Summary of the Third Meeting of the 

Working Group on Low-Voltage Dry-Type Distribution Transformers 

of the Energy Efficiency and Renewable Energy Advisory Committee 

November 9, 2011 

Richard W. Parker, Facilitator 

Note: This meeting summary has been prepared for the convenience of the Working Group. It has 

not been approved by the Working Group and should not be construed or taken to represent the official 

position of the Working Group or any member as to what transpired at the meeting. 

 The Working Group on Low-Voltage Dry-Type Distribution Transformers (“LV Group”) held its 

third meeting on Nov. 9, hosted by the National Rural Electric Cooperatives Association in Arlington, 

VA. A list of attendees is included in the official transcript to the meeting. 

 The meeting began at 12:05 pm after the conclusion of the Medium-Voltage Dry-Type Meeting in 

the morning. After introductions, the meeting began with an update on the status of the Engineering 

Analysis for low-voltage transformers, the results of which participants had received the previous 

evening. (See Annex A for a summary). Mr. Coffey of Navigant Consulting noted that after the last 

meeting DOE had sent out a template to manufacturers for the purpose of providing feedback on the 

validity of DOE’s engineering designs for low voltage transformers. He noted that they had received 

some feedback (mostly for DL 7 and 8) and at the meeting he reviewed the changes to the Engineering 

Analysis made in response to this feedback. 

Engineering Analysis 

 Reviewing the principal changes, Mr. Coffey noted that they had added a design option for M6 Al-Al 

full miter in Design Line 8, because that is common in today’s market. They adjusted the materials prices 

for M4 steels and worse, because staff discovered that grades below M3 were being used more frequently 

than their model predicted, perhaps because the price spread between M4 and M3 was unrealistically 

small in DOE’s model. 

 Navigant also limited core construction to stacked cores because, as Mr. Rivest explained, although 

wound core designs are being produced, combining wound cores and stack cores in the analysis produced 

anomalies in the handling of capital costs that skewed the results. These could be avoided by excluding 

wound cores in the analysis even though there is no proposal to exclude them as a design option. He 

thought the results should not be biased because there is no cost advantage for either design. 

 Mr. Coffey noted that DOE also had created a per-pound cost average for form mitering and step-lap 

mitering to reflect additional process and costs associated with these operations. He noted that the results 

had been posted to the Sharepoint site along with a price sensitivity tool that participants could use to 

model their own results using a range of material price inputs. 

 Mr. Rivest added that they had received very little feedback on DL 6, which is very low-volume line. 

The facilitator distributed a handout drawn from the TSD indicating the sales by equipment class and 

showing DL 6 to be a very low-volume category. Participants agreed to focus their attention on DL 7 and 

8. 

 After recessing for lunch, the meeting resumed with a review of the updated LCC/NIA results for low 

voltage dry transformers. 
2

LCC/NIA Analysis 

Mr. Bolduc reviewed the LCC results, explaining that the sawtooth pattern at various points in the 

LCC and PBP charts usually corresponded to materials switching. He noted that the results showed rising 

LCC savings through EL 6, followed by a dip to negative savings at EL 7. There was a zero mean 

payback period for DL 7 and a very low payback period through EL 5. One participant asked how there 

could be a zero payback period, and the response was that that meant that the cost of the least cost 

standards design was less than or equal to the base case. (T21). Looking at the engineering plots, M5 

dominates the base case, with a switch to M4 and M3 at EL2 and to H0 thereafter. 

 

 One industry participant noted that the engineering results suggested that the industry should be 

building base case efficiency level transformers with M6 steel, when in fact the speakers’ company is 

using M12, at a cost close to the lowest cost appearing in the engineering analysis. Another manufacturer 

agreed that M12, not M6, is the grade primarily used. 

 Moreover, after some discussion Mr. Rivest concluded that the negative incremental first cost results 

were probably the result of a “math error”, that more OPS modeling was needed, along with further 

guidance from industry. He noted that DOE consultants had been able to get good alignment with 

industry data for reoptimized M12 designs at the baseline and NEMA premium levels, because these units 

were actually being manufactured. So it was agreed to send the design details in the OPS model for DL 7 

back to those who had provided design details to make sure that Navigant has acceptable designs at each 

of the ELs (T37). 

 Moving on to DL 8, Mr. Rivest noted that the least cost design used M6 butt-lap aluminum-aluminum 

for the base case, and M5 for CSL-2, which corresponded to NEMA premium. Industry participants 

believed these were reasonable designs at those ELs. However, an industry representative then asked 

why it appeared on the LCC that the material selected for EL2 is “98 percent M3” and “100 % ZDMH” at 

EL3. Ms Coughlin noted that this reflected the propensity of the LCC model to pick a single point at the 

efficiency frontier, and that the efficiency boundary had been put at that point, causing a very rapid shift. 

 

 This was not considered realistic by the participants in the room, and the participants agreed to defer 

further negotiation of standards levels to a future meeting to allow time for refined analysis. 

Market for low-voltage transformers 

 Discussion then turned to a general overview of market conditions for low voltage transformers. 

There was a discussion about the origins of the NEMA premium and it was revealed that it accounts for a 

small percentage of the market that is built in low-volume facilities. Raising the minimum standard 

would require retooling factories to manufacture these transformers at much higher volumes. 

 The facilitator asked whether it is correct that most low-voltage transformers are sold for installation 

in public, commercial and industrial facilities and are a small but essential component of total building 

cost, meaning that sales would not likely diminish if the standard were to increase. An industry 

participant agreed that this is the case with one caveat: that electrical contractors/builders who buy 

transformers would have to pay more, and this might reduce their profits. 

Data centers 

 An industry participant raised a concern with certain companies not represented in the room are 

according themselves exemptions from the existing standard by selling distribution transformers as 

exempt UPS units, saving 30-40 percent in cost. One industry participant opined that this is not a result 

of a loophole in the law. It is an enforcement issue (T61, T63). 
3

 In addition, an industry participant reiterated his company’s prior request for a differential standard 

for data center transformers. Another industry participant seconded this request, noting that it makes little 

sense to establish a standard based on a 35 percent loading, when data center transformers are operating at 

80 percent loads. 

 The facilitator noted that creating a sub-class for data center transformers would require developing a 

clear legal definition of data center transformers based up some physical and operational uniqueness in 

the sub-class that requires a separate and lower standard. This definition must be sufficiently clear as to 

prevent circumvention. One industry participant expressed skepticism that a unique legal specification 

based on physical difference could be found, and opined that the risk of circumvention is high. 

 The facilitator called for the formation of a sub-group to explore the possibility of creating a sub-class 

and separate standard for data center transformers. Onyx agreed to lead the group (Vijay Tendulkar, Irene 

Kennedy, Alan Katz). The following individuals volunteered to participate: Thomas Patzner, Schneider 

Electric; Gary Fernstrom, PG&E; Tim Ballo, Earth Justice; Jerry Schoen, AK Steel. 

Availability of separate test method for data center transformers 

Participants noted that the current test method calling for testing of low-voltage transformers at a 

loading of 35 percent makes little sense for data center transformers which typically are loaded at near 80 

percent, but it was noted that this group does not have jurisdiction to alter the test method rule. 

Manufacturing Impact Analysis (MIA) 

 Mr. Carmichael of Navigant Consulting noted that the MIA will include an analysis of conversion 

costs, a discussion of the impacts of various efficiency levels on subgroups, and a discussion of some of 

the options companies might pursue to begin meeting a hypothetical higher standard, which might include 

mitering, moving to a better grade of steel, or outsourcing the cores. He indicated there will also be an 

analysis of impacts on employment, though he noted that a number of companies, including small 

businesses, are already making their product in Mexico. 

 He noted that his group had found 25 businesses in the space, of which 15-20 are relatively low 

volume players, and perhaps 10-15 are small businesses within the legal definition of the term (T76). He 

also noted that about 50 percent of low-voltage transformers are sold in statutorily exempt categories, and 

a number of manufacturers of covered products also manufacture exempt products. He noted that the key 

output of the manufacturing impact analysis will be a discussion of the impact of higher standards on 

small businesses relative to larger players. He opined that small volume manufacturers in aggregate 

probably account for less than 20 percent of the total market for low-voltage covered products. 

 He noted that small businesses typically face higher prices for steel than larger companies. 

 One call-in participant stressed the importance of reaching out to small low-voltage manufacturers 

who might not be in the room and might not be represented by NEMA. Many of them manufacture in 

Mexico to take advantage of low labor rates but still have large staffs of people in the U.S. to manage the 

product and design it. The facilitator noted that Navigant has been reaching out to a small companies in 

their surveys and interviews, and has received feedback from a number of them. An industry participant 

noted that Navigant had sent out a design engineering template to the manufacturers in their database and 

encouraged the phone caller to encourage his associated companies to participate in that validation 

exercise. 

 Another industry participant noted the importance of adequate lead times for compliance since 

mitering machines cost half a million dollars and have a six to eight-month backlog. 
4

Conclusion and Next Steps 

 

 In an effort to make doubly sure that those not at the table would not be overlooked, the facilitator 

asked the NEMA participant if he would alert his members (particularly smaller manufacturers) to the 

group’s work and analysis. He agreed but asked for a short summary of the information they need to have 

in order to weigh in effectively. 

 Another industry participant asked if Navigant planned to disclose the manufacturing requirements 

that the model expects for each EL. Mr. Carmichael responded that it would. 

 Mr. Carmichael of Navigant also indicated, in response to a request from an industry participant, that 

it should be possible to include amortized conversion costs in the engineering analysis, as part of the next 

revision. 

The parties then agreed to hold a telephone conference call/webinar to discuss revised engineering and 

LCC results on November 21st at 2:00 pm. 

 The meeting adjourned at 2:27 pm. 
5

Annex A 

TO: Distribution Transformers Negotiation Committee 

FROM: Navigant on behalf of DOE 

DATE: Monday, 07 November 2011 

RE: Updates to the Analytical Methodology since meetings of 12-14 October 

Navigant has made several changes to the engineering analyses in response to manufacturersupplied design details. 

Liquid-Immersed (Design Lines 1-5): 

(no changes) 

Medium-Voltage Dry-Type (Design Lines 11 and 12 only): 

• New design option combination (M4 Al Al step-lap miter) 

• Adjusted material prices for M6 and worse (see table below) 

• Revised labor estimates 

• Modified estimates of losses to reflect those of substation-style units 

Low-Voltage Dry-Type (Design Lines 6-8): 

• New design option combination (M6 Al Al full miter) for design line 8 

• Adjusted material prices for M41

 and worse (see table below) 

• Revised labor estimates 

• Limited core construction type to Stacked core to improve comparisons(amorphous 

excepted) 

• Deleted step-lapping as a design option for design line 6 

• Created per-pound cost adders for both full mitering and step-lapping 

• Reduced induction upper bound limit in design line 7 

 

1 The original version read M6, but this was revealed to be a typographical error during the meeting (see p. 12 of 

transcript).

Dry-Type Material Price Changes 

Material for Dry-type Original Current 

M36 core steel (26 gauge) $ 0.66 $ 0.60 

M19 core steel (26 gauge) $ 0.91 $ 0.83 

M12 core steel $ 1.03 $ 0.95 

M6 core steel $ 1.46 $ 1.33 

M5 core steel $ 1.51 $ 1.38 

M4 core steel $ 1.59 $ 1.45 
6

Annex B 

Equipment Classes and Shipments 

 

Table 2.4.1 

Distribution 

Transformer 

Equipment 

Classes EC # 

DL 

Shipments 

(MVA Capacity) 

(2009 estimates) 

 

Insulation Voltage Phase BIL Rating kVA Range 

1 1,2,3 21,994 LiquidImmersed Medium Single - 10-833 kVA 

2 4,5 28,372 LiquidImmersed Medium Three - 15-2500 kVA 

3 6 647 Dry-Type Low Single - 15-333 kVA 

4 7,8 15,778 Dry-Type Low Three - 15-1000 kVA 

5 9*,10* 23 Dry-Type Medium Single 20-45kV BIL 15-833 kVA 

6 9,10 257 Dry-Type Medium Three 20-45kV BIL 15-2500 kVA 

7 11*,12* 23 Dry-Type Medium Single 46-95kV BIL 15-833 kVA 

8 11,12 3,665 Dry-Type Medium Three 46-95kV BIL 15-2500 kVA 

9 13* 9 Dry-Type Medium Single ≥ 96kV BIL 75-833 kVA 

10 13a, 

13b 2,206 Dry-Type Medium Three ≥ 96kV BIL 225-2500 kVA