### 202-234-4433 Neal R. Gross & Co., Inc. Page 1 U.S. DEPARTMENT OF ENERGY + + + + + LOW VOLTAGE DRY-TYPE DISTRIBUTION TRANSFORMERS NEGOTIATED RULEMAKING WORKING GROUP

+ + + + +

PUBLIC MEETING

+ + + + + WEDNESDAY SEPTEMBER 28, 2011

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The Working Group met in Room 8E089 of the U.S. Department of Energy, 1000 Independence Avenue, S.W., Washington, D.C., at 9:20 a.m., Richard W. Parker, Facilitator, presiding.

PRESENT RICHARD W. PARKER, University of Connecticut School of Law, Facilitator TIM BALLO, Earthjustice SCOTT BECK, Lakeview Metals ROBERT A. BERMAN, Berman Economics JOHN CASKEY, National Electrical Manufacturers Association JOHN CYMBALSKY, U.S. Department of Energy ANDREW DeLASKI, Appliance Standards Awareness Project ROBERT GREESON, Federal Pacific Company DAVID MILLURE, Metglas THOMAS PATZNER, Square D/Schneider Electric ERIC PETERSEN, AK Steel Corporation EDUARDO ROBLES, Eaton Corporation

### 202-234-4433 Neal R. Gross & Co., Inc. Page 2 ART ROSENFELD, Lawrence Berkeley National Laboratory; Efficiency and Renewables Advisory Committee (via phone) ROBIN ROY, Natural Resources Defense Council VIJAY TENDULKAR, ONYX Power

ALSO PRESENT GARY ALLEN, Metglas (via phone) PETER G. AMOS, Warner Power ALEX BOESENBERG, National Electrical Manufacturers Association CHRIS BOLDUC, Lawrence Berkeley National Laboratory (via phone) SCOTT CHOINSKI, National Electrical Manufacturers Association DAN COHEN, U.S. Department of Energy KATIE COUGHLIN, Lawrence Berkeley National Laboratory BRENDA EDWARDS, U.S. Department of Energy JEREMIAH FREEMAN, New West Technologies WAYNE GORDON, U.S. Department of Energy PHIL HOPKINSON, HVOLT (via phone) MATT NARDOTTI, Navigant Consulting WES PATTERSON, ABB (via phone) MIKE RIVEST, Navigant Consulting STEVE ROSENSTOCK, Edison Electric Institute GREG ROSENQUIST, Lawrence Berkeley National Laboratory JOHN ROSSETTI, Memphis Light, Gas and Water (via phone) PAUL C. RYAN, Hitachi Metals America JERRY SCHOEN, AK Steel Corporation (via phone) BOB SMITH, Federal Pacific Company (via phone) MEG WALTNER, Natural Resources Defense Council (via phone) DANIEL YOUNG, Pacific Gas and Electric (via phone)

### 202-234-4433 Neal R. Gross & Co., Inc. Page 3 1 P-R-O-C-E-E-D-I-N-G-S

2 9:20 a.m. 3 FACILITATOR PARKER: Okay, welcome 4 everybody. Sorry for the late start, we had 5 a few technical difficulties but we'll try to 6 make up for lost time as we go along. This is 7 the Low-Voltage Transformer Working Group 8 first day. 9 And why don't we just -- a lot of 10 familiar faces but some that are not, so I 11 first want to just welcome not only the 12 familiar folks but the newcomers. There are 13 two separating committees that are meeting, 14 separate but parallel and equal, both aiming 15 for producing a proposed rule at about the 16 same time. 17 And so I think it's, you know, for 18 some people what we go through today will be 19 very familiar but I want to make sure that 20 those people who are new to our process are 21 not disadvantaged as a result of not having 22 participated in the Medium-Voltage.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 4 1 So there will be some repetition 2 today, unavoidable. Hopefully that will 3 diminish as we go on. But we'll try to, I 4 think we can also sort of depend on the work 5 that the Medium-Voltage group has done, for 6 example in the ground rules and so forth to 7 expedite what we are doing here. 8 Let's just move straight into the 9 agenda. Then I'm going to go around the table 10 and everybody, please introduce themselves and 11 their affiliation. And then we will get 12 started. Robin? 13 MR. ROY: Hi, Robin Roy from 14 Natural Resources Defense Council. I'm here 15 representing our more than 1.3 million members 16 who have a great interest in energy efficiency 17 and the environmental benefits that come with 18 it. 19 MR. BECK: Scott Beck, Lakeview 20 Metals. We're an electrical steel and 21 amorphous core manufacturer. 22 MR. ROBLES: Eduardo Robles, Eaton

### 202-234-4433 Neal R. Gross & Co., Inc. Page 5 1 Corporation. 2 MR. TENDULKAR: Vijay Tendulkar,

3 ONYX Power. We are manufacturer of the small 4 and medium-volt -- small low-voltage and the 5 medium-voltage transformers. 6 MR. PATZNER: Thomas Patzner, 7 Schneider Electric, a manufacturer of 8 electrical distribution equipment. 9 MR. CASKEY: John Caskey, National 10 Electrical Manufacturers Association. 11 MR. PETERSEN: Eric Petersen. I'm 12 with AK Steel. We are an electrical steel 13 supplier. 14 MR. MILLURE: Dave Millure, 15 Metglas, Inc. We make amorphous metal for

16 cores.

17 MR. GREESON: Rob Greeson. I'm 18 the engineering manager at Federal Pacific 19 Transformer and we manufacture medium-voltage 20 and low-voltage dry type distribution

21 transformers. 22 MR. BALLO: Tim Ballo with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 6 1 Earthjustice. 2 MR. DeLASKI: Andrew DeLaski with 3 the Appliance Standards Awareness Project. 4 We're a coalition project that consists of 5 environmental groups, efficiency advocates, 6 consumer groups, state government agencies and 7 others who work for improved energy efficiency

8 standards.

9 MR. CYMBALSKY: I'm John 10 Cymbalsky. I manage the Appliance Standards 11 Program at DOE. 12 FACILITATOR PARKER: Let's go to 13 the back. All the way in the back. 14 MR. CHOINSKI: Hi, I'm Scott 15 Choinski with the National Electrical 16 Manufacturers Association. 17 MR. RABUN: Jim Rabun, Department 18 of Energy. 19 MS. COUGHLIN: Katie Coughlin, 20 Lawrence Berkeley National Laboratory. 21 MR. NARDOTTI: Matt Nardotti, 22 Navigant Consulting.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 7 1 MR. BOESENBERG: Alex Boesenberg, 2 NEMA. I'm the manager of regulatory affairs. 3 MR. BERMAN: Robert Berman, Berman 4 Economics. 5 MR. RYAN: Paul Ryan, Hitachi 6 Metals Metglas. 7 MR. COHEN: Dan Cohen, DOE General 8 Counsel's Office.

9 FACILITATOR PARKER: Great. And 10 I'm Richard Parker, University of Connecticut 11 Law School. For those of you who I haven't 12 had the pleasure of meeting yet I am a 13 professor of law. I teach administrative law, 14 my specialty is sort of administrative 15 process, alternative dispute resolution. I am 16 not a transformer person or an electrical 17 person. I have no dog in this race. I'm here 18 to try to facilitate the work of the group in 19 a neutral and impartial way and help us all 20 forge a consensus on a proposed rule. 21 Let me just again very quickly for 22 the benefit of the few of us here who are new

### 202-234-4433 Neal R. Gross & Co., Inc. Page 8 1 just describe how the negotiating process 2 works. For those who are new and my apologies 3 to those who've had to sit through this once 4 before already. But basically the way 5 negotiated rulemaking process works is that 6 it's an alternative way of developing a 7 proposed rule that will then be put out for 8 comment in the normal way and finalized based 9 upon public comments. What's different about 10 it is that instead of DOE or the agency just 11 gathering input in its own way, in a rather 12 unstructured way and drafting a proposed rule 13 as it sees best we actually convene a 14 committee of people that is balanced to 15 represent a diverse array of stakeholder 16 interests and hopefully expert in the issues, 17 and we sit around a table and we look at the 18 analysis that DOE's consultants have prepared 19 and we try to come up with a draft standard 20 that seems both in the interests of the 21 parties and also in the public interest. 22 And I mentioned before and I want

### 202-234-4433 Neal R. Gross & Co., Inc. Page 9 1 to just emphasize again that we are here to 2 discharge a statutory framework -- a statutory 3 mandate. So we are bound by the statute and 4 we have general counsel here to remind us that 5 we have to meet certain statutory standards. 6 One of those is that our standards not be, 7 that what we come up with be grounded on the 8 facts, grounded in the analysis so we have to 9 pay attention to that as well. And so we have 10 to explain what we're doing, we can't just act 11 like a jury and say this is our, you know, 12 this is our verdict. But we do try to come up 13 with a proposed rule that seems both legal, 14 economically justified, technologically 15 feasible, I think that's the statutory 16 standard, and in the public interest. 17 We will have several sessions in 18 which we meet to try to do this. Jointly with 19 the Medium-Voltage Working Group we're trying 20 to schedule the rest of the sessions now 21 concurrently or adjacently, let's say. The 22 Medium-Voltage Group will meet for a day and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 10 1 a half, this group will meet for a day and a 2 half, or one day each, one day each. Try to 3 keep the two groups in the future moving in 4 tandem. This is the only time that we will 5 actually meet separately as a committee in the 6 sense that there's no other meeting the day 7 before or the day after. But the Low-Voltage 8 Group will work separately, it's going to be9 its own working group. It's not the Medium10 Voltage Group. And this group is not bound by 11 anything that the Medium-Voltage Group does 12 including rules of procedure.

13 We need to work on a -- we need to 14 decide on sort of a schedule. That is really, 15 the schedule is really as those who sat 16 through the medium-voltage discussion last 17 time will understand and appreciate, the 18 schedule is really constrained by the 19 availability of meeting space and conference 20 rooms and so forth, but we'll talk about what 21 schedule would be feasible and hopefully there 22 are, people can accommodate those times or

### 202-234-4433 Neal R. Gross & Co., Inc. Page 11 1 their alternates can accommodate those times. 2 We will also try to make progress between 3 meetings through an online dialogue. We've 4 had a pretty robust online dialogue in the 5 Medium-Voltage Group and I look forward to the 6 same kind of dialogue emerging after this 7 meeting with the Low-Voltage Group. We'll 8 work some more on creating, if we can, a 9 discussion forum online. This is still 10 something where we're sort of experimenting to 11 see if there's a way to facilitate online 12 discussion in a little bit more streamlined 13 way than just emails. And if we can work that 14 out we'll share that with both groups. But 15 the bulk of what we do will be done in these 16 meetings. So we're going to try to be as 17 efficient as possible in the meetings and get

18 as much work done as we can when we come here. 19 I realize I neglected to welcome 20 the people who are calling in so first my 21 apologies for that. Welcome to all our 22 webinar call-ins. Despite my oversight I want

### 202-234-4433 Neal R. Gross & Co., Inc. Page 12 1 you to feel very much a part of our 2 conversation. Let me just turn the phones 3 over, or open the floor to the people calling. 4 If you would please just let us know who's on 5 the line, announce yourself and your 6 affiliation. Anyone? 7 MR. HOPKINSON: Phil Hopkinson, 8 HVOLT, Inc. 9 FACILITATOR PARKER: Thank you, 10 Phil, welcome. 11 MR. BOLDUC: Chris Bolduc, 12 Lawrence Berkeley National Lab. 13 FACILITATOR PARKER: Chris, thank 14 you. 15 MR. ALLEN: Gary Allen, Metglas. 16 FACILITATOR PARKER: Gary Allen, 17 Metglas. I'm repeating the names just to make 18 sure that the court reporter and hear. If I 19 can understand it then maybe he can understand 20 it but sometimes the phones break up. So 21 that's why I'm doing that. Go ahead, keep 22 going. Anyone else?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 13 1 MR. PATTERSON: Wes Patterson,

2 ABB. 3 FACILITATOR PARKER: I'm sorry? 4 MR. PATTERSON: Wes Patterson with

5 ABB.

6 FACILITATOR PARKER: Wes 7 Patterson, ABB. All right. 8 MS. WALTNER: Meg Waltner, NRDC. 9 FACILITATOR PARKER: Meg Waltner, 10 NRDC. Anyone else? 11 MR. SCHOEN: Jerry Schoen. 12 FACILITATOR PARKER: Jerry Schoen, 13 S-C-H-O-E-N. Jerry Schoen, AK Steel.

14 MR. SCHOEN: Correct. 15 MR. YOUNG: Daniel Young, Pacific 16 Gas & Electric. 17 FACILITATOR PARKER: Daniel Young, 18 okay. Pacific Gas & Electric. Anyone else? 19 MR. ROSSETTI: John Rossetti, 20 Memphis Light, Gas and Water. 21 FACILITATOR PARKER: John Rosetti, 22 Memphis Gas, Light and Water.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 14 1 MR. ROSSETTI: Memphis Light, Gas

2 and Water. 3 FACILITATOR PARKER: Light, Gas 4 and Water, excuse me. 5 MR. SMITH: Bob Smith, Federal 6 Pacific. 7 FACILITATOR PARKER: Bob Smith, 8 Federal Pacific. Anyone else? All right, 9 welcome. Thank you. Okay, let's start right 10 in. The first thing that we need to do as you 11 can see from this slide is basically to agree 12 on an agenda for today's meeting. What is 13 customarily done just to let you know for a 14 group like this is first I neglected to 15 mention that negotiated working groups like 16 this, negotiated rulemakings generally involve 17 sort of a facilitator which is me who is not 18 a part of the agency, who is not affiliated 19 with any stakeholder both helping and 20 convening the group and also moderating the 21 discussion. One of the things we need to do 22 up front that every group does is agree on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 15 1 ground rules for the committee. The ground 2 rules that are distributed to you were those3 that were provisionally agreed by the Medium4 Voltage Working Group and I thought they might 5 just be used as a basis for discussion 6 although this group again I emphasize is not 7 bound by that. 8 Just a little history again on the 9 origin of these ground rules for the 10 newcomers, basically a draft version of these 11 ground rules that was modified at the previous 12 meeting a little bit was tailored by me based 13 upon ground rules that previous negotiated 14 rulemaking working groups have used in the 15 past. To unpack that a bit, negotiated 16 rulemaking is a standard practice that is used 17 in a wide variety of agencies and a wide 18 variety of contexts. There is a statutory 19 framework for it, the Negotiated Rulemaking 20 Act of 1996 that lays out the basic things 21 that need to be done, the basic procedures

22 that need to be followed. And one of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 16 1 things that is laid out in the statute is that 2 the committee chooses its own ground rules. 3 But it seems to make sense, this is basically 4 the way that the committee is going to 5 operate. It seemed to make sense to draw on 6 the experience of previous committees and so 7 we did that and I tabled a set of ground rules 8 that previous committees had used. And then 9 the medium-voltage committee altered those 10 rules somewhat to fit its own, you know, to 11 sort of suit their needs. 12 Let me just highlight some of the 13 changes that were made. The first and perhaps 14 most important issue is the question of what 15 is a consensus. And the reason that's 16 important is because the Department of Energy 17 has committed, has made a legal commitment to 18 propose any rule or standard or part thereof 19 that this group recommends by consensus, 20 consensus as defined by the ground rules of 21 this group. And so it matters how we define 22 the word "consensus." And we had a discussion

### 202-234-4433 Neal R. Gross & Co., Inc. Page 17 1 about that in the Medium-Voltage Group and I 2 think it's fair to say that the consensus of 3 that group was that consensus should mean 4 unanimous consent of the members of the 5 committee with the understanding that 6 abstentions do not constitute a negative vote. 7 It's unanimous so you need to affirmatively 8 and clearly dissent from a holding before it 9 can be considered a lack of consensus. And 10 the hope is that people will dissent only when 11 there really is a reason to, a need to, and 12 that we won't have situations where one person 13 or two people are blocking the progress of the 14 entire group for reasons that are not shared. 15 One thing that I will emphasize 16 and that I think is really key to the success 17 of the group is the importance of giving 18 reasons for your positions and not just taking 19 positions but giving reasons and supporting 20 them with data and with analysis and with 21 argument. And being willing to move from your 22 coming-in position if the evidence seems to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 18 1 flow the other way. So there's the issue of 2 what constitutes consensus that we should

3 table. 4 There's also questions about what 5 are the obligations of the committee members 6 to the process, what constitutes good faith 7 negotiation. And previous committees have 8 agreed that members, people who are directly 9 represented at the table undertake that they 10 will not oppose any rule or any proposed rule 11 to which they have given their consent during 12 this process. They won't give their consent 13 during this process and then go out and lobby 14 against it in some other forum, whether it be 15 Congress or the media or the rulemaking itself 16 after it's proposed if it's in keeping with 17 what was proposed, what was agreed upon. 18 There was also a discussion about 19 provisions in the prior, in the boilerplate 20 ground rules that actually call for people to 21 lobby in favor of it. That was a bit too much 22 for the Medium-Voltage Group and I think it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 19 1 was generally agreed that people who, you 2 know, at best abstained with regard to a 3 particular provision should not be thereafter 4 called to lobby in favor of that very 5 provision if they consent to it. And so we 6 struck that language. 7 There is also a question about 8 participation at these meetings. And it was 9 noted in the medium-voltage meeting that it 10 was a pretty loosy goosy format, everybody 11 spoke whether they were a member of the 12 committee or not and there were some concerns 13 raised about how the committee is going to 14 make progress if we don't keep a somewhat 15 tighter rein on discussions. I thought about 16 that, I discussed it with other people who are 17 very, very experienced in the rulemaking 18 process and what I understand is the common 19 practice and that I would propose that we 20 implement in this committee which is 21 consistent with the ground rules that I passed 22 out there in front of you is that the members

### 202-234-4433 Neal R. Gross & Co., Inc. Page 20 1 of the committee are the ones who are entitled 2 to speak. Their alternates are entitled to 3 speak in their stead if the members are 4 absent, but if the member is present for any 5 particular stakeholder then the alternate 6 should supply their comments to the person 7 present, to the principal who's at the table 8 and the principal should either make that 9 comment or call upon, ask the chair to 10 recognize that person to speak in their stead 11 at the mic. So I will also at the end of the 12 day just open the floor to people who are not 13 around the table for them to raise concerns. 14 But we'll limit that to about 15, 20 minutes 15 or 30 minutes at the very end so that we make 16 sure that we give this group the maximum 17 possible chance to agree. 18 So those are some of the ground 19 rules that we discussed, some of the changes 20 that we discussed. And we will, I think that 21 gives you sort of a basic framework. Is there 22 anything that I missed that people around the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 21 1 table want to raise that -- in connection with 2 the ground rules? Yes, Andrew? 3 MR. DeLASKI: A couple of things. 4 One is can you tell who's on the committee? 5 Is it the people at the table? 6 FACILITATOR PARKER: The people 7 around the table, the people -- not everybody 8 on the committee is here I think but. 9 MR. DeLASKI: Is it the name tags

10 around the table? 11 FACILITATOR PARKER: The name tags 12 around the table, yes. There are some people 13 who are not here who are on the committee. I 14 think Steve Nadel is on this committee, right? 15 I'm not sure if he's attending today. 16 MR. DeLASKI: So what is the total

17 number then? 18 FACILITATOR PARKER: So there is 19 in your handouts a list of -- with Tim Ballo. 20 I've already apologized to Tim for the 21 inadvertent omission of his name from the 22 committee. But -- and I'm not sure about Ray

### 202-234-4433 Neal R. Gross & Co., Inc. Page 22 1 Polinski. There was also an issue about his 2 nomination that we're checking into and we're 3 in contact with him.

4 MR. DeLASKI: Who was the last 5 person? 6 FACILITATOR PARKER: Ray Polinski 7 from Allegheny Ludlum. 8 MR. DeLASKI: Did you mention a 9 Tim person? 10 FACILITATOR PARKER: Tim Ballo. 11 MR. DeLASKI: Oh. Hi, Tim. And 12 then another question. Richard, is that the 13 last point --

14 FACILITATOR PARKER: And I'm 15 sorry, we will circulate a revised contact 16 list once we get these. We just noticed the 17 omissions last night and I apologize for that. 18 Sorry. 19 MR. DeLASKI: Yes, the last point 20 you made I thought was quite different than 21 what we agreed to in our meeting last time 22 which is that what I just heard you say is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 23 1 that only committee members can speak unless 2 the committee member taps their alternate to 3 speak, in which case their alternate can 4 speak. But no one else in the room can speak 5 until the end of the day. That's what I just 6 heard you say. 7 FACILITATOR PARKER: I was going 8 to propose that. We don't have to agree on 9 that. I was going to propose that. 10 MR. DeLASKI: So I thought you 11 were summarizing what the last committee 12 agreed to. I don't think the last committee 13 agreed to that. 14 FACILITATOR PARKER: No, no, I

15 meant to make that clear. Yes. 16 MR. DeLASKI: And I guess, okay, 17 so that's going to be discussed I assume. 18 FACILITATOR PARKER: Right. 19 MR. DeLASKI: That I think will 20 create some -- I have concerns about that, so. 21 FACILITATOR PARKER: Okay. Let's 22 hold that. I'm sorry, that goes to how we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 24 1 conduct the discussion of the ground rules. 2 There's a recursiveness problem here. But 3 anyway, yes, that's a point well taken. That 4 is something that is common practice. It's 5 the way that the previous, the rules that we 6 sort of around the table have been implemented 7 in the past but it's not the only way that 8 they have to be implemented. So that's fair 9 enough. 10 MR. DeLASKI: Do you want to 11 discuss that right now or do you want to --

12 FACILITATOR PARKER: Let's hold on 13 for a second. Let's -- I realized I got into 14 the weeds with the ground rules. We need to 15 first just sort of take a look at the agenda 16 and make sure that people are happy with that 17 and then we'll close that out and then get 18 into the ground rules. What I hope to do is 19 have a little discussion about the ground 20 rules, hopefully people have had a chance to

21 look at them and have had a chance to have 22 their in-house counsel look at them. We had

### 202-234-4433 Neal R. Gross & Co., Inc. Page 25 1 actually voted on and adopted the ground rules 2 previously but then after the meeting I heard 3 from a couple of individuals that they would 4 like their in-house counsel to be able to look 5 at them since this is actually sort of a legal 6 document and that seemed like a reasonable 7 request. And so I reopened the discussion of 8 the ground rules for the medium-voltage 9 committee so that they are not completely 10 final and we'll aim to finalize them at the11 beginning of the next meeting with the medium12 voltage committee in October. So those are 13 not final for that committee and you are 14 certainly not bound by what they do. We'll 15 have an open discussion as I said. The rules 16 of participation are one thing we need to 17 discuss but there are other things that you 18 may want to raise around the table as well.

19 We need to talk about the schedule 20 going forward for meetings. And then I'm 21 hoping that we can get through this quickly 22 and that we can turn, around 10:30 or 11:00,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 26 1 to Navigant's presentation of its analysis, 2 its engineering analysis of the low-voltage 3 transformer standards. Questions about that 4 analysis, I'm sure there will be many. We'll

5 break for an hour at lunch and come back 6 promptly and meet from -- meet in the 7 afternoon to really just get into the issues. 8 And what we did with the Medium-Voltage Group 9 and I would propose it for this group is that 10 we really focus on just identifying the 11 analytical issues and the policy issues that 12 need to be decided in coming up with 13 efficiency standards for these three design 14 lines. And make sure that we're happy with 15 the way the analysis is being framed, with the 16 way it's being presented, with the structure 17 of the analysis so that if changes to the 18 analysis need to be made, Navigant and LBL can 19 actually get to work on doing that. We're 20 going to have to have a discussion about how 21 much analysis and what sort of, you know, what 22 is the threshold for asking for more analysis

### 202-234-4433 Neal R. Gross & Co., Inc. Page 27 1 from our consultants because, you know, 2 information is not free, there's a cost to it 3 and we have to be cognizant of the resource 4 limitations that they have, the data 5 limitations that they have. So we can have 6 that discussion but we do need to focus on 7 sort of identifying the key issues. 8 And the last thing that is on the 9 agenda for today if we can get to it is 10 actually agreeing on, if we can, on at least 11 a first cut of the trial standard level, the 12 TSL criteria for low-voltage transformers. 13 That is necessary, it's an important early 14 step because those are the criteria that LBL 15 will then use in doing their life cycle and 16 their present value assessments and so forth. 17 We'll try to get to that at the end and 18 adjourn promptly at 5:00 so people can get out

19 of here. 20 Does this seem like a reasonable 21 way to proceed? Are there any changes to the 22 agenda that people would propose? If not,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 28 1 we'll consider the agenda adopted and move on 2 to the ground rules. 3 One last comment on the ground 4 rules before I end my filibuster and turn it 5 over to you guys. In the online discussion of 6 the ground rules -- actually, excuse me, 7 before we do that John pointed out that our 8 FACA representative is not here. But, okay. 9 So we'll just table that discussion and he can 10 come back and give it himself. Great. 11 An issue arose in the online 12 discussions of our rules of procedure for the 13 Medium-Voltage Group which I thought might be 14 helpful to clarify for this group and that is 15 the question of what is a rule and procedure, 16 what is a ground rule. And one of the things 17 that was tabled, for example, was the idea

18 that there should be subclasses formed and 19 there should be, for some groups, and that 20 there should be a ground rule that says that 21 we can form subclasses for different groups, 22 for different equipment classes and design

### 202-234-4433 Neal R. Gross & Co., Inc. Page 29 1 lines and so forth. Those are all perfectly 2 valid questions. What I want to suggest is 3 that the kind of ground rules that we were 4 talking about at the very outset of the talks 5 before we'd had any kind of substantive 6 discussion, the kind of ground rules that 7 we're adopting here, it's not that kind of a 8 ground rule. That's an analytical thing. The 9 way the ground rule, what we mean by ground 10 rules of procedure is the kinds of things that 11 would apply to any committee. If we were a 12 committee on snowmobiling in Yellowstone, you 13 know, how would we proceed, what are the rules 14 of participation, you know. We will get into 15 the substance and we might, based upon the 16 analysis, based upon the politics, based upon 17 the policy we might agree that we'll have some 18 rules for how we're going to handle substance 19 but what we're talking about here is 20 generalized rules of procedure, what 21 constitutes consensus, what are the 22 participation rights and so forth. So

### 202-234-4433 Neal R. Gross & Co., Inc. Page 30 1 hopefully that'll just keep us kind of on 2 point as we're discussing this. And again, we 3 can also agree later as we get into the 4 discussion about whether there should be 5 subclasses. That's going to the merits, 6 that's not going to the rules of procedure. 7 Does that help people? 8 So with that in mind let me just 9 open the floor to questions, concerns. I've 10 already tabled one issue which is the rights 11 of participation but there are other issues 12 that you might want to raise. The floor is 13 open. John, did you want to? 14 MR. CASKEY: Sure. John Caskey 15 from NEMA. I have a couple of different 16 points or observations. One deals with who 17 has the right to speak relative to the 18 committee or the guest. And I would, I mean 19 my recommendation would be something where the 20 facilitator has some leeway on how he presents 21 that or how he handles that. I certainly feel 22 strongly that the committee members should

### 202-234-4433 Neal R. Gross & Co., Inc. Page 31 1 have the first choice to answer questions or 2 ask questions and present issues but then once 3 that is sort of wrapping up I certainly feel 4 that it's appropriate for the facilitator to 5 see if there are guests out there that have a 6 particular view that they want to express at 7 that period of time. So it seems like it's 8 more reasonable to do that during the 9 discussion as opposed to at the end of the 10 day, you know, give each person five minutes 11 that's not a committee member to say what they 12 think about a certain issue that was discussed

13 seven hours before. So I would recommend that 14 we give some leeway to the facilitator, but 15 again, the preference is for the committee 16 members sitting at the table to have the first 17 sort of right of refusal or the first 18 opportunity. 19 The other thing that we need to 20 interject in there someway is that you and DOE 21 need the authority or the ability to be able 22 to call on LBL and Navigant and others that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 32 1 there may be a technical question that comes 2 up. And even though they're not sitting at 3 the tables, I mean you want them to speak 4 before you know quarter of 5:00 in the 5 afternoon. So I mean, there needs to be 6 something like that factored in there. 7 FACILITATOR PARKER: Right. Well 8 thank you, that's helpful, and I think LBL and 9 Navigant stand in sort of a different stead 10 because they're not stakeholders. They are 11 consultants and analytical support. So I 12 think, yes. They would definitely be able to 13 speak before the end of the meeting. They'll 14 be presenting in the middle of our meeting. 15 MR. CASKEY: The other thing that 16 is of interest to me that I think is important 17 is to figure out what is going to be done 18 relative to summaries of the meeting. I think 19 that was on, you know, one of the last items 20 in the ground rules. But in here it states 21 that basically there's going to be some sort 22 of summary, not necessarily minutes but a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 33 1 summary. So the question is when is that 2 going to be made available relative to when 3 the meeting concludes. And sort of a subset 4 of that is the last time we had the session 5 there were a lot of presentations and other 6 materials that were discussed. What is the 7 process for getting those presentations and 8 other supporting information posted on the 9 website. You know, do we have -- can we have 10 some time frame like two days, or five days, 11 or some X number of days after the conclusion 12 of the meeting to get that stuff posted. 13 Because, you know, the people that are 14 listening on the phone today don't have access 15 other than going through the website to see 16 those presentations or materials and some of 17 those are pretty important. So -- 18 FACILITATOR PARKER: Well, let's 19 address that by webinar. Let me -- they can 20 see what's on the screen. But I think that's 21 a very good point, it's a point well taken. 22 So the point is that I wanted to take to get

### 202-234-4433 Neal R. Gross & Co., Inc. Page 34 1 the minutes, and I apologize for not getting 2 the minutes out sooner. I will undertake in 3 the future to have the minutes out within one 4 week of the meeting. 5 MR. CASKEY: Okay. 6 FACILITATOR PARKER: Summary 7 minutes within one week. And I think that's 8 probably a reasonable time frame for having 9 the presentations posted online as well, 10 right? So within one week of the meeting. 11 What's that? And the transcript, yes. We 12 will get those posted on the website. LBL 13 also sent around I think to everybody by email 14 the draft chapters to the updated TSD for the 15 rulemaking. I hope everybody got that. I 16 understand that for technical reasons that's 17 still not posted on the website but DOE is 18 working on getting that posted. But hopefully 19 the committee members and alternates and 20 everybody on the distribution list was able to 21 get that at least by email, right? So that 22 you were able to print it out and have it for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 35 1 this meeting. But we will try to get that 2 stuff on the website. And I will get the 3 minutes for the MV group out quickly and we'll 4 have the minutes out within one week of this 5 time. If we want to put that into the bylaws 6 we can but I'll certainly commit to that, I 7 think DOE will. Anything else? Andrew, did 8 you want to? 9 MR. DeLASKI: I think John's 10 suggestion for how to proceed, how to 11 recognize folks is good. I actually think 12 it's actually pretty consistent with what's in

13 the draft. 14 FACILITATOR PARKER: Right. 15 MR. DeLASKI: Which is different 16 than what you described, right? What you 17 described was more rigid, I think.

18 FACILITATOR PARKER: Yes. Excuse 19 me, yes. Could everybody please -- 20 MR. DeLASKI: I'm looking at point 21 number 2 in the draft. This is the second 22 page, the top participation. This seems

### 202-234-4433 Neal R. Gross & Co., Inc. Page 36 1 reasonable to me and I think less restrictive 2 than what I heard you say. 3 FACILITATOR PARKER: Okay. 4 MR. DeLASKI: And I think -- so 5 for example what I, you know, I think it's 6 right that the committee members have 7 precedence, they should be given first 8 recognition or are alternates. But that also, 9 what it says here is that, you know, a 10 committee member can call upon another 11 individual to elaborate on a relevant point. 12 So not just an alternate but if there's 13 someone else in the room who I need to explain 14 what I'm trying to tell you but they can do it 15 better than I can, have them do it rather than 16 have them whisper in my ear and have me try to 17 tell you what they can say better. 18 FACILITATOR PARKER: Right, okay. 19 MR. DeLASKI: Committee counsel, I 20 guess, I don't know, is that you or is that 21 Dan? Who's our committee counsel?

22 FACILITATOR PARKER: That's Dan.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 37 1 MR. DeLASKI: And Dan. So that 2 makes sense to me. And then I think if the 3 time permits I think that should happen in 4 real time as opposed to at the end of the day. 5 FACILITATOR PARKER: Right. 6 MR. DeLASKI: You know, so. 7 FACILITATOR PARKER: Well, those 8 are both reasonable constructions of that 9 language that have been applied different ways 10 in different times. But I'm happy to go with 11 the will of the group. 12 MR. DeLASKI: I think it is 13 important to recognize, you know, I'm a 14 proponent here that we need to work diligently 15 and try to advance the discussion. And use 16 our time wisely. 17 FACILITATOR PARKER: Right. 18 MR. DeLASKI: And I'm looking to 19 you as the facilitator to help us move things 20 along so that we're not getting caught up in 21 an issue and having, you know, people from the 22 audience go back and forth on an issue.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 38 1 FACILITATOR PARKER: Okay. I will 2 be sensitive to that that we won't make any 3 draconian changes in the rules procedure that 4 would do that. Great. So basically, you 5 know, I would just ask folks, you know, 6 particularly in the audience to be sensitive 7 to the need to make progress. We want to 8 encourage participation but we also want to 9 make sure that we're getting through our work.

10 11 Anything else that we need to 12 discuss about the rules of procedure? The 13 ground rules. I particularly want to invite 14 any, the Low-Voltage people who were not here 15 at the previous meeting. Does that seem 16 amenable to you? Are we ready to take a vote 17 on adopting them? Has everybody -- yes? 18 MR. TENDULKAR: I say yes to the

19 vote. 20 FACILITATOR PARKER: All in favor? 21 All right. All opposed? Okay. In case 22 they're adopted. And I understand that people

### 202-234-4433 Neal R. Gross & Co., Inc. Page 39 1 have had these rules in advance and have had 2 a chance to run them through their in-house 3 counsel so we will actually consider them 4 adopted. And congratulations, you're now 5 ahead of the MV group. Great. 6 Well, let's just move on and 7 discuss possible schedules and locations of 8 meetings for the future. I believe our next 9 meeting, Jeremiah, can you remind us? But I 10 think it's October 12th through the 14th we 11 are definitely slated to meet. Let me correct 12 that. The 12th through the 13th will be the 13 meeting of the Medium-Voltage Group. Through 14 noon on the 13th the Medium-Voltage Group will 15 meet. From 2:00 -- thank you, Jeremiah --16 from 2:00 until 5:00 on the 13th the Low17 Voltage Group will convene and will continue 18 over until -- through on the 14th as well, 19 concluding on Friday the 14th at 3:00. 20 Just a couple of words of 21 explanation here. Basically the idea is to 22 give each group about a day and a half to meet

### 202-234-4433 Neal R. Gross & Co., Inc. Page 40 1 on two separate calendar days and the reason 2 is that in the past the experience has been 3 that it's actually helpful to have an 4 overnight where people can consult with their 5 principals back home, can caucus with each 6 other, with their other interest groups and so 7 forth and come up with creative, constructive, 8 helpful solutions that they can then table the 9 next morning or the next afternoon. So we've 10 tried to structure it so that there is an 11 overnight for each group. The idea I think 12 would be to have two days for each committee 13 but I think four days for those people doing 14 both was just too much to ask, too much of a 15 commitment, so we're doing a day and a half 16 basically back to back for medium-voltage and 17 low-voltage and that's the, at least that's 18 the proposal. 19 And the National Rural Electrics 20 Cooperative has very graciously agreed to host 21 the October meetings and so it will be there. 22 If you hadn't received it already you will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 41 1 receive an announcement that will give you all 2 the call-in information. I think they sent 3 out and I think I sent to you previously the 4 address and information about hotels. Is it 5 in the packet? Okay, great. So you have 6 that. And that will be the October meeting. 7 MR. PETERSEN: Richard, may I 8 confirm?

9 FACILITATOR PARKER: Yes. 10 MR. PETERSEN: The Friday the 11 14th, is that till 3:00 or 5:00? 12 FACILITATOR PARKER: That is until 13 3:00. Again, the reason is that a number of 14 people came to me and said look, if we get out 15 at 5:00 on a Friday it's gruesome getting to 16 the airport and getting home. We won't see 17 our families, you know. So whenever we're out 18 on a Friday I've committed to try to end the 19 meetings at 3:00 or 3:30 at the latest so that 20 you can get to the airport if you're flying 21 and get home at a reasonable time. 22 The November meeting, we need to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 42 1 have -- yes, go ahead, John. 2 MR. CYMBALSKY: John Cymbalsky, 3 DOE. So the November meetings, we still don't 4 have a confirmed place to hold the meetings 5 yet. We went out for some bids and they came 6 up extremely costly. So as a taxpayer and I 7 think we're all taxpayers in this room we'll 8 put out the beg one more time for someone to 9 offer up space. I know Steve Rosenstock from 10 EEI offered up November 8th I believe, just 11 that one day. So at this point we're just 12 looking for some creative ideas for November

13 9th and 10th. 14 MR. DeLASKI: This group is 15 significantly smaller than the liquid-immersed 16 group. So I mean, I'm looking at this room 17 here and I'm thinking that some of the NGOs 18 that we work with have conference rooms that 19 could hold a group of this size. 20 MR. CYMBALSKY: Right. So I 21 think, I guess the only problem then is the 22 morning of the 9th when we'd have the medium-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 43 1 voltage would be a rather, you know, bigger 2 than this crowd. So I think, so maybe -- 3 FACILITATOR PARKER: Maybe we 4 could split them up. I mean maybe, you know.

5

6 MR. CYMBALSKY: Yes.

7 MR. DeLASKI: I don't know when 8 we're available. I need to check on those 9 things but that's something to put into your

10 calculus. 11 MR. CYMBALSKY: I mean, I think 12 actually you have a good point. I think with 13 this size we can, back in L'Enfant where I 14 reside I think our room's big enough for this 15 amount of people. So I'll get that as a 16 backstop.

17 MR. TENDULKAR: Are those dates 18 fixed or they are variable? 19 MR. CYMBALSKY: Well you know, we 20 spent so much time last meeting getting these 21 dates that I'd be loathe to go back and open 22 that up.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 44 1 MR. TENDULKAR: I will be out of 2 country on those dates. 3 MR. CYMBALSKY: Okay. Do you have

4 an alternate that can? 5 MR. TENDULKAR: I'll be coming 6 back on 13th of November so anything after 7 13th should be fine. But I don't want to 8 inconvenience everybody else in the meeting. 9 MR. CYMBALSKY: Yes. I mean, we 10 tried to space them out too at proper 11 intervals so I think if we get too close to 12 Thanksgiving it's just going to blow up on us. 13 I'll just put the word out for maybe, I'll get 14 our room as a backstop for the 9th and the 15 10th. We'll continue to try to get this room 16 because sometimes they're canceled at the last 17 minute. But if anyone else in the room can 18 just put out some feelers we'd appreciate that 19 as taxpayers. 20 MR. DeLASKI: Another thought, 21 John, would be if there's EEIs available for 22 the first day, right. So you could have, I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 45 1 mean, we may just need to do a 2-day meeting. 2 Instead of doing a 3-day meeting you could do 3 a 2-day meeting, one day on -- 4 MR. CYMBALSKY: Right, we can do

5 that. 6 MR. DeLASKI: So I think that 7 maybe you can have a good backup plan. 8 MR. CYMBALSKY: That's a good 9 idea. So maybe we just extend the hours. 10 Steve, how do you feel about the hours of your 11 room? Can they go past 5:00 let's say till

12 6:00? 13 MR. ROSENSTOCK: Steve Rosenstock, 14 EEI. I believe so, I don't believe that that 15 would be an issue. 16 MR. DeLASKI: As a way to resolve 17 it I think that would be a constructive way to 18 kind of nail that down and say that's what 19 we're going to do. I mean, I know Richard's 20 worked on this a ton already trying to get 21 this resolved. 22 MR. CYMBALSKY: That's a good

### 202-234-4433 Neal R. Gross & Co., Inc. Page 46 1 proposal. So Steve, if you could book your 2 room for November 8th. And then I'll go ahead 3 and book my room for the 9th. 4 MR. ROSENSTOCK: And what time 5 would you like me to make? I mean 9:00 to 6 5:00 I kind of tentatively booked so what time 7 would you like me to make sure? 8 MR. CYMBALSKY: Does anyone have a 9 real -- well, I guess the medium-voltage would 10 be the one we're talking about so I'm kind of 11 wasting my breath here. You know, I wouldn't 12 mind a little earlier and a little later 13 personally, but I don't want to speak for 14 everybody. 15 MR. DeLASKI: My preference is to 16 keep a 9:00 start. Some of us who are East 17 Coasters, don't live in Washington and want to 18 get here that morning. And you know, of 19 course for those of us who are staying over 20 the next day I don't care how late we go.

21 FACILITATOR PARKER: So can we 22 work till 6:00? I mean would that be --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 47 1 MR. ROSENSTOCK: I think that's 2 fine. I mean really -- Steve Rosenstock, EEI 3 -- we'll set up in the morning so it'll be 4 there, the AV and everything like that. 5 MR. CYMBALSKY: Okay, so let's 6 shoot for 9:00 and then 9:00 till question

7 mark. 8 MR. ROSENSTOCK: I'll schedule it 9 for 6:00 if that works for you. 10 FACILITATOR PARKER: Okay, thanks. 11 Great. And then the December meeting I 12 believe is confirmed for November 30th through 13 December 2nd at the American Public Power 14 Association (APPA). Again they're very kindly 15 extending their hospitality to cover both the 16 medium-voltage and the low-voltage. So 17 November 30th through December 2nd I think we 18 have locked in. So that would be, is there 19 any problem for the low-voltage people? Vijay 20 and Eduardo, can you make -- will those 21 meetings work okay for you? Okay. 22 So then does that seem like -- and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 48 1 there is, you know, if we get stuck, you know, 2 there is the possibility of meeting again in 3 December but I think thoughts will be turning 4 towards holidays. So you know, hopefully we 5 won't need that. We may have that as a 6 fallback if necessary. I think we're holding 7 the room, right, if it's needed for December 8 20th and 22nd I believe. Is that when it is?

9 10 I should say that you know the 11 strength of negotiated rulemaking has been 12 that it usually requires about six meetings. 13 We're going to try to do our work in four. 14 This is very complex stuff and so I think it's 15 daunting. I make no guarantees but hopefully 16 with good will and good faith and a lot of 17 hard work between meetings which will be 18 important we can, you know, we'll try to do it 19 in four and see how it goes. Okay. Any 20 further discussion of the schedule?

21 MR. PETERSEN: Just on the APPA 22 could you have someone send a location?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 49 1 FACILITATOR PARKER: Yes, it will 2 be -- it's in the area here but we'll send the 3 details. We still have lots of time for that. 4 Thank you. Any other comments? Okay, we have 5 a plan. Moving right along. 6 I think we are now ready to talk 7 about -- to have the Navigant engineering 8 analysis. Do we want to just plunge right 9 into this? Jeremiah is going to call Art 10 Rosenfeld who is going to be joining us from 11 California. The rules for this committee 12 state that somebody from the ERAC needs to be 13 present at our meetings and Art has very 14 kindly agreed to be that person. He asked 15 that he be spared a review of the rules of 16 procedure but he's going to join us for the 17 remainder of the meeting so he will be joining 18 us on the call soon. If people are ready, if 19 -- we have Matt Nardotti from Navigant here 20 who can present. Matt, do you need time to 21 set up or are you all ready to roll? 22 MR. NARDOTTI: I'm okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 50 1 FACILITATOR PARKER: Okay. Why 2 don't you come on up here and I'll turn it 3 over to you. 4 MR. NARDOTTI: Good morning. I'm 5 Matt Nardotti from Navigant Consulting who, 6 with Lawrence Berkeley National Lab we provide 7 support to the Department of Energy for this 8 rulemaking. Navigant Consulting is 9 responsible for the market and technology 10 assessment, the screening analysis, the 11 engineering analysis and the manufacturing 12 impact analysis. This morning I'm going to be 13 going over the methodology that we used for 14 the engineering analysis. As you can see on 15 this flow chart the screening analysis and the 16 market and technology assessment feed into the 17 engineering analysis. The market and tech 18 assessment describes the market, characterizes 19 the products that are available, identifies 20 technology options that can be used. And then 21 the screening analysis takes those technology 22 options, passes them through four screening

### 202-234-4433 Neal R. Gross & Co., Inc. Page 51 1 criteria and decides if they are design



### 2 options that can be used in the engineering analysis.



### 3 So the purpose of the engineering



### 4 analysis is to develop a relationship between



### 5 the efficiency of a transformer and the



### 6 manufacturing selling price. To do this DOE



### 7 examines the design options that pass the



### 8 screening analysis and then the outputs of the



### 9 engineering analysis, costs and efficiency are



### 10 then fed as inputs into downstream analyses



### 11 like the life cycle cost analysis and the



### 12 national impacts analysis.



### 13 On this slide we highlight some of



### 14 the key steps that we take for the engineering



### 15 analysis. So the first step is to subdivide



### 16 the products into equipment classes and design



### 17 lines. Within each of the design lines select



### 18 a representative unit which will be used and



### 19 directly analyzed. After selecting a



### 20 representative unit DOE identifies design



### 21 options that can be used to characterize the



### 22 range of possible efficiencies for each of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 52 1 these representative units. 2 Next, DOE develops cost inputs for 3 material prices, markups and labor 4 requirements. After that DOE used a software 5 program to model hundreds of optimized designs 6 for each of the design option combinations 7 that are identified using various A and B 8 combinations. I'll get back to that in a few 9 minutes. The designs then yield a range of 10 efficiency from which DOE can select 11 incremental efficiency levels which are then 12 analyzed further in the downstream analyses. 13 Finally, DOE scales the results from the 14 representative units to the other unanalyzed 15 kVA ratings. 16 As you may know each of the 17 equipment classes that DOE has identified 18 spans a range of kVA ratings. In the 19 engineering analysis DOE subdivided these 20 equipment classes into 14 design lines to 21 group kVA ratings based on similar design 22 principles and construction, things such as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 53 1 core configurations. Since DOE will 2 ultimately need to scale the unanalyzed kVA 3 ratings DOE selected design lines to span a 4 range of kVA ratings where the 0.75 scaling 5 rule could provide accurate results. Once the 6 design lines were selected DOE then identified 7 a single rep unit from each design line. And 8 that's the basis for the engineering analysis. 9 When selecting these representative units DOE 10 did examine shipment volumes and tried to 11 identify and use or analyze the higher volume 12 products but ultimately -- or also DOE tried 13 to pick a kVA rating which would serve as a 14 solid reference point to scale the results. 15 So this slide shows two figures 16 which kind of demonstrate how equipment 17 classes, design lines, representative units

18 are all related. Each of these boxes 19 represents the two equipment classes that are 20 the most pertinent for this committee, the 21 low-voltage products, low-voltage dry type 22 products. And as you can see one is for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 54 1 single-phase products and one is for three. 2 For the single-phase products DOE did not feel 3 the need to separate into multiple design 4 lines and so one design line is used for that 5 equipment class. But for the three-phase 6 units since the kVA ratings was such a larger 7 span DOE divided the products into two design 8 lines and selected two representative units 9 which would be analyzed. 10 This table shows some of the more 11 descriptive characteristics of those 12 representative units that were selected. So 13 on the right side you can see that some of 14 those characteristics for these products. For 15 the single-phase the 25 kVA unit was analyzed, 16 for three-phase, the 75, the 300 kVA. 17 So after identifying 18 representative units DOE selects design option 19 to characterize the range of efficiencies. 20 DOE selected these design options from the 21 list of potential technology options that were 22 not eliminated by the screening analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 55 1 When selecting design options DOE tried to 2 capture the most common designs that are used 3 in the industry but also those designs that 4 would provide DOE with the maximum efficiency 5 level possible. So some of these design 6 options include various core configurations, 7 core steels and winding materials. The table 8 here presents some of those designs, some of 9 the specific designs that were considered in 10 the analysis using these design options. As 11 you can see DOE considered a large number of 12 design types including wound and stacked cores 13 with and without mitering, various core 14 steels, M12 all the way up to amorphous steels 15 and both aluminum and copper for windings. 16 On this slide we present an 17 example of the different design option 18 combinations that were selected for one of the 19 representative units, in this case design line20 7 which is the three-phase 75 kVA unit, low21 voltage dry type. In general these design 22 options are listed in order of -- or in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 56 1 ascending order of efficiency. So as you go 2 down the table the efficiency of the 3 transformer generally improves. 4 In the next step of the 5 engineering analysis DOE developed cost 6 inputs. A list of material prices was 7 determined from a 5-year time frame, 2006 to 8 2010, and the total labor hours required to 9 build each design were determined through 10 conversations with manufacturers and industry 11 experts. DOE used the 2010 material prices 12 for its reference case but also examined a 13 high and low price sensitivity case, 2008 and 14 2006 respectively. Next, DOE calculated 15 markups to use in its analysis to account for 16 items such as scrap and handling factory 17 overhead, non-production costs. A fully

18 burdened labor rate was also calculated to 19 determine labor costs. All of these markups 20 are presented on this table. For scrap and 21 handling DOE generally used a 2.5 percent 22 markup unless the design was a prefabricated

### 202-234-4433 Neal R. Gross & Co., Inc. Page 57 1 amorphous core. Then the scrap factor was 2 reduced to 1.5 percent, or if it was a mitered 3 design, a fully mitered design the scrap 4 factor was increased to 4 percent. For 5 factory overhead DOE applied a 12.5 percent 6 markup to all designs including amorphous. 7 And additionally, DOE accounted for shipping8 costs in their calculation prior to the non9 production markup because manufacturers --

10 because DOE understands that these costs are 11 typically borne by the manufacturers and are 12 included in their profit markup calculations. 13 MR. GREESON: Pacific Transformer. 14 I have a question regarding those -- I assume 15 you're going to get to these scatter plots and 16 the pricing that is shown on those scatter 17 plots. Are those markups that you just showed 18 on that slide applied before or after? Are 19 those the final prices? 20 MR. NARDOTTI: -- you're talking

21 about?

22 MR. GREESON: Yes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 58 1 MR. NARDOTTI: Those clouds 2 include all of the markups. The prices on 3 those plots include the markups. 4 MR. GREESON: Okay. It was a 5 little unclear to me when I was reading some 6 of the information whether they were, those 7 were inputs and then the markups were applied 8 at a latter point in the analysis or not. So 9 all those that you just listed up there for

10 labor and overhead.

11 MR. NARDOTTI: Yes. So those 12 clouds are of the manufacturing selling price 13 versus the efficiencies. So they include all 14 of the markup. It's completely marked up, 15 that's the final result. 16 MR. GREESON: Is your information 17 about -- you had $51 and something for labor. 18 What labor are you referring to there, the 19 manufacturing time to build the transformer or 20 were those installation? Was that 21 installation labor or what labor were you 22 referring to?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 59 1 MR. NARDOTTI: So that would be on 2 the manufacturing side of things. That would 3 be the hourly rate, a fully burdened hourly4 rate. So it includes things for the non5 production workers as well. But it's on the 6 manufacturers side. 7 MR. GREESON: Okay, so the scatter 8 plot with the pricing included a material 9 price the markups were applied to and there

10 were some labor hours attached to those 11 designs. 12 MR. NARDOTTI: Exactly. 13 MR. GREESON: At some point. 14 Okay, thank you. 15 MR. TENDULKAR: I have a question. 16 This is Vijay Tendulkar from ONYX Power. In 17 this graph you said about 1.5 percent or 18 something for the steel. Did you have a 19 number for the conductor also? Or I missed 20 it. 21 MR. NARDOTTI: So the 2.5 percent, 22 that's like an original standard scrap factor

### 202-234-4433 Neal R. Gross & Co., Inc. Page 60 1 that's -- 2 MR. TENDULKAR: That is for 3 everything, conductor and? 4 MR. NARDOTTI: Right, that 5 includes everything. But if the core is in a 6 prefabricated amorphous core for that design 7 specifically we used the 1.5 percent rather 8 than the 2.5 percent markup. 9 MR. TENDULKAR: Okay. 10 MR. NARDOTTI: Or if it was a 11 fully mitered design then we used 4. 12 MR. TENDULKAR: And 4 percent for 13 the mitered core. 14 MR. NARDOTTI: Exactly. 15 MR. TENDULKAR: Okay. Those -- 16 okay. And the other one you had mentioned 17 about the temperature rise about 150 degrees 18 C as your design criteria for the coming up 19 with the efficiencies. Now, have you made any 20 allowances for the other temperature rises 21 like 115 degrees or 80 degrees was also 22 common? Is there any effect that has on the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 61 1 efficiency or not?

2 MR. NARDOTTI: We haven't done a 3 sensitivity analysis on the other temperature, 4 the other standardized temperature rises. 5 MR. TENDULKAR: Okay. And also 6 you mentioned there is a delta Y design, 480 7 volts to 8 volts is the one you did on that 8 particular three design I noticed. Maybe I'm 9 wrong. Have you made any allowances for the 10 other designs like delta zigzag or a delta 11 double zigzag where quite a bit of carbon for

12 some of the transformers we made for the data

13 centers.

14 MR. NARDOTTI: As far as I know I 15 don't believe so, no. 16 MR. TENDULKAR: Okay, thank you. 17 MR. PATZNER: Matt, Thomas 18 Patzner, Schneider Electric. Since we're 19 asking questions could you go back to the 20 slide with the design line choices? In your 21 April meeting you asked if the industry 22 thought we should -- go, it's about two more

### 202-234-4433 Neal R. Gross & Co., Inc. Page 62 1 slides back, please. One more. You guys 2 asked if we wanted more design lines and I was 3 at the meeting. We suggested that there be a 4 design line added for the 15 kVA three-phase 5 because we did not believe the scaling factor 6 would do an adequate result if we did not add 7 it. So you had two questions. Should we add 8 design lines or should we keep the scaling 9 factor. You have not added design lines and 10 you kept the scaling factor, but from those 11 discussions in that meeting we determined the 12 scaling factor on the outer ranges started to 13 cause problems. So it was not as easy to hit 14 the efficiencies that it was done. So there 15 was a suggestion for us to add the 15 or 30 16 kVA and there was a suggestion to add the 750 17 and there was a suggestion to add the 167 or 18 the 250 to this because not to add more 19 complexity but to give more strength to the 20 scaling factor. Because on the outer limits - 21 - because we did the scaling factor for the 22 first pass and when we get to the outer

### 202-234-4433 Neal R. Gross & Co., Inc. Page 63 1 limits, like the 15 kVA and the 750s and the 2 1,000s it starts pushing the cost and so forth 3 to how we can actually meet those efficiency 4 levels. So was there discussion not to add 5 the design lines or? 6 FACILITATOR PARKER: Would you add 7 a design line or just add a representative 8 unit?

9 MR. PATZNER: I meant a 10 representative unit. I'm sorry, excuse me. 11 It was more representative units. 12 MR. NARDOTTI: Mainly the biggest 13 constraint was time and we weren't able to add 14 another representative unit. I mean that's, 15 how we addressed this issue on the fringe of 16 the kVA ratings is certainly something that's 17 going to be talked about in this meeting. 18 Maybe it is an adjustment to the scaling 19 factor, but in between the preliminary 20 analysis public meeting and when we were 21 originally bound to have a NOPR out which was

22 October 1st we weren't able to add another

### 202-234-4433 Neal R. Gross & Co., Inc. Page 64 1 representative unit. We added one for the 2 medium-voltage but we weren't able to add even

3 more. 4 FACILITATOR PARKER: What is 5 involved in adding one, just to get a sense of

6 how much labor?

7 MR. NARDOTTI: We would have to do 8 all the simulations for another. So each 9 design option combination, those 14 design 10 option combinations would have to be rerun for 11 the different kVA rating processing. 12 MR. PATZNER: So in regards to 13 this time constraint, one of the reasons we 14 were excited that you broke us out from the 15 medium-voltage is that we could put our own 16 time table together instead of being bound by 17 doing the medium-voltage. I understand18 there's other constraints with the medium19 voltage timelines due to a negotiated rule --20 I mean a negotiated court order, but the low21 voltage is not included in that. So I don't 22 think we're going to do the low-voltage

### 202-234-4433 Neal R. Gross & Co., Inc. Page 65 1 service if we can't obtain data that's going 2 to be beneficial to maximizing the energy that 3 could be saved. So we've been constantly tied 4 to the medium-voltage time schedule but it 5 would be nice now that we've broken off our 6 committee to maybe obtain data. 7 MR. CYMBALSKY: John Cymbalsky, 8 DOE. Do you think we can work within the 9 construct of the scaling factor as opposed to 10 doing the OPS simulations to resolve this? 11 MR. PATZNER: I just know that on 12 the 15s and the 1,000s, on the outer ranges it

13 becomes -- 14 MR. CYMBALSKY: Do you have data 15 to support --

16 MR. PATZNER: The cost becomes a 17 whole lot greater. 18 MR. CYMBALSKY: Sure. And you

19 have data?

20 MR. PATZNER: I can show our -- I 21 mean, I have data for our products, yes. 22 MR. CYMBALSKY: Okay. Great.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 66 1 MR. TENDULKAR: I just wanted to 2 make one comment on this. The scaling factor 3 of three-quarters we are using is not the 4 exact science. It's very close but it's not - 5 - this isn't an exact science. So whenever we 6 use the scaling factor and when we use actual 7 materials and actual transformer the scaling 8 factor doesn't hold good to 0.75. It is 9 different. So if you have more points on the 10 representative units that's better than it is 11 real close to what we are really talking about 12 rather than just scale something. A scaling 13 factor is not necessarily very accurate 14 science. 15 MR. CYMBALSKY: John Cymbalsky, 16 DOE. Yes, I agree and I think, you know, the 17 analysis -- we're going to try to simplify the 18 analysis as much as possible. And so the 19 Medium-Voltage had the same comment about the 20 scaling factor. So I think you know, 21 everything else aside, if we can get to the 22 same place by not running OPS simulations.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 67 1 MR. PATZNER: Maybe once we decide 2 on the trial standard levels for the 3 representative units we could run analysis for 4 just that efficiency levels instead of the 5 whole range. Because you do CSL 1 through CSL 6 7 for these representative units. If the 7 group ends up between 2 and 4 we could do -- 8 add a 15 kVA for 2 to 4 scaling rule and add 9 1,000 kVA for the smaller range of efficiency 10 targets after we decide on the TSLs. I just 11 think we need to add some data for the outer 12 ranges because of the scaling factor.

13 MR. CYMBALSKY: So are most of 14 your comment -- John Cymbalsky, DOE. Are most 15 of your concerns on the right-hand side of

16 that chart? 17 MR. PATZNER: The design line 6, 18 the volume is so low that no matter what 19 occurs we're probably going to eat those costs 20 that are going to occur. To be honest we 21 would prefer that we remove design line 6 22 completely because we do not believe it will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 68 1 add value to the overall market because it's 2 less than 10 percent of the overall units, 3 especially when we get above 50 kVA. So I 4 don't have a concern on design line 6 because 5 the market only buys 15 through 50 basically. 6 So 75 through 333 is very small volume. So 7 with the volume not being on the left side I 8 was only -- we've only addressed the right 9 side because it's so much, it's such a larger 10 percentage of the overall market. 11 MR. CYMBALSKY: I guess my -- John 12 Cymbalsky, DOE -- my concern is to just try to 13 limit the analysis. And I think you proposed 14 some good ideas going forward. 15 MR. DeLASKI: If I could just 16 comment. Yes, and I like if you all can share 17 data with the consultant and I know you have 18 this relationship where you can do that 19 confidentially. It strikes me that it's also 20 the sort of thing that as we go forward and 21 have discussions that if you pick a given 22 level for some transformers there's nothing

### 202-234-4433 Neal R. Gross & Co., Inc. Page 69 1 that compels you to pick that same level for 2 other transformers. So we can slice and dice 3 this in ways that are creative in these, 4 around this table in ways the department can't 5 in a rulemaking, in a more formalized 6 rulemaking process. So this kind of give and 7 take is really constructive and I think it 8 helps us to find a way forward I think. If we 9 can think about the kind of scaling factors, 10 you know, what adjustment to the scaling 11 factor that can be done that gets us out of 12 that box, you know, it's really helpful. 13 Thank you. 14 FACILITATOR PARKER: Yes, Rob. 15 MR. GREESON: Rob Greeson, Federal 16 Pacific Transformer. I agree with the 17 representative unit comment. We've seen the 18 same thing. If we don't have time to add 19 representative units there at the very least 20 needs to be kind of a post screening process.

21 In other words we should not use the 0.75 22 scaling factor to determine the appropriate

### 202-234-4433 Neal R. Gross & Co., Inc. Page 70 1 efficiencies down to a 15 kVA from the 75. 2 They will probably have to be visually looked 3 at and evaluated on a basis of similar design 4 parameters, something of that sort so that you 5 don't get the ends messed up but that's 6 definitely something that we ought to look at 7 and I just wanted to agree with Schneider's

8 comments on that. 9 But on design line 6 although 10 that's a small percentage of the market we 11 don't get a great deal of orders for those but 12 a 167 kVA would be good for us to look at even 13 if we can add it later, you know, just to make 14 sure that those don't get out of kilter. 15 Because from time to time we do get orders for 16 those and I don't -- we'd like for those to be 17 at least somewhat consistent. And scaling up 18 to a 167 from a 25 is probably not going to 19 work too well. So we probably would apply the 20 same methodologies there. Thank you. 21 MR. CASKEY: Yes, Matt, this is 22 John Caskey with NEMA. I have two sort of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 71 1 general questions. One deals with the 2 applications of the various transformers and 3 certainly loading and other design parameters 4 come into play when you look at the various 5 applications, whether it's a data center, 6 whether it's a high school or a hospital or 7 whatever. Are you able to factor any of that 8 in relative to the various applications in 9 this analysis? And sort of a secondary 10 question related to that is when you picked 11 the representative units did you look at that 12 relative to the number of transformers that 13 are sold in that particular size or capacity

14 of transformer? 15 MR. NARDOTTI: So I mentioned the 16 A and B factors earlier. And as you probably 17 know, like the ratio of the A and B factors 18 implies a certain loading. And so in so much 19 as we looked at those various combinations 20 which are over 500 combinations of A and B 21 values that sort of addresses the different 22 types of loadings that these transformers

### 202-234-4433 Neal R. Gross & Co., Inc. Page 72 1 might undergo. But in terms of looking at the 2 applications to develop the engineering we 3 looked at volumes of the kVA ratings. We 4 didn't really look at the applications that 5 they went -- 6 MR. CASKEY: So you looked at -- 7 this is John again. You looked at the volume 8 of sales, the shipments? Okay. And that 9 helped you determine your representative 10 units? 11 MR. NARDOTTI: Right, that 12 factored into it. 13 MR. CASKEY: Okay. 14 MR. NARDOTTI: The biggest thing 15 was though where the kVA rating fell relative 16 to the rest of the kVA ratings covered by that 17 design line though. We wanted a good anchor 18 from which we could scale. 19 FACILITATOR PARKER: What do you 20 mean by a good anchor?

21 MR. NARDOTTI: So these 22 representative units, from those we would

### 202-234-4433 Neal R. Gross & Co., Inc. Page 73 1 scale up and down in terms of efficiency. So 2 we wanted a kVA rating that wasn't necessarily 3 all the way on the extreme of one point and 4 then causes the scaling up to be all thrown 5 off or vice versa. 6 MR. PATZNER: Hey Matt, I might be 7 able to help you with that. If you did the 8 volume for these kVAs and you did the bell 9 curve the representative unit is the peak. So 10 even in DSL6 the peak is going to be the 25 11 kVA, even that's so. If you bell curve the 12 quantities they grab the representative unit 13 at the peak. 14 FACILITATOR PARKER: And do you 15 agree that that applies for either way?

16 MR. PATZNER: So when he tells the 17 representative unit for design line 8 that is 18 where the peak was, but due to growth in the 19 data center market that peak is actually going 20 closer to 500 or 750. There's a unit shift in 21 design line 8 due to market but when they 22 actually picked these those kVA sizes would

### 202-234-4433 Neal R. Gross & Co., Inc. Page 74 1 have been the peak for the market. So they 2 were, there was no argument from our point of 3 view on the representative units that were 4 picked back in 2002. 5 FACILITATOR PARKER: You go back

6 to 2002? 7 MR. NARDOTTI: Well, the 8 representative units are the same as for the 9 previous rulemaking. So I think we're a 10 couple of slides in. 11 FACILITATOR PARKER: Okay, go

12 ahead. 13 MR. NARDOTTI: So the next step in 14 the engineering analysis was to model these 15 optimized designs. And to do this DOE 16 subcontracted an optimized program service 17 (OPS). For each design option combination OPS 18 created designs based on over 500 combinations 19 of A and B. The A and B values as you know 20 represent the present value of future core 21 losses and winding losses. These valuation 22 inputs are oftentimes used by customers in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 75 1 industry when placing an order. We talk about 2 these more in detail in Chapter 5. Basically 3 the different combinations, the 500-plus 4 combinations give us our design spacing, are 5 able to -- they give us a nice refined set of 6 designs that we can pick efficiency levels 7 from. After running all the combinations we 8 add approximately 2,500 unique designs for 9 each of the representative units. 10 For each of the OPS designs DOE 11 received data on construction, windings, an 12 electrical analysis and a bill of materials. 13 Using the bill of materials prices and the 14 materials prices discussed previously we were 15 able to determine the materials cost of each 16 design, the total cost of the design, 17 materials cost. DOE then applied the other 18 cost factors and markups to determine the 19 total manufacturers selling price. A 20 temperature-corrected efficiency is also 21 determined using the electrical analysis from

22 OPS's software.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 76 1 MR. PATZNER: Hey Matt, is the 2 temperature correction done now based on the 3 temperature rise that that design would come 4 out of OPS or is it all done at 150 degrees C? 5 MR. NARDOTTI: I actually don't 6 know the answer to the question, to that 7 question, I'm sorry.

8 MR. PATZNER: Because we have 9 found as we do the lower efficiencies we can't 10 hit the lower efficiencies and run them at 11 150. They end up with a temperature-wise -- 12 a temperature factor below that. So since 13 we're using a formula to change the value of 14 the efficiencies for temperature correction I 15 think we need OPS to estimate what the 16 temperature is for those windings so that we 17 add the appropriate coefficient to the data. 18 So for example on CSL3 equivalent type product 19 we're only getting 130 degrees C rise. So we 20 need to use that temperature to correct for 21 the efficiency at 35 percent instead of a 150. 22 So I just, it's just a point that we should be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 77 1 able, OPS should be able to give us what the 2 theoretical temperature rise is.

3 MR. NARDOTTI: I'll have to check 4 with my colleague. Brian Coffey who I think 5 most of you know and have met, he's the main 6 point of contact and I can check with him. He 7 did a lot of this work. 8 FACILITATOR PARKER: Can you 9 explain for the non-transformer people in the 10 room how that translates into energy 11 efficiency versus price? 12 MR. PATZNER: So I squared R 13 losses are done at full load and that is done 14 per the 431 subcut K. We have to do that at 15 20 degrees C. We then have to change that 16 value to be at 75 degrees C to do the 17 efficiency calculation at 35 percent when we 18 register the product. So we test for losses 19 and the program outputs full of losses, so 20 what we're going to be testing for is measured 21 at 20 degrees C per the federal registry but 22 then it's corrected up to 75 degrees C for 35

### 202-234-4433 Neal R. Gross & Co., Inc. Page 78 1 percent and the factor for that correction is 2 based on the full load temperature rise. So 3 if the full load temperature rise is 150 it's 4 a different factor than if it's 80 or if it's 5 115 or in our case when we have the CSL3 130. 6 So you're going to have different I squared R 7 losses at that point and different 8 efficiencies if you don't use the proper 9 corrective factor. 10 MR. TENDULKAR: Just to simplify 11 what is the question you asked. The losses in 12 the windings of the transformers are dependent 13 on the temperature of the windings. As the 14 temperature changes -- you cannot test at the 15 temperature when we're testing and are 16 factored in the test department. Our 17 temperature is 20 degrees but when the 18 transformer is under load the temperature is 19 different.

20 FACILITATOR PARKER: I see.

21 MR. TENDULKAR: And the reference 22 temperature we're asking for the efficiency is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 79 1 something else. That's what we are talking

2 about. 3 FACILITATOR PARKER: So you need a 4 more realistic reference temperature. 5 MR. GREESON: Rob Greeson, Federal 6 Pacific. I think most of the representative 7 units, they were all, they had a rating of 150 8 C rise and the losses are corrected to 75 C 9 for the efficiencies. And I understand that 10 some of the products might be -- have a lower 11 temperature rise rating. But I think as long 12 as you know what the temperature rise -- as 13 long as you state at what temperature those 14 losses are reported to you can correct to the 15 75 C with some degree of accuracy. Tom, was 16 your question what were -- were they at 170 C 17 initially or? 18 MR. PATZNER: So my comment is I 19 don't believe if we do any efficiencies at 20 some of these candidate standard levels we're 21 going to be able to build the unit at 150 22 degrees C any longer. If we lower the losses

### 202-234-4433 Neal R. Gross & Co., Inc. Page 80 1 they're going to be less than that. 2 MR. GREESON: That's exactly what

3 we've seen. You have to lower the losses 4 down. You may be at 150 rise unit but it's 5 really running a lot cooler than that. 6 MR. PATZNER: And for the -- since 7 you actually use that data to correct the 8 information we would like to -- we would like 9 to make sure that there's -- I mean, I 10 understand OPS has the ability to estimate the 11 temperature rise. So it would be nice to have

12 that added to the data. 13 MR. DeLASKI: This is Andrew 14 DeLaski. Just so I understand the effect, so 15 you're actually going to see fuel efficiency 16 higher than what you're rating, is that

17 correct? 18 MR. PATZNER: Yes, you're going 19 to. Is it higher, Robert? Is the efficiency? 20 MR. DeLASKI: Things are going to

21 run cooler.

22 MR. GREESON: Rob Greeson.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 81 1 Technically if the transformer runs cooler 2 than the 75 C that we assume it will run a 3 little bit more efficient but you've got to 4 put a market down somewhere so that you can 5 have some basis for reporting and things of 6 that nature. And I don't really have a 7 problem with the 75 C rating but as sort of a 8 tangential note it is -- probably some of 9 these transformers are likely run a little 10 cooler than that at 35 percent load. But you 11 know, you have to kind of pick something to 12 base your ratings on. You just have to be 13 careful up front that you report your -- 14 everybody knows what temperatures you report 15 up front so that you can correct them 16 properly. And so that we're not correcting 17 our losses differently than say OPS did I 18 think is the key. 19 MR. TENDULKAR: I've got just -- 20 there's confusion in my mind between what you 21 said and what you said. What you are telling 22 me is when we have got a 150 degrees rise unit

### 202-234-4433 Neal R. Gross & Co., Inc. Page 82 1 our efficiency has to be declared at 75 2 degrees Centigrade because we assume that at 3 35 degrees load, 35 percent load it will be 75 4 degrees temperature. But what you are saying 5 is when your transformer is running at about 6 say 130 degrees rise then it is on full load 7 because of this new design change. The 8 temperature from 75 has to be reduced to 9 something like 60 or whatever the number is, 10 is that what you are saying? 11 MR. PATZNER: So it's real simple. 12 Once we get all done with this, once we decide 13 on the efficiency levels and everything we're 14 going to get a federal registry on how we have 15 to comply. And when we get there we have to 16 measure it at 20 degrees C. We are going to 17 do the measurement at ambient temperature. 18 From that point on the losses are now 19 calculated. So the losses at 35 percent is 20 calculated, the losses at 100 percent is

21 calculated. So there's a formula for 22 temperature correction for that losses. And

### 202-234-4433 Neal R. Gross & Co., Inc. Page 83 1 I'm just saying since it's never ever going to 2 be measured at 35 or it's not going to be 3 measured at 100 that the 20 percent C is 4 critical and we just need to make sure we have 5 the proper temperature when we change those 6 losses because when we get into -- to building 7 this product we're going to be tied to those 8 entities. And if we just convert it to 75 9 degrees C every time I'm okay. But the 10 problem is the full load losses is part of the

11 formula.

12 FACILITATOR PARKER: So 13 particularly since Brian is not here and he 14 needs to get this would you mind just 15 submitting that in the form of a written 16 comment to the group and we will follow up on 17 that afterwards? That would be great. And 18 then we'll try to get a response back. Matt, 19 you want to continue? 20 MR. NARDOTTI: Yes, next one. So 21 DOE did consider symmetric core designs in the 22 preliminary analysis though they were not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 84 1 considered in the previous rulemaking. A 2 sensitivity analysis was done and presented in 3 the preliminary analysis. That was not done 4 this time. Part of the reason for that is 5 that DOE wasn't able to identify a company 6 that could model this core configuration. We 7 were able to gather some information from 8 manufacturers and that provided the 9 information that we used to develop the 10 sensitivity previously. I guess sort of this 11 committee can decide how it would like to 12 handle this, I think, this design option. 13 Right now we just don't have sufficient 14 evidence to accurately model it. FACILITATOR 15 PARKER: Okay, Robert? 16 MR. BERMAN: Robert Berman, Berman 17 Economics. I just have a, I guess a 18 regulatory question, a legal question on this. 19 What does it mean not to include something in 20 the standard? Does that mean for example that 21 if a symmetric core transformer isn't covered 22 in the standard that it -- you can build

### 202-234-4433 Neal R. Gross & Co., Inc. Page 85 1 whatever you want, or you can't build 2 anything, or none of the above? But what do

3 those words mean? 4 MR. CYMBALSKY: John Cymbalsky, 5 DOE. What Matt just said is that the 6 technology was screened out of the analysis 7 due to the inability to model its performance.

8 9 MR. NARDOTTI: Right. We didn't - 10 - it passed the screening criteria. We 11 weren't able to model it in the engineering 12 analysis. 13 MR. CYMBALSKY: So this could be 14 built. I mean as I understand it the 15 efficiency of this design option would be 16 higher than what's here. 17 MR. NARDOTTI: The traditional

18 core. 19 MR. CYMBALSKY: We just didn't 20 analyze it. It's not -- it is a transformer. 21 MR. BERMAN: It's not subject to 22 the standard? Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 86 1 MR. CYMBALSKY: Well no, it is 2 subject to the standard but when you go to 3 certify it complying to the standard I don't 4 think -- I'm not an engineer, but I think a 5 symmetric core transformer would beat the 6 standards that were analyzed here. Does that 7 answer your question? 8 FACILITATOR PARKER: They're 9 performance, in other words, they're not 10 design standards, so.

11 MR. BERMAN: It would seem that 12 that would depend on how much and what type of 13 materials we used in it. That it --

14 MR. CYMBALSKY: The manufacturer

15 would have -- 16 MR. BERMAN: Like other types of 17 cores, you could build these different ways, 18 they've got different properties. The 19 symmetric aspect of it is one thing but the 20 material that's used or something else would 21 be something else. 22 MR. CYMBALSKY: I'd say the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 87 1 manufacturer would have to make sure that that 2 design would meet whatever standard we have. 3 It's just, it's a transformer with a different 4 design. Steve. 5 MR. ROSENSTOCK: Steve Rosenstock, 6 EEI. Mr. Berman, it would still be considered7 a covered product. It was still called a low8 voltage dry type transformer at whatever kVA. 9 It's a covered product, it's just a matter of 10 using that design as an efficiency option is 11 what he's talking about.

12 MR. BERMAN: So we use the same 13 testing?

14 MR. ROSENSTOCK: Yes. And as a 15 follow-up to the gentleman from Schneider 16 Electric, I appreciate that discussion but 17 that really was again forgive me but it 18 sounded like it was veering into what to do 19 about the test procedure in a way. You were 20 talking about 20 degrees C as the test 21 procedure, how you test it, then you scale it 22 up, right, and that's veering into test

### 202-234-4433 Neal R. Gross & Co., Inc. Page 88 1 procedure. Again, that's an issue for the 2 committee to decide about do you want to even 3 discuss revising test procedures. 4 FACILITATOR PARKER: Thank you, 5 that's helpful.

6 MR. DeLASKI: A follow-on 7 question. 8 FACILITATOR PARKER: That is 9 something that this committee would have to 10 decide. You know, part of every rule you know 11 that we will have to decide not only what the 12 standards are but what are the test procedures 13 for measuring whether there's compliance with

14 the standards. 15 MR. DeLASKI: Yes, then following 16 onto that, related to that, just to follow up 17 on that, you're going to have certification, 18 certain certification and compliance 19 requirements and how you do that. So it's all 20 connected. So on the symmetric core, your 21 last bullet up there, Matt, so you may -- just 22 from looking at the table, the current status

### 202-234-4433 Neal R. Gross & Co., Inc. Page 89 1 is that right now you're not able to, am I 2 interpreting you correctly? But this is 3 something you're still investigating to the 4 extent that you -- 5 MR. NARDOTTI: Right. 6 MR. DeLASKI: Okay. 7 MR. NARDOTTI: Exactly. 8 MR. DeLASKI: Thank you. 9 MR. BALLO: Tim Ballo, 10 Earthjustice. Can I get some clarification on 11 that? The scatter plots that you put out 12 within the last week or so do have an analysis 13 of the symmetric core impact on moving the 14 scatter plots down in price but you just don't 15 have confidence in those numbers or? 16 MR. NARDOTTI: I'm sorry, I must 17 have been misinformed. I thought that those 18 were removed for this design. I know we had, 19 like I said, we had done them for the 20 preliminary analysis and I thought there was 21 some contention over how we did them and I 22 thought they had been removed for the NOPR so

### 202-234-4433 Neal R. Gross & Co., Inc. Page 90 1 I stand corrected. But I think the way in 2 which we deal with a symmetric core is 3 something that I think that's probably a 4 technical issue that would be something that 5 would be discussed in this committee. 6 MR. TENDULKAR: I can add just one 7 comment. In 1960s, late 1960s, my company 8 which was working, just this company at the 9 time and still is, they were working, making 10 these transformers, liquid-filled transformers 11 so a finite kVA. And finally they made a few 12 and then abandoned the thing because it was 13 commercially not feasible to make that product 14 economical. So they finally made the 15 transformers and they discontinued that line 16 completely. This is in 1960s, this is not 17 something new. If you look at a book in 1942 18 published by MIT transformer you'll find the 19 symmetric core. People are not using those 20 because it is difficult to make and it has 21 cost a lot more money. That's the whole 22 reason people were not making.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 91 1 Now also I don't think it is 2 anybody's business to tell the manufacturer 3 how to make their transformers. The only 4 thing they should say, this is the efficiency 5 and see the regulation. How they make it is 6 up to the manufacturer, not up to the 7 regulating bodies. That's what I will say. 8 MR. DeLASKI: Just to follow up on 9 that point. Andrew DeLaski. I think you'll 10 find consensus in this group on that point. 11 We're talking about here performance standards 12 and it's up to the manufacturer how to comply 13 with that. You define a transformer as it's 14 defined in the code and that's a transformer 15 you can make it any which way you want to, you

16 know.

17 FACILITATOR PARKER: The standard 18 is technological feasibility and economically 19 justified. But if you can get there by using 20 a symmetric core then that's one avenue one 21 could consider in deciding whether that 22 standard is technologically feasible or

### 202-234-4433 Neal R. Gross & Co., Inc. Page 92 1 economically justified. Rob. 2 MR. GREESON: Rob Greeson, Federal 3 Pacific Transformer, and you guys are hitting 4 on the right topic there. The key is not to 5 push these standards so high that only certain 6 technologies can meet those and that in effect 7 is forcing the manufacturers to make 8 transformers a certain way which is what I 9 would hope that the committee can collectively 10 agree on would be a bad thing. But what a 11 good thing is is picking an efficiency level 12 that leaves the broad flexibility in the 13 market for customers to respond to their 14 specific needs. For example, there are 15 several companies marketing higher efficiency, 16 premium efficiency products right now and the 17 customers are eager to buy those, a certain 18 segment of the market is. The other segment 19 of the market are perfectly fine to purchase 20 the present TP1 candidate standard levels. 21 What's nice about that now is there is a 22 little bit of a gap between the two and it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 93 1 allows the customer to pick the most efficient 2 option for him. If we move these standards up 3 you are going to run the risk of forcing a 4 customer to pick a less efficient option. I'm 5 not sure if I'm saying it properly. 6 Everything's based on this 35 percent load 7 assumption, but peak efficiency varies per 8 design. And if we move these standards up and 9 we're forcing at that 35 percent load mark 10 we're essentially taking options from the 11 customer to provide himself a more efficiently 12 operating product. So, that's all I have on

13 that. Thanks. 14 MR. DeLASKI: Follow-up because 15 this kind of follows a little bit of the 16 thread that's been going on in the other 17 transformer negotiations. I think many of us 18 are part of this thread, of this conversation. 19 I think it's one that, you know, Robin and Tim 20 and I and others who have been involved in 21 many DOE dockets as well as John is involved 22 in all of them and as a member of this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 94 1 committee, you know, there's a certain 2 bluntness to the tool of efficiency standards. 3 You know, we recognize that. But that's the 4 tool we're working on. That's the mandate of 5 the Department of Energy given to it by 6 Congress is to set efficiency standards which 7 apply to products, not to applications. So 8 the charge of this committee is to consider 9 what are the revised standards going to be and 10 can we come to a consensus on what they're 11 going to be. It's not to say, you know, in 12 waiting for some class we'll decide there's no 13 revision. That's something that we could 14 decide and that's a point that was made in the 15 last committee meeting. But it's not to say

16 that customers should do better. 17 We can't -- if that's all we're 18 going to come out of this committee with then, 19 you know, we can end these discussions pretty 20 soon and put it back with the department what 21 the standards are going to be. So there's a 22 recognition in standards -- when we set

### 202-234-4433 Neal R. Gross & Co., Inc. Page 95 1 standards for clothes washers, okay, we all 2 have clothes washers, there's some customer 3 who bought the clothes washer who will not 4 benefit from that standard. There's a lot of 5 them, actually. Second homes, people who do 6 very little laundry, they don't benefit from 7 clothes washer standards. So this is not a 8 unique problem to the transformers. And the 9 department typically in their analysis will 10 show you, you know, some customers benefit, 11 some don't benefit, some are unaffected. And 12 I'll tell you that there are some standards by 13 the department where a significant portion of 14 the customers by its own analysis do not 15 benefit. But the average benefits and that's 16 what you're doing with national standards. So 17 I think it's something we have to -- we can 18 talk about it a lot but we're not here to set 19 application standards for individual

20 customers.

21 FACILITATOR PARKER: That's 22 something that not only occurs in an appliance

### 202-234-4433 Neal R. Gross & Co., Inc. Page 96 1 setting but it occurs in administrative law 2 generally, the difficulty of making rules that 3 have general applicability and you know, and 4 how do you strike the balance between having 5 a rule that's simple enough to be feasible to 6 administer on the one hand but you know, 7 refined enough to apply fairly to everyone. 8 And you can't strike a perfect balance, and 9 you have to -- you have to accept that rules 10 inevitably fit imperfectly some applications. 11 Just try to keep it from being too extreme. 12 MR. PATZNER: Thomas Patzner, 13 Schneider Electric. To expand on that last 14 comment, the low-voltage transformers are a 15 unique product because the purchaser of the 16 product does not get any of these benefits so 17 they are not going to buy it. So if the 18 government does not help the purchasers along

19 the actual end user of the transformer does 20 not have a large voice in the say of this 21 product. So without -- so TP1 was launched 22 originally in 1996. Nobody bought the product

### 202-234-4433 Neal R. Gross & Co., Inc. Page 97 1 until the state of Minnesota mandated it in 2 1999. So the fact that we are discussing 3 this, we have to remember if we -- the goal is 4 to help save energy and the people that buy 5 this product will not do it on their own. At 6 least the majority of the people, close to 80- 7 85 percent. So, because the guy who buys it 8 is not the user. MR. DeLASKI: And maybe 9 you can expand on that because I think I 10 understand that and I think it's important. 11 I think it's the people who are putting up 12 buildings, it's the folks who are typically 13 not going to be the occupant. You know, and 14 I think that may be a little different, Rob. 15 Maybe you can help us understand, you know. 16 There's 80 products in the market and that may 17 be the 15 percent and maybe that's more some 18 of your customers who are, you know, we 19 talked, we had a whole conversation in the 20 last docket about mining transformers. And 21 there may be some specific applications where, 22 you know, and that I think is a constructive

### 202-234-4433 Neal R. Gross & Co., Inc. Page 98 1 conversation for us to engage in because it 2 helps us to define products that -- where the 3 market may drive some more efficiency than 4 would happen absent regulation. 5 MR. GREESON: Rob Greeson, Federal 6 Pacific. I think if the committee does its 7 job properly there will be a proper balance 8 struck. I just, my comment was simply to 9 reinforce the idea that there can be extremes. 10 Obviously I think the mandate here is to look 11 at the average just as I agree with what 12 you're saying there. But you know, it is -- 13 I kind of word it to at least acknowledge the 14 fact that there is a healthy interest in 15 higher efficiencies now and you know, if we 16 can pick a level that seems to make sense that 17 -- and also provide a little flexibility I 18 think that's what we should do. But on the 19 other hand I think we need to be responsible 20 to the task we're given as well. So I think 21 we agree. 22 MR. CASKEY: We've gotten into

### 202-234-4433 Neal R. Gross & Co., Inc. Page 99 1 some general discussions here. Just want to - 2 - sorry, John Caskey of NEMA. I just wanted3 to add in, one, certainly I think for low4 voltage dry type there is a real possibility 5 of coming up with a cost-justified smart 6 engineering design that produces an energy 7 efficiency level higher than where we are 8 today with the current DOE regulation. 9 However, for medium-voltage dry type and 10 liquid-filled I'm not sure given the 11 information that we've learned from digging 12 into the OPS model and some of the other 13 options and things like that. I'm not sure in 14 that category, those two categories of 15 transformers that it is necessarily proven 16 that what we've got in place that became the 17 rule in 2010 actually is economically 18 justified from my personal perspective. So 19 I'm not starting at the point that we 20 necessarily always have to go higher, because 21 I'm not sure that all the analysis that was 22 done back in 2006 or 2007 really got us in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 100 1 right ballpark. Hopefully it did but I'm 2 still sort of holding out on that. 3 The other issue that we're talking 4 about, applications and things like that, I 5 think it is difficult to get into too much 6 detail on specific applications but we have 7 touched on mining transformers and UPSs and 8 there may be other categories that need to be 9 separated out for some reason where we can't 10 do that for everything. But in addition to 11 that there is the issue of substitution and at 12 some point if in the case of oil-filled 13 regulations that becomes a -- that can become 14 out of balance with the dry type transformers 15 so you may have some substitution, people 16 avoiding an oil-filled high efficiency 17 transformers and substituting with the lower 18 efficiency dry type transformers. And 19 likewise, the people that are making decisions 20 can also look at the fact that to go to a 21 super, super high efficiency transformer they 22 may say well gee, it's worthwhile for me to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 101 1 get the old one reconditioned or rebuilt in 2 some way and avoid having to adhere to the new 3 DOE regulation relative to the manufacturer of 4 transformers. So people are going to bypass 5 and basically find loopholes if some of the 6 efficiency standards get so high it's 7 rewarding them for sort of bypassing those 8 high efficiency standards.

9 MR. TENDULKAR: Let me make --

10 FACILITATOR PARKER: Let me hold 11 on just for a second. Should we try? We'll 12 see -- if the noise resumes we may take a 13 coffee break or even a very early lunch break. 14 I'm finding it extremely difficult to, I don't 15 know about you but it's like taking an exam 16 while having a root canal done simultaneously. 17 (Laughter)

18 MR. TENDULKAR: Let me make one 19 comment, what Mr. Caskey said about when you 20 say think about the dry type transformer we 21 think about the transformer which is somewhere 22 lying on the rooftop or somewhere in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 102 1 backyard somewhere and supplying the power to 2 the homes and all those kind of things. But 3 the dry type transformers have a lot more 4 applications because they are used indoors and 5 we make a lot of these dry type transformers 6 at this time. They last about 20 years. The 7 transformers used in the UPS industry as well 8 as in the data centers and they go in places 9 where the reliability is much more important 10 than the efficiency or anything else. And the 11 size is sometimes also very important. And if 12 you do not have your cell phones working or 13 telephones working or your banking system not 14 working 24/7, 365 days a year you are going to 15 be very upset. And those transformers are 16 supplying powers to those critical loads. And 17 that's where it is very important to think 18 about how the application of the transformer 19 is.

20 We have talked about the 21 efficiency to be declared at 35 percent load 22 for the distribution transformer for a reason.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 103 1 Most of the time the distribution transformer 2 used may be in the morning few hours, in the 3 evening few hours in the residential area or 4 in the school building between about 7:00 to 5 about 3:00 or 4:00 in the day and that's it. 6 And that's where we have those kind of -- the 7 rest of the time it is just idling. But if it 8 goes to the data center it will be used 24 9 hours a day at the same load, whether you have 10 computers are working, some of us are working 11 or not. And then the efficiency point should 12 be different. They cannot be just 35 percent 13 for all dry type transformer but we cannot get 14 any exemption because they, oh, these are all 15 low-voltage dry type transformers. And they 16 have got a 480 volt input, 28 volt output, 17 that's it. And then we get into trouble a lot 18 of times to meet the temperature rise 19 requirement because a lot of times they want 20 very low temperature, 115 degrees rise, 80 21 degrees rise, small footprint and reliability. 22 And those things to meet, and to meet the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 104 1 price criteria we have is very difficult. 2 FACILITATOR PARKER: Yes. Well, 3 this is a very -- it's a good point, it's an 4 important point and even a novice I think can 5 understand that. I'm not sure that Congress 6 understood it when they drafted the statute 7 that constrains us because as I understand it, 8 basically, I defer to those who are more 9 expert about this than I am, but the charge is 10 to develop standards for product lines based 11 upon their, you know, various characteristics. 12 Getting into how they're applied would require 13 first going beyond the statutory authority and 14 also even if there were statutory authority it 15 would require an entire administrative 16 apparatus to be set up to develop, gather 17 information on who's buying the transformer, 18 what -- certifying what they're going to use 19 it for, then verifying that it actually is 20 going to that use. That would be, you know, 21 a very large administrative operation that 22 would be called upon to implement any kind of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 105 1 a standard that is bifurcated by, or 2 trifurcated by application. So it's a great 3 conceptual point. The question is is there 4 authority and is there a practical means to 5 actually, you know, do something about it. 6 Katie, did you want to chime in?

7 MS. COUGHLIN: Yes. I wanted to 8 answer your point. The -- 9 FACILITATOR PARKER: Katie 10 Coughlin from LBL. 11 MS. COUGHLIN: Sorry, Katie 12 Coughlin. The loadings in the life cycle cost 13 analysis are not the test procedure loadings, 14 and that's why we do attempt to take into 15 account the diversity of load shapes, peak 16 loads, sizing factors, all that stuff. And 17 since the LCC is used to actually decide on 18 the standard level. The idea is that by 19 considering a diversity of conditions you 20 avoid imposing sort of an artificial 21 efficiency criterion on field applications 22 that's not realistic. So we'll get into that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 106 1 more when I present the LCC. 2 MR. MILLURE: Dave Millure, 3 Metglas. About the symmetric core. So are 4 you saying that for your least life cycle 5 analysis the symmetric core was not used as an 6 option? 7 MR. NARDOTTI: I don't believe it 8 was. I think it was a sensitivity but I'll

9 have to double-check. She would know the 10 answer though. 11 MR. BOLDUC: Chris Bolduc, 12 Lawrence Berkeley National Lab. To answer 13 your question directly, no, symmetric core 14 transformers were not considered in the life 15 cycle cost analysis. 16 FACILITATOR PARKER: Can you give 17 us a sense of is there significant sales 18 volume with symmetric core in this country

19 now? No? 20 MR. NARDOTTI: I don't believe so.

21 FACILITATOR PARKER: Not much? 22 But there is in Europe or other markets?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 107 1 MR. NARDOTTI: There's some. 2 MR. BERMAN: Robert Berman, Berman 3 Economics. So then the correct interpretation 4 then of the data is that to the extent that 5 symmetric cores were not considered in the 6 analysis, the analysis might then have an 7 upward bias in terms of cost? In other words, 8 if you can deliver an efficiency with a 9 symmetric core at a lower cost than you could 10 otherwise then by not including that you would 11 have an upward bias in your results in terms

12 of the cost. 13 MR. NARDOTTI: If that's actually 14 the case with the symmetric design then yes,

15 that would. 16 MR. MILLURE: My understanding 17 which is very limited on symmetric cores is 18 that they're not so popular in Europe. There 19 is a Chinese manufacturer who made something 20 called a stadium core that has some degree of 21 similarity but certainly hasn't caught fire in 22 Europe.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 108 1 FACILITATOR PARKER: Good. Well, 2 I think let's get through the analysis and 3 then you know we will table, we'll try to 4 develop a list of issues to be considered. 5 And I guess one of the issues for this group 6 is, you know, should there be any kind of an 7 anecdotal, should this be considered as a 8 potential avenue for changing given efficiency 9 levels at a certain cost or should they be off 10 the table for purposes of this process, right?

11 12 I guess if there's not -- I mean 13 one of the things that I've been concerned 14 about is that this, you know, we come up with 15 something that is appropriate for the industry 16 as a whole including people who are not at 17 this table. And we're going to hear a 18 presentation at 1:00 from the FACA person 19 about, you know, the duty of this group to 20 speak on behalf of sort of the broader group 21 of stakeholders that are similarly situated to 22 them, the low-voltage manufacturers. So I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 109 1 think it matters whether there is a 2 significant group of manufacturers out there 3 that is making a particular product line. If 4 there is that would -- it would be important 5 to make sure that their interests are 6 considered even if they're spokesmen are not 7 at the table. But if there are not then that 8 perhaps changes the analysis. So it would 9 just be helpful to know. 10 Okay. Should we continue? Next 11 slide.

12 MR. NARDOTTI: So once DOE 13 generated all of its designs in the 14 engineering analysis it selected several 15 benchmark efficiency levels or ELs to analyze 16 directly. The efficiency levels span the 17 range of distribution efficiencies for each of 18 the representative units all the way from the 19 baseline of the current standard up to the 20 maximum technology feasible. DOE considered 21 several criteria. First, DOE selected levels 22 that harmonized efficiencies across single-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 110 1 phase and three-phase units. Second, DOE 2 tried to evenly space the CSLs between -- or 3 excuse me, evenly space the ELs between the 4 baseline and the maximum technology feasible 5 level. And lastly, DOE tried to consider 6 several benchmark efficiency levels such as 7 NEMA premium for low-voltage dry type. These 8 discrete ELs allowed DOE to analyze 9 incremental increases in efficiency and serve 10 as the basis for the trial standard levels 11 that are selected in the NOPR. We'll get to

12 that. 13 So this graph actually is of 14 design line 1 which is not a low-voltage dry 15 type unit but for the purposes of this it's 16 just illustrative. It shows the basic outputs 17 of the analysis, the efficiency and the 18 manufacturers selling price. And here we've 19 superimposed, the efficiency levels were 20 actually denoted by CSL but CSL is also the 21 same thing as, conceptually the same thing as 22 an efficiency level. Each of the dots on the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 111 1 graph represents a unique optimized design and 2 the different colors on the graph represent 3 the various design option combinations 4 considered. So on this example the pink dots 5 represent amorphous, copper, copper. So 6 copper primary and secondary windings. 7 Assuming the DOE decides to, or 8 this committee decides to amend standards it 9 selects trial standard levels based on various 10 groupings of efficiency levels. For example, 11 DOE may group efficiency levels based on the 12 per phase harmonization, minimum life cycle 13 costs or the maximum net present value of cost 14 of representative units. These TSLs help to 15 characterize the interaction between different 16 design lines or equipment classes. As Richard 17 noted earlier the criteria for selecting these 18 is one of the goals of today's meeting I 19 guess. 20 FACILITATOR PARKER: Now, let me 21 just clarify, this slide is geared towards a 22 unilateral process. Obviously you know, this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 112 1 group is here to negotiate a proposed rule so 2 we're actually the ones who are sitting in 3 DOE's stead in this slide assuming we can 4 reach consensus. So it'll really be up to 5 this group to decide, you know, what are the 6 appropriate TSLs to use and we'll have more to 7 say about that later on today. 8 MR. NARDOTTI: So finally DOE 9 needed to scale the results of each of its 10 representative units to the non-analyzed 11 equipment, or kVA ratings, excuse me. To do 12 this as we mentioned DOE relied on the 0.75 13 scaling rule which states that the total 14 transformer loss is scaled by the ratio of kVA 15 ratings to the 0.75 power. And this is when 16 you assume that design characteristics such as 17 frequency and build remain the same. By 18 holding certain parameters constant DOE can 19 use this rule to scale losses, dimensions and 20 costs from its analyzed units. 21 FACILITATOR PARKER: Any 22 questions? Okay. Thanks. John.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 113 1 MR. CASKEY: Hi, John Caskey of 2 NEMA. And in the medium-voltage dry type and 3 liquid-filled there has been a lot of 4 technical recommendations or issues discussed 5 over the past two or three weeks, something on 6 that order, that identified some I want to say 7 weaknesses relative to the OPS model or some 8 of the other Navigant analysis. Have you or9 anybody looked at that stuff on the medium10 voltage dry type to see if any of those 11 comments transfer back to the low-voltage dry 12 type analysis and can you summarize sort of 13 any of those points that might be changed in

14 the near future to reflect those comments 15 you're getting on the other class of

16 transformers? 17 MR. NARDOTTI: Certainly. Any 18 comments that we received in one committee 19 they'll pretty much be considered. Since 20 we're supporting -- the analysis was all done 21 as a group. We didn't disaggregate, right? 22 So any comments that come up in that committee

### 202-234-4433 Neal R. Gross & Co., Inc. Page 114 1 we'll be considering how we might have to 2 adjust anything for the low-voltage if 3 necessary. 4 MR. CASKEY: Okay. So you don't 5 have a list of like the top five that need to 6 be -- oh, excuse me, go ahead. 7 MR. RIVEST: Mike Rivest, Navigant 8 Consulting. Well, this slide certainly 9 prompts the issue of scaling across kVAs and 10 the appropriateness of using the 0.75 rule and 11 what happens when you get to the extremities. 12 And in the medium-voltage we will be analyzing 13 this issue explicitly and I expect we will be 14 for the low-voltage dry as well. In the 15 medium-voltage it was a question of the bill.16 I don't know if that applies here in low17 voltage. I'm looking for the experts here. 18 No? Right. 19 MR. GREESON: Rob Greeson, Federal 20 Pacific. Real quickly on the medium-voltage. 21 I have been kind of working with OPS to try to 22 iron out where some of these issues may have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 115 1 occurred. And if time permits I do have a 2 slide I can probably show today if anybody's 3 interested that I looked at the design line 8, 4 the 300 kVA and I essentially isolated the 5 representative units that corresponded to the 6 same core steel and core construction and 7 conductor and did a comparison kind of on a 8 per-unit basis. And I'm seeing some fairly 9 broad discrepancies there too. That was kind 10 of why I asked the question about the markups. 11 I thought well maybe I'm missing some markups. 12 But certainly I'm very concerned about getting 13 the data going into it. Because I think the 14 analysis is pretty well thought out, it's just 15 getting the data going into it to be accurate. 16 And hopefully later we can talk a little bit 17 about maybe how we can reconcile that 18 together. I think it's going to take a little 19 horsepower from the manufacturers in 20 conjunction with Navigant to try to get that 21 ironed out. Thank you. 22 MR. RIVEST: So, Mike Rivest

### 202-234-4433 Neal R. Gross & Co., Inc. Page 116 1 again. So, I think you pointed out an 2 important issue here, it's the issue of 3 markup. And that's something that is very 4 difficult to get a hold on. But I think if we 5 back into the actual design of the transformer 6 and produce and share information about core 7 weights, for example, coil weights at each 8 efficiency then we can make this a discussion 9 about pounds of steel. And that will, you 10 know, from that starting point I think, you 11 know, what the market sees in terms of price 12 is, you know, that's hard to judge. But 13 pounds of steel I think the engineers can 14 agree about that. So we're hoping to get down 15 to that level of discussion very shortly. 16 FACILITATOR PARKER: One issue 17 that I recall reading from just glancing18 through the comments that came in for medium19 voltage was a concern about the choice of CSLs 20 and ELs and the change in CSLs and ELs from 21 April to August. Is that -- are people, and 22 perhaps it would be useful just in a broader

### 202-234-4433 Neal R. Gross & Co., Inc. Page 117 1 way to just take this opportunity to sort of 2 table any kind of other concerns that have 3 been, you know, that you have about the, sort 4 of the architecture of the analysis. The 5 choice of CSLs, the spacing of them. I think 6 we've got the scaling factor issue pretty well 7 aired. But right off the top you raised sort 8 of the basic questions and make sure that 9 we're comfortable with those. Did you want to 10 comment, Vijay? 11 MR. TENDULKAR: Well, one of the 12 things I was thinking about is I had looked at 13 some of these OPS designs and I was trying to 14 see practically they can build that 15 transformer with that numbers and those kinds 16 of things. And I could not. I don't know 17 what's the problem. I try OPS software in, 18 somewhere in 1990s. I gave up on it, came up 19 with my own software to design the transformer 20 to make it in our factory. But those, that 21 was the old OPS. So today's OPS I do not 22 know, it would be a lot more advanced. There

### 202-234-4433 Neal R. Gross & Co., Inc. Page 118 1 are people in my factory, they use it, but I 2 don't use it so I do not know. But I tried to 3 get the numbers and they are not necessarily

4 accurate numbers as far as the -- what we can 5 see in the production results and what the OPS 6 has predicted. There is a difference and I 7 don't know why the difference is coming up. 8 And some of the things in the OPS as I 9 understand from the other people, engineers 10 who work on it, that it is an individual what 11 number they put in as far as the space factor. 12 It's very -- they call it a degradation 13 factor, a destruction factor for the core. 14 Everybody can put a different number. And 15 that is what is something, it's different in 16 the design I make in my software. You don't 17 have to put any of those numbers, that 18 automatically is taken care of kind of thing. 19 FACILITATOR PARKER: Are you 20 saying a systematic bias in the number of 21 level in the OPS or is that kind of a random 22 fluctuation?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 119 1 MR. TENDULKAR: It is left to the 2 individual designer as to think, you know, for 3 example there's a core, we have a geometry for 4 the core and there is a weight for the core. 5 And then we say so many watts per pound of the 6 core lost for this particular flux density. 7 And you multiply that watts by that weight and 8 this should be the core loss. But because of 9 the particular geometry of the core there is 10 some extra losses are there, and those extra 11 losses they call it a destruction factor which 12 is always more than 1. And that destruction 13 factor is individual's guess, not necessarily 14 something that is from a concrete theory that 15 this is the geometry, this is what it has to 16 be. And that is where the differences come 17 in. And then what you calculate and what you 18 test are two different things. I'm just 19 wondering the numbers we get in the designs 20 which is are numbers published by OPS numbers 21 exactly the right numbers or not? Maybe you 22 can answer that because you are working with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 120 1 that all the time, I'm not. 2 MR. GREESON: Rob Greeson, Federal 3 Pacific Transformer. We have a pretty 4 extensive use of OPS at our facility and there 5 are certain aspects of the program that you 6 have to kind of reconcile with your own design 7 parameters and design information that you 8 get, especially with regard to core losses. 9 But what I've been trying to reconcile are 10 these differences in price. And the markups 11 seem to be possibly one of the big confusions, 12 but even on some of the weights I'm seeing 13 some things that don't make a lot of sense on 14 why I come up with a weight that's half the 15 weight or twice the weight let's say and if I 16 don't get to that slide later today to show 17 you guys. What I saw last night briefly was 18 somewhere around, you know, 60-70 percent 19 variation. We were higher in price than the 20 price in the database, the engineering 21 analysis, and then up towards the upper end it 22 jumped like to 160-some percent. And these

### 202-234-4433 Neal R. Gross & Co., Inc. Page 121 1 were using materials as I said, they were the 2 same core steel, same conductor because I 3 wanted to try and compare apples and apples. 4 And I'm not sure what's going on. And I don't 5 -- we're going to look at a life cycle cost 6 analysis and I don't feel comfortable -- I 7 feel comfortable with the analysis but I don't 8 feel comfortable with the outcome of it till 9 I feel comfortable with what went into it and 10 that's where I'm basically having my issues. 11 Thank you. 12 MR. TENDULKAR: There is one more 13 issue on the OPS software which I had been 14 finding from time to time is the temperature 15 rates calculation in the OPS software. It 16 used to be lower than what actual temperature 17 we will get. And because of that what we had 18 was we had a lower number of ducts in the 19 windings so the windings were bigger and of 20 course the transformer material was more and 21 the efficiency was slightly lower than 22 whatever the OPS was predicting kind of thing.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 122 1 And this is one of the variations we had. I 2 don't know whether we had the same problem 3 predicting the OPS designs or not. I hate to 4 say that we have a problem. 5 MR. RIVEST: Mike Rivest, 6 Navigant. I, you know, certainly we look 7 forward to sharing much more design details 8 with you and reconciling any differences. One 9 major difference between the low-voltage dry 10 universe and the medium-voltage is of course 11 that the low-voltage dry tends to build at 12 very specific levels and the market is 13 standardized to certain efficiencies. The 14 medium-voltage is much more of a custom 15 industry so, you know, we found there's just 16 more experience out there, there was more -- 17 there are more things to test, more things to 18 calibrate the models with when you're dealing 19 with medium-voltage than when you are with20 dry. However, we did do a number of tear21 downs of low-voltage transformers and used the 22 OPS model to compare the measure deficiencies,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 123 1 in other words calibrate the models along the 2 lines of destruction factors and the like. 3 And we did get good corroboration, you know, 4 once those adjustments were made. But, you 5 know, like I said we'll certainly open up the 6 box and look into the details. 7 MR. TENDULKAR: A little bit -- 8 you will find further it is a little bit 9 easier to calculate the temperature rises of 10 the liquid-filled transformers compared to the 11 medium-voltage or the dry type transformers 12 mainly because there's a lot more radiation,

13 a lot more other factors affect the 14 temperature rise of a dry type transformer. 15 But it is not that much in the liquid-filled 16 transformers, a lot more forgiving in those 17 kind of things. Because I used to work on the 18 liquid also, the bigger units. But 19 calculating the dry type transformer 20 temperature is very, very difficult sometimes. 21 FACILITATOR PARKER: Is somebody 22 on the phone? Comment from the phone? Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 124 1 I assume the -- is this OPS model proprietary? 2 It can't be? It's not something that could be 3 posted that people could play around with?

4 MR. RIVEST: The model's 5 proprietary but I think engineers will be able 6 to analyze the, you know, all the inputs that 7 go in, all the assumptions and the 8 calibrations that are done and then recognize 9 if the outputs are consistent with the inputs.

10 11 FACILITATOR PARKER: Okay.

12 MR. RIVEST: And those 13 assumptions. So we'll provide that design 14 information so that, you know, individual 15 manufacturers can do their due diligence on 16 the designs. 17 FACILITATOR PARKER: This is where 18 it might be helpful to form a sort of a 19 technical working group that could work with 20 Navigant. So Rob, you may be interested in 21 this. I was going to say this may be an area 22 where it would be useful to form kind of a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 125 1 technical working group for people who are 2 concerned about the parameters that are being 3 used and who want more detail to just work 4 directly with Navigant in trying to figure 5 out, you know, why -- why we're having 6 difficulty replicating the data and the 7 outcomes, and reconcile. And maybe we could 8 do, you could just work together in preparing 9 a little report for the next meeting that 10 would indicate, you know, what you found and 11 what implications it may have. Again, if the 12 differences are small, if they're -- around 13 the OPS results we don't worry about it. If 14 they're significant and introducing a bias 15 then it's more significant and the group needs 16 to take cognizance of it. But it seems to me 17 that you don't want to get this group too much 18 in the weeds, it would be -- it might make 19 sense to split off a working group to just 20 develop those concerns. Does that make sense? 21 MR. GREESON: Rob Greeson, Federal 22 Pacific. I agree with that. I'd be more than

### 202-234-4433 Neal R. Gross & Co., Inc. Page 126 1 happy to share kind of the approach that I was 2 taking to try to figure out what's going on. 3 And I'd welcome any of the other manufacturers 4 to come talk to me offline there and I'll show 5 you what I'm working on and you guys might 6 kind of look at that and maybe provide some 7 other information as well. And it's 8 proprietary, I mean it's, you wouldn't be 9 providing it to one another but specifically 10 to them and that helps them figure out what's 11 going on. And I'm hoping through that process 12 we'll, once we get to trust the data I think 13 we'll all feel better about what we decide

14 based on the data. Thanks. 15 FACILITATOR PARKER: Okay. Vijay? 16 Great. So then it's moved then that we agree 17 that a technical working group will be formed 18 to explore the issues of replicability 19 basically and assumptions and parameters being 20 used in the Navigant and the LBL analysis. 21 But principally I think here the issues are 22 engineering issues though in the Navigant

### 202-234-4433 Neal R. Gross & Co., Inc. Page 127 1 analysis. Perhaps we'll ask if Navigant could 2 sort of be the rapporteur for that working 3 group? If you could give us a little report 4 on your discussions, clear it with the group. 5 I'll be happy to be in the loop as necessary 6 but it would be your issue. Mike, did you 7 want to respond? 8 MR. RIVEST: Just agreeing with -- 9 you're saying. 10 FACILITATOR PARKER: Okay. John?

11 MR. CASKEY: One sort of concern 12 and it's really up to the manufacturer to 13 support or not support this. This is John 14 Caskey with NEMA. But you know, we're getting 15 into an area where we're getting into the 16 design of the transformers from individual 17 manufacturers as well as their cost or 18 pressing estimates related to those 19 transformers. So when I picture a working 20 group I picture, you know, five or six people 21 getting around a table and sort of hashing 22 things out. I'm not sure if the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 128 1 manufacturers' intend for it to be that way or 2 each one individually would work with Navigant 3 to say this is my you know confidential 4 information about how my prices are coming up 5 different than the price that the OPS model is 6 producing, or other things like that. So I'm 7 just saying, cautioning that it may not be a 8 traditional working group. It's sort of 9 individualized working with Navigant to try 10 and get the model validated. 11 FACILITATOR PARKER: Appreciate 12 that. So the working group will have 13 discretion to set their own internal separate 14 rules of procedure regarding confidentiality 15 of information to keep proprietary data 16 proprietary but still allow Navigant to do its 17 analysis. 18 MR. RIVEST: Exactly. 19 FACILITATOR PARKER: All right, 20 makes sense. Anything else to add? Okay, 21 good. So we'll look for a report on that from 22 that working group. We'll call it the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 129 1 technical working group at the next meeting. 2 Hopefully if we can get some results to post 3 online just to keep, you know. Ideally, you 4 know, a week but since the next meeting is not 5 too long away, just a few days before the next 6 meeting so that we can have time to assess it 7 and respond that would be great. So please, 8 you know, let your various stakeholders know 9 that you're invited to attend. And if you 10 could maybe we could just get a preliminary 11 report from Navigant on who is in the group 12 and contact information and so forth. I'll 13 send that out so that people will know who is 14 in the group, just give us sort of a -- keep 15 us apprised of the process of the group of 16 what's happening so that people who may be 17 coming in late are free to join if they want 18 to. And so that we know, you know, just who's 19 doing what when. Excellent. So that will be 20 sort of -- the scope of that group will be 21 dealing with data, dealing with methodology 22 for the engineering analysis, dealing with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 130 1 replication of results. 2 Anything else we need to cover for 3 the engineering analysis? The issues that I 4 take away from this and I'll try to do a 5 little table over the lunch break is basically 6 the question of scaling factor, the quest for 7 different kVA ratings, the issue of the 8 representative of load factors, the problem of 9 the representative unit for design line 6, and 10 the question of whether that can be -- whether 11 more data is available to do another 12 representative unit, sounds dicey, or whether 13 there's some other technical solution for 14 that. Is that the kind of thing, by the way, 15 that representative unit factor that would be 16 appropriate for the technical working group to 17 work on as part of its mandate or do you think 18 that's a broader issue that should stay with 19 the plenary? Any thoughts on that? 20 MR. GREESON: Rob Greeson, Federal 21 Pacific. Perhaps we could talk about that. 22 I'm more than happy to try to provide --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 131 1 FACILITATOR PARKER: When I said 2 design line 6 I meant design line 7, yes. 3 MR. GREESON: We would be willing 4 to try to help provide some design information 5 for 15 and 1,000 but we need to be realistic 6 about not trying to look at like 16 or 17 7 different options up there. And if we could 8 kind of come to agreement that we're going to 9 be looking at kind of narrow -- materials to 10 look at it wouldn't be that bad. Certainly we 11 could probably do something. I'd be willing 12 to talk to my cohorts on that. Thanks. 13 MR. PATZNER: We definitely feel 14 that once we decide on the trial standard 15 levels that we can put together the 16 appropriate information to see if it's a 17 similar type of ratio for those efficiencies 18 after we do the scaling factor. In fact, 19 we'll probably do it throughout the entire 20 range.

21 FACILITATOR PARKER: Good. 22 Anything else from engineering? If that's the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 132 1 case what I propose is that it's now about 2 11:35. We've had a good run. We've weathered 3 a root canal. Let's break early for lunch I 4 think, beat the lines down there and instead 5 of going from 12:00 to 1:00 let's go from say 6 11:40 to 12:40. And then we will reconvene 7 here because I think rather than have LBL come 8 up and start and quit in 20 minutes I think it 9 just makes sense to stop now. We'll reconvene 10 at 12:40, we'll have a head start on the 11 afternoon and we'll resume with LBL's 12 analysis. Thanks. 13 (Whereupon, the foregoing matter

14 went off the record at 11:36 a.m. and went 15 back on the record at 12:53 p.m.) 16 FACILITATOR PARKER: Okay, so 17 let's start with the LBL analysis of their 18 life cycle cost studies. So Katie, if you 19 would come up and start us through your slide. 20 By the way, thank you, Matt Nardotti, for your 21 presentation. I really appreciate that from 22 before lunch. I think you gave us a lot to go

### 202-234-4433 Neal R. Gross & Co., Inc. Page 133 1 on. We'll start with Katie. I'm told that 2 the representative from the Federal Advisory 3 Committee Act Office who gives a short pep 4 talk and guidelines talk to each group as part 5 of his legal requirement will be showing up at 6 1:00 which is a bit awkward for our timing 7 since that will be in a few minutes but why 8 don't we get started. And then when he comes 9 if you don't mind we'll just interrupt, let 10 him give his talk. We'll have whatever 11 discussions we need briefly for that and then 12 we'll just resume with the talk. I think it's 13 better to go ahead and get started if we can.

14 So. 15 MR. DeLASKI: Richard, again just 16 one quick question.

17 FACILITATOR PARKER: Yes.

18 MR. DeLASKI: One of the matters 19 of business from the last committee meeting 20 was the development of some people use the 21 word "cheat sheet," the list telling us what 22 changes were made.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 134 1 FACILITATOR PARKER: Yes and I 2 understand that one of the chapters, there's 3 an introductory chapter in the updated TSD.

4 MS. COUGHLIN: There was a memo 5 sent out with the updated TSD chapters. It 6 summarizes the -- I think it should have been

7 sent out.

8 MR. DeLASKI: That has been 9 distributed already. 10 MS. COUGHLIN: I think so, yes.

11 FACILITATOR PARKER: It was 12 distributed but it wasn't posted online. It 13 was sent by email. 14 MR. DeLASKI: I received the email 15 but I just haven't been through it yet. 16 FACILITATOR PARKER: Yes, it's 17 going to be attached to that.

18 MR. DeLASKI: You sent that last 19 Friday night I think. 20 FACILITATOR PARKER: Right. 21 MR. DeLASKI: East Coast time it 22 was night. Maybe it was daytime perhaps

### 202-234-4433 Neal R. Gross & Co., Inc. Page 135 1 still. 2 MS. COUGHLIN: No, it was night. 3 FACILITATOR PARKER: Yes, the 4 danger of coming out with things on a Friday 5 night, they tend to get lost. 6 MR. DeLASKI: No, it's there, it's 7 just --

8 FACILITATOR PARKER: It's there.

9 MR. DeLASKI: I understand.

10 Thanks. 11 MR. ROSENFELD: Excuse me, this is

12 Art Rosenfeld. In whose name was that sent

13 out? 14 MS. COUGHLIN: Chris Bolduc. 15 MR. ROSENFELD: Chris Bolduc.16 MS. COUGHLIN: Bolduc, B-O-L-D-U17 C. 18 MR. ROSENFELD: Okay. 19 FACILITATOR PARKER: And again, 20 Art, I think this goes to a report we made 21 actually -- which is, and I think we discussed 22 that probably before you were on the phone.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 136 1 But there have been some technical problems 2 with getting those chapters actually posted 3 online. I checked last night and they're 4 still not on the website. You should have 5 gotten them in your emails but they need to 6 get up on their website. So hopefully you 7 know we'll get them up there very, very soon 8 so that you can just download them. 9 MR. CYMBALSKY: So just to 10 clarify, Chris's email was sent on September 11 23rd at 5:35 p.m. Eastern time. There should 12 have been an email with 10 attachments. 13 MR. ROSENFELD: Thank you.

14 FACILITATOR PARKER: We don't want 15 you to be bored on a Friday night. Okay. 16 Katie, do you want to start? 17 MS. COUGHLIN: Okay, so this is 18 somewhat similar in structure to the 19 presentation I gave for the previous meeting. 20 So hopefully it won't be too boring for those 21 of you who were at the other meeting. So. 22 FACILITATOR PARKER: Is it not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 137 1 working?

2 MS. COUGHLIN: I'm not sure

3 what's. 4 FACILITATOR PARKER: I'm pushing 5 the left button which is what -- 6 MS. COUGHLIN: I'm just trying to 7 figure out. It's backwards, it's just

8 backwards. 9 FACILITATOR PARKER: Okay. 10 MS. COUGHLIN: Okay, so I'm going 11 to review the life cycle costs and national 12 impacts analyses. The chevrons here show the 13 way the various pieces fit together and so -- 14 MR. ROSENFELD: Hold on. This is 15 Art Rosenfeld. On my screen, it just says, 16 you know, welcome to the ERAC Transformers 17 webinar. 18 MS. COUGHLIN: Oh, okay. I think

19 --

20 FACILITATOR PARKER: Excuse me. 21 Let's -- how's that, is that better?

22 MR. ROSENFELD: That's much

### 202-234-4433 Neal R. Gross & Co., Inc. Page 138 1 better. 2 FACILITATOR PARKER: Okay, sorry

3 about that. 4 MS. COUGHLIN: Thanks. One thing 5 to take from this is that the engineering 6 analysis feeds into the LCC and that in turn 7 feeds into the national impacts analysis. So 8 this is a constraint essentially on our 9 ability to redo things. I'll go into that in 10 a little more detail. So let's see. Why is 11 this not working? 12 FACILITATOR PARKER: Now does it

13 work? 14 MS. COUGHLIN: Yes, okay. So 15 before I get started I wanted to review the 16 terminology. There's been a bit of back and 17 forth on these things and I just wanted to be 18 very clear. So we have two sets of terms. We 19 have the term candidate standard levels and 20 efficiency levels. These are -- technically 21 they're the same thing, they're identical in 22 terms of the way they function in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 139 1 analysis. The name change is decided on to 2 refer to different stages of the rulemaking 3 process. So for the preliminary analysis we 4 were calling them candidate standard levels 5 and for this pre-NOPR phase we're calling them 6 efficiency levels. But we mixed them up 7 because they're basically the same thing. 8 And these are defined for each 9 individual design line in the analysis. So 10 they're not the aggregate measures, they're 11 defined for each individual design line. And 12 I'm going to try to stick with the term 13 "efficiency levels" from now on.

14 MR. ROSENFELD: In the documents 15 that we just sent out in the email they're

16 referred to as DTFLs. 17 MS. COUGHLIN: Yes, I'll get to 18 that in a moment. So there's two sets of 19 terms, right? The candidate standard levels, 20 efficiency levels are the things that are 21 defined for each design line and then the 22 trial standard levels or TSLs are defined as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 140 1 a collection of these efficiency levels. And 2 they're defined for -- there's a single trial 3 standard level defined for all the design 4 lines within a product class. So in the case 5 of low-voltage their design lines 6, 7 and 8 6 are all low-voltage dry type transformers. So 7 a TSL is going to comprise a CSL for each one 8 of those products. And this little table at 9 the bottom here gives you a summary of how the 10 different stages of the analysis depend on the 11 definition either of the efficiency level or 12 of the TSL. So the engineering essentially 13 can be done without reference to either one. 14 The engineering is just an analysis of the 15 cost and efficiency of a cloud of designs for 16 each design line. But once you get to the 17 life cycle cost the results of the life cycle 18 cost will depend on the way the efficiency 19 levels are set. But the life cycle cost 20 doesn't care yet about trial standard levels. 21 Then when you get to the national 22 impacts analysis, the national impacts

### 202-234-4433 Neal R. Gross & Co., Inc. Page 141 1 analysis need to have a trial standard level 2 defined because they need to aggregate the 3 analysis results for all the different 4 products. So the national impacts does depend 5 on the TSL and then the manufacturing impacts 6 which is where you get into the question of 7 materials, new materials and material 8 availability, they're downstream of everything 9 so they also depend on both the efficiency 10 levels and the trial standard levels. So 11 hopefully this will be a useful reference as 12 we go along. 13 So this is a flow chart that was 14 in the presentation materials from the April 15 public meeting. This just shows the list of 16 inputs to the life cycle cost analysis. So 17 there's quite a lot going on here and all the 18 blue, the blue rectangles at the far left 19 represent the various inputs to the analysis 20 which were reviewed in a lot of detail back in 21 April. So I'm not going to talk too much 22 about those today. And they're also

### 202-234-4433 Neal R. Gross & Co., Inc. Page 142 1 documented in the TST. And to the extent that 2 we received specific comments on these inputs 3 we have modified them for the analysis that 4 was published in August, for the summary of 5 results published in August. But just on a 6 kind of numerical level most of those 7 modifications have not resulted in a very 8 large change in the output of the analysis. 9 And what I would like to focus on 10 today is just sort of an understanding of how 11 the mechanics of the calculations work. Okay. 12 MR. GORDON: Hi, good afternoon. 13 I'm Wayne Gordon. I'm from the General 14 Counsel's Office. I'm the legal advisor for 15 the parent committee for this subcommittee 16 that's doing work on these standards. And I'm 17 just going to spend about 10 minutes or less 18 talking with you about ethics rules and ethics 19 responsibilities while you're here in your 20 roles as members of this subcommittee. I see 21 several people that I briefed a couple of 22 weeks ago here in the room. I just wanted to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 143 1 go over for those of you who did not hear this 2 briefing before. 3 The subcommittee that's dealing 4 with the standards that you've been all 5 brought together to work on and this 6 rulemaking is a matter that is going to be 7 taken up, once you've made your 8 recommendations regarding the various rules 9 it's going to be taken up for a vote by the 10 Energy and Renewables Advisory Committee 11 (ERAC) which is the parent committee for this 12 organization. ERAC has been charged to do a 13 lot of things but one of them is to run this 14 as a subcommittee. As members here you're all 15 in a representative capacity. That means you 16 have a certain interest group that you're 17 supposed to be representing. You are supposed 18 to be able to give your opinions that are 19 going to reflect those various interests and 20 we don't want to dissuade you from being 21 vigorous in terms of those interests. 22 However, from an ethics perspective you also

### 202-234-4433 Neal R. Gross & Co., Inc. Page 144 1 have to be aware that the conflict of interest 2 rules that allow you to do that kind of 3 representational interest talking and working 4 on their behalf don't allow you to act on 5 matters and to make discussions or make 6 recommendations that would affect your home 7 personal institution, so your employer. If 8 there's something that comes up in the 9 rulemaking or the regulations that would 10 affect your company specifically and uniquely 11 that's an area where you have to get some 12 guidance from John and he will probably 13 contact either Dan Cohen or myself for advice 14 on whether or not you should participate in 15 that matter. We don't anticipate that that's 16 going to happen because rulemaking as an 17 overarching principle is a matter of general 18 applicability which means it affects 19 everybody. Everybody's going to be, all 20 manufacturers, all producers, all 21 distributors, all of those people that are 22 going to be subject to the rules that you are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 145 1 recommending that the department promulgate, 2 they're all going to be affected equally. So 3 in that respect we don't expect those issues 4 to arise. But from a process perspective we 5 want to make sure that you're aware that if it 6 gets into that nitty-gritty and it affects 7 your company personally then you really have 8 to step back and get some guidance on whether 9 or not you should continue to participate in 10 that conversation. 11 Once your recommendations on the 12 regulations are forwarded to the parent 13 committee, the parent committee will vote on 14 those and make those recommendations to the 15 Secretary through ERAC. ERAC, we usually have 16 a representative member who's going to be 17 sitting here and chairing these subcommittee 18 type meetings. I know that Art Rosenfeld was

19 --

20 FACILITATOR PARKER: Art Rosenfeld 21 is on the phone. 22 MR. GORDON: He's on the phone.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 146 1 Okay.

2 MR. ROSENFELD: I'm on. 3 MR. GORDON: Okay, Art. So I just 4 wanted to point out that your role is here as 5 the leader of this because you're part of the 6 parent committee, not necessarily that you've 7 been appointed as a representative for this 8 group. 9 MR. ROSENFELD: All right.

10 MR. GORDON: So that's all I 11 needed to brief you about. If there's ethics 12 issues or questions that you have about 13 conflict of interest issues that come up in 14 the course of doing these regulatory talks and 15 discussions I would encourage you to either 16 talk to John or to Dan if he happens to be 17 here. They can get in touch with me to get 18 guidance and I'd be glad to walk through any 19 issues with you if it happens to arise during 20 the course of your duties here. Thanks very 21 much for participating. Any other issues? 22 FACILITATOR PARKER: Questions,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 147 1 comments? 2 MR. GORDON: Any questions? Okay. 3 Oh sure, go ahead, sir. 4 MR. CASKEY: John Caskey, NEMA. 5 And certainly in discussing the different 6 transformer designs there are some points 7 where the cost effectiveness for a particular 8 size of transformer and efficiency is 9 dependent on the types of materials, you know, 10 particularly steels or other materials that 11 are used in that. So there are not a whole, 12 in some cases there are not a whole lot of 13 suppliers, in some cases I think there's only 14 one supplier for that particular product. So 15 how do we deal with that as a discussion in 16 this sort of setting? 17 MR. GORDON: Well, I have not 18 looked at your appointment letter, sir, but I 19 would venture to say that your letter said 20 that you're supposed to represent the 21 interests of all manufacturers and all 22 producers and all suppliers of equipment. So

### 202-234-4433 Neal R. Gross & Co., Inc. Page 148 1 in that case you have to take what is 2 aggregately the best for your organization, 3 the people that you're representing and say 4 this is the best path forward. However, if 5 you happen to be seen in this position as a 6 representative, you were working for one of 7 those suppliers that was a sole type supplier 8 with that kind of equipment and it came down 9 to the point where, well, we're making the 10 decision whether or not it's going to be 11 broad-based or we're just going to work with 12 this kind of a wire or this kind of metal then 13 in that situation if you know that your 14 employer is -- the only way he's going to get 15 a lot of business is if you vote for his 16 product in that regulation, that's an area 17 where I would say you need to get some 18 guidance from us as to whether or not you 19 should still be involved in that conversation. 20 But in most situations what we're talking 21 about is, you know, you're representing -- 22 here in this room you're representing the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 149 1 interests of thousands of organizations and 2 companies, and in terms -- that's why we 3 brought you in to do this kind of rulemaking 4 work. You really have to look at it from a 5 global perspective, not looking at it from a 6 perspective where my individual employer might

7 be affected.

8 MR. CASKEY: Sure.

9 MR. GORDON: Does that make sense?

10 MR. CASKEY: Yes. 11 FACILITATOR PARKER: I've got to 12 say it makes less and less sense to me. Maybe 13 I'm just missing something. But in situations 14 where there are a lot of different companies 15 that are competing with each other to sell 16 various product lines they may have different 17 facts much of which are proprietary, different 18 situations, different cost structures. They 19 may be implicated by the rules in different 20 ways. It's famous that rules create winners 21 and losers, you know. How is one company here 22 supposed to know precisely at which point his

### 202-234-4433 Neal R. Gross & Co., Inc. Page 150 1 or her interests diverge from those of their 2 competitors such that they are speaking only 3 for their company, not for their competitors? 4 MR. GORDON: Well, the way that we 5 do the appointment letters for people usually 6 is that you are here to represent the 7 interests of a class of particular. So 8 although somebody like John may have a home 9 employer some of these organizations, you 10 know, they're made up of and they're peopled 11 by particular organizations, particular 12 companies. 13 FACILITATOR PARKER: Right. 14 MR. GORDON: So in that situation 15 you would say hey, I'm not here as a company 16 representative, I'm here as an organizational 17 representative which has to take into account 18 all of that cloud of people that could be

19 affected.

20 FACILITATOR PARKER: For them 21 though it's fairly straightforward. I think 22 for an individual company which we also have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 151 1 here it's less straightforward, and we have a 2 particular case here, let's put it on the 3 table, I mean of Metglas and Hitachi which is 4 -- has a very, very substantial market share 5 of amorphous metals. They are the amorphous 6 metal industry in a sense and it's going to be 7 very difficult I think for, you know, to talk 8 about an industry interest as distinct from, 9 you know, Hitachi's interest because it's so 10 much, there's such a great overlap. 11 MR. GORDON: If it's one and the 12 same then what we count on is the fact that 13 there's a transparency with how this process 14 is going on. 15 FACILITATOR PARKER: Right.

16 MR. GORDON: And the fact that 17 there's an oversight process. And in that 18 respect if you've got a particular company 19 that's such a dominant industry in a 20 particular area that's going to be discussed 21 I think everybody knows that when we're 22 dealing with these things as a matter of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 152 1 general applicability everybody is going to be 2 affected by these rules. There's another 3 thing in terms of rulemaking which is the guy 4 who comes late to the table deals with the 5 table that's been dealt to him. So from that 6 perspective. And I don't see a conflict of 7 interest issue that comes up with that. 8 That's, I think that's inherent in the 9 process.

10 FACILITATOR PARKER: So what I'm 11 hearing then is that the key is disclosure and 12 transparency. 13 MR. GORDON: Absolutely. 14 FACILITATOR PARKER: As long as 15 people understand, you know, where people are 16 coming from, as long as we all are aware and 17 I think everybody here is more aware than I am 18 of the industry structure then there's not an 19 ethical issue per se.

20 MR. GORDON: Correct. 21 MR. MILLURE: Excuse me, Dave 22 Millure, Metglas.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 153 1 FACILITATOR PARKER: Excuse me, 2 David?

3 MR. MILLURE: Just for the record 4 we didn't get individual customized 5 appointment letters. 6 MR. GORDON: You did not? 7 MR. MILLURE: No. So when you 8 talk about that our interest groups that we 9 were to be representing are defined in those 10 that never happened.

11 MR. GORDON: You don't have -- 12 okay. Well then I will have to deal with Dan 13 and see what your appointment letters look 14 like. Did you guys have appointment letters? 15 You just got invited to the table. Okay. 16 MR. CASKEY: This is John Caskey 17 from NEMA. I would say it was opened up for 18 different organizations to nominate people to 19 serve on this committee and then we got a 20 validation or a verification that we were 21 selected to be on the committee. But I don't 22 remember getting an appointment letter per se.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 154 1 MR. GORDON: And that's through 2 that Federal Register process that went a 3 couple of months back. 4 MR. CASKEY: Right. 5 MR. GORDON: Okay. From that 6 perspective in terms of the selection and 7 putting you guys all here in the room it's 8 because that is the negotiated rulemaking part 9 of the procedure. I'm just dealing with the 10 FACA side of the house and the FACA issues say 11 that if you're dealing with a matter of 12 general applicability the people that are in 13 the room are here representing not sole 14 organization interests but they're 15 representing a class of interests that could 16 be affected by the rules that they're doing. 17 And what we've tried to do is include the big 18 players, the people that we know are going to 19 have influence so that when the rulemaking 20 actually goes out on the street it's got a 21 measure of support that reflects reality and 22 it reflects, you know, what the state of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 155 1 current industry is, what the likelihood for 2 technological advancement in the future is 3 going to be and it makes sense from a taxpayer 4 perspective. So to the extent that you didn't 5 get independent representational letters 6 that's what those usually say. And I don't 7 think there's anything different in terms of 8 the nature of the work that you're going to do 9 that doesn't say you're not just here for 10 Hitachi, you are here to represent players 11 like Hitachi and other companies that do that 12 kind of work. And in that respect that's why 13 this room has been put together like this. 14 I'll talk to Dan about notifications and how 15 people got put on. 16 FACILITATOR PARKER: Maybe because 17 there's a statutory framework for negotiated 18 rulemaking which may not exactly correspond to 19 the ordinary FACA process although this is 20 subject to FACA rules by statute. 21 MR. GORDON: Absolutely.

22 FACILITATOR PARKER: I'm not sure

### 202-234-4433 Neal R. Gross & Co., Inc. Page 156 1 whether that includes a requirement for 2 appointment letters or not. 3 MR. GORDON: And it may not 4 require letters but when I'm talking about 5 representational -- when I'm talking about 6 people being representatives that's the FACA 7 side that says, you know, you're here in a 8 matter of general applicability. All the 9 rules are going to be applicable to all 10 players equitably. And where we only worry 11 about is where it's going to -- where the 12 rules that are going to be negotiated and 13 recommended, you know, this is a 14 recommendation process up through the 15 department. All of those things, we just want 16 to be in a situation where from a transparency 17 perspective it doesn't look like backroom 18 wheeling and dealing is done that's going to 19 benefit one particular company over another. 20 And that's realistically, that's our end goal 21 is for -- to have that broad-based look at the 22 matters that you guys are going to be dealing

### 202-234-4433 Neal R. Gross & Co., Inc. Page 157 1 with, have the transparency, have the ability 2 to say yes, this was a fair and open process, 3 and that's where we're looking at. Then it 4 goes into the FACA process and it comes back 5 to the department and we put that out on the 6 street. Any other issues that came up John? 7 MR. CASKEY: Well, sort of a 8 little bit related to that but this is John 9 Caskey at NEMA again. And the idea is one of 10 the things that we're pushing for is a 11 sensitivity analysis because as you do have a 12 limited number of suppliers in some areas then 13 doing a sensitivity analysis on the price that 14 we're projecting at this point to say oh my 15 gosh, what happens if it doubles or triples or 16 something like that as long as we do that 17 sensitivity analysis at the conclusion of this 18 then that'll help us sort of validate whether 19 those recommendations are in the right 20 ballpark or not or whether they're critically 21 dependent on the particular price of, you 22 know, one commodity in the whole analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 158 1 FACILITATOR PARKER: I think 2 that's a good point and I'm certain that will 3 be done. But one thing this raises is not 4 only the legal and ethical issues but the sort 5 of political with a small "P" implications 6 which is that you know this group is here to 7 generate a proposed rule which will then have 8 to sell itself to the world at large. I mean, 9 the media will look at it, OMB will look at 10 it, Congress will look at it, the courts will 11 look at it. None of those people will give 12 the rule any greater deference by virtue of 13 the fact that this group came up with it. And 14 what's perhaps most important the rest of the 15 industry will look at this. And I'm keenly 16 aware from just the interviews I've had so far 17 that the low-voltage manufacturing market is 18 a little more fragmented, a little more 19 dispersed, more moms and pops operations than 20 the medium and liquid-immersed. And that 21 presents some real, you know, challenges for 22 us in this group I think. I did reach out to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 159 1 some of the smaller folks. You know, people 2 just don't have time to come to these 3 meetings, are not aware of the process. It 4 may be that we should think about how to bring 5 some other representatives here even if 6 they're not on the committee and can't come to 7 all the meetings to at least review results 8 and comment on them. If there are particular 9 market segments within the low-voltage that -- 10 where manufacturers are occupying a niche and 11 might be affected. I don't know how to get a 12 handle on that apart from, you know, people 13 who are expert at Navigant and elsewhere just 14 calling that to our attention. But I think we 15 need to be alert to that as a group so that 16 when we get our product we worked hard to 17 produce, at the end of the day product we 18 don't put out there and then have a whole 19 chorus of boos coming at us from people who 20 were, from companies who were not consulted, 21 did not participate. Whether or not they had 22 the opportunity to, they didn't. This group

### 202-234-4433 Neal R. Gross & Co., Inc. Page 160 1 is a lot smaller, there are empty seats at the 2 table reflecting the fact that you know there 3 are fewer big players here. So I think you 4 know we need to think about and perhaps even 5 reserve time today, probably some time today 6 to talk about that issue, whether there should 7 be a proactive outreach to some of these other 8 manufacturers to try to bring them in and give 9 them a chance to articulate their own 10 interests to the extent they might diverge 11 from, or complement or somehow differ from

12 those around the table. Does that make sense 13 to people? Any thoughts, comments on that 14 idea? It is a really important issue and it's 15 -- but I'm also just keenly aware that it's 16 very hard for one competitor to really, you 17 know, both because of the limitations of 18 proprietary data that competitors don't show 19 to each other. It's hard even if we wanted to 20 be completely ethical and completely noble we 21 should really put ourselves in the shoes of 22 our competitors and think how they would be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 161 1 impacted. And so there's no substitute for 2 having more people around the table and that 3 would have been ideal. But there are various 4 ways that we might be able to compensate for

5 that. John? 6 MR. CASKEY: Yes, John Caskey from 7 NEMA. Yes, given that some of the small 8 companies weren't able to be here for a 9 consistent four or five sessions one option 10 might be to, if there are certain issues that 11 the committee has to ask that sort of pool of 12 manufacturers would be to dedicate, you know, 13 here's a 2-hour session on a particular day on 14 session 3 or 4 or something to discuss some of 15 those issues that might be different for a 16 small manufacturer than a big manufacturer and 17 get them to that one session or that one day 18 might be more practical as opposed to trying 19 to get him for two days for, you know, five 20 sessions in a row or something like that. 21 FACILITATOR PARKER: And NEMA is 22 very well positioned to do that. So perhaps

### 202-234-4433 Neal R. Gross & Co., Inc. Page 162 1 you could, you know, poll your membership and 2 let us know if there would be interest. Would

3 that make sense? 4 MR. CASKEY: We'd be happy to do 5 that. The other way is to see if this 6 committee comes up with a list of you know, 7 like issues, five or ten issues that they 8 think the small manufacturer should weigh in 9 on and then we can make sure that they provide 10 responses or participate in a teleconference 11 or maybe even attend personally on that 12 particular day that you want to discuss those 13 issues.

14 FACILITATOR PARKER: Great.

15 MR. GORDON: There was one more 16 question from the -- you're all set, sir?

17 FACILITATOR PARKER: All set. 18 MR. GORDON: Okay. Well, thanks 19 very much for your time. 20 FACILITATOR PARKER: Thank you 21 very much for sharing with us. Appreciate it. 22 Okay. I thought that was helpful. Katie,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 163 1 apologies for the interruption. Come on back. 2 MS. COUGHLIN: Okay, so the idea 3 here is to go through the LCC in a kind of -- 4 to understand the mechanics of the calculation 5 and where the different assumptions come in. 6 So this is an outline which I assume you've 7 all had time to read. This sort of gives you 8 the way the LCC proceeds. So we have in each 9 LCC spreadsheet, so there's one from each 10 design line. We go through a loop of 10,000 11 what I call transformer installations. The 12 installation is a combination of an owner and 13 it's certain characteristics attached to the 14 owner and the installation, and then 15 characteristics -- those characteristics don't 16 change when we go through different efficiency 17 level calculations. Then there are similar 18 characteristics in the LCC that attach to the

19 transformer. 20 And so within the LCC the basic 21 steps are we have a sample -- for the dry type

22 transformers the owners are assumed to be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 164 1 commercial and industrial buildings. So we 2 have a sample of building data which includes 3 monthly energy and baseline energy use and 4 marginal prices for electricity. So we pick 5 an owner from the sample based on weight. The 6 weight is intended to reflect the likelihood 7 that a building of that type will contain a 8 transformer under consideration. We calculate 9 with sort of statistical models that we've 10 presented in detail in April that we use to 11 calculate load simulation parameters. Then 12 you choose a transformer design. This is 13 where the efficiency level comes in. So the - 14 - and then once you've chosen a transformer 15 you calculate the total installed cost. This 16 is where any constraints on the installation17 would enter. They're not so relevant for low18 voltage but they are relevant for the liquid19 immersed. And once that's done you get the

20 full LCC.

21 So the -- 22 FACILITATOR PARKER: You randomly

### 202-234-4433 Neal R. Gross & Co., Inc. Page 165 1 select an owner from the sample?

2 MS. COUGHLIN: From the 3 population, yes.

4 FACILITATOR PARKER: The 5 populations. So it's not based upon the 6 frequency of that particular. 7 MS. COUGHLIN: It has a weight. 8 Each potential owner has a weight associated 9 with it. 10 FACILITATOR PARKER: Okay. 11 MR. GREESON: Rob Greeson, Federal 12 Pacific. When you say choose a transformer 13 designs chosen, what's the criteria for that? 14 Is it based on the least operating cost for 15 the -- is it sort of random or does it just 16 depend on some other factors? 17 MS. COUGHLIN: Yes, that's where 18 we get into this issue of A and B parameters. 19 So in the medium-voltage and liquid-immersed 20 we do really assume a high level of evaluation 21 and then the installation would have 22 associated with it an A and B value. We do

### 202-234-4433 Neal R. Gross & Co., Inc. Page 166 1 that for the low-voltage as well and we can --

2 we do sort of A and B values based on the 3 prices following this procedure outlined in 4 the IEEE proposed standard. But in fact what 5 we have been told is that for the low-voltage 6 dry very few people evaluate. So we have 7 essentially --

8 MR. GREESON: That's correct. 9 MS. COUGHLIN: Yes. So we have it 10 in the LCC. I think we're running right now 11 with 2 percent just to make sure that the 12 mechanics work but that's one of those 13 parameters that you can set is a sensitivity. 14 So this is essentially minimum cost. 15 MR. GREESON: So is it correct to 16 say then that they pick the least, lowest 17 first cost? 18 MS. COUGHLIN: Yes, pretty much. 19 I'll actually show a graphic on that in a

20 moment. 21 MR. GREESON: So out of the, say, 22 a hundred designs that may meet 98.6 percent

### 202-234-4433 Neal R. Gross & Co., Inc. Page 167 1 efficient for example, the program would focus 2 in on the lowest cost design in that grouping 3 of A/Bs. 4 MS. COUGHLIN: Right. 5 MR. GREESON: Okay, thank you. 6 MS. COUGHLIN: Are you -- do you 7 want to take questions or do you want me to do 8 it?

9 FACILITATOR PARKER: Go ahead. 10 MS. COUGHLIN: Okay. Yes. 11 MR. BERMAN: Robert Berman, Berman 12 Economics. Katie, I'm a little confused at 13 this point on the low-voltage market what an 14 owner is. Is this somebody who is using the 15 transformer, somebody who selects the

16 transformer? 17 MS. COUGHLIN: The purchaser and 18 the one who pays for the electricity. 19 MR. BERMAN: The purchaser and the 20 one who pays for the electricity. So it's not 21 the building owner, it's not the one who 22 builds the building necessarily.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 168 1 FACILITATOR PARKER: Those are two 2 different people. 3 MS. COUGHLIN: For the purposes of 4 this analysis a transformer is attached to a 5 building and it's considered that the features 6 of the building are -- can be conveyed to the

7 transformer. 8 MR. BERMAN: Okay, so the 9 transformer is -- this is a very different 10 world from the liquid -- 11 MS. COUGHLIN: That's right. 12 MR. BERMAN: -- and medium-voltage 13 type. So the transformer is used by the 14 building, not by the function going on in the 15 building. 16 MS. COUGHLIN: Well, yes. I mean 17 you know, that level of detail is not in the 18 analysis. You may have some transformers on 19 certain types of circuits that serve different 20 types of loads but we don't have that level of 21 detail in the analysis.

22 MR. BERMAN: So I don't know the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 169 1 difference say between an office building, a 2 hospital, a school or a data center. 3 MS. COUGHLIN: Yes, we know the 4 difference between those types of buildings. 5 What we don't -- but the function within the 6 building I thought you were referring to end

7 uses.

8 MR. BERMAN: That's what I mean. 9 If the building is being used as a data 10 center, as a hospital, as an office complex --

11 MS. COUGHLIN: That's accounted

12 for.

13 MR. BERMAN: That's accounted for. 14 And do we have buildings that change uses? 15 MS. COUGHLIN: Not in the 16 analysis, no. 17 MR. BERMAN: Okay. But the 18 loading then would represent sort of a 19 weighted average of the different possible 20 uses that might be in that building? 21 MS. COUGHLIN: No, each building 22 has one building use. If we're using the data

### 202-234-4433 Neal R. Gross & Co., Inc. Page 170 1 sets that were prepared by EIA Commercial 2 Building Electricity Consumption Survey so you 3 have a -- each building has an end use in the 4 year when the data was collected, or a 5 building use in the year where the data was 6 collected and that stays the same. 7 FACILITATOR PARKER: Okay.

8 MR. TENDULKAR: When we do the 9 analysis we are assuming the life of the 10 transformer is what 30 years, 40 years? 11 MS. COUGHLIN: This, I believe 12 we're assuming here a 30-year mean lifetime 13 with a very wide distribution. 14 MR. TENDULKAR: And if the 15 transformer is used less than 30 years, maybe 16 say 10 years because of the particular 17 application then this analysis may not be 18 valid. The point I'm trying to make here is 19 there are some data centers now that people 20 are putting inside the containers. They are 21 not building in the buildings. And the 22 transformer irrespective where it is going,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 171 1 low-voltage general purpose transformer, 2 that's what we class, will be used there and 3 that is going for a data center. Once the 4 data center is done it's like because servers 5 are out of date, the computers out of date, 6 they trash the whole thing. The transformer 7 is gone and everything is gone. So how do we 8 account for that because again those 9 transformers are not yielding a partial load. 10 They'll always use a hundred percent load, 11 what the load level is, that doesn't change.

12 MS. COUGHLIN: Yes. We don't -- 13 we haven't received detailed data on that type 14 of thing. It can be accounted for because 15 there is a distribution of lifetimes and there 16 is -- it's technically not difficult to 17 associate building type with a weight and some 18 particular characteristics with the load. But 19 the data requirements to do that are fairly 20 strict so it's a question of whether we can 21 actually find enough reliable data to 22 implement it. So right now we don't have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 172 1 detailed data at that -- on the relationship 2 between building type and transformer 3 lifetime. But if we need to acquire such data 4 we could use it to deal with this type of 5 issue. 6 MR. TENDULKAR: Yes, that's what 7 my point is. Is there anybody of us can help 8 you on that or something we should do. That's 9 why I'm asking. 10 MS. COUGHLIN: If you can do it we 11 would certainly use it, yes.

12 MR. TENDULKAR: I'll see what I

13 can do. 14 FACILITATOR PARKER: Steve, did 15 you have a question? 16 MR. ROSENSTOCK: I think someone 17 at the table had a question first I believe.

18 We --

19 FACILITATOR PARKER: Steve

20 Rosenstock. 21 MR. ROSENSTOCK: -- we provided 22 some comments in April about the use in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 173 1 certain commercial buildings where the dry 2 type transformer is basically serving I'll say3 computers, office equipment, typically low4 voltage equipment versus, you know, the high5 voltage equipment. The heating and cooling 6 and ventilation is typically on the 480 volt 7 or 277 volt. So those dry type transformers 8 are already serving I'll say low-voltage, I'll 9 say almost, I won't say base load, but could 10 be considered base load. Were you able to 11 incorporate some of that or was there data 12 available to kind of show the type of 13 equipment basically being served by the dry 14 type transformers for your analysis? I mean, 15 mine was just anecdotal to say based on -- 16 MS. COUGHLIN: The short answer is 17 no. We can go into the details but there's 18 essentially, again, what we need for this 19 analysis is we need two things. One is a way 20 to weight the faction of transformers that 21 might be subject to that type of special 22 loading and another is a sort of, a way to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 174 1 translate. We have a fairly broad 2 distribution of statistical load factors so 3 there's a particular subset of those that 4 should be associated with the building type. 5 That's the other thing that we need to know. 6 So we don't -- I mean, it may be possible to 7 come up with a model for that part but we 8 still need to know what fraction of 9 transformers we should be assigning to this 10 particular subset of the end use loads. And 11 that, again, I mean if that information can be 12 provided we can look at how to incorporate it

13 but we don't have a source for that at the

14 moment. 15 MR. ROSENSTOCK: Steve Rosenstock, 16 EEI, again. I think for certain building 17 types again it all depends on the weighting, 18 especially office buildings and schools and 19 probably a lot of retail establishments. Dry 20 type transformers are going to be used for21 I'll say, the end uses I'll say the low22 voltage non -- I'll say less fluctuating non

### 202-234-4433 Neal R. Gross & Co., Inc. Page 175 1 heating or cooling ventilation type stuff. I 2 believe there should be some data out there I 3 would -- I would say it's a significant 4 fraction in those. Of course data center is 5 a totally different story obviously. You 6 know, but in terms of a lot of I'll say more 7 traditional type of commercial buildings I 8 think it should be either data or modeled such 9 that you know the actual end use loads are the 10 low-voltage equipment and typically there 11 should be data available. I'm sorry no one 12 from BOMA is here that, I'm sure there's an 13 end use trade association that could probably 14 hopefully give you some good feedback in that 15 regard. Thank you. 16 MS. COUGHLIN: Okay. Okay, so 17 this is just a summary of -- 18 FACILITATOR PARKER: Let me just 19 say that BOMA was not only invited but 20 exhorted to attend and they decided that it 21 was not worth their time to attend. But we -- 22 if there is interest they did agree that they

### 202-234-4433 Neal R. Gross & Co., Inc. Page 176 1 might be willing to send somebody to a meeting 2 to give us a report at an individual meeting. 3 So that's another thing that we could work on 4 if there's interest around the table in 5 setting that up. 6 MS. COUGHLIN: Okay, so this just 7 summarizes those features that are associated 8 either with the transformer itself in which 9 case they do change when they change 10 efficiency levels versus those that are 11 associated with the installation. And the 12 features that are associated with the 13 installation do not depend then obviously on 14 the engineering data. So it's somewhat easier 15 to do sensitivities on the set of 16 characteristics on the right-hand side if that 17 would be of interest. 18 So I think most of these are 19 familiar. We have the buildings are divided 20 commercial/industrial. There's a population 21 weight. Along with the building data comes 22 the geographic location which is going to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 177 1 affect the seasonal variation in loads. 2 There's also seasonal margin of prices for 3 electricity, both electricity consumption and 4 electricity demand. A flag for evaluators 5 which in this case is mostly no. There's 6 discount rates. The building electricity use 7 data from CBECS is translated into monthly 8 values for the loss factor and the peak 9 responsibility factor which are used to 10 estimate the cost of serving the losses. 11 There's a peak load factor which is 12 essentially a sizing parameter. It tells you 13 -- so the load shape gives you the 14 relationship between average loads and peak 15 loads and then the sizing factor gives you a 16 relationship between the peak load and the 17 capacity of the transformer. So under the 18 current set of parameters we have been told 19 that these transformers tend to be oversized 20 so the peak loads tend to be about 80-90 21 percent of the capacity. And then there's 22 lifetime which is a distribution. And then if

### 202-234-4433 Neal R. Gross & Co., Inc. Page 178 1 there are any installation constraints as I 2 mentioned they're not so relevant for this 3 product class. They would be included in the 4 LCC this way. Yes? 5 MR. ROSENSTOCK: Hi, Steve 6 Rosenstock, EEI again. Again, I think that's 7 the issue. 8 When you look at the monthly loss 9 factor and peak responsibility factor, 10 equipment served by the dry-type transformers 11 isn't really responsible for building peak. 12 I mean, at the building loads and 13 the building things, but the transformers are 14 only serving a subset of that equipment. So, 15 the actual loading of the equipment served by 16 the transformer is going to be a subset of

17 those factors. 18 And that could make a big 19 difference especially when you're talking 20 about peak responsibility, which is driven by 21 the heating or cooling equipment. It's not 22 driven by the equipment typically served by

### 202-234-4433 Neal R. Gross & Co., Inc. Page 179 1 the dry-type transformers in traditional 2 buildings. 3 MS. COUGHLIN: Right.

4 MR. ROSENSTOCK: That could have a 5 huge impact in the LCC. 6 MS. COUGHLIN: Yes, I mean, we're 7 pretty conservative. Actually, our peak load 8 factors tend to be very small - the 9 responsibility factors tend to be very small. 10 So, let's see. Let's move on. 11 So, I want to be very clear that within the 12 LCC we don't assume that the test procedure 13 loads are attached to each building. The 14 building loads are, again, they're cranked out 15 with the statistical model. 16 And another point that I want to 17 be clear on is that the efficiency level gives 18 you a single number for the efficiency of the 19 equipment, but you still have two parameters 20 to play with; the no-load loss and the load 21 loss. So, it's the whole range of possible 22 designs that can meet a single efficiency.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 180 1 Let's see. Most of this is - and 2 then within this version of the LCC we have - 3 again, we're assuming that the owner of the 4 transformer is billed for electricity on a 5 monthly bill. So, we're using these monthly 6 electricity prices. 7 Let's see. Okay. So, this is the 8 - I'm going to present several figures. These 9 are for Design Line 7, which I believe is the 10 largest market share of all the dry-types that

11 are modeled. 12 So, this is the cost-efficiency 13 data produced by the engineering analysis. 14 This is the updated data that was, I guess, so 15 the results published in August used this 16 engineering data. 17 The different colors represent 18 different combinations of core materials and 19 design options. 20 One thing that's interesting with 21 this product line if this works, which it 22 doesn't - let's see. There we go. So, you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 181 1 can see that there is a large number of 2 designs on the sort of lowest efficiency or

3 low-cost band. 4 So, what that ends up meaning in 5 practice is that you don't necessarily see a 6 lot of variation in the LCC going from one CSL 7 to another. So, this is the - the old labels, 8 unfortunately, are on this chart. They should 9 now say efficiency level. 10 So, what happens in the LCC is 11 this cutoff is imposed at each efficiency 12 level. So, the base case, this cutoff here 13 just allows all the designs to be selected 14 from during the LCC. 15 And then the first efficiency 16 level is here. So, only the designs that are 17 to the right are going to be selected. And 18 you essentially go on up until you reach an 19 efficiency level for which essentially there 20 are two designs in the engineering space. 21 And another thing I'd like to 22 mention, and this is just to give you some

### 202-234-4433 Neal R. Gross & Co., Inc. Page 182 1 additional background on the OPS work. What 2 we have done with - the decision was made 3 quite a long time ago that we wanted to model 4 a very wide range of evaluations of the load

5 losses and no-load losses. 6 So, the way this was set up is 7 there is a grid of A and B values which are 8 given to OPS. And then they calculate the 9 optimal design for each A/B value. So, each 10 one of these points represents a different A

11 and B value. And OPS has to calculate all the 12 designs consistently using the same materials 13 prices. 14 So, this is a very large amount of 15 work that they have to do in one batch. And 16 since it's an optimization algorithm, it's not 17 hard to believe that some shift in materials 18 prices might lead to a different optimal 19 design being chosen at each point. And that 20 may have some affect on the discrepancies that 21 people are seeming to find between the OPS 22 output and the stuff that you guys do.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 183 1 So, there is a lot of, you know, 2 just because of the requirement that OPS 3 generate a very large number of optimized 4 designs at one time using consistent materials 5 prices, again there's a limit to how much we 6 can do to investigate the sensitivity of this 7 part of the analysis to changes in materials 8 prices. 9 MR. GREESON: Rob Greeson, Federal 10 Pacific. 11 The problem that I ran into - and 12 you're exactly right about the A/B. It gives 13 you a wide range of prices for the different 14 A/B values, which would correspond to a 15 greater benefit to the customer, given that 16 particular load profile that he has. 17 But when I discovered some of the 18 discrepancies that I had been looking at, I 19 focused on the low cost - low first cost. 20 So, in other words, I filtered all 21 the 98.6 percent efficiency transformers that 22 use the same steel, SAN4, aluminum and miter,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 184 1 filtered all those out and I got maybe fifty

2 to a hundred of them. And then there would be 3 a minimum and an average and a maximum because 4 of all the A/B factors. 5 And typically the industry, or at 6 least the way we design our transformers, 7 we're typically driving at lowest first cost 8 to get the job. And those were the designs 9 that I focused on specifically. And that's 10 where I was kind of finding these issues.

11 MS. COUGHLIN: But even then 12 there's still an optimization that gives you 13 that very lowest, lowest cost point. 14 MR. GREESON: Exactly. 15 MS. COUGHLIN: So, that may be the

16 - 17 MR. GREESON: There is, but I guess 18 the bottom line is we can't attribute the 19 variation in the OPS design solely to that. 20 It might be some of that, but 21 because I'm aware of that characteristic, I 22 actually filtered those designs out to try to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 185 1 keep away from accidentally picking a high or 2 a low-cost design. I try to stay apples to 3 apples, in other words. 4 MS. COUGHLIN: Okay. 5 MR. GREESON: Thank you. 6 MR. MILLURE: This is Dave Millure, 7 Metglas. 8 It looks for all the world like 9 there's a lot of low-hanging fruit there. You 10 can go to CSL3 for no additional cost to the

11 transformer. 12 Rob, I think you were just saying 13 that your modeling showed something different 14 than that because it looks like 0.6 percent 15 efficiency for no extra cost. 16 MR. GREESON: My first pass numbers 17 which, you know, I was seeing somewhere 18 between 60 and 70 percent higher pricing 19 levels than what was given in the engineering 20 analysis data, which would be on the -

21 FACILITATOR PARKER: At what level 22 were you seeing that?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 186 1 MS. COUGHLIN: Well, it doesn't 2 matter. He's just talking about the cheapest 3 points along there.

4 MR. GREESON: I looked at 5 specifically, I think, CSL1 and maybe 3, 6 because I had to focus on a design that I 7 actually had access to that I had done that 8 was similar to one that they had done. 9 And depending on the CSLs, 10 sometimes you couldn't find the material mix 11 that I was - I was trying to keep it the same 12 material so that I wouldn't be comparing an M6 13 to an M3, for example. 14 MR. DeLASKI: So, Rob, in your 15 calculation, was it a 60 or 70 percent 16 increase that you're seeing at both CSL1 and 17 CSL3 for those two that you looked at?

18 MR. GREESON: It was between 60 and 19 70 percent between CSL0, which is the present 20 level, and up to two. And then when I got to 21 three, it just skyrocketed to like 167 22 percent. It just went - instead of being a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 187 1 flat curve, it kind of went up exponentially 2 and departed from the DOE and OPS data. 3 And those are the types of things 4 we're trying to resolve. I'm not a hundred 5 percent saying that maybe there's something we 6 did, but - 7 FACILITATOR PARKER: Well, that's

8 what the - 9 MR. GREESON: That's the kind of 10 thing we - there's enough difference there 11 that there's definitely some - 12 MR. DeLASKI: Right. So, you and 13 Navigant need to talk or you and -

14 MR. GREESON: Yes. 15 FACILITATOR PARKER: Well, that's 16 with the working group that we set up this 17 morning.

18 MR. DeLASKI: I had a follow-on 19 question for Katie. 20 So, I'm looking and I'm seeing a 21 cloud of dots. And this is input to the LCC. 22 So, if we look at CSL2, for example, how do

### 202-234-4433 Neal R. Gross & Co., Inc. Page 188 1 you come up with the range of prices for that

2 CSL2 transformer? 3 Between the CSL2 dotted line and 4 the CSL3 dotted line, there's a whole cloud of 5 transformers that would be compliant meeting 6 CSL2, but not meeting CSL3. 7 So, how do you turn that cloud 8 into a purchase price? Because that price 9 varies between - go back a slide for a moment, 10 please. 11 It's varying between, in this 12 example, something like $700 up to $5500. 13 MS. COUGHLIN: Right. 14 MR. DeLASKI: So, what's the 15 purchase price? 16 MS. COUGHLIN: The purchase price - 17 well, this is where the selection algorithm 18 comes in. 19 So, again, because most of those 20 designs with the higher prices correspond to 21 higher A/B values when you were doing a 22 simulation where no one evaluates, they don't

### 202-234-4433 Neal R. Gross & Co., Inc. Page 189 1 actually enter into the calculation at all. 2 So, this next slide gives you a 3 picture of what's actually selected when you 4 run the calculation. 5 And so, again, this is a 6 simulation where a nominal number of 7 evaluators - I think two percent. There's 8 essentially no evaluators. Those green dots 9 are the base case, but we add a little bit of 10 random noise to the price at each selection 11 point so that you're not always picking the 12 one design that happens to be the cheapest in

13 the LPS software. 14 So, what you can see is that in 15 the base case because of this flatness of the 16 bottom of the curve, you're actually picking 17 all the way across these efficiencies. So, 18 once you pick one of these, you have the 19 price. 20 And then in this illustration, we 21 are illustrating the selection when you impose 22 CSL5. So, now the selection of dots is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 190 1 limited to things which are - complied with

2 the standard and are close to the lowest cost. 3 And I think this graph is 4 displaying differently on the screen than it 5 does in my computer.

6 MR. DeLASKI: I can't read what the 7 legend is up there. 8 MS. COUGHLIN: Okay. The green 9 circles are the base case selections. And the 10 red circles are the CSL selections. But, in 11 fact, the - on my computer, these circles were 12 green. I don't know why this thing is coming 13 up this way. 14 So, when you impose the standard 15 level, you're eliminating all these guys from 16 the possible choices. So, you still pick 17 along the lowest curve, but you're now 18 restricted to a much smaller set of possible 19 designs. 20 MR. PATZNER: Katie.

21 MS. COUGHLIN: Yes. 22 MR. PATZNER: Thomas Patzner,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 191 1 Schneider Electric. 2 Based on your comment on the early 3 adapters due in A and B, I think we need to 4 reevaluate as an industry the percentage we're 5 using, because there's a - I'm one of the 6 people that helped you with that current 7 percentage and argued for it. 8 But now that I am sitting here 9 listening, I believe there's a larger number 10 of people specifying lower winding losses by 11 calling for 80 degrees and 115. 12 So, they're asking the 13 manufacturers - they're not buying them for 14 efficiencies. They're buying them for lower 15 BTUs at higher loads. 16 So, when we looked at the early 17 adapters, we commented on how many were buying 18 it for more efficiencies, but there actually 19 are a larger number of customers buying the 20 product, but they're not doing it for 21 efficiencies, they're doing it to lower their 22 air conditioning costs.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 192 1 MS. COUGHLIN: Okay. 2 MR. DeLASKI: So, they're lowering 3 their I squared R losses so that they can size 4 their air conditioning differently. 5 So, they would be considered - 6 MS. COUGHLIN: Right, that would 7 affect the product choice, yes. I mean, 8 again, these things are - we have built the 9 spreadsheets to make it easy to adjust this 10 type of thing. So, again, we just need some 11 kind of mathematically clear rule for making 12 that choice within the model.

13 MR. PATZNER: Tom Patzner from 14 Schneider Electric. 15 I will pull some numbers on our 16 115 and 80 to try to recalculate what I 17 believe people that spec A and B losses are 18 with the fact that I understand now that when 19 -- people are specifically asking for low 20 temperature rise to lower their I squared R 21 losses. That's the reason they buy it from

22 us.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 193 1 MS. COUGHLIN: Okay. 2 MR. TENDULKAR: For some people who 3 don't understand what the gentleman is saying 4 is, whenever they want to reduce the I squared 5 R loss, you have to increase the size of the 6 winding. That also means you have to increase 7 the size of the quota to get the bigger 8 winding. 9 And that means you have to use the 10 lower flux density at a much better steel 11 conducting. So, your cost goes up. 12 The people are paying extra for 13 these transformers, but they're also reducing 14 their cost of air condition and saving the 15 money and energy on the air conditioning so 16 that it's - you can look at the -

17 FACILITATOR PARKER: Because 18 they're generating less heat. 19 MR. TENDULKAR: Yes. If you get a 20 higher efficiency at the lower load, that also 21 can translate into the lower efficiency at the 22 higher loads. You know what I'm saying?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 194 1 Because if I want to get - let me 2 put in a different way. If I want to reduce 3 the size of the core, that means I have to put 4 more winding to get the same kVA. 5 More winding is more losses in the 6 winding. And the winding losses go with the 7 square of the load. 8 So, if you are ten percent load, 9 it's only about one percent of the losses in 10 the winding. But if a hundred percent load, 11 a hundred percent losses in the winding. 12 And for general rule of thumb, 13 maybe it is not correct, but for every one 14 watt increase in the core loss, you can reduce 15 about three to four watts in the winding at a

16 full load. 17 So, if you take that kind of 18 thing, I'm just telling it to people who do 19 not design the transformer, so not 20 understanding of the transformer. 21 But people who do all the 22 transformers, I don't have to explain it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 195 1 anymore. Thank you.

2 MR. DeLASKI: I have a follow-on 3 question. Andy deLaski again. 4 I'm having - maybe this is just an 5 anomaly in this picture or graph, but I'm 6 having trouble squaring what you just told me

7 are base case transformers. 8 Okay, you said all the green dots

9 are base case transformers.

10 MS. COUGHLIN: Yes. 11 MR. DeLASKI: With earlier 12 statements from the manufacturers that people 13 spec TP1 transformers. So, what I'm having 14 trouble squaring is that so that I would 15 expect that a base case transformer would be 16 up against CSL0 TP1 and that those will all be 17 based - there is not a distribution of 18 efficiency being sold, what I thought I was 19 hearing from Tom and those earlier. But that 20 would not characterize what the market is 21 doing in reality. Those are not all base - 22 what people are buying in their base case.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 196 1 MS. COUGHLIN: That may be, yes. 2 Again, this is sort of the engineering input 3 that we received. And these designs are - 4 again, the LCC doesn't really reflect market 5 share directly. 6 What we try to do in the LCC is 7 reflect a lot of different design options and 8 see, you know, that have equivalent costs. 9 MR. DeLASKI: But you see where I'm 10 driving.

11 MS. COUGHLIN: Yes. 12 MR. DeLASKI: Where I'm driving is 13 that it would affect the NIA, right? If we're 14 assigning a distribution of efficiencies in

15 the base case -

16 MS. COUGHLIN: That's correct.

17 MR. DeLASKI: -- that would - 18 MS. COUGHLIN: And it - 19 MR. DeLASKI: We're underestimating 20 the impact of change. 21 MS. COUGHLIN: That's right. 22 MR. DeLASKI: And if that's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 197 1 happening or not happening, am I - 2 MS. COUGHLIN: Well, that's 3 something, you know, again if the engineering 4 data - I mean, the only thing that's going to 5 change the LCC is if this stops being flat, 6 basically. And I don't know, once we sort out 7 these problems, it sounds like there are some 8 underestimates in those numbers. 9 So, I think in the process of 10 sorting out that problem, we can also address 11 this one. 12 MR. DeLASKI: Okay. Thanks. 13 MR. CASKEY: Katie, John Caskey,

14 NEMA. 15 Can you go back one slide?

16 MS. COUGHLIN: Sure. 17 MR. CASKEY: Okay. So, since this 18 is so flat, I mean, I can't see very clearly 19 from here, but it looks like somewhere around 20 $2,000. 21 So, for this 75 kVA single-phase 22 transformer, basically I can get that for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 198 1 roughly $2,000 all the way from the CSL0 all 2 the way up to like the CSL4, basically, for 3 the same price. 4 So, is that the conclusion from 5 this? Even though the actual purchase might 6 be a different design in terms of mixtures of 7 metals, basically the bottom line is if I'm 8 going to buy it, I can get - 9 MS. COUGHLIN: CSL3, I would say, 10 the NEMA premium is - 11 MR. CASKEY: Well, there's a lot of 12 those light blue as CSL4.

13 MS. COUGHLIN: Yes. 14 MR. DeLASKI: I think those are the

15 wound cores. Aren't those the wound cores - 16 I'm sorry. The symmetrical cores. The ones 17 that we thought we screened out.

18 Are those - 19 MS. COUGHLIN: There's no modeling 20 software for symmetric cores. So, those 21 designs are not included. 22 MR. DeLASKI: Those are not showing

### 202-234-4433 Neal R. Gross & Co., Inc. Page 199 1 up on here, okay. 2 MS. COUGHLIN: I mean, they're 3 close. They're close. 4 MR. CASKEY: Okay. So, basically 5 it's true that according to this analysis that 6 the cost for additional efficiency, as 7 somebody else stated, is essentially the delta 8 is zero or close to zero all the way up until 9 you get to the CSL4 category. 10 MS. COUGHLIN: Yes, yes. And if 11 that's not true, let me know. 12 MR. CASKEY: Well, I mean, as I 13 understood it, Navigant, and I'm not sure 14 about LBL, spent time with the manufacturers, 15 at least three or four of them, to try and get 16 an understanding of what their prices were for 17 various types of transformers and various 18 efficiencies. 19 MS. COUGHLIN: That's right. 20 MR. CASKEY: So, do these data 21 points here validate what the manufacturers 22 have said, or vice-versa?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 200 1 MS. COUGHLIN: Well, okay. So, 2 Brian Coffey - I'm not - we didn't - LBL 3 doesn't do the engineering analysis. 4 MR. CASKEY: Okay. 5 MS. COUGHLIN: But my understanding 6 is that materials prices were updated and 7 everything was re-optimized between April and 8 August. 9 So, this should reflect updated 10 materials prices, but it's still using the OPS 11 algorithm. And, again, I don't know. There 12 may be some issues there that need to be 13 sorted out, but I believe this does reflect 14 the updated materials prices from the 15 manufacturer interviews. 16 MR. CASKEY: Okay, yes, I was 17 really asking about the selling prices, not 18 the materials prices. 19 MS. COUGHLIN: Well, in the - okay. 20 I can't answer that. I don't know how they

21 affected that.

22 I know that there were comments on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 201 1 the markups that we also implemented. And 2 that affects the total installed cost. 3 MR. CASKEY: Okay.

4 MR. TENDULKAR: I don't know about 5 the selling prices, but what about -- well, 6 some of the experts, I can see there is a lot 7 of difference in the material prices, 8 transformer manufacturer prices, between the 9 TP1 designs and CSL3 designs. A 60 to 70 10 percent increase in the actual cost of the

11 transformer. 12 And this is not me. A lot of 13 other manufacturers say the same thing to me. 14 MR. CYMBALSKY: This is John 15 Cymbalsky, DOE.

16 Do we know the market share of the 17 NEMA premium transformers versus the baseline? 18 MR. CASKEY: This is John Caskey. 19 I think it's relatively small, but 20 I don't know. I mean, I would guess at like 21 10 or 20 percent or something like that at the 22 most, but I honestly do not have the raw data

### 202-234-4433 Neal R. Gross & Co., Inc. Page 202 1 on that. 2 MS. COUGHLIN: Yes, but that was 3 one of the motivations for the low number of 4 evaluators is that the TP1 does not have a 5 large market share for this type of product. 6 MR. DeLASKI: So, when was TP1 7 officially - not TP1 - NEMA premium, when did 8 you guys adopt that? 9 MR. CASKEY: We offered it to the 10 public beginning in 2009. I think July of 11 2009, if I'm not mistaken.

12 MR. DeLASKI: It's been around a 13 couple years, right?

14 MR. CASKEY: Yes. 15 MR. MILLURE: Dave Millure, 16 Metglas. 17 I think when Rob was talking about 18 going to higher levels in the 60 percent 19 differential, you said you were keeping the 20 same material combinations of core steel and 21 conductor, which I believe those curves would 22 probably corroborate, right?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 203 1 So, to keep that curve flat, 2 you've got to go to higher grades of core 3 steel and maybe conductor. And that's how you 4 keep it flat, right? 5 MR. GREESON: That's, in some 6 cases, you can keep it flat. I'd have to do 7 a little bit more analysis. 8 I was just trying to verify the 9 costing aspect of it, not so much the flatness 10 aspect of what we're talking about here. 11 Because if the pricing aspect is off, then you 12 got to start on that first. But in theory, 13 yes, maybe you can do an M3 design for a 14 little bit more efficient at almost the same 15 price. 16 It really depends on the commodity 17 of the steel. My colleagues can attest to 18 that that depending on what the steel prices 19 do, sometimes you can and sometimes you can't. 20 And it depends on how much efficiency you're 21 trying to get. 22 MS. COUGHLIN: Yes, I'll just

### 202-234-4433 Neal R. Gross & Co., Inc. Page 204 1 mention another thing to keep in mind looking 2 at these plots, is that these are test 3 procedure efficiencies which assume a 35 4 percent RMS load. 5 And if -- in practice, most 6 transformers are loaded at a lower level. So, 7 within this design space of 35 percent, you 8 can use improvements on the load losses to 9 bring you into the right efficiency because 10 you also have a tradeoff between no-load

11 losses and load losses. 12 In reality, there may be less of a

13 tradeoff because the loads are assumed to be - 14 are actually lower than what the test 15 procedure assumes. 16 So, it may actually be harder to 17 meet these efficiency level - or to construct 18 something with that efficiency that would have 19 that efficiency in the field. And that would 20 be why they're not actually manufactured. 21 So, again, it's a bit of a - the 22 test procedure efficiency can sometimes lead

### 202-234-4433 Neal R. Gross & Co., Inc. Page 205 1 to low - going up in test procedure efficiency 2 depending on how the transformer is loaded, 3 can cause you to go down in energy savings. 4 And you can see that in a couple of the 5 product lines. 6 So, again, you have to remember

7 there's a balance of no-load losses and load 8 losses that can change quite dramatically when 9 you move from one - essentially one color of 10 designs to another. 11 So, let's see. Is there any other 12 issues on this, or should we move one? 13 MR. PATZNER: Katie, I was - Tom 14 Patzner, Schneider Electric. I was just going

15 to comment on Robert's comment. 16 We're finding our cost ratio 17 closer to 60 percent as well with the jump 18 being after CSL3 and going to CSL4 being a lot 19 higher curve, but we also take into account 20 that we're going to plan to build an awfully 21 large number of these without increasing our 22 square footage.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 206 1 So, when I do my potential cost 2 designs, I'm picking a design that I figure I 3 don't have to increase my capacity in my 4 facilities to do. 5 So, I know that comes afterwards, 6 the manufacturing analysis is afterwards, but 7 when I'm doing this now, I'm taking in the 8 manufacturing analysis point of view because

9 we are manufacturers. 10 So, the manufacturers need to look 11 at how can we put it in the same square 12 footage we have today if it's all possible? 13 So, I think that's somewhat where 14 on here, I think these designs figure we can 15 double our capacity in a building, or we can 16 double the number of winding machines, we can 17 double the number of stacking equipment, and 18 that's just not practical. 19 FACILITATOR PARKER: Is it possible 20 to run these numbers with a size constraint 21 put into the model? Is that what you're 22 saying?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 207 1 MS. COUGHLIN: No, I think he's 2 talking about the actual manufacturing plant,

3 not the transformer. 4 MR. PATZNER: So, I'm talking about 5 our facility. So, today if I am -- just say, 6 for example, if I'm building 275 Design Line

7 7s a week - 8 FACILITATOR PARKER: Oh, I see. 9 MR. PATZNER: -- I want to build 10 200 no matter what the efficiency is in that 11 same square footage.

12 FACILITATOR PARKER: I see. 13 MR. PATZNER: So, when I'm looking 14 at - when you guys give me an efficiency 15 level, I might end up being higher than what 16 the program says for the end user price, 17 because my - once we get to the manufacturing 18 analysis, we need to keep our capital 19 expenditure as low as possible. 20 So, when we're looking at these 21 dots, we're looking at it from the perspective 22 of not having to invest a large amount of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 208 1 capital. 2 And the largest amount of capital 3 is if we have to increase capacity. 4 MR. CYMBALSKY: John Cymbalsky,

5 DOE. 6 So, from the consumer's 7 perspective if you look at this graph, I don't 8 know anything. I don't know a lot about 9 transformers, but let's say these were 10 refrigerators. 11 I mean, wouldn't the whole market 12 be buying -

13 MS. COUGHLIN: No. 14 MR. CYMBALSKY: What is the other 15 constraint? I must be missing something here. 16 MR. PATZNER: So, Tom Patzner -

17 MR. CASKEY: I'm not the 18 manufacturer. I work for an association, but 19 I do have a technical background. But it's 20 just not intuitively obvious for me that you 21 can increase - to me, it would indicate - I 22 would start questioning the model.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 209 1 If a model produces a flat price 2 over four different energy efficiency bands, 3 I would really say, well, gee, I have assumed 4 something wrong or there is something that's 5 not happening right in this model for that to 6 be coming out true. 7 MS. COUGHLIN: Right. 8 MR. CASKEY: Because, right. Then 9 why wouldn't everybody be buying the CSL4 10 today? 11 MR. CYMBALSKY: That's why I asked

12 about the market share. 13 MR. CASKEY: And people are not - 14 not everybody is buying the CSL3 today, which 15 is essentially the NEMA premium. So, again, 16 that may have -

17 MR. CYMBALSKY: But there's no

18 other - 19 MR. CASKEY: -- a two percent 20 market share in sales after like a two-year 21 program. 22 MR. PATZNER: So, Tom Patzner here

### 202-234-4433 Neal R. Gross & Co., Inc. Page 210 1 from Schneider Electric. 2 If you look at the market today 3 and you look at the CSL0, people are actually 4 paying from 2100 all the way up to $5,000. We 5 are supplying every last one of those dots 6 based on different specifications. 7 Somebody wants a copper 80-degree 8 rise, somebody wants a K13 device. So, the 9 market is actually supplying units in that 10 full range of price. 11 You get up to the CSL3 or the NEMA 12 premium, and in the NEMA premium market the 13 industry is only offering the $5,500 market, 14 because those are the only customers that are 15 asking for it. 16 So, what the difference in the 17 market price today is, is the guy who's paying 18 me $4,800, he's jumping up to the 5,500. The 19 guys that are paying the 2100 - so, the 20 industry hasn't designed the bottom line,

21 because we haven't been asked to. 22 We're only building - we're only

### 202-234-4433 Neal R. Gross & Co., Inc. Page 211 1 building the guy who is willing to pay that 2 yellow dot up there at 5,500. 3 MS. COUGHLIN: Okay. So, I think 4 if I would summarize, it sounds - and these 5 are sort of engineering possibilities. There 6 may be additional constraints on the industry 7 that do not allow those possibilities to 8 actually get manufactured systematically. 9 So, again, that's the kind of 10 thing where if we can get some kind of clear 11 statement of what needs to be removed, it's 12 pretty straightforward to take these out of

13 the LCC. 14 MR. MILLURE: Dave Millure, 15 Metglas. 16 For what it's worth, we've done 17 analysis and it looks sort of flat to us, too. 18 MS. COUGHLIN: Okay.

19 MR. MILLURE: And we're confused. 20 You have to assume we're going to change to 21 different levels, different materials. No M6. 22 It will go to M3. You've got to change the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 212 1 design. You can't use your old designs 2 anymore, and it looks sort of like that. 3 MR. DeLASKI: This is Andrew 4 deLaski. 5 I think it's - and I'm hearing

6 from the manufacturers that the costs are too 7 low. So, you guys are missing your data and 8 you guys are going to have to reconcile that. 9 We've got a process set up for that. So, 10 that's going to happen, it sounds like. 11 I guess my observation is that 12 it's not uncommon to see a costed energy curve 13 that is flat to start. They are typically 14 flat to the left, and they tend to have an 15 inflection point at some point. This is 16 something that you see. 17 This one is particularly flat, but 18 I am also hearing this is a market that's very 19 sensitive to first cost and where you have a 20 vicious split incentive problem with the 21 people who buy the equipment aren't the ones 22 who benefit from the savings.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 213 1 So, that curve would not have to 2 have much of a tilt to it - 3 MS. COUGHLIN: Right. 4 MR. DeLASKI: -- for the purchases 5 to end up at that CSL0. So, I guess I'm not - 6 - this is not - this is a plausible situation, 7 in my mind. 8 FACILITATOR PARKER: But if they're 9 not evaluating energy savings from the 10 transformers anyway, because it's just not on 11 their radar so they are not going to pay a 12 penny more. 13 And even if it would save the 14 customers a bunch of money over the lifetime, 15 they won't - 16 MR. DeLASKI: And then I also think 17 - the other dynamic here, I really appreciate 18 what Tom said, is that as a manufacturer, you 19 guys speak to this, you want to move people to 20 higher value added products. 21 MR. PATZNER: That is 100 percent

22 correct.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 214 1 MR. DeLASKI: Right. And so, that 2 higher value added product, as you said, is 3 not moving along that curve. That's not going 4 to help you. 5 FACILITATOR PARKER: So, bowing to 6 the market is not necessarily the most 7 efficient answer. 8 MR. PATZNER: One last comment in 9 regards - Thomas Patzner, Schneider Electric. 10 The other thing that occurs is 11 when projects go over-budget, the transformers 12 go from the $4,000 one down to the $2,100 one

13 real fast. 14 So, we might be bidding these, 15 quoting these. But when the project goes 16 over-budget, these are one of the first 17 entities that gets changed to the less 18 expensive solution because the consultant's 19 now moved on to his next project, it's the 20 contractor there, he has the opportunity to 21 pocket some money, and he's going to do so. 22 FACILITATOR PARKER: So, the only

### 202-234-4433 Neal R. Gross & Co., Inc. Page 215 1 exception to the lower first cost buyers is 2 these issues where you were talking about 3 earlier where they try to reduce I squared R 4 by getting a cooler unit that is more 5 efficient. 6 MR. PATZNER: So, the biggest 7 person who's buying this product today is K 8 through 12. K through 12 is buying this 9 product left and right. And the reason 10 they're building it is ASHRAE put in their 11 appendix the recommendation to use it. 12 So, as of right now, there is a 13 recommendation for K through 12 schools to 14 save energy by including their transformers. 15 In LEED buildings, like I said, 16 these are going to get designed out. They 17 only add for LEED points, you got to save 14 18 percent of your electricity in the new 19 building. These are only going to add above 20 TP1, 0.5 percent of your energy reduction. 21 So, people aren't going to pay the 22 premium for 0.5 unless they're at 3.5.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 216 1 (Laughter.)

2 MR. PATZNER: And as was stated 3 earlier, they get the 14 percent from the air 4 conditioners, they get the 14 percent from the 5 lighting. 6 And so even in LEED buildings, 7 we're not seeing this because the electricity 8 reduction is coming from the 480 volt usage, 9 not the 120 volt usage.

10 FACILITATOR PARKER: For the court 11 transcriber, LEED is capital L-E-E-D. It's 12 low efficiency -- what is it? What does the 13 acronym stand for? Leadership in Energy 14 Efficiency Design. 15 MR. TENDULKAR: Yes, I just wonder 16 if the curve is so flat from CSL0 to CSL3, 17 wouldn't you think the manufacturers would 18 make the CSL3 at the same price and get the

19 market share more? 20 It is not true what the curve says 21 and what actual reality is. 22 MR. DeLASKI: Well, I guess what

### 202-234-4433 Neal R. Gross & Co., Inc. Page 217 1 I'm saying is that it is plausible to me. And 2 the reason why it's plausible is that -- 3 again, we have a committee to work on this. 4 So, I'm eager to find out if it's true or not. 5 And this is a question that should be a 6 question of data that can be answered. 7 It's plausible to me. And the 8 reason why it's plausible is that -- for the 9 reason that Tom has described that you're 10 going to sell the minimum compliant 11 transformer, and you want to sell up to a 12 value added product. 13 There's no reason why the market

14 wouldn't want to do that. If the market 15 doesn't value efficiency, then you're not 16 going to get market share by selling a more 17 efficient product.

18 MR. TENDULKAR: Yes. 19 FACILITATOR PARKER: Berman, okay. 20 MR. BERMAN: Robert Berman, Berman 21 Economics. 22 Now, what I've heard is that there

### 202-234-4433 Neal R. Gross & Co., Inc. Page 218 1 is a lot of reason to believe that the market 2 isn't putting an efficiency premium on this 3 equipment. And it's not unusual. 4 There is a lot of equipment out 5 there, there's a lot of things being built 6 where there aren't standards. And they're 7 being built on a first cost basis. Even 8 though the efficiency is incredibly cost 9 effective, it's being decided by other than

10 the users. 11 So, to have a situation in which 12 there are designs that are a similar price, 13 maybe a dollar or two more, and it may only be 14 that much, if the information isn't in the 15 market, and the market hasn't put a valuable 16 premium on it, you're not going to see it. 17 You're not going to see it in the market 18 unless there's a standard that says you put it 19 there. The standard may not cost anymore. 20 FACILITATOR PARKER: Okay, I think

21 we've covered that. Should we move on?

22 Go ahead.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 219 1 MS. COUGHLIN: Okay. So, this is 2 just to illustrate - this is from one of the 3 simulations to illustrate the distribution of 4 RMS loads that are being selected. 5 So, again, I'll skip the details, 6 but so I commented that we're not using the 7 test procedure loading. So, the ranges on 8 these are about 10 to 30 percent. 9 We have two different models. One 10 for commercial buildings, one for industrial 11 buildings. But as you can see - 12 MR. ROSENFELD: Katie, have you 13 updated your slide? 14 MS. COUGHLIN: Yes, I should be on 15 - I think it's Slide 12. Two histograms. 16 MR. ROSENFELD: No, I'm seeing 17 Slide 8. 18 MS. COUGHLIN: Okay. We'll check 19 into that.

20 MR. ROSENFELD: Thanks. 21 FACILITATOR PARKER: Apparently we 22 lost the network connection for a bit. It now

### 202-234-4433 Neal R. Gross & Co., Inc. Page 220 1 says your network connection has been 2 reestablished, implying that we had lost it. 3 What do you see now?

4 MR. ROSENFELD: Number 8. 5 MS. COUGHLIN: Okay. 6 FACILITATOR PARKER: Did we just

7 lose the - 8 MS. COUGHLIN: So, we were playing 9 with the computer. 10 MR. ROSENFELD: Appreciate it.

11 FACILITATOR PARKER: Should we take 12 a break now, maybe? We've been going on two 13 hours. We've been going for almost two hours. 14 MS. COUGHLIN: I have a few more, 15 yes. 16 MR. PATTERSON: Folks, while she's 17 working on that, coming back to the last 18 discussion about the flatness of those dots on19 the histogram, when I look at the medium20 voltage data, the smaller the kVA gets, the

21 flatter that curve becomes. 22 FACILITATOR PARKER: Could you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 221 1 repeat that? 2 MR. PATTERSON: I said when you 3 look at - coming back to the issue with the

4 flatness of the curve on the 75 kVA scatter 5 diagram, when I look at the medium-voltage 6 diagrams and compare them to what's actually 7 produced in the marketplace as the kVA gets 8 smaller, those curves get flatter. 9 So, I'm wondering if - where 10 they're coming up with their price by 11 considering overheads to be a percentage of 12 material values where it's so flat. 13 MR. CASKEY: So, Wes, this is John 14 Caskey. 15 So, a point of clarification. 16 When you say the curves are getting flatter 17 for the smaller kVA transformers, are you 18 saying the actual price that a manufacturer 19 might sell is getting flatter, or the results 20 of the analysis is getting flatter?

21 MR. PATTERSON: It's the OPS data 22 that is getting flatter. The prices from the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 222 1 manufacturer still have a steeper growth. 2 MR. CASKEY: Okay. Thanks.

3 MR. PATTERSON: But the OPS data 4 shows approximately the same growth in the 500 5 to - higher kVA ranges. 6 MS. COUGHLIN: Okay. So, can the 7 people on the phone see the two histograms?

8 FACILITATOR PARKER: Are we back? 9 Can you see the histograms? 10 MR. ROSENFELD: Thank you. Yes. 11 MS. COUGHLIN: So, these are 12 histograms. So, this is from an LCC run. And 13 this is just a histogram of the RMS loads that 14 were simulated. I think these are the annual 15 values. So, this is kind of an indication of 16 the range of loadings. 17 The shapes of the distributions 18 are similar, but what you probably can't see 19 that the axis for the commercial building plot 20 on the left is some of that five percent to 45 21 percent, the horizontal axis. 22 And on the right, the industrial

### 202-234-4433 Neal R. Gross & Co., Inc. Page 223 1 building's range is from 10 percent to 30 2 percent, which is a much narrower band, which 3 is pretty much what you would expect. There's 4 less diversity in industrial loads than in 5 commercial loads. 6 MR. ROSENFELD: Katie, are these7 diagrams strictly for the low-voltage dry8 type, or are they - 9 MS. COUGHLIN: Yes, this is for the 10 low-voltage dry-type. 11 So, the shapes of these histograms 12 were based on the data that we have for hourly 13 loads, but again there's a parameter, a sort 14 of scaling parameter in the LCC that can move 15 the distribution so that you get different 16 values of the average RMS load. 17 And in this particular case, the 18 average RMS load is - it's around 25 percent. 19 Maybe about 22 percent. So, again, that's a 20 relatively easily adjustable variable. 21 MR. ROSENSTOCK: Katie, again Steve 22 Rosenstock, EEI.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 224 1 For these histograms when you talk 2 about - these are based on entire building 3 load profiles? 4 MS. COUGHLIN: Yes, and no. 5 There's a detailed discussion in the TSD, and 6 I'd be happy - I don't know if you want to get 7 - it's pretty complicated. So, they're based 8 on a model of the diversity of many loads that 9 are contributing to a single overall load. 10 MR. ROSENSTOCK: Right. And in the 11 TSD, it breaks out the ones that are served by 12 the low-voltage transformers and the ones that

13 aren't? 14 MS. COUGHLIN: In the TSD, it 15 explains the details of how the difference - 16 how medium-voltage and low-voltage models 17 differ, because they both use building data. 18 MR. ROSENSTOCK: Okay. And again 19 just -

20 MS. COUGHLIN: There's some - the 21 data is specific to building activities. So, 22 things like schools, hospitals, that sort of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 225 1 thing, are separate. 2 MR. ROSENSTOCK: Right.

3 MS. COUGHLIN: But not to 4 subcircuits within a building. 5 MR. ROSENSTOCK: Okay. The reason 6 I ask is I know that in the late '90s, and I 7 sort of did a lot of research on the actual 8 loading of the low-voltage issues in dry-type 9 transformers. And was that used - were any of 10 these used against that data set to kind of 11 look for correlation or matches in terms of, 12 okay, this modeling is - looks pretty good 13 compared to the actual data that was presented 14 by that study? 15 MS. COUGHLIN: I don't know of any 16 data. So, I'd be interested to see it. We 17 couldn't find anything in sort of public 18 domain on actual transformer loading data. 19 MR. ROSENSTOCK: I sort of did the 20 study like ten years - 12 years ago. That was 21 in the public domain. 22 MS. COUGHLIN: No, I mean, I've

### 202-234-4433 Neal R. Gross & Co., Inc. Page 226 1 seen - okay, I'm not familiar with it. 2 MR. ROSENSTOCK: Thank you. 3 MR. PATZNER: So, Tom Patzner from 4 Schneider Electric. 5 That study is the Cadmus Group up 6 in Boston did the study. The output of the 7 study was the loading is at 16.6 percent for 8 a low-voltage distribution transformer in a 9 commercial building. 10 MS. COUGHLIN: Okay.

11 MR. PATZNER: Due to the fact of 12 pressure in the building and stuff, Schneider 13 Electric believes that's closer to 12 percent 14 today. And that's due to the fact of the 15 efficiency loss and so forth are making all 16 the equipment more efficient. So, what we're 17 plugging into 120 volts. 18 So, in other words, when they did 19 the study, your computer didn't turn itself 20 off if you left it on. Today, it turns itself

21 off. 22 So, you take an assumption that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 227 1 the energy reduced by 30 percent. That value 2 comes to closer to 12 « percent for a 3 commercial building for the loading of the 4 device. And that's using the Cadmus Group and 5 a 30 percent reduction in consumption of 120 6 volt loading. 7 But the bell curve is probably - 8 just needs to be shifted to the left.

9 FACILITATOR PARKER: From 25 10 percent to 12 percent, you say? 11 MR. PATZNER: If we're projecting 12 it into the future and we take a look at all 13 potential other energy-saving activity that's 14 going on for 120-volt devices, and that's what 15 this is doing, we should assume even if we got 16 the exact loading today, it's going to go down 17 over the next 33 years. 18 FACILITATOR PARKER: Do you have

19 some data to -

20 MR. PATZNER: I would have to check 21 to see if the Cadmus Group report is actually 22 public domain. I thought the last time I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 228 1 Googled it, it actually comes up. 2 If it comes up under Google, I 3 will -

4 FACILITATOR PARKER: There's a 5 preliminary report? 6 MR. PATZNER: It was done - it's 7 actually referenced in the DOE's documents, a 8 PowerPoint presentation.

9 FACILITATOR PARKER: Is that what 10 updates it or provides the basis for - do we 11 have a basis for projecting in the future

12 based on that? Because - 13 MS. COUGHLIN: First of all, 14 there's two issues here, right? So, the 15 Cadmus study, the one you're referring to, I 16 am familiar with, but that gives you the kind 17 of median value, if you like. 18 Yes, we're aware of it. We were 19 not - it's not enough to choose a parameter 20 based on that. So, we're - but, again, these 21 are parameters that were designed to be very 22 easily changed within the LCC. So, this is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 229 1 something that can be dealt with. 2 If you have a consensus 3 recommendation on what you want it to be, we 4 can certainly do that as a sensitivity. But 5 then the shapes of the distribution, that's 6 what comes from data that the only access we 7 have - the only data that we actually have is 8 building data, not individual transformer

9 data.

10 MR. PATZNER: And that's from EAI? 11 MS. COUGHLIN: This is a 12 combination of - and there are some hourly 13 building load data that is from the previous 14 analysis that - I guess it's - we refer to it 15 as the Duckett data. It was a study conducted 16 by someone at a university. And also the 17 ELCAP hourly load data. 18 So, these distributions, the model 19 that backs up these distributions is actually 20 based on hourly data. 21 MR. PATZNER: And that's in the TSD 22 so I can take a look at it?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 230 1 MS. COUGHLIN: Yes. 2 MR. PATZNER: Thank you. 3 FACILITATOR PARKER: Well, it's - 4 okay, a few comments. Yes, Rob. 5 MR. GREESON: Rob Greeson, Federal 6 Pacific. 7 I'm having a hard time 8 understanding what that histogram is telling 9 me. Percent load on the x axis and the y axis 10 is the frequency of which - 11 MS. COUGHLIN: The frequency, 12 right. So, in the 10,000 installations that 13 we simulate, this is the distribution of RMS 14 loads within that 10,000-member sample. 15 MR. GREESON: So, for example, on 16 the left histogram at 25 percent load, you've 17 got - I can't read the numbers on the y axis 18 to the right.

19 MS. COUGHLIN: I can't read them 20 either. 21 (Laughter.) 22 MR. GREESON: That's showing you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 231 1 actually the number of people that were at 25 2 percent load. I think I understand it now. 3 I just couldn't see those numbers on the 4 right. 5 I think I understand it now.

6 Thanks. 7 MS. COUGHLIN: And then, again, 8 there's both commercial and industrial 9 buildings within the single run. So, I think 10 it's roughly 50/50. 11 MR. CASKEY: One sort of point of 12 curiosity or whatever, I'm not sure, but 13 Thomas was noting that basically if you kept 14 your existing stock of buildings and the 15 efficiency or the use of efficient products 16 within those buildings increased with time, 17 then the loading on existing transformers 18 would - dry-type transformers would 19 essentially go down. 20 But in reality, the - not 21 necessarily the housing stock. The building 22 stock does not stay constant with time. And

### 202-234-4433 Neal R. Gross & Co., Inc. Page 232 1 as you said, a lot of the sales that you're 2 making today are for school systems. So, 3 you're building new schools and I would hope 4 unless we have a lot of retarded engineers out 5 there, that they would be designing the 6 buildings today and asking for transformers to 7 support the new load, which is reduced because 8 of energy efficiency lighting and other 9 efficiency improvements within those building 10 designs. 11 So, I would think that the median 12 or whatever would stay pretty much the same 13 way it is as the - you're designing more 14 efficient buildings into the future. 15 MR. PATZNER: I agree with - Tom 16 Patzner, Schneider Electric. 17 I agree with John completely. 18 You'd think that we'd be able to downsize the

19 transformers.

20 The transformers are a hundred 21 percent size based on 180 VA per outlet. The 22 outlets are set for the National Electric

### 202-234-4433 Neal R. Gross & Co., Inc. Page 233 1 Code. 2 The National Electric Code is to 3 prevent fires. It is not to save energy. So, 4 there is not an ability to have a conversation 5 with them of changing their VA for the 6 outlets, because their goal is to stop fires. 7 So, the transformers end up 8 staying the same size because it's based on 9 square footage, number of outlets and 180 VA 10 per outlet. 11 MR. CASKEY: Great, thanks. You 12 learn something new every day. 13 MR. ROSENSTOCK: Two points. You 14 said the ELCAP data was used for one of the

15 data sets. That's the data set that was done 16 in like the late '80s in the Pacific Northwest 17 by BPA. 18 They did break out the data by end 19 uses. Did you use the whole building ELCAP 20 for the analysis? 21 That's my question.

22 MS. COUGHLIN: That's all we have.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 234 1 We don't have the end use level data. We just 2 have the whole building data. 3 MR. ROSENSTOCK: Well, ELCAP broke 4 it out. They actually had reports where they

5 broke out some of the end use data. 6 MS. COUGHLIN: Right, but not the - 7 we were not able to get the actual hourly time 8 series at the end use level.

9 MR. ROSENSTOCK: I - 10 MS. COUGHLIN: We'd certainly be 11 happy to get them if you know someone who has

12 them. 13 MR. ROSENSTOCK: I know they did 14 summaries of the end use data.

15 MS. COUGHLIN: Yes. 16 MR. ROSENSTOCK: The second issue 17 was the issue of the loading of the 18 transformers over time. Are you assuming 19 constant that this histogram never changes, or 20 do you assume possibly, again, for an existing 21 transformer in an existing building, that does 22 get more efficient over time because of other

### 202-234-4433 Neal R. Gross & Co., Inc. Page 235 1 new standards for electric products.

2 MS. COUGHLIN: Yes. 3 MR. ROSENSTOCK: Do you assume the 4 flat, are you actually declining loads on the 5 transformers, or do you assume constant or 6 even increasing? 7 MS. COUGHLIN: I believe -

8 MR. ROSENSTOCK: Because that would 9 make a huge difference as well. 10 MS. COUGHLIN: Yes. Again, I mean, 11 that's a parameter that is easily changed. I 12 think these are just assuming the flat loads.

13 MR. ROSENSTOCK: Constant 14 throughout the life of the transformer.

15 MS. COUGHLIN: Yes. 16 MR. ROSENSTOCK: Thank you. 17 FACILITATOR PARKER: So, I gather 18 from the discussion that there is a sense that 19 the median that is reflected in this model 20 although it's gathered from the sources that 21 you have, may not correspond to your 22 expectation about what the current status

### 202-234-4433 Neal R. Gross & Co., Inc. Page 236 1 median is for loading, and that there may be 2 an anticipation that loading would decrease in 3 the future if the things in the buildings get 4 more energy efficient as we hope and expect 5 they will be due to the work of this committee 6 and others, and that that would affect the 7 economics of transformer size. 8 MR. DeLASKI: That's what you heard

9 from Thomas. 10 (Laughter.)

11 FACILITATOR PARKER: That's what I 12 said. That's what I heard. I'm waiting for 13 you to jump in, but that's what I heard. 14 MR. CYMBALSKY: I'll jump in. John 15 Cymbalsky, DOE. 16 I think we need to look at the 17 time series of the EIA CBECS data or the AEO. 18 You can easily look at what they're projecting 19 for building electricity. 20 Because, yes, things are getting 21 more efficient, but now there's three 22 computers per person, not one.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 237 1 MS. COUGHLIN: Right.

2 MR. CYMBALSKY: So - 3 MS. COUGHLIN: They don't go down. 4 MR. CYMBALSKY: Yes, I worked for 5 the EIA for 20 years. I can remember them 6 going up significantly since that last study.

7 FACILITATOR PARKER: I remember 8 when everybody said that computers were going 9 to save paper, but we just produced more 10 printouts. 11 MR. DeLASKI: I guess I also would 12 just say that the Cadmus study is a single 13 study. There are other sources of data out 14 there and you've mined them, it sounds like.

15 MS. COUGHLIN: Yes. 16 MR. DeLASKI: So, we need to use 17 multiple data sources, not rely on a single 18 study done ten years ago. 19 It solves the data point, but it's 20 not definitive. 21 MS. COUGHLIN: But there are very 22 few quantitative ones, and they tend to have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 238 1 small sample sizes. So, there's one by FEMP, 2 and there's one by Canadian Energy National 3 Resource Council.

4 FACILITATOR PARKER: I'm not 5 totally familiar with your latest TSD, but 6 does it contain sensitivity analysis for what 7 happens if you vary the parameters for 8 loading? 9 MS. COUGHLIN: It's pretty obvious 10 what's going to happen. 11 MR. BOLDUC: Just to help you out, 12 yes, we do run a sensitivity on transformer 13 overloading. 14 FACILITATOR PARKER: Okay. 15 MS. COUGHLIN: I mean, just 16 shifting the whole thing up or down is just 17 going to either - it's going to shift your 18 load loss component of the LCC. 19 So, a lot of these things can 20 actually, you know, you can sort of - at least 21 once you start to get into the - you 22 understand the mechanics of it very well, you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 239 1 can actually anticipate the effect it's going

2 to have. 3 So, we're going to try, actually, 4 to come up with some rules of thumb about some 5 of these parameters if we can. But, yes, the 6 thing is to do every possible sensitivity that 7 you can think of. 8 And usually when we go to OMB, we 9 end up doing them all. So, we might as well 10 do them early this time. 11 (Off-record comments.)

12 MR. ROSENSTOCK: Just one more.

13 Steve Rosenstock. 14 Yea, I work on the ASHRAE process, 15 Standard 90.1 for commercial buildings. And 16 if you look at the trend lines published by 17 ASHRAE for new buildings that meet the ASHRAE 18 standards ever since it started in 1980, but 19 especially starting with like the 2001-2004 20 versions, the energy savings - it's not just 21 electricity, it's energy, it's electricity 22 plus all the fossil fuels used in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 240 1 building, DOE just came up with a preliminary 2 analysis that the 2010 version of ASHRAE was 3 about 24 percent or 23 percent more efficient 4 than its 2004 version. 5 And under federal law, DOE just 6 certified that the 2007 version was more 7 efficient than the 2004 version. States have 8 two years to upgrade their building standards. 9 They'll probably come out with 10 another certification for 2010 next year where 11 states will have two years to update their

12 standards to 2010. 13 So, there's a definite ramping 14 down of energy, not just electricity, but all 15 energy use in commercial buildings covered by

16 ASHRAE. 17 And that's - IECC tends to adopt 18 their - a lot of ASHRAE as well. So, there's 19 a definite downward trend in the energy use 20 per square foot in a lot of buildings. 21 FACILITATOR PARKER: Well, it 22 sounds to me like we have a suite of issues

### 202-234-4433 Neal R. Gross & Co., Inc. Page 241 1 here that goes to what parameters should be 2 used in the TSD analysis for the LCC modeling 3 both from the standpoint of loading factors, 4 but you can imagine materials prices on the 5 engineering side feeding into this, energy 6 prices, discount rates. 7 And it may be that it would be 8 worthwhile if there are people who are willing

9 10 to step forward and form a little working 11 group to work on that. That engineering is a12 little bit more broad reaching for the non13 engineers. 14 It might be useful to sort of put 15 a little group together to look at the various 16 studies that are out there. Andrew was 17 mentioning that this is just one study, but we 18 might just if people think this is a good 19 idea, have a group that's charged with looking 20 at the other - sort of a catchall group that 21 would look at the other parameter assumptions 22 that go into the LCC and NPV analysis and just

### 202-234-4433 Neal R. Gross & Co., Inc. Page 242 1 explore what is the reasonable range of values 2 that one might use in a sensitivity analysis. 3 And then look at what happens when 4 you vary things across that range and what 5 might be a reasonable midpoint.

6 Does that make sense? 7 MR. DeLASKI: I guess my 8 counterproposal would be that this is a 9 function that the consultants typically play. 10 And they create models that any one of us can 11 perturb. 12 And getting consensus on these set 13 of assumptions, I think, will be a bigger task 14 than what this committee set out for itself. 15 MS. COUGHLIN: There's also in the 16 TSD that was published - well, which was not 17 yet updated, there are four or five appendices 18 with sensitivity analysis results that people

19 can look at. 20 So, this is kind of a standard 21 part of every rulemaking is to vary all these 22 parameters.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 243 1 MR. DeLASKI: I also think it helps 2 us by having the Department and its 3 consultants be the - to manage this process. 4 What you guys are doing is grounded in the 5 history of the rulemaking process and what you

6 have to do under the statute. 7 We can't change those rules. 8 MS. COUGHLIN: Right. 9 MR. DeLASKI: So, I think it's 10 important that that - that we work within that 11 context and how they do things. 12 Now, we all can have different 13 assumptions, but we can't - we can't change 14 the discount rates, for example, because 15 they're dictated. 16 MS. COUGHLIN: Right. I mean, I 17 would be surprised if anyone could find data 18 that we have not actually looked at as part of 19 this. 20 MR. DeLASKI: You're open to it,

21 I'm sure. 22 MS. COUGHLIN: Yes, we'd be very

### 202-234-4433 Neal R. Gross & Co., Inc. Page 244 1 happy to see it, but it's pretty exhaustive 2 because, again, a lot of these things are 3 cross-cutting. They go across all products. 4 Electricity prices, discount rates, all that 5 kind of thing. 6 So, we spend years tracking down 7 every piece of information. So, again, we're 8 always happy to accept more, but I'd be 9 surprised if there's something that's missing 10 that's that easy to find. 11 FACILITATOR PARKER: Okay, John. 12 MR. CASKEY: Yes, John Caskey,

13 NEMA. 14 I agree with Andrew. I'm not 15 sure that we need a working group or something 16 to do that yet. I mean, I plead guilty that 17 I have not looked at the sensitivity analysis 18 results of the process to educate myself 19 enough to be able to say that whether it's in 20 the right ballpark or not. 21 I just want to make sure that it's 22 available as we get close to the end that we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 245 1 can say, well, gee, if you double the price, 2 what does that do or things like that. 3 MS. COUGHLIN: Right. 4 MR. CASKEY: So, I need to do more 5 research personally and education on what 6 you've already provided before I ask for 7 anything more. 8 MS. COUGHLIN: Yes, and you can 9 download the spreadsheets from the DOE website 10 and just go in and change a lot of things that 11 we're not even discussing today such as 12 electricity price trends and, yes. 13 So, let's see. 14 MR. DeLASKI: On that, just to make 15 sure I understand, we can make those changes 16 and the model will run. Because there are 17 histories in the past that - 18 MS. COUGHLIN: Let's see. Chris, 19 how would you answer that? 20 MR. DeLASKI: I mean, because 21 there's the question of in the past you had to

22 have the Monte Carlo tool and -

### 202-234-4433 Neal R. Gross & Co., Inc. Page 246 1 MS. COUGHLIN: Yes, this is a Monte 2 Carlo simulation. 3 MR. DeLASKI: So, unless you own

4 Monte Carlo - 5 MS. COUGHLIN: Crystal ball. 6 MR. DeLASKI: Crystal ball.

7 MS. COUGHLIN: Yes. 8 MR. BOLDUC: Chris Bolduc, LBL. 9 Download a trial version of the 10 crystal ball module, run it for two weeks for

11 free. 12 MR. PATTERSON: Would it be 13 possible to provide the link to download it? 14 MR. BOLDUC: I can distribute that

15 to the - 16 MR. PATTERSON: This is Wes

17 Patterson. 18 FACILITATOR PARKER: Yes, that was

19 Wes Patterson. 20 (Laughter.)

21 FACILITATOR PARKER: The court 22 reporter is having trouble identifying

### 202-234-4433 Neal R. Gross & Co., Inc. Page 247 1 speakers. So, please identify yourselves on 2 the phone. 3 Thanks, Wes. You got it. Go 4 ahead after all that. Oh, he's finished. 5 Okay. 6 MS. COUGHLIN: So, are we - 7 FACILITATOR PARKER: Okay. So, I 8 guess the issue is that even when you get a 9 sensitivity analysis, then the question is 10 what do you do with it? But let's -

11 MR. DeLASKI: That's what I would 12 suggest, because we've tried to run crystal 13 ball. It's not something that we can do, my 14 organization can do in an afternoon. 15 So, I think what we may have to 16 come up with at some point in this process are 17 some scenarios or situations that we want to 18 ask the consultants to run. That's something 19 that we can agree on, I think, as a group. 20 In prime negotiations we've done 21 this type of negotiation and asked the 22 Department to run certain situations that we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 248 1 want to see and keep them to a useful 2 universe, useful set of things. 3 FACILITATOR PARKER: Well, that 4 gets into the issue of how many requests are 5 there being made for new runs and so forth and 6 what is the burden, that's why I thought it 7 might be a good idea to have sort of open 8 season on the consultants, have some kind of 9 a group process to sort of get a collective 10 sense of whether there is something that is 11 important enough, significant enough to 12 warrant doing further analysis or not. 13 It's really up to LBNL and 14 Navigant, though, whether they want - I'll do 15 it either way, but I just don't want them - 16 what we're seeing in the medium-voltage group 17 so far is a whole lot of requests for 18 analysis, can you give us this, can you give 19 us that, from individuals on the Committee, 20 from alternates coming in online. I can see 21 them being barraged with requests that may be 22 of interest to one person, but not of interest

### 202-234-4433 Neal R. Gross & Co., Inc. Page 249 1 to everybody. 2 So, that was why I thought the 3 idea of a little working group might be

4 useful. 5 If people are really satisfied 6 with the data and they're confident that 7 what's gone in is adequate to QA/QC, that's 8 fine. Let's move on. 9 But I think if people do have 10 trouble with the assumptions or with the 11 analysis, then rather than have each person 12 peppering the consultants with requests for 13 more data analysis, it might be useful to have 14 some kind of a group process. 15 I don't know, Andrew. Did you - 16 MR. DeLASKI: I think we've already 17 put our finger on the key one. That's the one 18 that we ought to have a working group formed 19 where the manufacturers have particular 20 expertise, which is the pricing of their 21 products. 22 I think the other parameters are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 250 1 ones that are -

2 FACILITATORY PARKER: That we can 3 just play with? 4 MR. DeLASKI: What I was going to 5 say is that the other parameters are things 6 that are largely exogenous to the transformer

7 manufacturer. 8 So, I leave that up to the 9 Department to figure out the best - the mean 10 cases. And then as we get further along, 11 which ones really matter, okay? 12 MS. COUGHLIN: Right. 13 FACILITATOR PARKER: Right. 14 MR. DeLASKI: Help us to identify 15 those. And then we as a group, as a 16 committee, can ask you to run scenarios on the

17 ones that - 18 FACILITATOR PARKER: Okay.

19 MS. COUGHLIN: Yes. 20 MR. DeLASKI: -- we'd like to see 21 down the - at the next meeting. 22 FACILITATOR PARKER: Okay. We'll

### 202-234-4433 Neal R. Gross & Co., Inc. Page 251 1 reserve that for the planning. 2 MR. DeLASKI: And there may be 3 something else. 4 MS. COUGHLIN: Well, we can 5 circulate a - 6 MR. DeLASKI: Maybe today, but I

7 don't know what that would be. 8 MS. COUGHLIN: We can circulate a 9 list of the sensitivities that we do anyway as 10 part of the standard analysis.

11 FACILITATOR PARKER: That's a 12 wonderful idea. 13 MR. BOLDUC: Chris Bolduc, LBL. 14 The sensitivities are listed at 15 the Chapter 8 synopsis. If you want to take 16 a look at this and then get back to us, that

17 would be - 18 MS. COUGHLIN: Okay. So, can you 19 repeat that, Chris? It wasn't that clear. 20 MR. BOLDUC: I'm sorry. The 21 sensitivities have been run and the results 22 are available in Chapter 8 under LCC and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 252 1 payback period sensitivities. 2 MS. COUGHLIN: Okay. So, you have

3 those. Great. 4 So, this is an intermediate - I 5 just wanted to illustrate again, I mean, 6 sometimes things end up not being so sensitive 7 in one of these instances, because we already 8 have a very large amount of diversity in the 9 various parameters that go into the LCC. 10 And especially when you have sort 11 of moving distributions around often doesn't 12 have huge impact, especially when things move 13 in different - sort of you change one thing 14 and it makes it go up, and you change 15 something else and it makes it go back down. 16 So, just to illustrate, I've 17 plotted here the - this is a very simple 18 representation of the incremental costs and 19 energy savings associated with two of the CSLs 20 for Design Line 7. 21 So, the blue dots are CSL4, and

22 the black crosses are CSL6. And the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 253 1 horizontal axis is the incremental total 2 installed cost. 3 So, again, it's for each one of 4 those 10,000 installations, you take the 5 design selected at this particular CSL and 6 subtract the cost of the design selected in 7 the base case. That gives you the incremental 8 first cost. 9 And on the vertical axis is the 10 lifetime energy savings for that installation. 11 So, the difference between losses under the 12 particular CSL and the losses in the base

13 case. 14 And so, you can see with CSL4 15 there's a significant number of cases where 16 the incremental total installed cost is zero. 17 You're not really seeing any affect of 18 changing the choice. 19 And you could also see that these 20 - there is a leap between CSL4 and CSL6 from 21 incremental costs of around a few hundred 22 dollars to over a thousand dollars roughly a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 254 1 factor of three in the middle of those blobs, 2 but there's also quite a significant leap in 3 the vertical axis between 20 to 40 energy 4 savings.

5 And the blue blob toward the 6 middle is 60, 80, 100. So, this is another 7 factor of two. So, this makes the LCC 8 somewhat sensitive to the discount rate. 9 And all of these, again, these are 10 using this wide distribution of RMS loads and 11 a wide distribution of lifetimes. All those 12 sorts of effects are taken into account here. 13 So, these types of plots are 14 relatively easy to generate. If you can think 15 of any intermediate steps of the calculation 16 where you'd like to see more detail, just let

17 us know. 18 And this is the LCC output for 19 DL7. I think I've listed - actually, the 20 heading is wrong. This is from the most 21 recent August publication. 22 So, here we see basically we have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 255 1 LCC savings because - largely because we're 2 getting sort of free efficiency at the lower 3 CSLs. So, you're getting operating cost 4 savings. 5 And all the way up to CSL6 there's 6 positive LCC savings. And then CSL7 it goes 7 negative. 8 So, you'll see these plots are, I 9 believe, most of the sensitivities you get a 10 plot like this under all the different 11 variations of conditions. 12 Okay, so that's actually all I 13 have to say about the LCC. So, moving on to 14 the NIA, I'll try to go through this fairly 15 quickly. 16 This is the part of the analysis 17 that actually depends on these TSLs rather 18 than CSLs. So, the trial standard levels, 19 which are the collection of efficiency levels 20 for each product in the product class. And we

21 need all of those before we can move onto the 22 national impacts analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 256 1 So, in this case the Design Line 6 2 through 8 are included in the equipment 3 category. And we also have to extrapolate the 4 results to the full range of kVA. And we've 5 already discussed the scaling log. So, we are 6 using that now. 7 We have some adjustments that we 8 can make in some cases, but - and then when we 9 do the NIA, we have the national level 10 results. Primarily, they come off a forecast 11 of shipments for each kVA. And included in 12 the NIA are the aggregate dollar costs and 13 operating costs, benefits, essentially, the 14 energy savings, and then all of the downstream 15 stuff, including emissions impacts and social

16 class of carbon. 17 So, again, the national impacts 18 depend on the combination of efficiency levels 19 that are used to put together a TSL, but we've 20 structured our analytical tools so that it is 21 not that difficult to modify that choice. So, 22 we can do a fairly wide range of TSLs.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 257 1 So, again, I'm just going to 2 present illustrative results based on the 3 draft TSLs, what we used in the August 23rd. 4 Before I get to that, this is just 5 a picture of the scaling relationship across 6 the kVA. So, the goal of this is to 7 extrapolate the efficiency as a function of 8 kVA from the two representative units. 9 This curve is for the low-voltage 10 dry-type three-phase. It's actually Design 11 Line 7 and 8. Design Line 7 is the 75 kVA, 12 and Design Line 8 is the 300. 13 And what we essentially do is we 14 assume that a scaling-type relationship holds 15 between the two representative units, but we 16 modify the exponent so that the curve is 17 continuous.

18 And that allows us to create a

19 smooth curve when there are more than one 20 representative unit in the design line. And 21 that is not the case for Design Line 6. We 22 only have that one design in the center of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 258 1 plot. So, there we have to use the 0.75 rule. 2 So, moving on to the NIA results, 3 this is - the set of draft TSLs are in the 4 August 23rd publication. I just put the 5 Design Line 7 which we have been looking at in

6 red. 7 So, the CSLs here - or the TSLs, 8 excuse me, are represented here as specific 9 efficiency numbers. We could also produce 10 this table that just said, you know, CSL2, 11 CSL3, that sort of thing. 12 And so you can see, for example, 13 in TSL2, 3 and 4 - rather, 2 and 3 are using 14 the same efficiency level for Design Line 7, 15 and then it goes up in four. So, there's a 16 whole lot of things that you can do in 17 constructing these TSLs. 18 And when they have been 19 constructed, then we produce - this is a table 20 of typical output of the national impacts 21 analysis. So, we get the total equipment cost 22 increment, we get the total operating cost

### 202-234-4433 Neal R. Gross & Co., Inc. Page 259 1 increment or decrement. 2 And when we get source energy 3 savings, this conversion from electricity to 4 fossil fuels. And then you can do the NPVs 5 under different discount rate assumptions. 6 So, again, these are the standard 7 output from an NIA. Different types of 8 metrics can be added if those are useful to 9 people. 10 MR. PATZNER: Katie, Tom Patzner 11 from Schneider Electric. 12 When you do this analysis with the 13 kVA quantities, can we do an analysis with the 14 fact that Schneider Electric is predicting on 15 the 15 kVA and the 30 kVA if you hit a certain 16 price mode, the industry is going to switch 17 from a distribution ventilator product to a 18 distribution sealed product. 19 So, because this industry is so 20 price sensitive at purchasing, when we do this 21 analysis on certain kVA sizes, the industry 22 already has readily available non-in-scope

### 202-234-4433 Neal R. Gross & Co., Inc. Page 260 1 product already available off the shelf that 2 if we hit a certain price point, they're going 3 to shift to those entities. 4 So, certain kVA sizes it's going 5 to go to zero - not zero. All the way to 80 6 percent would not buy it if we get to a 7 certain price level, because they can buy the 8 product for a lesser price outside the scope. 9 MS. COUGHLIN: Yes, in a general 10 sense we generally try to model that product 11 switching if it can be demonstrated to occur, 12 yes. 13 MR. PATZNER: Okay. 14 MR. DeLASKI: Tom, just for those 15 of us who are not transformer manufacturers, 16 what's the market - what's the purpose in the 17 market? What's the user getting? 18 MR. PATZNER: So, manufacturer - 19 Thomas Patzner, Schneider Electric. 20 Manufacturers choose to build 21 certain units as sealed, and certain units as 22 ventilated. The sealed units become less

### 202-234-4433 Neal R. Gross & Co., Inc. Page 261 1 expensive for us to manufacture in lower VA 2 sizes. 3 So, everything 10 kVA and below in 4 the industry is going to most likely be 5 sealed. Everything 45 kVA and above is going 6 to be ventilated.

7 Manufacturers then choose on how 8 they're going to build the two entities 9 between 10 and 45. So, there are 10 manufacturers that do not start building TP1 11 product until 45 kVA. 12 MR. DeLASKI: Below that, they're

13 sealed. 14 MR. PATZNER: Below that, they're 15 sealed. And their price in their sealed unit 16 is still higher than my 15 kVA TP1.

17 MR. DeLASKI: Yes. 18 MR. PATZNER: But if we set an 19 efficiency level where I cross that price 20 point because it's a readily available in the 21 marketplace, it's off the shelf, we're 22 expecting those customers to shift to that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 262 1 entity.

2 MR. DeLASKI: What's the 3 purchaser's benefit in a sealed product 4 relative to a ventilated product? 5 Why would a purchaser spec one, 6 other than price? 7 MR. PATZNER: So, the reasons that 8 some people buy sealed units are on an oilrig 9 you want to keep everything completely not 10 exposed to the environment. In a wastewater 11 treatment plant, there's certain applications 12 where they're going to have a device in a 13 NEMA3R, NEMA4X enclosure, but that market is 14 extremely small. 15 However, due to manufacturing 16 techniques, some people build the sealed units 17 through 30 kVA and it's just their standard 18 offering. 19 MS. deLASKI: They're offering it 20 because that's what they want to compete in 21 the market. They're being put every which 22 place, not just being put on oilrigs.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 263 1 MR. PATZNER: I'll answer that a 2 better way. We put sand and resin in the 3 sealed units. So, we actually call them 4 encapsulated, which allows us to distribute 5 the heat from the core and coil faster to the 6 enclosure surface so we can make it more 7 compact installed. 8 At a point somewhere between 15 9 and 45 kVA, that becomes no longer technically 10 cost beneficial to us. And each manufacturing 11 makes that choice if it's going to be a 10 12 kVA, 15 kVA, 30 kVA or 45 kVA that they do the 13 choice based on their processes.

14 But somewhere between 10 kVA and 15 15 kVA it becomes - it's a cost to sell price 16 ratio. Below 10 kVA we almost all build them 17 as resin encapsulated because it allows us to 18 make a smaller compact device and distribute

19 the heat. 20 Westinghouse patented the device 21 back in the '60s, and now everybody builds it.

22 MR. PATTERSON: I'm Wes Patterson

### 202-234-4433 Neal R. Gross & Co., Inc. Page 264 1 here. 2 FACILITATOR PARKER: Yes, Wes.

3 MR. PATTERSON: Don't the sealed 4 transformers have to comply with the standard?

5 MR. PATZNER: Sealed transformers 6 are in the law as not included as a 7 distribution transformer. So, in the - 8 MR. PATTERSON: But once they touch 9 into the kVA rating at the voltage class, then 10 they're under scope.

11 MR. PATZNER: It does not have that 12 wording in the public - I mean, if that's the 13 wording, I'll be ecstatic because then it's

14 not - 15 MR. PATTERSON: I mean, correct me 16 if I'm wrong, but the wording on the standard 17 provides a definition of the kVA and voltage 18 class, and then explicit exclusions. 19 They are not listed in the 20 exclusion. So, if they bump into the kVA and 21 voltage, they have to comply.

22 MR. PATZNER: Sealed transformers

### 202-234-4433 Neal R. Gross & Co., Inc. Page 265 1 are one of the listed exclusions. 2 MR. PATTERSON: They are listed as 3 an exclusion? 4 MR. PATZNER: Yes, they are. 5 MR. BALLO: This is Tim Ballo. 6 Section 321(35)(B) of EPCA, if 7 anyone wants to look it up. But, yes, sealed 8 and non-ventilating transformers are excluded 9 from the definition. 10 MR. DeLASKI: I guess that's a 11 question back to Dan. I think that was a 12 question to you, Dan, during our last 13 conversation, you know, is there authority for 14 the Agency to address those transformers or - 15 MR. PATZNER: The definitions are 16 actually in the text that was signed by 17 congress. 18 FACILITATOR PARKER: Okay. So, the 19 point is that - 20 MS. COUGHLIN: I got it. 21 FACILITATOR PARKER: You got it. 22 MS. COUGHLIN: I got it, yes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 266 1 MR. PATZNER: So, Katie, I can help 2 you with that on my predictions of what might 3 occur based on price point. So, it would only 4 occur once an efficiency gets to a certain 5 price point. 6 MS. COUGHLIN: Right, right, yes, 7 okay. 8 Okay, so only a couple more slides

9 left. 10 MR. SENTA: Katie.

11 MS. COUGHLIN: Yes. 12 MR. SENTA: This is Mahet Senta 13 from EMS Consulting. I've got one quick 14 question on Slide 15. 15 MS. COUGHLIN: Okay.

16 MR. SENTA: If I look at the 17 cumulative source savings, it's confusing as 18 CSL goes up, I expect, from four to five. 19 MS. COUGHLIN: Right. 20 MR. SENTA: I don't quite 21 understand. Is there a good explanation? 22 MS. COUGHLIN: Yes, this is the -

### 202-234-4433 Neal R. Gross & Co., Inc. Page 267 1 again, this is the issue of the difference 2 between the efficiency in the test procedure 3 and what you might see in the field, because 4 the test procedure loadings are generally 5 significantly higher than the assumed loadings 6 in the new installations. 7 So, what's happening at CSL 5 is 8 that the efficiency level is being met by 9 greatly improving - greatly reducing the load

10 losses. And the new load losses are not

11 reduced. 12 So, when you take that transformer 13 and put it in installations that are loaded 14 less heavily, you don't get that benefit of 15 the improved load loss. So, you see the 16 actual energy savings go down. 17 MR. SENTA: Okay. Thank you. 18 MR. PATTERSON: This is Wes 19 Patterson again. I'd like to come back to the 20 sealed exclusion. 21 FACILITATOR PARKER: Very quickly,

22 Wes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 268 1 MR. PATTERSON: That sealed 2 exclusion pertains to sealed gas-filled 3 transformers, not encapsulated transformers. 4 We're talking about the 5 temperature and pressure characteristic on

6 them. And when that was debated back on the7 original standard, this had to do with a gas8 filled transformer which is almost 9 nonexistent. 10 MR. PATZNER: Wes, Tom Patzner here 11 from Schneider Electric. 12 The text on 35(a) -- 35(b) in the 13 actual EPACT 2005, small double I, it just 14 says regulating transformers, sealed 15 transformers are not ventilated transformers. 16 So, if this committee agrees that 17 we can define "sealed" differently, I'm all

18 for that. 19 MR. PATTERSON: Okay. There was a 20 definition - 21 FACILITATOR PARKER: Okay, I'm 22 going to break this off. This is very good,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 269 1 but let's move on. 2 Wes, why don't you work with Tom 3 and Dan Cohen to look at it and give us a 4 report back and we'll pick it up at the next 5 session. 6 I want to move on, Steve. We're 7 running short of time. Is this something very 8 quick? Go ahead. 9 MR. ROSENSTOCK: Just real quick on 10 the source energy estimates, I know they were 11 based on annual energy outlook 2011 12 projections for the source energy savings over 13 the next 30 years. 14 Is anybody doing a sensitivity 15 analysis based on all the announcements by 16 many companies over the last few months about 17 coal, power plants retiring, refueling, et

18 cetera? 19 MS. COUGHLIN: The Department - 20 MR. ROSENSTOCK: Because that will 21 be a significant change. 22 MS. COUGHLIN: The Department uses

### 202-234-4433 Neal R. Gross & Co., Inc. Page 270 1 NIMS. 2 MR. ROSENSTOCK: Right. 3 MS. COUGHLIN: So, we can run 4 anything that NIMS can produce. If NIMS has 5 a scenario in it that describes that 6 situation, we could use it, yes. 7 MR. ROSENSTOCK: Well, can we add a 8 new scenario, because it's based on, you know, 9 the last six months have been a whole slew of 10 announcements that would dramatically change 11 and lower, actually, any upstream estimates.

12 MS. COUGHLIN: We'll have to 13 discuss that internally. It's not purely a 14 technical issue. 15 Technically, you can do it. 16 MR. ROSENSTOCK: Right. 17 MS. COUGHLIN: It has to fit into 18 the rules of the larger process which normally 19 just use the AEO scenarios as sensitivities. 20 So, we'll discuss it. 21 MR. ROSENSTOCK: Okay, because as I 22 recall in the document, there was only one set

### 202-234-4433 Neal R. Gross & Co., Inc. Page 271 1 of values shown. There was no sensitivity

2 shown for those numbers. 3 MS. COUGHLIN: Okay. So, I'll look 4 into it. 5 MR. ROSENSTOCK: Thank you. 6 FACILITATOR PARKER: Great. Okay, 7 you have that? 8 As I understand it, though, and 9 you may be getting to this, each TSL is 10 generated by reference to some criteria, 11 right, that you want us to - 12 MS. COUGHLIN: Yes, I'll get to

13 that. 14 FACILITATOR PARKER: -- approve, 15 right? And so that's -

16 MS. COUGHLIN: Well - 17 FACILITATOR PARKER: I guess the 18 question is where are the criteria that led to 19 these six? 20 MS. COUGHLIN: These are really 21 just trying to sample the design space in a 22 relatively uniform way.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 272 1 FACILITATOR PARKER: Okay. So, 2 these are just more or less evenly spaced - 3 MS. COUGHLIN: More or less, yes. 4 FACILITATOR PARKER: -- efficiency 5 levels that you - 6 MS. COUGHLIN: I mean, again, 7 they're a necessary input. So, we have to do 8 something. 9 And the analytically sensible 10 thing to do when you have no other 11 information, is just try to sample the 12 existing design space more or less uniformly, 13 yes. 14 FACILITATOR PARKER: Okay. 15 MS. COUGHLIN: The next slide is 16 just an illustration of the time development 17 of - so, the previous table was the NPVs and 18 things over the entire analysis period. 19 The standard approach in these 20 analyses is to do two lifetimes as the 21 analysis period. Again, these are just 22 accounting decisions. They're not necessarily

### 202-234-4433 Neal R. Gross & Co., Inc. Page 273 1 meant to be of any metaphysical importance. 2 So, what we do is we follow the 3 new purchases for a single lifetime. And then 4 beyond one lifetime we continue to account for 5 the existence of that product, but we don't 6 count additional new shipments after one 7 lifetime. 8 So, that's - so, what you're 9 seeing on this plot is the green bars are 10 showing the additional cost incurred by buying 11 the more efficient units over the first 30 12 years of the period. 13 The blue bars are the aggregate 14 energy savings. So, they go up because what's 15 happening in each year is you're getting more 16 efficient units in the population and retiring 17 the less efficient units. 18 So, there's a steady increase in 19 the overall energy savings attributable to the

20 standard. 21 And if there's any kind of new 22 material requirement related to a standard,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 274 1 you will see generically this type of pattern 2 where there will be some slow growth of demand 3 for that material as the product turns over in

4 the market. 5 So, again, given the set of TSLs 6 that we want to examine, we calculate all 7 these things in the national impact analysis. 8 And there are - we discussed this in the 9 previous meeting, and I'll summarize here. 10 We're coming to have certain types of TSLs as 11 being a standard set of criteria to examine in 12 each rulemaking. 13 Again, this isn't just 14 transformers. This is all rulemaking. So, 15 they've been proposed for the medium voltage 16 and liquid immersed. 17 One is the max tech. That's the 18 maximum efficiency that exists in the market. 19 That's part of the legal requirement. So, we 20 always analyze that. 21 A favorite of OMB is maximum NTV. 22 And typically in the way things work out, that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 275 1 tends to be the minimum LCC. 2 So, you would go to each design 3 line. You would pick the efficiency level 4 that has minimum LCC. And you would aggregate 5 those together to create the TSLs. 6 FACILITATOR PARKER: Do they ever 7 differ? 8 MS. COUGHLIN: It depends. They 9 could, yes. It depends. 10 And then the maximum energy 11 savings with non-negative LCC is another 12 choice. So, in that case you would 13 essentially have - you would break even on the 14 life cycle cost, but you would typically have 15 a larger energy savings. 16 And then so these three are going 17 to potentially create gaps in the efficiency 18 space. And it's generally useful to fill 19 those gaps with something just so you have 20 something to interpolate between. 21 And then other criteria that have 22 been discussed are technology breakpoints

### 202-234-4433 Neal R. Gross & Co., Inc. Page 276 1 where you move away from a diversity of 2 materials, one or two materials. And that's - 3 so, again, I assume part of the work of this 4 committee is to sit down and figure out how 5 many TSLs and what criteria you want to use to 6 inform your negotiations. 7 And once those have been selected, 8 again it's fairly straightforward to run 9 through the NIA and produce the results. 10 The manufacturer impacts is a 11 little more complicated. So, it is harder for 12 the manufacturer impacts analysis to cope with 13 a lot of last-minute changes in the choice of

14 TSLs. 15 So, I think that's it. That's all

16 I have.

17 FACILITATOR PARKER: Good. Thank 18 you. That was a perfect break point, and we 19 are right at our break time with an extra half 20 hour added in for lunch. 21 So, why don't we take a break, 22 come back at - why don't we say - we have to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 277 1 be out of here by 4:30, right, so that they 2 can - 4:45 so that they can get the computer 3 back by 5:00. 4 So, should we take a half an hour, 5 or is that too long? 15-minute break? How do 6 people feel? Who would prefer longer?

7 PARTICIPANT: I'd rather leave 8 earlier and get back sooner. 9 FACILITATOR PARKER: Okay. 10 (Whereupon, the proceedings went 11 off the record at 2:59 p.m. for a break, and 12 went back on the record at 3:26 p.m.) 13 FACILITATOR PARKER: Somebody who 14 was on our call, left. There were 13 people 15 on the call. We now only have 11. So, we 16 surmise on the technical support side is that 17 one of those two people who left the call, 18 left their phone ringing. 19 And the only way to fix that is 20 for all the callers to hang up and then call 21 back in. But we're not ready for that to 22 happen yet, because the technical people who

### 202-234-4433 Neal R. Gross & Co., Inc. Page 278 1 have to resume the call from our end since we 2 don't control the phone here are not here yet. 3 They've been summoned and are on their way. 4 So, as soon as they are here, we 5 will do our brief reprieve to reestablish the 6 phone connection without buzzing, and go from 7 there. Sorry about that. 8 This is going to be a test of 9 concentration. One quick thing on the ground 10 rules, by the way, just a typo. 11 In the goal, Jeremiah pointed out 12 in the first paragraph of the ground rules 13 while we're just waiting for this, you will14 notice the phrase "liquid-immersed and medium15 voltage dry-type." 16 That's because this was cut and 17 pasted from the previous group. We will 18 correct that to say "low-voltage dry-type" in 19 the next iteration. So, that will be done. 20 Okay. The two things that we need 21 to accomplish now in the next hour or so 22 before we adjourn, is to discuss and come to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 279 1 agreement hopefully and adapt some criteria 2 for trial standard levels. 3 This was what the medium-voltage 4 group had done. And I think Katie can - gave 5 us a pretty good overview of the 6 possibilities. 7 I'm trying to think here if the - 8 Katie, do you have that slide? Is there -

9 MS. COUGHLIN: Yes. 10 FACILITATOR PARKER: Page down. 11 Let's see. I want to go back which way? 12 There you go. 13 So, just for the benefit of those 14 who were here for the first time, and again 15 this is not binding on this group. What the 16 medium-voltage group did is not binding on 17 this group. 18 But the TSLs that were, as I 19 recall, agreed on, the criteria that were 20 agreed on by the previous group is first max 21 tech, which is required by law, obviously. 22 Secondly, the maximum net present

### 202-234-4433 Neal R. Gross & Co., Inc. Page 280 1 value which is essentially required by OMB and 2 is an obvious choice in any case, the minimum 3 life cycle cost analysis. 4 The third thing was the maximum 5 energy savings with non-negative LCC. I think 6 the analysis for that has already been run, 7 right? 8 The filling in the gaps in the 9 design space, I think that's what Katie was 10 referring to when she was saying that they try 11 to make sure that there are no big gaps there. 12 The main thing that required 13 significant discussion in the previous group 14 and that I would just in the interest of 15 efficiency try to summarize for this group to 16 launch the discussion, and please correct me 17 if I misstate it, but is the TSL defined by 18 technology breakpoints. 19 And here the issue is at what 20 point do as you increase the CSL or the 21 efficiency level, do you reach a point where 22 even upgraded conventional steel can no longer

### 202-234-4433 Neal R. Gross & Co., Inc. Page 281 1 compete in some sense with amorphous metal 2 causing significant adverse harm to makers of 3 the conventional steels with bottom line 4 consequences for market competition and so

5 forth? 6 Those impacts are part of the - 7 they're one of the criteria that I think DOE 8 is expected to consider in setting an 9 appropriate standard. It's one of the factors 10 to consider. It's also something that the 11 Department of Justice in my conversations with 12 them, wants to look at. They are concerned 13 with anti-competitive impacts of any standard. 14 So, it's definitely a relevant 15 factor. The problem is that you can't - the 16 problem analytically is, and here Katie will 17 correct me if I misstate it, but the problem 18 is that in calculating manufacturing, it's 19 kind of an endogenous variable. 20 The manufacturing impacts depend 21 upon the TSL that was created, the TSL was 22 defined according to manufacturing input. So,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 282 1 you have the cat kind of chasing its tail. 2 The way we tried to deal with that 3 in the - proposed to deal with that in the 4 medium-voltage analysis - well, I think the 5 phone has stopped, actually. Oh, it's 6 disconnected. 7 Okay. So, could everybody - we've 8 just disconnected you. So, if you can't hear 9 me, please dial back in. 10 (Laughter.) 11 (Whereupon, the proceedings went 12 off the record at 3:32 p.m. and went back on 13 the record at 3:39 p.m.) 14 FACILITATOR PARKER: Okay, can we 15 go back to that slide there's max tach? 16 MR. CASKEY: And there is the net 17 present value on -

18 FACILITATOR PARKER: There's the 19 max net present value, which is min life cycle 20 cost. There's maximum net energy savings with 21 positive life cycle cost. There is CSL0, 22 obviously, status quo.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 283 1 MR. PATZNER: In regards to the 2 maximum net present value, since the majority 3 of the marketplace does not see any value, I 4 don't know if an NPV for a low-voltage 5 transformer is actually a beneficial criteria. 6 MR. CYMBALSKY: This is John 7 Cymbalsky, OMB - DOE. 8 (Laughter.) 9 (Off-record comments.) 10 MR. CYMBALSKY: They actually - 11 that's the first thing they'll ask us for. 12 MR. PATZNER: I mean, because the 13 contractors don't actually get the benefit. 14 The guy who's purchasing it -

15 MR. CYMBALSKY: I understand. 16 MR. PATZNER: I just -

17 MR. CYMBALSKY: There's an 18 executive order that came out in January that 19 says every regulation that the U.S. government 20 will put out will be subject to this maximum 21 net benefit provision. So, that's the first - 22 so, whether or not we pick that one -

### 202-234-4433 Neal R. Gross & Co., Inc. Page 284 1 FACILITATOR PARKER: I think the 2 way OMB, correct me if I'm wrong, John, but I 3 think what they're thinking of is social 4 benefit. These are economists who are looking 5 at social welfare curves. So, they're not 6 necessarily distinguishing between building 7 owners who buy the transformers and consumers. 8 You're absolutely right in terms 9 of who buys it, but I think they're talking in 10 terms of social benefits. So, it's a benefit 11 to a different person, but it's still a 12 benefit to society in lower consumption. 13 Is that fair enough? 14 MR. DeLASKI: No, I won't take 15 anything coming from economists.

16 FACILITATOR PARKER: What's that? 17 MR. DeLASKI: Economists can make 18 lots of assumptions about how benefit will 19 flow through. 20 (Simultaneous speaking.) 21 MR. DeLASKI: Those benefits will 22 be accrued to the people who actually rent

### 202-234-4433 Neal R. Gross & Co., Inc. Page 285 1 those spaces. 2 MR. GREESON: Rob Greeson, Federal 3 Pacific. I have a question for AK here. 4 When it comes to silicon steel, 5 let's say the market shifted dramatically 6 towards M3. I understand that in doing that, 7 that there's a certain amount of M4 that comes 8 out of that process. So, it's not like you 9 can just make all M3.

10 Is that an accurate statement? 11 MR. PETERSEN: There is a 12 portfolio. We don't have the potential just 13 to be able to produce a single product. 14 There is some portfolio aspects 15 associated with what we produce that is able 16 to swing our distribution of products so far 17 one way or the other. 18 I think that's what you're asking

19 here. 20 MR. GREESON: Yes, and what I'm 21 getting at is a TSL that - and we know that 22 the silicon steel manufacturers have a greater

### 202-234-4433 Neal R. Gross & Co., Inc. Page 286 1 capacity to provide the material that's 2 required. 3 And we know that the amorphous 4 steel has great advantage in certain areas as 5 well. So, I'm interested in a TSL that kind 6 of focuses on kind of optimum grade of silicon

7 steel. 8 For example, if it was maybe the - 9 that big cloud of dots for the M3, maybe on 10 the lower end of the cloud, if that makes any 11 sense. That way it would still sort of 12 encompass the M4 material. 13 I think that would be a meaningful 14 TSL to look at. I mean, am I making any

15 sense? 16 MR. PETERSEN: I think what I hear 17 you saying is that you want an efficiency 18 level that allows you a distribution of 19 potential products that you can use. 20 MR. GREESON: And be fair to the 21 amorphous folks too, if at all possible. Is 22 there such a level that we can pick?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 287 1 And I think Andrew sort of touched 2 on this in the medium-voltage side. He 3 suggested TSL with regards to the core steels, 4 and I'm trying to remember exactly how you

5 worded that. 6 Do you recall? 7 MR. CYMBALSKY: I think what he 8 said was a level at which you can get the 9 highest efficiency or energy savings, but 10 there is not a single supplier and there's 11 competition for the supply of the material. 12 MR. DeLASKI: Yes, that's a good 13 way to put it. I think that's different than 14 what you were - I'm not sure - I think that's 15 a good one to look at. 16 I think also in terms of this 17 mixture of products from steel manufacturers 18 maybe working the global marketplace, this is 19 not - the U.S. market is not insulated from 20 the global market. 21 So, I think we need to keep that 22 in mind as well as we think about how it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 288 1 impacts - 2 MR. PETERSEN: That's correct. So, 3 the most we would be able to do is provide 4 some understanding associated with some of the 5 capability issues steel manufacturers will be 6 able to provide. 7 However, as you look at your total 8 scope of steel manufacturers, that's not just 9 AK, that's not just ATI, because it is a 10 global market. 11 So, even though you might consider 12 capability issues if you're to say, well, what 13 if we just threw it all down M3 and created a 14 huge market, we would be able to give you a 15 perspective associated with how that affects 16 AK Steel. ATI would be able to tell you from 17 their perspective. 18 But I think what this group would 19 have to consider is whether or not those two 20 suppliers really represents the sum total of 21 their supply in terms of how you would make 22 your decision.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 289 1 We recognize you have other 2 suppliers than the two here in the U.S. So, 3 we can provide you some feedback in regards to 4 how it affects us, but your decision, I think, 5 should certainly contemplate the full scope of 6 your suppliers. 7 MR. TENDULKAR: My understanding on 8 this, and maybe I'm wrong, but what if you 9 decided to make all M3 steel. You cannot make 10 all M3 steel, a little bit will be M4. 11 MR. PETERSEN: Absolutely. 12 MR. TENDULKAR: That's something 13 that's going to be there. So, there will be 14 always some material which does not meet M3 or 15 M4 and will be there and it has to be used

16 somewhere.

17 MR. PETERSEN: That's correct. And 18 I guess that's the point I was making is that 19 we would end up producing actually a portfolio 20 or a distribution of products. I'm not going 21 to just produce this product. It would be a 22 portfolio.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 290 1 And so the impact that we would 2 end up taking a look at is depending upon the 3 size of this market, we are a global company, 4 would be my potential to be able to take those 5 other products and sell them outside the 6 United States. 7 FACILITATOR PARKER: Why do you 8 have to do a portfolio? I don't quite

9 understand that. 10 MR. PETERSEN: Probably the best 11 way I could explain it is it's largely 12 dependent upon the overall capability of our 13 process. 14 So, there is - and I'm using some 15 broad terms here because this isn't true for 16 each product. There's some differences. But 17 for the simplest terminology, I would just say 18 that we produce a product that has a bell 19 curve, if you will, of distributions. 20 There are certain portions of that 21 distribution that would make an M3 quality or 22 an M2 quality just as an example.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 291 1 My capability is the overall 2 distribution of the products that I make. So, 3 it's not necessarily that I'm always just 4 producing this product. It's that I'm 5 actually producing a bell curve of products. 6 And within that, I'm separating 7 them based upon the level of quality - 8 FACILITATOR PARKER: Like cookie 9 dough. 10 MR. PETERSEN: Exactly. 11 FACILITATOR PARKER: Okay. 12 MR. PETERSEN: I'm making my cookie 13 dough and some of it is only acceptable for 14 chocolate, and some of it's only acceptable 15 for vanilla, if you will. 16 FACILITATOR PARKER: So, is that 17 relevant from the standpoint of, say, 18 environmental groups concerned about global 19 impacts from carbon emissions if you get 20 higher efficiency by having a high standard in 21 this market, that could be sort of like 22 pushing on a waterbed, right? It just bubbles

### 202-234-4433 Neal R. Gross & Co., Inc. Page 292 1 up somewhere else. 2 The less efficient steel will go

3 overseas or - what's that? 4 MR. DeLASKI: We're heading down - 5 that's a very - it's unknowable.

6 FACILITATOR PARKER: Unknowable. 7 MR. DeLASKI: Particularly in the 8 time we have today. 9 FACILITATOR PARKER: Okay. I think

10 that was the concern. 11 MR. PETERSEN: I think what - I'm 12 sorry. I think what Rob's concern was just 13 basically based upon what is the overall 14 capacity of the steel suppliers to provide a 15 given grade recognizing that I can't just 16 take, for example, if I had a hundred tons, 17 can I put all hundred tons in M3, or does my 18 bell curve result in only 60 tons available

19 for M3? 20 And if he's basing it upon a 21 hundred, he wants to recognize that my 22 capacity is not the 100. It's actually only

### 202-234-4433 Neal R. Gross & Co., Inc. Page 293 1 the 60 that I can actually make it the M3. 2 I'm speaking for - 3 MR. GREESON: Yes, I was just - I'm 4 wondering if we can focus on a TSL that is - 5 provides a significant - or it's a good point 6 where the material - from a material 7 availability standpoint. 8 You don't want to - you want to 9 put one somewhere where it makes sense from a 10 material availability standpoint. And that's 11 what I'm trying to figure out, and I had just

12 wanted some feedback on that. 13 MR. PETERSEN: Our intent was to 14 speak to the capability issues that were the 15 capacities that are defined and provide that 16 type of feedback. So, we'll be prepared to do 17 so as we're ready as we continue in these 18 discussions. 19 FACILITATOR PARKER: Okay, Robert. 20 MR. BERMAN: Robert Berman, Berman 21 Economics, qua Dave Millure, Metglas.

22 There's been a lot of talk around

### 202-234-4433 Neal R. Gross & Co., Inc. Page 294 1 the table about the users not being the 2 decision makers on the transformers. And I 3 think we need to reflect some of that in the

4 TSLs. 5 I'd like to see something based on 6 the cost per kilowatt hour of energy saved. 7 Possibly calculated at a couple of different 8 load factors. And something on the impact of 9 the building's electric bill. 10 To some extent, arguably, some of 11 that may be embedded in the NPV and OCC 12 calculation, but that's not a number that you 13 can really focus on to get that result. 14 And if what we're looking for is 15 where the customer is, where the individual 16 is, where the user is going to be, it will be 17 that much better off than what are they saving 18 versus what is it costing them to save that, 19 and what does that mean to them in their 20 operations. 21 FACILITATOR PARKER: Well, we need 22 something that operates as a boundary

### 202-234-4433 Neal R. Gross & Co., Inc. Page 295 1 parameter, right? 2 MR. PATZNER: Tom Patzner, 3 Schneider Electric. 4 I concur and I think it would be 5 we want a TSL at a some percentage savings for 6 dollars per year. Because we have the kill 7 core loss, we have the I squared, we have the 8 A and B losses. So, we can determine using a 9 blended kilowatt rate, the dollar amount real 10 fast even if we just do it straight at 35 11 percent loading. 12 So, it's basically the end user, 13 what he would pay for the energy for the year. 14 I think that would be a good - I don't know 15 what the matrix of where we choose that if 16 it's 20 percent less, 30 percent less, but the 17 industry has kind of been focusing on a 30 18 percent reduction and a 50 percent reduction. 19 So, if we had a TSL at a 30 20 percent reduction in dollars spent per year 21 and one at 50 percent reduction, we would have 22 the ability.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 296 1 FACILITATOR PARKER: That would

2 work.

3 MR. PATZNER: And the tool has both 4 values in. So, it's just adding a column in 5 the spreadsheet and multiplying it by - 6 MR. BERMAN: None of this is 7 additional information. This is a 8 transformation, arithmetic transformation of 9 what you've got in there already. 10 MR. DeLASKI: So, is there a 30 11 percent reduction and a 50 percent reduction 12 in the consumer energy bills? 13 MR. PATZNER: No, if they're going 14 for 30 percent reduction in energy or 50 15 percent reduction in energy, that's what the 16 industry is asking in energy. 17 So, just to translate it for which 18 TSLs to pick, I'm suggesting a 30 percent 19 reduction in what they spend, because the end 20 user is not making the decision.

21 MR. DeLASKI: In the LCC. 22 MR. PATZNER: No, for the TSL. To

### 202-234-4433 Neal R. Gross & Co., Inc. Page 297 1 pick the TSLs we use. 2 FACILITATOR PARKER: The 30 percent 3 reduction in what, though? 4 MR. PATZNER: So, we have this

5 CSL0. 6 MR. DeLASKI: In electric cost? 7 (Simultaneous speaking.) 8 MR. PATZNER: So, if it cost us 9 $200 to date on the TP1, it cost something to 10 run a CSL2, it cost something to run a CSL3

11 and so forth. 12 So, we pick a point that is a 13 reduction in how much they spend per year. 14 MR. CYMBALSKY: So, I think we can 15 just put those values to what we've already

16 done and see where that shakes out before we -

17

18 FACILITATOR PARKER: Hold on. 19 MR. ROSENSTOCK: Again, I think 20 what he is talking about is the goals for 21 building energy reductions at ASHRAE and some 22 other things are 30 percent. And then 50

### 202-234-4433 Neal R. Gross & Co., Inc. Page 298 1 percent. That's in the DOE's goals in terms 2 of building energy efficiency, goals for the 3 new buildings and building codes. So, I think 4 that's what he's referring to. 5 And he's looking at operating 6 costs. The actual operating costs of the 7 transformer per year before any discount rate. 8 It would be like a first-year reduction annual 9 operating cost reduction. Don't worry about 10 the lifetime, don't worry about the discount 11 rates, because that gets all confusing and 12 everything like that. 13 MR. CYMBALSKY: We can assign those 14 values to each of the TSLs just to see where 15 they shake out.

16 FACILITATOR PARKER: Is there a 17 reason for choosing - you say 30 and 50 have 18 standards because they are in the ASHRAE

19 standards.

20 Is there - 21 MR. PATZNER: It's just the two 22 percentages always here.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 299 1 MR. CYMBALSKY: We may just by 2 luck, have them already. I don't know. 3 FACILITATOR PARKER: Katie, can you 4 tell us is that a viable, analytical - 5 MR. ROSENSTOCK: It's energy cost 6 savings. You say highest energy savings. 7 It's energy cost savings. You're trying to 8 write the notes. There's a big difference. 9 MR. CYMBALSKY: I'm sorry, this was 10 the one previous to the one we're talking

11 about now. 12 MR. ROSENSTOCK: Oh, okay. Okay. 13 MR. CYMBALSKY: I haven't typed 14 that one yet. 15 MR. ROSENSTOCK: Okay, sorry. 16 MR. CYMBALSKY: I'm still saying I 17 think we might already have that. So, I'm not

18 - 19 MR. ROSENSTOCK: It's basically a 20 first-year energy cost savings number. 21 MR. CYMBALSKY: Right. 22 MR. ROSENSTOCK: Not a lifetime,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 300 1 not discounted. 2 MR. CYMBALSKY: I fully understand 3 what you're asking. 4 MR. ROSENSTOCK: I'm not asking. 5 I'm just trying to interpret - 6 MR. CYMBALSKY: Whatever, yes. 7 FACILITATOR PARKER: So, this would 8 be a pair of TSLs, basically. One affecting 9 30 percent, and one affecting 50 percent. 10 This part of information, is there 11 a distinction here, a major distinction 12 between energy losses and operating cost? I 13 suppose maintenance would distinguish - 14 MR. PATZNER: Well, it becomes - 15 it's based on, I mean, it changes drastically 16 based on the loading curve. And basically 17 because if we just pick 35 percent, it's not 18 going to be any different. 19 But if we actually loaded it into 20 a software that actually did the typical 21 loading of a building, you would see a drastic 22 difference if we went to something that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 301 1 reduced the core loss from 200 watts to a 2 hundred than if you kept the core loss at 150 3 and you just removed the losses from I squared

4 R. 5 So, it would actually - it would 6 force us to do - it's an A and B - it impacts

7 the A and B and how the transformers are 8 actually loading. And it puts more - it 9 actually puts more emphasis on reducing the 10 core loss instead of the core losses for the 11 end product we pick. 12 FACILITATOR PARKER: Any other 13 thoughts around the table? Does that seem 14 like a reasonable TSL criteria? 15 Steve, did you want to comment? 16 MR. ROSENSTOCK: I want to wait for 17 the people at the table to comment before I 18 added some suggestions concerning the TSL. 19 MR. CASKEY: This is John Caskey at

20 NEMA. 21 And I think, Robert, when you 22 first started talking, you mentioned like two

### 202-234-4433 Neal R. Gross & Co., Inc. Page 302 1 things. And we sort of evolved into this 2 proposal of the 30 and the 50, but then there 3 was another thing that you said that I didn't

4 catch. 5 MR. BERMAN: What I was looking at 6 was a couple of different things that had the 7 flavor of capturing the savings due to a more 8 efficient transformer, the savings to the

9 user. 10 MR. CASKEY: Okay. 11 MR. BERMAN: And what I mentioned 12 were just measures off the top of my head that 13 were conventional measures that would do that. 14 What Tom was talking about was 15 another measure that - a transformation, if 16 you will, on that that would do the same 17 thing. If that - if everybody is comfortable 18 with that, if that makes more sense to the 19 manufacturers and so forth, then that's the

20 one we should use. 21 I mean, that's - I'm happy with

22 that.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 303 1 MR. CASKEY: John Caskey again. 2 So, did we capture the concept, 3 and Andrew said it and I think John said it, 4 did we capture that concept of trying to pick 5 a high efficiency level that does not lock us 6 in to basically one material in the design of

7 these transformers? 8 MR. CYMBALSKY: No, it's this one. 9 The third line from the bottom here that the 10 cursor is on right here. 11 MR. CASKEY: Okay. 12 MR. CYMBALSKY: I put it in simpler 13 words, but - 14 MR. DeLASKI: Well, I think there's 15 a distinction here which I think was drawn by 16 Eric in the last meeting, which was that 17 there's a question of do you have - this is an 18 important TSL to evaluate. 19 But I think the distinction that 20 Eric drew, and, Eric, you're going to have to 21 help me out here to make some kind of - 22 restate these in our last meeting, which is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 304 1 that there's question of what you make, well, 2 now, you've just changed it, right? 3 I want both, right? I want what 4 you had before, and I want this. 5 MR. PETERSEN: Oh, you want a 6 different one, okay. 7 MR. DeLASKI: Right, because here 8 the material availability, this is - this will 9 come out of the engineering analysis, right? 10 This is just engineering. 11 But then you have a question of 12 you have to put into the pricing, which 13 affects competitive, right? 14 So, there's a question of - how 15 did you put it last time? Capability and 16 viability or something. 17 MR. PETERSEN: Capability and 18 competitiveness. 19 MR. DeLASKI: There's a capability 20 threshold and there's a competitive threshold. 21 MR. CYMBALSKY: So, this one is 22 going to be the competitive one?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 305 1 MR. DeLASKI: Yes. 2 MR. CYMBALSKY: Okay. Still 3 highest energy savings though.

4 MR. DeLASKI: Yes. 5 MR. CYMBALSKY: Okay. 6 MR. DeLASKI: Right. 7 FACILITATOR PARKER: So, as Eric 8 commented last time, there was an outside 9 competition threshold which basically at what 10 point do you stop having multiple suppliers. 11 And one the competitiveness threshold which 12 was a more difficult thing to determine at 13 which point you start getting severe 14 competitive impacts in the marketplace. And 15 there was a discussion about how we would 16 define severe anti-competitive. 17 And the way I recall it being left 18 was there were discussions about, well, let's 19 look at, you know, impacts on rate as a 20 surrogate for price. 21 But then Brian Coffey pointed out 22 that, well, why use weight as a surrogate for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 306 1 price? We actually have data on price so we 2 can predict price impacts.3 And we left it with the medium4 voltage group that the manufacturers would get 5 together and just try to work out amongst 6 themselves with Navigant and LBL a reasonable 7 TSL to propose based upon their estimate of 8 whatever - coming up with a criteria of what 9 price differential could be accepted as 10 defining by some measure, competition, the 11 remaining competition in the marketplace that 12 we're still - there is still competition in 13 some sense. It's not moving in. 14 And there are antitrust guidelines 15 that one could look at if we consulted an 16 antitrust expert. If people are interested, 17 Hirschman-Herfindahl Index, you can look at 18 market share, but it may not be necessary to 19 get that fancy. 20 I did have some concerns about 21 whether the extensive antitrust immunity that 22 we would have for this. And so, I urge people

### 202-234-4433 Neal R. Gross & Co., Inc. Page 307 1 to hold off having those discussions among 2 competitors in particular since virtually the 3 entire U.S. market was present in the room in 4 the last meeting and sort of to get an opinion

5 from the DOJ. 6 We didn't get a formal opinion, 7 but I did call a fellow over in the antitrust 8 shop at DOJ. And he said so long as the goal 9 is avoiding anti-competitive effects with the 10 standard we set and there's not deliberate 11 price setting going on, he didn't foresee 12 there being a problem. 13 So, I emailed back and said that 14 people should feel free to go ahead and 15 convene that working group and talk about what 16 the, you know, what the LBL is producing in 17 the way of forecasts for price impacts and 18 come up with a recommendation for the MV group 19 on what breakpoint criteria might be set for 20 defining that competition TSL in terms of 21 steel impacts. 22 Is that a fair summary of what you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 308 1 said before, Eric? 2 MR. PETERSEN: I can give you a bit 3 of an update since then. 4 FACILITATOR PARKER: Okay. 5 MR. PETERSEN: We actually - Dave 6 Millure attempted to call a meeting with us. 7 And I can't speak for Ray, but Ray Polinski of 8 ATI actually chose to speak directly with 9 Navigant rather than conduct a meeting with 10 the four of us. We were attempting to arrange 11 a group between the three, and Brian Coffey. 12 So, what we had done since ATI 13 chose to work directly with Navigant, the 14 recommendation was made that each group 15 individually work with Navigant. 16 So, I can't speak to what the 17 others are doing, but I can tell you that we 18 have put together essentially a recommendation 19 of the way the analysis can be conducted. 20 We don't necessarily have the 21 capability within some of the modeling work 22 that we have to be able to provide that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 309 1 analysis, neither would I think the group want 2 to see it from us individually as much as 3 they'd want to see it from Navigant. 4 So, we are putting together a 5 proposal that we intend on delivering to Brian 6 here either tomorrow or Friday. Jerry was 7 trying to set up that meeting to review with 8 him here's how our analysis would look like, 9 here would be our recommendation for a means 10 of trying to determine - 11 FACILITATOR PARKER: Are you all 12 coming in at the same time? 13 MR. PETERSEN: I'm sorry?

14 FACILITATOR PARKER: Is the 15 understanding that they're all coming in at 16 the same, Allegheny's and Metglas?

17 MR. PETERSEN: I don't know the 18 answer to that point.

19 FACILITATOR PARKER: But that would 20 be a way of proceeding here. In the meeting, 21 of course the issue is the competition between 22 amorphous and conventional metals.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 310 1 It sounds like here the 2 competitive aspects may be somewhat different 3 and the breakpoint may be somewhat altered. 4 May be more M3, M4, I don't know. Something 5 in that range; is that right? 6 MR. PETERSEN: It would be, though, 7 I think the key difference there would be is 8 that you have a large multiplicity of 9 suppliers. As we mentioned, there are a large 10 number of M4, M5 suppliers out there that a 11 transformer manufacturer would do it. 12 FACILITATOR PARKER: So, it's a 13 much less salient TSL in this group than in 14 the other group. 15 Andrew, do you want -

16 MR. DeLASKI: I'm not sure that's 17 true based on the scatter plots I've seen. In 18 fact, I think it's not true. Based on the 19 scatter plots I've seen, it looks like 20 amorphous does do well in the analysis. In 21 fact, they look very similar between the 22 liquid-immersed and the dry-type markets. So,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 311 1 I would think that the criteria would be 2 applied in the same manner. 3 I also have a different 4 recollection of what we agreed on the process. 5 I remember GE Prolec standing up at the last 6 meeting and say, I'm not so sure I'm happy 7 having the steel manufacturers get together 8 and tell me where they can compete, okay? 9 And I think I saw a lot of nodding

10 from the manufacturers that there was some 11 discomfort with having - so, I think the 12 process that you have ended up with is the 13 process that I thought we had agreed on. So, 14 I'm glad you ended there. 15 Because I think it makes sense 16 that we would have you guys provide your 17 individual input to the consultant, and then 18 try to for them then to make their judgment as 19 to what they think where there is competition. 20 MR. PETERSEN: The intent, Andrew, 21 was actually have the group work with Navigant 22 and Navigant to conduct the analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 312 1 MR. DeLASKI: Yes. 2 MR. PETERSEN: We aren't going to 3 do it. We're going to have Navigant do it. 4 MR. DeLASKI: Right. But I think 5 to do that, they need to be able to talk to 6 you individually to get that what ultimately 7 is going to proprietary views of how the

8 market works. 9 I also think that - 10 FACILITATOR PARKER: Listen, 11 everybody. I didn't mean from my discussion, 12 that we're taking a position on how that 13 internal group organized its own affairs. 14 They were just going to work out their own 15 procedures. 16 MR. DeLASKI: On a different point, 17 the other thing that occurs that I think we 18 had a discussion about last time and you 19 referenced this a few minutes ago, is using 20 weight. 21 And then I think you mentioned, 22 well, Brian said that while we've got prices,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 313 1 then we know what weight translates into to 2 user prices, therefore. 3 But the problem is that there are 4 different views as to what pricing scenarios 5 will play out. So, I think having weight is 6 a useful way - is useful data for stakeholders

7 to be able to look at.

8 And then we can talk about - then 9 different folks may have different assumptions 10 about how the pricing is going to play out 11 over these different scenarios. 12 It's engineering information as 13 opposed to views as to what's going to happen 14 with pricing, which is very unclear depending 15 on what market players had to do.

16 FACILITATOR PARKER: That's from 17 the industry? Is weight a - how did the 18 weight criteria be applied in this case? 19 MR. DeLASKI: The discussion we had 20 last time was if we mapped weight against 21 efficiency much as we do cost against 22 efficiency now, then we know what's entailed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 314 1 in getting to a different efficiency with 2 various materials. 3 FACILITATOR PARKER: So, we would 4 look at the point at which there is a weight 5 differential that reaches some threshold? 6 MR. DeLASKI: Yes, I mean, you -- 7 MR. PATTERSON: This is Wes with

8 ABB. 9 Using the weight versus 10 efficiency, there's a small bandwidth of the 11 dollar per pound of transformers that goes up 12 and down with changes in the major 13 commodities, and it's a mild bandwidth. 14 Other dimension on this thing is15 there's still with the medium-voltage liquid16 filled, a big question as to the impact of the 17 weight is to the pole-mount transformers. 18 So, an analysis of weight versus 19 efficiency could be very handy.20 MR. DeLASKI: In the medium21 voltage, you say? 22 MR. PATTERSON: On the medium-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 315 1 voltage side. 2 MR. DeLASKI: Does that apply to 3 the low-voltage though? 4 MR. PATZNER: Tom Patzner, 5 Schneider Electric. 6 It would be beneficial for Design 7 Line 7 and Design Line 7 only. And the reason 8 being is, is the National Electric Code does 9 not allow you to put a panel board above a 10 transformer any longer. So, those 11 transformers get put on wall-mounted brackets 12 and hung above the panel board. 13 So, once again the NEC forces the 14 industry to do something in a certain way. 15 So, the 15's, 30's, 45's and 75's get hung 16 above or they get put in drop ceilings. 17 So, for Design Line 7 only, a 18 weight to efficiency would be beneficial. 19 MS. COUGHLIN: Okay. This is Katie 20 Coughlin at LBL. 21 This information is already in the 22 TSD and in the spreadsheets. So, in the - if

### 202-234-4433 Neal R. Gross & Co., Inc. Page 316 1 you - in the spreadsheets, the design table 2 includes the transformer weight and the core 3 weight. So, we can, you know, we can plot up 4 that data if that would be useful. 5 FACILITATOR PARKER: I guess the 6 question is do you have a TSD that's defined 7 by some kind of a weight threshold. 8 MR. CYMBALSKY: No - well, I think 9 again this comes back to looking at what we 10 have and then seeing if we need to put one in. 11 So, I'm not going to write that 12 one down, but - 13 MS. COUGHLIN: Yes, I think there's 14 not a well-defined way to do a TSL based on 15 weight, but the information may be useful in 16 coming up with other criteria. 17 MR. DeLASKI: We're thinking about 18 how to use weight to help us understand where 19 the products compete. That's what we're 20 trying to get at as opposed to trying to 21 figure out how do you - that's what we're 22 working on.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 317 1 MR. CYMBALSKY: Okay. So, I don't 2 really need to - 3 MR. DeLASKI: No, it's not a new

4 TSL. 5 MR. CYMBALSKY: Right. 6 MR. DeLASKI: It's something that - 7 MR. CYMBALSKY: It's just an 8 analysis point that we - 9 MR. DeLASKI: Okay. Very good. 10 FACILITATOR PARKER: So, in terms 11 of a - it sounds to me like we have a rough 12 consensus anyway that - first, let me back up. 13 Are there any other criteria that 14 need to be tabled for draft TSLs? Steve, did 15 you want to chime in? 16 MR. ROSENSTOCK: Steve Rosenstock, 17 yes. 18 I suggested some of these last 19 time. I'll add these for your consideration 20 especially because of the fact that in many 21 cases the purchaser of the transformer does 22 not receive the energy savings or cost savings

### 202-234-4433 Neal R. Gross & Co., Inc. Page 318 1 benefits because of transfer of ownership. 2 Lowest total incremental equipment 3 cost which is already done in the analysis

4 based on TSL level - TSL level. 5 Minimal - it's another way of 6 looking at the competitive issue, but the 7 minimum domestic job impact, that would be 8 another possible criteria. Domestic job 9 impact would be another criteria. 10 And I guess those are two for 11 consideration. And I'm trying to think if 12 there was as third one. I think that - 13 especially for that market, for the dry-type 14 market, I think those two might be of 15 consideration there. Thank you. 16 MR. CYMBALSKY: John Cymbalsky,

17 DOE. 18 The job impact, that's calculated 19 at the end as opposed to in the beginning. 20 MR. ROSENSTOCK: It's not part of 21 the manufacturing impact analysis? 22 MR. CYMBALSKY: Right, but that -

### 202-234-4433 Neal R. Gross & Co., Inc. Page 319 1 you've already picked the - you're not going 2 to do a Monte Carlo simulation on job analysis 3 to come up with a TSL. 4 These guys do the work back there, 5 they can correct me, but I think that part of 6 the analysis is done at the end for each TSL. 7 We don't design a TSL to minimize job impact.

8 MR. ROSENSTOCK: There's no 9 estimate done at the preliminary analysis or 10 at the NOPR analysis?

11 MR. CYMBALSKY: It's done at the

12 end once all of them are created. 13 MR. DeLASKI: And I think in this 14 case if you go back to the 2007 final rule, 15 you'll find that the Department estimated that 16 you actually - what you'd end up at is at the 17 higher efficiency levels, you have more jobs

18 because there's more labor. 19 MR. ROSENSTOCK: Domestic, or 20 global? 21 MR. DeLASKI: I'm not sure it's 22 going to get you a new TSL, is my point. You

### 202-234-4433 Neal R. Gross & Co., Inc. Page 320 1 can look at it, but I don't think it's going 2 to get you a new TSL. You can look back to - 3 I suggest you could look at the analysis to 4 see where it takes you, but I don't think it's 5 going to take you to a new TSL. 6 MR. CYMBALSKY: So, I think we can 7 look at other TSLs that we come up with and 8 look at the job impacts for each one, for 9 example. 10 MR. ROSENSTOCK: Okay, but I think 11 that could be a criteria for one of the TSLs 12 that - okay. All right. You're saying it's 13 afterwards. Okay. I understand. 14 MR. CYMBALSKY: Not all incremental 15 cost can be done at levels that are suggested 16 by a new committee. 17 I don't think we have people 18 guessing what an engineering cost curve would 19 be that would create the most jobs. Maybe I'm 20 wrong. But, again, Katie is shaking her head. 21 That would be - I could just 22 imagine how you would try to come up with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 321 1 that. I don't know.

2 MR. ROSENSTOCK: But the lowest 3 incremental cost, you're already doing that 4 anyway. So, there's other TSLs suggested by 5 any committee member, which should be allowed 6 under this process. I think that's a fair TSL 7 to be considered under this process. 8 FACILITATOR PARKER: I guess I 9 would just put last time which I'm still 10 coming back to, was that the lowest TSL - the 11 lowest incremental cost would be zero. 12 MR. ROSENSTOCK: And I had said as 13 a response, the lowest incremental cost above 14 the baseline. Because under the analysis for 15 liquid-filled, there were significant 16 differences in incremental cost. 17 You can actually go higher on the 18 ELs and have a lower incremental cost based on 19 the analysis. So, there could be a point 20 where it actually minimizes incremental cost21 to the consumers. Many of whom for the low22 voltage dry-type won't receive any of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 322 1 benefits of the energy savings. 2 MR. SMITH: Richard?

3 FACILITATOR PARKER: Yes. 4 MR. SMITH: This is Bob Smith at 5 Federal Pacific. 6 FACILITATOR PARKER: All right. 7 MR. SMITH: I would like to go back 8 to the comments plotting weight versus 9 efficiency. 10 FACILITATOR PARKER: Okay. 11 MR. SMITH: I believe Wes' comments 12 that the pricing is relatively - in a 13 relatively narrow band as a function of weight

14 for transformers. 15 On the low-voltage drys, we need 16 to consider the fact that we have three 17 different temperature rises, 80, 115 and 150, 18 with the 150 being the lightest. But at the 19 present, they all have the same minimum 20 efficiency requirements. 21 Also with the low-voltage drys, we 22 have k factors to consider. And as the k

### 202-234-4433 Neal R. Gross & Co., Inc. Page 323 1 factors go up, the weight will go up. But the 2 efficiency levels are not changing as a 3 function of the k factors. 4 So, I think we're better off going 5 back and looking more seriously at plotting 6 cost as a function of efficiency. 7 FACILITATOR PARKER: Response, 8 anyone around the table? Focus on cost. 9 Remember, there is a criteria that 10 basically the goal here is not to cover every 11 conceivable point of interest, but to get a 12 reasonable spread across the range of 13 possibilities and understand the consequences 14 of each point that is chosen while choosing 15 some conceptually meaningful targets to look

16 at. 17 There is a criteria, a gap-filling 18 criteria that says look at their reports. And 19 this maybe, I think, is a way of dealing with

20 Steve's concern.

21 If there are areas that don't have 22 - aren't getting covered, you can put a TSL to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 324 1 just look at the impacts there and see if 2 there are - if there is useful information to 3 gain from looking at that. 4 I guess the question is you want 5 to have a finite range of - you want to have 6 a finite number of TSLs. 7 MR. CYMBALSKY: And you want it to 8 be a meaningful place to negotiate to or from, 9 I think. If we've got the whole range covered 10 and we're only going to move down one notch 11 from max tech or up one notch from the 12 baseline, are they places where this group 13 might end up negotiating? 14 And, you know, we need consensus

15 here. So -

16 FACILITATOR PARKER: Yes. And not 17 only places where this group negotiating, but 18 also places where we have a story to tell to 19 the outside world about why we chose this 20 particular criteria to look at as relevant and 21 why we might make a decision based on it. 22 So, that was why I was querying

### 202-234-4433 Neal R. Gross & Co., Inc. Page 325 1 where 30 percent and 50 percent come from. 2 Because to the insiders, those are numbers 3 that you often see. For outsiders, you go, 4 well, why did you choose those numbers and not 5 something else? 6 So, there needs to be some kind of 7 a story to tell, I think, as we think about 8 how we sell our product, because it's not 9 enough for us just to agree around the table. 10 So, with that let me ask if there 11 is anything else around the table, any other 12 candidates? 13 As I understand it then, is there 14 any objection to basically in this group 15 pursuing the same process for developing the 16 final manufacturing impact TSL that they're 17 doing in the medium-voltage group, which is 18 the manufacturers consulting with Navigant to 19 provide their information on a proprietary 20 basis and let Navigant come back with a 21 recommendation on why those set of TSLs would

22 be -

### 202-234-4433 Neal R. Gross & Co., Inc. Page 326 1 MR. GREESON: This is Ron Greeson, 2 Federal Pacific. 3 I think that's a pretty important 4 part of the whole process is to get that - I 5 mean, speaking for myself, a lot of these 6 analyses are suspect to me until I feel 7 comfortable with how the data is. And when 8 I'm seeing these discrepancies, it just makes 9 me not sure if I can trust what they're 10 saying. 11 But on the flip side of that is 12 we're going to be under a pretty severe time 13 crunch to get that worked out. So, I think 14 the other manufacturers, I think, will have to 15 act on that pretty quickly. 16 And I think what needs to happen 17 is if we get together as a group and then 18 maybe we could conference in OPS and Navigant

19 and we could all talk about sort of a data set 20 and then pick a finite number of things to 21 provide, because there can't be hundreds and 22 thousands like OPS did.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 327 1 But then if we can independently 2 provide that data and then OPS and Navigant 3 can overlay their methods onto what they see 4 manufacturers saying, and then they can kind 5 of see the validity of it, say, yes, that's a 6 good design and we see where we didn't mark 7 this up, or we didn't put enough money in 8 here, or whatever. 9 Hopefully when they discover that, 10 then they can use that knowledge to blanket 11 across their whole entire database of designs. 12 And that's kind of where I'm seeing - but that 13 probably needs to happen within two or three 14 weeks, I would think. 15 FACILITATOR PARKER: Yes, by the 16 next meeting. 17 MR. DeLASKI: Well, yes. The next 18 meeting is in 10 days. So, it needs to happen 19 - I hope it can happen by the time of that 20 meeting and at least there's been some initial 21 work on it, because I think you're right. I 22 agree with you, Rob, that that's the big data

### 202-234-4433 Neal R. Gross & Co., Inc. Page 328 1 discrepancy that needs to be sorted out. 2 Since we're on this topic, I think 3 as in the break, it occurred to me, Tom, it's 4 something that you said earlier today. You 5 said that when you look at your costs, you 6 know, you hold your manufacturing square 7 footage constant. 8 DOE is not doing that. DOE, I 9 think, in their rulemaking process, does not 10 assume that manufacturers don't make capital 11 investments. In fact, just the opposite. 12 Department of Manufacture Impact 13 Analysis does look at manufacture impacts, and 14 the manufacturers are going to have to make, 15 you know, may have to make more complex, more 16 costly, more labor intensive transformers. 17 So, I'm wondering if that's 18 affecting the cost curves and that that's 19 something for us to - it is a consideration in 20 this negotiating room. No doubt about it, you 21 know, one of the impacts of manufacturers. 22 But most rulemakings that I've

### 202-234-4433 Neal R. Gross & Co., Inc. Page 329 1 been involved with anticipate significant 2 investments on the part of the manufacturers. 3 So, I think it is something that may be 4 affecting different views of what it cost to 5 get to a higher efficiency level, because some 6 may anticipate significant capital 7 investments, some anticipate no capital 8 investments. 9 I see you want to respond, Tom. 10 MR. PATZNER: Thomas Patzner, 11 Schneider Electric. 12 So, that was the initial look for 13 where we're looking. I agree once we get to 14 the manufacturing impact, in fact, until I get 15 TSLs, I can't really comment on what it's 16 going to do to us, but I'll be 17 straightforward, our goal is to not have to 18 build a new building. 19 I'm not saying we might not have 20 to buy a miter core-cutting machine, we might 21 not have to buy winding equipment, but we do 22 not want to have to pour concrete.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 330 1 MR. DeLASKI: Okay. So, then you 2 are not holding capital investments to zero. 3 You're holding square footage to zero. 4 So, you may have more capital, you 5 may have more labor hours - 6 MR. PATZNER: We might have to add 7 a third shift. 8 MR. DeLASKI: Right.

9 MR. PATZNER: But we want to be 10 able to hold square footage to zero. 11 MR. DeLASKI: Okay. 12 MR. PATZNER: The square footage is 13 where it becomes expensive. 14 MR. DeLASKI: Okay.

15 MR. TENDULKAR: The other factor we 16 may want to talk about is -

17 FACILITATOR PARKER: Is that a 18 common concern across the industry, or is that 19 something unique to your company? 20 MR. DeLASKI: Well, I'm sure -

21 MR. TENDULKAR: It's a common

22 concern.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 331 1 MR. DeLASKI: I think also that's 2 going to shake out in the manufacture impact 3 analysis. You're going to see some 4 discontinuities where sometimes they've got to 5 make much bigger investments. 6 FACILITATOR PARKER: Is that always 7 affected in the analysis, the square footage? 8 I mean, is it part of the standard -

9 MR. CYMBALSKY: The NIA would take 10 that all into account. If we would think 11 you'd have to build a new plant, yes, that is 12 absolutely part of the cost. 13 MR. PATZNER: So, and the impact on 14 me is a whole lot different than as you've 15 worded it earlier, to mom and pops. 16 Assume the company that's building 17 transformers, and some of these mom and pops 18 have been around since the 1930s. And, by the 19 way, they're in the same buildings they built 20 in 1930. 21 So, that impact is going to impact 22 them differently than a company like mine.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 332 1 FACILITATOR PARKER: Right. So, 2 the small business impacts are also part of

3 that.

4 MR. TENDULKAR: I can attest to 5 that because we are in a small business kind 6 of thing. But at the same time, we have a lot 7 of mixed product kind of thing. This is not 8 the only thing we make. 9 We make different kinds of 10 transformers and different kind of 11 requirements for those. Some of them are 12 exempt from the DOE requirement. 13 Now, we change this kind of thing. 14 Now, we have to start some new materials and 15 there is a cost for the inventory and getting 16 the material processed. That is something 17 which is not reflected in some other thing. 18 That is also incurring cost, it's 19 not just a capital cost, but it's a daily, 20 every month, every year we are incurring extra 21 inventory cost.

22 Of course we have to borrow the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 333 1 money from the bank, and you know how it is 2 difficult these days. That's another point to

3 look at. 4 MR. DeLASKI: So, I want to come

5 back to the TSLs. I don't want to cut off 6 anybody else on that topic, but I want to talk

7 to TSLs. 8 I think you've got a list of - is 9 it eight there? 10 (Off-record comments.) 11 MR. DeLASKI: All right. That 12 seems like a reasonable number. And I guess 13 I would add, you know, the need for gapfill, 14 I think, is real. 15 I think the gapfill most likely 16 would capture the items that Steve is - 17 Steve's concerns. So, maybe there's a 18 gapfill, but seven is kind of a typical number 19 that you see in the DOE - in fact, it's a 20 little on the high side, I'd say, John. I 21 mean, a little more than normal. 22 As long as you've got a good

### 202-234-4433 Neal R. Gross & Co., Inc. Page 334 1 distribution, I mean, we're talking about 2 efficiency ranges of a couple percent. 3 (Off-record comments.) 4 MR. CYMBALSKY: So, I think the 5 other ones that we filled in on the bottom in 6 particular, they might already be there. That 7 might already be one that we did. 8 So, it may only be five or six, 9 but I think - 10 MR. DeLASKI: I think the phrasing 11 here isn't quite right on one of these. 12 MR. CYMBALSKY: All right. So,

13 let's do that. 14 MR. DeLASKI: You wrote "highest 15 energy savings not reducing competition among 16 the suppliers." 17 FACILITATOR PARKER: Highest energy 18 savings with positive LCC. 19 MR. DeLASKI: Okay. 20 FACILITATOR PARKER: That's how it

21 should read. 22 MR. CYMBALSKY: Just give me a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 335 1 second and let's do this - 2 FACILITATOR PARKER: While he's 3 doing that, I wanted to come back again to the 4 material availability thing, the M3, M4. 5 Is that what that was getting at, 6 that phrase? 7 MR. DeLASKI: Can I finish on that

8 one? 9 MR. CYMBALSKY: All right. Let's 10 do it, Andrew. Which bullet? 11 MR. DeLASKI: My concern is highest 12 energy savings not reducing competition among 13 suppliers. 14 That's a stricter criteria than 15 what we discussed last time or what I 16 intended, which was that I was -- the highest 17 energy savings with multiple competitive 18 suppliers. 19 FACILITATOR PARKER: As in more 20 than one supplier. 21 MR. DeLASKI: Yes, that's the 22 phrasing that I think we came up with last

### 202-234-4433 Neal R. Gross & Co., Inc. Page 336 1 time and I thought worked well. 2 FACILITATOR PARKER: Well, that was 3 one of the anti-competitive, and then there

4 was another - 5 MR. DeLASKI: No, that's the one -

6 FACILITATOR PARKER: That was the

7 extreme. 8 MR. DeLASKI: The one above it is 9 the more extreme one, material availability 10 and highest energy - so, multiple material 11 availability and highest energy savings is the

12 one - 13 FACILITATOR PARKER: Yes, I think 14 we need the "multiple" in front of "material."

15 MR. DeLASKI: Yes. 16 MR. CASKEY: I think you can write 17 it like the one below, highest energy savings 18 with multiple suppliers. Get rid of 19 "competitive." 20 That's what you're looking at, 21 right? 22 MR. DeLASKI: Yes - no, editing the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 337 1 one above to be exactly the same. Take out 2 the word "competitive." 3 MR. ROY: Delete the one above, 4 copy that one, and then just delete the word 5 "competitive." 6 MR. CYMBALSKY: So delete this one. 7 You guys are really testing my skills here. 8 I'm supposed to be a manager. I don't know 9 how to do this, okay. Let's do it.

10 MR. ROY: And delete the word 11 "competitive." 12 MR. PATTERSON: May we put the - 13 may we put the term "raw material" in front of 14 the word "suppliers"? 15 MR. DeLASKI: Yes, what we're 16 talking about here is core material suppliers, 17 right? That's what we're talking about. 18 We'll just call them core material suppliers. 19 (Off-record comments.) 20 MR. CASKEY: This is John Caskey. 21 I'm not sure that that's exactly 22 what I was thinking. I mean, what I was

### 202-234-4433 Neal R. Gross & Co., Inc. Page 338 1 looking for ideally is highest energy savings 2 and still being able to meet those energy 3 requirements with more than one transformer 4 design. So, I'm not sure if that's the same 5 thing or not.

6 MR. PATZNER: Tom Patzner. 7 Basically, what John's saying is, 8 is besides material, we want to be able to do 9 full miter, partial miter, butt-lap, etcetera. 10 And so we might end up all decided it's M3. 11 But because we're going to build 12 60,000 75 kVAs, it might not be the same way 13 as a 300 kVA where we're only going to build

14 a thousand of them. 15 So, we have to have flexibility 16 because of one manufacturers is going to be 17 building a hundred of them, and another 18 manufacturer is going to be building 15,000. 19 So, I mean, no matter what we do, 20 us manufacturers are going to have to work out 21 the multiple designs just because we're going 22 to make that decision based on our volume.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 339 1 MR. CASKEY: Yes. I don't think 2 you can design a TSL around that. 3 MS. COUGHLIN: I'd just like to 4 make a suggestion. This is Katie Coughlin,

5 LBL. 6 We can scope out for the - for the 7 TSLs, we can begin by just filling out a table 8 of which efficiency levels would correspond to 9 those TSLs. And that we can do for a very 10 long list. 11 And then when you have that list 12 in front of you, it may be easier to pick out13 the ones you want to use for the full follow14 up analysis. 15 So, if you want to have a long 16 list now, what we will do is then go in and 17 plug in the efficiency levels. Depending on 18 how different they might be, we can proceed 19 from there to the subset of TSLs that will 20 actually go through the full analysis 21 procedure. 22 MR. CASKEY: I think I understand

### 202-234-4433 Neal R. Gross & Co., Inc. Page 340 1 what -- let me try this one more time. 2 So, I'd like your expert opinion 3 on the one there that says highest energy 4 savings with multiple core material suppliers. 5 Would that be better stated to say 6 "multiple core material designs"? I agree 7 that it would probably be better to say 8 design, because we might decide on it being M3 9 with a miter cut compared to a butt-lap cut. 10 So, it's not just the suppliers 11 that is going to determine that TSL. It could 12 be the way that that material is actually 13 produced. 14 Robert or Ethan, what do you -- 15 I'm just one manufacturer. So -- 16 MR. ROY: Robin, NRDC. 17 I'm really more concerned about 18 the core steel as opposed to the design of the 19 core, because I've heard so much about there 20 being only one manufacturer of the amorphous 21 steel. And the concern there being that they 22 will then be able to dominate a market.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 341 1 So, unless there's something which2 is similar about the different types of non3 amorphous steels that leads to sort of a 4 monopoly, effective monopoly position by a 5 supplier, I don't feel the same concern.

6 MR. TENDULKAR: There are two 7 factors. We are talking two - there are two 8 different factors. One is we are talking 9 about core material suppliers, but when it 10 gets to processes also there are equipment 11 manufacturer for certain processes, and there 12 are only one or two manufacturers for a 13 certain kind of equipment who want to cut a 14 miter cut. I think there is only one 15 manufacturer. And that's another problem we

16 have. 17 So, the designs is also important 18 factor in the things, and maybe we ought to 19 put another bullet for that. I do not know. 20 MR. PETERSEN: I think it is a new 21 topic. I don't think it's the same thing, 22 because it's wrote up on the board as really

### 202-234-4433 Neal R. Gross & Co., Inc. Page 342 1 talking the supply of your core material. As 2 what you're talking about is how I take that 3 core material and what are the different 4 configurations, designs I can do to meet the

5 market need. 6 So, I think it's really a 7 secondary issue that John Caskey is bringing 8 up. 9 MR. TENDULKAR: It's two issues. 10 Separate issues. 11 MR. PATZNER: It's definitely going 12 to impact us based on the timeline. So, this 13 industry is different than the medium-voltage 14 industry because I believe there is a fair 15 amount of us still butt-lapping our designs. 16 And if we get to a level where we 17 have to convert to non-butt-lapping, that 18 employment impact thing is going to be huge 19 because we have people stacking butt-lap. 20 Machines actually will create the meters for

21 us. 22 So, this topic will come up a lot

### 202-234-4433 Neal R. Gross & Co., Inc. Page 343 1 more in depth when we do the manufacturing 2 impacts. But if we can put a TSL where we 3 actually ask for multiple design techniques, 4 it would be beneficial long term. 5 And Vijay is correct. Right now 6 for miter cut core machine manufacturers, 7 there's two. One in Amsterdam and one in 8 Germany. 9 MR. BALLO: This is Tim Ballo. 10 I'm wondering do you actually have 11 the engineering analysis that we have now? Do 12 we have the capability to look at butt-lap 13 cores and all the different permeations of 14 core material?

15 I'm not sure - 16 FACILITATOR PARKER: Matt, can you

17 comment on that? 18 MR. NARDOTTI: Matt Nardotti, 19 Navigant. 20 So, right now each of the design 21 option combinations has a specific core design 22 like a miter core or butt-lap core associated

### 202-234-4433 Neal R. Gross & Co., Inc. Page 344 1 with it. 2 We haven't exhausted every core 3 design that's possible with every core steel. 4 So, up to like an M2, we didn't consider every 5 conceivable like a butt-lap or a fully mitered

6 core. 7 So, I don't think with the data we 8 have right now, you'd be able to necessarily 9 say that like Efficiency Level 6 you'd be able 10 to design it with mitered core or a butt-lap

11 core.

12 MR. BALLO: That would seem to 13 create some problems for trying to use this as 14 a criteria to make TSLs.

15 FACILITATOR PARKER: Does the 16 industry have any data that they could provide 17 on this? 18 MR. PATZNER: I don't know if we 19 need it in TSLs. We need it to be discussed, 20 and it's going to come up when we bring up the 21 manufacturing analysis. And when we do the 22 employment analysis in these topics.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 345 1 So, just be aware that it could 2 impact, because the low-voltage transformers 3 do not have all the miter core-cutting 4 equipment already in place, because we are not 5 - the largest volume is below 150 kVA. And 6 that today, has the most maximum amount of 7 waste to build the devices. 8 And when we get to the 9 manufacturing analysis, that's going to be our 10 biggest concern making sure we have multiple 11 configurations for those high-volume units. 12 When we get to the higher volume 13 units - I mean the lower volume units like the 14 300 kVA and above, I'll be honest, I'm already 15 miter cutting them. 16 So, if I have to switch from an M6 17 to an M3, that's possible. But when I'm using 18 a butt-lap on a 75 kVA and, as I said earlier, 19 the industry has 60,000 of them, I know -20 marked units are a higher volume than the low21 voltage transformers, but they're already 22 doing these. They're already producing these

### 202-234-4433 Neal R. Gross & Co., Inc. Page 346 1 multiple cores. We are not. 2 MR. SMITH: Richard, this is Bob 3 Smith.

4 FACILITATOR PARKER: Yes. 5 MR. SMITH: I would like to add 6 that there is another core configuration that 7 will have even more of an impact or an 8 investment if the manufacturers have to go to 9 it, and that is a wound core. 10 Here, you're not only talking 11 about a new core cutter, but you're talking 12 about annealing ovens. And in that case, 13 you're also talking about a limited number of 14 suppliers who can furnish wound cores as most 15 of the dry-type manufacturers do not have 16 enough volume to justify the investment in 17 core cutting an oven. 18 So, I think that's - we just need 19 to remember there's another configuration that 20 can have a greater impact on the investment 21 that we may have to make. 22 FACILITATOR PARKER: Well, I think

### 202-234-4433 Neal R. Gross & Co., Inc. Page 347 1 there's a number of manufacturing impacts, I'm 2 gathering, that will have to be considered. 3 The question is whether we try to define the 4 TSL around them or whether we just consider 5 them when they come up in the analysis as 6 we're choosing them on other TSLs. 7 Again, if we have a reasonable 8 range of TSL, there's a lot of criteria that 9 one could apply in choosing among them and 10 you're not slavishly, you're not required to 11 choose one single TSL for every product line, 12 right? You can choose among them. 13 So, we just have to have that 14 analysis when it comes up, but it might overly 15 complicate and burden us up front if we try to 16 prejudge that now. 17 So, what I would propose is that 18 we particularly since we're short of time, is 19 that we see if we can agree on this going 20 forward with the understanding that we will 21 consider these other things when the analysis, 22 you know, if we get data that supports it when

### 202-234-4433 Neal R. Gross & Co., Inc. Page 348 1 we're discussing manufacturing impacts as part 2 of the criteria. And we certainly will have

3 to do that. 4 MR. DeLASKI: I wonder if we should 5 add to this list just gapfill. I mean - 6 FACILITATOR PARKER: Gapfill, yes. 7 MR. DeLASKI: If you end up at the 8 end, these are all clustered in the top one 9 percent point and these are all the top 50 10 percent, we want something telling us what's 11 happening in the bottom.

12 FACILITATOR PARKER: And there 13 could be more than one. Again, if we're 14 covering a range and looking at the impacts 15 along that range, we can always interpolate 16 based upon manufacturing impacts or something 17 else. We will have covered the range. 18 The last thing I want to cover 19 real quickly is what - at some point we're 20 going to have to get clarity on what 21 constitutes competitive impacts. And we're 22 just, you know, we're going to have to have a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 349 1 specific criteria that will translate into 2 something quantitative and, hopefully, not 3 arbitrary. 4 I don't think we have time to 5 really try to come to consensus on that now, 6 but we will. Let's try to have an online 7 discussion of that as we go forward. And 8 let's do it, if we could, report for the next 9 meeting so that we could table that and 10 hopefully get some analysis of it going to 11 report to the next meeting. That would be 12 nice since we're running short of meetings

13 here. 14 Steve, we're going to have to 15 very, very quickly - 16 MR. ROSENSTOCK: I guess in terms 17 of competitiveness, is there a way to talk to 18 the Justice Department? Because they have 19 done some rulemakings on DOE where they said 20 there are competitive concerns based on their 21 analysis. So, they might have some criteria 22 already that might be available.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 350 1 I'm just trying to think, you 2 know, like the last incandescent reflector 3 lamp they said they had some competitive

4 concerns because of the TSL that was chosen

5 for the standard. 6 FACILITATOR PARKER: That's a nice 7 suggestion, okay. 8 MR. ROSENSTOCK: So, maybe they 9 have some criteria that they could pass on to 10 you. 11 FACILITATOR PARKER: I will ask my 12 contact there and see. That's a nice idea. 13 Okay. So, just to wrap up very 14 quickly, I think we've had a good session. 15 There's a lot of - I will try to get the 16 minutes up for this meeting by the end of next

17 week. 18 We have a working group formed to 19 try to resolve the data discrepancies that -- 20 and the analytical discrepancies with -- 21 problems that seem to be surfacing. And 22 hopefully that group can also get us something

### 202-234-4433 Neal R. Gross & Co., Inc. Page 351 1 out in writing so that we can ponder it before 2 the next meeting. 3 We need to really at the next 4 meeting, wade into the TSD work. I think none 5 of us really were on top of it for this 6 meeting, but let's really immerse ourselves in 7 it for the next one. 8 Our reply to circulate as part of 9 the minutes, a list of the issues that were 10 raised here. And, please, when you respond to 11 that, feel free to raise additional issues. 12 And let's have - let's try to have 13 sort of, I guess, an online discussion if we 14 can, about what issues require further 15 analysis and what is possible since we can't 16 finalize that here. 17 We have only a couple of weeks 18 before the next meeting. So, it's going to be 19 pretty intense. And I will actually try to 20 expedite getting the minutes and the reactions 21 out to you so that we can be ready for the 22 next meeting. Anything else we need to cover

### 202-234-4433 Neal R. Gross & Co., Inc. Page 352 1 before -- yes. 2 MR. PATZNER: Richard, will there 3 be guest WiFi at the meeting facility we're 4 going to next time? 5 FACILITATOR PARKER: Yes, I think 6 there will be. I don't have Bob Saint here, 7 but I understand there will be WiFi.

8 MR. PATZNER: I knew there wasn't 9 going to be any here, but is there capability

10 at the other - 11 MR. CYMBALSKY: I don't want to say 12 yes, because they're not here, but - 13 FACILITATOR PARKER: I would hope

14 so.

15 MR. CYMBALSKY: It would be 16 infinitely nicer than this. 17 MR. PATZNER: Well, I'm not coming. 18 And that's why I want it, because I want to be 19 able to IM with - 20 FACILITATOR PARKER: Oh, I see. I 21 will ask Bob Saint if there will be 22 facilities. Great. Sorry we missed Dunkin'

### 202-234-4433 Neal R. Gross & Co., Inc. Page 353 1 Donuts, but I thank everybody for a great 2 session and we'll see you next time. 3 (Whereupon, the proceedings were 4 adjourned at 4:44 o'clock p.m.)

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186:15,18 201:9 202:18 205:17 254:6 292:18 293:1 60s 263:21 60,000 338:12

345:19 60-70 120:18 7 7 55:20 67:6 131:2 140:5 180:9 252:20 257:11,11 258:5,14 315:7,7 315:17 7s 207:7 7:00 103:4 70 185:18 186:15 186:19 201:9 75 54:16 55:20 68:6

70:1 77:16,22 79:8,15 81:2,7 82:1,3,8 83:8 197:21 221:4 257:11 338:12 345:18 75's 315:15 750 62:16 73:20 750s 63:18 8 61:7 73:17,21

115:3 140:5 219:17 220:4 251:15,22 256:2 257:11,12 8E089 1:13 8th42:10 46:2 80 60:21 78:4 97:6

97:16 103:20 191:11 192:16 254:6 260:5 322:17 80s 233:16 80-degree 210:7 80-90 177:20 85 97:7 9 9th42:13,22 44:14

46:3 9:0046:5,16 47:6,6 9:20 1:14 3:2 90s 225:6 90.1 239:15 98.6 166:22 183:21NEAL 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 398

Negotiated Rulemaking Working Group

Richard W. Parker, Facilitator

09-28-11

Washington, DC