From: Meyers, Aaron [mailto:Aaron.Meyers@CooperIndustries.com]

Sent: Wednesday, November 16, 2011 3:32 PM

To: Simmons, Chuck; Phil Hopkinson; Robert Berman; Steve Nadel

Cc: Bruce R Hirsch; John Caskey; Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB)

Savitz; mhyland@appanet.org; Raymond.Polinski@ATImetals.com; maheshsampat@bellsouth.net;

tpetrosino@carolina.rr.com; dbrender@cda.copper.org; James.Lass@cleco.com;

chris.brown@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com;

ted.johnstone@cogentpowerinc.com; Trujillo, Antonio; Corkran, Jerry L; tballo@earthjustice.org;

carlosgsiqueiros@eaton.com; eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jere miah (CONTR)

Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org; DYoung@energy

‐ solution.com;

rick.anderson@faypwc.com; bsmith@federalpacific.com; rgreeson@federalpacific.com;

carlos.gaytan@ge.com; artrosenfeld@gmail.com; greg.coulter405@gmail.com;

ned.efbrush@gmail.com; Richard Parker; Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen;

cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov; ScottB@LVMetals.com;

dave.millure@metglas.com; kwinder@mleainc.com; jrossetti@mlgw.org; Brian Coffey; Caitlin Johnson;

Matthew Nardotti; Michael Rivest; Zhimei Luo; Jim Creevy; mwaltner@nrdc.org; rroy@nrdc.org;

robert.saint@nreca.coop; Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com;

ahofmann@publicpower.org; pkumar@publicpower.org; adelaski@standardsASAP.org;

jmauer@standardsasap.org; wes.pa tterson@us.abb.com; chad.kennedy@us.schneider

‐ electric.com;

thomas.patzner@us.schneider

‐ electric.com; charlied@uus.org; Moore, Jack C; Smith, Jennifer; Meyers,

Aaron

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Correct me if I’m wrong, but at the last meeting, I thought Katie Coughlin stated that the loading used in

the LBNL analysis was actually a distribution of loading profiles and that the average was close r to 25 or

30% than the 50% load factor upon which the standard is built. This was rather shocking to me, since all

of the efficiency levels are referenced to 50% load in the standards. Based on the differences in

efficiency versus loading fa ctor curves (see attached), it is immediately obvious why amorphous core

transformers would have been selected over grain

‐ oriented ones under those conditions. However,

consider that at low loading (10%), the amorphous transformer example in the attachment saves 41W

but at 100% load, the M3 transformer SAVES 128W over the amorphous design. It sort of reminds me

of when my grandfather used to drive 20 miles to save 50 cents on a 12

‐ pack of Coca

‐ Cola (not realizing

he was spending $4.00 in gas to drive there and back). I also believe that the analysis assumes ZERO

load growth over the life of the transformer (transformer life is also a distribution with the average

being 30 years, so extending out beyond 60 years in some cases). Considering the growth in the electric

vehicle market just in the last 5 years, the fact that this is not being taken into accou nt at all is a severe

oversight. NEETRAC predicts a 17

‐ 18% load growth over the next 25 years, yet DOE project 0% over the

next 60? Something isn’t right here. As Chuck points out below, for commercial and industrial

customers with higher loading levels, the virtual mandate to em ploy the use of amorphous core

transformers, this is a real concern. When we spoke with various utilities, they indicated that their

larger single

‐ phase and their three

‐ phase transformers were typically running at 50% load. Essentially

ANY load growth from where we are today will cause amorphous core transformers in those

applications to be less efficient than their amorphous counterparts.

Obviously any model has to be built on a set of assumptions; however, it feels as though nearly all of the

assumptions that were made were done so such as to err on the si de of showing economic justification

for raising the efficiency levels. This may have been an inadvertent effect of trying to appease those

parties who previously brought suit against the DOE for allegedly not going far enough with the 2010efficiency levels. The compounding of the biased assumptions is what I believe is responsible for

producing results that don’t resonate positively with end

‐ users or those closest to the industry. In

addition to those listed above, below is a list of additional biased assumptions that compound to yield

the results under consideration currently :

1) The estimated cost for pole replacement is low (~$2000). Testimony from utilities was that pole

replacement cost ranges from around $2000 (70% of jobs) to approximately $9500 (30%) of

jobs, thus an average of $4250. The DOE analysis used something in the $2000

‐ $2500 range.

2) The first analysis included an inaccurate extra polation of how many poles would need to be

changed out. Since the pole design line was 25kVA, no poles were assumed to be heavy enough

to warrant pole change out. Thus zero was extrapolated across higher kVA’s and no additional

cost was factored in. This was supposed to be corre cted, but the comment was also made

during the last meeting that the analysis for liquid filled hadn’t changed since the first meeting.

3) The analysis uses a conservative cost of money, most likely a reflection of current depressed

economic conditions. The question is whether this assumption will hold true over th e analysis

period (30

‐ 60 years)? Due to economic uncertainty among other factors, most companies won’t

make investments that don’t show a payback in 2

‐ 4 years. Using the LCC approach, ANY

payback in less than 30 years becomes favorable. As a tax payer, I do not want to make

investments li ke this. I’m sure that the advocates will be quick to point out the <10

‐ year

payback periods for EL2 and higher, but looking under the hood, what is driving that is the

assumption that all or nearly all of the designs selected were amorphous

‐ core designs. The

lowest cost a morphous core design in the OPS analysis essentially achieves between EL4 & EL5

performance. If we allow pure economics to normalize the prices of amorphous relative to M3,

such that M3 designs are being built, the actual efficiency of EL1 & EL2 designs will be lower in

efficien cy than is being reflected in the payback analysis currently. I would assume that the

economics of EL2 would be much closer to those reflected for EL1 in that event.

4) The analysis assumes an average of either 30

‐ or 32

‐ year transformer life. This is substantially

more than is recognized by the IE EE standards (20.5 years), and more than shown by a recent

study performed by CFE in Mexico which showed average transformer life to be closer to 16

years. By being able to amortize savings over a longer period of time, the LCC is able to show

savings that would not exi st under shorter durations.

5) Stray and eddy current losses were not taken into account by OPS software. Stray losses can

typically be anywhere from 3% on smaller, low current transformers, to 20+% on larger, high

‐

current transformers. Either way, it is most definitely not negligible, and results in transformer

designs that are smaller, li ghter, and cheaper than what manufacturers are able to produce in

the real world. This was confirmed by Phil Hopkinson in acquiring real price quotations from

both NEMA and non

‐ NEMA manufacturers for the transformers under consideration. To date,

we have no evidence that suggests that the DOE has sought or obtained any rea l price

quotations from manufacturers to corroborate their results.

6) The movement away from purchasing new, high

‐ efficiency transformers to rebuilding older, less

efficient transformers is only accounted for in the shipments analysis, but based on the first

‐

price economics of buyi ng rebuilt transformers as compared to the substantially higher cost

associated with buying transformers of the proposed efficiency levels, I believe that the DOE’s

analysis grossly overestimates the shipments of new transformers. If older copper

‐ wound coils

are replaced with aluminum wound coils, the efficiency of the rebuilt transformer will be eve n

less than the efficiency of the original transformer being rebuilt, moving even further from

achieving the objective of conserving energy and reducing greenhouse gas emissions. This step

backwards is not considered at all in the DOE analysis.7) The current analysis does not consider the effect of omitting network & vault transformers from

the efficiency standard as far as the economic or environmental impact analysis are concerned.

The same holds true for high BIL units.

8) I don’t believe that the present analysis accounts for higher generation costs u nder peak load

conditions. This essentially makes load losses more costly than no

‐ load losses. However, the

push has been almost exclusively to reduce the no

‐ load losses via amorphous metal

endorsement by advocates. The result is that a few watts are saved during times when

generation costs are low and hi gher watts are lost during times when generation costs are high.

If this were weighed more appropriately, the designs that were chosen in the DOE analysis

would likely show significantly longer payback and potentially no energy savings.

9) The current analysis disregards the pricing leverage that the higher standard would afford

amorphous p roducers. If amorphous producers were to price according to their customers’ next

best price/performance alternative, amorphous pricing could go up by 50%, yet the price

sensitivity analysis uses bounds that are based on historical swings in an environment where

both can compete. This is a complete and total game cha nger as previously described in my

lions & gazelle analogy.

Unless everything plays out perfectly, the American public could quite possibly never see any payback

on raising the efficiency levels. Cooper was prepared to accept moving to EL1 in the spirit of the

negotiation process, but even at that level, we do not bel ieve there is any real economic justification.

We strongly urge the subcommittee to step back and listen to their instincts on this vital national

interest.

Best Regards,

Aaron

From: Simmons, Chuck [ mailto:Chuck.Simmons@pgnmail.com ]

Sent: Wednesday, November 16, 2011 7:10 AM

To: 'Phil Hopkinson'; 'Robert Berman'; 'Steve Nadel'

Cc: 'Bruce R Hirsch'; 'John Caskey'; 'Eric.Petersen@aksteel.com'; 'jerry.schoen@aksteel.com'; 'Maxine

(EMAB) Savitz'; 'mhyland@appanet.org'; 'Raymond.Polinski@ATImetals.com';

'maheshsampat@bellsouth.net'; 'tpetrosino@carolina.rr.com'; 'dbrender@cda.copper.org';

'James.Lass@cleco.com'; 'chris.brown@cogentpowerinc.com'; 'frank.guilbault@cogentpowerinc.com';

'ted.johnstone@cog entpowerinc.com'; Meyers, Aaron; Trujillo, Antonio; Moore, Jack C; Corkran, Jerry L;

'tballo@earthjustice.org'; 'carlosgsiqueiros@eaton.com'; 'eduardorobles@eaton.com'; 'Emily (CONTR)

Marchetti'; 'Jeremiah (CO NTR) Freeman'; 'Jim Raba'; 'John Cymbalsky'; 'srosenstock@eei.org';

'DYoung@energy

‐ solution.com'; 'rick.anderson@faypwc.com'; 'bsmith@federalpacific.com';

'rgreeson@federalpacific.com'; 'carlos.gaytan@ge.com'; 'artrosenfeld@gmail.com';

'greg.coulter405@gmail.com'; 'ned.efbrush@gmail.com'; 'Richard Parker'; 'Paul.Ryan@hitmet.com';

'jhodge@howard.com'; 'Daniel Cohen'; 'cabolduc@lbl.gov'; 'gjrosenquist@lbl.gov'; 'kcoughlin@lbl.gov';

'ScottB@LVMetals.com'; 'dave.millure@metglas.com'; 'kwinder@mleainc.com'; 'jrossetti@mlgw.org';

'brian.coffey@navigant.com'; 'caitlin.johnson@navigant.com'; 'matthew.nardotti@navigant.com';

'mrivest@navigant.com'; 'zhimei.luo@navigant.com'; 'Jim Creevy'; 'mwaltner@nrdc.org';

'rroy@nrdc.org'; 'robert.saint@nreca.coop'; 'Teckman@nwcouncil.org';

'vijay.tendulkar@onyxpower.com'; 'gbf1@pge.com'; 'ahofmann@publicpower.org';

'pkumar@publicpower.org'; 'adelaski@standardsASAP.org'; 'jmauer@standardsasap.org';

'wes.patterson@us.abb.com'; 'chad.kennedy@us.schneider

‐ electric.com';'thomas.patzner@us.schneider

‐ electric.com'; 'charlied@uus.org'

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Phil:

Excellent points. Can anyone confirm that the consultants are taking these higher load losses into

account that result from transformers with an amorphous core? I am concerned that use of amorphous

with distribution transformers that have a high average loading (su ch as distribution transformers

serving industrial and commercial customers) will result in higher losses than those that may be realized

with silicon grain oriented steel.

This is a major concern for utilities.

Regards,

Chuck Simmons, P.E.

Distribution Standards

Progress Energy

Voice Net: 745

‐ 6033

Bell: 919

‐ 662

‐ 6033

From: Phil Ho pkinson [ mailto:phopkinson@hvolt.com ]

Sent: Tuesday, November 15, 2011 5:31 PM

To: Robert Berman; Steve Nadel

Cc: Bruce R Hirsch; John Caskey; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ;

chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ;

ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ;

brian.coffey@navigant.com ; caitlin.johnson@navigant.com ; matthew.nardotti@navigant.com ;

mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy; mwaltner@nrdc.org ; rroy@nrdc.org ;

robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ;

Simmons, Chuck; ahofmann@publicpower.org ; pkumar@publicpower.org ;

adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us.abb.com ;

chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐ electric.com ;

charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Good afternoon Robert and all:

I must disagree fundamentally with the way you have characterized the loss values. At night when the

load is light everywhere then the energy cost is also low and those who have time of day metering canattest to it. If the load is as low as 10% then what is left is largely core loss and the generation is only

base generation at very low cost per kWH.

During the day when the load is high the peak generators are all fired up and that is expensive ener gy.

There the winding losses are the big contribution to total transformer losses. Unfortunately when one

has an amorphous transformer that meets the same efficiency as an M3 transformer it has higher

winding losses than the M3. In the modeling that Jerry Corkran and I did we found that the amorphous

transformer had hi gher day time losses than the M3 which looks like it takes away from the enthusiasm

for amorphous cores as a National standard.

The bottom line is that core loss is not as valuable as winding loss on a watt for watt tradeoff.

Best regards,

Phil

Philip J Hopk inson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Tuesday, November 15, 2011 1:23 PM

To: Steve Nadel

Cc: Bruce R Hirsch; Robert Berman; John Caskey; Eric.Petersen@aksteel.com ;

jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz; mhyland@appanet.org ;

Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetrosino@carolina.rr.com ;

dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpowerinc.com ;

frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers; Antonio

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ;

eduardorobles@eaton.com ; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ;

bsmith@federalpacific.com ; rgreeson@federalpacific.com ; carlos.gaytan@ge.com ;

artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker;

Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ;

gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ;

kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ;

caitlin.johnson@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ;

zhimei.luo@navigant.com ; Jim Creevy; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ;

Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ;

chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ;

adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us.abb.com ;

chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐ electric.com ;charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Steve,

The statement that "reducing transformer losses primarily affects baseload, not peak" is a bit of an over

simplification. Reducing transformer losses affects both base and peak. The value of the loss at any point

in time is then marginal cost or system l ambda. That is, the value of reducing transformer losses is the

greater of the cost of the next unit that would have been dispatched, but for the reduced load

attributable to the transformer, or the cost of generation from the last unit actually dispatched, but

used less due to the more efficient tran sformer. Because generation is brought on line least

‐ cost first,

losses are evaluated in reverse order

‐‐ highest cost first. As Katie Coughlin explained at the last meeting,

this is the way LBNL evaluates benefits. Thus in the early years, the more efficient transformer may

actually save substantially more money than in later years, when the older, hig her cost units have been

retired. I don't believe this benefit is picked up by the LBNL modeling, as it requires more detailed

information

‐‐ at least hourly marginal costs for each power pool.

Regards,

Bob

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 15, 2011, at 8:57 AM, Steve Nadel wrote:

Two comments. First, some comments have focused on just the market for M3 and amorphous steel.

The two markets are linked

‐‐ we need competition between the two to keep the price of both in check.

We don't want a standard that strongly favors one over the other. The re vised DOE analysis on the mix

between M3 and amorphous at different standard levels should help us to address this. Second,

reducing transformer losses primarily affects baseload, not peak. So talking about cost per kW is

misleading. An efficient transformer is energized for more than 8 000 hours per year. The average DSM

measure saves for about 3000 hours per year (although there is wide variation). If you want to

compare, you'd need to compare levelized cost per kWh saved over the measure lifetime.

Steve

>>> "Hirsch, Bruce R" < Bruce.R.Hirsch@bge.com > 11/15/2011 7:37 AM >>>

John’s points are well taken. Keep in mind that the DOE numbers indicate a payback at EL4 only if

amorphous steel is used. Thus, to assume that because it can be built using M3 steel, all is well, is totally

untrue. In John’s auto analogy, at least the custom er has a choice of spending the extra money. In our

case, the customer will have no choice.We all also need to understand that there is not an infinite supply of money to spend on efficiency

improvements. By forcing utilities to spend money on improving transformer efficiencies, we may very

well be taking money out of other efficiency programs which have a much higher payback than what is

being proposed here. In BGE’s case our packa ge of efficiency programs cost us approximately $139 per

kilowatt saved. What is being proposed here is up to 100 times more costly. If BGE pulls back funds from

other efficiency programs to pay the high costs for transformer efficiencies, we would see a significan t

decline in efficiency improvements overall.

Bruce

From: Caskey, John [ mailto:Joh_Caskey@nema.org ]

Sent: Monday, November 14, 2011 3:14 PM

To: Robert Berman; Hirsch, Bruce R

Cc: 'Steve Nadel'; Phil Hopkinson; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine

(EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetr

osino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers;

Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millur

e@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Creevy,

Jim; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.tend

ulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ; p

kumar@publicpower.org ; adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us

.abb.com ; chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐

electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert

You continue to reference the ABB data presented by Wes Patterson as indicating that since a

transformer was sold at the EL3 or EL4 efficiency level that this level is cost effective. Specifically, you

state “Market sales data, however, is quite real. In this case it u nambiguously says that the transformers

at EL4 are an economically reasonable choice

‐‐ the market has, in fact, selected that choice on multiple

occasions”. This is simply NOT TRUE.

Just because a person buys as Jaguar for $100k that gets 25 mpg in place of a $40k Cadillac that ge ts 20

mpg; does NOT mean that the $60k delta will ever be “economically reasonable” for the extra 5 mpg.You seem to be assuming that all of the transformers purchased from ABB that meet the efficiency

levels were purchased for efficiency reasons. This is simply not fact. The fact is that one large

transformer manufacturer was able to produce distribution transformers at EL3 and EL4 using M3 steel.

To my knowl edge, Wes did not state the price for these transformers. In addition, just because one

company can produce this product doesn’t mean that all transformer manufacturers can make this

product at this level using M3 steel.

My hope is that we can all understand the facts and the analysis results better over the ne xt few weeks

so that we can negotiate a solution that benefits the consumers, the ratepayers, the manufacturers, the

environment, etc. I plan to stay at the table till the end of the negotiation process.

Regards,

John

John F. Caskey, CEM

Assistant Vice President, Industry Operations

National Electrical Manufacturers Assoc. (NEMA)

1300 North 17 th Street

‐ Suite 1752

Rosslyn, VA 22209

john.caskey@nema.org

703

‐ 841

‐ 3233 Voice

703

‐ 841

‐ 3333 FAX

703

‐ 350

‐ 6886 Cell

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Monday, November 14, 2011 1:19 PM

To: Hirsch, Bruce R

Cc: 'Steve Nadel'; Robert Berman; Phil

Hopkinson; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetr

osino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers;

Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure

@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Creevy, Jim; Caskey,

John; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.te

ndulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ;

pkumar@publicpower.org ; adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@

us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐electric.com ; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Bruce,

Those upfront transformer costs are compared to the fuel cost savings in the LCC approach. The

discounting process values fuel cost saving in the future at less than the costs incurred today. The

positive LCC means that that the efficiency advocates are not ignoring costs, bu t comparing them with

benefits and finding that the consumer is better off and will be paying less. One does not, however,

need to rely on the LBL analysis to see this. The ABB sales data shows M3 transformers being delivered

at EL4 efficiency. As a modeler, I am always skeptical of model results

‐‐ people do not live in computers

and certainly not on in some of the back

‐ of

‐ the

‐ envelope calculations that we have seen from others.

Market sales data, however, is quite real. In this case it unambiguously says that the transformers at EL4

are an e conomically reasonable choice

‐‐ the market has, in fact, selected that choice on multiple

occasions.

To the extent that there are dug

‐ in positions, again the evidence does not support that it is the

efficiency advocates that are dug

‐ in. Although EL4 is achievable and beneficial based both on market

data and LBL analyses, the proponents of greater efficiency indi cated a willingness to compromise. It is

certain representatives of the industry who have consistently said either no change, or a fractional

change. It is those industry representatives who appear to be advancing the "my position or nothing"

attitude. Although I happen to agree th at substantial movement towards more efficient distribution

systems, I also note that these are incredibly expensive meetings. We have a large number of very

senior people devoting substantial time to the meetings, their preparation and non

‐ trivial travel costs.

These people have other things competing for their time. If you and others hon estly believe that you

cannot agree to a higher standard, and place no value on regulatory certainty, then let's not waste

additional time and money. Let's just say that we gave it a good shot, cut our losses here, and make our

respective cases to DOE outside the ne gotiation process and let DOE make it's own decision. I believe

that they certainly have sufficient information to support their position in a February NOPR. I can't

imagine what else they would need.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 14, 2011, at 11:49 AM, Hirsch, Bruce R wrote:

Steve,

I am disappointed with your approach to this assignment.It appears that negotiation to you is defined as agreeing with your position

‐‐‐ or calling it off. It is

unfortunate that you believe the American public, especially in these trying economic times, should be

expected to foot the (very large) bill for more efficient transformers when it is still not certain that there

is value in doi ng so. You have clung to one suspect calculation that indicates there may be a payback

‐‐‐

in the distant future

‐‐‐ and only if all the assumptions being made pan out. You choose to ignore the

costs, not yet factored in, on US jobs, US businesses and the rel iability of supply of an item so

desperately needed for our economy to expand.

This is not a “cut and dried” economic decision but is one that needs to be taken seriously for the major

impact it could have on the electric supply of the US and the financial position of the Am erican public. If

DOE makes the final decision on this, I would expect them to do “due diligence” in considering all the

effects there decision would have on US businesses and the US economy.

Let it be known that the Utility Industry has not pulled out of the negotiation proc ess and will continue

to work with DOE to reach the right decision.

Bruce.

From: Steve Nadel [mailto:snadel@aceee.org]

Sent: Friday, November 11, 2011 2:16 PM

To: Robert Berman; Phil Hopkinson

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

Hirsch, Bruce

R; tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogent

powerinc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron

Meyers; Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millur

e@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Jim.creevy@nema.org ; john.caskey@nema.org ; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nrec

a.coop ; Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@p

gnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ; jma

uer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐

electric.com ; thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Phil,

We're in the middle of negotiations and some of us have made clear that no or little change to the

standard is not acceptable as the DOE analysis justifies higher standards (higher levels are technically

feasible and cost

‐ effective on a life

‐ cycle cost basis). The efficiency groups would rather leav e thedecision to DOE than agree to subpar standards. If you and other participants want to veto any

significant change in the standard, then we might as well save some time, break off negotiations and

just make our respective arguments to DOE. Is that what you want to do? If the answer is no, then let's

start talki ng about how to make higher standards acceptable rather than continue to make arguments

about why low standards are needed. We're all busy and if we're going to make progress we need to

break new ground and not rehash old ground.

Steve

>>> Phil Hopkinson < phop kinson@hvolt.com > 11/11/2011 1:16 PM >>>

Hello Robert and all:

You must not have looked at Jerry Corkran’s message because he found the cost to be $17/watt, which

is pretty close to my number, where both Jerry and I have used M3 core steel to derive the cost curve.

The fact is th at the cost curve is very steep with M3 and quickly hits the brick wall.

1. I have checked Carlos Gaytan’s cost curves as well and he is finding about the same relationship

with M3.

2. I have checked Wes Patterson’s data as well and he is finding an M3 cost curve about the same as

mine.

3. I have checked the OPS data with M3 as well and it too is very close to $20/watt.

a. For example, for design line 1 they show an efficiency at 50% load of 99.08% which translates to

232 watts of loss and sells for $1,960.73.

b. They show another M3 design with an efficiency of 99.26% which translates to 186 watts of loss

and sells for $2962.11.

c. The change in selling price is $2,962.11

‐ $1,906.11 or +$1,001.38

d. The change in watts is 232

‐ 186 or ‐ 46 watts.

e. The OPS $/watt is the refore, $1,001.38/46 watts or $21.77

f. Hence we see that all data sources are pointing to cost per watt of ~$20 /watt saved to go from

the current mandatory standard to EL1. I get $30/watt to go to EL2 and $53/watt to go to EL3

4. The fact is that M3 is about out of gas and the DOE did a good job in the la st rule making.

5. The fact also is that a push to anything beyond present does not show economic value and I do not

support it.

6. The fact also is that a push to higher effi ciencies will kill the new transformer market and open up

the rebuild market, destroying jobs at the new transformer manufacturers and resulting in transformers

of lower efficiency which will cost energy and not save it.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson @hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520Cell 704

‐ 236

‐ 3320

www.hvolt.com

From: Robert Berman [mailto:bermaneconomics@gmail.com]

Sent: Friday, November 11, 2011 11:16 AM

To: Phil Hopkinson

Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@ne

ma.org ; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; r

greeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; d

ave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ;

Raymond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; rob

ert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry

.schoen@aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org

; bsmith@federalpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel;

Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@

navigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo

@navigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy

‐

solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; matthew.nardotti@navigant.com ;

Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; cha

d.kennedy@us.schneider

‐

electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schnei

der

‐ electric.com ; carlosgsiqueiros@eaton.com ; Robert Berman; Trujillo, Antonio; Moore, Jack C

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Even if it were that high (and Mr. Hopkinson is the only one I've seen who has put the number anywhere

near that), the efficiency objective is saving Watt

‐ hours (energy) not Watts (the capacity to save energy )

. One Watt saved for 8,760 hours per year for 30 years is 262.8 kWh (not counting leap years). Even at

Mr. Hutchinson's $20, that's just over 7¢ / kWh. If Mr. Hutchinson will examine his electric bill, as he has

reported, he will see that even as high as 7¢ it's a go od buy, and that assumes we put a ZERO value on

any environmental benefits (which is why DOE agreed to reconsider its 2007 MEPS in the first place.

Indeed, the cost of losses per Watt (roughly the A factors that OPS has been using) are no wh ere near

the $20 claimed here. Moreover, as ABB and others have pointed out, the proper approach would have

been to minimize cost subject to efficiency, not A & B, which would have resulted in a lower, flatter

curve to the asymptote. ABB's actual market data

‐‐ physical transformers produced and delivered

‐‐

shows a competitive market for M3 transformers even at EL4 efficiency. You can make all the

hypothetical claims you want to, gentlemen, the market is the real world

.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote:

Well stated Jerry

That is also what my analysis and report said. If you restrict to M3 then the cost of EL1 rises to about

$20/watt.

Phil

Phil Hopkinson,P.E.

HVolt Inc.

704

‐ 846

‐ 3290

F: 704

‐ 845

‐ 2520

C: 704

‐ 236

‐ 3320

phopkinson @hvolt.com

On Nov 10, 2011, at 18:04, "Corkran, Jerry L" < Jerry.Corkran@CooperIndustries.com > wrote:

To Mr. Parker and the DOE working group,

The reason for the request for the incremental cost of the losses is that the current DOE efficiency levels

can be obtained if the design is optimized at about $4 per core watt and $1 per winding watt at full

load. At the DOE 50% kVA rating, this is the same as evaluating th e losses or optimizing the design at

about $4 per total watts loss.

The present DOE efficiency loss level results in transformer designs about like many utilities were

purchasing their transformers before 2007. The utilities were purchasing the efficiency leve ls that were

justified based on the cost of losses. A few utilities were purchasing higher efficiency that the 2007

efficiency rules because of the calculated cost of energy being higher than the $4/$1 loss evaluation.

What came up in the discussion last week was even for loss level 1, the incr emental cost of losses was

about $17 per watt for the design checked, between the present DOE losses an efficiency level of DEL1.

The added cost of $17 per watt is so much higher than the typical cost of the energy for the utilities,

that it is very questionable that the DOE payback esti mates are accurate. A 3% interest rate may be a

factor in the payback calculations.

Jerry Corkran

From: Richard Parker [mailto:richardparkerdc@gmail.com]

Sent: Thursday, November 10, 2011 3:23 PM

To: Robert BermanCc: Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@ne

ma.org ; Corkran, Jerry L; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; r

greeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; d

ave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ;

Raymond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; rob

ert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry

.schoen@aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org

; bsmith@federalpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel;

Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@

navigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo

@navigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy

‐

solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; phopkinson@hvolt.com ; matthe

w.nardotti@navigant.com ; Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; ch

ad.kennedy@us.schneider

‐

electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schnei

der

‐ electric.com ; carlosgsiqueiros@eaton.com

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert,

I understand the DOE staff are working on the incremental Watts calculations and will get that out to

group as soon as it's ready.

best wishes,

Richard

On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman < bermaneconomics@gmail.com > wrote:

Thank you Richard. That clarification is helpful.

In the liquid

‐ filled meeting we were told that we would receive an analysis of incremental Watts saved

by DL for all ELs, as well as the incremental cost. When will that analysis be available? For many of us,

that analysis is the basis for additional, perhaps e xtensive analyses, so it should come with enough lead

time before any additional meetings or teleconferences to that we can give it the required

consideration. It would be most helpful if the incremental cost were provided separately for transformer

and installation, with any pole component of the ins tallation identified.

For the MV Dry and LV Dry meetings, it would be most helpful if you would also circulate an agenda with

objectives, hopefully this week, so that we are able to prepare for those meetings.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 11:14 AM, Richard Parker wrote:

Dear Colleagues:

The telcon on the 17th is currently planned for medium

‐ voltage dry

‐ type and the telcon on the 21st is

reserved for low

‐ voltage. There will be revised analysis circulated in advance of both calls per our

discussion yesterday. Eac h call has substantial chunks of time allocated, though I hope we won't need

all that time.

It may be prudent to schedule a liquid

‐ filled call at some point as well, but I propose that we hold off on

that for day or so, until we can clarify when revised an alysis for liquid

‐ filled will be ready.

Thanks for your very constructive participation in the meetings over the last two days.

Richard Parker

On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR) < Jeremiah.Freeman@ee.doe.gov >

wrote:

When: Thursday, November 17, 2011 1:00 PM

‐ 5:00 PM (GMT

‐ 05:00) Eastern Time (US & Canada).

Where: Webinar and Phone

Note: The GMT offset above does not reflect daylight saving time adjustments.

*~*~*~*~*~*~*~*~*~*

Dear Colleagues,

This event is to save the time slot on your calendar based on our discussion at ye sterday's meeting.

Later today further information will be sent regarding the registration information for our November 17

and November 21 webinars. After registering you will get the link for the webinar and a toll free

number.

Please call with questions or concerns.

Very Respectfully,

Jeremiah Freeman

202

‐ 431

‐ 424 3 (cell)

202

‐ 586

‐ 1867 (office)>>> This e

‐ mail and any attachments are confidential, may contain legal,

professional or other privileged information, and are intended solely for the

addressee. If you are not the intended recipient, do not use the information

in this e

‐ mail in any way, delete this e

‐ mail and notify the sender. CEG

‐ IP2