyone. I'm Richard Parker. I'm a 22 professor at the University of Connecticut Law

### 202-234-4433 Neal R. Gross & Co., Inc. Page 24 1 School. I specialize in administrative law 2 and alternative dispute resolution mediation 3 and I look forward to working with you as we 4 go forward in trying to come up with a 5 consensus rule or proposed rule. 6 Just a couple of thoughts about 7 what a negotiated rulemaking is. I thought we 8 might just talk you through that process just 9 very briefly so that we know sort of what to 10 expect. First, my job is to simply be a 11 facilitator of your discussion. I have no 12 views on this and my background is in 13 administrative law and process. I know very 14 little about electric transformers and have no 15 opinions on the subject whatsoever. So I hope 16 to learn enough and know enough to maintain 17 and promote an orderly discussion to help this 18 group forge a consensus, but I don't have any 19 dog in the race. 20 Everybody else in this room and 21 everybody at the table does have a dog in the 22 race. The way negotiated rulemaking normally

### 202-234-4433 Neal R. Gross & Co., Inc. Page 25 1 works is it's really a meeting of stakeholders 2 and representatives of stakeholders. Again, 3 remembering what Mr. Gordon said, that you're 4 representing your industry and not just your 5 company. You're here in your capacity as 6 citizens as well as industry experts. 7 So there's a group of people, 8 there is a literature. There is a discussion9 about whether you should have sort of free10 floating experts on the committee who bring a 11 lot of vast knowledge of an industry, but 12 don't necessarily represent anybody with 13 financial or professional interest in it and 14 we decided to focus this committee and the 15 membership on stakeholders because a 16 negotiation is designed to get results. If we 17 are successful, we will produce a term sheet 18 that will serve as the basis for DOE's 19 proposed rule. 20 DOE has committed, I understand as 21 part of the ground rules, to propose to the 22 public any consensus product that this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 26 1 committee comes up with. I should mention 2 that there is an act that governs our 3 proceedings. I'm a lawyer. I find these 4 things fascinating. 5 I'm not sure to what degree you 6 find these things fascinating, so I have not 7 burdened you with a handout that contains the 8 act, but I'd be happy to share that with you 9 if anybody wants to see it. But basically the 10 way the process works is that an independent 11 facilitator convener is hired to sort of bring 12 a committee together that is broadly 13 representative of a diverse array of 14 interests, that is balanced so that no one set 15 of interests can dominate, either in terms of 16 knowledge or numbers around the table, and 17 that is public, so everything we say here is 18 basically on the record and you should be

19 aware of that. 20 There will be a transcript of the 21 meeting. It will be distributed to you. We 22 are doing this on webinar and that reminds me

### 202-234-4433 Neal R. Gross & Co., Inc. Page 27 1 that I should as soon as I'm through with 2 these remarks open it up to the phone and let 3 people who are on the phone introduce 4 themselves. I apologize to people joining us 5 by webinar, welcome. 6 But the proceedings are public. 7 We can form into working groups, if people 8 like, and caucuses and so forth. You are free 9 to caucus with your own colleagues and 10 industry members and so forth. And that, of 11 course, is off the record. Everything said 12 around the table is on the record. So this is 13 a public proceeding. 14 Anybody is welcome to attend these 15 meetings and speak to the extent that the 16 orderly business allows. That part is 17 mandated by statute. That's why I don't 18 discuss this in the ground rules section that 19 we can agree on. There are certain things 20 that the statute requires. And that's one of

21 them. 22 We will meet through several

### 202-234-4433 Neal R. Gross & Co., Inc. Page 28 1 sessions, the exact number to be determined, 2 and try to forge what I call a term sheet 3 which would be basically the guts of the deal 4 in as much detail as people feel is necessary 5 to ensure that the consensus is reflected. 6 We found in the past that it is 7 not productive to have 25 people haggling over 8 the exact wording of the exact rule. So we 9 would do a term sheet. It would go to DOE. 10 They would draft the actual NOPR and the 11 supporting preamble and it would come back to 12 this committee to look at and presumably to 13 bless or to offer, but mostly our product will

14 be a term sheet. 15 What the statute says is that we 16 can go as far if people want as actually 17 negotiating the draft rule, but that's 18 absolutely the outer limits of what this 19 committee can do under the statute. At that 20 point, the rule is proposed, like any other 21 NOPR and it is open to public comment and the 22 public can come in and comment on the rule.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 29 1 And if it is determined that certain changes 2 are required, those changes might be made. 3 We'll talk more about that process when we get 4 into the procedure. 5 But all this committee is allowed 6 to do under the statute is to negotiate the 7 proposed rule. Experience shows, long 8 experience with negotiated rulemaking shows 9 that in the vast majority of cases, what is 10 proposed ends up being the rule, but you never 11 know, things can happen. And so there has to 12 be some allowance for the public to be 13 involved, in some sense that their input would 14 be meaningful. And so we can't actually 15 negotiate the final rule, but only the 16 proposed rule. 17 Other than that, it's a very open, 18 informal process. And we as a group, you as a 19 group, can decide how you want to operate, 20 what issues you want to address, in what 21 order, and so forth, and when you want to wrap 22 up. The agenda that I've put on the table for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 30 1 the day is just a draft. It's really up to 2 you to decide how you'd like to do things. 3 I propose that we start off with 4 discussion of the ground rules and I've 5 circulated a draft. It has been used in prior 6 discussions, excuse me, prior negotiated 7 rulemakings. And so that can be a basis for 8 discussion. I do apologize for getting it to 9 people last night. What we can do is if 10 people want to look at the draft, we can just 11 take a break for a few minutes after the 12 introductions and when we get to the ground 13 rules of the agenda and just let people read 14 through it so people have a sense of it. 15 They're not long. They're not rocket science. 16 I think if you look at them, you can get a 17 pretty good sense of it. 18 Before I go any further though, 19 let me again apologize to the people who are 20 on the phone and just open the lines to people 21 who are calling in. I hope everybody got the 22 call-in information and the link for the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 31 1 webinar access. So who is on the line? Does 2 anybody want to step forward, speak up. 3 MR. HOPKINSON: Yes, Phil 4 Hopkinson here from HVOLT, Inc. 5 MR. PARKER: Great, welcome, Phil.

6 MR. PETROSINO: Tom -- 7 MR. PARKER: I'm sorry, who was

8 that? 9 MR. PETROSINO: Tom Petrosino,

10 consultant for Prolec GE. 11 MR. MEYERS: Aaron Meyers, Cooper 12 Power Systems. 13 MR. DREXLER: Charlie Drexler, 14 KAEC, Kentucky Association of Electric Co-ops. 15 MR. PARKER: Anyone else? 16 MR. YOUNG: Daniel Young,

17 consultant to PG&E. 18 MR. PARKER: Anyone else? 19 MR. ROSSETTI: John Rossetti, 20 Memphis Light, Gas, and Water. 21 MR. PARKER: Anyone else? Could I 22 ask everybody on the line if you could just --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 32 1 if you will email me your information, your 2 contact information, we will make sure that 3 you are copied on the documents that go out to 4 the group and obviously, if you have enough of 5 an interest to have tuned in today, you have 6 enough interest to be apprised of what we come 7 up with between meetings. 8 So please, I can be reached at 9 richardparkerdc and this is true for everybody 10 in the room as well, if you need to reach me, 11 richardparkerdc@gmail.com. We will add you to 12 the contact list so that you get the 13 information that is circulated. 14 Could I also just ask everybody on 15 the line to mute their phones so that we don't 16 get noise in the room. And if everybody in 17 the audience and the room here, please take a 18 chance to turn off your cell phones if that's 19 appropriate. 20 Any thoughts, comments, before we

21 start? Great. 22 Well, what I thought we would do

### 202-234-4433 Neal R. Gross & Co., Inc. Page 33 1 initially is just agree on sort of what is our 2 agenda for these next two meetings. And I 3 have just a very, very informal proposal here. 4 And it basically is that we discuss the 5 ground rules. We need to talk a little bit 6 about what our schedule is going to be. 7 That's complicated a little bit by this issue 8 of location. It's great to be here. I'd like 9 to be in a place where we can get all 25 10 people around the table if that's possible. 11 So I thought we might have a preliminary 12 discussion about how many meetings we think we 13 will need. 14 I don't think they can be more 15 than preliminary. I think I'd like to have 16 sort of a general discussion and then we'll do 17 our work for a couple of days and at the end 18 of -- during our wrap-up portion of the 19 meeting tomorrow, we can revisit this, based 20 upon how things go during the first meeting. 21 I think we may have a better sense of how many 22 meetings we'll need and what kind of time

### 202-234-4433 Neal R. Gross & Co., Inc. Page 34 1 frame we'll be on. 2 I thought in the afternoon we 3 would, if we can get done earlier, if we can 4 get through the rules and procedure more 5 quickly, that would be great. I'd love to get 6 into the substance of the meeting this 7 morning, if possible, but past experience 8 indicates that sometimes these procedural 9 issues and scheduling issues and so forth take 10 longer than you expect, so I've given them the 11 morning. 12 We'll adjourn for lunch at noon. 13 I'm giving everybody a two-hour lunch break 14 because I know that people have other jobs as 15 well as a desire to eat lunch. So it's a 16 chance for you to check in with your home 17 office and do some work and then come back at 18 two o'clock. I thought we would start -- 19 Navigant and LBL are here now so if we get to 20 them early this morning, they're ready to go. 21 But otherwise, we will plan on starting this 22 afternoon with basically just a discussion of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 35 1 their latest analysis that I think is posted 2 on the website. Everybody should have it. 3 And then essentially just a pretty 4 open-ended discussion. I don't want to try to 5 steer it too much. I want this to come from 6 you, really what are the issues that you see 7 as salient to the rulemaking that go into the 8 selection of TSLs and efficiency levels of -- 9 standard levels for the various design lines. 10 And what are the key issues that bear on 11 those issues? If we can specify those with as 12 much clarity and specificity as possible, in 13 the course of this meeting, figure out what we 14 need to address those issues productively, and 15 then hear from Navigant and LBL about what 16 they can do because not every wish list can be 17 fulfilled with reasonable resources and 18 available data. 19 And hopefully, we can then come up 20 with an agenda not just for today, but for the 21 rest of the rulemaking as to what issues we're 22 going to address and in what order we're going

### 202-234-4433 Neal R. Gross & Co., Inc. Page 36 1 to address them and what data we need, if any, 2 beyond what is already provided to us in order 3 to do that productively and effectively. 4 It might also talk a little bit 5 about the analytical requirements that we need 6 to do to support the analysis, to support our 7 conclusions, excuse me. You know, the fact 8 that we've agreed on it is great, but a court, 9 if this is challenged, doesn't give this group 10 any more deference than it would give any rule 11 that comes straight out of DOE. It still has 12 to pass the arbitrary and capricious test. It 13 still has to conform to the law.

14 And so we need to have a clear 15 idea and maybe Dan can talk a little bit this

16 afternoon about the statute and what the 17 criteria are. I'm sure that people here are 18 familiar with that. But it would be good to 19 know what our parameters are, what we have to 20 do to produce something that actually will 21 withstand political scrutiny, judicial 22 scrutiny, and so forth.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 37 1 OMB will review this rule, OIRA. 2 And they have been known to weigh in on the 3 past so we have to produce something that can 4 answer their concerns and can pass muster 5 there as well. So we don't have unlimited 6 scope. 7 And previous negotiated rulemaking 8 committees have run aground, so to speak, with 9 political, sometimes with political 10 compromises that worked well for the people 11 around the room, but when it went out people 12 decided oh well, it actually isn't what the 13 statute requires. So we'll be looking to Dan 14 to keep us honest there so that we don't make 15 the mistakes that some previous committees

16 have made. 17 And then tomorrow, I thought we 18 would just continue the discussion and 19 conclude with, you know, hopefully we'll work 20 over the evening to try to synthesize what 21 we've come up with today into something that 22 will give us the basis for going forward

### 202-234-4433 Neal R. Gross & Co., Inc. Page 38 1 tomorrow. And then hopefully leave this 2 meeting -- I'll consider it a successful 3 meeting if we leave this meeting with a 4 schedule for going forward and a clear agenda 5 that involves the major issues that we need to 6 discuss, the data needs, and the order of 7 discussion. 8 Does that seem like a sensible way 9 to proceed? I'm sure people will have 10 comment. This is just a discussion draft. I 11 open it up to your thoughts, reactions. 12 MR. ROSENSTOCK: Mr. Parker, you 13 said that you'd give us time to review the 14 ground rules and if we wanted to make any 15 suggestions or additions, would that still be 16 part of today's agenda? 17 MR. PARKER: Yes, definitely. 18 MR. ROSENSTOCK: Thank you. 19 MR. PARKER: Any other thoughts? 20 Does this agenda seem agreeable to people?

21 MR. ROSENSTOCK: Just another 22 follow up. You said about the LBL analysis,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 39 1 you're still referring to the analysis that 2 was posted, I believe it was dated August 3 23rd. It was posted around August 30th. 4 There's no other analysis that has been 5 created since then, correct? 6 MR. PARKER: Katie, would you like 7 to speak to that? 8 MS. COUGHLIN: Yes. We're still 9 working on the NOPR analysis. 10 MR. ROSENSTOCK: So just for the 11 record, so everyone could hear, you said 12 you're still working on the NOPR analysis. 13 Does that mean you've changed the analysis 14 since the August 23rd publication? 15 MS. COUGHLIN: Yes. I mean, the 16 NOPR is not concluded yet. 17 MR. ROSENSTOCK: I can barely hear 18 you. I'm sorry. 19 MR. PARKER: Come to the mic here, 20 if you would, please. Thanks. 21 MS. COUGHLIN: Yes, there have 22 been some changes. We're still in review of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 40 1 the NOPR analyses, so there will be another 2 publication of the NOPR. I don't know what 3 the current target date is. 4 MR. CYMBALSKY: I'm sorry. This 5 is John Cymbalsky. So for the purpose of this 6 negotiation, the data that was posted, the 7 analysis that was posted is what we're working 8 off of, any subsequent changes will come from 9 this process and the NOPR comes from this 10 process. However, concurrently, they will 11 work -- if this breaks down and we run away 12 from the negotiation, we're still on the hook

13 for a NOPR. 14 And so what Katie is referring to 15 is the team still is working to produce a NOPR 16 while we're doing our business here. And as 17 we look at the numbers that are posted, that 18 we're all looking at, if there are questions 19 or concerns the team is here to address those. 20 MR. ROSENSTOCK: I appreciate 21 that. I guess my concern is we had the numbers 22 from the March preliminary analysis for the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 41 1 CSLs and then we have the draft efficiency 2 levels. And if they're doing further analysis 3 where they might come up with even a third set 4 of efficiency levels, that makes it rather 5 difficult for us because their numbers could 6 be flying all over the place, and you know -- 7 MR. CYMBALSKY: We'll post as we 8 go. So I think, you know, let's work with 9 what's posted and go from there, please.

10 MR. PATTERSON: I have one 11 question on this. What was published at the 12 end of August essentially was three 13 spreadsheets with detailed design information. 14 Are we recalculating those designs? 15 MR. COFFEY: That work represents 16 the latest that we have, as John had 17 mentioned, as a result of the proceedings of 18 this committee. Sure, there could be some 19 changes, some new thinking incorporated. 20 MR. PATTERSON: But as we speak,

21 we have not recalculated -- 22 MR. COFFEY: That's right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 42 1 MR. PARKER: We're going to have a 2 lot of time to discuss the methodology, the 3 scope, the definition of design lines and so 4 forth. Let's hold that if we could for that 5 discussion. 6 Anything right now on the agenda? 7 MR. DELASKI: A simple matter of 8 logistics. You suggested a two-hour lunch. I 9 would suggest it may be more efficient for 10 some of us to do an hour lunch, finish early. 11 Getting back to the office, hotel, may be a 12 better use of our time than taking two hours 13 in the DOE lunch room. 14 MR. PARKER: How do people feel? 15 I'm completely open. Do people prefer to 16 break for an hour for lunch and get out of

17 here at 4? 18 MR. ROY: I definitely do for

19 tomorrow. 20 MR. PARKER: Okay. 21 MR. ROY: I'll be running to the 22 airport.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 43 1 MR. CREEVY: I would just caution 2 that I've been to a lunch in this building 3 before and the lines can be long, so I just 4 would be concerned if everybody is counting on 5 one hour, it might turn into an hour and 20 or

6 so. 7 MR. DELASKI: In my experience 8 through many, many hearings, we're able to do 9 it in an hour. I would say an hour -- you 10 guys stay focused. Don't get distracted. 11 (Laughter.) 12 MR. ROSENSTOCK: I have to say 13 it's not about the room, it's about everybody 14 else in the building and when they're going to 15 lunch, too.

16 MR. PARKER: Can we eat here 17 without having to check in again?

18 MR. CYMBALSKY: There are two 19 places that you can potentially have lunch. 20 If you go directly below this room, there's a 21 Subway. You don't have to worry about -- you 22 haven't left the building. Your badge is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 44 1 fine. No one checks you. 2 If you go to the cafeteria, 3 technically, you've left the building. You 4 have to show your badge to go into the 5 cafeteria and back out of the cafeteria and 6 they'll make you go back through the metal 7 detector that's in the cafeteria. So it's a 8 little slower to go to the cafeteria. You 9 don't have to go through the main. 10 MR. PARKER: Do we agree on the 11 square table? 12 (Laughter.) 13 MR. PARKER: So we will work until 14 12:15. We'll adjourn at 12:15 until 1:15 and 15 we'll see who's right, Jim or Andrew. 16 Good. All right. Why don't we, 17 again, with my apologies for the late notice 18 in giving you this, why don't we just all take 19 a five-minute, ten minutes to read over the 20 rules of procedure, look at them. And again, 21 these are basically more or less standard 22 rules of procedure for negotiated rulemakings,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 45 1 but there's absolutely no reason to be chained 2 to them so long as whatever we do is 3 consistent with the statute. 4 (Whereupon, the above-entitled

5 matter went off the record at 9:50 a.m. and 6 resumed at 10:17 a.m.) 7 MR. PARKER: Okay, welcome. There 8 were some comments, people couldn't hear me. 9 Pardon my weak voice. I hope this is a little 10 better. Is it audible in back now? Okay. 11 Good. So I will be speaking up for the people 12 in back and I will ask the people in back, the 13 other comment was if people could please come 14 to the mic to speak because it's virtually 15 impossible to hear otherwise. And the people 16 on the phone will not have any chance of 17 hearing you if you don't come to the mic. So 18 please come to the mic to speak. 19 I also want to emphasize that 20 people in the seats in back not around the 21 table are absolutely welcome to speak. Just 22 please raise your hand and I will make sure

### 202-234-4433 Neal R. Gross & Co., Inc. Page 46 1 that you are included in the conversation. 2 You are very much a part of our dialogue. 3 So please, when you come up to the 4 mic, again, just give your name. We have a 5 reporter here who is doing the transcript. 6 Give your name, give your affiliation and then 7 whatever question or comment you wanted to 8 have, wanted to make. 9 MR. CREEVY: May I ask how the 10 folks on the phone may be able to chime in in 11 that same fashion? 12 MR. PARKER: Yes. I believe that 13 there are two ways to chime in. One, if you 14 want to just speak up on the phone, just feel 15 free to holler and say can I speak? And don't 16 be bashful at all. Thank you, Jim, for 17 mentioning that. And we will pause and let 18 you speak. 19 Another way of doing it, I 20 believe, is to email through the webinar, you 21 can -- if you have a question, chatter 22 questions, you can email and Tatiana will --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 47 1 I'm hoping it's self explanatory to people who 2 are on the website. Tatiana will pass the 3 comment to me and we'll make sure that it gets

4 addressed. 5 If this system is not working out, 6 by the way, this is kind of a trial or 7 everybody, our first time, so if there are 8 problems, please let us know and we'll try to 9 fix them. 10 Okay, let's start with the draft 11 ground rules. I trust people had more than 12 enough time to read through these things. 13 First, I will say that there obviously is one 14 typo. In the meetings, there's a reference to 15 the Department of Labor. It's the Department 16 of Energy's negotiated rulemaking policy. The 17 problem with taking ground rules that have 18 been used before is they've been used before. 19 So anyway, please substitute 20 Energy there. 21 Let's start off with just a brief 22 discussion, presentation from Dan Cohen,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 48 1 Assistant General Counsel, here at the 2 Department about the issue of our timetable in 3 the context of the pending Ninth Circuit 4 litigation. 5 MR. COHEN: This is Dan Cohen from 6 the Department of Energy. If Tim would like 7 to comment on this as well, as you all know, 8 pursuant to an order in the Ninth Circuit in a 9 case that was brought for the 2007 rule that 10 we had promulgated, we took a voluntary remand 11 which leads to the rulemaking we're now 12 engaged in here. 13 Under that remand, there was a 14 requirement that we have a proposed rule 15 published by October 1st of this year. 16 Obviously, that date -- since we're just 17 starting this process now -- is not going to 18 be met. So we have jointly with the other 19 parties in that litigation gone to the Ninth 20 Circuit and asked for additional time. 21 We are optimistic the court will 22 grant that time, but we haven't heard back

### 202-234-4433 Neal R. Gross & Co., Inc. Page 49 1 from the court yet. I don't know if Tim wants 2 to say any more about that. 3 MR. BALLO: No. I think that 4 covers it. We should hear something hopefully 5 very soon from the court. 6 MR. ROSENSTOCK: Question. Steve 7 Rosenstock, Edison Electric Institute. When 8 was that paperwork filed and how much time did 9 you ask for? 10 MR. COHEN: Fortunately, we have 11 the guy whose email that actually went to the 12 court sitting right here at the table with us. 13 MR. BALLO: We didn't actually 14 file anything. We just sent -- we had been 15 working with the Mediator's Office of the 16 Ninth Circuit to sort of pave the way with the 17 Judges that the case was before to get an 18 extension of the deadlines. So I sent an 19 email on Wednesday, no, maybe late last week 20 and we needed some clarifications. The 21 Mediator's Office asked for some 22 clarifications and I believe that email will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 50 1 go to the Judges this week. So we should hear 2 something hopefully in the next week or two. 3 MR. COHEN: And also, the reason 4 why we went back through the mediator was the 5 original settlement agreement was reached 6 through the mediator and that process worked 7 very, very well. And it's the same mediator, 8 the same person. 9 MR. PARKER: And how much time was 10 the other part of your question? 11 MR. BALLO: February 1st would be 12 the new date. So from October 1st to February

13 1st. 14 MR. DELASKI: And Tim, this is 15 Andrew. Is the date for the final rule

16 affected? 17 MR. BALLO: No, it's still October 18 1st, 2012.

19 MR. DELASKI: So that's the court20 ordered deadline for a new final rule?

21 MR. BALLO: Pursuant to the 22 settlement agreement, yes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 51 1 MR. ROSENSTOCK: Steve Rosenstock, 2 EEI. Mr. Cohen, for the record, the deadline 3 was also for Option 1, a determination 4 pursuant to EPCA that standards are not to be 5 amended, correct?

6 MR. COHEN: Yes. So all that's 7 moving, this is Dan Cohen. All that's moving 8 is the date for which that action has to be

9 taken. 10 MR. ROSENSTOCK: So it's one of 11 those two actions. 12 MR. COHEN: Yes, yes. 13 MR. ROSENSTOCK: Thank you. 14 MR. COHEN: Thank you for the 15 clarification. 16 MR. PARKER: Any other comments on 17 the timetable? Okay, let's move on to the 18 rules of procedure. Most of these things are 19 self explanatory. You've read them. I don't 20 think we need to walk you through them or 21 anything. The one -- I don't want to say the 22 one, but one big issue that faces every

### 202-234-4433 Neal R. Gross & Co., Inc. Page 52 1 committee of this type is what constitutes 2 consensus. We will be striving for a 3 consensus and the Department of Energy's 4 commitment is to reflect any consensus reached 5 by this on a new standard. 6 And so what I thought I would do 7 is if Dan wants to talk a little bit about 8 under the Negotiated Rulemaking Act, what the 9 statutory definition of consensus is, very 10 briefly, and then we can discuss how this 11 group wants to define consensus for purposes 12 of going forward.

13 Dan? 14 MR. COHEN: Sure. Dan Cohen, DOE. 15 So this is straight out of the statute. The 16 definition of consensus is unanimous 17 concurrence among the interests represented on 18 a negotiated rulemaking committee established 19 under the subchapter unless such committee 20 agrees to define the term in general, but not 21 unanimous consent concurrence or agrees upon 22 another specified definition. So it's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 53 1 unanimous, unless we unanimously agreed to not 2 be unanimous. 3 (Laughter.) 4 MR. PARKER: Let's have an open 5 discussion of what people think. Steve, go

6 ahead. 7 MR. ROSENSTOCK: Hi, Steve 8 Rosenstock, EEI. I caucused with some of the 9 utility representation here and we thought 10 that it might be good that we'd always strive 11 for consensus, unanimity, where possible, but 12 maybe add a Part B where unanimous vote is not 13 possible and please reword it. I'm not a 14 lawyer, but please reword it to make it sound

15 a lot better. 16 Where the unanimous vote is not 17 achieved or not possible, then an acceptable 18 vote would be -- we can put in -- we suggest 19 18 out of 25, that's 72 percent. Obviously, 20 that number -- and the reason being is that we 21 discussed it with other code making, like I 22 work on ASHRAE, and there's other places where

### 202-234-4433 Neal R. Gross & Co., Inc. Page 54 1 they strive for unanimity, but they do take 2 like a two-thirds vote to get things passed, 3 basically. 4 Other organizations have different 5 thresholds, 70 percent,75 percent. We thought 6 that might be a reasonable number as a backup 7 position. So again, out there for everyone's 8 consideration. Thank you. 9 MR. PARKER: Reactions? 10 MR. DELASKI: Talking about 11 unanimity. And I guess I would distinguish 12 what Steve's talking about. Steve, you're 13 talking about a sort of -- you're just driving 14 sort of decisions along the way. I think for 15 decisions along the way, as the ground rules 16 describe, everything is tentative until it's 17 the final deal, right? 18 That gives you a lot of 19 flexibility in discussions because you're 20 trying to find a way forward that meet the 21 needs of all the parties, so in that give and 22 take process, you may give something with the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 55 1 hope of getting something later on, okay? 2 That's why the nature of the tentativeness of 3 agreements until there's a final agreement. 4 But I would submit that unanimity 5 is what we want for the final agreement. 6 There's a variety of parties here. I think a 7 majority rule or a super majority rule would 8 leave some parties out in the cold, not being 9 represented in that majority. I think at 10 least the potential for that. 11 I also think that there's nothing 12 to stop a subset of this group from making a 13 recommendation to the government. In fact, 14 many of us already have as subsets. Utility 15 industry represented by EEI, AGA, APPA, and 16 NRECA have made recommendations which 17 represents a subset of this committee, EMA 18 representing manufacturers. My coalition has 19 submitted joint comments, so subsets of the 20 submitted comments. And we might form, get 21 together as -- some of us might join together 22 and make a recommendation to the government.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 56 1 EEI, APPA and my coalition made a 2 recommendation in 2007 to the government of 3 what a final rule should be. So there's no 4 reason why we can't pursue that path, but that

5 would not be a consensus under the ERAC or 6 under the FACA. It would be a joint 7 recommendation to the government which any of 8 us can do at any time. Have done it in the 9 past and you could do it again. But it's not

10 the same as a consensus under the FACA. That 11 would be my proposal for how we do business. 12 MR. PARKER: One clarifying point 13 just to mention because the rules of procedure 14 obviously are packaged, they fit together. 15 They represent an agreement among the 16 committee members and they're like the 17 contract for this committee. So embody 18 commitments by DOE. They also embody 19 commitments by people on the committee. 20 And one of those commitments under 21 the draft rules of procedure which is a fairly 22 standard arrangement in negotiated rulemakings

### 202-234-4433 Neal R. Gross & Co., Inc. Page 57 1 is if there is a consensus, however that is 2 defined, the members around the table extend 3 to the people who are virtually around the 4 table, that are on the committee, would agree 5 not to file adverse comments, not to undermine 6 the rule later on with their own oral or 7 written comments on any final rule, so long as 8 the proposal and the final rule reflect the 9 consensus that is achieved. 10 MR. DELASKI: Right, so just to 11 clarify, Richard. So if you went with Steve's 12 proposal, say 18 out of 25, then are you 13 saying that you are in the minority, we're 14 part of the 7 that was to be bound not to 15 object under that contractual arrangement? 16 MR. PARKER: Well, that's the way 17 unless you alter that part of it. 18 MR. DELASKI: We can't agree to 19 that under any terms. 20 MR. PARKER: And I think that's 21 why, you know, in most negotiated rulemakings 22 they adopt the unanimous approach, but the way

### 202-234-4433 Neal R. Gross & Co., Inc. Page 58 1 it's worded here in this agreement is you have 2 to affirmatively dissent. What we do want to 3 do is apply some kind of peer pressure, if 4 there's one person who just absolutely won't 5 give in, they can block a consensus and that's

6 the concern. But we want to at least ask 7 people to do that affirmatively rather than 8 requiring everybody to vote aye. You have to 9 actually vote to abstain or you have to 10 exercise a veto, if you're the only person 11 that is not consenting to something. 12 So that's kind of the way the 13 consensus is devoted here, but again, this is 14 not the way -- but you're absolutely right. 15 If consensus is defined as 18 out of 25, and 16 these other things stay in, then people would 17 contract not to oppose that. 18 Yes, in the back. If you could 19 come to the mic. 20 MR. FOSTER: Good morning, Mr. 21 Parker. Chuck Foster representing Edison 22 Electric Institute. In a follow on to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 59 1 Andrew's comment, do we perceive that the 2 restrictions on -- that in the event that 3 consensus is reached under this agreement, 4 that extra regulatory comments, i.e., lobbying 5 at DOE -- I mean on Capitol Hill, and to take 6 a position that would be inconsistent with 7 that, would that be viewed as undermining this 8 and prohibited? 9 So once we agree to consensus 10 here, we're locked in, we can't go to 11 Congress, we can't go to -- can't issue press 12 releases saying that was a dumb thing? 13 (Laughter.) 14 MR. PARKER: I think most 15 organizations would, you know, if they're 16 representative is giving consent, they 17 wouldn't say what their representative just 18 agreed to is a dumb, stupid thing never to be

19 enacted. 20 MR. FOSTER: But we just heard 21 Andrew describe -- we were part of his 22 coalition where we said -- we took a position

### 202-234-4433 Neal R. Gross & Co., Inc. Page 60 1 with Congress and are we able to take a 2 separate, distinct position with Congress than 3 we are with -- in this setting? 4 MR. PARKER: Well, I think there's 5 -- I don't really have a strong answer. But 6 in terms of the legal, the technicalities, I 7 think -- certainly the spirit of good faith, 8 you know, dealing would suggest that if you 9 support a rule in one form, you support it in 10 all form and don't have one message for one 11 audience and another message for another 12 audience. 13 MR. DELASKI: I guess I would 14 suggest perhaps that maybe under this no 15 challenge clause, Chuck, under the agreement, 16 maybe we need to add there or through 17 legislation. 18 MR. FOSTER: Right. I think 19 Andrew's raising a good point. I can -- this 20 will not be the first time I've seen people 21 agree to something in a regulatory setting and 22 then try to get it fixed legislatively with a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 61 1 completely different approach. 2 MR. PARKER: I think that's a good 3 point. Thank you for raising that. 4 MR. DELASKI: The other thing that 5 I think has come up and we've done these 6 negotiations not in this kind of format 7 before, sponsored with the government's 8 involvement, but on a private basis with NEMA 9 and with other organizations. And some of 10 those agreements have been governed by a 11 written agreement at the end. And we 12 typically have attached an end date to the 13 agreement, so that you're not bound forever 14 and ever and ever, you know, come the year 15 2030, okay. So there is some sunset. 16 MR. PARKER: Thoughts on the idea

17 of a sunset? 18 Steve, did you want to comment on

19 that? 20 MR. ROSENSTOCK: We really didn't 21 discuss that, but in terms of being bound by 22 the conditions I think a sunset date is a fair

### 202-234-4433 Neal R. Gross & Co., Inc. Page 62 1 thing. Again, I'm not going to suggest a 2 date, but I think we're okay with some sort of 3 sunset date to be bound by the conditions of 4 this.

5 MR. PARKER: Dan? 6 MR. COHEN: I guess -- I was just 7 going to ask about suggesting a date. But are 8 we talking about the -- by the promulgation of 9 the final rule maybe? Or the compliance date 10 with the standards would seem to be two 11 options for dates? 12 MR. DELASKI: We typically, the 13 thing that you're concerned about is two 14 things. One is something seeking a court 15 challenge and the other one is someone doing 16 what Chuck has mentioned, running to the Hill 17 for a legislative change. So I think that 18 would need a little bit of a longer period. 19 MR. COHEN: So Dan Cohen again, so

20 -- 21 MR. CORKRAN: Can I ask people to 22 get closer to the microphone when you're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 63 1 talking? 2 MR. COHEN: I'm sorry. So in 3 terms of a court challenge, of course, there's 4 a 60-day limitation in the statute after the 5 promulgation of the rule that sets the 6 standards. If someone by the 61st day doesn't 7 file that challenge, they've lost their 8 ability to challenge. So that's just clearly

9 -- 10 MR. PARKER: Sixty days after the 11 effective date? 12 MR. COHEN: Sixty days after the 13 effective date of the rule. Publication, I 14 think, is the actual word in the statute. 15 MR. DELASKI: The effective date 16 not being the implemented date. Not the 17 compliant date, but something close to the 18 date it's published. 19 MR. COHEN: I think it's the date 20 of publication. Let me just look real quick. 21 Sixty days from the date of publication which 22 is basically the effective date, right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 64 1 MR. DELASKI: But you figure the 2 legislation option is also still open until 3 the compliant date, that's three to five years 4 technically. 5 MR. COHEN: Theoretically, the 6 legislation option is open forever, I guess. 7 MR. CYMBALSKY: But you figure if 8 it happens past when they had to comply -- 9 MR. DELASKI: Not if you have to 10 comply, you can't. 11 MR. PARKER: Yes, Tim? 12 MR. BALLO: Just a point on 13 anything relative to supporting or working 14 against legislation that frequently things are 15 packaged together in Congress and we have to 16 be careful how we phrase any sort of 17 commitment to support or oppose legislation 18 because I wouldn't want to foreclose anyone 19 taking a position on say a bill that gets some 20 transformer issue packaged together with a 21 whole bunch of other measures. I guess we 22 just need to be clear about how that situation

### 202-234-4433 Neal R. Gross & Co., Inc. Page 65 1 will be handled. 2 MR. PARKER: Yes, I think the 3 language that we have here, I had just by the 4 way, I've typed in and this is all again just 5 a draft to propose, not to challenge the 6 standard in court or in any other forum, 7 adding the phrase, "any other forum" to the 8 extent the final standard and its preamble 9 have the same substantive effect as the term

10 sheet. 11 So it doesn't say not challenge 12 any bill containing the standard. It says not 13 to challenge the standard. So I'm wondering 14 if that answers your concern or if there would 15 still be issues? I see what you mean about 16 packaging. That's a great point. 17 MR. BALLO: I'm not sure what it 18 means to challenge a bill. 19 MR. PARKER: Yes, not to challenge 20 in court or oppose -- oppose the standard in 21 any other forum. Does that help? Not to 22 challenge the standard in court or oppose the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 66 1 standard in any other forum to the extent that 2 it is -- 3 MR. BALLO: I guess that's fine 4 because it covers the standard specifically 5 and not the legislation. 6 MR. PARKER: Right. Okay. Good, 7 yes. 8 MR. FOSTER: And just to add

9 another two cents worth. 10 MR. PARKER: I'm sorry, you're 11 going to have to specify your name each time. 12 MR. FOSTER: Chuck Foster, 13 representing Edison Electric Institute. I 14 think I was thinking more of a take of 15 position materially and consistent with that 16 expressed here as opposed to a challenge. 17 Anybody working in Washington on legislative 18 matters knows if a bill comes up and it's 19 packaged in there, it's there. We didn't do 20 it. We can't challenge it. But to go out and 21 send a letter of endorsement, to go out 22 promoting that, I think would be what I would

### 202-234-4433 Neal R. Gross & Co., Inc. Page 67 1 be looking for. It would be something that -- 2 taking a position materially inconsistent. 3 MR. PARKER: Okay, take a 4 position, materially inconsistent. 5 MR. ROSENSTOCK: Sorry. It's 6 pretty daunting having your typing scrutinized 7 by the entire -- 8 (Laughter.) 9 MR. PARKER: Take a position 10 materially inconsistent with the standard in 11 court or in any other forum then? Is that the 12 proposal? Chuck? Does that work for people?

13 Not to take -- 14 MR. ROSENSTOCK: Steve Rosenstock, 15 EEI. Not inconsistent or consistent. 16 MR. PARKER: There you go. Thank 17 you. 18 MR. ROSENSTOCK: Again, Steve 19 Rosenstock, EEI. Since one of the options for 20 some of these standards could be not to change 21 the levels, you might standard or 22 determination, just to do the shorthand.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 68 1 MR. PARKER: The standard or 2 determination?

3 MR. ROSENSTOCK: Yes. The 4 determination being option one, determination 5 that the product, the standards do not have to 6 be amended. So I would leave that in there as 7 a determination versus compared to a, quote,

8 new standard. 9 MR. PARKER: Okay. Yes, Mr.

10 Berman. 11 MR. BERMAN: Robert Berman, Berman 12 Economics. I think the restriction may be a 13 bit overly broad. We've got members of the 14 public as well and others who are more loosely 15 associated with the committee who on a 16 consensus don't have a veto, if you will. To 17 require they also give up any dissension 18 rights is a bit strong. So I think the 19 limitation to the extent that there is one 20 needs to focus on only those committee members 21 that have specific veto authority. 22 MR. PARKER: I think that's kind

### 202-234-4433 Neal R. Gross & Co., Inc. Page 69 1 of more a definition of a party, right? This 2 agreement is really is only binding on the 3 parties which are the people that -- the 4 organizations that are represented at the 5 table. It doesn't bind and we cannot bind 6 people who are not -- they participate 7 informally in our proceedings or if they don't 8 participate at all, you know, they're not

9 bound. 10 We hope that they will be 11 persuaded by the wisdom of what we come up 12 with, but we can't bind them or ask them to 13 bind themselves. This is really a question of 14 you know, an issue of good faith. People 15 coming to the table, agreeing to something, 16 and then agreeing that they won't go out and 17 sabotage and undermine it in some other forum

18 later on. 19 Any other thoughts on this? Is 20 this language acceptable? Can we just take a 21 vote? Anybody have any problems with this 22 language with regard to the challenge? We

### 202-234-4433 Neal R. Gross & Co., Inc. Page 70 1 will haven't dealt with the consensus issue. 2 MR. ROSENSTOCK: Steve Rosenstock, 3 EEI. In terms of the sunset date, do you want 4 to say 60 days after publication in the 5 Federal Register or until the effective date 6 there would be -- I just want to make sure 7 that -- I can't remember if there's a specific 8 definition or not. So I don't know if you 9 want to say -- 10 MR. DELASKI: What I would suggest 11 for that sunset date would be the compliance

12 date. 13 MR. ROSENSTOCK: Compliance date 14 meaning either the date that the standard 15 actually takes effect.

16 MR. PARKER: In 2016? 17 MR. DELASKI: Whatever we agree, 18 whatever the date is that is not 2016, but 19 maybe that's what it will be, whatever the 20 compliance date is agreed upon. 21 MR. COHEN: Dan Cohen, DOE. Just 22 one nomenclature issue here. We have two

### 202-234-4433 Neal R. Gross & Co., Inc. Page 71 1 dates we talk about. We talk about the 2 effective date and the compliance date. The 3 effective date is the date the rule becomes 4 effective and usually is 60 days after 5 publication. The compliance date is the date 6 by which products manufactured that are 7 subject to that rule need to meet the new

8 standard. 9 MR. PARKER: Okay, so that's the 10 issue. Do people want effective date or 11 compliance date? Two different dates. Will 12 vary -- will differ from each other by years 13 as I understand it. Compliance date? 14 Yes, Gerry? 15 MR. HODGE: I'm a little bit 16 puzzled why the sunset date needs to be in 17 there and not totally understanding. The 60 18 days is a pretty short time. Why do we need 19 that in there? 20 MR. BALLO: Sixty dates is in the 21 statute. You actually can't challenge the 22 rule in court 60 days after it's published or

### 202-234-4433 Neal R. Gross & Co., Inc. Page 72 1 beyond 60 days after it's published. 2 MR. PARKER: No, but if we're 3 talking about the legislation now, you can 4 always go to Congress on the 61st day. 5 MR. DELASKI: I'm sorry, sir. 6 What was your question? I didn't follow what 7 your question was. 8 MR. HODGE: I just wasn't 9 understanding the effects of the 60 days, but 10 I guess what I heard was that once the law 11 takes effect and it doesn't matter and that's 12 the reason for the 60 days. Is that correct? 13 MR. COHEN: No, just again, Dan 14 Cohen, DOE. Just a clarification. On the 15 61st day after we publish the rule, if no one 16 has yet brought a lawsuit, the ability to 17 bring a lawsuit to challenge that rule has 18 gone away. But that doesn't stop someone on 19 the 61st day from, in other fora, doing 20 whatever they want to do to try to undermine

21 the -- 22 MR. PARKER: Yes, so this is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 73 1 really to Chuck's comment about these other 2 fora where people can undermine the rule or 3 the proposal, legislation, media, et cetera. 4 Does anybody have an objection to 5 compliance date? 6 MR. MILLURE: This is Dave Millure 7 of Metglas. Just one clarification. The 8 definition of party I don't really see 9 defined. Is party limited to the 25 members 10 named on the committee or does it also include

11 alternates? 12 MR. PARKER: Oh, good question. 13 Well, as nominated by the affected interest. 14 Each organization, interest caucus, that is 15 directly represented on the committee shall be 16 deemed a party. That doesn't really indicate 17 whether -- yes, each organization or interest

18 caucus. 19 MR. MILLURE: My question is are 20 the alternates also included as a party? 21 Because in my case, my alternate is a 22 different legal entity than I am.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 74 1 MR. PARKER: I think that's 2 something that we could decide as a group. 3 How do people feel? That's a great question. 4 MR. DELASKI: It's a little 5 awkward. It seems that if your alternate is 6 not here today, for example, I guess the 7 question is is that a 26th member of the 8 committee sort of -- in effect, right? That 9 alternate then has to sign off. So you need 10 to be able to speak for your alternate I guess 11 is what I'm saying it seems to me. 12 MR. MILLURE: My understanding is 13 the alternate doesn't get a vote, if you want 14 to call it, if I'm present. 15 MR. COHEN: The question -- Dan 16 Cohen, DOE. The question I'm asking is if the 17 alternate is voting for the member, they're 18 voting for the member not for -- really, 19 they're representing Metglas at that point, 20 don't you think? If the alternate is showing 21 up for you, that alternate is representing 22 your position in the negotiation. They're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 75 1 representing Metglas, I would think, not the 2 other organization. 3 MR. MILLURE: I would agree with 4 that. So the alternates' legal entities are 5 not bound by limitations -- 6 MR. PARKER: No, but again, to the 7 extent that there's a corporate affiliation, I 8 would hope that one wouldn't use the law of 9 corporate groups as a way of circumventing -- 10 I mean if it's an affiliate, if the corporate 11 affiliate is jointly owned and so forth, 12 unless you have the letter of the law would 13 apply. I hope the spirit of the law would be

14 clear. 15 MR. BERMAN: Robert Berman, Berman 16 Economics. Would it eliminate the confusion 17 then if you remove the word alternates from 18 the definition of a party and therefore when 19 the -- if the alternate is voting, is speaking 20 on behalf of the party, the alternate is 21 standing in the shoes of the party, is not the 22 alternate at that point. They're standing in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 76 1 as the party. 2 MR. PARKER: Right. 3 MR. BERMAN: So after all is said 4 and done, the alternate should not be bound as

5 an alternate. 6 MR. PARKER: Right. And I don't 7 think this language does bind them. 8 MR. BERMAN: It does as long as 9 the word alternate is in there, it seems to me 10 because it says that there is no distinction 11 between the party and the alternate because 12 you're saying and. Or the alternate, rather. 13 MR. PARKER: It says each party in 14 negotiation they designate an alternate 15 committee member. Alternates may substitute 16 for committee members in the event the member 17 cannot attend a session of the committee. 18 Does that not make clear that the alternate is 19 standing in the shoes of the committee member?

20 MR. BERMAN: It wouldn't hurt to 21 be a little bit more redundant saying that in 22 the case of the -- of any binding commitments,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 77 1 the alternate is only bound to the extent that 2 they are standing in the shoes of the 3 committee member, not in their other shoes, if 4 you will. 5 MR. COHEN: Dan Cohen, DOE. Maybe 6 it's that we just need to define at the end of 7 D that the alternate is in the representative 8 position of the committee member. In other

9 words --

10 MR. PARKER: Yes -- 11 MR. COHEN: The alternate can only 12 represent the interest of the member of the 13 committee. 14 MR. PARKER: So I put my draft 15 change in bold here. Only committee members 16 may vote on any contentious recommendation. 17 And any alternate casting a vote shall do so 18 on behalf of the committee member. 19 We can, again, we can define the 20 language, but hopefully that will make the

21 sense clear. 22 MR. COHEN: Dan Cohen, DOE. And

### 202-234-4433 Neal R. Gross & Co., Inc. Page 78 1 should we add on the end of that, "and not in 2 their own" and "not representing their own 3 interests"? 4 MR. BERMAN: Thank you. 5 MR. PARKER: Or organization's 6 interest. Okay. All right. Does that help? 7 MR. CORKRAN: May committee 8 members cast votes by telephone if they're not 9 on site?

10 MR. PARKER: Yes. 11 MR. ROSENSTOCK: Is there a way to 12 put that in the ground rules?

13 MR. PARKER: Yes. Where would 14 that go? Let's see. I guess that's really a 15 definition of consensus. 16 MR. ROY: Perhaps that's in 2F 17 under definition of attendance and 18 participation at meetings. 19 MR. PARKER: Thank you. 20 MR. ROY: To define the table as 21 including the telephone at the table. 22 MR. PARKER: Right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 79 1 MR. COHEN: Or you can add a

2 second sentence -- 3 MR. PARKER: I'll just add a

4 sentence at the end. 5 MR. COHEN: Each committee member 6 will make a good-faith effort to attend every 7 session of the negotiating committee. 8 Attendance may be telephone or other 9 electronic means. 10 MR. PARKER: Right. You can put 11 that in, but I strongly encourage people to be 12 here in person. It's just much better. 13 MR. ROSENSTOCK: Just quickly, 14 when you say other electronic means, if you 15 think about internet voting, doesn't that 16 require internet access and to ensure that the 17 -- again, that's logistics in terms of that's 18 how the vote is counted and recorded at the 19 current time. 20 MR. COHEN: Yes, Dan Cohen, DOE. 21 I don't know that we're ever going to get that 22 sophisticated, but theoretically we could set

### 202-234-4433 Neal R. Gross & Co., Inc. Page 80 1 up a videoconference. 2 MR. PARKER: Okay. All of which 3 is a nice way of doing business and dancing 4 around the bigger issue which I want to return 5 now is what constitutes a consensus. 6 MR. ROY: I have a question, Robin 7 Roy, NRDC, for Dan, I suppose. How unusual is 8 it in negotiated rulemakings to have a 9 definition of consensus which is other than 10 unanimity? Would we be really stepping out 11 from what is quite the norm or is this in the 12 mainstream to have a different definition? 13 MR. COHEN: Dan Cohen, DOE. The 14 truthful answer is, I have not the slightest 15 idea. This is the first one I've ever done.

16 I don't know. 17 MR. ROY: Because I would think it 18 might be unusual. It would be interesting to 19 know if we were really -- 20 MR. COHEN: We do have this tome 21 which apparently was put together by the guy 22 who wrote the statute and so I'm going to go

### 202-234-4433 Neal R. Gross & Co., Inc. Page 81 1 look, actually. But I really just don't know. 2 MR. ROY: I'm not inclined to go 3 to unchartered waters particularly. I don't 4 see a great advantage in having a definition 5 of consensus that we come up with here that is 6 different from the one which is the default 7 case under the act. I like that. It's 8 simple. It's easy to discuss, easy to explain 9 and very workable. 10 If you want to move away from 11 that, you really have to have a good reason. 12 MR. PARKER: My impression -- I am 13 consulting fairly frequently with Phil Harter 14 who invented the concept of negotiated 15 rulemaking and got it enacted into statute, 16 wrote this book and has done about a thousand 17 of them. He tells me that unanimity -- what 18 we have here in this text which is taken from 19 one of this rulemaking rules is sort of the 20 standard. There are departures from it, but 21 they are not very frequent. But you know, 22 there's unanimity, but dissent requires a very

### 202-234-4433 Neal R. Gross & Co., Inc. Page 82 1 affirmative act that's deliberately made and 2 good cause show, hopefully. 3 MR. HYLAND: Mike Hyland at APPA. 4 As part of the Department of Labor OSHA 5 Cranes and Derricks rulemaking and we deviated 6 from 100 percent on the vote. We went to two 7 negative votes were allowed. And it was a 22- 8 to 24-person panel and the ground rules made 9 it that two could vote negative and still be a

10 consensus.

11 MR. PARKER: Would have near 12 unanimity be a sweet spot? Twenty-two out of 13 24. One person can't or two people can't hold 14 up the whole -- 15 MR. HYLAND: This is Mike Hyland, 16 EPA again. That was kind of the thought, 17 regardless of voting and those kind of things, 18 you may have one person who just has a crook 19 in the craw here and they just don't want this 20 to go forward. And they're going to continue 21 to say no, no, no, no, no, because they would 22 rather send up being dropped back to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 83 1 Department of Energy. 2 MR. PARKER: Excuse me, I'm 3 getting urgent messages here. Could the 4 people who are on the phone please mute their 5 phones unless you want to speak to us? We're 6 getting a lot of background noise that's 7 making it hard for the transcript person to

8 hear and to record. Thanks.

9 Steve? 10 MR. ROSENSTOCK: Steve Rosenstock, 11 EEI. I know that I work on building codes in12 ASHRAE, they strive for -- it's an anti13 process. It's a standards development 14 organization. They strive for consensus 15 whenever and wherever possible, but they do 16 record the votes and they allow less than 17 consensus to send out a new proposal for 18 public review. And so I think that with all 19 the different interests, it makes sense to 20 strive for that consensus that's unanimous, 21 but again, I think we need to be realistic and

22 that we should have another reasonable

### 202-234-4433 Neal R. Gross & Co., Inc. Page 84 1 threshold that says again, not until -- I'll 2 leave the final vote for another -- that could 3 be another issue, but at least for all of our 4 work up to the final vote and/or including the 5 final vote, I think it helps to be realistic 6 to say there could be some instances where we 7 just cannot reach unanimous and that another 8 threshold would be reasonable. Thank you. 9 MR. CYMBALSKY: John Cymbalsky, 10 DOE. I think -- I'm not a rocket scientist by 11 any means, but if you look at the member list 12 of the committee you can kind of draw lines at 13 each interest, how many there are. So like 14 six of these, six of those, six of the others 15 and then there's Art and I who don't represent 16 any interest. But I don't think we want to 17 come up with a number that would say one of 18 those blocks, for example, could be voted out. 19 So if we're not going to go for 100 percent, 20 if we go 3 members, that means every group 21 will be covered if my rudimentary math skills 22 are okay. Just an opinion.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 85 1 MR. ECKMAN: Tom Eckman, Northwest 2 Power and Conservation Council. I'm inclined 3 to lean either with John or Andrew that, given 4 the other binding commitment to endorse the 5 results of the group, that having a fairly 6 large block not being behind that particular 7 consensus agreement, but bound by the 8 agreement, makes it pretty difficult to sign 9 on to that idea as a concept. 10 A more limited ability to move 11 forward with minor departures from agreement 12 is more palatable, but certainly three might 13 be at the outside. That might be half of a 14 block. And that doesn't mean we've got great 15 agreement. I'm inclined to try and say 100 16 percent, but knowing that that might be a 17 limit on practicality. 18 MR. BALLO: This is Tim Ballo. I 19 have a question for the Department. If we 20 were to keep the agreement limited to 21 consensus as being 100 percent and we're not 22 able to achieve a 100 percent agreement

### 202-234-4433 Neal R. Gross & Co., Inc. Page 86 1 through this process, will the Department 2 nonetheless weigh in its determination 3 analysis or in a NOPR the idea that several of 4 the organizations in this process did support 5 one particular standard level? Will that be 6 considered by the Department in its analysis 7 if we don't achieve 100 percent? 8 MR. CYMBALSKY: John Cymbalsky, 9 DOE. I think we would consider all of the 10 work that's done in this group if there is not 11 unanimity. 12 MR. BALLO: That suggests to me 13 there's probably more value than in keeping 14 100 percent as a definition of consensus, 15 particularly as one of the real values I see 16 in this process is avoiding a potential for 17 litigation over the ultimate standard in the 18 future. And if there is a significant or even 19 more than one or two parties who are unhappy 20 with the negotiated standards, that suggests 21 to me that there are going to be further 22 parties out there who will also be unhappy and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 87 1 will potentially end up in court again. 2 MR. BERMAN: Robert Berman, Berman 3 Economics. I think Tim is correct on that.

4 It seems to me that consensus or near 5 consensus is sort of like being a little bit 6 pregnant, either you are or you aren't. 7 Either you have consensus or you don't. 8 For DOE, it would seem to me for 9 DOE to say well, a majority or a large block 10 of the group suggested this and therefore 11 we're going with it, to rely on that would 12 totally destroy the whole notion of what the 13 consensus is for. So I think that if you 14 adopt a consensus rule and 100 percent 15 consensus and you don't get consensus, that

16 DOE then should not be able to draw on the 17 work as a basis. They could draw on the work 18 certainly in terms of capability and in terms 19 of what they learned, but to draw on the work 20 of the committee or the existence of the 21 committee as a basis for the decision I think 22 would be inappropriate.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 88 1 MR. COHEN: This is Dan Cohen at 2 DOE. I'll partly respond to that and maybe 3 there's a bridging language here. I was just 4 reading from this. So obviously, these are 5 all public meetings so to the extent there's 6 information generated and analysis and 7 thoughts, we would consider that in developing 8 a rule if the committee process broke down. 9 MR. BERMAN: Exactly. The 10 knowledge itself, in consideration itself, the 11 information itself, of course should be 12 considered, absolutely. There's a big 13 investment in it. But it's one thing to 14 consider the information. It's another thing 15 to say -- to consider the fact that a large 16 block of the committee supported that should 17 not be available. 18 MR. COHEN: If I could just read 19 from the Negotiating Rulemaking Source Book 20 that Richard mentioned was written by the same 21 person who actually wrote the statute and has 22 done any number of these. He actually says

### 202-234-4433 Neal R. Gross & Co., Inc. Page 89 1 here, "Achieving consensus does not 2 necessarily require a formal yes or no vote, 3 nor is it necessary that each interest 4 representative affirmatively like the 5 decision, merely, it does not or will not 6 oppose the decision if implemented." 7 So I guess one thought is whether, 8 if there is somebody who is sort of not happy 9 with a particular outcome just -- or can't 10 vote yes for it for some reason, at least 11 willing to say I won't -- I'll be bound to the 12 agreement, not to subvert the agreement or 13 work against the agreement. So unanimity 14 would be consensus with the stipulation that 15 there could be abstentions still being bound 16 by the agreement not to challenge. 17 MR. ROY: I think that's 18 consistent with Richard's definition where he 19 says that in 3A concurrence will be assumed 20 absent overt dissenting. So you have to take 21 action to dissent. So if you're quiet, you 22 don't like it, you abstain, then you're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 90 1 agreeing. 2 MR. COHEN: Dan Cohen, DOE. The 3 slight difference, what I heard Richard saying 4 was that you actually had to affirmatively 5 dissent. And I'm suggesting that abstention 6 would maybe be okay. So you wouldn't have to 7 affirmatively dissent. You just would have to 8 affirmatively agree not to oppose. 9 (Laughter.) 10 MR. PARKER: By the way, I want to 11 keep us moving here. We are getting still a 12 lot of noise on the phone lines. So please, 13 people on the phones, mute your phones. If we 14 can't solve the problem, we're going to have 15 to cut off your speaking access. So please 16 mute your phones. It's becoming a real 17 problem. I'm getting repeated urgent 18 messages. Thank you. 19 MR. DELASKI: Andrew DeLaski from 20 ASAP. I think there's sort of two pieces to 21 this. One is the decisions along the way. I 22 think for decisions along the way, this tool

### 202-234-4433 Neal R. Gross & Co., Inc. Page 91 1 of abstention or I'm not going to object, 2 we'll try to get to an agreement here. 3 Everything is tentative. I'm okay with that 4 for the moment. We're going to have to come 5 back to that as we get towards a final 6 decision. But that silence is acquiescence, I 7 think, is an important rule to help things 8 move along. 9 I'd also -- you mentioned John 10 described blocks and there are groups of us 11 who work together a lot who have common 12 interests and I think there's a function that 13 I've observed in other negotiations I've been 14 involved with where the blocks exert internal 15 pressure on their members to -- if four out of 16 five on a block are there, then it's incumbent 17 on those four to work on the fifth, okay? 18 Because the objective here is to come to a 19 consensus that gets around a contested brutal 20 rulemaking. I think that's where you start 21 looking at -- if four out of five are 22 convinced, but the fifth has the same set of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 92 1 interests, but yet isn't there, then someone 2 needs to work on them, okay? Let's get to

3 that consensus because that's what we're 4 trying to get to is a rule as Robin described 5 that truly does recommend. If you can't 6 convince something, then it's not a consensus. 7 Then your arguments haven't prevailed and 8 you're stuck. And then you're back to 9 government makes a decision. They've got to. 10 The law says they've got to and it's on the 11 government to go forward with a normal 12 rulemaking. 13 MR. PARKER: I think the logic 14 behind the nuance is that there are some 15 people who don't want to go back to their own 16 management and say I supported this. It's 17 much easier to go back to them and say I 18 decided not to create the whole process with 19 my opposition to it. So that allows them to 20 acquiesce without affirmatively supporting, 21 but still allows to maintain a unanimity

22 consensus rule.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 93 1 I'm really -- it's really up to 2 the group and I think perhaps we should just

3 take a vote. 4 Steve, as I understand it, you 5 would concede that perhaps 18 is not enough. 6 That it should be, if anything, 22 or 23? 7 MR. ROSENSTOCK: I'd like a vote 8 on the record for 18, please. 9 MR. PARKER: On 18, okay. 10 MR. ROSENSTOCK: Thank you.

11 MR. PARKER: So let's take a vote 12 on -- there will be three votes. One on 18, 13 one on 23, and one on unanimous, but with the 14 affirmative dissent, basically the rule as 15 written. 16 Anything that departs from 17 unanimous under the statute is -- requires 18 consensus. So the default is unanimous.

19 That's the statute. 20 So first 18, all in favor? Let me 21 count. One, two, three, four, five, six, 22 seven eight. Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 94 1 All in favor of -- 2 MR. ROSENSTOCK: Obviously this can 3 not be considered unanimous. Can this be 4 considered a separate vote? 5 MR. PARKER: Yes. It's Florida. 6 Or Chicago, right. Right, right. Good, okay. 7 So the next thing to vote on is 8 what do the proponents want to put forward, 9 23? There are 24 voting members of the 10 committee because I don't count.

11 MR. DELASKI: Is Art a member? 12 MR. PARKER: Art is. Excuse me, 13 25. He's replacing Mark Storey. So there's 14 actually 24 members of the full committee 15 including Art because he replaced Mark Storey 16 who did not decide to do this. 17 So one dissent would be 23. Two 18 dissents would be 22. Who is proposing the 19 modified? Was it Mike? 20 Do you want to choose the number 21 that you put up?

22 MR. HYLAND: Two.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 95 1 MR. PARKER: Two. All in favor of 2 a consensus defined as 22. One, two, three, 3 four, five, six, seven, eight. 4 Well, 1, 2, 3, 4, 5, 6, 7, 8, 9, 5 10, 11, 12, 13; 13 in favor of 22. 6 By the way, I apologize I should 7 know this. Is there anybody in the seats who 8 is on the committee or anybody on the phone 9 who is on the committee? Okay, so we're all

10 around the table. Great. 11 MR. YOUNG: Gary Femstrom of PG&E, 12 he is on the committee, but he was unable to 13 attend this meeting, but he does plan to

14 attend. 15 MR. PARKER: Who is this? 16 MR. YOUNG: Daniel Young. 17 MR. PARKER: Oh, hi, Daniel. Can 18 you speak for Gary? Would you like to cast a 19 vote on his behalf? Are you authorized to do

20 that? 21 MR. YOUNG: No, I'm not. I'm just 22 here to track what's going on.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 96 1 MR. PARKER: Okay. Okay, well, 2 under the statute since neither of those 3 commanded unanimous consent, we are left with 4 unanimous consent unless somebody -- we didn't 5 even get 23. But I think it has to be adopted 6 by unanimous. All in favor of 23? It sounds 7 like no. 8 Okay, so now we have the issue of 9 the current language. 10 MR. SIMMONS: This is Chuck 11 Simmons of Progress Energy. With at least one 12 member being absent, are we still -- 13 MR. PARKER: Present and voting, 14 yes. It would be a lot to say it's got to be 15 unanimous with regards to who was at the 16 meeting. That would be tough. 17 MR. DELASKI: What does it say? 18 What does it say? 19 MR. PARKER: It doesn't say. It 20 says -- I think the -- does the statute say 21 anything about presence in voting? 22 MR. BERMAN: It just says

### 202-234-4433 Neal R. Gross & Co., Inc. Page 97 1 everybody. 2 MR. PARKER: Can we agree that 3 unanimity means consensus if everybody present 4 is voting, understanding that you can vote to 5 an alternate and you can vote telephonically. 6 Can we agree on that? Not show up and the 7 whole thing is paralyzed. 8 MR. ROSENSTOCK: Can you roll

9 that?

10 MR. PARKER: Can we have a show of 11 hands on present and voting being added to 12 those words? All in favor? All opposed? 13 Unanimous, yes, all right. 14 Okay. Now the next sentence, I 15 just want to make sure that we're all 16 comfortable here. The next sentence, 17 "Concurrence will be assumed absent overt 18 dissent" is not mandated by statute. And I 19 don't think it's forbidden by statute. So I 20 think we can adopt this by whatever our rule 21 is. But I just want to make sure people are 22 comfortable with that. So let's have a vote

### 202-234-4433 Neal R. Gross & Co., Inc. Page 98 1 on that language and it's pretty critical. 2 "Concurrence will be assumed 3 absent overt dissent." We're not going to 4 have separate votes on every sentence in this 5 agreement. But is there any objection to that 6 language?

7 MR. ROSENSTOCK: I don't have an 8 objection. I just have a question. I'm not 9 exactly sure what that means in terms of the 10 negotiation process. Concurrence meaning 11 agreement and then what is overt dissent? I'm 12 not exactly sure what -- 13 MR. PARKER: It means if you 14 abstain and you don't vote, we still have

15 consensus. 16 MR. ROSENSTOCK: Are you going to 17 take abstention votes as well, as part of the 18 process? 19 MR. PARKER: We can if people 20 like. I'd be happy to do that and abstention 21 is -- yes, Paul, or Robert, excuse me. 22 MR. BERMAN: Robert Berman, Berman

### 202-234-4433 Neal R. Gross & Co., Inc. Page 99 1 Economics. It seems that you've already 2 effectively covered that with your present 3 voting because if somebody wants to abstain -- 4 MR. PARKER: They're not voting. 5 MR. BERMAN: They can simply walk

6 out of the room. 7 MR. PARKER: Well, we won't make

8 them walk out of the room. 9 MR. BERMAN: It's covered if they 10 do, then they've effectively abstained and you 11 have your consensus through those present in 12 voting. So I would say that you don't need to 13 have the implied consensus clause in there.

14 That's at best redundant and at least 15 confusing. 16 MR. PARKER: Well, I don't quite 17 agree because we're not going to vote on every 18 single thing. That would be quite a challenge 19 from a parliamentary standpoint. We're going 20 to be talking about analysis. We're going to 21 have to agree on not only the term sheet, but 22 supporting analysis and so forth that we use

### 202-234-4433 Neal R. Gross & Co., Inc. Page 100 1 to justify what we do because it's going to 2 have to withstand review. And we're not going 3 to have an opportunity to vote on everything. 4 And so I think the point is that 5 unless somebody tables some aspect of the 6 analysis that they think is absolutely wrong 7 and can't live with that, if we've had a 8 discussion of it and everybody else feels it's 9 fine, you know, you need to overtly dissent 10 rather than just require that you get on

11 board.

12 Steve?

13 MR. ROSENSTOCK: In other 14 standards processes, they do take abstention 15 votes, but I do not believe they're -- they 16 are treated differently, but they're not 17 necessarily counted as yes votes towards any 18 sort of whatever the criteria is for passage, 19 so again, I think it's kind of important. 20 There might be some people that feel that 21 they're rather not be on record as voting no, 22 but they'd rather be on record as voting

### 202-234-4433 Neal R. Gross & Co., Inc. Page 101 1 abstaining from the issue, but again, I think 2 there's an issue of if someone is present and 3 they vote to abstain, does that still count 4 towards this unanimous consensus? Because 5 they are voting, but they're not voting 6 affirmatively. 7 MR. COHEN: This is Dan Cohen. 8 That's exactly the hair that I was splitting 9 earlier with Rob. I read that language 10 requiring overt dissent. You actually had to 11 vote no. And I was suggesting that we could 12 allow if there were 22 yeses and two 13 abstentions, that would be unanimous. So you 14 didn't have to have someone to vote no, they 15 could just say I choose not to vote and not 16 hold up the consensus, but I will not 17 affirmatively agree to that either. That was 18 sort of the hair I was trying to split 19 earlier. 20 MR. DELASKI: And is that captured 21 by the presence and voting. Don't vote, just 22 abstain?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 102 1 MR. COHEN: Well, do you want to 2 actively abstain? 3 MR. PARKER: Well, again, I mean 4 we're not going to vote on every aspect of the 5 analysis and every aspect -- so the idea is 6 unless you have overtly dissented and vetoed 7 some aspect of this for purposes of triggering 8 the non-sabotage provisions later, you're 9 considered to have consented. So in other 10 words you can't say I abstain and therefore

11 I'm not bound. 12 MR. DELASKI: To a final 13 agreement. 14 MR. PARKER: To a final agreement, 15 right. But in terms of the supporting 16 analysis and so forth. But it may be there 17 are aspects of the analysis and supporting 18 analysis, the preamble and so forth that we 19 discussed and form a basis for what we're 20 doing that we put forward as the basis for 21 what we're doing that we don't have a chance 22 to vote on because it's just not practical to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 103 1 vote on everything. So I think that's the 2 baggage that that other sentence carries.

3 MR. BERMAN: Hello. Is that 4 better? Robert Berman, Berman Economics. It 5 seems that if you're not going to vote on 6 everything, but to take something that's not 7 an overt exception is a bit strong, 8 particularly when you're talking about 9 analyses. You've got a number of esoteric 10 analyses here that a lot of the people may not 11 be familiar with, Monte Carlo analyses, those 12 sorts of things that they may still be trying 13 to figure out what's going on and how that 14 works with the analyses that they are familiar 15 with so to take their reluctance to object at 16 that point as agreement to the analysis, I 17 think, is a bit strong. 18 MR. PARKER: Any other thoughts 19 before we vote on this? 20 MR. MILLURE: Dave Millure, 21 Metglas. So the definition of overt dissent 22 is a no vote, because it also could mean a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 104 1 written dissent. In this case a no vote is 2 overt dissent. 3 MR. PARKER: Yes, if we vote. You 4 know, I think, I mean just as a question of 5 how do you handle aspects of the analysis that 6 you may not agree with, but you don't decide 7 to veto the thing and it doesn't come up for a 8 vote. And because it's not something that is 9 actually part of the term sheet that you vote 10 on, but you think that methodology is suspect. 11 I guess basically if you're voting 12 on the term sheet that's what triggers the13 overall analysis, I mean the overall non14 sabotage rules, so I guess that's good enough. 15 MR. GREESON: Rob Greeson, Federal 16 Pacific. This is a very interesting 17 discussion but my question for the DOE is we 18 as a committee can say well, this is consensus 19 and that is consensus. I wonder what DOE's 20 position is on how these votes are 21 interpreted. What are they looking to see 22 because our decision ultimately has to be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 105 1 concluded upon by DOE. So I think we should 2 kind of work towards the framework that they 3 kind of see to be -- I mean they agreed to 4 this negotiated rulemaking because it would be 5 advantageous in certain ways. So we don't 6 need to be making up things that are going to 7 obstruct their initial assumptions about why 8 this negotiated rulemaking was going to be 9 advantageous to begin with. I didn't really 10 have a huge problem with the way things were 11 worded initially, but I wonder what DOE's 12 position is on that? 13 (Laughter.) 14 MR. PARKER: DOE abstains. 15 MR. CYMBALSKY: I think in the 16 beginning, Wayne, who talked about the FACA 17 and why it was set up, the ERAC subcommittee, 18 I think spelled out the work of this group. 19 The conclusion would be brought up to ERAC for 20 recommendation for the Secretary to consider 21 the rule. I think that is exactly what we're 22 doing.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 106 1 MR. COHEN: I would also, this is 2 Dan Cohen, I would also point out that we're 3 one member of this committee. We're not -- 4 the judge. So we're here to participate in a 5 negotiation, not to have something proved to 6 us one way or the other. 7 MR. GREESON: Rob Greeson, Federal 8 Pacific. I guess I misunderstood. I thought 9 we were going to propose a position and then 10 it was going to be like a final vote by the 11 DOE before it went on. 12 MR. CYMBALSKY: No, no. I'm part 13 of the process. 14 MR. GREESON: That sort of changed 15 my whole position because I'm thinking if 16 we're passing it on to you we sort of need to 17 be in line -- 18 MR. CYMBALSKY: This negotiation 19 is I have one vote as opposed to all votes. 20 (Laughter.) 21 MR. PARKER: He's a nice guy. 22 He's paying for this, too.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 107 1 MR. GREESON: I thought DOE could 2 veto the whole thing. That's where my 3 confusion came in. 4 MR. COHEN: Dan Cohen, DOE. In 5 fact, one of the provisions in here is that we 6 agree to publish as a proposed rule whatever 7 this group comes up with. 8 MR. ROY: But you can veto just 9 like all of us by voting no.

10 MR. COHEN: Sure. 11 MR. PARKER: If consensus is such 12 that, you know, it's not unanimous. 13 MR. CYMBALSKY: That's why I voted

14 for the two members. 15 (Laughter.) 16 MR. PARKER: But you only get one

17 vote. 18 MR. COHEN: I would point out I am

19 not a member. 20 MR. PARKER: He only gets one

21 vote. 22 MR. SIMMONS: This is Chuck

### 202-234-4433 Neal R. Gross & Co., Inc. Page 108 1 Simmons, Progress Energy. Just a quick 2 question. What's ERAC's role in this whole 3 process? I thought this subcommittee passed 4 our recommendation to them and they did 5 something with it, but I'm hearing something 6 different now. 7 MR. COHEN: Dan Cohen, DOE. So 8 just as a legal matter, the way we set up this

9 structure under what's called the Federal 10 Advisory Committee Act, ERAC is a Federal 11 Advisory Committee Act committee. We could 12 have set this up as a wholly separate, this 13 particular committee, as a wholly separate 14 committee under that act, but that created a 15 whole lot of procedural hurdles and what not 16 that were better dealt with by setting this 17 committee up as a subcommittee of that other 18 committee. 19 So as a result, certain 20 requirements, certain procedural requirements 21 don't apply to this subcommittee that would 22 have otherwise applied to the establishment of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 109 1 this committee. But the quid pro quo for that 2 is that whatever this committee comes up with 3 as a recommendation is not a recommendation 4 directly to the Secretary. It's a 5 recommendation to the ERAC that then votes to 6 send that recommendation on to the Secretary. 7 MR. PARKER: Okay. We've heard a 8 lot yea and nay, why don't we just put it to a 9 vote now in terms of adding that sentence or 10 not. I'm not sure that it makes a huge 11 difference because I think the present and 12 voting does cover it, so you know, however you 13 guys want to do it. 14 I think it basically conveys the 15 idea that if we're having a unanimous consent 16 rule which I think we've failed to agree on a 17 departure from, that we want to have some kind 18 of peer pressure to not dissent unless there's 19 really, really good reason and a strong 20 manifestation of intent to dissent. With that 21 said, let me just put it to a vote. 22 All in favor of keeping the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 110 1 sentence in, raise your hand? 2 MR. ROSENSTOCK: Which sentence? 3 MR. PARKER: I'm sorry, 4 concurrence will be assumed absent overt 5 dissent. 6 I'm sorry, let me rephrase. This 7 is the draft. Why don't we see if there's 8 opposition to it. Those in favor of striking 9 the sentence either because of redundancy or 10 because of objection could you raise your

11 hand? 12 MR. ROSENSTOCK: I don't know if 13 that sentence adds anything so to streamline 14 it I am sorry, I am going to say I don't think 15 that sentence adds anything. 16 MR. PARKER: Okay. 17 MR. HYLAND: Richard, have we 18 decided the abstain thing yet? I'm confused 19 on where we went with all that. If somebody 20 abstains, the cutting of the hairs, if 21 somebody abstains, is it still considered 22 unanimous?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 111 1 MR. PARKER: I think part of the 2 function of that sentence is to clarify that 3 abstentions are not no votes. They don't 4 undermine concurrence. They don't prevent 5 arrival at a consensus. 6 MR. HYLAND: I guess I'm being too 7 simple and maybe trying to keep things in the 8 KISS method, if that's what you mean, then 9 write that. I have a hard time working

10 around these sentences that we're not sure 11 what they mean. If you think abstains don't 12 count, then please write abstentions don't 13 count, and then let us vote on it and see if 14 we get unanimous. Otherwise, I don't know

15 what that sentence means. 16 MR. PARKER: Great suggestion. 17 Great suggestion. Abstentions shall not be 18 construed as negative votes or as -- 19 MR. ROY: As overt dissent. 20 (Laughter.)

21 MR. PARKER: How about that? Is 22 that okay?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 112 1 MR. COHEN: Dan Cohen. I guess do 2 we want to add "concurrence will be assumed 3 absent overt dissent evidenced by a no vote." 4 MR. PARKER: Okay. Maybe that's 5 all we need to do. Evidenced by a no vote. 6 Thank you. There. Concurrence will be 7 assumed absent overt dissent evidenced by a 8 negative vote.

9 MR. COHEN: What about 10 abstentions?

11 MR. PARKER: That covers 12 abstentions, a negative vote is not an 13 abstention. It's one or the other. Does 14 anybody want to add that as an explicit -- 15 abstention does not count -- is not a negative

16 vote. 17 MR. BERMAN: Robert Berman, Berman 18 Economics. So to be clear then, there is no 19 issue of assent or concurrence except in a 20 voting process? 21 MR. PARKER: Right, because here 22 we're talking about a concurrence that has a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 113 1 certain legal, you know, despite my prior 2 statements about there may be things we don't 3 vote on. I'm not sure that that actually is 4 germane as I think more about it because the 5 thing that triggers the non-sabotage language 6 later is the concurrence by voting to adopt

7 the standard. 8 MR. BERMAN: Thank you.

9 MR. PARKER: That's what we need 10 to focus on. Okay, any other modifications of 11 this language before we vote on it? All in 12 favor of this language? I don't have a vote. 13 Question? Any objections? All opposed? We

14 have a deal. 15 Okay, I will then remove the bold 16 because it's agreed. Now that is the thing 17 that most groups spend most time on and we 18 have proved to be no exception. But let me 19 now just turn to basically the rest of the 20 agreement and people should feel free to bring 21 up issues and hopefully we can make rapid 22 progress getting through them.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 114 1 Go ahead, Steve. 2 MR. ROSENSTOCK: Again, with 3 talking to the other members of the group, we 4 asked for the addition of an Item 7 at the end 5 of the agreement. Is it called a working 6 group or subcommittee? I don't know what the 7 official term of it is. This working group 8 reserves the right to amend or modify these 9 rules in the future as necessary. 10 We just got to see this last 11 night. There might be something else that 12 someone might want to consider. We just want 13 to have at least a clause that if someone 14 wants to propose a new rule or modification 15 that at least that they would have the right, 16 if there's something that could help the 17 process along that they should have the right 18 to amend or modify. 19 MR. PARKER: Well, you can propose 20 it. We'd have to agree on it. You mean if 21 you have subsequent -- 22 MR. ROSENSTOCK: Just put it in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 115 1 writing that you still have -- anyone has a 2 right to amend this agreement. It's not 3 locked in stone period. That's it. It's just 4 putting it in writing that it can be changed. 5 Right now it's not in there. 6 MR. PARKER: You want to say that 7 people can propose future amendments? 8 MR. ROSENSTOCK: Yes, committee 9 members can propose amendments or 10 modifications to this document. 11 MR. PARKER: Let's just do it 12 simply. 13 (Pause.) 14 We will further commit to actually 15 giving it consideration. We'll make space at 16 the table for it. Okay? 17 Discussion? How do you get this 18 thing to indent? 19 MR. ROSENSTOCK: This is again 20 Steve Rosenstock. Thank you. I think you 21 don't need the words "in the future." 22 MR. PARKER: Discussion? All in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 116 1 favor? Any opposed? Adopted. Other

2 comments? 3 Jim? 4 MR. CREEVY: Jim Creevy with NEMA. 5 I'd like to return to the issue of adverse 6 action in challenges that we were discussing 7 earlier. 8 MR. PARKER: Okay.

9 MR. CREEVY: We had talked about 10 the sunset date. I don't believe a vote was 11 ever taken on this. 12 MR. PARKER: Thank you for raising 13 that. Good point. 14 MR. CREEVY: And I guess before we 15 take that vote I'd like to offer some views on 16 that. The discussion was that no action may 17 be taken inconsistent. Is the term "action" - 18 - how is that defined? 19 To take a position materially 20 inconsistent with the standard, how are we 21 going to define "take a position" because if - 22 - I'll just offer a real world example that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 117 1 certainly could occur, particularly if the 2 sunset date is many years off, such as it 3 would be with if it were tied to compliance. 4 We write the rule. Everybody 5 agrees with the rule. And not to get too much 6 into all these issues we're going to be 7 discussing, material costs skyrocket over the 8 matter of a year or two. The rule is still 9 two years away. It seems as though this 10 language, if tied to compliance date, would 11 prevent NEMA from taking any number of actions 12 and particularly lobbying Capitol Hill for a 13 delay in compliance. Or putting out a press 14 release or telling your mother that you might 15 disagree. 16 (Laughter.) 17 MR. DELASKI: Right, and there's a 18 corollary to that, too. Say energy prices 19 skyrocket, right? It goes both ways in terms 20 of what is the right standard, right? Imagine 21 an implementation date that's out, as you 22 said, a number of years. Variables will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 118 1 change. And we're bound to the agreement. 2 That would be my view. 3 MR. CREEVY: I guess NEMA would 4 propose that the sunset date, we're fine being 5 bound by the agreement, but that the sunset 6 date ought to be when the effective date 7 printed in the Federal Register, as opposed to 8 the compliance date three or four years later, 9 whatever we decide. 10 MR. DELASKI: I guess that's awful

11 short. That means that as of next -- so the 12 rule is published in October, 2012, January 1, 13 2013, any party here can go do something 14 different. 15 MR. CREEVY: There's a clause in 16 here. This is Jim Creevy with NEMA, that 17 would prevent any legal challenge. And I 18 would believe that we're fine with that. But 19 because we've expanded this to take a position 20 materially inconsistent, that has nothing to 21 do with the legal system or taking this rule 22 to court. It can be your opinion pieces and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 119 1 suggestions to Congress. 2 I feel like the actions are 100 3 percent broad here, that you can't do anything 4 that anybody would potentially interpret as 5 contravening the agreement. And I would think 6 this would hold true for anybody in the room 7 because of the uncertainties inherent in this 8 process. Things can change and to be 9 prevented from basically discussing this rule 10 until it is in effect, not only in effect, but 11 must be complied with. For instance, some of 12 our guys may simply not be able to comply, 13 therefore, they'd be out of business. 14 We would like to reserve the right 15 to make a political argument outside the legal 16 framework, outside lobbying DOE, sort of after 17 this committee has completed its work and DOE 18 has signed the papers, it's all done, outside 19 of the Department of Energy. 20 I think NEMA would like to reserve 21 the right to address it in sort of the 22 political forum. And I think it holds for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 120 1 anyone in the room for any number of reasons. 2 MR. PARKER: Would putting in 3 language about fundamental change of 4 circumstances help with that or would that 5 just introduce ambiguity? 6 MR. CREEVY: I suppose one of the 7 easiest ways to get at it is to limit the 8 types of activities we're talking about: 9 challenges in court, and I'm no attorney, but 10 challenges in court. Petitioning DOE, I would 11 think you're a member of the committee, you're 12 writing the rule, you know those two and maybe 13 some others should be overtly included and 14 everything else that is excluded is excluded 15 and is not addressed here.

16 MR. PARKER: That's where we 17 started. That was the original language, 18 challenge in court. So I guess the question 19 is does the latest comment change people's 20 mind on that issue, the issue being whether 21 you should extend this to extra judicial 22 challenges or opposition. And if so, what --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 121 1 Jim, do you have language that is somewhat

2 broader than what was there before that would 3 deal with the legislation angle? 4 MR. CREEVY: Well, to inhibit the 5 adoption of the recommended proposed standard, 6 when is adoption date? What does that mean 7 legally? What is the adoption date? Is it 8 the compliance date or is it the effective 9 date? If it's the effective date, I think 10 it's fine as is. But if we're changing -- 11 we're basing this on the compliance date six 12 years away, it prevents anyone in the room 13 from having any opinion on this other than we 14 support it 100 percent for those six years. 15 MR. BERMAN: Robert Berman, Berman 16 Economics. Would an option to shorten the 17 compliance date, in other words, or to include 18 the compliance date in the term sheet get us 19 out of that problem? That is to say the 20 closer the compliance date is to the -- what's 21 the other date -- the effective date, the less 22 likely conditions are to change and you don't

### 202-234-4433 Neal R. Gross & Co., Inc. Page 122 1 have to get into the definition of what 2 significantly changing conditions are. 3 MR. COHEN: Dan Cohen, DOE. Just 4 on that point, one of the issues when we get 5 to issue spotting that we're going to have to 6 address here is going to be the compliance 7 date. There's a question we're going to have 8 to look at and come back to this group with in 9 terms of just a legal position on the statute 10 as to whether the statute specifies what that11 compliance date is going to be and is non12 negotiable or not. So we may or may not be 13 able to shorten the compliance date. 14 MR. DELASKI: Andrew DeLaski from 15 ASAP. I certainly hope that the compliance 16 date will become a dimension of discussions 17 and negotiations I have been involved in in 18 the past, compliance date has been an 19 important dimension to the discussion, provide 20 flexibility for the parties and often being 21 flexible in multiple ways on compliance date 22 has been a very helpful way to get -- have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 123 1 discussions move forward. 2 But to Jim's point about being 3 locked in for a long period, I hear you. I 4 agree with you that being locked in, imagine 5 if we were to agree on ten years out as the 6 compliance date, you know? A lot of folks 7 might like that idea. But ten years out, but 8 that would be too long to be locked in. I 9 agree with your point on that. 10 I think there probably is 11 something that's longer than 60 days that 12 makes sense, but short of say five years, 13 maybe it's a year, maybe it's two years. I 14 think it would be inappropriate for us to 15 agree in October 1st to one thing and then go, 16 say something different in an opinion piece on 17 January 1st. That would be too short. 18 MR. CREEVY: So is this something 19 that can be addressed in the term sheet later 20 on as part of the final agreement? 21 MR. PARKER: The compliance date 22 can. It would be nice to settle the rules of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 124 1 procedure now. If the compliance date is 2 uncertain, maybe that's another reason not to 3 use the compliance date as the trigger, but to 4 choose some other date, like maybe a year from 5 the effective date. 6 MR. DELASKI: A year from the 7 agreement is what I would say. I think you're 8 looking at -- not from the agreement, a year 9 from the date it's published in the Federal 10 Register. 11 MR. PARKER: Right. 12 MR. PATTERSON: Or why not a year 13 from when this committee is dissolved?

14 MR. DELASKI: I don't know when 15 that would be officially.

16 MR. PATTERSON: You set an 17 official date for the dissolvement of this 18 committee. 19 MR. BALLO: The problem with that 20 is if the Department falls behind in issuing 21 the final rule, then we potentially have a 22 final rule comes out after the year expires.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 125 1 I'd prefer to go with the issuance date or the 2 effective date rather, a year from then maybe. 3 MR. COHEN: Dan Cohen, DOE. I 4 would say our view of this, the key date to us 5 is 60 days after the rule is published because 6 we would want to know that no one is going to 7 take us to court. Absent that, I'd leave -- 8 the policy -- 9 MR. BALLO: After it's published -

10 - 11 MR. COHEN: After the final rule 12 is published. The effective date, right. 13 MR. PARKER: That is the effective

14 date.

15 MR. CREEVY: That seems to me to 16 be a change from what has been -- what was 17 assumed to be the case before I asked my 18 question. 19 MR. PARKER: No, that's a good 20 question. It was a good point. It's well

21 taken. 22 MR. CYMBALSKY: John Cymbalsky,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 126 1 DOE. So I think the material costs, 2 obviously, it's kind of random when they can 3 ramp up or ramp down if you look at the costs 4 of copper and steel. They change frequently, 5 so I can understand you don't want to lock in 6 for a long period of time, but it could happen 7 in a day they skyrocket or it could not 8 happen. It could take three years. But maybe 9 we say like Andrew mentioned a year after the 10 effective date, as opposed to the three or 11 five years that I think is implied with the 12 compliance date. 13 MR. PATTERSON: John, I think in 14 this industry you'll find that there was not a 15 significant change in the material cost until 16 about 2004. And over 40 years I've been in 17 the business that was the only occurrence. It 18 has never happened in the past. It was an

19 unusual bubble. 20 MR. PARKER: Okay, Andrew? 21 MR. DELASKI: I would say in other 22 agreements that we've struck again privately

### 202-234-4433 Neal R. Gross & Co., Inc. Page 127 1 with industry trade associations, I think 2 we've typically used two years as the sunset 3 date, but you're right, we haven't used five 4 or six, typically two. 5 MR. COHEN: Dan Cohen, DOE. So 6 that was your agreement with other parties. 7 We weren't there so it didn't tie into whether 8 we ever even adopted that rule. It was just a

9 matter of -- 10 MR. DELASKI: But it spoke to the 11 issue that Jim is raising about conditions 12 changing that your views could change because 13 conditions change and you don't want to lock 14 in. 15 MR. COHEN: Right. 16 MR. PARKER: Would you like to 17 propose two years? Reaction to that? Two 18 years from the effective date? 19 MR. FOSTER: Mr. Moderator, this 20 is the original proponent of this language and 21 I can tell you what, I'm sensitive to all 22 these discussions. I'll tell you what my

### 202-234-4433 Neal R. Gross & Co., Inc. Page 128 1 intent was which was 60 days, it coincided 2 with the expiration of the appeals period and

3 -- 4 MR. PARKER: But you raised the 5 issue of going to Congress as well. 6 MR. FOSTER: Yes. Well, where I 7 was headed with that was during the period of 8 these discussions I didn't want anybody to get 9 some leverage by saying take what we're 10 offering here or we're up on the Hill right 11 now and this is what we're proposing.

12 MR. PARKER: I see. 13 MR. FOSTER: I think it's next to 14 impossible to enforce this beyond the 60-day 15 period. And I'm sensitive to further -- we 16 can go out five years. We can go out two 17 years. We can go out one year, but my intent 18 was 60 days to have it coincide exactly. 19 MR. PARKER: Okay, so there's two 20 proposals on the table. One is 60 days and 21 one is 2 years, as I understand it. Is that a 22 correct formulation?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 129 1 MR. ROSENSTOCK: You're talking 2 about the effective date only, correct? 3 MR. PARKER: Yes. I believe, my 4 interpretation of the sense of the group is 5 that we've moved away from compliance date as 6 the trigger and that we're talking about 7 effective date plus, plus X. And the question 8 is what will X be. So let's just take a vote. 9 All in favor of X plus two years raise your 10 hand. One, two, three, four, five. 11 All in favor of X plus 60 days, 12 raise your hand. Well, we have 3, 4, 5, 6 -- 13 3, 6, 9, 12. We have some abstentions. So 14 now here we are in probably in a situation we 15 will be facing fairly frequently where we 16 don't have unanimous consent starting off. 17 What can people live with? What 18 can people live with? 19 MR. ROSENSTOCK: Just a quick one, 20 not saying one way or the other, do you want 21 to put up the original language just as 22 another marker just as another possible --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 130 1 MR. PARKER: Yes, thank you. And 2 in the future I will avoid deleting the 3 original language until we actually have an 4 agreement. Can you give me the original 5 language there? 6 Each party agrees -- there was no

7 date. 8 MR. COHEN: Honestly, if you limit 9 it to court challenges it has a sunset. It's 10 60 days. You don't need to specify a sunset. 11 MR. PARKER: Okay, so these 12 brackets -- those are the options. Agrees not 13 to challenge the standard in court, not to 14 take a position clearly inconsistent with the 15 standard determination in court or in any 16 other forum. And then there's the question of

17 sunset. 18 MR. COULTER: Richard, this is 19 Greg Coulter, Prolec GE. I propose one year. 20 Let's find something between 60 days and two 21 years. I think we as a manufacturer can live 22 with one year.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 131 1 MR. PARKER: Greg Coulter proposes 2 one year. 3 MR. COHEN: Could I also just make 4 a friendly clarification, if I may?

5 MR. PARKER: Sure. 6 MR. COHEN: Agrees not to 7 challenge the standard or the determination, 8 if we're going to be consistent with the -- 9 MR. PARKER: Okay. Any objection 10 to including the phrase "the determination?" 11 To challenge the standard -- I can tell this 12 is going to give me a nervous breakdown. 13 (Laughter.) 14 MR. ROSENSTOCK: Steve Rosenstock, 15 EEI again. The next sentence where it says 16 "final standard" please add the word "or final 17 determination." 18 MR. PARKER: The final standard -- 19 MR. ROSENSTOCK: The final 20 determination. 21 MR. PARKER: Is that right? Okay. 22 Okay, we're going to have to curtail

### 202-234-4433 Neal R. Gross & Co., Inc. Page 132 1 comments, soon. But go ahead. 2 MR. BERMAN: Robert Berman, Berman 3 Economics. It seems that that's equivalent to 4 simply saying no court challenge and allowing 5 any sort of lobbying or legislative challenge 6 prior to the effective date, regardless of 7 what the outcome is or what the conditions in

8 the market are. 9 MR. PARKER: Well, there will be a 10 period between the time that this group makes 11 its recommendation and the time -- and 60 days 12 past the effective date which will be a fairly 13 extensive period in which case people could be 14 going up to the Hill if they wish to, absent 15 this agreement, and lobbying against on the 16 Hill what they've just agreed to in this room. 17 The only other forum does have 18 operative, as I read it, does have operational

19 effect. 20 Chuck, did you want to -- no. So 21 why don't we vote on the one-year proposal 22 then, one year from the effective date,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 133 1 sunset. With this language of not to take a 2 position materially inconsistent with as part 3 of it. 4 And again, maybe what we should do 5 is three votes. In favor, opposed, strongly 6 opposed. 7 (Laughter.) 8 Negative vote, yes. As in can't 9 live with. 10 MR. DELASKI: If I can just 11 comment? I think a year is reasonable. I 12 think it's important that as we're sitting 13 around this table we reach an agreement which 14 at some time is going to go into effect or be 15 a final rule as of a certain date, so then 16 leave yourself the flexibility to say well, 17 within 60 days I'm going to say something 18 different, to me, seems like that's not the 19 kind of spirit of this discussion. So I think 20 a year gives us a bit of confidence that the 21 scenario that Chuck painted would not play

22 out.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 134 1 MR. ROSENSTOCK: Quick question. 2 You just gave three votes. Favor, opposed, 3 strongly opposed? Does that mean you're 4 obliterating the consensus? 5 (Laughter.) 6 MR. PARKER: No, I was actually 7 trying to apply them with concurrence, absent 8 overt dissent. 9 Okay, one year, one year from the 10 effective date? All in favor. All opposed. 11 You guys are marvelous. We have a deal. All 12 right? One year from the effective date of

13 the rule. 14 We'll put in language to that 15 effect. I don't want to spend any more time 16 on it. 17 Go ahead, Steve.

18 MR. ROSENSTOCK: Above that 19 language, I guess it's item 3D where it says 20 "Deadline for negotiations" -- 21 MR. PARKER: Excuse me, one 22 second. Is there any objection to this -- to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 135 1 changing -- to the second brackets basically, 2 agree not to take a position materially 3 inconsistent with. We didn't formally vote on 4 that. Anybody opposed? If not -- 5 MR. ROSENSTOCK: Okay, just to be 6 consistent, you're taking out the first 7 bracket and you're including the second

8 bracket? 9 MR. PARKER: Taking out the first 10 bracket, including the second. Can I do that? 11 Any objections? Overt dissent? Okay. 12 MR. COHEN: Dan Cohen, DOE. Just 13 one clarification that I would make just on

14 the sunset date. 15 MR. PARKER: Okay. 16 MR. COHEN: One year from the 17 effective date of the rule. I would point out 18 that the rule, we would have to have a 19 determination by rulemaking as well and that 20 would have an effective date. So regardless 21 of whether it's a proposed and final 22 rulemaking to set a standard or a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 136 1 determination of those standards -- it's the 2 same -- the sunset is the same. 3 MR. PARKER: Right. Okay. Any 4 objection to that language?

5 MR. ROSENSTOCK: You have to add 6 in the word "agrees" before "not." Right now 7 it says "Each party not" -- no, no, no. First

8 -- 9 MR. PARKER: I was just going to 10 add in "Each party agrees for a period of one 11 year" -- you can just actually put in the 12 language. Maybe I can get a mouse pad later. 13 Okay. Done? Why won't this work? 14 Okay. It's sloppy, but it will get there. 15 All right, any objection to F as 16 it reads now? Cleaning up the bracket from 17 the bold. Not hearing any, we'll move on. 18 Any other comments on these ground

19 rules? 20 MR. MILLURE: Dave Millure, 21 Metglas. E, right above that, does that not 22 somewhat address the same issue we just hashed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 137 1 out? 2 MR. BALLO: This is Tim Ballo. I 3 read E as being before the final rule, after 4 the proposal, but before the final. 5 MR. PARKER: So during the comment 6 period after publication is that the idea, 7 you'd like that clarification? 8 MR. COHEN: This is Dan Cohen, 9 DOE. I also read that to suggest that the 10 parties to the agreement other than the 11 Department would file comments in the 12 rulemaking proceeding saying we like this. 13 MR. PARKER: Right. 14 MR. COHEN: So that's an on-going 15 obligation. 16 MR. PARKER: Right, so does adding 17 the phrase "after publication of the NOPR" do 18 it? 19 MR. DELASKI: The phrase is 20 already there. It says the "recommended 21 proposed standard" and just put NOPR in 22 brackets or something, you think?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 138 1 MR. PARKER: Yes. 2 MR. DELASKI: This is referring to 3 the recommended proposed standard whereas the 4 next paragraph is the quote unquote final. 5 MR. PARKER: The final, right. 6 MR. DELASKI: So maybe you put 7 NOPR in brackets. 8 MR. PARKER: I've got it. Thank 9 you. 10 MR. COHEN: Dan Cohen, DOE, the 11 first one is to say that if we propose what 12 the group comes up with, you will tell us you 13 want us to adopt it as final. And once we 14 adopt it as final, you won't then undermine 15 it. 16 MR. PARKER: Okay. I'm saving the 17 work. It hope control-S does that on this 18 machine, too. I have an Apple. 19 Any other comments on the -- Tim? 20 MR. BALLO: I just had a -- maybe 21 it's a practical question. There's a couple 22 places in here in E and in G where it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 139 1 discusses the parties submitting a memorandum 2 to the docket responding to any objections 3 that are raised. And if the objections come 4 in at the end of the comment period, how would 5 we do that if the comment period is closed? 6 MR. COHEN: If you're going to 7 send us something, we'll be happy to extend 8 the comment period. 9 (Laughter.)

10 MR. PARKER: Good. One of the 11 bennies of going through this work. Anything

12 else?

13 Steve? 14 MR. ROSENSTOCK: Again, following 15 up on that item G, it depends on, I guess, are 16 you talking about the docket during -- once 17 you do a NOPR or determination based on these 18 negotiations that we're required to submit a, 19 quote, memorandum? Because that's what it 20 seems to be. Some parties may just prefer not 21 to -- and it's out for public review, but we 22 don't feel the need to write a comment during

### 202-234-4433 Neal R. Gross & Co., Inc. Page 140 1 the comment period. I think that's -- 2 MR. COHEN: Dan Cohen, DOE. This 3 actually, it seems to me to go even one step 4 further which is to say if some other party 5 not party to these negotiations were to, in 6 fact, challenge us in the court, you'd show up 7 in the court, too, and say something positive

8 about the rule. 9 MR. ROSENSTOCK: Yes, and I guess 10 especially with item one -- Steve Rosenstock, 11 EEI -- we won't see the adverse comments until 12 after the comment period has completed on 13 regulations.gov. 14 If there's a comment period on the 15 NOPR, let's say it's 60 days after its 16 publication, we won't see it until after the 17 period is closed, so how would we be able to 18 respond? 19 MR. COHEN: Flippantly, but not 20 completely flippantly, if -- we would be happy 21 to reopen the comment period to allow you the 22 opportunity to send us back a memo that says

### 202-234-4433 Neal R. Gross & Co., Inc. Page 141 1 we still like this regardless of that comment. 2 MR. PARKER: Particularly if it's 3 required by the -- if it's implicitly required 4 by the ground rules of the procedure. 5 MR. ROSENSTOCK: But then if 6 you're opening the comment period, that means 7 other negative comments can come in, too. It 8 could just keep going forever. 9 MR. COHEN: That's theoretically 10 possible. 11 MR. BERMAN: Robert Berman, Berman 12 Economics. Following up on Dan's comment with 13 more of a question, does this language, your 14 interpretation, your understanding 15 affirmatively commit a party to appearing in 16 court on behalf of the DOE in the event of a 17 challenge? 18 MR. PARKER: Not to appear in 19 court, just to agree to submit a memorandum. 20 MR. BERMAN: A deposition, 21 effectively. 22 MR. PARKER: An affidavit of some

### 202-234-4433 Neal R. Gross & Co., Inc. Page 142 1 sort. And again, I think -- being actually 2 called upon to do that would require some 3 determination by Justice that it would be 4 helpful in the litigation and you might or 5 might not be asked, but you agree to be 6 willing to do that, basically.

7 Steve? 8 MR. ROSENSTOCK: I'm going to 9 propose that to move to strike item G because 10 the Federal Register notice of September 9th 11 already shows that we're participating and 12 that we've agreed to the rules that the 13 working group will adopt, so I'm going to move 14 that item G be struck from these ground rules. 15 MR. PARKER: I don't have any 16 objection to that. Doesn't sound like DOE 17 does either. This is boiler plate language. 18 Nobody is going to live or die over it.

19 Andrew? 20 MR. DELASKI: This is something 21 that we have used in other discussions which 22 is that the parties might agree to consult in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 143 1 submitting a joint comment, right? I would 2 hope that if there's an objection to our 3 comment, we all get together, we had an 4 agreement. There's an objection to it, right, 5 by some party outside this room. I would hope 6 that we would talk to each other and figure 7 out well, do we want to respond together as a 8 committee?

9 MR. ROSENSTOCK: Steve Rosenstock. 10 I understand the idea behind that. The only 11 problem is it's during the formal comment 12 period that -- we can agree to respond, but 13 again, it's still requiring us to do something 14 that would extend the comment period. 15 MR. PARKER: It's also, or the 16 standard is challenged in court, so it applies

17 after the end as well. 18 MR. ROSENSTOCK: You know, again, 19 that's another issue in terms of timing and 20 consideration. I understand, but this 21 requires and it requires every party to do it 22 and that might not be possible.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 144 1 MR. PARKER: Andrew, do you want

2 to comment? 3 MR. DELASKI: I don't think it 4 needs to be in there in terms of being part of 5 the agreement. I think it's a good faith 6 point. 7 MR. PARKER: Any objection to 8 striking this from the agreement? All in

9 favor? Struck. 10 We have a few minutes before 11 lunch. We need to really move forward. 12 Jerry? 13 MR. CORKRAN: Jerry Corkran, 14 Cooper Power. Maybe outside the scope of 15 these ground rules, but as far as rural 16 compliance, will that be discussed now during 17 ground rules or is that something that comes 18 up later? 19 MR. PARKER: Compliance? 20 MR. CORKRAN: Yes, the rule that 21 we come up with and the effective date, is 22 that part of the ground rules?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 145 1 MR. PARKER: No, that's one of the 2 issues. In fact, that's one of the reasons 3 why we took out compliance date as a trigger 4 for our ground rules because we're not sure 5 what the compliance date will be. We still

6 have to talk about that. So we'll talk about

7 that later. 8 MR. CORKRAN: To be determined. 9 MR. PARKER: Yes, to be 10 determined. Right. 11 Tim? 12 MR. BALLO: Tim Ballo, on E, I 13 guess I have a concern that we're leaving open 14 the possibility that DOE will be reopening the 15 comment period if it gets adverse comment, it 16 will reopen the comment period to get more 17 comment from us, but potentially also get more 18 adverse comment and I'm wondering if -- 19 MR. PARKER: Well, we've now

20 struck that. 21 MR. BALLO: No, that was G. 22 MR. PARKER: G, yes, yes, right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 146 1 MR. BALLO: Which is potential for 2 extending the comment deadline on the proposed 3 rule or proposed determination. I'm wondering 4 if it would maybe avoid that potential for a 5 never-ending comment period if we just agree 6 to have a meeting with the Department after 7 the close of the comment period to provide the 8 Department with feedback on any adverse 9 comment so that the whole comment period 10 doesn't have to be reopened, we don't get in 11 that potential for significant delay. I don't 12 know if that's a better solution. 13 MR. PARKER: Thoughts? Steve. 14 MR. ROSENSTOCK: Maybe it might 15 help in the third sentence "if any person does 16 anything to inhibit" -- maybe it's better to 17 strike "person" and put in "participating 18 party" because any person could be anyone in 19 the United States, if you want to read that 20 technically. 21 MR. PARKER: Right, right. 22 MR. ROSENSTOCK: So you might want

### 202-234-4433 Neal R. Gross & Co., Inc. Page 147 1 to replace person with "party." 2 MR. COHEN: Dan Cohen. I thought 3 that was inherent in what we just did on the 4 no challenge provision. 5 MR. PARKER: So the idea of this 6 language is that if anybody -- but we just 7 agreed to strike similar language in other 8 context. So the question is -- we don't need 9 it here either, right? Again, this is another 10 requirement of affirmative action, very 11 similar to the one we just struck. Is there 12 any objection to just striking this as well? 13 MR. COHEN: Dan Cohen, again, I'm 14 not a committee member and I'm talking for my 15 client here, I'm consulting him, but I would 16 think we would want the parties to submit 17 something in the rulemaking record saying 18 their position is in support of the proposal, 19 but the whole -- saying something about other 20 parties' adverse comments, I don't think is 21 necessary. 22 MR. PARKER: Right. Well, what

### 202-234-4433 Neal R. Gross & Co., Inc. Page 148 1 about just changing this to say each party 2 agrees to file comments indicating their 3 support for this standard if they've consented 4 to it? 5 MR. ROY: Robin Roy, NRDC. I 6 think that's okay, but to be consistent with 7 the unanimity definition which involves no 8 overt dissent, we'd be now asking for an overt 9 approval. I don't see why we need to ask for 10 that. You're putting some folks on the line 11 who are being happily quiet about it because 12 of a host of reasons. So maybe to change E to 13 be no adverse action, drop the "and support" 14 and drop everything after "if any person." 15 MR. PARKER: Right. 16 MR. ROY: We're not going to fight 17 it. 18 MR. PARKER: So moved. Any 19 objection? Done. Further comments? Moving 20 right along. 21 MR. MILLURE: Dave Millure of 22 Metglas. Is this going to remain a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 149 1 gentleman's agreement or are we going to have 2 to sign off on this? 3 MR. PARKER: This is a formal 4 agreement.

5 MR. MILLURE: So we would have to 6 sign off, sign, sign? 7 MR. PARKER: Just vote yes. 8 (Laughter.) 9 MR. PARKER: And you might raise a 10 point during the break about appointment

11 letters? 12 MR. MILLURE: Wayne referenced at 13 the very beginning of this meeting today that 14 we all received appointment letters. I don't 15 recall getting a personalized appointment 16 letter that defined my interest group that I'm 17 representing. I'm representing Metglas, 18 Incorporated. 19 So first of all, for the record 20 I'd like to say I don't think I got an 21 appointment letter that said Dear Mr. Millure, 22 this is the interest group you're going to be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 150 1 representing. So I was a little confused 2 about the whole conflict of interest.

3 MR. PARKER: We'll have to check. 4 I heard that for the first time this morning 5 from Mr. Gordon. So I'm a little caught off 6 guard. He can get back to us maybe tomorrow. 7 Would that be okay. So Dan will get back to

8 us tomorrow. 9 Okay, so I'm going to ask 10 everybody in the spirit of getting us to lunch 11 that we confine our comments to the bare 12 minimum now. 13 Yes, Steve? 14 MR. ROSENSTOCK: Okay, I promise 15 this one is a bare minimum. In item D, 3D 16 which is right above the agreement, for 17 deadline for negotiations, we just wanted to 18 clarify about -- it says "unless a committee 19 decides to extend the deadline" so I just 20 wanted to clarify that under this that only 21 the ERAC Committee is allowed to extend the 22 deadline for this working group. I'm just

### 202-234-4433 Neal R. Gross & Co., Inc. Page 151 1 trying to read it correctly. 2 MR. COHEN: This is Dan Cohen. 3 Are you talking about 1 on the first page? 4 Committee is defined as this committee. 5 MR. ROSENSTOCK: Oh, okay. Very 6 good. I just got confused there with -- what 7 the ERAC is. So we can ask for an extension. 8 That's fine. 9 MR. PARKER: Okay, now I don't 10 want to -- we've had a long discussion on 11 rules and procedure which is quite customary 12 I'm told, and I think it's been a productive 13 one. I don't want to force a vote, but I'd 14 like to keep the process moving. Is there 15 anybody who feels that they are not ready to 16 vote yet? 17 Steve, you had one more thing? 18 MR. ROSENSTOCK: Yes, it's for 19 item 4 and again because there is a 20 possibility that there will be -- we're 21 talking about 27 different products with 22 different standards. There could be an

### 202-234-4433 Neal R. Gross & Co., Inc. Page 152 1 agreement, we'll see, that some standards 2 don't change, so in a way it's a determination 3 that the standards are not being amended. 4 I think some of us would prefer -- 5 there's a lot of talk about proposed rules. 6 We've added the word determination. We'd kind 7 of like to add there's a lot of places where 8 it says proposed rule or standard or final 9 rule or rulemaking, that the words "or 10 determination" be added in there because that 11 is one of the options for DOE and one of the 12 options for this group whether it's for 13 everything or for just one particular size 14 transformer that there could be an agreement 15 where we just keep the standards, but the 16 standards are not amended. So again, it's 17 just showing that it's not just a rule, it can 18 also be a determination as part of the 19 agreement. 20 MR. PARKER: So you're basically 21 proposing a global, more or less global search 22 and replace for standard --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 153 1 MR. ROSENSTOCK: Search and add.

2 MR. PARKER: Search and add

3 standard --

4 MR. ROSENSTOCK: In area 4. 5 MR. PARKER: -- to determination. 6 MR. DELASKI: I'm fine with that. 7 I think it's also fine to just sort of define 8 it that way. There's a standard for these 9 products today. We could decide they should 10 stay the same and that's our recommendation. 11 That's the new standard is the old standard. 12 I think it's a little bit of semantics and 13 what we agree to is what we agree to. I 14 understand Steve's point is well taken. I 15 don't think you need to muck up the language

16 too much. 17 MR. PARKER: Can anybody propose 18 language very quickly or should we just take 19 this under advisement and come back to it?

20 MR. DELASKI: You could add a 21 bullet. I don't know what it would be, but 22 "proposed standards may entail keeping some

### 202-234-4433 Neal R. Gross & Co., Inc. Page 154 1 standards the same as they are today."

2 MR. ROSENSTOCK: That would be 3 fine with me if somebody wanted to put that as 4 part of either the agreement or just the 5 general definition in that, that's fine with

6 me.

7 MR. PARKER: Great.

8 MR. DELASKI: Some or all. 9 MR. ROSENSTOCK: Absolutely, one,

10 some or all. 11 MR. PARKER: Great, we will add a 12 definition to that. 13 MR. DELASKI: I think kind of in a 14 similar vein, I think there's a possibility 15 that -- I'm not sure this needs to be 16 envisioned by this or not, but there's a 17 possibility that, for example, we might reach 18 agreement on say liquid-immersed transformers, 19 but not medium voltage dry-type transformers. 20 So agreement on some classes, but not others. 21 MR. ROSENSTOCK: I'm fine with

22 that.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 155 1 MR. DELASKI: Does that need to be 2 envisioned by this document in some way or is

3 that -- 4 MR. PARKER: I'm sorry, I'm just 5 writing this down. The term standard or rule 6 shall be deemed to include any determination 7 that a revision of the standard is 8 unnecessary? Is unnecessary for some or all 9 covered products. 10 Okay, so that's the language. 11 Does that do it for you, Steve? Good for you,

12 Andrew? 13 I'm sorry, I'm going to assert the 14 prerogatives of the chair here and keep the 15 focus. We're all hungry for lunch. Keep the 16 focus. Any objections to this around the 17 table? Okay. Agreed. 18 Steve, did you have further --

19 MR. ROSENSTOCK: I don't have. 20 MR. PARKER: Go ahead, Chuck. 21 MR. FOSTER: This may, in fact, be 22 covered by 6C kind of obliquely, but one thing

### 202-234-4433 Neal R. Gross & Co., Inc. Page 156 1 that I have some concern about is that we 2 don't end up reaching consensus here, but 3 during the process of trying to reach 4 consensus we -- parties will articulate 5 positions that in the absence of this group, 6 they wouldn't have articulated. We might 7 agree that TSL-4 for some line of transformers 8 just to try to move the thing along, but if we 9 don't go to -- reach consensus here, I don't 10 want us to be locked into TSL-4 on that line 11 in the formal rulemaking. I think that's a 12 basic precept of any good faith negotiation of

13 a settlement. 14 So it might obliquely be addressed 15 here in 6C where it says that there aren't any

16 -- not to be construed as taken as the 17 official position of any member, et cetera, 18 for the transcripts, but we're going to have 19 lots of other documents flying around. We're 20 going to have emails, we're going to have 21 personal positions. And this cuts against 22 everybody, I believe. Andrew might agree to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 157 1 something that he wouldn't otherwise have 2 agreed to, just to make it move forward. If 3 we don't reach consensus, though, I wouldn't 4 want us to be locked into that position. 5 MR. PARKER: Right. 6 MR. DELASKI: Chuck raises a 7 really good point, and I think in our private 8 negotiations they're always private and a term 9 of those negotiations is that you don't repeat 10 what happens inside the room outside the room. 11 That's very different in this situation 12 because you guys are here. 13 MR. PARKER: The public. 14 (Laughter.) 15 MR. PARKER: Maybe we should say 16 in the absence of consensus positions taken 17 are accepted by individual parties shall not 18 be -- we want to capture something about

19 "shall not be" -- 20 MR. ROSENSTOCK: Parties shall not

21 be bound? 22 MR. PARKER: Parties shall not be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 158 1 bound. Taken or accepted during these 2 negotiations. Does that work? This is the 3 language on the table being bolded right now. 4 Any objection? The idea of taken or 5 accepted, either want something that you have 6 affirmatively proposed or something that you 7 acquiesced to, you're not bound to it either 8 way. You either all agree or it's not agreed, 9 nothing is agreed. Any objection? Done. 10 Any other comments? Are people 11 ready for a vote on these rules of procedure? 12 Yes. Anyone feels that we need more 13 discussion? All in favor? 14 MR. BALLO: Did we actually 15 address Andrew's point about if we achieve

16 consensus as to some transformers but not as 17 to others? Do we need to include anything 18 specific in the --

19 MR. DELASKI: So here's what -- as 20 I said, there's a potential that we could 21 reach agreement on some categories, but not 22 others. So this says -- the beginning

### 202-234-4433 Neal R. Gross & Co., Inc. Page 159 1 sentence says "The goal of the committee is to 2 reach consensus on a recommended set of energy 3 efficiency standards for liquid-immersed and 4 medium voltage dry-type distribution 5 transformers." So what if we get part of that 6 goal? 7 MR. PARKER: This is what we need 8 to do with DOE's commitment. Now where's the 9 language dealing with DOE's commitment? 10 MR. COHEN: This is Dan Cohen. I 11 thought we just added this language in 12 response to Steve talking about the proposed 13 rule and determination for some or all of 14 covered products. The second sentence I 15 believe.

16 MR. PARKER: For some or all 17 covered products. Yes, okay. I see what 18 you're saying. 19 MR. ROY: It's different, what 20 Andrew is suggesting is different. We 21 couldn't figure it out for some as opposed to 22 some don't need to have a change.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 160 1 MR. DELASKI: How about any 2 agreement may include standards or standards

3 for some or all. 4 MR. PARKER: Any agreement reached 5 by the committee on recommended standards for 6 some or all covered products?

7 MR. DELASKI: Yes.

8 MR. PARKER: And then do we need 9 to look at a commitment? Is DOE willing to 10 commit to proposed partial consensus? 11 We used the written statement -- 12 MR. BALLO: You're still using it 13 to the maximum extent practicable. It's just 14 maximum extent practicable happens to -- only 15 those products to which there's consensus. 16 MR. PARKER: Right. Okay. I'm 17 adding the words "written statement and 18 recommended standards" because we're focusing 19 here on standards. Written statement was 20 taken from a -- yes, I think that covers it. 21 I think you're right, Tim. Any recommended 22 standards. Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 161 1 Great. Any objection to the 2 bolded language either in A or in B? Okay.

3 Done. 4 You'll get a track changes of this 5 as well as a final, clean version as well. So 6 you will know exactly -- have a record of 7 exactly what we've amended from the original. 8 Any other comments? 9 MR. POLINSKI: Richard, Ray 10 Polinski, Allegheny Ludlum. I'd just propose, 11 as much as I would like to end this process, I 12 do propose that we get a clean version of this 13 to look at after lunch one last time. 14 MR. PARKER: Fair enough. 15 MR. POLINSKI: Right now it seems 16 like we're just -- 17 MR. PARKER: Yes, we'll print out 18 a clean version of this and circulate it and 19 let people review it and then we'll come back 20 and you can look at it afterwards. That's a 21 point well taken, particularly as hunger 22 gnaws, right?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 162 1 Discretion the better part of 2 valor, let's adjourn for lunch and be back 3 here at -- well, it's about 12:25 now, so why 4 don't we say 1:45, an hour and 15 minutes. 5 (Whereupon, the above-entitled 6 matter went off the record at 12:23 p.m. and 7 resumed at 1:45 p.m.)

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### 202-234-4433 Neal R. Gross & Co., Inc. Page 163 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:45 p.m.) 3 MR. PARKER: Okay, everyone. 4 Welcome back from lunch. I hope you had a good 5 one. Everybody back on the phone? Again, not 6 that you're not welcome, but if you're on the 7 phone please mute your phone. It's very 8 important for purposes of getting a record of 9 things. Thank you so much. 10 Okay. A couple of things. First, 11 we need to finish up the Rules of Procedure, 12 vote on them, talk about meeting options, and 13 then get into substance. 14 Let me -- I should have passed 15 these around. I'll just pass around a little 16 handout that contains a set of options for 17 meetings that you can be glancing at as we 18 discuss other stuff, so that when that comes 19 up we'll be able to talk about it. 20 I am told that it's a good thing 21 we changed our lunch plans because this room 22 will be locked down at 4:30, and they will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 164 1 take the computer away, and we will all turn 2 into pumpkins if we're still here, so we will 3 adjourn come hell or high water promptly at 4 4:15, and you'll be out of here. 5 So, let's just start with the 6 Rules of Procedure. We passed around rules -- 7 the markup. Sorry, the production values are 8 a bit rough. I should have left everything in 9 bold that we had changed, but I designated it 10 by not taking the bold once we agreed on it, 11 but that means that it's kind of hard to spot 12 our changes. Track changes was also an option 13 but on these kinds of computers I'm not quite 14 sure how they work. I use an Apple and it's 15 different. But, in any case, I'm hoping that 16 you guys have followed our discussions closely 17 enough that you know where to look for the 18 varied bodies. 19 So, please take a look at it for 20 just a minute or so, and then we will have any 21 final discussion and hopefully bring it to a

22 vote.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 165 1 MR. MILLURE: Richard.

2 MR. PARKER: Yes? 3 MR. MILLURE: On 2F(2) we sort of 4 set a precedent that people that are not 5 sitting around the table can go up to the mic 6 without being called upon by people at the 7 table. This says that you're not allowed -- 8 if you're not at the table, that you have to 9 be called upon to be -- to get permission to 10 speak. 11 MR. PARKER: I've basically just 12 been calling upon people to talk without 13 requiring them to get permission from someone

14 else. 15 MR. MILLURE: I'm just pointing out

16 that's sort of -- 17 MR. PARKER: I thought that was 18 kind of under 2C, but presumably the 19 facilitator makes the decision about whether 20 time permits. And as you saw, when time 21 started not permitting, I started getting 22 tougher on the audience.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 166 1 MR. MILLURE: Okay. 2 MR. PARKER: Any other thoughts, 3 questions, comments? 4 (Off mic comment.) 5 MR. PARKER: Would you mind? I 6 don't know if -- I hope there's enough copies. 7 Okay. Any further discussion of 8 the ground rules? Are we ready to vote on the 9 ground rules? All in favor, raise your hand. 10 All right. Any opposed? Okay, good. The 11 ground rules are adopted. 12 We will send out clean copies with 13 the formatting cleaned up and so forth to you 14 at the conclusion of the meeting. 15 All right. Let's move on to the 16 really hard stuff, meeting dates, and places. 17 What's that? Well, I think I have a slide on 18 the meeting dates for those people -- 19 (Off mic comment.) 20 MR. PARKER: Oh, DOE, sorry, thank 21 you. Sorry, there's another one. 22 Okay. So, we have up here

### 202-234-4433 Neal R. Gross & Co., Inc. Page 167 1 basically a list of options. Let me just try 2 to set the -- a little background. All right, 3 thank you. That's a little bit bigger. 4 So, I'm beginning with the 5 presumption based upon the experience of 6 previous negotiated rulemaking committees -- 7 of course, every committee has its own 8 dynamic. I think you guys have a very positive 9 dynamic, and I'm hopeful that we can move 10 through expeditiously, and get things 11 accomplished. 12 In general, the experience is that 13 six meetings are about the norm for how long 14 it takes. They also like to have, basically, 15 to have meetings of a particular group occur, 16 including overnight, because oftentimes if you 17 get log jammed on something or grid locked on 18 something it helps to be able to just go home, 19 talk to your principals, caucus with each 20 other, let tempers cool, ideas germinate, and 21 come back the next morning fresh and take 22 another crack at it.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 168 1 So, we have tried to have each



### 2 meeting -- the original idea was to have each



### 3 meeting be two days, as this one will be.



### 4 When the agreement was made -- and I should



### 5 give you a little bit of history. I think all



### 6 of you are aware of it, but we began under a



### 7 court ordered deadline of October 1 to have



### 8 the NOPR out. As a quid pro quo for the



### 9 plaintiff's agreement to extend the deadline,

th 

### 10 there was an agreement in the July 28



### 11 meeting to include low voltage transformers in



### 12 the scope of a parallel but separate 

### 13 rulemaking. There was also -- and to come up



### 14 with either a determination or standards for



### 15 low voltage, as well as medium voltage.



### 16 The reason for separate meetings



### 17 was that the utilities aren't typically



### 18 involved as much in low voltage. There's



### 19 different manufacturers, although Federal



### 20 Pacific does both. A number of manufacturers



### 21 don't do both. And the manufacturers who



### 22 don't do both did not want to sit through the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 169 1 meetings of medium voltage. And I'm sure you 2 don't want to sit through the low voltage 3 meetings. 4 So, we agreed that the deadline 5 would be extended until the end of January to 6 give room for the medium voltage talks to 7 proceed. The low voltage talks, which are not 8 part of that settlement agreement are, 9 nonetheless, racked into this process as a 10 separate but equal process. And the idea for 11 the -- there are a number of people who are 12 doing both, and of organizations doing both. 13 And for their convenience, as well as for the 14 convenience of the staff on scheduling it

15 seemed to make sense to schedule them 16 adjacently. 17 So, the ideal meeting situation is 18 to have a day and a half of medium voltage 19 followed by a day and a half of low voltage, 20 or vice versa. I mean, there's no reason why 21 one has to go first or second. But a three 22 days period.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 170 1 Ideally, it would be four days, 2 but that -- two days for each but that seems 3 to test people's patience and schedules too 4 much. So, we tried to pare it down to a day 5 and a half for each working group. 6 As -- we didn't discuss it because 7 it wasn't really controversial, but there can 8 be sub-working groups that can meet 9 concurrently, but we have in mind that, 10 basically, the medium voltage and low voltage 11 will meet separately but on adjacent dates. 12 The challenge then in the medium 13 voltage committee is large. We don't all 14 quite fit around this table. That's the 15 second problem. Due to the absence of Bruce 16 Hirsch, Steve Nadel, and Art Rosenfeld 17 leaving, we actually can pack people around 18 this table now who are on the committee, but 19 it's a really tight squeeze, as you can see. 20 And if all -- if everybody is present, we 21 simply will not fit around the table, all of 22 us. So, it would be nice, although not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 171 1 essential, if we could find other meeting 

### 2 venues. And it is in the spirit of that kind 

### 3 of brainstorming that I had this idea, after 

### 4 talking with Phil, of well, what if everybody 

### 5 chipped in, maybe we could rent a space. That 

### 6 did not fly, and fortunately DOE is able to 

### 7 pony up funds for at least one session at the 

### 8 Pew Center, which is a beautiful facility. 

### 9 We're still working out a few kinks there, and 

### 10 it could still create -- I'm fairly confident 

### 11 that that will work out. 

### 12 They have very limited 

### 13 availability, however. In fact, the only th 

### 14 availability they have are the November 8 th th 

### 15 through 11 , and then December 14 through th 

### 16 16 . That's the only time they're available. 

### 17 The other options were to just 

### 18 meet on the premises of various members of the 

### 19 committee. And several committee members 

### 20 graciously stepped forward and said we would 

### 21 be happy to host, subject to the availability 

### 22 of our conference rooms. And EEI was very

### 202-234-4433 Neal R. Gross & Co., Inc. Page 172 1 nice, but is a very busy organization. 2 MR. ROSENSTOCK: Especially three 3 days in a row. 4 MR. PARKER: Three days in a row, 5 yes. That's a tall order. 6 By the way, I should mention that 7 logistically the low voltage could actually 8 meet in a separate place. It's a smaller 9 group. There's only 15 or 16 members of that 10 group, so there would be no problem here for 11 low voltage. So, as we're thinking about 12 options, one possibility might be to change

13 venues. 14 It's logistically much more 15 complicated for everybody who's presenting, 16 who's doing -- it's nice to be able to stay in 17 one place, so there was a presumption in favor 18 of that. But in extremis, that would be an 19 option, I suppose. 20 The question is, how many meetings 21 do we need, and how many should we schedule, 22 or might we need? And the problem is that we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 173 1 can't really just kind of -- the ideal thing 2 would be to say, okay, let's just see how it 3 goes, and if we need meetings we'll then hold 4 them. But the problem is that you have to 5 book these places way in advance or they ain't 6 available. So, the question is do -- is not 7 really -- we're not going to -- let's all 8 stipulate that we're not going to meet if we 9 don't need to, even if we have a place booked. 10 But it's much easier to have a place reserved 11 and they say, gosh, we were really efficient. 12 We got our agreement. Let's go see the 13 monuments instead, than to not have a place 14 done, and have no reservations, and no place 15 to meet. So, that's the train wreck we're 16 trying to avoid. 17 So, the presumption -- so, my 18 working assumption has been that we need to 19 schedule, or try to schedule at least six 20 meetings, and if we can get our work done 21 faster, which is kind of the norm for these 22 things, we can get our work done faster,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 174 1 hooray. But let's give ourselves the option 2 of meeting at least six times. 3 Between now and December, that's a 4 tall order. This is the only room in DOE, or 5 I guess there's one more, but this is really 6 the only room that's available, and it's only 7 available on those very limited dates that -- 8 basically, all the dates that this room is 9 available are on this sheet in front of you. 10 So, with that in mind, let's just 11 talk through. Unfortunately, Mike Hyland at 12 APPA, who will be our host -- they have a 13 beautiful place up on Connecticut Avenue. He 14 had to go out to another meeting, and he's not 15 here for this discussion this afternoon. 16 MR. ANDERSON: I can check with him 17 tonight. 18 MR. PARKER: Can you?

19 MR. ANDERSON: Yes. 20 MR. PARKER: Okay. 21 MR. ANDERSON: I can check with 22 Mike. I'll see him tonight.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 175 1 MR. PARKER: Okay. 2 MR. ANDERSON: And I think, 3 hopefully, will have an answer tomorrow. 4 MR. PARKER: That would be great. 5 MR. ANDERSON: But that would be th th 6 the 12 through the 14 . 7 MR. PARKER: Right. The other 8 possibility, I think he said there might have 9 been some time in December, but I'm a little 10 bit vague. That's not on the sheet, but I 11 think he may have mentioned it to me in some 12 conversation. It's an either/or thing. I think 13 APPA is willing to host one event, and that's 14 very generous. 15 MR. ANDERSON: Well, I think what 16 it was in December, there was a conflict the th 17 week of December 5 . 18 MR. PARKER: Ah, but some other 19 time in December might be possible. Okay. Yes? 20 MR. ROSENSTOCK: Just one quick 21 comment. I'll just say, in terms of December, 22 the problem with Option D, according to our

### 202-234-4433 Neal R. Gross & Co., Inc. Page 176 1 ground rules, we have to be finished by th 

### 2 December 16 for the term sheet. 

### 3 MR. PARKER: Good point. Well, I 

### 4 think -- we have to be finished by December th 

### 5 16 . Is that -- 

### 6 MR. ROSENSTOCK: It says, every 

### 7 effort shall be made to conclude negotiations, th 

### 8 report a term sheet to DOE by December 16 . 

### 9 It says negotiations terminate by December nd 

### 10 22 , but there's the other deadline of 

### 11 December 16th. 

### 12 MR. PARKER: Right. Yes, that was - 

### 13 - I'm glad you raised that. I put that in with 

### 14 regard to the Pew Center -- we're thinking the 

### 15 Pew Center. But I think probably we should 

### 16 modify that, if we can agree. 

### 17 Well, let's see. We may need to 

### 18 put that clause, that sole clause of the 

### 19 contingency agreement back on the table. 

### 20 Thank you for catching that, Steve. 

### 21 MR. DeLASKI: And as Steve -- we 

### 22 have provided a clause to be able to amend it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 177 1 anytime we want to. 2 (Laughter.) 3 MR. PARKER: Good point. Okay. So, th th 4 I think in terms of the 12 through the 14 , th th 5 or the 17 through the 19 , in terms of 6 keeping the trains running, those dates are 7 pretty close together. I'm happy with any of 8 them. What do you -- 9 MR. ROSENSTOCK: Mr. Parker, just a 10 quick one. But for those dates where it says 11 medium voltage and low voltage, the assumption 12 is that this committee will meet for one and a 13 half days, and then the low voltage would meet 14 for the other one and a half days. 15 MR. PARKER: Right. 16 MR. ROSENSTOCK: That's what it 17 sounded like. 18 MR. PARKER: Right. So, it would 19 really only be -- you're absolutely right. 20 So, we're really only talking about for this 21 committee meeting, we're talking about a day 22 and a half, the first two days.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 178 1 MR. ROSENSTOCK: But for those 

### 2 people it's all three days. 

### 3 MR. PARKER: Right. 

### 4 MR. ROSENSTOCK: For people on both 

### 5 it's all three days. 

### 6 MR. PARKER: Right. Exactly, a 

### 7 number of people in the room. 

### 8 MR. ROSENSTOCK: This is Steve 

### 9 Rosenstock, EEI. For the people on the phone, 

### 10 the meeting dates we're looking at for October th th 

### 11 are October 12 through the 14 in the 

### 12 Washington, D.C. area, since it could be out th 

### 13 in Virginia, if it's NRECA, or the 17 th 

### 14 through the 19 at DOE headquarters in D.C. 

### 15 MR. PARKER: Right. By the way, is 

### 16 there anybody on the phone who does not have 

### 17 access to the webinar, cannot see the screen? 

### 18 MR. ROSENSTOCK: They're all on 

### 19 mute so they can't answer. 

### 20 PARTICIPANT: We can see it. 

### 21 MR. PARKER: Okay, good. I'm 

### 22 assuming that you can see the screen, so I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 179 1 won't repeat things that are on the screen. 2 So, go ahead. 3 MR. SAINT: Well, one thing. NRECA 4 is, again, happy to provide meeting rooms, but th th 5 the 12 through 14 was the only date that 6 we were given that we can accommodate -- 7 MR. PARKER: Right. That you can 8 accommodate. Right. 9 MR. SAINT: And I, personally, 10 would prefer that date versus the other date 11 because I have a conflict with another 12 meeting. 13 MR. PARKER: Okay. Are you pretty 14 sure that your conference room can accommodate 15 everyone? 16 MR. SAINT: Yes. And we might -- 17 we probably will have a huge room, which will 18 definitely accommodate. 19 MR. PARKER: Okay. 20 MR. SAINT: It is pretty big. 21 MR. PARKER: If NRECA is willing, 22 is there any objection to us taking them up on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 180 1 their offer of hospitality? Yes? 

### 2 MR. CASKEY: I, unfortunately, have th 

### 3 a conflicting meeting on that week of the 12 th 

### 4 through 14 . 

### 5 MR. PARKER: Oh. 

### 6 MR. CASKEY: But that's life in the 

### 7 big city. I'm sure somebody is going to have a 

### 8 conflict. 

### 9 MR. PARKER: Yes, okay. Is there 

### 10 anybody else on the committee who cannot make 

### 11 those dates? Show of hands who cannot make th th 

### 12 the dates, the 12 through the 14 . Because, 

### 13 obviously -- 

### 14 MR. MILLURE: I've got another th 

### 15 commitment on the 13 , but -- 

### 16 MR. PARKER: Is it the afternoon 

### 17 of, or the morning of? 

### 18 MR. MILLURE: Morning of. I could 

### 19 be here in the afternoon sometime. 

### 20 MR. PARKER: Okay. 

### 21 PARTICIPANT: Can I make a 

### 22 suggestion?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 181 1 MR. PARKER: Sure. 2 PARTICIPANT: Why would you not 3 default to the DOE locations first, because 4 this is a DOE meeting, so we work off that 5 premise, rather than -- 6 MR. PARKER: Well, the main thing 7 is we can get everybody around the table. 8 That's the only -- I think it would be really 9 desirable for the committee to be able to fit 10 around the table and not have three people 11 relegated to second class. It may be that my 12 concern is not really -- because we never have 13 a full quorum anyway, and we're always going 14 to have a few people away. Steve? 15 MR. ROSENSTOCK: I would just say 16 if you wanted to -- there are certain people 17 who aren't here today, and I would just say, 18 try to -- for the October dates, try to see 19 who has the best availability in terms of 20 numbers, and just see how the numbers pan out. 21 Because everyone is busy this time of year, th th 22 so I -- the 12 through the 14 works better

### 202-234-4433 Neal R. Gross & Co., Inc. Page 182 1 than the 17 through the 19 for me because 2 of other commitments. But, again, just -- 3 whatever numbers work best. And then if they 4 can't make it, then they appoint alternates 5 just to move forward. 6 MR. PARKER: Okay. Can we agree on th th 7 the 12 through the 14 ? 8 MR. MILLURE: Just to clarify, th th 9 that's the 12 through the 13 , actually. th 10 MR. PARKER: 12 through -- 11 MR. MILLURE: For this group. 12 MR. PARKER: For this group, yes. 13 MR. MILLURE: I have a conflict on th 14 the 14 . I'm good 12 and 13. 15 MR. PARKER: Right. So, this would th 16 be 12 through 13 -- 12 through noon of 13. 17 And then if you're doing low voltage, you 18 would stay, and if you're doing medium 19 voltage, you'd be done. If you're doing medium 20 voltage only, you'd be done. Okay? 21 At NRECA, yes. Okay, good. Thank you very 22 much. Appreciate that, Bob.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 183 1 MR. SAINT: It's right next to the 

### 2 Ballston Metro Station. And I can send the 

### 3 group a list of hotels near there, and all the 

### 4 logistics. 

### 5 MR. PARKER: Right. And you have a 

### 6 projector for --



### 7 MR. SAINT: Yes, we have a 

### 8 projector. 

### 9 MR. ROSENSTOCK: It's Arlington, 

### 10 Virginia. 

### 11 MR. PARKER: Okay. So, the next th th th 

### 12 issue is the 8 through the 10 , or the 9 th 

### 13 through 11 at the Pew Center. We still 

### 14 haven't totally locked on the Pew Center, but 

### 15 I'm confident enough that we can handle the 

### 16 remaining technicalities, that I'm willing to 

### 17 put it forward for discussion. And if for 

### 18 some reason that really blows up, the issue is 

### 19 basically, so you know, whether DOE can -- the 

### 20 Pew Center will only deal with non-profits. 

### 21 They only rent to non-profits, so Andrew 

### 22 DeLaski has kindly offered to provide ASAP as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 184 1 a non-profit to rent with them, with them 

### 2 fully understanding that this is a hybrid 

### 3 committee, and that there -- 

### 4 But, apparently, DOE for 

### 5 appearance reasons, doesn't feel comfortable 

### 6 giving money to Andrew, even if he's going to 

### 7 give it right to Pew, so they have to be able 

### 8 to pay them directly. I think we can work 

### 9 through that problem, so I think they will be 

### 10 available. th th 

### 11 The issue is 8 through the 10 , th th th 

### 12 9 through the 11 . The 11 , obviously, is th 

### 13 Veteran's Day. It's a Friday. The 8 th 

### 14 through the 10 , I know that there were some 

### 15 people who had conflicts. I think it -- I 

### 16 don't know how people think about 

### 17 memorializing Veteran's Day and not working on 

### 18 that day, and so forth. I tend to work on 

### 19 that day, frankly, but it is a federal 

### 20 holiday, yes. 

### 21 MR. CORKRAN: Could you break those th th 

### 22 two proposals apart? The 9 to 11 is much

### 202-234-4433 Neal R. Gross & Co., Inc. Page 185 1 more attractive as far as travel for some of th th 

### 2 us, than 8 to the 10 , so I would be much th th 

### 3 more in favor of the 9 to 11 . 

### 4 MR. PARKER: Yes, they are separate 

### 5 proposals. 

### 6 MR. PATTERSON: Well, again, this 

### 7 is going to be just a day and a half. th 

### 8 MR. PARKER: Right. So, the 11 th 

### 9 is really -- I guess for this group, the 11 

### 10 is really more of an issue for the low voltage 

### 11 than -- I mean, it depends on whether this 

### 12 group meets first or second. And I guess, 

### 13 since you guys are meeting first, you get 

### 14 first dibs, right? th 

### 15 MR. PETERSON: I prefer 8 through th 

### 16 10 , personally. 

### 17 MR. PARKER: I'm willing to do 

### 18 that. I would have to reschedule my class, 

### 19 but I'll do that. But my students would prefer 

### 20 that, yes, exactly. Maybe I'll make them all 

### 21 sit back there. 

### 22 MR. PATTERSON: We're talking about

### 202-234-4433 Neal R. Gross & Co., Inc. Page 186 1 the 8 and the 9 . th th 

### 2 MR. PARKER: The 8 and the 9 . th 

### 3 MR. PATTERSON: Or the 9 and the th 

### 4 10 . 

### 5 MR. PARKER: Right. 

### 6 MR. PATTERSON: So, it's those two

### 7 day windows. 

### 8 MR. PARKER: Right. And that 

### 9 raises a good point. Would you like to go 

### 10 second in that time frame and meet the second th th 

### 11 half of the 9 and the 10 , or would you 

### 12 like to go first? 

### 13 (Off mic comment.) 

### 14 MR. PARKER: So, in other words 

### 15 either medium voltage or low voltage, one th 

### 16 group will meet from the morning of the 8 th 

### 17 until noon on the 9 . The other group will th 

### 18 meet from say 2:00 on the 9 until the end of th 

### 19 the 10 . Okay? Since you guys are first, 

### 20 you can choose which one of those blocks you 

### 21 want to fill. th 

### 22 MR. PATTERSON: How about the 8

### 202-234-4433 Neal R. Gross & Co., Inc. Page 187 1 and the 9 ? th 2 MR. PARKER: Eighth and the 9 ? 3 MR. PATTERSON: Is anybody opposed th th 4 to the 8 and the 9 ? 5 MR. PARKER: All right. Eighth and 6 the ninth, done. 7 Okay. I'm going to leave it on the th 8 trolley for the 10 because that will help 9 for our planning because we have to do both. 10 Now, to get to the part where you 11 guys are going to be really, really angry with 12 me. That takes us to meeting number three. 13 Meeting number three we're at mid-November. 14 So, then the question becomes how -- we're in 15 meeting number one. Right. That takes us 16 through meeting number three. Right, I'm 17 sorry. Takes us through, not to, through 18 meeting number three, yes. 19 So, then the question is how do we 20 get three more meetings in, or how do we 21 reserve time for three more meetings? Or do 22 we want to play roulette and not reserve time

### 202-234-4433 Neal R. Gross & Co., Inc. Page 188 1 for three more meetings? 2 But if we're going to do three 3 more meetings, somehow we have to be willing 4 to think about the margins of our holidays as 5 work days. That's -- I don't know how to put 6 it anymore bluntly than that. 7 So, 21, 22 would be a possibility. th th 8 It's pretty soon after the 8 and the 10 , 9 but we could -- it's two weeks later. That's 10 about as fast as we could turn things around. 11 People have already vetoed Wednesday, so12 Wednesday is off the table. It would be a two13 day meeting, not a three, so it would be a 14 one-day meeting of this group, not a one and a 15 half day meeting. 16 MR. ROSENSTOCK: So, all those 17 meetings after, I'll say 2B are all one-day 18 meetings for this group? 19 MR. PARKER: What's that? 20 MR. ROSENSTOCK: They're all -- 21 you're showing two days except for 3C, so 22 anything that's showing two days is just a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 189 1 one-day meeting for this group, and one day 2 for the low voltage group. 3 MR. PARKER: Yes, that's right. 4 It's a good point, because we don't have a st 5 room for the other days. Well, the 21 and nd 6 22 is because nobody wants to meet on a 7 Wednesday before Thanksgiving, but the other 8 days, we don't have rooms. th th 9 Now, the 14 through the 16 is 10 a three-day block, but it comes right in the 11 middle of December. It's kind of too late to 12 be early December, and too early to be late 13 December. We could get -- 14 MR. PATTERSON: Weren't you th 15 supposed to have the term paper by the 16 ? 16 MR. PARKER: What's that? 17 MR. PATTERSON: I thought on this 18 other paperwork you sent in -- 19 MR. PARKER: Yes, Steve mentioned 20 that earlier. 21 MR. PATTERSON: You have to have th 22 the term paper by the 16 .

### 202-234-4433 Neal R. Gross & Co., Inc. Page 190 1 MR. PARKER: Right, right, right. 2 Steve mentioned that, and if we --obviously, nd th nd 3 if we do the 22 -- 20 to 22 , we're going 4 to have to invoke that amendment clause that 5 we put in to change the ground rules to allow 6 us time to finish. 7 MR. PATTERSON: Then why don't we st 8 see if people can do the 21 ? 9 MR. PARKER: Well, the ground rules th 10 said the 16 . Right? 11 MR. PATTERSON: Yes, but you were - 12 - 13 MR. PARKER: That was my screw up 14 because I was thinking in terms of the Pew 15 Center. st 16 MR. PATTERSON: November 21 , why 17 don't we see if we can do a meeting on st 18 November 21 ? 19 MR. DeLASKI: I guess I'd submit 20 that that's just two weeks after the prior 21 meeting. 22 MR. PATTERSON: That's correct.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 191 1 MR. DeLASKI: I think that -- 2 (Simultaneous speaking.) 3 MR. DeLASKI: Yes. I mean, I would 4 just make a general comment, which is that 5 what this envisions right here for those of us 6 involved in both meetings is 18 work days in 7 meetings over the next two months.

8 MR. PARKER: Yes. 9 MR. DeLASKI: It's an extraordinary 10 load on those of us who are NGOs. Okay? I 11 mean, look at all the time -- coming from the 12 west coast, got to add 10 travel days, big 13 load, folks. I mean, I don't see six meetings 14 happening. I see three meetings happening. 15 Folks have to -- I mean, we used a lot of time 16 today setting up the rules, and now we're 17 spending an hour and a half talking about 18 scheduling. We started late, we're breaking 19 early. We've got to put in longer days, and 20 put our -- we've got to figure out how to do 21 this with less meetings. Two weeks I don't 22 think gives us enough -- gives the consultants

### 202-234-4433 Neal R. Gross & Co., Inc. Page 192 1 -- hey, you have a meeting, come out of the 2 meeting with some instructions to the 3 consultants to run some scenarios, probably. 4 Right? Help us move things forward. Is two 5 weeks enough time for your team, John, to go 6 run some numbers and give us new numbers? I 7 mean, it's a question, so that's my thing for 8 two weeks between meetings, is that we aren't 9 going to know anything more to help us move 10 the discussion forward with only a two-week 11 window. 12 (Off mic comment.)

13 MR. PARKER: Yes. 14 MR. CYMBALSKY: I would suggest --

15 MR. DeLASKI: I don't know how a 16 two-week window works. And I would think that 17 we need to figure out when to do this -- three 18 meetings max for work. 19 MR. PARKER: Okay. People want to

20 do that? Yes? 21 MR. ROSENSTOCK: I think I'm in 22 agreement with that. And I would -- maybe I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 193 1 would suggest again, just because of the 

### 2 schedule that maybe the last meeting be 

### 3 tentative for that -- again, I'd have to check st nd 

### 4 my calendar, but for the December 1 and 2 

### 5 at DOE, just because we know that -- 

### 6 MR. PARKER: It's there. 

### 7 MR. ROSENSTOCK: -- the financial 

### 8 problems if -- I see Item C might be --there's 

### 9 that other issue. And that way it could be 

### 10 almost like a tentative. 

### 11 MR. PARKER: Okay. 

### 12 MR. ROSENSTOCK: For the DOE on the st nd 

### 13 1 and 2 , again, that could be -- we could 

### 14 always say if needed. 

### 15 MR. PARKER: All right. So, you're nd 

### 16 saying September and October is the 2 -- th th st 

### 17 November 8 to 10 . Nothing on the 21 and nd st nd 

### 18 22 , and then meet here on the 1 and 2 at th th 

### 19 DOE, or the 14 to 16 at Pew. 

### 20 MR. ROSENSTOCK: I would say the st nd 

### 21 1 or 2 because if we're -- 

### 22 MR. PARKER: But we're only going

### 202-234-4433 Neal R. Gross & Co., Inc. Page 194 1 to have the room for one day. I think Andrew's 2 point was that he'd like to really to crash 3 and burn these meetings, and not -- have fewer 4 meetings, but have them do more. So, that's 5 kind of inconsistent with having -- 6 MR. MILLURE: We should hold off on 7 December and see if that APPA thing comes 8 available.

9 MR. PARKER: Yes. 10 (Off mic comment.) 11 MR. PARKER: Okay. 12 MR. MILLURE: And do a one and a 13 half day thing there. 14 MR. PARKER: Okay. Is anybody -- 15 so, why don't we hold off then? That's a good 16 point, and see if APPA is available. 17 The first week in December would 18 be ideal. Right? 19 MR. ANDERSON: Well, December is 20 Thursday. My question is how about the week th 21 of November 28 ? We'll find out from Mike 22 whether or not --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 195 1 MR. PARKER: Right after 2 Thanksgiving? 3 MR. ANDERSON: Right, right after 4 Thanksgiving. I know they've got a conflict th 5 the week of December 5 . 6 MR. PARKER: Okay. 7 MR. ANDERSON: So, I'm saying, let 8 me see if we can find out about availability th 9 the week of November 28 . 10 MR. PARKER: Okay. 11 MR. SAINT: All right. So, you're th st 12 talking about November 30 , December 1 , and nd 13 December 2 . Right? 14 MR. PARKER: Yes. 15 MR. ECKMAN: For those of us who 16 are traveling, midweek would be better because 17 right after Thanksgiving, getting a plane 18 coming back here on that Sunday won't be a 19 good idea. th 20 MR. ANDERSON: So, like the 29 -- th 21 Tuesday the 29 through Friday the -- 22 MR. ECKMAN: Well, I have to travel

### 202-234-4433 Neal R. Gross & Co., Inc. Page 196 1 on -- I've got a full day's travel to get 

### 2 here. 

### 3 MR. ANDERSON: So, you want 

### 4 Wednesday. 

### 5 MR. ECKMAN: Wednesday-Thursday is 

### 6 better than Monday-Tuesday.



### 7 MR. ANDERSON: Right. th 

### 8 MR. PARKER:Okay. So, November 30 

### 9 through December -- Wednesday, that Wednesday nd 

### 10 through December 2 , is what we're checking? 

### 11 MR. ANDERSON: Yes. 

### 12 MR. PARKER: APPA. Okay. 

### 13 MR. SAINT: In don't think that's 

### 14 one of the dates that we were given, so I'll 

### 15 check with our -- 

### 16 MR. PARKER: Okay. Great. 

### 17 MR. SAINT: I'll check. 

### 18 MR. MILLURE: I'll just finalize 

### 19 December tomorrow. 

### 20 MR. PARKER: Okay. Finalize 

### 21 December tomorrow, absolutely. 

### 22 So, we are setting -- what we're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 197 1 talking about is the 12 through the 14 of th th th 

### 2 October, 8 to the 10 of November, 8 to th th 

### 3 the 9 , November 30 to December 1, if APPA 

### 4 can host. Well, that would be for the low 

### 5 voltage. 

### 6 Can you still host for the low 

### 7 voltage? This is not -- well, the other thing 

### 8 is we could do the low voltage here. We can 

### 9 do low voltage at DOE, so let's keep that room 

### 10 here for low voltage as a stop gap. 

### 11 Okay. And then we are not doing th th th 

### 12 anything on the 14 to the 16 , or the 20 nd 

### 13 through 22 . And we don't have to change the 

### 14 ground rules. Two, three, four. That means 

### 15 you're committing yourself to practically a 

### 16 word record pace for negotiated rulemaking. 

### 17 MR. GREESON: If we see that we're 

### 18 getting in a bind, is it possible to put a web 

### 19 conference -- would there be such thing as 

### 20 like a working session webinar to kind of iron 

### 21 out some details -- 

### 22 MR. PARKER: Well, that's -- I like

### 202-234-4433 Neal R. Gross & Co., Inc. Page 198 1 the idea of trying to set up some kind of a 2 discussion forum, discussion board with 3 different threads that people could just weigh 4 in either in the form of a wiki or some kind 5 of thing that we could keep some discussion 6 going between meetings. 7 There's no substitute for getting 8 around a table, I mean, absolutely none, but 9 it would be much better than -- particularly, 10 if we're cutting the meetings down to do 11 something like that. 12 MR. SAINT: Right. If we start 13 getting behind --

14 MR. PARKER: Yes. 15 MR. SAINT: A couple of things

16 we're concerned about --

17 MR. PARKER: Yes. 18 MR. SAINT: -- just touch base 19 with each other and see how it's going. 20 MR. PARKER: Yes. I mean, I think 21 at a minimum, does everybody have access to 22 Gmail? Maybe we could set up a Google docs

### 202-234-4433 Neal R. Gross & Co., Inc. Page 199 1 things that would be a shared thing, which 2 would be very, very low tech, or an email. 3 (Off mic comment.) 4 MR. PARKER: Oh, really. 5 MR. ROSENSTOCK: This is Steve 6 Rosenstock, EEI. Other organizations use GoTo 7 Meeting, that seems -- a lot of people are 8 using that to do the webinars, where the 9 speaker, the moderator has the live session 10 where they can play with a document and 11 everybody else calls in. 12 MR. PARKER: Right.

13 MR. CYMBALSKY: We have that 14 capability, actually. 15 MR. PARKER: Great. Okay. 16 MR. ROSENSTOCK: Using GoToMeeting,

17 or some other software?

18 MR. CYMBALSKY: Yes. 19 MR. PARKER: Great, we can do that. 20 Okay. 21 (Off mic comment.) 22 MR. PARKER: Nice idea. Nice idea.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 200 1 That'll allow us to economize on travel, 2 economize on meeting time and so forth. I 3 think this is great. 4 Any dissent, any problems with 5 this idea? 6 MR. PETERSON: Is this saying that 7 we'll be in a position to vote after three 8 meetings? 9 MR. PARKER: This is your group. 10 This is the question. 11 MR. PETERSON: Even though we've th 12 got until the 16 , so I'm just wondering th 13 should you tentatively schedule the 14 to th 14 16 in case we get to that first and have an 15 issue. I'm just stating, it seems an awfully 16 fast pace to do in those -- 17 MR. PARKER: Are you comfortable 18 with that, Andrew? Schedule the -- reserve th th 19 the room for the 14 to 16 if we need it, 20 with the hope that we won't. 21 MR. DeLASKI: Yes, I'm okay with 22 that. I think part of what we'll have to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 201 1 assess as we go forward this month, this is 2 going to be a question at each meeting, is the 3 next one worth doing. You know, we've got to 4 make some progress, so it may be that we st nd 5 decide to cancel the 1 and 2 . We may need 6 more time between meetings is what I'm 7 suggesting. In part, because I think we're 8 going to be looking to the consultants to 9 revise the analysis and do the scenarios, and 10 it's not quick. So, I'm fine with you 11 providing the space with the proviso that we 12 might not use all the days. 13 MR. CYMBALSKY: Well, we won't 14 cancel any of the -- that are on the sheet of 15 paper here at DOE. We will hold them. We 16 don't have to commit to that amongst ourselves 17 right now, but we'll hold them. 18 MR. PARKER: I guess the question, 19 should we hold the room at Pew -- I'm not sure 20 we can -- I don't think we can reserve a room 21 at Pew if we don't think we're going to use 22 it. I guess that's the issue. But there wasn't

### 202-234-4433 Neal R. Gross & Co., Inc. Page 202 1 anything here on the 14 and 15 . There's th nd 2 nothing here until the 20 to the 22 , so 3 it's really -- I think let's just try to do it 4 in four. 5 MR. DeLASKI: Yes. And what I 6 would add is kind of to the point that Bob is 7 making, is that if you're 90 percent there 8 after four, shuttle diplomacy is the way to 9 get to the end usually anyway, so other 10 mechanisms. It isn't like you stop talking 11 when the meeting is over. Though, at that 12 point, hopefully, if we're down to just a 13 handful of issues, I think it's -- the folks 14 who are the holdouts are the ones who need to 15 figure out how to get the folks who are 16 holding out to come on board, and that can 17 happen through other venues. 18 MR. PARKER: Well, those of us, we 19 don't have to absolutely finalize this now. 20 As I said when we started, I'd like to have a 21 preliminary discussion. I think we've had a 22 good discussion. I think perhaps what would

### 202-234-4433 Neal R. Gross & Co., Inc. Page 203 1 make the most sense now is for us to go ahead 2 and get into substance, which we're all aching 3 to do anyway. And work through the rest of 4 this afternoon and tomorrow morning, and then 5 see where we are. And I think we may have a 6 better sense based on how things go in the 7 next few hours or so, how things may look down 8 the road. Maybe we can reassess this after 9 lunch tomorrow before we adjourn. 10 MR. ROSENSTOCK: Steve Rosenstock. 11 I just want to be -- for all the out of 12 towners, I just want to be fair, at least lock 13 in the October meeting so people can book 14 airfares and everything, just because airfares 15 have been kind of rising recently. Be fair to 16 that? 17 MR. PARKER: Yes, absolutely. th th 18 Let's say that the October 12 to 14 , th th 19 November 8 to 10 are locked in. November th nd 20 30 to 2 are locked in if APPA is available, 21 and we'll find that out tonight. And the 22 question is what do we do about December?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 204 1 Okay, great. Now, let's get to 2 what you're all here for, the analysis. I'd 3 like to start off with Dan Cohen talking a 4 little bit about the -- before we get into the 5 numbers, into the charts, into the details, I 6 thought you would talk about the legal

7 framework. 8 (Off mic comment.) 9 MR. PARKER: Yes, we did vote. Is 10 that it? 11 MR. CYMBALSKY: Okay. I have 12 handouts, as well. Okay. So, we thought it 13 would be a good idea to just talk about some 14 of the process in terms of selecting trial 15 standard levels, what our thinking is when we 16 do this. So, this basically just sets out 17 some of the ground rules that we have here at 18 the Department. Of course, we follow the 19 statute. That pretty much guides us through 20 this. 21 I'm not going to read everything, 22 but I think this is just something for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 205 1 everyone to keep in their back pocket as we go 2 through the analysis, and the negotiations. 3 You're going to see the levels that are out 4 there, and we're going to negotiate levels, et 5 cetera, et cetera. So, I thought it would be a 6 good idea just to hand this out and tell you 7 how we actually decide on these levels. 8 So, on the first slide should be a 9 number one on the page. It's double-sided, so 10 be careful. The purpose is just to develop a 11 list of standard levels where we weigh the 12 different impacts of each proposed standard 13 level to select. Each one consists of a set 14 of candidate standard levels covering all 15 equipment classes, and may vary between 16 equipment classes. So, one type of transformer 17 with different kVAs could have different set 18 of levels than the other, that kind of thing. 19 The NOPR analysis assesses impacts 20 for each of these. So, what method do we use? 21 We usually start at the top with the most 22 efficient, so we looked at -- in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 206 1 engineering, we try to develop what we would 2 think is the top of the engineering curve.

3 And we call that the max tech level. And then 4 we come up with a few different options to

5 sort of walk down to what would be sort of the 6 lowest level where we are today; essentially, 7 the baseline level. You could see there's 8 different things we look at. I'm not going to 9 read them all but -- so, that's how we get

10 them. 11 Go to the second page. Now, it's 12 how we select the proposed standard level. 13 So, this is what we call the walkdown method. 14 So, we look at the entire list. And, again, 15 we start at the top, and then we select the 16 appropriate trial standard level from the list 17 which will offer the maximum improvement in 18 energy efficiency that is technologically 19 feasible and economically justified. So, we 20 start at the top, and when we get a positive 21 number, we stop, we stop the walkdown. 22 And then you could see all the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 207 1 different things that are part of the statute 2 that we look at, national energy savings and 3 emission reductions, consumer impact. We look 4 at manufacturing impact, other factors, 5 including technology uncertainty, et cetera,

6 et cetera. 7 Again, if the benefits outweigh 8 the burdens, we select the TSL. If they don't, 9 again, we walk down, and we start at the max 10 tech and work our way down, not the other way 11 around. So, that's just a basic quick 12 overview. And unless there's questions, we'll 13 turn it over to Brian Coffey from Navigant to 14 really get into the detailed engineering 15 analysis. Steve? 16 MR. ROSENSTOCK: Steve Rosenstock, 17 EEI. A quick question. The proposed standard 18 levels, those are associated with the -- 19 typically with the Notice of Proposed 20 Rulemaking; correct? 21 MR. CYMBALSKY: So, that's what 22 we're going to do here.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 208 1 MR. ROSENSTOCK: Yes. The question 2 I had is on the slide, there's nothing in here 3 about incorporating information and 4 suggestions from stakeholders. Why is that not 5 in here? 6 MR. CYMBALSKY: Right. So, I think 7 during this process, that's where we can do 8 new analyses as we go into this. I think as we 9 -- the preliminary analysis, we had the public 10 meeting, I assume you were here for that, so -

11 - 12 MR. ROSENSTOCK: Right. And we 13 provided input for the next -- 14 MR. CYMBALSKY: Right. So, that's 15 where Brian comes in, and he will -- yes.

16 MR. COFFEY: Hello. Good 17 afternoon, everybody. My name is Brian Coffey. 18 I work for Navigant Consulting, who, in 19 conjunction with Lawrence Berkeley National 20 Laboratory, supports the Department of Energy 21 in developing certain analyses for the 22 rulemaking.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 209 1 I guess we need the presentation 2 up, don't we? I can just go back and forth 3 with this. Great. 4 So, here on this slide you can see 5 how these analyses relate to and inform each 6 other. On the left, we have the market and 7 technology assessment, which characterizes the 8 market and explores the different technologies 9 used to make more efficient transformers. 10 Then we have the screening 11 analysis, which evaluates those technologies 12 on the basis of several criteria, including 13 technological feasibility. And both of those 14 inform the engineering analysis, which I'm 15 going to discuss right now. 16 Now, you've received an email that 17 the results of the engineering analysis as 18 they currently stand have been made available 19 on the Department website. I assume that 20 everyone here has had a chance to look at 21 those. So, what I'm going to tell you is how 22 we arrive at those, the methodology and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 210 1 thinking behind those. 2 (Off mic comment.) 3 MR. COFFEY: That's right. Great, 4 thank you. 5 So, the purpose of the engineering 6 analysis is to develop a relationship between 7 the efficiency of distribution transformer and 8 the manufacturer's selling price for that 9 unit. 10 DOE uses the design options 11 discussed previously to characterize this 12 relationship. The cost and efficiency outputs 13 of the engineering analysis are then used 14 downstream for the lifecycle cost and payback 15 period analysis, as well as the national 16 impacts analysis. 17 So, this slide shows the key steps 18 DOE uses in the engineering analysis. First, 19 DOE subdivides the equipment class groupings 20 into 14 design lines with similar design 21 principles and then identifies a 22 representative unit for analysis within each

### 202-234-4433 Neal R. Gross & Co., Inc. Page 211 1 design line. 2 MR. PATTERSON: Brian, can we ask 3 questions as you go through this?

4 MR. COFFEY: Sure. 5 MR. PATTERSON: So, one concern 6 that I initially have was the selection of 7 these representative design units, because 8 when I look at at least the pad-mount market, 9 it represented less than 2 percent of the 10 market. And the pad-mount market is roughly11 half of the entire medium voltage liquid12 filled market. So, I don't understand how 13 these representative design lines were

14 selected. 15 MR. COFFEY: Well, most -- I can 16 tell you, obviously, resources mean that we 17 can't analyze every possible transformer that 18 anybody could ever build, so what DOE does is, 19 tries to distill the general categories of 20 transformers into certain units that are 21 representative of the bunch. 22 Now, how does it go about choosing

### 202-234-4433 Neal R. Gross & Co., Inc. Page 212 1 those? Well, often it chooses based on market 2 share, and based on units that would share 3 similar performance attributes. Most of these 4 units that we have today were used in the 5 previous rulemaking which concluded in 2007. 6 Along the way, we've made slight modifications 7 to those, and we've added one design line in 8 the medium voltage dry-type space. 9 MR. PATTERSON: But in the 2007 10 analysis that was done, there was to my 11 knowledge no cross-check on the legitimacy of 12 the representative design lines, the ratings 13 of the units that were used. So, since we 14 have this committee now set up, I figured I'd 15 go ahead and analyze what those units were. 16 And, as I said, they're representing less than 17 2 percent of the market. 18 MR. COFFEY: Well, that's good 19 feedback, and I think we do have an 20 opportunity now to address any what you 21 perceive to be deficiencies in terms of 22 representative unit coverage. If everyone

### 202-234-4433 Neal R. Gross & Co., Inc. Page 213 1 agrees that more work needs to be done 2 exploring a given area, I think we can talk 3 about doing that. 4 MR. PARKER: Can you give us a 5 sense of how difficult it is for you to do 6 that? Is it just a matter of pushing a button 7 and putting in a different parameter, or does 8 it require a lot of finagling and a lot of 9 time? 10 MR. COFFEY: It requires a little 11 bit of finagling. Many of you know that we 12 work with a company called Optimized Program 13 Service based out of Ohio that does some 14 simulation. I know some of your organizations 15 also have done business with OPS, so we would 16 need to specify parameters of the designs 17 which we wish to generate, receive that data, 18 process it, check it to make sure that we 19 think it's free of errors and reasonable, and 20 then begin compiling it to a report. It's 21 certainly possible, but it couldn't happen 22 overnight.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 214 1 MR. PATTERSON: We mixed an apple 2 with an orange. OPS performs a calculation for 3 a transformer rating, so with a given rating, 4 then they will calculate many design options 5 for that rating. My question was the rating 6 itself.

7 The fact that we chose a 14-4 8 primary with a 208/120 secondary, right, at a 9 particular kVA phase with a particular 10 enclosure, to me this didn't represent the 11 market. So, if we start at the rating itself, 12 the transformer rating, we have difficulties 13 with the data. 14 MR. PARKER: Do you have data on 15 what market share is accounted for by 16 different design -- 17 MR. PATTERSON: In, as a firm, 18 represent about 20 percent of the pad-mount 19 market, so I see a great deal of the business. 20 I looked at roughly 40,000 units shipped 21 between the first 12 months of the new DOE 22 regulation, and then did an analysis of how

### 202-234-4433 Neal R. Gross & Co., Inc. Page 215 1 many of these units match those ratings. And 2 this is where I come up with the 2 percent. 3 That sets into my mind a big question mark. 4 MR. RIVEST: This is Mike Rivest 5 here. Mr. Patterson, I remember visiting your6 facility. I actually remember your pad7 mounts, too. It's pretty impressive. You 8 know, this is -- I think the fact -- calling 9 it representative is really not necessarily 10 that it has to have those physical 11 characteristics. The important thing is, are 12 the results of the analysis that we obtain by 13 looking at that transformer going to be 14 scalable to other types of transformers, 15 whether they be pull-mounts or of other kVA 16 ratings. So, if you could help us understand 17 why having those different voltage ratings, or 18 the fact that it's a pad-mount, for example, 19 if that's the problem, might result in a 20 different answer, or might constrain the 21 analysis differently. 22 MR. PATTERSON: During the -- on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 216 1 the lead up to the 2007 study that was done, 2 there was a lot of discussion that related 3 back to the BIL rating with dry-type

4 transformers5 MR RIVEST: That I remember. 6 MR. PATTERSON: And that's impact 7 and influence of the selling price. Right? 8 And it's the selling price versus the 9 efficiency that's driving everything. 10 And in the liquid-filled market, 11 while the influence is not as big, it is still 12 significant when you look at the difference

13 between a 60 BIL transformer and a 150 BIL 14 transformer. So, when we selected these 15 ratings we didn't specify the BIL, which 16 forces the BIL to default to the industry 17 standard BIL rating. Okay? 18 So, then this sets up a 19 relationship of a certain market segment that 20 we're trying to represent. So, we're saying 21 that if we take this 150 BIL transformer, it 22 represents the selling price of a 95 BIL

### 202-234-4433 Neal R. Gross & Co., Inc. Page 217 1 transformer, and it does not. 2 MR. RIVEST: Could we -- so, I'm 3 trying to save resources and time, because we 4 don't have much of either. Is it possible to 5 rather than get -- losing all the analysis we 6 have of doing some select analysis at the 7 different rating and see how we might scale 8 our existing analysis to the new voltages? 9 MR. PATTERSON: Could it be 10 possible to come up with an engineering 11 scaling factor to go from one BIL to the 12 other, and the answer is yes. There is a 13 relationship that can be ball parked, 14 estimated. That can be done. And I am not 15 suggesting that the analysis, the data that 16 has been collected is garbage and start from

17 scratch. 18 MR. RIVEST: Okay, good. Thank 19 you. 20 MR. PATTERSON: We could definitely 21 build on the data that's there. 22 MR. RIVEST: Okay, great.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 218 1 MR. PATTERSON: But we have to 2 recognize the deficiencies that are in the 3 data, and make appropriate adjustments. 4 MR. PARKER: Do you have 5 adjustments that you would -- specific 6 adjustments that you would propose? 7 MR. PATTERSON: I haven't gotten as 8 far as quantifying how much is there. My 9 first challenge was to identify whether or not 10 the data that we had represented the market. 11 MR. PARKER: Okay. Steve? 12 MR. RIVEST: So, when you say the 13 data that you have, you're saying that the 14 units that were analyzed were at a different, 15 is it BIL rating than -- 16 MR. PATTERSON: Actually, there was 17 a whole lot of questions raised about the 18 actual voltages. 19 MR. RIVEST: The voltages. Okay. 20 MR. PATTERSON: Right? But my 21 design experience says that if I'm working 22 within the same BIL class, whether or not I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 219 1 change the voltages doesn't matter. 2 MR. RIVEST: Okay. 3 MR. PATTERSON: So, then when I 4 look at your set of ratings and subset it at

5 the BIL rate --

6 MR. RIVEST: I see. 7 MR. PATTERSON: -- instead of only 8 seeing 2 percent of the market, I now see 25 9 percent of the market.

10 MR. RIVEST: I understand.

11 MR. PATTERSON: And that's a much 12 better representation, but it's a concept 13 change from the voltage of the BIL. 14 MR. RIVEST: And this is something 15 we simply didn't pick up. We missed it. 16 MR. PATTERSON: Missed. 17 MR. RIVEST: Years ago? Well, I 18 mean, we've had multiple -- there have been 19 multiple -- 20 MR. PATTERSON: It was discussed 21 years ago. 22 MR. RIVEST: Right. And there have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 220 1 been multiple reviews. So, as far as I know, 2 this is the first time it comes up, because we 3 would have reacted to this.

4 MR. PATTERSON: We weren't asked. 5 We're asked this time.

6 MR. PARKER: Steve? 7 MR. ROSENSTOCK: Steve Rosenstock, 8 EEI. In the April meeting, I have the slides, 9 and there was a couple of slides on the 10 scaling results. There was an issue about 11 using the .5 scaling rule, and the issue of 12 going outside of one standard deviation. The 13 results don't really follow that scaling rule, 14 so I guess I have to ask, since you only have 15 the summary sheet, in this instant was the 16 scaling rule changed based on all of the input 17 that you received after the April meeting? And 18 what was it changed to? 19 MR. COFFEY: So, that's slightly 20 different than the concern that Wes was 21 raising. He was talking about scaling between 22 BILs, this is across kVA ratings.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 221 1 MR. ROSENSTOCK: Right, it's about 2 rating scale, yes. 3 MR. COFFEY: The general approach 4 is basically the same. We have added a 5 representative unit. We've added a design 6 line to address a -- what I'll call a bald 7 patch in the medium voltage dry-type space. 8 But that's -- in terms of adding design lines,

9 that's all that we've done. 10 MR. ROSENSTOCK: So, for the 11 liquid-filled you still have the same scaling 12 rule, even though there was a lot of input 13 about how there's distortions outside of one 14 standard deviation.

15 MR. COFFEY: That's correct. 16 MR. PARKER: Did your team address 17 whether you can scale across different BILs? 18 MR. COFFEY: Not in the liquid. We 19 do do that in the medium voltage dry-type 20 area, we set standards by BIL. 21 MR. PARKER: And that's what you're 22 proposing?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 222 1 MR. PATTERSON: We're proposing 2 that when we try to figure out the national 3 impact based on the data that they have to 4 work with, that we factor these dimensions in. 5 We should recognize that you cannot take a 6 150 BIL transformer price and assume that 7 price is going to be directly the same price 8 as a 60 BIL transformer. It's not going to 9 happen. 10 MR. PARKER: Do you have the data 11 that would allow you to establish a 12 relationship? It sounds like Wes is putting 13 forward the notion that -- the hunch that 14 there is a price BIL relationship that hasn't 15 been factored in. And I guess the question 16 is, does your data allow you to do a scaling 17 factor based on that to calculate that, or 18 would that be difficult? 19 MR. COHEN: I would -- it's 20 certainly something that we could look at. We 21 may rely on input from manufacturers to help 22 us develop that relationship to some extent,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 223 1 but it's within the realm of possibility. 2 MR. CORKRAN: I'm in 100 percent 3 agreement with Wes, but I believe we need to 4 take one step back on the basic approach. 5 Utilities have been using total owning costs 6 for about 30 years, and that evaluates the 7 dollars per watt that it's worth to make a 8 more efficient transformer. And the 9 variations that Wes is talking about, whether 10 it's a 150 BIL or a 30 BIL, are automatically 11 taken into consideration on total owning cost. 12 The present DOE standard comes out 13 about $4 per watt, $1 for winding watt. We 14 can either put in the efficiencies, or we can 15 put in about $4/$1, and we get the 16 efficiencies. And if the DOE finds watts are 17 worth a certain amount, instead of $4/$1, if 18 they decide it was worth $8 and $2, that would 19 still be the 4 to 1 ratio which implies a 50 20 percent load. And in doing that, the law 21 would require that utilities and other 22 transformer buyers purchase on total owning

### 202-234-4433 Neal R. Gross & Co., Inc. Page 224 1 cost. That's the end of story. 2 We don't need 2,000 efficiencies 3 or anything else. We need a rule that you 4 have to buy according to total owning cost. 5 And it automatically covers the difference in 6 BILs, and difference in -- tomorrow the 7 material costs are going to be different, but 8 if we evaluate the watts, that saves the 9 country the money for the efficiency, and it 10 makes it a heck of a lot simpler because you 11 guys are getting into engineering, and the 12 engineering will change tomorrow, and your 13 efficiencies are going to be locked in. So, 14 it's a basic mistake of approach that the DOE 15 is making. Should be applying at the total 16 owning cost.

17 MR. PARKER: I'm not sure that the 18 DOE has the jurisdiction to mandate that 19 utilities buy according to total owning cost. 20 Right? I don't think that's within the 21 jurisdiction of this committee, or even the 22 DOE to determine. We set energy efficiency

### 202-234-4433 Neal R. Gross & Co., Inc. Page 225 1 standards for transformers. 2 MR. ROSENSTOCK: Steve Rosenstock, 3 Edison Electric Institute. With all due 4 respect, different utilities use different 5 factors, and some utilities are not using 6 total owning cost any more. As shown in some 7 of the DOE analysis, different companies are 8 using different criteria, and the DOE should 9 adapt to all the criteria. 10 We would be opposed to any sort of 11 national mandate. There's no such national 12 mandate for any other product under DOE 13 purview. I don't know of any consumer who is 14 forced to buy a refrigerator on total owning 15 cost, or any commercial business that's forced 16 to buy lighting products on total owning cost, 17 so I don't think that really is part of the 18 purview of this committee. Thank you. 19 MR. PARKER: Well, I think it's one 20 thing to recognize that they should if they're 21 economically rational. But even if they 22 should, it's not really -- we don't have the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 226 1 authority to make them, so it's not really an 2 issue that we have to -- 3 MR. MILLURE: This is Dave Millure 4 with Metglas. There are a couple of states 5 and the District of Columbia that do actually 6 have state laws on it, but not -- 7 MR. PARKER: Right. If they choose 8 to, they can, but it's not up to us. Are 9 there others who share this concern about BILs 10 being represented? Remember, taking Mike's 11 point that it's not just a question of how 12 much market share that they represent, but 13 whether or not being a different BIL would 14 actually change the analysis. 15 MR. RIVEST: Just to follow-up on 16 that -- Mike Rivest. So, if you look at the 17 analysis, what really drives the results is 18 the difference -- the incrementals. So, it's 19 the incremental cost of going from one 20 efficiency to the next higher up efficiency. 21 So, as we look at the impact of BIL, two 22 things to take into account is, does having a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 227 1 different BIL change that incremental cost, 2 and does it also create a barrier to 3 efficiency? So, is it harder to increase 4 efficiency, and also is it more -- is it 5 limiting to increasing efficiency. So, those 6 are the two things to look at doing that 7 analysis. 8 MR. PARKER: So, I think we have -- 9 yes, Steve, did you want to add -- 10 MR. ROSENSTOCK: I just want to say 11 there is the other scaling issue across kVAs, 12 as well. That credit was discussed. I got an 13 answer from Brian, and it was not adjusted, 14 but it was brought up in the April meeting. 15 And many people expressed concerns about the 16 scaling across kVA. 17 MR. DeLASKI: I'm very impressed 18 that you got a response to Mike's questions. 19 Mike's questions I think are really helpful to 20 help frame it for me, which is what's the 21 impact on the increment.

22 MR. PATTERSON: I've not done the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 228 1 analysis, but I can -- 2 MR. RIVEST: That wasn't really a 3 question. That was just -- 4 MR. ANDERSON: Well, to me it's a 5 question. I'll pose it as a question. 6 MR. PATTERSON: I can state this; 7 that if I look at a 60 BIL transformer and I 8 change its losses, I reduce its losses 10 9 percent and come up with a new selling price, 10 the ratio of the old price to the new price 11 will be fundamentally different than if I look 12 at a 150 BIL transformer, reduce its losses 10 13 percent and come up with a new selling price. 14 So, the ratio of the change in price for the 15 same 10 percent change in loss will be greater 16 on the higher BIL than the lower BIL. That's a

17 fact. 18 MR. RIVEST: Are you looking at 19 ratio or just -- 20 MR. PATTERSON: The ratio, that 21 ratio of one price to the other price, the 22 incremental change.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 229 1 MR. RIVEST: The ratios don't drive 2 the analysis, it's the absolute dollars. It's 3 like absolute dollars versus the absolute 4 dollars of watts times hours of use. But, I 5 mean, we can definitely look at that. I don't 6 think we could answer right now. 7 MR. PARKER: Let's put that as an 8 issue that we need to discuss and come back 9 to. Right now, this meeting is not to resolve 10 the issue. This is to spot the issues. 11 Right? So, I think we've done that in spades. 12 Let's press on. 13 MR. COFFEY: I think we left off at 14 representative unit selection. So, once DOE 15 has done that it identifies different design 16 option combinations that characterize the 17 range of possible efficiencies for each unit. 18 Next, DOE developed cost inputs 19 such as materials prices, mark ups and labor 20 requirements for each design. DOE then used a 21 software model to create hundreds of optimized 22 designs for each design option combination

### 202-234-4433 Neal R. Gross & Co., Inc. Page 230 1 based on different A and B value combinations 2 that I'll talk about in a few minutes, 3 although we've already touched on them. 4 And then these designs that are 5 generated yield varying levels of efficiency 6 so that DOE can develop efficiency levels or 7 ELs, which are the former CSLs completely 8 analogous, just new terminology when you get 9 to the NOPR to identify specifically 10 efficiency levels for the analysis. Those are 11 the baseline for constructing TSLs. TSLs are 12 just packages of these efficiency levels from 13 each design line. 14 MR. PATTERSON: Brian?

15 MR. COFFEY: Sure. 16 MR. PATTERSON: So, I understand we 17 take component material prices and feed them 18 into a calculation engine, and then through 19 some optimization theories for A and B factor 20 come up with an optimized unit, an optimized 21 design. 22 I also understand from many years

### 202-234-4433 Neal R. Gross & Co., Inc. Page 231 1 of working on developing such programs, 2 there's a lot of assumptions go into the 3 programs. Right? And I think we've done an 4 excellent job from the DOE perspective with 5 the amount of information they had available

6 to them. 7 But when I take the data, the 8 output, the 40,000 designs that were in those 9 there spreadsheets that were just released in 10 August, and I overlay those designs on top of 11 real data, then I see gaps. They don't line 12 up. And then I have to question where is the 13 error? Was the error in the material cost 14 selection? Was the error in the algorithms of 15 the optimization routine that you use, because 16 it's not matching what is actually sold in the 17 marketplace. It's not reflecting it, even on 18 the specific BIL rating. It doesn't match 19 selling prices. 20 MR. COFFEY: I mean, there are two 21 types of ways that it can't match. One is just 22 that if you ask 10 different manufacturers to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 232 1 simulate designs, you're going to get 10 2 different ways of doing it. So, in that sense 3 OPS is sort of like another manufacturer 4 that's going to come out every time you ask 5 them to do it with a slightly different 6 answer. That's sort of random noise. 7 The other source of error is a 8 systematic error where there's some factor 9 maybe that's not being considered, or 10 considered in a different way than somebody 11 else might be doing it. So, if we think that 12 that might exist in any areas, I think this is 13 a great opportunity to look at the assumptions 14 and try to tease out where the discrepancies 15 may lie.

16 MR. ANDERSON: Excuse me.

17 MR. PARKER: Go ahead. 18 MR. ANDERSON: Wes, from a consumer 19 standpoint, they'll go through the design 20 optimization, they'll figure out the A and the 21 B factors, and they'll use the best possible 22 information they can. You've got to make

### 202-234-4433 Neal R. Gross & Co., Inc. Page 233 1 assumptions. So, recognizing that, what some 2 people do is they'll say I'm going to throw in 3 a 3 percent error for these assumptions. So, 4 if I get a design from Howard, ABB, General 5 Electric, I'll look at the total evaluated 6 cost, and then I'll look at -- I'll apply a 3 7 percent window. And if it's inside that 3 8 percent window, I'll take the lowest first 9 cost. So, that might be a little bit why it's 10 not matching up. 11 MR. PATTERSON: This is what we 12 call the bandwidth of equivalence. And if I 13 was referring to something that was in the 14 bandwidth of equivalence, I wouldn't have even 15 made the comment. I'm talking about 16 significant differences, large differences 17 that I cannot understand other than perhaps --18 I did my analysis in the past month on pad19 mount transformers. They have designs which 20 are figuring a construction of a pole-mount 21 and applying that to the pad-mount. Okay? 22 Their analysis basically on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 234 1 liquid-filled assume that the whole market was 2 just poles and pad, but we all know there's 3 significant parts of this country that use 4 things called network transformers. There's 5 also a large segment of this market that's a 6 substation transformer. Neither of these cost 7 structures are reflected anywhere, and somehow 8 there's a mechanism to apply a pole-mounted 9 structure cost to a pad-mounted transformer. 10 This introduces the errors. 11 MR. RIVEST: So, that's true, and 12 what we do -- when we go on interviews and 13 when we get data, what we do is we try to 14 normalize the data to eliminate the factors 15 which like that would create large 16 differences. And the first thing we do is we 17 don't look at absolute costs because they're 18 extremely misleading. 19 Like you said, you can have one 20 transformer that has the same electrical 21 characteristics that might be 20,000, the 22 other one might be 10,000.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 235 1 What we focus on is the 2 incremental cost of going from 98 to 98.3 3 percent efficient, because a lot of the 4 features that you are talking about subtract 5 out one from the other. And when we normalize 6 that way to incremental cost, and I take 7 Manufacturer A, B, C, D and then OPS and I 8 just look at incremental cost of going from 9 baseline to CSL 1, 2, and 3, when I've done 10 that exercise, the data looks pretty good. 11 And we've obtained --

12 MR. PATTERSON: It doesn't match

13 what a manufacturer sees -- 14 MR. RIVEST: Well, you're not going 15 to see in the market what -- the way I do it. 16 MR. PATTERSON: Well, we should. 17 MR. RIVEST: I think -- we obtain a 18 lot of data under confidentiality, so I'm not 19 at liberty to show my numbers. But I would be 20 happy to show my numbers to those who have 21 provided the data. And if there's an occasion 22 for a subset of people to do an engineering

### 202-234-4433 Neal R. Gross & Co., Inc. Page 236 1 review starting with those who provided the 2 data, I'd be happy to do that and show that 3 the information we have corroborates the 4 designs that we have. 5 MR. PATTERSON: So, let me make 6 sure I understand. What you're saying is you 7 have somewhere in your collection of data 8 something that says that when I lower the 9 losses of a substation transformer by 10 10 percent, that relationship can be modeled by 11 the same loss lowering in a pole-mount

12 transformer.

13 MR. RIVEST: That's not what I 14 said. What I said is when I've obtained data 15 from manufacturers that provided the cost of 16 manufacturing transformers at various 17 efficiencies on the representative units that 18 we did the analysis on, and when I did two 19 things, I looked at incremental costs, and I 20 had sufficient design information, such as 21 pounds of steel, pounds of copper, type of 22 steel that I could common size, meaning apply

### 202-234-4433 Neal R. Gross & Co., Inc. Page 237 1 the same price to Manufacturer A, Manufacturer 2 B, and OPS so that I'm comparing apples to 3 apples. The data looks okay. 4 MR. PARKER: So, here's what I 5 think we should -- 6 MR. PATTERSON: The data may look 7 okay on the product segment that you've looked

8 at. 9 MR. RIVEST: Well, that's the 10 framework of analysis. 11 MR. PATTERSON: But when you try to 12 extend that product framework, that product 13 segment across the marketplace it doesn't seem

14 to make sense. 15 MR. PARKER: So, here's what we 16 need to do, we need to keep this on track but 17 I don't want to lose this thought. So, a 18 couple of questions. First, did you document 19 these concerns in any previous written comment 20 either as part of the prior rulemaking or is 21 this the first time this concern has been 22 raised?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 238 1 The only reason I'm questioning -- 2 I'm asking is that if you have it, we can 3 just refer people to it and they can read it, 4 and everybody can have a better sense of what 5 the issues are. If you have it, maybe you 6 could supply it in writing for people to look 7 at. Could you use the microphone. Sorry?

8 MR. PATTERSON: I don't recollect 9 back in 2007 whether I -- I know I brought up 10 the issue of the BILs. I did not bring up the 11 issue of the various product segments not 12 being represented. 13 MR. PARKER: What about in April of

14 -- 15 MR. PATTERSON: April? 16 MR. PARKER: At the April public 17 meeting or anything like that, comments prior

18 to that? 19 MR. PATTERSON: No. I brought up 20 the scaling issue. 21 MR. PARKER: Right. 22 MR. PATTERSON: But they've

### 202-234-4433 Neal R. Gross & Co., Inc. Page 239 1 addressed the scaling issue. 2 MR. PARKER: Okay. So, I guess the 3 question would be -- and this is part of the - 4 - this gets into sort of the informal ground 5 rules for this group. And I think one of the 6 things that we have to really focus on is 7 supply arguments, supplying data wherever we 8 can to corroborate our own assertions and 9 concerns. So, you've articulated very strong, 10 very serious concern. It would be helpful if 11 you could give us a document, give us 12 something that lays out the specific nature of 13 your concern in writing and the evidence to 14 substantiate it, and then people could just 15 take a look at it and see if others concur 16 that this needs to be addressed in data. 17 MR. RIVEST: Mike Rivest, just on 18 nomenclature here. So, there are product 19 classes, and then we have representative units 20 within those product classes. It sounds like 21 there might be a bit of both here. There are 22 products that -- we have correctly identified

### 202-234-4433 Neal R. Gross & Co., Inc. Page 240 1 the product class, but the representative unit 2 might not be representative of its class. And 3 you're saying there might be some product 4 classes that have been lumped inappropriately 5 with others. So, there's how many product 6 classes, 14? 7 MR. COFFEY: Fourteen design lines. 8 MR. RIVEST: Fourteen design lines. 9 MR. COFFEY: Ten equipment classes. 10 MR. RIVEST: Ten equipment classes.

11 MR. PATTERSON: But those ten 12 equipment classes are scattered over medium 13 voltage liquid, medium voltage dry, and low 14 voltage dry. 15 MR. COFFEY: That's right. 16 MR. RIVEST: Right. I mean, this 17 is the basic framework.

18 MR. PATTERSON: When we look at the 19 losses in the grid, by and large it's 20 dominated by this liquid filled market. Okay? 21 And when we look at this market, my challenge 22 -- my discussion has to do with trying to take

### 202-234-4433 Neal R. Gross & Co., Inc. Page 241 1 the representative units that we've identified 2 and saying how does that reflect that market? 3 Does it represent the market? And the data I 4 have says it does not represent the market. 5 That was item one. But your point was whether 6 it represents the real market or not is 7 immaterial provided it shows the relative 8 movement of price with efficiency.

9 MR. RIVEST: Correct.

10 MR. PATTERSON: That's what I 11 understood you said.

12 MR. RIVEST: Correct. 13 MR. PATTERSON: Okay? And when I 14 look at the relative movement which 15 essentially would be the change in the slope 16 of the curves relative to -- 17 MR. RIVEST: Not the slope, the

18 dollars. 19 MR. PATTERSON: Relative to the 20 efficiency versus the price, if I look at 21 efficiency versus price and say okay, does the 22 slope change the same, I find it does not, not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 242 1 as far as what I see in the marketplace. And 2 what I see in the marketplace is 20 percent of

3 the true market. 4 The data that I have is a 20 5 percent slice of the entire U.S. market, so 6 that's why I have difficulty. And I will 7 provide the data so you guys can look at it 8 and see it. 9 MR. RIVEST: Right. So, the 10 engineering analysis, as you see, is focused 11 on those representative units. And then the 12 standard is an equation that smooths out 13 transitions between those design lines. And 14 there's opportunity in this group to do that. 15 But we can't analyze every kVA rating around 16 2,000 designs. 17 MR. PARKER: Okay. So, somebody -- 18 so, I guess the question is if you wanted to 19 supply data that has -- that suggests a 20 different representative unit -- 21 MR. RIVEST: Again, I would suggest 22 that. I would suggest --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 243 1 MR. PATTERSON: We don't have 2 within the time frame that we have to work, we 3 don't have the capability to run a bunch of 4 whole new calculations and start the whole 5 thing over. So, what we have to do is 6 recognize what we do have and then try to 7 leverage the information that we have. 8 MR. RIVEST: Correct. Yes. So, if 9 there is an engineering principle that allows 10 us to say: that slope is different, that's

11 what we want. 12 MR. PATTERSON: Right. And this -- 13 I will try to work with the folks to try to 14 come up with something that we can do. 15 MR. PARKER: Great. Okay. 16 MR. PATTERSON: To build on it, but 17 I'd like to recognize the deficiencies that 18 exist. 19 MR. PARKER: Okay. Could I ask the 20 other engineers around the table, do other 21 people concur with this concern that he just 22 brought up? Steve, did you want --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 244 1 MR. ROSENSTOCK: Steve Rosenstock 2 EEI. I guess one thing is -- I'm following up 3 on Mike is, yes, there are five design lines. 4 Basically, we're looking at setting 27 5 standards. There's 27 products shown right 6 there. And what we're trying to do, again, 7 we're trying to -- because of resources and 8 everything, but the issue is, as Wes was 9 saying, is that look, there could be some very 10 unique things for each product line that could 11 have a significant impact on the cost curves, 12 on efficiency curves, and on --eventually on 13 the life cycle cost analysis and efficiency 14 level. And, yes, I understand why we're doing 15 this, to really try to help streamline the 16 analysis, but the problem comes in is that if 17 there are issues with any specific class 18 because of economies of scale, or because of 19 any sort of new supply issues, is we basically 20 have to look at every line as a separate 21 entity because we're doing standards for every 22 separate line. So, I don't know if it is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 245 1 possible. I mean, I know there's 33 classes 2 of residential refrigerators that have 3 standards. It's a very large number, and with 4 commercial refrigerators you did standards for 5 25. And I think at some point analysis was 6 done for each design line, basically, of 7 refrigerators, as I recall. No? There's 8 still substitution? How many were done with -

9 - 10 MR. RIVEST: I would have to do it 11 for every volume.

12 MR. ROSENSTOCK: But for 13 refrigerators, how many refrigerator -- 14 MR. RIVEST: We did top mounts, 15 bottom mounts, side-by-sides, but we didn't do 16 every cubic foot. 17 MR. ROSENSTOCK: Right, I know 18 that, but you broke out cubic --

19 MR. RIVEST: That was scale. 20 MR. ROSENSTOCK: Scale, all right. 21 MR. RIVEST: Heat pumps, goes from 22 one and a half ton to five in model 3.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 246 1 MR. ROSENSTOCK: Right, I know. 2 MR. RIVEST: What happens is the 3 representative unit is picked in the middle of 4 the range -- 5 MR. ROSENSTOCK: Right.

6 MR. RIVEST: -- for a reason. 7 It's because typically the engineering doesn't 8 scale perfectly, but where one end gets 9 slightly disadvantaged, the other end gets 10 slightly advantaged. Right? 11 MR. PARKER: So, it represents the 12 middle. 13 MR. GAYTAN: I would like to follow 14 on on Wes' point, because I think he had more 15 points to make with his data, at least I hope 16 he did. And that is, if you just take 17 Equipment Class Group 1 up there, he's doing a 18 rectangular tank unit and a round tank unit. 19 And on a simpler scale, the round tank unit 20 doesn't scale to the rectangular unit, and the 21 rectangular unit doesn't scale to the round 22 unit; yet, we're using those two units to do

### 202-234-4433 Neal R. Gross & Co., Inc. Page 247 1 all the efficiencies across that range. We 2 have a scaling factor we use, the .75 per kVA 3 and you can't get the 25 kVA to a 50, and you 4 can't get the 50 kVA to a 25 even on that 5 methodology. And the reason is because it's a 6 little bit apples and oranges. 7 Now, I kind of hate to bring this 8 up because that implies that we ought to have 9 a different -- another class of efficiency, 10 one for round tanks, another one for 11 rectangular tanks. That would be a -- 12 MR. PATTERSON: If I may, I have 13 also had heartburn with round and rectangular. 14 MR. GAYTAN: Right. 15 MR. PATTERSON: Because, in 16 essence, what we're talking about is the round 17 is a pole-mount transformer. Okay? 18 MR. GAYTAN: And the rectangular is 19 a pad.

20 MR. PATTERSON: It's not a round 21 tank that sits on the floor. It is a specific 22 product, hangs on a wooden pole where the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 248 1 utilities have all kinds of issues with the 2 pole size as I raise the efficiency. The 3 rectangular unit that they're referring to is 4 thought of as a pad-mount, but there are other 5 rectangulars which are not scoped and scaled

6 the same. 7 That rectangular slice that they 8 have there was conceptually a representation 9 of the pad mount, and the round was a pole 10 mount, but we missed two other major market 11 segments. 12 MR. PARKER: Okay. So, what I'm 13 hearing is basically that there may be market 14 segments that are not represented by their 15 analysis because of the choice of 16 representative unit, that are unrepresentative 17 and significant both in the sense that they 18 reflect a large segment of the market, and 19 that they have a different relationship 20 between price and efficiency than the other 21 units have. You would get a biased answer. Is 22 that right?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 249 1 MR. PATTERSON: If I may, on the 2 rectangular, just to give you an example. 3 Right? A major market segment for urban areas 4 in the U.S. is network transformers. Network 5 transformers are stuck in a concrete vault. 6 Okay? The pad-mount sits on a slab, nothing 7 constraining its dimensions. Okay? 8 MR. PARKER: Okay. 9 MR. PATTERSON: So, if we raise the 10 efficiency level, improve the efficiency 11 level, which we may well be able to do for the 12 pad-mount transformer because it's not 13 constrained as much by physical size, we 14 cannot apply that standard to the network -- 15 MR. PARKER: So, you're saying 16 there should be subcategories within the 17 rectangular.

18 MR. PATTERSON: Or we take and set 19 an efficiency standard to the lowest common 20 denominator which would end up being the

21 network transformer. 22 MR. PARKER: Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 250 1 MR. PATTERSON: We can make it low 2 so it will work with New York City. 3 MR. PARKER: So, our task today is 4 to identify -- thank you. Our task today is 5 to identify issues, not to resolve them. But 6 also to identify data needs that we need. So, 7 what we need going forward then is, as a 8 generic matter, anybody who feels that these 9 design lines are too inclusive, too 10 encompassing, which is I think what was Wes is 11 saying in some cases, please specify those 12 things in writing to the group. Indicate in 13 what ways they are not representative, 14 indicate the data that support that the best 15 you can as if you're providing a written 16 comment. Get it to me, and I will circulate 17 it to the group as soon as possible so that we 18 can take this up at the next meeting. This is 19 clearly on the table as an issue. A member 20 has raised it. We'll deal with it. 21 I don't want to spend a lot of 22 time trying to resolve an issue, that's not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 251 1 our function today. It's clearly an issue, 2 and we'll work on it. But, in general, the 3 way to deal with issues then is to first 4 document them in writing so that everybody has 5 a very clear sense of what the issue is. And 6 then based upon that, I think at that point is 7 to ask Navigant -- it's fair to ask Navigant 8 to come back and say okay, this is an issue, 9 it isn't an issue, we don't agree. And, also, 10 if it is an issue, is it feasible within the 11 data that we have without going out to do a 12 whole other set of manufacturing interviews. 13 We're constrained really by the 14 data that we have with the time frame that we 15 have. Is it feasible to plug this into the 16 computer model as a parameter and come up with 17 a different outcome? Is that a reasonable way 18 to proceed? 19 MR. COHEN: I just want to point 20 out, within the statute we can set up 21 different product classes, but just -- I want 22 to just make sure people understand what the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 252 1 basis is for doing that. 2 So, the Secretary has to determine 3 that within the group different -- can set 4 different product classes if consume a 5 different kind of energy from that consumed by 6 other covered products within such type or 7 class do not have -- not only that, that's not8 -- or have a capacity or other performance9 related feature which other products within 10 such type or class do not have and such 11 feature justifies a higher or lower standard 12 from that which applies, or will apply to 13 other products within such type or class --so, 14 capacity or other performance-related

15 features. 16 MR. PATTERSON: Yes, but a 17 performance-related feature is whether or not 18 it's installed in a vault in the ground or 19 hanging off a wooden pole -- 20 MR. PARKER: Sure. That gives you 21 enough flexibility to set up a new product 22 class, if it's justified. But the presumption

### 202-234-4433 Neal R. Gross & Co., Inc. Page 253 1 -- 2 (Off mic comment.) 3 MR. PARKER: Right. Thank you for 4 keeping us honest on the law, really. Okay. 5 So, please -- generic invitation challenge we 6 have -- this is an issue, the representative - 7 - these representative units. Remember the 8 two criteria that I think have been put 9 forward that are helpful are market 10 significance and bias results from choosing a 11 different unit. Is that acceptable to you, 12 Brian? Does that get us a path forward? 13 MR. COFFEY: I think that's 14 fair. You know, I skipped ahead to this slide 15 right here that shows the relative positions 16 of the design lines, equipment class groupings 17 and representative units, and I think through 18 our discussion that we kind of just had we 19 explained how those all fit together. I'll go 20 over it quickly here. 21 These are only the liquid immersed 22 units, a similar table could be constructed,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 254 1 and has been constructed for the medium and 2 low voltage dry-type units. You can see that 3 we've got two blocks. We've got equipment 4 class group 1, equipment class group 2. The 5 equipment classes are collections of 6 transformer designs that will ultimately be on 7 the same standard trajectory. In other words, 8 a standard is taken and scaled to touch on all 9 the transformers within that equipment class. 10 The points for scaling come from 11 the cost efficiency data developed for each 12 representative unit within a design line. So, 13 you can see -- I can use as an example 14 Equipment Class 1 here. Going down, we are 15 increasing in kVA. At the low kVAs, 10 to 16 167, we've got design lines 1 and 2. 17 This is a little bit unique in 18 that we'd have two design lines covering the 19 same space. Again, the thought here is that 20 we wanted to look at the round and rectangular 21 tank units separately. Once we get into 250 22 kVA, we've only got one design line now with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 255 1 the rep unit at 500 kVA. So, collectively, 2 those three representative units will give the 3 cost of efficiency data that's ultimately used 4 to scale standards to all the units covered 5 under Equipment Class Group 1. Does that makes

6 sense? 7 MR. CASKEY: Can I ask you, you had 8 a graph up there just a minute ago that 9 actually showed the process that you went 10 through. Right there. Okay. So, I've got a 11 question concerning the fourth bullet, "Use 12 Optimized Program Services software to model 13 optimized design base" -- blah, blah, blah. 14 So, I do have -- I didn't bring all my file 15 with me, but I do have a letter from Phil 16 Hopkinson for the Department of Energy 17 actually identifying what were systematic 18 errors, not just sort of random errors, but 19 seem to be consistent errors in the model 20 itself. And were those sort of errors or 21 discrepancies ever adjusted between when there 22 were some model runs that were done back in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 256 1 the March-April time frame to what was 2 actually just recently released in August? 3 MR. COFFEY: Yes, there were. One 4 of them that comes to mind is correcting the 5 oil volumes in the three-phase liquid immersed 6 units. We're certainly always looking at the 7 data and trying to make sure that it's 8 consistent with reality. 9 And we've also gotten the chance 10 to look, as Mike said earlier, at some 11 manufacturer design data for the cost for the 12 efficiency ranges that were relevant, we found 13 that the OPS data was firmly in the middle of 14 the range. In often cases, it would have been 15 the median, so we took that as at least a 16 first step in validating that OPS results are 17 somewhat grounded in reality. 18 But as we mentioned before, if 19 somebody has market data that suggests that 20 there could be a systematic difference with 21 the way that OPS is modeling, we're always 22 eager to see that.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 257 1 MR. ROSENSTOCK: Can I ask a 2 follow-up question real quick?

3 MR. PARKER: Go ahead. 4 MR. ROSENSTOCK: Steven Rosenstock, 5 EEI. In terms of the optimized program it says

6 several hundred A and B values. Was the 7 program adjusted for the percentage of 8 utilities that do not use A and B values? 9 MR. COFFEY: So, that would come 10 into play in the life cycle cost analysis. All 11 this is doing is -- 12 MR. ROSENSTOCK: Okay. 13 MR. COFFEY: -- attempting to 14 canvas the whole possibility that a utility 15 could purchase that. 16 MR. ROSENSTOCK: Including zero for

17 both values. 18 MR. COFFEY: Including zero, 19 although now the lowest would be at the 20 current standard now, not zero zero. 21 MR. ROSENSTOCK: I meant just in

22 terms of the --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 258 1 MR. COFFEY: Non-evaluator, sure. 2 MR. GREESON: A question. Robert 3 Greeson, Federal Pacific. It's my 4 understanding from the last meeting that those 5 A and B factors that OPS uses are solely 6 parameters they use to essentially manipulate 7 their optimized program to pick higher or 8 lower efficiency levels. And that the A and B 9 factors you're talking about having to do with 10 loss evaluations, are we talking about two 11 different A and B factors here? Because if 12 we're not talking about A and B factors that 13 they used to loss evaluate transformers, I 14 think -- aren't those A and B factors the ones 15 that OPS used to simulate their -- just for 16 their modeling? 17 In other words, they would tell 18 this program, any A and B factor, just to get 19 the efficiencies to do what they wanted them 20 to do. That was my understanding. 21 MR. COFFEY: That's right. So, we

22 --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 259 1 MR. GREESON: Okay.

2 MR. COFFEY: -- create a cloud of 3 points, which is what was posted on the 4 website and which I think many of you have 5 already seen. And those -- each point 6 corresponds to a specific A and B value. 7 Now, the way that it's presented 8 is with efficiency as measured at 50 percent 9 load, so there will be a boundary of the curve 10 with designs that have a 4 to 1, A to B ratio 11 for the liquid immersed and medium voltage 12 dry-type that are at the boundary of the

13 curve. 14 Not all customers have a 4 to 1, A 15 to B ratio; not all utilities see that, so 16 those utilities would come to a manufacturer 17 and say hey, my A to B is 5 to 1 or 3 to 1, 18 and they would end up purchasing a design that 19 doesn't lie on the boundary of the curve as it 20 is presented. Am I answering your question? 21 MR. SAMPAT: I have a question, may

22 I?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 260 1 MR. PARKER: Yes. Go ahead, 2 please. 3 MR. SAMPAT: There is new data now 4 compared to what was released in April. Would 5 you help us understand what changed from April 6 to now as far as engineering data? One thing 7 you mentioned was there was some calculation 8 error. Is that the only thing, or was it 9 something more than just one calculation error 10 that made you release more data? 11 MR. COFFEY: Certainly. So, one 12 thing is that materials prices are always 13 changing, and so every time we go through 14 another round of analysis we try to use the 15 latest material price information that we have 16 available to us. So, that's a big reason for 17 the changes.

18 MR. SAMPAT: Excuse me. The 19 analysis you have released is for 2008 price, 20 2010 price which is history. They don't 21 change -- they didn't change, or did I miss 22 something?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 261 1 MR. COFFEY: No. So, the latest 2 prices that we've used are 2010 prices. So, 3 the way that we'll gather information is by 4 going around and interviewing different 5 manufacturers and asking what they pay for 6 their various materials. We'll then take that 7 and aggregate that, so the most recent prices 8 we could get would be whatever the 9 manufacturers told us. There could be a delay

10 there. 11 Then we have to process those, and 12 then feed them to OPS to generate designs. 13 Then once we get those designs, they have to 14 be passed into the downstream analyses, so 15 there's always a little bit of a lag in 16 between when we're able to gather the material 17 price data and when we publish it online. So, 18 for instance when -- once it turns over to 19 January 2012, we're not going to have 2012 20 prices available right away. 21 MR. SAMPAT: No, I understand that, 22 but I think the April data had same analysis,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 262 1 the price of 2006, 2008, and 2010. New sets 2 of data has same analysis, price of 2006, 3 2008, and 2010. So, the material price should 4 not have been different between April analysis 5 and now, because that's history.

6 MR. COFFEY: The 2008 and 2006 are 7 sensitivity cases that we run -- 8 MR. SAMPAT: Right. 9 MR. COFFEY: -- for high and lows. 10 We used for this run the most recent data 11 that we had available, which was gathered in

12 2010. 13 MR. SAMPAT: Okay. 14 MR. PARKER: Are those the only 15 differences between the April analysis and 16 this, or there are other significant 17 differences?

18 MR. COFFEY: There are some other 19 minor differences. For instance, the way that 20 we modeled the amorphous cores initially 21 assumed that amorphous ribbon was available in 22 infinitely many strip widths. Since it's not,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 263 1 we are constrained to using the widths that 2 are available, and that has the effect of 3 slightly lowering the cost efficiency 4 proposition of amorphous designs. That's 5 another change that was made. But by and 6 large it's pretty similar to what was released 7 in April with new materials prices. 8 There were some additional

9 hardware costs that commentators had noted for 10 large medium voltage dry-type designs that 11 were included, again, a fairly minor tweak. 12 MR. HODGE: Gerry Hodge from Howard 13 Industry. With regard to this oil error that 14 you mentioned with the OPS, how long has that 15 been going on? Was that error in effect when 16 we made the rules back in 2007, or is this 17 just something -- a short-term error?18 MR. COFFEY: No, this is a short19 term thing that we picked up on once we got

20 data from manufacturers that seemed to be 21 systematically different, so we alerted them 22 and they spotted the error and fixed it.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 264 1 MR. HODGE: But when you ran the 2 three-phase, did you just consider them all 3 pad-mounted transformers, or as Wes pointed 4 out, did you look at subways and other styles 5 of transformers? Or did you really just use 6 -- simulate a pole type and consider that as a 7 three-phase pad? What did OPS do? 8 MR. COFFEY: So, I would refer to 9 this diagram again. The only place in which we 10 look at the rectangular and the cylindrical 11 transformers are for the low kVA single-phase 12 units. Outside of that, there's only one 13 representative unit for a given space. So, you 14 can see on the right, this is the three-phase 15 coverage. 16 MR. PARKER: So, would that be a 17 pad-mount? 18 MR. HODGE: So, quite a bit of

19 error? 20 MR. PATTERSON: Design line 3 was a 21 round tank, which means a pole-mount. So, 22 design line 2 and design line 3 were poles,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 265 1 and design line 1 was a pad. And design lines 2 4 and 5 were both pads in the OPS calculation. 3 MR. PARKER: So, is there a 4 problem? 5 MR. HODGE: I'm just concerned 6 about design line 4 and 5 mainly for the most 7 part. That's pad-mounts. 8 MR. PATTERSON: Those are pads 9 being used to represent poles.

10 MR. HODGE: Pardon me? 11 MR. PATTERSON: Being used to 12 represent poles. 13 MR. HODGE: Yes, that's what I'm 14 wondering, what's going on here, and how much 15 inaccuracies do you have? That concerns us. 16 MR. COFFEY: Sure. And I think like 17 we said before, if there's any data that you 18 can submit that characterizes this difference 19 in incremental efficiencies, again, the 20 absolute efficiencies don't have a strong 21 bearing on the final economic results. It's 22 more if the increments are dramatically

### 202-234-4433 Neal R. Gross & Co., Inc. Page 266 1 different, and you have any data that can 2 support that, we would be interested in seeing 3 it. 4 MR. PARKER: Do you have data that 5 distinguishes between the different kinds of 6 pad-mounts within DL 4 and 5? 7 MR. COFFEY: For DL 4 and 5, again, 8 when we choose a representative unit, we try 9 to choose the thing that's most general. And 10 inevitably, that's not going to be a perfect 11 analog for every possible thing that you could 12 build. So, we only have data for the 13 representative units that are pictured on this 14 graph. We don't have pole and pad for every 15 single kVA rating. The only place that we do 16 that is in this low kVA single-phase phase. 17 MR. MILLURE: This is Dave Millure, 18 Metglas. You mentioned you changed the 19 material prices in the latest analysis. Is 20 that what you said? I confess I didn't read or 21 study that entire spreadsheet. Are those 22 materials -- new material prices you used

### 202-234-4433 Neal R. Gross & Co., Inc. Page 267 1 published in that spreadsheet somewhere? 2 MR. PATTERSON: No. No, they 3 weren't published yet. 4 MR. MILLURE: So, can't we see the 5 new material prices assumed? 6 MR. COFFEY: Yes, we can publish

7 those. 8 MR. PARKER: These are new material 9 -- I'm not getting something now. These are 10 new material prices -- these are new quotes of 11 material prices for 2010, or are these just 12 2010 dollars that you're expressing current 13 prices in? 14 MR. PATTERSON: If I might, as a 15 point of clarification. We're talking about 16 cost drivers from optimization program. So, 17 in order to come up with a universe of designs 18 they came up with this spectrum of A/B 19 factors. And they said we will run an 20 optimized lowest cost design, lowest total 21 owning cost for an A/B combination. But behind 22 that is material cost per commodity, so they

### 202-234-4433 Neal R. Gross & Co., Inc. Page 268 1 have so many dollars per pound for copper that 2 they assume. So, when we look at 2006, the 3 dollar per pound of copper was X. We looked 4 at 2008, it was Y. They adjusted them for 5 their best knowledge for 2010 prices, and then 6 re-ran the 40,000 designs. 7 MR. PARKER: Right. 8 MR. PATTERSON: This is what I 9 understood took place. 10 MR. PARKER: But you had already 11 done that in April, as well. Right? 12 MR. COFFEY: That's right. Any 13 time we run an analysis, we use the latest 14 materials prices that we have available to us. 15 MR. PATTERSON: And if I may, in 16 your March publication, the pre-analysis, you 17 had one of these TSDs that had a section in it 18 with the material prices. 19 MR. COFFEY: That's right. 20 MR. PATTERSON: But the August 21 release was just the spreadsheets. It was not 22 a complete set of TSDs.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 269 1 MR. COFFEY: That's right. 2 MR. PATTERSON: So, they have them 3 somewhere. They just didn't send them out. 4 MR. COFFEY: A TSD would normally 5 accompany the publication of a NOPR, so we 6 haven't published a NOPR yet, so we haven't 7 published the TSD yet. Now, a lot of the 8 information that would be contained in a TSD 9 would be important for this committee to come 10 to a conclusion. So, we'll make that 11 available, as needed. 12 I will add, while we always run 13 our analysis using the latest materials prices 14 that we have available, we did through a 15 series of manufacturer interviews, several 16 faces in the room I see that participated, we 17 got some more input on 2011 materials prices. 18 Those weren't available at the time that we 19 ran the analysis that was reflected in the 20 August release of data. Those will be 21 reflected, if any future tables of materials 22 prices that DOE were to release.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 270 1 MR. PARKER: Okay. Yes? 2 MR. SIMMONS: This is Chuck 3 Simmons, Progress Energy. Is it possible that 4 we could ask for the material process 5 associated with each set of design runs so 6 that we, as a committee, could see what the 7 changes are or have been? You know, I'd like 8 to get some type of validation, that at least 9 we know, I mean, are we close, or are we -- 10 MR. COFFEY: That all gets 11 published on the DOE website with each round 12 of analysis, so we can refer you to that. 13 MR. PARKER: Is it there now? 14 MR. PATTERSON: You can see it's 15 2008 numbers, and 2006 numbers from the data - 16 - the TSDs are on the website. It just doesn't 17 have the latest ones on that website.

18 MR. COFFEY: Just 2010. 19 MR. PATTERSON: Updated 2010. 20 MR. MILLURE: The original table 21 541 has 2010 numbers in it. Now, you're 22 saying those numbers have changed, changed in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 271 1 2010. 2 MR. COFFEY: This analysis was 3 based on those 2010 numbers. Since we gathered 4 those 2010 materials prices we've had an 5 opportunity to go around, interview 6 manufacturers, ask what they pay, and develop 7 a new set of 2011 materials prices. However, 8 at the time that the analysis was run those 9 weren't available. 10 MR. MILLURE: You said you used 11 different material prices in the latest 12 analysis, different 2010 numbers. Is that what 13 you -- 14 MR. PARKER: I think we have a 15 general process issue here, which is on what 16 basis of information is this committee going 17 to act, recognizing that new information keeps 18 coming in, and if we keep updating, we could 19 never get closure on anything. So, I guess 20 what we need to decide as a group is look, do 21 we have a stable set of data that we're going 22 to use and say this is what we're going to use

### 202-234-4433 Neal R. Gross & Co., Inc. Page 272 1 to run the analysis on. 2 I think we certainly don't want to 3 be producing a rule that could be undercut by 4 later data that comes in as a result of 5 information that was too recent for us to 6 consider. So, I'm just wondering at what 7 point we say we have a closed set of data and 8 this is what we're going to rely on, or is not 9 advisable to do that? 10 MR. COFFEY: I mean, the materials 11 prices will always be changing as anybody in 12 the industry can tell you.

13 MR. PARKER: Yes. 14 MR. COFFEY: And nobody is able to 15 predict where they're going to go in the

16 future. 17 MR. PARKER: But that's the thing, 18 that's the point. That's the point. The 19 latest data is no better a predictor in the 20 future than it was a year ago. 21 MR. COULTER: This conversation has 22 -- excuse me. This is Greg Coulter with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 273 1 Prolec GE. This conversation has come up, and 2 Brian knows we've had it, is material prices 3 is a moving target. And to be honest, that's 4 one of the biggest scary things all the 5 manufacturers have, anyway. And what we really 6 ask for is sensitivity analysis. 7 MR. PARKER: Right. 8 MR. COULTER: You can't -- it is a 9 moving target, and you've got to do 10 sensitivity around how bad could this be, 11 because we've seen bad over the last time 12 period that Brian is going through, and he -- 13 since he picks times in there, he hasn't seen 14 the worst, and he hasn't seen the best in 15 there, but that range has been big. So, as we 16 do this, whatever numbers you agree on, I 17 don't care if it's 2010, 2011, when you finish 18 that, and as you say, drive your stake in the 19 ground, now you've got to do sensitivity 20 analysis. 21 MR. PARKER: Exactly.

22 MR. COULTER: And we have been

### 202-234-4433 Neal R. Gross & Co., Inc. Page 274 1 working on, because you've got to know what 2 sensitivity analysis to do, what ranges it 3 ought to be. We haven't brought it to Brian. 4 We've suggested that we will, but that's a 5 moving target also. But we think we're getting

6 close. 7 MR. PARKER: Right. 8 MR. COULTER: I think the other 9 manufacturers might have some different 10 numbers. I think it has to be based on 11 sensitivity analysis. 12 MR. PARKER: So, it sounds like 13 that's another issue that we need as a group. 14 Basically, what is the range of material 15 prices that we want to use, both midpoint and 16 sensitivity analysis, what are the boundaries? 17 And I guess what the usual -- 95 percentile, 18 whatever, two standard deviation range, 19 however you want to define it. But we need a 20 reasonable range of price assumptions and then 21 an impact study. And I assume you could do 22 that pretty easily.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 275 1 MR. RIVEST: To that point -- Mike 2 Rivest. You have a sensitivity analysis ready 3 in a couple -- in a week or two? 4 MR. COFFEY: Well, the data package 5 that was released in late August includes 2008 6 and 2006 sensitivity prices. 7 MR. RIVEST: Okay. And to get to 8 the specific question, were there two sets of 9 2010 prices?

10 MR. COFFEY: There was one set that

11 was used to -- 12 MR. RIVEST: Was it updated 2010? 13 MR. COFFEY: That's right. So, not 14 every design -- it takes -- as we update our 15 design lines, they're done serially. They 16 aren't all done in an instant, so during the 17 preliminary analysis, most of those had been 18 run with 2010 materials prices. Others had 19 the 2010 materials prices applied to their 20 designs, which causes the points to shift 21 around. But those points had been optimized 22 to earlier design prices.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 276 1 This most recent data has points 2 optimized to 2010 prices, which were the 3 latest that we had available at the time of 4 optimization. 5 MR. PARKER: Is that -- okay. 6 MR. SAMPAT: Could you please 7 publish -- what do we use for this latest

8 venture. 9 MR. COFFEY: Absolutely. That's 10 something we plan to do. 11 MR. MILLURE: But originally you 12 had this table 541 that has 2010 prices on it. 13 You're saying those numbers have not changed, 14 it's just now all the designs have had those 15 prices applied. 16 MR. COFFEY: That's right. 17 MR. PARKER: And let me just 18 reinforce something that -- and I'm -- and 19 obviously tell me if I'm misspeaking, but 20 something Greg Coulter said, which is what we 21 really care about is not what the prices were 22 in 2011 or 2010, or whatever, but what they're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 277 1 going to be going into the future. It's a 2 predictive exercise that we're engaged in 3 here. And 2011 prices, a no better validator 4 of that than 2009 prices or 2010 prices, 5 prices go all over. Right? 6 There are periods that may have 7 been atypical. Right? But the question is, 8 what is the best predictor? And it sounds like 9 the idea that you would come up with sort of a 10 central point and have a sensitivity analysis 11 around it, that can be done on the basis of a 12 policy decision by this group looking at the 13 data, looking at the historic data. And it14 doesn't change --that doesn't change week-to15 week depending upon what the latest set of 16 interviews produces. Right? Yes? 17 MR. PATTERSON: Richard, you might 18 be missing a point in the design. When you fix 19 the set of materials costs, specifically 20 mainly the core steel cost relative to 21 conductor and installation cost, those three 22 as a block. And let's say there's a fixed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 278 1 ratio of X, and then for a given design I run 2 an optimized design, so my design when it's 3 done weighs 10 pounds. 4 Now, I change the ratio of one 5 material relative to another, steel relative 6 to copper. Now, my transformer weight will 7 change 20 percent for that optimized design. 8 The entire unit is a fundamentally different 9 unit. 10 Now, in this business we build a 11 customized optimized design for every order 12 that comes in the door. Right? Because it's 13 very material-intensive. Right? So, we 14 completely redesign the whole animal every 15 time the material prices change relative to 16 each other, which is -- it's not just looking 17 at the change of materials, because those 18 change of materials change the act of amount 19 of material in the unit, which changes the 20 efficiency of the unit. 21 MR. PARKER: So, it's kind of a --

22 MR. PATTERSON: That's the nature

### 202-234-4433 Neal R. Gross & Co., Inc. Page 279 1 of the business we're in. 2 MR. PARKER: Kind of a chaotic 3 thing, small changes produce big 4 perturbations. 5 MR. PATTERSON: So, the sensitivity 6 analysis is very complex. 7 MR. PARKER: Right. 8 MR. ROSENSTOCK: Steve Rosenstock, 9 EEI. And again, the baseline in the 10 projections will have a big impact not only on 11 -- materials, transformer price, and then some 12 of the projections. And that's later on in 13 the discussion, obviously, but again, it's not 14 easy because we've seen what's happened with 15 the material prices over the last several 16 years. And it has gone up faster than 17 inflation, and it's a matter of what is your 18 baseline, and what is your projection. That 19 will have a huge impact on a lot of the -- 20 MR. PARKER: So, they could end up 21 with a big boundary, big range. 22 One quick question I want to --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 280 1 go ahead. 2 MR. COULTER: Okay. This is Greg 3 Coulter, again, Prolec. I don't want to point 4 fingers at anybody at the table, but I will. 5 (Laughter.) 6 MR. COULTER: If you just take a 7 quick look at the study, they show that 8 depending on what efficiency level you choose, 9 the usage of amorphous metal, people at the 10 table, that's why I don't want to point to 11 anybody here, could go from levels like 12 20,000, 30,000, 40,000 tons a year to 140, to 13 150,000 tons a year. For anybody to suggest 14 there's going to be no change in price is 15 crazy. And it isn't -- that isn't just 10 16 percent, 15 percent, 20 percent change we've 17 seen over the last couple of years. We're 18 talking big numbers. 19 Now we'll point a finger at a 20 different -- so you don't feel bad. If high B 21 steel has to go from the 30-40,000 tons a year 22 to 170,000 tons a year, they can't make it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 281 1 now. It isn't going to do it for a 10 percent 2 increase in price. At least he'll shake his

3 head. 4 That's why I'm saying the 5 sensitivity analysis is much bigger than 6 looking at `04 data, `06 data, `08 data, `10

7 data. 8 MR. PARKER: Right. 9 MR. COULTER: At least, let's say 10 that's our concern. These cost analyses are 11 way off when you look at this extreme shift in 12 technology we're talking about over these 13 efficiency levels. And I think that's what we 14 have to take into account as we look at the 15 effect of all the efficiency -- 16 MR. MILLURE: Dave Millure, 17 Metglas. So you're assuming a capacity 18 increase goes hand-in-hand every time with a 19 price increase? 20 MR. COULTER: I'm saying you all 21 are business people, we're business people, 22 you get more price where you can, and if

### 202-234-4433 Neal R. Gross & Co., Inc. Page 282 1 you've got to put on all kinds of capacity, 2 and you know you're the only game in town, 3 yes, I think price is going to go up. That's 4 my opinion. I could be wrong on that, market 5 economics don't work that way. 6 MR. PARKER: Well, that's another 7 issue that's been identified before, that's 8 been spoken of before, what is the impact of 9 any shift towards amorphous on the likely 10 price of the -- 11 MR. COULTER: It might go down. I 12 mean, we ought to look at that, too. I'm not 13 saying only look at it in one direction, but I 14 think you've got to look at it and make 15 reasonable assumptions. 16 MR. PARKER: Right. Totally -- 17 MR. COULTER: Does that help, Dave? 18 MR. MILLURE: Thanks for that, 19 Greg. 20 (Laughter.) 21 MR. SCHOEN: Jerry Schoen, AK 22 Steel. The other issue that you have, when

### 202-234-4433 Neal R. Gross & Co., Inc. Page 283 1 you talk about the overall supply of the 2 market, there's one real Metglas manufacturer, 3 amorphous metal manufacturer in the world of 4 any commercial consequence and that is Hitachi 5 Metglas. But then when you go to the 6 electrical steel companies, and there are 14 7 companies out there making grain-oriented 8 electrical steels, transformer steels. But the 9 standards in the U.S. are already so presently 10 high that many of them really can't sell their 11 product here, because to design a transformer 12 using an M-4 or an M-5 today, you have to 13 surrender a tremendous amount of price. You 14 basically give the losses of the customer at a 15 low price so they can design with it. So, 16 what happens is you make the standards tighter 17 and tighter, you're going to end up with fewer 18 and fewer suppliers, as well. 19 MR. PARKER: Right. So, another 20 issue is the impact of any efficiency standard 21 on manufacturing competitiveness and jobs, and 22 so forth for the steel makers. Absolutely.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 284 1 That's going to be an issue we have to deal 2 with. 3 Brian, do you want to continue?

4 How much -- 5 MR. COFFEY: Sure, let's press 6 onwards. So, here's a table that shows 7 additional descriptive information about the 8 representative units selected. We're looking 9 at the first three design lines. The column 10 all the way on the right indicates the 11 characteristics of the representative unit DOE 12 selected for its analysis. 13 The bottom row shows that for its 14 analysis of single-phase liquid immersed 15 distribution transformers between 250 and 833 16 kVA, DOE analyzed a 500 kVA unit with a 65 17 degree rise operating at 60 hertz, 14/400 18 primary, 277 secondary. I think it's pretty 19 self-explanatory. 20 DOE does understand that higher 21 BIL ratings accompany higher primary voltages. 22 And it's conducting several sensitivity

### 202-234-4433 Neal R. Gross & Co., Inc. Page 285 1 analyses to explore the effects of BIL on 2 efficiency. 3 MR. PATTERSON: If I may, on the 4 OPS designs, you did select different BILs for 5 those units. 6 MR. COFFEY: That's right.

7 MR. PATTERSON: OPS software has 8 different BILs. 9 MR. COFFEY: That's right. So, 10 what I was saying is that we've run some 11 sensitivities exploring the effect of higher 12 BILs for the units that you see, and we'll be 13 making that data available in the near future. 14 After identifying the 15 representative units, DOE selects design 16 options to characterize the range of 17 efficiencies possible for each of these 18 representative units. DOE selected these 19 design options from the list of potential 20 technology options that weren't screened out 21 of the analysis. 22 When selecting design options, DOE

### 202-234-4433 Neal R. Gross & Co., Inc. Page 286 1 tried to capture the most common designs in 2 the industry, and also the maximum efficiency 3 for each rep unit. So, this includes core 4 configuration, steels, and different winding 5 materials. 6 The table here presents the 7 various designs that were considered in the 8 analysis for each of these options. As you 9 can see, DOE considered a very large variety 10 of design options, including wound and stacked 11 cores with and without mitering, various core 12 steels from M-12 all the way up to amorphous 13 and both aluminum and copper windings. 14 As a note, in this rulemaking 15 presently, DOE is considering amorphous cores 16 for all of its designs; whereas, in the 17 previous rulemaking, DOE considered amorphous 18 for use only in liquid immersed. 19 This slide presents an example of 20 different design option combinations selected 21 for a representative unit. This is design line 22 7, which is a three-phase 75 kVA low voltage

### 202-234-4433 Neal R. Gross & Co., Inc. Page 287 1 dry-type. 2 In general, these options are 3 presented in ascending order of efficiency 4 started with M-12 stacked butt lap cores with 5 aluminum windings all the way up to an 6 amorphous wound core with copper windings as 7 the maximum of efficiency level, and then 12 8 other steps in between. 9 In the next step of the 10 engineering analysis, DOE develops cost 11 inputs. A list of materials prices was 12 determined for a five-year time frame, and the 13 total labor hours required to build each 14 design were determined through conversations 15 with manufacturers and industry experts. 16 DOE considers the 2010 materials 17 prices, as we've discussed, as the reference 18 case, but also looked at high and low material 19 price sensitivities in the 2008 and 2006 data, 20 respectively. 21 Following that, DOE calculated 22 markups to use in its analysis to account for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 288 1 items such as scrap and handling, factory 2 overhead, and non-production costs, a fully

3 burdened labor rate was also calculated to 4 determine the total labor cost. Was there a 5 question? 6 MR. ROSENSTOCK: A quick question. 7 Steve Rosenstock. What was the shipping rate 8 you used for the April analysis? I'm just 9 looking, I'm trying to find the -- has it 10 changed? 11 MR. COFFEY: This would be 28 cents 12 a pound. 13 MR. ROSENSTOCK: Right. I'm trying

14 to see --

15 MR. COFFEY: Would be the most

16 recent data.

17 MR. ROSENSTOCK: Because there were 18 some comments in April about that --okay.

19 MR. COFFEY: I don't remember the 20 old number off the top of my head. 21 MR. ROSENSTOCK: Okay, it's 22

22 cents.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 289 1 MR. COFFEY: It was lower, though. 2 MR. ROSENSTOCK: Okay, very good. 3 And that's based on current diesel prices?

4 MR. COFFEY: That's the most recent 5 that we have available, so if that's low or 6 high, that's feedback that we could take. 7 MR. ROSENSTOCK: Thank you. 8 MR. COFFEY: For factory overhead, 9 DOE applies a 12.5 percent markup to all 10 designs, including amorphous designs using 11 prefabricated cores, which we know some 12 manufacturers purchase. 13 Additionally, DOE accounts for the 14 shipping costs in the manufacturer's cost 15 calculation because DOE understands that these 16 costs are typically borne by the manufacturer, 17 and included in their profit markup 18 calculations. Again, this treatment of 19 shipping costs is different from the previous 20 rulemaking, where shipping costs were 21 effectively tacked on at the end. 22 The remaining markups are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 290 1 explained in this table, and in further detail 2 in Chapter 5 of the TSD, the most recent 3 published version, which would be for the 4 preliminary analysis and available on the DOE 5 website. 6 Here is the labor hours for large 7 dry-type designs using amorphous cores. This 8 is a special case. Manufacturers and industry 9 experts informed DOE that large dry-type 10 designs would require special handling 11 considerations for amorphous cores because the 12 material is thin and could become difficult to 13 work with in such a large core. As a result, 14 DOE increased the labor requirements for each 15 of these amorphous designs by 10 hours over 16 other design options for these rep units. 17 Similarly, DOE heard that large 18 dry-type amorphous designs would require 19 additional bracing to contain the coil and 20 prevent in the case of a short circuit. So, 21 industry experts estimated this incremental 22 cost to be 7 percent of the core and coil

### 202-234-4433 Neal R. Gross & Co., Inc. Page 291 1 weight, which equals -- I'm sorry, the weight 2 to be 7 percent of the core and coil weight, 3 which equates to about 230 to 330 in materials 4 per design. So, I think that wraps that. 5 The next step in the engineering 6 analysis is to model optimized designs for 7 each of the design option combinations 8 previously identified. As I mentioned, DOE 9 contracted with Optimized Program Services to 10 model these designs. 11 For each design option 12 combination, OPS creates designs based on over 13 500 combinations of A and B values, which 14 represent the present value of future core and 15 windings losses respectively. These valuation 16 inputs are oftentimes used by customers in the 17 industry when placing an order, and are 18 described in greater detail in the TSD. 19 After running all of the A and B 20 combinations for each design option, and 21 removing any designs below the current minimum 22 efficiency level, DOE was left with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 292 1 approximately 2,500 unique designs for each of 2 the 14 representative units, not including 3 additional sensitivity cases. 4 For each of these designs, DOE 5 receives data on the construction, windings, 6 electrical analysis, and the bill of 7 materials. Using the bill of materials and the 8 materials prices, the latest that it has 9 available, DOE is able to estimate the 10 materials cost of the design. DOE then applies 11 other cost factors and markups to determine 12 the total manufacturer's selling price. 13 A temperature corrected efficiency 14 is also determined from OPS's electrical 15 analysis report. So, DOE uses the selling 16 prices and efficiencies for each design as the 17 output of the engineering analysis, and those 18 service inputs into the downstream analyses, 19 like the LCC and NIA. So, a complete listing 20 of all the engineering outputs, including MSP 21 and efficiency would be available in that 22 August package that was published on the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 293 1 website. 2 Symmetric core designs, these have 3 come up in different ways over the months that 4 this rulemaking has gone on. DOE was unable 5 to identify a commercial company that could 6 model them in the same way that OPS could 7 model conventional designs. DOE has received 8 very limited design data on symmetric core 9 designs. And I can -- in case anybody is 10 unfamiliar, I can explain a little bit about 11 what those are. So, that analysis would also 12 come in the form of a sensitivity, but doesn't 13 show up in the mainstream cost efficiency 14 calculations. 15 MR. COULTER: Brian?

16 MR. COFFEY: Yes? 17 MR. COULTER: This is Greg Coulter. 18 I have a question. Does that mean you've 19 eliminated -- can we say the symmetric core 20 designs are now out of the equation, and we 21 don't have to study those anymore? Can we 22 just get one right out of the table and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 294 1 eliminate something here as we go along? 2 (Laughter.) 3 MR. COULTER: Just take them right

4 out. 5 MR. COFFEY: I think that the way 6 DOE works, it considers everything to be on 7 the table, and it starts with the maximum 8 technologically feasible, and then works its 9 way down in efficiency. 10 MR. COULTER: As we sit here as a 11 committee, can we take those off the table? 12 Could we just -- 13 MR. PARKER: Well, I think in the 14 absence of data, the burden would be upon 15 those producing symmetric core designs to come 16 forward with data that would enable us to deal 17 intelligently. But we haven't -- 18 MR. PATTERSON: I have a question. 19 Why don't you ask what manufacturers are 20 actually producing them commercially in the 21 United States?

22 MR. PARKER: What manufacturers

### 202-234-4433 Neal R. Gross & Co., Inc. Page 295 1 actually producing them commercially in the 2 United States? Does that help? 3 MR. PATTERSON: Do you see any

4 hands?

5 MR. PARKER: None?

6 MR. PATTERSON: It's not -- 7 MR. COULTER: Could anybody name 8 one, even if they're not in the room? 9 MR. PATTERSON: Actually, ABB does 10 ship those things outside the United States.

11 MR. PARKER: You sell them. I see. 12 (Laughter.) 13 MR. PARKER: A carefully crafted 14 question. I better watch out for you next 15 time. 16 (Laughter.) 17 MR. PARKER: It would be great to 18 have some data on your European sales. 19 MR. COFFEY: So, as I mentioned, I

20 do have clearance to -- from the owner of the 21 data to release what is the very small amount 22 that we've gotten. We'll make that available.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 296 1 Based on the way that it looks so far, it 2 doesn't appear to change the cost efficiency 3 proposition of the design line. 4 MR. FLATENFLATEN: This is Dave 5 FlatenFLATEN at Xcel Energy. Did the A and B 6 factors drive the 50 percent loading? 7 MR. COFFEY: Say that one more 8 time, please? 9 MR. FLATENFLATEN: Do you have a 10 ratio of A to B factors, did that drive your 11 consideration of the loading of 50 percent? 12 MR. COFFEY: The loading of 50 13 percent comes from the current test procedure. 14 MR. FLATENFLATEN: Not driven by

15 the A and B factors then.

16 MR. COFFEY: Some of the A and B 17 factors would correspond to a 50 percent 18 loading, others would not. 19 MR. FLATENFLATEN: Okay, so the 4 20 to 1 ratio didn't -- was not pushing the 50 21 percent loading.

22 MR. COFFEY: No.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 297 1 MR. FLATENFLATEN: Okay, thank you. 2 MR. PARKER: Any other questions -- 3 by the way, thank you for that question. Any 4 other questions from people on the phone and 5 the webinar attendees? I want to give you a 6 chance to speak and ask questions if you'd 7 like. 8 (No response.) 9 MR. PARKER: Okay. I'll take 10 silence as a no. Brian. 11 MR. COFFEY: Okay. Once DOE 12 generates all its designs in the engineering 13 analysis it selects several efficiency levels, 14 or ELs as benchmarks. And I think everyone has 15 probably seen, I wrote a short letter 16 attempting to clarify some of the terminology 17 ambiguity. 18 Basically, ELs are the NOPR 19 version of CSLs. They do the same thing. 20 They're different points within -- different 21 efficiency levels within a design line. In 22 the NOPR, they get packaged together in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 298 1 different TSLs, and those serve as the basis 2 for a standards discussion. But, 3 functionally, they do the same thing. 4 MR. ROSENSTOCK: A quick question 5 on your bullet points. I know that they did 6 the harmonization for the final rule, and I'm 7 fine with that. But for the second one, 8 equally spaced efficiency increments -- are 9 you saying in the same design line, or across 10 design lines? And why is that so important to

11 DOE? 12 MR. COFFEY: So, that's within a 13 design line, and that's not a philosophical 14 action, that's just a convenient way to start. 15 And they also get nudged left or right to 16 align with significant boundaries in 17 efficiencies that certain materials can hit

18 and whatnot. 19 MR. ROSENSTOCK: So, again, Steve 20 Rosenstock. Equally spaced between the 21 baseline and the max tech as identified, and 22 then you do an equal space increment?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 299 1 MR. COFFEY: That's right. It's 2 within a design line equally spaced in 3 efficiency. 4 MR. ROSENSTOCK: Regardless of what

5 the CSLs were. 6 MR. COFFEY: Well, these are -- 7 again, these are how the CSLs are formulated. 8 So, it's -- how the ELs are formulated are 9 the same as the CSLs, and the beginning of 10 that process is to look at the range of 11 possible efficiencies, and space several of 12 them out equally, and then say how do they 13 look? And then move them, if needed, to align 14 with significant points in the efficiency 15 space. 16 MR. PARKER: Being different design 17 parameters, different materials. 18 MR. COFFEY: That's right. So, for 19 instance, one that we might want to have a CSL 20 for is sort of the highest efficiency that 21 could be achieved with conventional steels. 22 So, if there's -- if the equal spacing gives

### 202-234-4433 Neal R. Gross & Co., Inc. Page 300 1 rise to one that's just above that, we might 2 nudge it down a little bit so that it's in the 3 point cloud that is reached with conventional

4 steels. 5 MR. PARKER: Because that will 6 dovetail nicer with the TSL that you do later, 7 which is trying to -- where you try to match 8 it to the various criteria. Right? 9 MR. COFFEY: That's right. 10 MR. PARKER: This is trying to sort 11 of mesh the CSLs with the criteria, of course, 12 that you take to the TSL. 13 MR. PATTERSON: If I may, this is 14 one point where I really got confused when I 15 started to study the data after the August 16 release. There are -- today as we sit here and 17 speak, in March there's a set of what was 18 called CSLs. In the spreadsheets that came out 19 in August, very often the far right-hand side, 20 there's a different set of CSLs. And then in, 21 I think it's in the life cycle analysis, 22 there's a third set of CSLs. So, as far as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 301 1 looking at trying to say CSL 1, it's totally 2 meaningless to me, because there's three CSL 3 1s. Pick which one you want to talk about. 4 MR. COFFEY: So, that was what I 5 was attempting to resolve with the clarifying 6 statement and reposting of the data with the 7 new terminology. 8 What happens is in the preliminary 9 analysis, DOE develops CSLs. It then updates 10 them for the NOPR, and picks a new name for 11 them, ELs, or efficiency levels. They do the 12 exact same thing, but it's just a difference 13 in terminology. 14 What you were seeing before was 15 CSLs that had been updated using new data, but 16 since we hadn't reached a NOPR yet, they 17 hadn't officially been relabeled ELs. 18 MR. PATTERSON: But I caution, 19 because when we discuss the data that's in the 20 spreadsheet and we're going to refer to 21 efficiency levels, what efficiency level are 22 we talking about in the spreadsheets, the ones

### 202-234-4433 Neal R. Gross & Co., Inc. Page 302 1 that are written in the upper right-hand 2 corner, or the ones in the life cycle analysis 3 report, or the ones in the TSD that came out 4 in the pre-analysis? Which one are we talking

5 about?

6 MR. COFFEY: The one -- 7 MR. PATTERSON: I would like to see 8 here a ground rule somewhere that says here is 9 the numbers that we're going to discuss. 10 MR. PARKER: Okay, fair point. 11 Steve, do you want to comment? 12 MR. ROSENSTOCK: I think it would 13 be helpful to get, but I'd also like to add as 14 part of the -- one of the thoughts is, what if 15 we want to look at a different number, are we

16 allowed to do that? We should be allowed to - 17 - you know, right now for design line 1, the 18 base case is 99.08, and on the LCC report 19 efficiency level 1, I don't know what the new 20 term is, 99.16, suppose you want to look at

21 99.12? 22 MR. PATTERSON: This is what I'm

### 202-234-4433 Neal R. Gross & Co., Inc. Page 303 1 saying, we should have one set to talk about. 2 MR. ROSENSTOCK: But the thing is, 3 what if someone -- because that way, suppose 4 we say well, 99.12 has terrific payback 5 numbers or whatever, there could be other

6 numbers that have -- are we excluded from 7 looking at those numbers? 8 MR. PARKER: How difficult is it 9 for you to input different numbers and come up 10 with -- 11 MR. COFFEY: So, those ELs are just 12 numbers that are normally chosen to simplify 13 the analysis so that you're not arguing over 14 .001 in efficiency. I suppose it's within the 15 committee's jurisdiction to look at other 16 efficiency levels within a design line if it

17 chose to do that. 18 MR. PARKER: I mean, could you do 19 that easily? How long would it take to -- 20 MR. COFFEY: Assuming everything 21 went well on the first try. 22 (Laughter.)

### 202-234-4433 Neal R. Gross & Co., Inc. Page 304 1 MR. COFFEY: I think that's within 2 the realm of possibility. But, again, I think 3 that what's the compelling reason for doing 4 that? Right? You'd have to ask yourself. If 5 there is one, I think we'd be able to do that. 6 MR. PARKER: Absolutely. 7 MR. COFFEY: Maybe Katie has 8 something to add, also. 9 MR. PARKER: Katie, do you want to

10 comment? 11 MS. COUGHLIN: Yes, this is Katie 12 Coughlin of LBNL. I just wanted to mention 13 that this is actually part of the LCC. The 14 importance of the efficiency levels really 15 comes out in the LCC. And I will be 16 discussing it, so we might want to defer some 17 of these questions until I present those 18 slides. 19 MR. PARKER: Thank you. It looks 20 like that will be tomorrow morning. Carlos? 21 MR. GAYTAN: Carlos Gaytan, Prolec 22 GE. You were asking about the reasons for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 305 1 reconsidering the ELs. On the CSL levels in 2 the document in April, we saw that there was a 3 consistency between the different design lines 4 in the relative cost of the designs for the 5 different combinations of core and conductor 6 materials. 7 However, on these new ELs, we are 8 observing that the -- some of the efficiency 9 increments are no longer even the space, so we

10 cannot correlate one of the new ELs to the 11 previous CSL level easily. So, we can no 12 longer -- we need to repeat a large number of 13 design exercise in our case not to be able to 14 derive new considerations for the behavior 15 between the different combinations of core and 16 conductor materials. 17 For example, in this case speaking 18 about liquid filled for the design line items 19 3 and 5, the efficiency levels did not change 20 significantly, but level 1, that was slightly 21 decreased. But the other three design lines, 22 1, 2 and 4 were more effective, especially on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 306 1 the initial levels 1 and 2. 2 MR. PARKER: So, there are some 3 areas where you -- are you saying that you 4 would want to have a different efficiency 5 level specified? You would want to 6 interpolate for some design lines, you might 7 want to do some efficiency level between two 8 existing ELs, and look at that. Is that the 9 point? 10 MR. GAYTAN: Well, we -- since the 11 data was recently published, we have not had 12 the time to recalculate the comparison for the 13 different design line items. So, I was 14 speaking to the benefit of staying with a 15 certain relationship between the efficiency

16 levels. 17 As I said, in the original CSLs in 18 the April document were in most cases evenly 19 spaced with increments of 10 percent, roughly 20 10 percent from one to another, 10 percent 21 lower losses we were decreasing on each of the 22 levels. Now in some of the cases, the levels

### 202-234-4433 Neal R. Gross & Co., Inc. Page 307 1 1 and 2 especially, where those were reduced 2 in some of the single-phase design lines. 3 MR. PARKER: Perhaps Katie's point 4 was that some of the CSLs were altered, the 5 ELs were changed because you were trying to 6 C based upon the LCC analysis and the design 7 analysis, you were trying to get the 8 categories to match up. Is that right? You're 9 trying to choose a CSL because it would be 10 significant from the standpoint of design? 11 MS. COUGHLIN: Not really, no. I 12 think in the choice of CSLs the major issue is 13 whether or not they make sense from an 14 engineering perspective. So, theoretically, 15 you can draw a line at any efficiency you want 16 and call it an efficiency level. But whether 17 or not as a standard that would represent a 18 logical way to do -- to distinguish different 19 engineering designs, that's the question. 20 MR. PARKER: That's the point, 21 yes. 22 MS. COUGHLIN: So, I believe if

### 202-234-4433 Neal R. Gross & Co., Inc. Page 308 1 there were adjustments to the efficiency 2 levels it would be to reflect that. But the 3 other thing that will affect the way those -- 4 you get these plots of cost versus efficiency

5 out of the OPS software. And that cloud of 6 points may change shapes slightly because of 7 the updates in materials prices. And that 8 may, in turn, create a slightly different -- 9 if you're looking for, say, a change in slope 10 of the minimum cost curve, that may move to a 11 slightly different place because of the change 12 in the shape of that cloud of points. 13 So, I think nothing in terms of 14 the principles has really altered, but some of 15 the details of the data may have shifted 16 around a bit between April and August. 17 MR. PARKER: Any other comments? 18 So, I take it that -- basically, what I'm 19 hearing is that we need to early on table as 20 an issue what are the CSLs we're evaluating. 21 Do people feel comfortable using the latest 22 version, or have they done already a bunch of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 309 1 analysis that would suggest trying to go with 2 the -- trying to stick with the April 3 subdivisions? But mainly to decide, these are 4 the CSLs that we're looking at. Katie, I'm 5 sorry, did I get it wrong? 6 MS. COUGHLIN: Just one more point.

7 MR. PARKER: Yes.

8 MS. COUGHLIN: From our 9 perspective, we can regenerate new LCC results 10 moving efficiency levels around without a lot 11 of trouble. But the question is what are you 12 going to do with them? So, every time we do 13 that you have 13 design lines, and you start 14 distributions of LCC results for each 15 efficiency level for each design line, you're 16 looking at on the order of 100 sets of results 17 for every configuration. 18 So, if the committee can come up 19 with a preferred format for summarizing those 20 results, we can go and do these alterations to 21 the runs, because it's -- you know, it takes 22 some effort but it's not that difficult to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 310 1 just move the efficiency levels around. 2 MR. PARKER: Okay.3 MS. COUGHLIN: But it's post4 processing that really requires a little bit 5 of thought. 6 MR. PARKER: Gotcha. Okay. Steve?

7 MR. ROSENSTOCK: Steve Rosenstock. 8 We're looking at five design lines, we're 9 only looking at the liquid filled design lines 10 for this one. 11 Secondly, and again this is one of 12 the clarifying questions is, in terms of some 13 of the analysis and kind of getting back to 14 kind of the earlier ones, we were wondering 15 when the analysis of the current standards is 16 going to be completed? That is one of DOE 17 options. We were wondering about the DOE 18 analysis of the current options and keeping 19 the current standards. Because that is one of 20 your options, and I've not seen any analysis 21 whatsoever in terms of at least looking at 22 that option. And we're wondering if that's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 311 1 going to be able to be completed during our 2 time frame. 3 MR. PARKER: That's just the base

4 case. 5 MS. COUGHLIN: Yes, that's the 6 baseline. So, the baseline analysis is what 7 would happen if we kept the current standard. 8 MR. PARKER: That's one column in

9 all the tables.

10 MS. COUGHLIN: Yes. 11 MR. ROSENSTOCK: Okay. But it's a 12 column, but there's also other issues in terms 13 of -- there are other possible analytics in 14 terms of keeping a standard versus going 15 ahead. All the analysis as if we're going 16 ahead, for this committee it might help for an 17 analysis of allowing stakeholders to provide 18 input about, okay, what if we kept the 19 baseline values? All of this is just here's 20 what happens if we go ahead. What happens if 21 we stay here? And there's other just overall 22 market and economic issues that are not being

### 202-234-4433 Neal R. Gross & Co., Inc. Page 312 1 addressed. 2 MR. COHEN: Dan Cohen, DOE. So, 3 Steve, what you're getting at is the walkdown 4 issue that John was mentioning earlier. 5 Because of the way the statute is set up that 6 we're supposed to maximize energy efficiency 7 as technologically feasible and economically 8 justified, we start off at the highest 9 efficiency level and apply those various 10 factors that are set out in the statute that 11 John had up on the screen earlier to determine 12 whether or not one level -- the highest level 13 is justified. 14 If the answer to that is no, it's 15 not justified, we then go down to the next 16 level of efficiency, run the same test. 17 Again, if the answer is no, we go down a 18 level. So, the way we would make the 19 determination that no standard change was 20 necessary was to go through all those various 21 more efficient levels first, and not reach a 22 determination of economic justification for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 313 1 those more efficient levels. Does that make

2 sense?

3 MR. ROSENSTOCK: That makes sense. 4 But, again, there is the theory that why not 5 go the other way?

6 MR. COHEN: Because the law 7 requires that -- 8 (Laughter.) 9 MR. PARKER: Okay. Very quickly, we 10 have to wrap up very soon. Brian, you had one 11 more slide. Right? The scaling issue. 12 MR. COFFEY: I can speed through 13 this. 14 MR. PARKER: Okay.

15 MR. COFFEY: Here's the -- here's a 16 point cloud. These boxes actually still say 17 CSL, but now they're ELs as the data was 18 recently released. Developing trial standards 19 for the NOPR level. If DOE does issue a NOPR, 20 it will select TSLs based on groupings of ELs. 21 I said all this. And there's different 22 concepts, like per-phase harmonization that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 314 1 need to be considered, minimum LCC could be a 2 TSL that gets floated as a possibility, 3 maximum net present value. 4 Ordinarily, a TSL would have some 5 sort of semantic significance to it; whereas, 6 ELs may not. ELs may just be we think that 7 1,000 of them are too many to cover an 8 efficiency space, and two aren't enough. We 9 chose seven, we spaced them out. TSLs usually 10 say okay, this is the package of ELs that 11 corresponds to the maximum net present value. 12 This is the max LCC. This is the minimum LCC 13 that's above zero. Things like that that have 14 some semantic significance. 15 MR. PARKER: Dan, do we have a 16 legal constraint on TSLs? Are there criteria 17 that are in the statute or OMB guidelines, 18 that indicate that we have to follow some 19 criteria or another?

20 MR. COHEN: No. 21 MR. COFFEY: So, then DOE proposes 22 one of the TSLs from its list of possibilities

### 202-234-4433 Neal R. Gross & Co., Inc. Page 315 1 in a NOPR, which is what this committee is 2 going to do.3 Medium voltage dry-type single4 phase. This is a special case. I know some5 in the room feel strongly about it. Single6 phase medium voltage dry-type have very low 7 shipment volumes, and MVA capacity shipped, so 8 instead of directly analyzing these, DOE has9 always just scaled the units from their three10 phase equivalents to create virtual rep units. 11 It's the same thing as scaling across kVA 12 values except we're scaling across phases. So, 13 just so everybody is aware of that. I suspect 14 many are. 15 We are running a sensitivity to 16 see what happens if you look at that directly, 17 but that's not available right now. 18 The final slide that I have is -- 19 concerns the scaling results. Aside from 20 scaling to the single-phase medium voltage 21 dry-type, DOE also scales to each kVA rating 22 that was not directly analyzed.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 316 1 To do this, DOE relies on the .75 2 scaling rule, which states that "the total 3 transformer losses scaled by the ratio of the 4 kVA sizes that you're scaling raised to the 5 .75 power when design characteristics, such as 6 frequency and BIL ratings are kept constant." 7 So, by holding those parameters constant, DOE 8 can use this rule to scale losses, dimensions, 9 and costs from its analyzed rep units to the 10 unanalyzed kVA ratings. 11 So, we give an example here, for 12 design line 7, it's a three-phrase low voltage 13 dry-type that generates standards for kVA 14 ranges from 15 to 150. DOE analyzed the 75 kVA 15 unit as representative, and then the 16 corresponding efficiencies for all the rest of 17 those ratings are scaled in directly from that 18 75 kVA analysis. 19 This is similar to what's done in 20 the DOE's 2007 rulemaking, and further detail 21 on that actually can be found in a TSD 22 appendix.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 317 1 MR. ROSENSTOCK: Steve Rosenstock. 2 This issue came up -- again, we're coming 3 back to it, but this issue did come up at the 4 April hearing, and as I recall, I wrote some 5 notes saying that it was okay for the first 6 standard deviation. For example, 45 and 112, 7 after that it didn't work so well. I'm pretty 8 sure -- I believe that DOE received 9 information in that regard, and I was 10 wondering if you -- I'm pretty sure you did, 11 that you received the information about it, 12 and if you've made any adjustments? 13 MR. COFFEY: We did. We split the 14 former design line 13. There used to be 13 15 design lines, there are now 14. There's 13A16 and 13B. Those are both medium voltage dry17 type units, and one is a low kVA design that 18 is a low market volume, but --

19 MR. ROSENSTOCK: And how about on 20 the liquid filled side, did you get any 21 information about the liquid filled side in 22 terms of this?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 318 1 MR. COFFEY: So, DOE hasn't added 2 any representative units in the liquid side, 3 so scaling would be the same for those. 4 MR. PARKER: Katie?

5 MS. COUGHLIN: We have made some 6 adjustments, and I'll go over that tomorrow. 7 But we have not added design lines to the 8 liquid immersed. 9 MR. PARKER: Okay. Is that --

10 MR. COFFEY: That's all I had. 11 MR. PARKER: Great. We are going 12 to have to wrap up because the police are 13 coming. But let me just briefly -- before you 14 pack up, let me just briefly review for you 15 what I came away with as the issues that we 16 spotted in this session, and we'll continue I 17 think with Katie's analysis tomorrow morning 18 looking at her issues. But what I came away 19 with, and tell me if I've missed anything or 20 gotten it wrong, was the -- first, the issue 21 of scaling across kVA. Steve's issue, BIL 22 scaling, materials prices. Do we have a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 319 1 satisfactory range of materials prices? Again, 2 we don't have to have the latest prices, but 3 is the central estimate reasonable, is the 4 range reasonable? 5 CSLs, do we have a choice of CSLs? 6 If you have a view that there should be 7 different CSLs, I think now or very soon is 8 the time to raise that, probably between now 9 and the next meeting send us an email 10 documenting why you think there ought to be a 11 change. I understand it is possible that it 12 creates complexity, so I would propose that 13 there be a presumption in favor of keeping the 14 current CSLs that are in the latest analysis. 15 But if people feel there's reasons not to, 16 let's air those. 17 There's a question that I think is 18 implicit in everything that's been said, which 19 is just how to handle in terms of our 20 operations the huge diversity of designs and 21 design lines that we have, both finding 22 representative units within it, and also just

### 202-234-4433 Neal R. Gross & Co., Inc. Page 320 1 how do we want to organize ourselves to do 2 this? Do we want to plow through this one 3 design line at a time? Do we want to cut 4 across it in different ways? So, think about 5 how you want to sort of deal with this 6 diversity problem as a decision making 7 structure as we go forward. 8 The final thing, last but not 9 least that I got, and then we'll just open it 10 for anything that I may have missed is the 11 impact of any decision on steel manufacturers 12 and jobs, particularly of moving from 13 conventional steels to amorphous, impact on 14 prices for utilities, and that's basically it. 15 Impact on manufacturers and on prices. 16 There were the other issues that 17 come up tomorrow. Did I fairly capture the 18 issues that were tabled today? Anything that 19 I missed, anything that I misstated? 20 (No response.)

21 MR. PARKER: Great. Let's declare 22 victory for the day and reconvene here

### 202-234-4433 Neal R. Gross & Co., Inc. Page 321 1 tomorrow morning promptly at 9:00. Have a 2 very good evening, enjoy D.C., and I'll see 3 you tomorrow morning. 4 (Whereupon, the above-entitled 5 matter went off the record at 4:23 p.m.)

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183:12 184:11,13 185:2,15 186:1,2 186:16,22 187:4 188:8 193:17 197:2,2 203:19 8E089 1:12 833 284:15 9 9 95:4 129:13 183:12 184:12,22 185:3 186:1,2,3 186:11,17,18 187:1,2,4 197:3 9th 142:10 9:00 1:13 321:1 9:07 5:2 9:5045:5 90 202:7 95 216:22 274:17 98 235:2 98.3 235:2 99.08 302:18 99.12 302:21 303:4 99.16 302:20NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of:

Before:

Date:

Place:

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

----------------------- Court Reporter 363

Liquid Immersed and Medium Voltage Dry-Type Distribution Transformers

DOE

09-15-11

Washington, DC