## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 1 U.S. Department of Energy Office of Energy Efficiency And Renewable Energy Regional Standards Enforcement Working Group

Enforcement Plan Public Meeting Friday, October 24, 2014

The meeting was held in the Forrestal Building, 1000 Independence Avenue, SW, Washington, D.C., at 8:27 a.m., Neil Eisner, Facilitator, presiding.

Reported by: Lynne Livingston

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 2 1 Appearances: 2 Neil Eisner, Facilitator 3 Doug Rawald, Department of Energy 4 Timothy Ballo, Esq. Earthjustice 5 Gary Clark, Goodman Manufacturing 6 Jordan Doria, Ingersoll Rand 7 John Gibbons, Carrier Corporation 8 John J. Hurst, Lennox International 9 Cynthia Hsu, U.S. House Committee on Science, 10 Space and Technology 11 Matt Lattanzi, Nordyne 12 Jonathan Melchi, HARDI 13 Karen B. Meyers, Rheem Manufacturing Company 14 Elizabeth Noll, Natural Resources Defense Council 15 Bryan Rocky, Johnson Controls 16 Aniruddh Roy, Goodman Manufacturing 17 Steve Porter, Johnstone Supply 18 Amy Shepherd, Esq., AHRI 19 Don Surrena, National Association of Home 20 Builders 21 Charles R. White, PHCC 22 Dave Winningham, Allied Air Enterprises

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 3 1 Gary Fernstrom, California IOUs 2 Charles McCrudden, Air Conditioning Contractors 3 of America 4 Laura Degitz, Navigant 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 4 1 PROCEEDINGS 2 MR. EISNER: We can get started. We 3 have a limited number of microphones. You're 4 going to have to use the microphones, especially 5 because it's such a big room so the court 6 reporter can get all of this, just a reminder to 7 people. 8 So again, I thought the best way to 9 start was to see whether anybody had any comments 10 on the recommendations that we had approved. You 11 have another few days to take a look at them. 12 Any problems, any issues you want to 13 raise on the recommendations we passed, so to 14 speak? 15 MR. RAWALD: So John Gibbons called me 16 to point out a mistake on one of the slides that 17 I want to make sure we correct from the 18 manufacturer label slide, if we can go there real 19 quick. 20 MR. EISNER: Do you want to give a 21 number if you have it? 22 MR. RAWALD: I don't have a number. I

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 5 1 don't have that in front of me. It's going to be 2 near the end. It's a lower scroll in looking for 3 it in our group of slides. 4 There you go, 30. So in the second 5 bullet where we state, we say states install 6 prohibited in pertinent regions, we southeast or 7 southeast and southwest, and it should be 8 southwest or southeast and southwest. So we make 9 that change. 10 Neil also pointed out a couple of 11 changes he thought needed to be made. I don't 12 know if you want to go over those. 13 MR. EISNER: No, I'm fine. Most of 14 them, a couple of them are just little edits. 15 Okay, a minor thing on slide 25, just to 16 be consistent it should say, routine violator. 17 No confusion there. 18 The next slide, right to appeal. 19 MR. RAWALD: Neil, if you could explain. 20 MR. EISNER: The heading on the slide, 21 it says, routine violation continued, the prior 22 slide says routine violator, just a minor thing

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 6 1 there. 2 The next slide, right to appeal, the 3 second bullet is just an if clause. It's 4 basically staying the penalty but it doesn't say 5 there, and I don't remember the exact wording we 6 had agreed to. So do we want to make a 7 suggestion as what that should say? Right now it 8 just says, if a notice of intent is filed within 9 three business days of notice of finding of 10 routine violation. And there should be something 11 after that or before that. 12 MR. RAWALD: Right, and this is Doug. 13 And I actually figured out in the manufacturer 14 liability slides, I think we can delete that from 15 this slide because it relates to the ability of a 16 manufacturer to have the ability to sell certain 17 products then if they're appealing. 18 MR. EISNER: Anybody object to deleting 19 that second bullet? 20 MR. RAWALD: Because it's addressed 21 later on, not that we're -- we address it within 22 context.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 7 1 MR. PORTER: Right, because I think it 2 was actually that second bullet was part of that 3 bullet, what it was, they must file an appeal. 4 MR. EISNER: Okay. And then on slide 5 32, and this one also there's some suggestions 6 for changes but there's a word missing in the 7 first dash under the first bullet, second line 8 should be, before it will be is missing, B-E. 9 Those were the minor things that I saw. 10 Okay, taken care of that. 11 We can go to the remaining issues. If 12 anybody has a preference we can start with the 13 slides that Amy circulated yesterday or we can 14 just go through the issues in order that they 15 appear on slide 35. 16 MR. RAWALD: If I could jump in, this is 17 Doug with the Department of Energy. So in 18 looking at the big picture I forgot some various 19 important narrow picture things, so and this 20 related to Bryan Rocky's discussion of 21 manufacturer-owned distribution. 22 What I want to make sure is that

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 8 1 everyone understands that we do have a definition 2 of distributor under the Energy Policy and 3 Conservation Act. The definition reads, the term 4 distributor means a person, other than a 5 manufacturer or retailer, to whom a consumer 6 product is delivered or sold for purpose of 7 distribution and commerce. 8 So if you have a company, one company 9 that both manufactures and distributes, they are 10 a manufacturer under our regime. And so their 11 distribution arm -- 12 MS. MEYERS: Did you say they are or 13 they aren't? 14 MR. RAWALD: They are a manufacturer and 15 the distribution arm, if the branch is not a 16 different company, would not be a distributor and 17 would not ever been found to be a routine 18 violator. They would be under the manufacturer's 19 umbrella and have to the manufacturer's 20 prohibited act. 21 So essentially you wouldn't have a 22 middleman. You have the manufacturer would be

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 9 1 selling directly to the dealer. And so that is 2 how that would be dealt with so. 3 So I think that I hopefully kind of 4 resolves some of these issues that we were 5 discussing with Bryan Rocky's hypothetical. 6 There would be no -- so if, if we take 7 Bryan Rocky for example, if Johnson Controls had 8 a factory that also had a distribution window, we 9 wouldn't say Johnson Controls St. Louis is a 10 routine violator, we would say Johnson Controls 11 shouldn't sell to the dealer who we knew to be a 12 routine violator. 13 So that's dictated by the statute, so 14 that should alleviate a concern, I think. 15 MS. SHEPHERD: Right. And then so if -- 16 MR. RAWALD: I can give you the mic, 17 Amy. 18 MS. SHEPHERD: Okay, it's going to be a 19 long meeting. 20 So then if that same structure is in 21 place but there's a corporate entity that's 22 distinct, does that change anything?

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 10 1 MR. RAWALD: So in your hypothetical you 2 have company A that owns company B, company A is 3 a manufacturer, company B is solely a 4 distributor. 5 MS. SHEPHERD: Yes. 6 MR. RAWALD: Is that correct? Those 7 would be independent companies under the 8 definition of EPCA. 9 MS. SHEPHERD: Okay. So in that 10 scenario then the distributor would, could be -- 11 MR. RAWALD: The distributor could. The 12 distributor could be found to be a routine 13 violator, and the company would be told not to -- 14 selling to that company would be a prohibited 15 act. 16 MS. SHEPHERD: Okay. 17 MR. PORTER: And how would joint 18 ventures be handled? 19 MR. RAWALD: Yeah, so I don't know the 20 answer to that question. I don't know enough 21 about corporate law to say how a joint venture's 22 structured and how that works. So if it's -- if

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 11 1 a company is a manufacturer, it can't be a 2 distributor, so my gut tells me if it's a joint 3 venture and a manufacturer's in it, then it's a 4 manufacturer. 5 MR. PORTER: It just depends on -- well, 6 I mean because there's joint ventures where the 7 distributor is the majority. 8 MR. RAWALD: Right. Yes, so I don't 9 know enough about corporate law, so I'll have to 10 look at that. So we can look into that issue if 11 it's a concern today. But I haven't dealt with 12 that issue in corporate law so I can't say what 13 the actual answer will be. 14 MR. PORTER: Okay. 15 MR. EISNER: Okay. Any comments, any 16 questions? 17 MS. SHEPHERD: I have one follow-up. So 18 on this scenario where -- this is Amy Shepherd. 19 From the scenario where the entity is separate -- 20 so okay, so in the scenario when there's not a 21 distinct corporate entity then the manufacturer 22 would just be subject to the penalty when there

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 12 1 is a distinct corporate entity then the 2 manufacturer could be subject to the penalty and 3 there'd be a routine -- there could be a finding 4 of a routine violation on the distributor, but as 5 we have this drafted that distributor would not 6 have a penalty? 7 MR. RAWALD: That's right. 8 MS. SHEPHERD: Okay. 9 MR. RAWALD: That's absolutely correct. 10 So, because essentially what you're doing is that 11 subsidiary company serves the distribution role 12 in the process but when they don't, it's a 13 separate company, there's simply a sale from the 14 manufacturer to the dealer, in our mind. 15 MR. ROY: So, Doug, just a follow-up 16 question, we have a distributor that's a 17 different name than the corporate name that we 18 have on the manufacturer, it would still be 19 considered as a manufacturer in that case? 20 MR. RAWALD: Only if they're not 21 separately incorporated. So if they are a 22 separate company, so they're a separate -- if

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 13 1 they're not a branch of your company, they're 2 actually a separate company, then they're a 3 separate company. 4 But a company that's a manufacturer and 5 a distributor is a manufacturer. So I don't know 6 enough about that particular hypothetical to say 7 what you're doing there. So, that's the 8 question. 9 So if you have a company, and this is 10 what I envision, you have a factory that has a 11 distribution window in it, so they build the 12 widgets and they sell them out the window, then 13 that clearly is a manufacturer, right? That's a 14 very simple case. 15 So but I can see it on a more corporate 16 level where you have a company that has a 17 distribution arm and a manufacturing arm and all 18 they're doing it transferring stock from one to 19 the other, so that's still a manufacturer. 20 But when you have a company that owns 21 another company and so you're essentially selling 22 stock to them through whatever process you have

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 14 1 in place, then those are two separate companies 2 and they'd be the manufacturer and the 3 distributor. 4 MR. LATTANZI: Put it another way, as 5 long the distributor is not a subsidiary of the 6 manufacturer, a subsidiary company, right, then 7 it's one company and it's a manufacturer? 8 MR. RAWALD: Right, exactly. 9 MR. DORIA: So this is Jordan. I think 10 this just makes sense to me. I think it would 11 just be helpful to have, much like we have with 12 some of the other definitional pieces, just some 13 preambular language to talk this through. 14 MR. RAWALD: Yeah, I think that makes 15 sense. And once again, this is a defined term in 16 EPCA so I think that we're really, you know, 17 we're dealing with what we have, but I definitely 18 don't mind us saying let's make sure we explain 19 this to people so they understand kind of the 20 parameter because this is all new concepts. 21 MR. EISNER: And, Jordan, this is 22 something you'd like to see the language on the

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 15 1 screen that would go in the preamble or are you 2 just saying -- 3 MR. DORIA: I guess from Doug's 4 description, at least my opinion is I'd be 5 comfortable with the department writing this up, 6 just reflecting what was said,you know, because 7 again, I think it is dictated by statute, but 8 we've been doing this for two months and kind of 9 just got to here, so I think it would be useful, 10 you know, to have it in the preamble. I don't 11 know, I don't feel like we all have to sit down 12 and word smith it today, and maybe that's just 13 because I want this to end today. (Laughter). 14 MS. MEYERS: So this is Karen with 15 Rheem. So I think it's kind of -- I don't think 16 it was our intent to define what entities are 17 doing based upon their corporate structure. I 18 think that's kind of outside what the working 19 group should be focusing on. 20 So I'm wondering for the purposes of 21 this rule if we can read it, we can define 22 distributor differently than the way it is on

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 16 1 that slide? Because to me, you know, the 2 enforcement is based upon what job that 3 particular entity is doing and it should not be 4 based upon their financial structure or their 5 corporate structure. 6 I think that's really, that's really 7 going to complicate this, and there's JVs, 8 there's subsidiaries, there's same companies, yet 9 all of these distributors, despite their 10 ownership, are performing the same thing. 11 There's independents. And so I think this is 12 going to really complicate things. And it's just 13 my question. 14 MR. RAWALD: Right. So this is Doug, 15 and the concern we have is so the prohibited act 16 we have in the statute says manufacturers are 17 prohibited from selling to distributors, dealers 18 and contractors who knowingly, routinely -- 19 routinely violate the regional standard. 20 So the statute uses the term 21 distributor. When the statute uses the term 22 distributor, it means the term that it had

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 17 1 defined earlier, which a distributor is somebody 2 who's not a manufacturer. That's part of the 3 statute's term. 4 So I'm constrained by the law here 5 because the law tells me a distributor's you 6 can't sell to and the distributor is someone 7 who's not a manufacturer. And so that's what I'm 8 coming back here to remind you of, that I had 9 forgotten that we talked about this much earlier 10 in the meeting but I think that's something where 11 we have, that's the reality of the statute. So I 12 can't get around that. That's just the existence 13 of the statute. 14 So if you want to flesh out some things 15 that make you feel more comfortable we can talk 16 about that, but as far as redefined distributor, 17 in this context we just, there won't be any way 18 to do that. 19 MS. SHEPHERD: This is Amy Shepherd. Is 20 it possible to clarify manufacturer definition? 21 Or is this -- because I mean I understand the 22 concepts certainly.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 18 1 MR. RAWALD: Right. 2 MS. SHEPHERD: But this is very specific 3 and this isn't I think -- and you know, we really 4 haven't been, we haven't addressed this issue 5 kind of in this context of liability and 6 responsibility before. It's sort of new. And so 7 I think that's kind of why it at the last minute 8 came up. So is that an avenue that can be 9 explored? 10 MR. RAWALD: So a manufacturer is 11 unfortunately also a defined term. 12 MS. SHEPHERD: Right, I know. 13 MR. RAWALD: To manufacturer and to 14 manufacture means to manufacture, produce, 15 assemble or import. So we're constrained with 16 those, but I'm open to I guess ideas if you folks 17 want to caucus a little bit and talk about maybe 18 something that might work. 19 MS. SHEPHERD: Yeah. 20 MR. RAWALD: But we have these terms 21 that are pretty well accepted. And I don't mind 22 explaining them to the best of our ability and if

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 19 1 we think there's something that needs to be 2 explained to help make this clearer. I mean I 3 don't want to spend my time when I'm doing a case 4 trying to figure out the corporate structure of 5 these entities either, so. 6 MS. SHEPHERD: Right. 7 MR. RAWALD: That complicates 8 enforcement. So but from a very simplistic point 9 of view, a distributor cannot be a manufacturer. 10 So if somebody both manufactures and distributes, 11 then they are a manufacturer. 12 MS. SHEPHERD: So do you think the 13 department would be open to an avenue where we 14 leave these definitions as they are but the 15 treatment is the same? So that if you have 16 manufacturer-owned distribution it would be 17 treated the same, so if this is the default that 18 we have, then manufacturer-owned distribution 19 wouldn't be subject to a routine violation but 20 the manufacturer has a penalty and that's the way 21 the entire class is treated? 22 MR. RAWALD: That's how we'd want to go,

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 20 1 you know, manufacturer-owned distribute. 2 MS. SHEPHERD: Okay. 3 MR. RAWALD: But you're saying even if 4 the distributor is a separate company? 5 MS. SHEPHERD: Yes, because I mean, and 6 I think to Karen's point functionally this is 7 exactly the same company. 8 MR. RAWALD: Right. Let me bring that 9 question back. 10 MS. SHEPHERD: Okay. 11 MR. RAWALD: Because I think that's an 12 area that we could work with possibly. So let me 13 go back and talk to folks about that. 14 MS. SHEPHERD: Okay. 15 MR. CLARK: This is Greg Clark from 16 Goodman. To Amy's point, you know, there are 17 several manufacturers with several different 18 histories of incorporation, and to think, you 19 know, based on this history that one branch 20 organization would be treated differently than 21 another's branch organization just doesn't really 22 seem like it would fit the spirit of what was

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 21 1 written in the law, right? 2 MR. RAWALD: Right. And, Gary, I get 3 it, and frankly I think it's easier for me to do. 4 The concern for me is I don't want to be in a 5 position where I'm bringing an action against a 6 manufacturer because their subsidiary distributor 7 has done what they have, and the manufacturer 8 says, but they're our distributor, I don't -- I 9 shouldn't pay this money for them. 10 So I want to make sure that we all 11 understand that. 12 MR. CLARK: Right. 13 MR. RAWALD: Okay. What we're saying is 14 that we're going to accept that liability for our 15 subsidiary company by doing this. And so long as 16 everybody understands that and I'll write that, 17 we'll write that into the rule, that's the 18 consequence. I don't want people saying, well, 19 but the statute says you can't. So I want to 20 make sure that the department is okay with us 21 taking that position and then I'll come back to 22 you guys with an idea on that, so at a break I'll

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 22 1 go ahead and talk to folks about that. 2 MR. EISNER: Assuming the department 3 agrees to do this would anybody object to it? 4 MR. DORIA: Sir, could you define what 5 this is? 6 MR. RAWALD: Okay. So the ask for Amy 7 is that if a distributor is a separate branch of 8 a company or a company owned by the manufacturer 9 company, it still be treated as part of the 10 manufacturer. So the only distributor that would 11 be a distributor would be one that's 12 independently unowned in any way, shape or form 13 by a manufacturer, or I guess in any way, shape 14 or form is too far, but unowned by a 15 manufacturer. 16 MS. MEYERS: Yeah, that's what I'm 17 saying. So instead of having -- this is Amy 18 Shepherd. Instead of having some distributors 19 treated some way and some -- I mean manufacturer, 20 distributor, we can't -- it sounds like we've got 21 a roadblock going one way, so we go the other 22 way. And so you'd be subject to penalties if you

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 23 1 fall into that category, but they wouldn't be 2 labeled a routine violator, the distribution arm. 3 MR. RAWALD: Right, right, but if you're 4 a distributor who's independent of a manufacturer 5 then you are concerned with independent, with the 6 concern of routine violation, but you're not with 7 civil penalties. 8 MS. SHEPHERD: Do we need to talk about 9 that? 10 MR. RAWALD: And does HARDI need to talk 11 about that? Because I don't know if HARDI has 12 distributors who are manufacturer-owned. 13 MR. EISNER: And will there be any issue 14 over what ownership means that we have to 15 resolve? How much you have to own? 16 MS. SHEPHERD: I mean it's hard to get 17 around that. 18 MR. RAWALD: Right. 19 MS. MEYERS: So only independent 20 distributors could ever be labeled as a routine 21 violator as part of a distribution network? 22 MR. RAWALD: That's the ask, as I

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 24 1 understand it from Amy. 2 MR. FERNSTROM: So this is Gary. I 3 think what the efficiency advocates are after in 4 this proceeding is equity, that is to say, so 5 that however we treat folks in this distribution 6 channel, they're all treated the same, and so we 7 don't have some that are subject to civil 8 penalties and not other penalties or vice versa. 9 And I understand the complexity of 10 whether it's manufacturer-owned distribution or 11 independent distribution, but my goal anyway 12 would be to want to have them all treated the 13 same way, whatever that is. 14 MR. DORIA: Yeah, I don't see how that's 15 possible. 16 MR. PORTER: So if we continue with this 17 conversation we should book another day. 18 MR. FERNSTROM: No (laughter). This is 19 Gary. No, we'll resolve it today. 20 MS. SHEPHERD: Well, I think maybe we've 21 talked about this but -- this is Amy Shepherd. 22 But there's still a penalty, it's just a

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 25 1 different one, right? It's, instead of the 2 routine violator they pay the fine. 3 MR. RAWALD: Right. 4 MS. SHEPHERD: So it's just a different 5 any of that, given that the statute carves out 6 manufacturers. 7 But then you're going to have people who 8 are -- you'll have entities that are more alike 9 that are treated differently in the first, in the 10 way we have it right now, this would at least 11 treat something that's more alike, more alike. I 12 don't think we're going to get to perfect. 13 MR. RAWALD: Right. I mean this in fact 14 in some way helps gives Tim some of what he was 15 asking for. So I think that Tim's nodding his 16 head saying, yeah, I might like this. So maybe 17 you and Gary want to talk a little before we -- 18 about that. But I think that would be the case, 19 right, Tim, am I correct that might be something 20 you would like? 21 MS. SHEPHERD: We're waiting (laughter). 22 MR. PORTER: What would he like?

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 26 1 MR. RAWALD: He would like the fact that 2 we're saying distributors who are owned by 3 manufacturers would be the manufacturer has to 4 pay civil penalties, so there's more, you know, 5 there's civil penalties in play now for these 6 manufacturer-owned distribution. 7 MR. BALLO: Yeah, it sort of cuts out 8 one step in the process. 9 MR. RAWALD: Yeah. No, it does, and I 10 think it makes sense but I want to make sure 11 everyone understands what we're talking about. 12 MR. PORTER: I'm Steve Porter, 13 Johnstone. I'm fine with it. I mean either way 14 the violation at the contractor level if it's 15 routine, whether it's happening, they're paid, 16 fine, not fined, that stops there, right? 17 MR. RAWALD: Right. 18 MR. PORTER: So to me it's, let's move 19 on. 20 MS. SHEPHERD: Wait, I have one more 21 thing I have to ask. So this is Amy Shepherd. 22 So then what would -- the DOE would to

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 27 1 prove it, before assessing the fine they would be 2 proving what, what knowledge? So it would be 3 that the manufacturer knowingly sold to their 4 distributor knowing that that distributor, is 5 that -- 6 MR. RAWALD: No. So if the distributor, 7 if the distributor is owned by the 8 manufacturer -- 9 MS. SHEPHERD: Right. 10 MR. RAWALD: And we're saying, okay, 11 there's no -- the distributor is a manufacturer 12 because it's owned by the manufacturer, the 13 penalty would be assessed under the contractor -- 14 MS. SHEPHERD: Okay, so knowingly 15 selling to -- 16 MR. RAWALD: So if the manufacturer17 owned distributor sold to a known routine 18 violator then the manufacturer would be paying 19 the penalty for their distribution arm. 20 MS. SHEPHERD: Okay, okay. 21 MR. RAWALD: Does that make sense? Yes? 22 MR. MELCHI: This is Jon Melchi with

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 28 1 HARDI. So say, I'm just trying to walk through 2 the scenario, a manufacturer-owned distribution 3 sells to a routine violator, that routine 4 violator or contractor disappears, you know, 5 can't be found for whatever reason, is the 6 manufacturer obligated to try to remediate for 7 the consumer? If -- 8 MR. RAWALD: Right, so as I understand 9 your scenario you're saying we found a contractor 10 to be a routine violator -- 11 MR. MELCHI: Yes. 12 MR. RAWALD: The manufacturer -- 13 MR. MELCHI: Or the contractor says, I'm 14 out of the business anyway, so I'm going to stick 15 to plumbing -- 16 MR. RAWALD: Right. No, the remediation 17 only comes into play in trying to cure the label 18 of routine violator. 19 MR. MELCHI: So the manufacturer-owned 20 distribution would not have to remediate? 21 MR. RAWALD: No, no, but that would be 22 in either case, whether they're owned or they're

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 29 1 independently owned, right? 2 So in the case where a distributor says, 3 I don't want to sell to this contractor anymore 4 or I can't sell them this anymore, the 5 distributor is under no obligation to remediate 6 unless the distributor himself is a routine 7 violator. 8 MR. MELCHI: Fair point. But I'm also, 9 okay, so just hypothetically then it would be a 10 factory-owned distribution could knowingly sell 11 to a contractor and just build in 200 dollars 12 cost and just do business that way if they so 13 wanted to do that? 14 MR. RAWALD: For every unit they sell? 15 MR. MELCHI: Yes. 16 MS. SHEPHERD: Right. 17 MR. RAWALD: They could. Yeah, that's 18 true of our regulatory regime now. 19 MS. SHEPHERD: Right. 20 MS. MEYERS: So does that mean then a 21 manufacturer can be a routine violator? 22 MR. RAWALD: No. No, only distributor,

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 30 1 dealer and contractor can be routine violators. 2 A manufacturer cannot be a distributor, a 3 distributor who is a manufacturer is not a 4 distributor. It's like a Dr. Seuss riddle, I 5 know (laughter). 6 MS. MEYERS: Okay. So only independent 7 distributors can be routine violators, factory8 owned distribution cannot be routine violators? 9 MR. RAWALD: Right, they're 10 manufacturers. 11 MR. CLARK: This is -- 12 MR. FERNSTROM: So this is Gary -- 13 MR. RAWALD: We've got both Garys at the 14 same time. 15 MR. FERNSTROM: I'm sorry, Gary. We've 16 received a little note from our associate David 17 Hungerford that he's having trouble hearing us, 18 even though we can hear each other in the room, 19 so I'd ask everyone if you're speaking to please 20 grab the microphone so that those online can 21 hear. Thanks. 22 MR. CLARK: So what it seems to me would

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 31 1 be helpful for everybody is if we could put 2 together a little table that has the different 3 entities, dealer, contractor, independent 4 distributor, company-owned distributor, 5 manufacturer, and then all the different 6 activities, fines, prohibited acts, all those on 7 the other axis, and then fill in what activities 8 apply to which group, just so that on one sheet 9 of paper -- I can tell you that that's what I'm 10 going to do when I get home anyway so I can talk 11 to my boss about this because, you know, it kind 12 of cuts through, you know, a lot of the words on 13 the sheet of paper, right. 14 Just so that, okay, a contractor, this 15 is what will happen, independent distributor, 16 this is what will happen, and so on and so forth. 17 I think it would be very helpful for everybody at 18 this point. 19 MR. RAWALD: Right. So this is Doug, so 20 we'll do that, either at the next break or at 21 lunch and then we'll have that for everyone 22 because I think would be simpler.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 32 1 So is there anymore questions on this 2 particular concept or do we want to move on to 3 anything else? Tim has a -- 4 MR. BALLO: This is Tim. I just wanted 5 to respond to the point about manufacturer-owned 6 distribution building in 200 dollars into the 7 price of the product. I didn't think about this 8 but DOE does have injunctive enforcement 9 authority as well, so at that point you could 10 potentially be violating a court order. 11 MR. RAWALD: Right. I mean if we knew 12 you were -- so, right, we can do things besides 13 fines. Tim is absolutely correct. 14 MR. HURST: The 200 bucks would drive 15 them just next door. 16 MR RAWALD: Right. And John Hurst made 17 the point that the 200 dollars is going to drive 18 away business essentially, so I don't think it's 19 going to be an incentive for manufacturers to 20 build in that into their business model. 21 Any other question on this concept? But 22 I will go back to the department to make sure

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 33 1 that they're okay with the concept of making sure 2 that when we say a distributor can't be a 3 manufacturer that we mean a distributor both who 4 is part of a manufacturer's corporate entity, but 5 also owned by a manufacturer's corporate entity. 6 That's the ask, okay? 7 MR. EISNER: All right. Any other 8 questions? 9 Back to where we were. Amy, do you 10 think it would be best to start with your slides 11 because I think they cut across some of these 12 issues? 13 MS. SHEPHERD: That's fine. May I have 14 the mic? So the slides we circulated, so we'll 15 just put aside the information that we added 16 about manufacturer distribution given the 17 discussion we just had and talk about the other 18 main point, which was that the idea here is 19 simply to provide the department with discretion 20 and the ability to, as we've said here, let the 21 punishment fit the crime. 22 So I guess we could call this the Mikado

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 34 1 solution because, in Harvey's absence we'll call 2 it that. 3 So basically the idea is that the 4 initial assessment or the initial assumption 5 would be if there's been a first violation that 6 the products that could be banned to that entity 7 would be split-system or single package air 8 conditioning, and that DOE would have the 9 authority based on the facts that it used to 10 determine the routine violator status, and we 11 added, any additional facts, because we had the 12 discussion about the location last time. So we 13 would want DOE to be able to determine whether or 14 not a 13 ban or a 14 ban is the most effective 15 thing. That's the first step in the process. 16 We think that gives DOE the ability to 17 kind of look at the situation with the facts that 18 it has and assess what the appropriate penalty 19 would be, much as they do today. 20 And then in particular though, if it was 21 a repeat routine violator, so it had been found 22 to be a routine violator before, or if the

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 35 1 violation was particularly severe, like it was 2 willful and egregious, or it was something that 3 was really beyond the norm, that DOE would have 4 additional authority for deterrent purposes or 5 again, you know, to match the conduct, to take 6 action in that regard. 7 So that's the main point of it. And 8 that's the first slide and that's the first 9 bullet point really, coupled with the last slide 10 where it talks about routine violations. 11 So basically what DOE would be doing 12 would be upon finding a routine violation it's 13 going to look at two things. It's going to look 14 at the scope of the conduct and severity of the 15 conduct. 16 And in terms of looking at the severity, 17 it'll look at these factors. In looking at the 18 scope they're going to determine which entity is 19 responsible, is this something that's widespread 20 throughout an organization, is it multiple 21 locations, is it isolated, is it isolated to a 22 particular employee, whatever that may be.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 36 1 And then the notice of finding of 2 routine violation would say what the scope of the 3 product limitation was, as well as identifying 4 exactly who it is that is prohibited from 5 receiving this product. 6 And we think that specificity is 7 important because manufacturers have to know who 8 they can't sell to, and particularly the name and 9 address. A lot of companies may have the same 10 name so unless you have something really specific 11 like the name and address, you're not necessarily 12 going to know where it is. 13 So we think that that is a good balance 14 in terms of what DOE needs to be able to do to 15 assess the situation, but also to be fair. And I 16 think it's important that there is a perception 17 that this is a fair process and that it isn't 18 that every routine violation, whether it's one 19 guy at one location doing something multiple 20 times or it's widespread corporate corruption, 21 that no matter what, it's going to be the 22 ultimate solution. And I think that that will

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 37 1 not create a sense of fairness that you really 2 want for an effective enforcement program. 3 MR. EISNER: Any questions or comments? 4 MS. SHEPHERD: No. 5 MR. EISNER: Anybody oppose the concept 6 that Amy's come up? 7 MR. RAWALD: Right, so this is Doug, and 8 I have to talk to the department still to make 9 sure that everybody is comfortable with the idea 10 because, as I explained to you before, we view 11 product to be the broad 430.32(c) and so what 12 we'd be using here is our enforcement discretion 13 to narrow the field of things by which we would 14 assess civil penalties against manufacturers for 15 selling to folks we found to be a routine 16 violator in particular instances. 17 So I've asked the question. We have to 18 talk more about it because we didn't get this 19 until the middle of the day yesterday, but I 20 hopefully will have an answer for you by middle 21 of the day today, and we can tell you the 22 department's position.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 38 1 But if the rest of the room wants to 2 come to their conclusion while we weigh on that, 3 that would be helpful for me to tell the 4 department what they feel about it. 5 So the way I see it is, so the going in 6 would be if we found someone to be a routine 7 violator, then the manufacturer would be put on 8 notice and the manufacturer could not sell them 9 anything that was a split-system or a single 10 package, regardless of SEER value. 11 And then if they were an egregious 12 routine violator then the department would say, 13 don't sell them anything at all. That's under 14 430.32(c), which as you folks represented is only 15 about 25 percent more of the air conditioning 16 market is what I think Karen said. So basically 17 split-systems are 75 percent of what we'd be 18 selling under that heading anyway. 19 So that's kind of the thing with the 20 department is most of the stuff they're not going 21 to be able to sell them anyway at that point, so 22 as long as that seems to be accurate, I want to

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 39 1 make sure I'm delivering the right mail to the 2 department, so if there's a different number, 3 please let me know. That's the number I heard 4 from Karen last week. 5 MR. EISNER: Now putting aside the words 6 on the slide, does anybody have a problem with 7 the idea that DOE, if they agree to it, using 8 their discretion to set the penalty in terms of 9 the definition of product? Anybody oppose that 10 concept? 11 Okay, we're depending on you now. 12 MR. FERNSTROM: So this is Gary 13 Fernstrom. I think it was Gary down at the other 14 end of the table that suggested a table or chart 15 might be useful where we show contractors, 16 distributors and manufacturers, and in cells 17 underneath those headings identify what triggers 18 some sort of penalty and what those penalties may 19 or may not be. That would be very helpful to me 20 if we could have that and then I could better 21 understand how it all fits together. 22 MR. RAWALD: And this is Doug, and I

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 40 1 will have us take that on as well in making our 2 master chart for everyone. 3 MS. SHEPHERD: It's going to be a long 4 lunch. 5 MR. RAWALD: Well, hopefully the meeting 6 will be short and we'll get this sooner. 7 MS. SHEPHERD: Right. 8 MR. EISNER: Okay, Amy, that was 9 manufacturer liability slide. Is there anything 10 you want to add on routine violation, slide 25? 11 MS. SHEPHERD: No, it's all -- 12 MR. EISNER: All tied together? 13 MS. SHEPHERD: Yeah, yeah, you 14 understand how I got there now. 15 MR. RAWALD: I do, and so but I think 16 you also had opposed prohibited act but I think 17 it would not be necessary given -- 18 MS. SHEPHERD: Given our earlier 19 discussion. 20 MR. RAWALD: What we discussed before. 21 MS. SHEPHERD: Yes, correct. 22 MR. RAWALD: So we can obviate that. So

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 41 1 that leads us, is there anything else that you 2 put forward that you want to discuss on here? 3 MS. SHEPHERD: Not in the slides. 4 (Off the record.) 5 MR. ROCKY: So this is Bryan from 6 Johnson Controls. I was just asking we've had 7 some discussions on the whole issue of 8 enforcement at a location for a distributor 9 location regardless of whether it's company or 10 independent owner. 11 I think that's been covered now 12 adequately under this other discussion so I don't 13 think we need a separate. I was asking if we 14 needed a separate continuation of that discussion 15 and it appears not. 16 MR. RAWALD: Okay. 17 MR. EISNER: All right. Going back to 18 slide 35, I guess it is, the second to last one, 19 meeting extension issues, Doug, and again, some 20 of this stuff interacts with what we've been 21 hearing, but you were going to follow-up on two 22 things with respect to routine violator.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 42 1 MR. RAWALD: Right. So this goes 2 actually to what Bryan Rocky was just mentioning 3 where we had the added discussion language 4 regarding DOE considering whether it's simply a 5 branch or a larger company that's having an 6 issue. 7 So we put forward the language that you 8 see on the screen right now. So there you go. 9 And the ask was, can we take out, or the 10 department had actually offered the revised 11 language from what the, what folks had put 12 forward. 13 And the department's revised language 14 said, DOE may consider. The ask from the 15 manufacturers were, can we get that to be shall 16 again. I went back to the department and they 17 said, we really prefer to have it stay with may. 18 So I'm kind of stuck here. I've, there's a real 19 reluctance to make it an absolute requirement 20 because we don't, just from playing out some 21 hypotheticals, so. 22 MR. ROCKY: This is the would or shall?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 43 1 MR. RAWALD: Right, exactly. So where 2 it says DOE may consider, so. I mean I will tell 3 you as a practical matter that we will consider 4 all of these things but the department doesn't 5 want to have a requirement that we shall because 6 of the fact that someone could turn this back 7 around on us and force us to make an actual 8 showing in some way of how we consider these 9 things. So there's a concern of how much that's 10 going to put our process to the test in a manner 11 that would make enforcement much more difficult, 12 I think. 13 MS. SHEPHERD: So I think it's important 14 for the folks that you're talking to, to really 15 understand the consequence of the punishment 16 under this situation. 17 And I think that it is absolutely not 18 unreasonable if you were talking about cutting 19 off someone from the entire supply chain in the 20 United States for a particular product, that the 21 department is required to look at the same 22 factors it's already considered in determining

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 44 1 that before it takes that action. 2 I mean this isn't a monetary fine. This 3 is very serious and it could really impact 4 someone's ability to survive as a business, 5 particularly your small business. 6 So I don't think it's that much of a 7 burden, and I think in terms of the perception of 8 fairness for the department to say, well, we 9 don't want to be forced to have to consider 10 whether this was limited in scope before we, you 11 know, take away that much product, I think that's 12 a really important fairness perception that the 13 department should consider. 14 MR. RAWALD: No, and I understand that. 15 This is Doug. And I am trying to make that 16 point. What I think would be helpful here is for 17 the group to decide if they are of consensus on 18 this point and then I will go back to the 19 department, as I've done before, and try to 20 persuade them to join the consensus. 21 So if everything else in that second 22 bullet were the same but we had the word, should,

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 45 1 rather than may, if the group would agree to 2 that, I guess then I will go back to the 3 department and say, this is what the group's 4 agreed to, I think here's why we should do it. 5 MR. EISNER: Any thoughts on that before 6 we vote? 7 MR. BALLO: So this is Tim with 8 Earthjustice and I don't have a problem I guess 9 with turning, making the requirement to consider 10 mandatory. I just want to make it clear in the 11 language that DOE then has discretion having 12 considered the issue to act and according to its 13 judgement of how to proceed. 14 MR. RAWALD: Right, and I think that's 15 Amy's ask is that it will simply be something 16 that we always think about but we don't always 17 have to do. And that's how I've explained it. 18 But I think that we can, I think we'll do that 19 and make sure it's clear. 20 MR. BALLO: Yeah, I guess my concern was 21 I mean if the department is happy with this 22 language, I just thought maybe the language up

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 46 1 there could have been a little more clear on the 2 department having that discretion. 3 MR. RAWALD: Right. 4 MR. EISNER: Is there language, Amy, 5 that would be acceptable if it were added to the 6 preamble on how they would apply this? 7 MS. SHEPHERD: I don't know. It's hard 8 for me to -- sorry, this is Amy. I just, I don't 9 see this as that complicated of an issue, but I 10 think we're certainly in agreement with the 11 department has to consider these and then it 12 would make its judgement call. I mean that's 13 what they do today, so. 14 MR. EISNER: Okay. Pass the microphone 15 down to the end. 16 MR. SURRENA: Don Surrena, National 17 Association of Home Builders. You just changed 18 the word may to shall, was that a correction or? 19 MR. RAWALD: That's the language that 20 we're asking the group to come to consensus on so 21 I could bring it back to the department. The 22 department's preference was for may, the

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 47 1 distribution and manufacturer ask last week was 2 that we make that may a shall. 3 So I'm asking if the group will come to 4 consensus on the language as drafted so I can go 5 back to the department and say, here's where we 6 are, can we live with this. 7 MR. SURRENA: And in enforcement shall 8 gives you latitude -- I mean excuse me, shall 9 does not give you latitude, may gives you the 10 latitude. 11 MR. RAWALD: That's right. 12 MR. SURRENA: We would be against shall 13 and would prefer may. 14 MR. RAWALD: Okay. And the reason for 15 it is, is not because it's latitude in finding, 16 it's latitude in considering. So what they're 17 asking for, the manufacturers, is that DOE always 18 be considered, always be required to think about 19 this, not to act upon it, but to think about it, 20 And what the department is saying we 21 want the flexibility to, if on occasion we decide 22 we don't want to think about it, to not think

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 48 1 about it. And that's unacceptable to 2 manufacturers, understandably. 3 And so I want to make sure -- but 4 regardless, nobody's saying the department's 5 required to make a finding that the smaller 6 company be, or the branch, or the further branch 7 be the one responsible. 8 MR. SURRENA: With that explanation and 9 having been absent for over a month, I accept 10 shall much better than may (laughter). 11 MR. RAWALD: Right. Right. I presume 12 most people are going to come out that way but I 13 want to make sure we have consensus so I can go 14 back to the department and tell them where 15 everyone is before I come back and lodge our 16 objection or not. So I want to make sure that 17 everyone understands where we are. 18 But I think, so I guess if we could just 19 say if everyone, if anyone else has an objection 20 to this, let it be known now or else I'll go back 21 to the department on our break and push for this 22 to be accepted.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 49 1 MR. EISNER: Does anybody want to say 2 anything else on this before we vote? 3 MS. SHEPHERD: Can I just clarify that. 4 So one of the slides I had, the last slide -- 5 this is Amy Shepherd. 6 One of the slides I had was the last, 7 that I sent around was the last slide would 8 actually replace this. The -- with that kind 9 of -- with the two approach that you consider 10 both things. 11 It's the same concept but I just tried 12 -- so right now it's sort of, it would be split. 13 So basically all the slide is getting at is 14 saying the department does the exact same thing 15 and then once it considers those factors, it 16 determines the location and it determines the 17 scale or the severity. Does that make sense? 18 So I don't think I'm necessarily I'm 19 wedded to that, but I just wanted to clarify the 20 relationship between those two when you're 21 considering it. 22 MR. RAWALD: So for ease of proffer, for

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 50 1 ease of I guess getting this accomplished, do you 2 want to offer this as an alternative to the 3 language and what do you want people to do? So 4 because we want to make this easy for people to 5 vote on this one. 6 MS. SHEPHERD: No, I understand. 7 MR. HURST: Perhaps you two could sit 8 together (laughter). 9 MS. SHEPHERD: I do want to put that 10 back to you, what you think is the best way to 11 present it to the department, right. 12 MR. RAWALD: Okay. I'll bring back both 13 language. 14 MS. SHEPHERD: Yeah, I want -- 15 MR. RAWALD: That's fine. 16 MS. SHEPHERD: What's your best sell. 17 (Off the record.) 18 MR. EISNER: All right. So we're not 19 voting on a specific one, we're voting on whether 20 the department should use shall or may 21 essentially? 22 MS. SHEPHERD: Yes.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 51 1 MR. EISNER: Does anybody in the room, 2 other than Doug right now object to using the 3 shall? 4 Okay, you've got unanimous support for 5 using shall. We'll go back and find out what DOE 6 thinks about this. 7 All right. Next on the list was three 8 business day response on the slide on right to 9 appeal. Right to appeal is slide 26. We took 10 three day response off, the three days off of 11 there, but that now appears on another slide. 12 MR. RAWALD: Right, so the conversation 13 we had on this was that initially the ask was we 14 can turn this off in three days, then it was, 15 boy, it's going to take us a lot longer than 16 three days. 17 And my response was, well, the 18 department is going to have a problem with the 19 concern with a surge in sales during that time 20 period where you're trying to turn things off. 21 So what our preference would be, would 22 be to use our discretion such that we could, if

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 52 1 we were to assess a civil penalty for a 2 manufacturer selling to someone after that three 3 day window, the manufacturer could come to us and 4 say, I was trying to turn things off and this is 5 what happened. 6 And we could say, okay, in our 7 discretion we're not going to bring a case 8 against you for those late sales. 9 But if it looked like the person bought 10 suddenly the entire season's worth of merchandise 11 in that intervening period while you were trying 12 to turn things off, we would then not be so 13 lenient. 14 And so I think that it seemed like that 15 allayed John and Karen's concerns at the time we 16 discussed it, but I guess I want to go back to 17 John Hurst and Karen Meyers and make sure that, 18 because it was their point in the first place, 19 make sure they're comfortable with how that 20 explained it. 21 MS. MEYERS: We're fine with the three 22 days.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 53 1 MR. RAWALD: Okay. 2 MR. HURST: We are as well. 3 MR. RAWALD: Okay. Given what I 4 explained about using our discretion? 5 MR. HURST: Yes. 6 MR. RAWALD: Okay. 7 MR. EISNER: All right. Now we have, I 8 guess we're basically talking about manufacturer 9 liability and that's where you're okay with the 10 way it's written. It has three business days 11 from date of violation -- of issuance. 12 We still have other issues on this 13 slide, so I'm not sure we're ready to take a 14 vote. And everybody's in agreement that slide 15 25, we've eliminated that language, is that 16 correct? 17 So just for clarity on the right to 18 appeal slide, slide 26, the vote was unanimous. 19 Does anybody disagree with that? 20 I just want to make sure we're all 21 understanding what we have. We're going to go 22 over the package later, the whole package, but

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 54 1 right to appeal should be acceptable right now. 2 Okay. 3 And then on slide 32, that's where the 4 three business days appears and everybody's okay 5 with the language on three days. We're just not 6 settled on the slide itself. 7 MR. MCCRUDDEN: This is Charlie with 8 ACCA. I actually have a question about -- 9 This is Charlie with ACCA. So going 10 back to slide 26, when you say we took off the 11 three business days, are we saying that now that 12 there's no need to file this notice of intent to 13 appeal of the routine violation? 14 MR. RAWALD: So the purpose of the 15 notice of intent to appeal was not to bar you 16 from being able to appeal but allow you to 17 purchase things during the timing of the appeal. 18 And so what we're saying is, if you file 19 your notice of intent to appeal within three 20 days, then you can still buy product that's above 21 the compliance level from the manufacturer and 22 the manufacturer won't face liability.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 55 1 So it's a way for the manufacturer to 2 say, okay, I feel comfortable, I'm going to keep 3 selling to you because you're going to appeal. 4 And so you have to file that notice. 5 Now if you don't file that notice within 6 three days then the manufacturer is not going to 7 be able to sell you anything because they're 8 going to be at risk. 9 MR. MCCRUDDEN: So on slide 26, we did 10 not remove that bullet. 11 MR. RAWALD: It's just in the 12 manufacturer's liability. That's what it comes 13 down to. 14 MR. MCCRUDDEN: Okay, okay. 15 MR. RAWALD: It's not a bar to 16 appealing. You can certainly appeal, you just 17 won't be able to but product while you're, 18 because you didn't say, hey guys, sell me 19 product, you're safe. 20 MR. PORTER: Yeah, that line they took 21 out should have been one bullet and a 22 continuation, that was the full sentence.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 56 1 MR. MCCRUDDEN: Okay. All right, I'm 2 good then. Thank you. 3 MR. EISNER: All right. Next issue was 4 product definition and I think we've taken care 5 of that. 6 So the fourth issue is state 7 enforcement. Gary, do you want to tee that one 8 up? 9 MS. SHEPHERD: No, actually that's 10 probably our issue. But I think we should do 6 11 and then 1.2 first because those are kind of 12 other pieces to this rule. State enforcement is 13 sort of a different animal. 14 MR. EISNER: Okay. So number 6. 15 MR. RAWALD: Right. So number 6 relates 16 to the fact that we have language on slide 33, 17 34 -- 34 now because we've added a slide. 18 So and it comes down to that 19 parenthetical, all certified combinations. And 20 here's how I was trying -- what we're trying to 21 convey, the concept here for folks. 22 So we're going to do our notice of

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 57 1 noncompliance exactly the way we do in the 2 national context, which is we find basic models 3 to be noncompliant. 4 So a basic model, as the department 5 defines it, is typically a combination of an 6 indoor and outdoor. That's how you certify your 7 basic models as a manufacturer, you say this is 8 my outdoor unit, this is my indoor unit and 9 here's how they perform together. 10 And if you say that's going to perform 11 14, then we test it, that basic model, that 12 combination of the outdoor and indoor unit, and 13 it tests at 13.8, then we're going to say, well, 14 that's noncompliant with the regional standard. 15 So the question is, what is the outcome 16 then? And as the department will do is we'll 17 issue a notice of noncompliance, again, for the 18 basic model. So we'll say that basic model, just 19 at that combination is noncompliant. 20 But the manufacturer will be responsible 21 for up until that point, all the sales into the 22 south of that outdoor unit because the outdoor

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 58 1 shouldn't have been in the south because it now 2 had a least efficient combination below 14. 3 So that's when we said, well, we've made 4 -- please hit the bar. We said, you know, for 5 there to be sales of the outdoor unit in the 6 south it's least efficient combination that's 7 rated must be 14, and now we have a least 8 efficient combination that's 13.8. 9 So the condensing unit itself, which is 10 how we do things now because right now we still, 11 you pay for all the condensing units essentially. 12 And then you de-list it and then it's back to 13 selling that condensing unit again in the south 14 because now the least efficient combination 15 that's rated is the one that's above 14 that you 16 had previously. 17 So that's what we mean by this. So what 18 I'll do is I'll take out the words, in all 19 certified combinations, so we'll take out that 20 parenthetical. And I think that will resolve the 21 problem. 22 MR. ROCKY: Yeah, you can give the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 59 1 microphone to Dave or myself, it doesn't matter, 2 either one. 3 MR. RAWALD: You're so polite, Bryan. 4 MR. ROCKY: So responding to that, 5 that's an acceptable situation for us. 6 MR. RAWALD: Okay. 7 MR. ROCKY: It again reminds us that 8 we're using the same process for national versus 9 regional activities and that does solve the issue 10 with the manufacturers as far as different 11 processes considered. So we accept that. 12 MR. RAWALD: Okay. 13 MR. EISNER: Okay. Slide 33 then, 14 product determined noncompliant. We had already 15 voted on that as unanimous. Does anybody object 16 now with the changes? Should we keep it as 17 unanimous? Anybody object to keeping it as 18 unanimous? Okay. 19 MR. RAWALD: Okay. So Amy asked that we 20 approach the issue of how do you remediate, 21 particularly the language that Laura has put on 22 the slide for you. One of the last slides or

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 60 1 earlier, wherever it is she put it. 2 Here we go, this is a new slide 24. 3 That's why the slide numbers have changed. So 4 we're looking at this, and so I put in language 5 that would explain how would a routine violator 6 be able to obtain units to address a desire to 7 remediate if the manufacturer would be liable for 8 selling to them. 9 So here's my proposal based upon our 10 discussions, so it's open to discussion. 11 Essentially what I've said is that if the routine 12 violator wants to remediate, he'll contact the 13 person who in the notice he receives, that he 14 should contact if he wants to remediate and let 15 us know, I want to remediate. I want to replace 16 Mrs. Smith's unit. I'm going to buy it from 17 Carrier. Can you please get in touch with 18 Carrier? 19 And I'll contact Carrier, and I'll call 20 John Gibbons, and I'll say, John, this person's 21 going to buy it from you, here's what they're 22 going to do, let them do that for this purpose.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 61 1 And I'll give you an official letter so John has 2 it in his books. 3 So John says, okay, DOE won't charge me 4 for selling this thing, and then they'll make 5 sure the sale happens. 6 The person will remediate and the person 7 will let us know they remediated. 8 That's the process as I see it taking 9 place. So DOE is involved because I think it's 10 important that we be involved in this to make 11 sure it's done properly. 12 MR. CLARK: The only question I have on 13 this, this all looks fine to me, it's just the 14 amount of time. Should this be time-bound also? 15 You know, you'd hate for this to kind of drag on 16 and on and on. 17 MR. RAWALD: I'm comfortable with 18 putting a time on it, I just want to hear from 19 the contractors and from the dealers and from the 20 distributors about how long they think would be a 21 reasonable amount of time for this process to 22 unwind.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 62 1 So I mean because basically there's no 2 time limitation on when someone wants to cure 3 their finding of a routine violator. If someone 4 comes to me a year after the finding and says I 5 want to remediate now, they can do it. 6 But once they decide they want to do it 7 and they buy the product, I think that's when the 8 timeline should begin. Like how soon after you 9 buy the product should it be remediated? That 10 seems to be the time issue to me, Gary. Does 11 that make sense to you? 12 MR. CLARK: I think that's part of it. 13 I think that if the routine violator wants to fix 14 something and, you know, contacts the enforcement 15 officer and the enforcement officer takes a year 16 to get back to him, I think that's unacceptable. 17 MR. RAWALD: No, that's fair too. 18 That's fair. And so I don't mind -- 19 MR. CLARK: It's the whole thing I'm 20 really looking at. 21 MR. RAWALD: Okay, right. And I don't 22 mind, I mean we're pretty quick in responding to

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 63 1 this kind of thing so I don't mind putting that 2 we'll respond within a certain number of days to 3 that kind of request. That's fair. 4 MR. MCCRUDDEN: This is Charlie with 5 ACCA. I like what Gary put out there. I think 6 there should be some time frame for DOE because I 7 think if there's an interest in remediating and 8 getting off that routine violator list, quicker 9 is better. As you presented in the slide though, 10 I'm okay with that. 11 MR. PORTER: How about three days? 12 MR. RAWALD: For the department to get 13 back (laughter)? So I will bring that request 14 back. 15 MR. EISNER: I'm going to use the 16 Chair's authority to call a five minute break. 17 MR. RAWALD: Well, before we do that 18 what would be the reasonable time frame for once 19 the distributor, once the dealer obtains the unit 20 to actually complete their remediation and inform 21 the department their remediation has been 22 completed? I think that's part of it, too.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 64 1 MR. WHITE: This is Chuck White with 2 PHCC. If it's a one off, 30 days gives you lots 3 of time to work it into your schedule, but if 4 you're talking about a larger quantity of things 5 to fix, working that in, I mean it's to the 6 contractor's interest to try and do it as quickly 7 as he can, so I guess -- 8 MR. RAWALD: How about language like 9 this, DOE will follow-up with the party within 30 10 days to determine if remediation is now completed 11 or the status of remediation, something like 12 that? 13 MR. WHITE: Yeah, that's fine. This is 14 Chuck White. I think I could agree with that. 15 MR. RAWALD: Okay. 16 MR. WHITE: You probably could key it to 17 the date of your official letter. 18 MR. RAWALD: Okay. 19 MR. EISNER: All right. Five minute 20 break. 21 (Off the record.) 22 MR. RAWALD: I have mixed news. So I

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 65 1 brought back the information we discussed and 2 brought back, so as you look on the slide now 3 that Laura has up, which is slide 26, the top 4 language is what we had agreed, what the group 5 had come to a consensus on. 6 I brought it back to the department. 7 The department said they're willing to agree to 8 the language below, so if you could look at that 9 and decide if that would something the group 10 would be amenable to reaching a unanimous 11 decision on. 12 MR. EISNER: Okay, any questions, 13 comments? 14 MS. SHEPHERD: So I have a question. So 15 basically this is -- so this is Amy Shepherd. So 16 basically this is setting it up that if it is 17 limited to one location then DOE has the ability 18 to say it's just one location, but if it was more 19 than one location they're not going to -- they 20 wouldn't -- let's say it was two occasions, what 21 happens then? 22 MR. RAWALD: Right. So what we were

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 66 1 comfortable with from the department's point of 2 view is that if it's limited to one location, 3 that's not a corporate problem, but multiple 4 locations may indicate a larger problem. 5 So we don't want to start thinking 6 about, okay, well, if it's these three locations 7 or these five places. So if it's one location 8 it's very easy to say it's really just one 9 location, it's just St. Louis. But if it's 10 St. Louis, Dallas and, you know, Arkansas, but 11 not the other three places, it becomes a little 12 more difficult for us. So I think this is the 13 compromise we can offer. 14 MR. EISNER: Any other questions? 15 Anybody have a problem they want to talk about? 16 MR. LATTANZI: Maybe just a question. 17 This is Matt Lattanzi. Just a quick question, 18 what was the, or can you expand upon the reason 19 why the words, in scope, was removed from the 20 language? 21 MR. RAWALD: Right. It just, it seemed 22 like what we were really talking about here, once

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 67 1 we'd gotten past the definition this morning of 2 distributor, were things that were different 3 branches in different places is what we were 4 talking about. 5 So if there's a different reason why 6 we'd want scope to be back in there, I can go 7 back and explain it, but I couldn't adequately 8 explain why that would be necessary given 9 everything else we've talked about today, so 10 that's why we had removed that. 11 MS. MEYERS: So but this just applies to 12 independent distribution, and contractors and 13 dealers, is that correct? 14 MR. RAWALD: Right, to those parties 15 that are at risk of being found to be a routine 16 violator. 17 MS. MEYERS: But didn't we say a routine 18 violation had to be more than one? 19 MR. RAWALD: So a routine violation is 20 more than one instance, absolutely. So but the 21 question is, so we're limiting it in scope to one 22 location so if it seems like it's the St. Louis

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 68 1 branch that's done this 25 times, then the entire 2 corporate entity shouldn't be held responsible if 3 the department thinks it's limited to the 4 St. Louis branch and the big company takes care 5 of insulating it to only the St. Louis branch, 6 for example. 7 MS. MEYERS: Okay, thank you. 8 MR. EISNER: Other problems? Anybody 9 want to voice any objections or do you still need 10 more time? 11 MS. SHEPHERD: I'd like to know what the 12 analysis was on the manufacturer distribution 13 before I decide. 14 MR. RAWALD: Right, so we're okay with 15 what we discussed this morning. 16 MS. SHEPHERD: Okay, okay. 17 MR. EISNER: Ready to vote? 18 MR. PORTER: No. This is Steve Porter 19 of Johnstone. 20 Can you help me understand, I mean we 21 talked about earlier this morning about a company 22 on distribution and if a manufacturer owned it,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 69 1 they'd just be a manufacturer. 2 So what actions would be taken besides a 3 200 dollar fine if I'm across the street 4 competing with a company on distribution and they 5 continue to routinely violate, is there any other 6 action that you have that you can take against 7 them? 8 MR. RAWALD: Right, so we have 9 injunctive relief and we also, we, all our 10 actions are noticed, so they would receive a 11 notice which would be public saying, hey, you've 12 been found to be doing this, and this is what it 13 is. So we have a public notice. 14 They wouldn't receive the routine 15 violator label because the purpose of that 16 violator label is to tell a manufacturer not to 17 sell to that person. So ostensibly manufacturers 18 are not selling to their -- if a manufacturer19 owned distributor, the manufacturer owns it, so 20 that label wouldn't apply. 21 But otherwise they would be labeled and 22 their conduct would be publicly noted as these

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 70 1 are people, let's look at them. 2 MR. PORTER: So then what's the 3 injunctive action that you take? 4 MR. RAWALD: Right. The department has 5 the ability to get, to seek injunctions to stop 6 sales. 7 MR. MELCHI: Doug, this is John Melchi 8 with HARDI. So would that injunctive action, I 9 guess you would have some leeway to determine 10 whether it would be limited to that one branch or 11 to all factory-owned distribution? 12 MR. RAWALD: Right, because we'd be 13 going to court with the Department of Justice's 14 help to -- 15 MR. MELCHI: If you find that it's 16 egregious you could say that we would seek this 17 injunction against all XYZ manufacturing? 18 MR. RAWALD: I wouldn't even want to put 19 in the wordy egregious because that wouldn't be 20 necessary. We'd just do what is necessary. We 21 would just -- 22 MR. MELCHI: You'd have that authority,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 71 1 okay. Thank you. 2 MR. EISNER: No other comments? Does 3 anybody object to this language? Okay, so we've 4 got this addition. 5 I think this is, we're at slide 25, 6 right? So with the addition of that routine 7 violator, we now have unanimous agreement on that 8 set of those two slides combined. 9 Anything else that you need to report 10 back on? 11 MR. RAWALD: Right, so the request from 12 Amy this morning was whether the department's 13 willing to narrow its discretion as our 14 understanding, our interpretation of the word, 15 product, for enforcement purposes to only -- for 16 a regular routine violator, to only prohibiting 17 sales of split-systems and single package. 18 And I talked about this with the 19 department before and I talked with them again 20 today to various people within the department who 21 are in important positions and I'm still being 22 told no, that we cannot agree to that at the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 72 1 moment. 2 So as I see the options for that 3 particular provision as put forward by Amy is the 4 group can either decide they want to vote as 5 consensus that they think the department should 6 do this, and then over the course of our, as we 7 get ready for rulemaking I can continue to try to 8 say, okay, this is what we can do, we have a lot 9 of pressure to do this, or the group can look at 10 a different answer. 11 But at the moment the department was not 12 prepared to limit our enforcement discretion for 13 collection of civil penalties for sale of 14 products to routine violators by manufacturers to 15 only the product classes that have regional 16 standards, namely the single package and the 17 split-system central air conditioners. 18 MR. EISNER: Anybody have any questions 19 or comments on that? Okay. 20 As of this morning it was unanimous, 21 except for Doug, to support it. Does anybody 22 want to change their vote?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 73 1 I think you want to voice -- I'm sorry, 2 Tim. 3 MR. BALLO: I think the efficiency 4 advocates just need to caucus very quickly on 5 that. 6 MR. EISNER: Okay. How long do you 7 need? 8 MR. BALLO: Three minutes (laughter). 9 (Off the record.) 10 MR. BALLO: This is Tim, and I think we 11 had a lot of discussion to get to a question, 12 which is I guess if we don't use this language 13 and we go back to the slides that this was 14 attempting to modify, are there strong objections 15 still to that language, given what we've heard 16 from the department, or has that changed anyone's 17 position on arguing that DOE needs to have some 18 constraint on its discretion for going to the 19 ultimate solution or the ultimate punishment for 20 a routine violator? 21 MR. RAWALD: And you don't have to feel 22 obligated to answer without caucusing first

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 74 1 obviously, if you want to discuss your viewpoint. 2 MS. NOLL: So this is Elizabeth at NRDC. 3 I think the question on the table is, and on my 4 slides it's slide 32, I'm not sure exactly, 5 manufacturer liability, back yeah, if the slide 6 stays as stands. 7 We haven't yet taken a vote on this. 8 This is what the department is asking for, am I 9 correct in that statement? 10 MR. RAWALD: You are correct. 11 MS. NOLL: Okay. So do we vote on this 12 slide? And if so, are there still significant 13 objections to this slide as written? 14 MR. EISNER: Are there any objections to 15 it as written? 16 MR. RAWALD: And if you need to caucus 17 first, once again, you can. 18 MS. MEYERS: So this is Karen with 19 Rheem. I would still object to this slide as 20 written because you are defining product as 21 everything included in a central air conditioner 22 under 10 CFR 430.32(c). This includes split-

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 75 1 system air conditioners, split-system heat pumps, 2 single package air conditioners, single package 3 heat pumps, through-the-wall, which is now air 4 conditioners and heat pumps, which are now being 5 defined as either small duct, high velocity 6 systems, or space constrained products. 7 This brings in the manufacturer -- there 8 are manufacturers out there who solely play in 9 this market. So I'm thinking Unico, Bard, 10 different companies like that where this is the 11 only product they make. 12 And so they are now being --they will 13 now, this could affect their factories and their 14 production on these units if they have a customer 15 who routine violates the regional standards 16 issue. 17 MR. RAWALD: So Karen, if I could, 18 because that's what I had not raised before. So 19 if I understand you correctly, there are 20 companies that do not make products that would 21 fall in the product classes that are regulated by 22 regional standards who would face possible civil

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 76 1 penalties for sale to someone that we deem to be 2 a routine violator of the regional standards? 3 MS. MEYERS: That is correct. 4 MR. RAWALD: Okay, that's good 5 information. So I'll pass that back as well. 6 MS. MEYERS: I can, two specifically 7 that come off the top of my head are Unico and 8 Bard manufacturing. 9 MR. CLARK: National Comfort Products. 10 MS. MEYERS: National Comfort Products. 11 MR. RAWALD: Okay. 12 MS. NOLL: So, Doug, just to clarify, as 13 this is stated though, you have, versus what AHRI 14 is proposing, the only difference is in the 15 language that AHRI is proposing you still have 16 the ultimate discretion to go to the products 17 that Karen has just laid out. 18 It only has to be with willful and 19 egregious or a repeat offender. So that is 20 really the only difference that we're talking 21 about here, is that correct? 22 MR. RAWALD: Well, so the department

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 77 1 said -- there's that, but the department is 2 looking for whether or not we want to actually 3 feel there's an obligation to narrow the scope 4 for the average routine violator to just those 5 two product classes that we're talking about for 6 regional standards. 7 That's the central issue for the 8 department, whether we're willing to narrow the 9 scope of our authority in that way. 10 MS. NOLL: And as this language is 11 written here you have the flexibility to narrow 12 it should you determine that that's -- 13 MR. RAWALD: But I don't want to give 14 anyone the false assumption that we would, right, 15 so we would go to the full extent of our 16 authority at the moment. 17 And I think that's a fair disconnect 18 we're having. And so I think Karen's point is 19 directly to that. I think it's a fair point. 20 Any other points on this besides Karen's 21 objection for that, raising the new issue I had 22 not thought of before that I can bring back to

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 78 1 the department? 2 MR. PORTER: Yeah, this is Steve Porter. 3 We would have that with Frederick also. There's 4 a number of manufacturers out there that that 5 would affect, as Karen stated, so I would like to 6 support Karen's comments on this. 7 MR. RAWALD: So perhaps we could have a 8 show of hands of how many would object to the 9 slide as drafted right now so I can bring that to 10 the department. 11 MR. EISNER: Close to unanimous, not 12 quite. 13 MR. RAWALD: All but the advocates and 14 the (inaudible) okay. 15 MS. SHEPHERD: So with that -- 16 MR. RAWALD: Understanding that John 17 can't vote when Dave's present and Aniruddh can't 18 vote when Gary Clark's present (laughter) so I'm 19 not going to count you guys twice. And then John 20 Melchi can't vote when Steve Porter's present. 21 But I appreciate -- 22 MR. PORTER: I was sitting on my hands.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 79 1 MR. RAWALD: I know, he's good. He's 2 good like that. 3 MS. NOLL: So acknowledging that, do we 4 want to go ahead and modify the slide to reflect 5 the proposed language, or do you, Doug, still 6 want to take back that new information? 7 MR. RAWALD: If you can give me, how 8 about this, why don't we break, you guys work on 9 a slide that will have, that will work for the 10 consensus, and I'll go back to the department 11 with the information Karen's given me and see if 12 folks, understanding that new caveat that I have 13 not presented before, nor thought of before, if 14 that changes any sort of analysis at all. So 15 let's do that. 16 (Off the record.) 17 MR. RAWALD: Okay. So I've gone back 18 and talked with folks in the department and even 19 with the information provided by Karen, I have 20 not been able to get them to decide they are 21 willing to limit the scope of our authority at 22 the moment. So that's what I can offer you,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 80 1 nothing (laughter). 2 MR. BALLO: Well, thank you for your 3 candor. 4 MR. EISNER: All right, so this is the 5 slide that's now up there to replace, I guess it 6 would be existing slide 32. 7 MS. SHEPHERD: I can just explain. So 8 what this, all this does is it's still the same 9 slide that we have but in the first bullet it 10 inserts, for selling any split-system or single 11 package air conditioner to the routine violator. 12 So it changes that from, product. 13 And then it adds the second bullet which 14 articulates the situations in which DOE could go 15 to the entire scope of product. 16 And then the rest of the bullets are the 17 same. They should be, they're intended to be the 18 same bullets that are there now. 19 MR. EISNER: Any questions? 20 MS. SHEPHERD: Oh, there is one more 21 thing, the phrase, for purpose of this rule, was 22 inserted in front of product, so I just wanted to

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 81 1 highlight that difference as well. 2 MR. EISNER: Any questions? Everybody 3 ready to vote? Other than Doug, does anybody 4 object? All right, it's -- 5 MR. BALLO: Hold on. This is Tim, I 6 don't object but I'm going to abstain from the 7 vote on this one. 8 MS. NOLL: And this is Elizabeth and I 9 will abstain as well. 10 MR. HURST: And this is John Hurst, I'm 11 not voting (laughter). 12 MR. FERNSTROM: And this is Gary for the 13 California IOUs, wanting to support DOE but being 14 sensitive to the manufacturers' concerns, I'm 15 going to abstain also. 16 MR. EISNER: Are you going to object or 17 abstain? 18 MR. RAWALD: No, the department objects. 19 MR. HUNGERFORD: Yeah, this is Dave 20 Hungerford, and I'm going to abstain here for the 21 same reason as Gary. 22 MR. EISNER: Okay, so I think we have

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 82 1 four abstentions, DOE objects, but we have -- 2 MR. DORIA: This is Jordan Doria, if I 3 could just maybe ask a question. I feel like 4 there's really only one piece of this slide that 5 is causing everyone some consternation, and it's 6 the definition of product, not necessarily the 7 other pieces. 8 So I'm wondering if we're not, you know, 9 throwing out the baby with the bath water on some 10 of these other things that we're in agreement on. 11 MS. SHEPHERD: But I don't think DOE 12 agreements on articulating that they will 13 consider factors, right? 14 So to me, there's two issues, there's 15 from the sort of -- to me, the bigger issue here, 16 because product is, that definition of product is 17 the same one we have, right? 18 So the only issue here really is whether 19 or not there's going to be a graduated approach 20 where DOE would look at different factors to 21 determine the scope of the product ban. 22 MR. RAWALD: And this is Doug. And with

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 83 1 this slide as drafted there's also a concern that 2 if a manufacturer had actual knowledge that they 3 actually wouldn't be held liable for selling to a 4 routine violator because this is predicated upon 5 only upon findings of a routine violator. 6 We talked about, I think by and large 7 there's going to be cases where we have a finding 8 and people sell (inaudible) but if we evidence of 9 actual knowledge of routine violation on the part 10 of a manufacturer, collusion, then of course even 11 if we hadn't found them to be a routine violator 12 yet, we would still want to reserve the right for 13 the department to bring action against folks, and 14 that's how the previous slide was drafted. 15 MS. SHEPHERD: Wait, I'm not clear about 16 that. Because we -- sorry, can you articulate 17 the language you're talking about because I 18 don't, wasn't aware that I had changed something. 19 I didn't mean to. 20 MR. RAWALD: Right. So it says, once 21 DOE issues notice of finding of routine 22 violation. So our premise is there's also the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 84 1 possibility that if a manufacturer has actual 2 knowledge of a person's routine violation before 3 the department issues a notice, they can still be 4 fined for what they're doing, but if they turn in 5 to the department the person within 15 days of 6 that knowledge, they'll be obviated from any 7 actual liability of selling to that person, so. 8 MS. SHEPHERD: But that was in the old 9 slide. 10 MR. RAWALD: Right, but it's not in the 11 current slide. So the department would have a 12 problem with the constraint -- 13 MS. SHEPHERD: No, no, no, it's on the 14 next page. Is that what you mean? 15 MR. RAWALD: So if we go back to the 16 first page -- 17 MR. PORTER: No liability for products 18 15 -- 19 MR. RAWALD: Right. So if we go back to 20 the first page -- 21 MS. SHEPHERD: Okay. 22 MR. RAWALD: So the concern is this is

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 85 1 once DOE issues a notice of routine violation, so 2 if we go back to the old one. 3 So this is our old slide, right, so 4 that's exactly, so this is only related to that 5 case. 6 Now we have the bottom one, if 7 manufacturer had knowledge of routine violation, 8 so is that on the second slide, on the new second 9 slide? 10 MS. SHEPHERD: Yes. 11 MR. PORTER: Yes. 12 MR. RAWALD: Okay. 13 MS. SHEPHERD: I didn't intend to 14 change anything else. 15 MR. RAWALD: Okay, okay, that's fine. 16 That helps me with that. Okay. 17 MR. EISNER: Anybody else have anything? 18 MS. NOLL: Laura, I think you have the 19 bullets inverted. 20 MR. RAWALD: So if I heard Jordan 21 correctly, did you, were you recommending parsing 22 this out into something that we could all vote on

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 86 1 consensus and kind of narrowing the things that 2 would be non-consensus? 3 MR. EISNER: There's an alternative, 4 too, which is I think in the past negotiated 5 rulemakings there was one situation with an 6 objection, or maybe two, the objectors stated the 7 basis for their objection, and that's part of 8 this record. That is part of the report that 9 would go to ASRAC. 10 I think we're talking about a sentence 11 or two that Doug could create that we could put 12 up on a slide everybody wouldn't be voting on, 13 but everybody would see the basis for the 14 objection. ASRAC would know what part of this 15 particular slide was objectionable. 16 So if we need to separate them, if 17 that's what you prefer, we can do that. 18 MR. DORIA: This is Jordan. I guess I'm 19 inclined to say let's simply separate out. Our 20 disagreement is over the term product. 21 The other pieces I think we've been in 22 agreement on for some time, the three days, the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 87 1 fact that manufacturers can be held liable, all 2 those other things. So why don't we just vote on 3 what we can agree on and then the one piece we 4 can't, we simply do not. 5 MR. PORTER: Put it on another slide? 6 MR. DORIA: Yeah, or a (inaudible) 7 that's fine too. 8 MR. EISNER: Are you comfortable with 9 that approach? 10 MS. NOLL: This is Elizabeth. So as my 11 question is, is that as drafted this does not 12 match our existing manufacturer liability slide. 13 The sub-bullet 2 should be an a main bullet with 14 the sub-bullet no liability below it. That's to 15 reflect what was on the other one. 16 And that was -- but Laura has, as she's 17 correctly stated, matched what Amy drafted. 18 MR. RAWALD: Right. So I propose this 19 can we go off the record and just hammer out 20 separate slides so we can get this to vote on? 21 (Off the record.) 22 MR. EISNER: Okay, people can take a

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 88 1 look at the slide that's up on the screen. 2 MR. RAWALD: Okay, and this is Doug, to 3 explain what we did. So we took the language 4 that we seemingly all had agreement on for the 5 manufacturer liability purposes and isolated it. 6 The concern seems to be around the scope 7 of the actual product that can't be sold or that 8 could be fined for being sold. 9 So we separated out how we define 10 product to a separate slide, which will be the 11 next slide. 12 So we're asking first if anyone could 13 look at the general premise on the manufacturer 14 liability slide, which the department is willing 15 to agree to, and if we can come to a consensus on 16 that. 17 Then we can look at the next slide, 18 which will be how product will be, the scope of 19 product will be determined. 20 MR. EISNER: Any questions or comments? 21 Does anybody object to this new slide on 22 manufacturer liability?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 89 1 Okay, it's unanimously adopted. 2 We can look at the second slide. 3 MS. SHEPHERD: This is Amy Shepherd. I 4 probably, looking at it, would change, will, to 5 may, because I think that was the intent. The 6 intent was that they had the discretion, not that 7 they were required, right? Anyone object to 8 that? 9 MR. PORTER: No, I agree. 10 MR. RAWALD: Okay. 11 MR. PORTER: You want to change your 12 vote, Doug (laughter)? 13 MR. RAWALD: Right. So once again, I'm 14 willing to go back upstairs, talk to lawyers and 15 people who are thinking now that I work for the 16 industry and not for the Department of Energy 17 anymore (laughter) so please feel me to hand me 18 any job advertisements you have (laughter). 19 (Off the record.) 20 MR. RAWALD: So if everyone else agrees 21 with this, barring the advocates who want to 22 abstain to support the department in what they

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 90 1 decide, if the manufacturers, distributors and 2 contractors agree with this, then I will deliver 3 this one last message and probably will have to 4 come back after lunch with a decision on this. 5 So if I can have a little bit of time on that. 6 But I this is, this is the last thing, I think, 7 right? So I think it's where we are. 8 MR. MELCHI: Does the change to, may, 9 give people a little bit more -- 10 MR. RAWALD: That may help me, right, 11 exactly. May is helpful. 12 MR. EISNER: So the slide as written, 13 scope of product, other than Doug, does anybody 14 object? Not worried about abstentions right now, 15 just does anybody object to it? 16 MS. MEYERS: I don't know my vote yet. 17 MR. EISNER: Can you decide over lunch, 18 or? 19 MR. RAWALD: I mean it's 11:30, so we 20 could take an hour and a half lunch, come back at 21 one o'clock or do you want to come back at 12:30 22 if you want to take an hour. I know people want

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 91 1 to leave too, so I'm sensitive to that. So if 2 you want to take an hour lunch, have you caucus 3 at lunch, then come back at 12:30, that might 4 work. 5 MR. MELCHI: How long do you think it's 6 going to take you to -- 7 MR. RAWALD: I'll have an answer by 8 12:30. So 12:30? 9 MS. SHEPHERD: Hang on one second. Do 10 you think that we would want to propose different 11 language for him to propose, or? 12 MS. MEYERS: Well, just here's my 13 problem -- 14 MR. RAWALD: Karen? 15 MS. MEYERS: I thought we were still off 16 the record. 17 MR. RAWALD: We can be off the record if 18 you prefer. 19 MS. MEYERS: So here's my problem with 20 this, it's better, but when you go back to the 21 previous slide and you look at that third bullet, 22 no, if you look at bullet 2, sub-bullet.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 92 1 So I don't know what you're going to do. 2 So I don't know what my potential liability is, 3 so leaving this all uncertain, am I going to 4 continue to sell him heat pumps, space 5 constrained products while I'm waiting on this? 6 And then because DOE may say that's okay 7 but they may not, so now my liability is very 8 uncertain. So that's my problem with how we have 9 it worded now is because I'm still very -- I 10 don't know what to do. 11 And if it happens to be a distributor 12 who sells an awful lot of heat pumps, which 13 aren't even subject to this, you know, that's my 14 problem. Does that make sense? 15 MR. RAWALD: So what I'm hearing you 16 saying is, this is Doug, is your problem is with 17 the notice, not with the regulatory regime we put 18 forward, which is you want to be informed when 19 you see the notice on what you can and can't sell 20 the person, is that correct? 21 MS. MEYERS: Yes. 22 MR. RAWALD: Okay. And Amy, that's what

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 93 1 we're doing here. So whatever DOE decided we 2 would -- as I look at the second slide here -- 3 MS. MEYERS: But this is under the 4 appeal, right? 5 MR. RAWALD: This is not under the 6 appeal, this is just in general. So if we found 7 someone to be a routine violator, the ask as I 8 understand it from AHRI is that in the course of 9 issuing a notice of routine violation we say, and 10 this person should not be sold single package or 11 split-systems, or everything because they're an 12 egregious person. 13 And so we in the notice say that, so 14 there's no uncertainty because the manufacturer 15 received the notice and the notice said okay, I 16 can't sell this person anything or I can't sell 17 this person split-systems and single package. 18 So it's not the regular line of the 19 notice. The notice will tell you what you can 20 and can't sell that person. 21 MR. DORIA: This is Jordan. The issue I 22 see with that sub-bullet is that during the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 94 1 pendency of an appeal you would, I'll call it the 2 carve out, is that you essentially are still 3 allowed to sell products applicable to the 4 regional standard as long as they are above both 5 of the regional standards? 6 MR. RAWALD: Right. 7 MR. DORIA: Right. So then the question 8 becomes during the pendency of the appeal though 9 can you sell them heat pumps? 10 MR. RAWALD: Yeah. No, so the appeal 11 question is not an issue. So in the appeal the 12 only thing you can't sell someone when they're 13 appealing is 13 SEER split-systems and single 14 package, or below the EER value. 15 If someone is appealing you can sell 16 them everything except for noncompliant with the 17 regional standards product. 18 MS. MEYERS: Can we make that clear on 19 this slide? 20 MR. RAWALD: That's what that's meant to 21 do, but -- 22 MS. MEYERS: Because I didn't get that.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 95 1 MR. RAWALD: That's how I expressed it 2 before so if we want to make it clearer, that is 3 fine. We can do that. 4 MS. MEYERS: If you would add a bullet 5 to that, that helps sell this. 6 MR. RAWALD: Right. So the bullet, if 7 an appeal is denied -- because if the appeal wins 8 then nobody cares what you sold them because 9 they're not a routine violator. 10 If the appeal is denied the manufacturer 11 liable for products below either applicable 12 regional standard sold to the routine violator in 13 that time. 14 So I don't know how to make that more 15 clear, but I definitely would like to if it would 16 help you, Karen. 17 MR. ROCKY: Can you say products subject 18 to the base standard? 19 MR. RAWALD: Well, the base implies base 20 national standard, so we're talking about the 21 regional standard which is not going to be the 22 base standard.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 96 1 MR. WHITE: How about rated below? 2 MS. MEYERS: Okay. So I'm sure I'm 3 being very dense on this so I apologize. So 4 you're going to issue a notice that's saying we 5 can't sell them anything? 6 MR. RAWALD: Right. 7 MS. MEYERS: Then they appeal it. 8 MR. RAWALD: Right. 9 MS. MEYERS: And so now we can sell them 10 all that stuff that you said we couldn't sell 11 them, except products subject to the -- 12 MR. RAWALD: Except products that are 13 noncompliant with the base. So you can sell them 14 even split-system and single package that are 15 above 14, you just can't sell them noncompliant 16 products during the course of the appeal. 17 And then when the appeal is over, if 18 they lose then you can't sell them anything. But 19 during the course of the appeal you can't sell 20 them those things. 21 MS. MEYERS: Okay, I'm clear. 22 MR. RAWALD: So the scope of things that

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 97 1 can't be sold during that course of appeal is 2 very, very narrow. 3 MS. MEYERS: Okay, I got it. 4 MR. PORTER: So then you would be, so I 5 violate an air conditioning rule but you'll 6 punish me over heating as well? 7 MS. MEYERS: No, heating's not on there. 8 Heat pumps are. 9 MR. PORTER: Heat pump? 10 MR. RAWALD: Right. So that's what 11 we're wrangling over this product definition, 12 right? So what we're saying is that we think 13 because of the way the statute has defined 14 central air conditioner to include heat pumps, 15 those things would be included on the no sale to 16 the person who's making them. 17 So I'm, once again, so that's how the 18 product slide is -- even with the product slide 19 you're saying for that the egregious person they 20 wouldn't be able to sell heat pumps. That's what 21 the AHRI offer is. 22 MS. MEYERS: Can we go back to the next

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 98 1 slide? 2 MS. SHEPHERD: So the only thing that I 3 would -- I would prefer to have in there that 4 DOE shall consider those factors that they use to 5 determine the location. 6 So I just want to -- what I'm trying to 7 get at is that DOE has to consider the scope 8 basically, and they may limit it. And I think 9 right now it just sort of says they can limit it. 10 But I want an obligation for DOE, you know, look 11 at the factors that they already have and make a 12 decision basically. 13 MR. RAWALD: In looking at the 14 egregiousness, is that what you're saying, to 15 decide whether it's egregious or not? 16 MS. SHEPHERD: Well, decide whether 17 they're going to limit the scope. So there's 18 like that the process would basically be like it 19 is now where DOE looks at these factors and 20 decides the appropriate scope. You don't have to 21 put all these words in. 22 The idea is that they look at the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 99 1 factors, they decide the appropriate scope and 2 that's how they make it. Then they may limit it. 3 MR. RAWALD: You can -- 4 MS. SHEPHERD: Right. So it's just 5 absolutely parallel to what we have about 6 location. 7 So DOE is going to look at all the 8 things that happen and decide, okay, how do we 9 want to say that their product ban is, and is it 10 a location or is it more than that? 11 MR. RAWALD: Okay. Any other thoughts 12 edits, changes? 13 MR. PORTER: Let me think about it, Amy? 14 MS. MEYERS: I think we need to caucus. 15 MR. RAWALD: Okay. 16 MS. SHEPHERD: Okay. 17 MR. RAWALD: Before I give it to the 18 department? 19 MR. PORTER: Yes. 20 MR. RAWALD: Okay, then let's do that. 21 Do you guys want the room? 22 MS. SHEPHERD: Yeah, it would be helpful

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 100 1 if we could look at the slide. 2 MR. RAWALD: So why don't those of us 3 who are not with you leave the room for awhile. 4 How long do you guys need? Can we come back at 5 12:00? 6 MS. SHEPHERD: You think twenty minutes? 7 Yeah. 8 (Off the record.) 9 MS. SHEPHERD: Okay, so we discussed 10 this slide and I think that the manufacturers 11 feel that this issue is something that we're 12 probably just going to have to say that we can't 13 reach consensus on. 14 We think there are parties, as Karen 15 noted, that are impacted by this that aren't in 16 the room, that haven't been part of these 17 discussions, and we think also that given the way 18 this was set up at the beginning with the 19 ground rules it was limited to these products, 20 and given DOE's sort of stated intent that they 21 intend to kind of from the get-go, go for the 22 entire definition of product when they see this

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 101 1 violation, I think all those facts coupled 2 together make it most appropriate for this just 3 to be an issue that we identify that we can't 4 reach consensus on and that folks will have the 5 opportunity, including the folks that Karen 6 mentioned that aren't in the room, to comment on 7 this particular definition of product. 8 So I propose that we deal with this 9 somewhat similarly that we dealt with the 10 prohibited acts issue, note we can't reach 11 consensus and just leave it for comment. 12 MR. RAWALD: So if we can go to the 13 slide before this. So with all that, the 14 manufacturers are still content with this, not 15 exactly this slide, but all the processes in 16 particular to be put in place, it's just a 17 question of how we define the scope of the term, 18 product? 19 MS. SHEPHERD: That's right. 20 MR. RAWALD: Okay. Then I'd obviously 21 be supportive of having no consensus having been 22 the one who stopped there being (laughter) so

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 102 1 that's fine with me. 2 MS. SHEPHERD: We can always change it. 3 MR. EISNER: Other comments on this? 4 All right. Well, then let me raise the 5 issue, we've got a slide up here on which we 6 can't get agreement. What do we want DOE to say 7 in the preamble? Do we want any language? Do we 8 just want them to say there was an issue on? 9 MR. RAWALD: Right. What I hear Amy 10 saying is she'd like us to have similar language 11 prohibited acts slide saying that there was a 12 discussion on this issue and the parties were 13 unable to reach consensus on it. 14 So we could possibly even take what we 15 have and the slide today has the issue that they 16 could look at and use it as the template for use 17 in that discussion. 18 MR. EISNER: And the reason I think that 19 might be a good idea was we did have some debate 20 on how much should be in the one or two sentences 21 we added on the other subject. So do we want to 22 -- do you have that language?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 103 1 MR. RAWALD: She's actually pulling it 2 up right now. 3 MR. EISNER: Okay. What do we want to 4 substitute? 5 MS. SHEPHERD: Add -- 6 MR. RAWALD: She's in the process of 7 cutting and pasting, let's give her a chance to 8 do that. 9 MR. DORIA: So this is Jordan. Just a 10 question on, I think you might clarify when you 11 say scope of the term product, should we, just to 12 make clear that what we're talking about is the 13 use of the word, product, in the statutory 14 prohibited act? 15 MR. RAWALD: That's fine, yeah. 16 MR. EISNER: Okay. Everybody want to 17 take a look at the language on the screen? The 18 rest of the screen would be deleted, right? 19 MR. RAWALD: Right, the top portion. 20 MR. EISNER: Any comment, any discussion 21 on this? Does anybody object to this 22 recommendation for language to the preamble?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 104 1 MR. BALLO: So this is Tim. I guess I 2 think it should give the full extent of the 3 disagreement so, yeah, the alternative would be 4 that the scope of the term product encompass 5 everything within the CFR definition of central 6 air conditioning. 7 MR. RAWALD: I'm going to propose an 8 alternative, just given the way this has played 9 out. 10 MR. BALLO: So this is Tim, and I hate 11 to split hairs, but I'm sort of in the middle on 12 this. I don't, I guess where I was coming from 13 was I think the department should have the 14 discretion to go either way, that it could just 15 be single package or it could be everything. So 16 is that adequately covered here? 17 MR. EISNER: So instead of should be 18 limited, could be limited at the department's 19 discretion, or may be limited at the department's 20 discretion? 21 MS. SHEPHERD: I think there's two 22 issues. One, I think from the manufacturers we

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 105 1 have this and we have the discretion. And it 2 sounds like from the advocates it's more just the 3 discretion. But it sounds like maybe the 4 missing, what seems to be is the missing item is 5 the discretion or they have to consider these 6 factors. 7 MR. RAWALD: Well, this is Doug. So I 8 guess in all reality what we're teeing up here is 9 the ability for people to comment. 10 MS. SHEPHERD: Right. 11 MR. RAWALD: So we want to make sure 12 that we're doing what you want so you guys can 13 make comments. So if there's a way, I mean, Tim, 14 if changing should to could would solve that, I 15 think that may be a way to go. 16 MR. BALLO: I think that works for me. 17 MR. RAWALD: Okay. 18 MS. SHEPHERD: It's also referencing 19 this transcript, right, so. 20 MR. RAWALD: Right. 21 MR. EISNER: As rewritten, any concerns? 22 Are there any objections? Any objections? All

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 106 1 right, so this is unanimously adopted. 2 Do we want to go back to the chart with 3 the different categories of distributors? 4 Do we want to go to the chart and see if 5 people are comfortable with the description 6 that's up there? 7 MR. RAWALD: The table. 8 MR. EISNER: The table. 9 MR. RAWALD: And if people like, we 10 could email it out and you can review it at lunch 11 on your personal device, if that's easier. 12 Okay. So you should already have that 13 in your mailbox. 14 MR. EISNER: Do you want to do it over 15 lunch or do you want to talk about it now? 16 MR. RAWALD: It is noon if we want to 17 take a lunch break. 18 MR. EISNER: Are there still things that 19 you've got to get from DOE? 20 MR. RAWALD: I don't think so now that w 21 have that. We're done. I mean this is Doug. So 22 just to get a bookmark where we are, I think that

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 107 1 we're ready to vote on the entire package and 2 also to, as long as we're okay with this table, 3 incorporate that in the package. Does anyone 4 else have anything else they want that's on the 5 table? 6 Well, the state enforcement issue, but 7 Amy wants to talk about that after the package is 8 done. 9 MS. SHEPHERD: Yeah, I think we can talk 10 about the package, get that wrapped up and then 11 talk about it. Because that won't go in. 12 MR. DORIA: What about the 14 SEER and 13 that guidance? 14 MR. RAWALD: Guidance. 15 MS. SHEPHERD: Oh, that's right. 16 MR. RAWALD: So Jordan has asked the 17 question about the guidance document related to 18 the 14 SEER being the minimum for regional 19 standards, the one that has never actually been 20 issued. 21 So it was the department's hope that 22 basically by us voting on it early on here, so at

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 108 1 least that would provide the industry guidance 2 that was required. So I have put pressure on 3 people to release the guidance document, but once 4 that vote had taken place and folks seemed 5 content, I have stopped putting that pressure on, 6 so there is no guidance document today to be 7 issued. 8 If there is a decision that while 9 waiting for the notice of proposed rulemaking 10 that we need to have such guidance I will put 11 pressure on people again, though I hope that 12 won't forestall us from saying that we reached a 13 negotiated conclusion today because it won't be 14 issued today. 15 MR. EISNER: There is the freedom to 16 also add something to the package to ASRAC about 17 the guidance and what the group wants. 18 MS. SHEPHERD: I think the concern that 19 we have is that there is oftentimes when we have 20 an understanding with what the department's going 21 to issue, what comes out in the rule is not what 22 we had understood that to be.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 109 1 So I think there's some concern that if 2 we agree to what we're saying but that if the 3 guidance is something else, then we're going to 4 be in the situation of uncertainty. That is the 5 concern. 6 So one thing we had talked about was 7 whether we could say, this is the identical 8 statement, or this statement will be in there, or 9 something that would give that certainty. 10 MR. RAWALD: Right. So the department's 11 plan right now is not to issue separate guidance 12 but to say this is part of the negotiated 13 rulemaking, NPRM, that will say, here are all the 14 things we agreed upon premised upon this thought, 15 which is the very first slide out of the box, 16 here's the deal. And this is the regulatory 17 requirement that you cannot sell anything in the 18 south that has a certified combination rated 19 below the minimum value required for that region. 20 That being said, if you folks want to 21 dictate something more to be said, I am open to 22 that. It's something else I have to bring to the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 110 1 department. 2 MS. MEYERS: So Doug, this is Karen. 3 Are you saying there is not going to be a 4 response, a guidance document is not going to be 5 published? 6 MR. RAWALD: Right. And I could have 7 sworn I mentioned this at least a while ago to 8 Aniruddh's question because I think he asked it 9 squarely, that we should take what was here as 10 the official guidance. 11 The department is taking the position of 12 the group. We are following the group and we are 13 going to do what the group says and we are going 14 to put that out in the NPRM. 15 Now if the group feels it needs this 16 sort of interim guidance before the NPRM comes 17 out, I will go back and tell the department that 18 it's necessary, but right now that is not the 19 plan. 20 MS. MEYERS: Okay. So let me just ask 21 my engineers in the room, one is guidance to a 22 test procedure, and this is a statement in the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 111 1 enforcement for regional air conditioners. Does 2 it make a difference? 3 MR. WINNINGHAM: This is Dave with 4 Allied. I think we're all fundamentally in 5 agreement with what is here in slide 4. The 6 missing piece is the definition of 14 SEER and 7 how do we get there. 8 Now we had kind of worked through that 9 in the guidance document because there could be 10 multiple ways to achieve what is stated here in 11 slide 4. 12 MR. RAWALD: So we had put a draft 13 guidance because the group had told me it was 14 very important. 15 MR. WINNINGHAM: Right, right. 16 MR. RAWALD: And that is working its way 17 to be finalized. There will be final guidance of 18 the guidance issued. 19 And the central issue in that really 20 didn't relate at all to the condensing unit, it 21 was mostly about the coils, as I understand it. 22 That was the main issue what the guidance as we

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 112 1 issued it to this point, it was about the 2 inclusion of the word, and indoor coil on one 3 particular piece. 4 And so I think that guidance will be 5 coming out sometime in the near future but not 6 today because there are some policy issues the 7 department wants to make sure they're soundly 8 okay with it before we release that guidance. 9 And so I was told not to expect that to happen 10 before I finish negotiations today. 11 But that's going to come out. There is 12 going to be guidance on that piece. 13 MS. MEYERS: There is going to be 14 guidance? 15 MR. RAWALD: The guidance that we have 16 draft will be issued as final. There will be 17 final guidance to that. 18 I'm talking about that there was a 19 request that we draft, issue draft guidance 20 consistent with this, this 14 SEER issue right 21 here. What is 14 SEER, what's minimal out in the 22 region? And I told you I would try a draft

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 113 1 guidance and then we didn't. So we never issued 2 draft guidance for that. 3 But the two draft guidances that you saw 4 at the beginning of this process will be 5 finalized. Those will come out as final 6 guidance. 7 I don't know what the content will be 8 (laughter) but we are considering your comments. 9 We are considering your comments and it will be 10 either reflective of some intelligent 11 modification in light of those comments or be 12 what the draft said it was going be, most likely. 13 So it could be either one of those. 14 And I say most likely because those are 15 the two outcomes I see as being possible. Either 16 modification based on comments or consistent with 17 what we said before. It won't be something new 18 because that isn't what we do, okay. 19 Karen is laughing. 20 MR. PORTER: Smiling. 21 MR. RAWALD: Well, there's 14 days of 22 this. So is that enough for lunch or do we have

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 114 1 another question for me? 2 MS. MEYERS: I think that's enough for 3 lunch but we need to (inaudible). 4 MR. GIBBONS: Is there a chance that we 5 can get a hard copy of this if we're going to 6 vote on it? 7 MR. RAWALD: Of the slides? 8 MR. GIBBONS: Yeah, just because it's 9 easier for us to page back and forth as opposed 10 to jumping around. 11 MR. RAWALD: Okay, how long will that 12 take? 13 MS. DEGITZ: Hopefully an hour. 14 MR. RAWALD: Okay, so they will be back 15 in an hour, so that's the best we can do for you. 16 We can email it out to you so you can look at it 17 on your device meanwhile if that would help. 18 MR. GIBBONS: Well, that's okay. It's 19 okay with me. 20 MR. RAWALD: So we'll email it out to 21 you now. We will endeavor to have it printed. A 22 copy should be here at one o'clock. Do you want

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 115 1 to adjourn to 1:30 to meet and vote on this so 2 you have time when you come back to flip through 3 things? What's the preference of the group here? 4 MR. PORTER: 1:15. 5 MR. RAWALD: Meet at 1:15, okay. 6 (Off the record.) 7 MR. EISNER: We can get back to work. 8 The issues that we need to talk about was whether 9 there were any problems on this chart. Any 10 issues we need to raise? Any questions about it, 11 any concerns? 12 Okay, should we go on to the next thing 13 then? All right, I think we're ready to take a 14 vote on the full package. Do people want to go 15 through slide by slide or do they just want to 16 raise slides. 17 MR. PORTER: Please go through it. 18 MR. EISNER: Which ones? 19 MR. PORTER: Review on each one. We've 20 been here long enough. 21 MR. RAWALD: And unfortunately, we're 22 still waiting for the printouts to arrive, that's

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 116 1 a question that I could not answer. 2 MR. EISNER: Do we want to wait for the 3 hard copies or no? 4 Okay, the first one is the 14 SEER 5 interpretation. We had a unanimous vote, one 6 abstention. Everybody comfortable with this one? 7 MR. PORTER: How about we just ask if 8 anybody wants to change their vote on each one of 9 these? 10 MR. EISNER: When I do that in the past 11 somebody says I have to read it first. So give 12 me a sign when you're ready to vote. But anybody 13 want to change their vote on this one? 14 Okay, let's go on to the next slide, 15 which is definitions. 16 This was a unanimous vote. Anybody 17 object to this slide, want to change their vote? 18 Okay, the next slide is DOE website. 19 This was also a unanimous vote. Anybody want to 20 change their vote on this one? 21 Okay, the next slide is industry 22 training.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 117 1 MR. PORTER: I was thinking maybe they 2 should have that website done in three days, but 3 we'll give them 30 (laughter). 4 MR. EISNER: This was a unanimous vote. 5 Anybody want to change their vote on this one? 6 Okay, let's go to the next one, it 7 should be reporting. Another unanimous vote. 8 Anybody want to change their vote on this slide? 9 Okay, the next one is proactive check, 10 also a unanimous vote. Does anybody want to 11 change their vote on this? 12 All right. Contractors and dealers, the 13 next one, also unanimous. Anybody want to change 14 their vote on this one? 15 Okay, next slide is distributor. The 16 vote was unanimous. Anybody want to change their 17 vote on this one? 18 Okay, the next one was manufacturers, 19 unanimous vote. Anyone want to change their vote 20 on this? 21 Okay, the next slide was other issues, a 22 unanimous vote.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 118 1 MR. FERNSTROM: Neil, this is Gary. Is 2 that first bullet consistent with what we had on 3 the table that we saw earlier? 4 MR. RAWALD: Yes, yes. 5 MR. FERNSTROM: Okay, thank you. 6 MS. NOLL: Is it clear that maintain 7 records, do we need to specify that? 8 MR. EISNER: Anybody have a problem with 9 adding the word, records, maintain records for 48 10 months? Okay, hearing no objections, nobody 11 wants to change their vote. 12 The next one is threshold for records 13 request. This was a unanimous vote also. Does 14 anyone want to change their vote? 15 Okay, the next slide is violation, the 16 vote was unanimous. Anyone want to change their 17 vote on this? 18 All right. The next one was product 19 installed in violation. The vote was unanimous 20 with one abstention. Anyone want to change their 21 vote on this recommendation? 22 Okay. The next one was the DOE

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 119 1 investigation. The vote was unanimous. Anybody 2 want to change their vote? 3 Okay, the next slide was remediation. 4 The vote was unanimous on this. 5 MR. PORTER: Give me a second on this. 6 MR. EISNER: Does anybody want to change 7 their vote here? 8 Okay, I think this is where we have a 9 new slide added in. Did we take a vote on this 10 one? 11 MS. SHEPHERD: No. 12 MR. EISNER: Okay, so this one we have 13 to vote on. Does anybody object to this? 14 Amy, are you still reading? 15 MS. SHEPHERD: No, sorry. 16 MR. EISNER: Does anybody object to 17 this? Okay, so this is a unanimous -- 18 MR. PORTER: Hold on. 19 MS. MEYERS: So this is Karen with 20 Rheem. I guess I sort of object because I don't 21 agree with the definition of product that is 22 insinuated in this language.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 120 1 MR. RAWALD: So in this slide, this is 2 Doug, where it says it wishes to buy a product 3 from, it is the product through which you are 4 replacing. So it's limited to, hey, I want to 5 buy the 14 SEER to replace a 13 SEER. That's 6 what that word product means in this context. In 7 the first bullet, is that what you're referring 8 to? 9 MS. MEYERS: Yeah, yeah. 10 MR. RAWALD: It's saying, hey, you have 11 to tell me who you want to buy the compliant 12 thing from so I can then tell you to go ahead and 13 buy it from that person. 14 MR. PORTER: Okay, but do you want 15 compliant product on there? 16 MS. MEYERS: Yeah, that might help. 17 MR. RAWALD: That's fine. That's fine. 18 MS. MEYERS: Yeah, compliant replacement 19 product. 20 MR. RAWALD: Okay, that's fine. 21 MS. MEYERS: That'd be great. 22 MR. EISNER: With the Karen amendment,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 121 1 does anybody object? Does anybody object? So 2 this is adopted unanimously. 3 Okay, the next one should be routine 4 violator. As I recall, there are two slides 5 here, so let's vote on the first one. And this 6 one had been unanimous. 7 MR. MCCRUDDEN: This is Charlie with 8 ACCA, just a question on the blast via email, 9 Doug. I had some conversations with some of our 10 chapter folks who would be interested in 11 receiving that email. So is there a way that, I 12 guess anybody could get access to that list 13 serve, or how would that work? 14 MR. RAWALD: Yes. So the department has 15 the ability for anyone in the public to sign up 16 for blasts regarding rulemaking activity. And 17 it's not limited to people who have a part in any 18 organization. Any individual person can sign up 19 for that. And so we use that same service to 20 sign up for this, so it would be open to anyone 21 who wants it, with an email address. 22 MR. MCCRUDDEN: So this is Charlie

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 122 1 again. Is there some type of way to notify? 2 MR. RAWALD: What I think we'll probably 3 do is on the regional standards and enforcement 4 web page, we'll put here's a link to sign up for 5 the blasts. Probably this is the best way to do 6 that. 7 MR. WHITE: That'd be great, thanks. 8 MR. EISNER: Okay, does anyone want to 9 change their vote on this one? Okay, this stays 10 the same. 11 Then we had a second slide. Does 12 anybody want to change their vote on this? The 13 vote was unanimous this morning. 14 All right, next slide is right to 15 appeal. This was a unanimous vote. We did this 16 morning remove the, if notice of intent to appeal 17 is filed within three business days, because it's 18 covered under another recommendation. 19 MR. DORIA: Jordan Doria, just a 20 question on the appeal process. Can you only 21 appeal essentially the finding of violation, not 22 the punishment itself? Meaning you could say

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 123 1 potentially, yes, these are in the, you know, the 2 facts as the department has ruled on them are 3 what they are, but we think the punishment, for 4 example, was simply too harsh and bring that to 5 the Office of Hearing Appeals? 6 MR. RAWALD: So our course right now is 7 to just appeal the finding of routine violation. 8 What would -- the only reason why I think it 9 would be in play is if we were to decide based 10 upon comment received in the course of the 11 rulemaking that we want to have the discretion to 12 narrow the scope of the product, as we've 13 discussed. 14 So I think that could be a narrowing 15 that we could consider but in the course of 16 rulemaking, but we wouldn't be able to do it 17 today because of the department's position on the 18 fact that product is product, right, so 430.32. 19 So there's only one consequence of the finding of 20 routine violation in our mind right now, which is 21 if you're a routine violator and a manufacturer 22 sells to you, they're going to be a prohibited

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 124 1 act. 2 So I think that's how I see those kind 3 of questions coming together in my mind. 4 MR. EISNER: All right, does anybody 5 want to change their vote on this? 6 Okay, next one is removal from the 7 routine violator list. The original vote was 8 unanimous. Does anyone want to change their vote 9 on this recommendation? 10 All right, the next one was the energy 11 guide label, unanimous vote with one abstention. 12 Does anyone want to change their vote on this 13 one? 14 MR. RAWALD: And Amy, this is Doug, do 15 we have a copy of the (inaudible) to put here 16 with the package for us to put to ASRAC? 17 MS. SHEPHERD: I don't have them but I 18 can get them for you. 19 MR. RAWALD: Okay. I think that might 20 be helpful for us to actually have the label we 21 want to go to ASRAC, or that you guys want 22 because I'm abstaining from this.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 125 1 MR. EISNER: Next one is the 2 manufacturer label. The vote was unanimous. 3 MS. MEYERS: So we talked about this a 4 lot but the label can't go on the units until the 5 guidance is out. So we know, so just for the 6 record, we have to have the guidance out before 7 we can proceed with any label. 8 MR. RAWALD: And this is Doug. And 9 Karen, when you refer to the guidance, do you 10 mean the final versions of the two draft 11 guidances that have previously been issued? 12 MS. MEYERS: Yes. 13 MR. RAWALD: Okay. 14 MR. EISNER: Anybody want to change 15 their vote on the manufacturer label 16 recommendation? 17 Okay, the next slide is manufacturer 18 liability. We voted unanimously on this one this 19 morning. Does anyone want to change their vote 20 on this? 21 Okay, I believe the next slide is the 22 recommendation for the preamble, the scope of the

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 126 1 product. The vote this morning was unanimous. 2 Anybody want to change their vote on this one? 3 All right, the next one was -- 4 MR. PORTER: Hold on -- 5 MS. MEYERS: Neil. I hate to do this to 6 you but I need a quick industry caucus on slide 7 33, I mean really five minutes. 8 MR. RAWALD: On 33 or 34? 9 MS. MEYERS: I'm back on 33, sorry. 10 MR. RAWALD: Okay. 11 (Off the record.) 12 MR. HURST: Doug, we're good. We don't 13 need further discussion. 14 MR. EISNER: Okay, we're again looking 15 at the preamble language, scope of product. 16 Anybody want to change their vote on this? It 17 was unanimous. 18 Okay, the next slide, product determined 19 noncompliant, the vote was unanimous. Does 20 anyone want to change their vote on this? 21 Okay, the next one is additional 22 prohibited acts. We had consensus but we had one

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 127 1 objection on this one. Does anybody want to 2 change your vote? Okay, nobody wants to change 3 their vote. 4 MR. RAWALD: The next two slides are 5 throw-aways. 6 MR. EISNER: Okay. First of all, the 7 people who voted no, not necessarily the people 8 who abstained, but you can do that, it would be 9 nice but probably no necessary to explain in the 10 report to ASRAC why there was an abstention or 11 why there was a negative vote. So if you want to 12 just give me one or two sentences on that for 13 particular recommendations, I could make sure 14 that gets included that in the report. I don't 15 think it's a requirement but it probably would 16 help ASRAC. You deal with them all the time, but 17 they may want to know what the basis of it was. 18 And that includes you. 19 MR. RAWALD: At this point we only have 20 one no vote, and that's just Chuck White's vote 21 on this slide. Otherwise we have no no votes. 22 There's only one no vote.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 128 1 MR. EISNER: Okay. I thought -- no, we 2 decided -- 3 MR. RAWALD: No, we went around that. 4 MR. EISNER: We went around that, okay, 5 you're right. 6 MR. RAWALD: So we have one no vote. 7 MR. EISNER: Well, I've got a 8 recollection of why it was a no vote, but Chuck, 9 if you want to give me -- where's Chuck? 10 MR. WHITE: I'm over here. 11 MR. EISNER: You can do it by email or 12 something like that, if you want to just send 13 something to me. 14 MR. WHITE: That would be fine. 15 MR. EISNER: Okay, are we ready to vote 16 on the entire package? 17 MR. WINNINGHAM: We felt it would be 18 appropriate to include some language that this 19 package from the manufacturers' perspective is, 20 you know, agreeable to us contingent upon the DOE 21 guidance document and that it aligns with kind of 22 the terms and understanding within this group.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 129 1 MR. EISNER: And my next point was going 2 to be, you know, again, you've got the freedom of 3 putting it where you think best, but I was going 4 to suggest to this in the last negotiated 5 rulemaking that we consider what language you 6 would like to add to the report to ASRAC. It 7 seems to me this would be the appropriate way to 8 tell ASRAC you've agreed to this package, but you 9 expect guidance to be issued before the NPRM gets 10 out or part of the NPRM or whatever. 11 And I'm looking for other suggestions 12 along those lines. Anything you want to be in 13 the report about what you think of this package 14 in general or in particular. 15 So if that satisfies you what I suggest 16 is let's take a final vote and then we can go on 17 and we can put up a slide here and we can agree 18 to some bullets that would go into the report to 19 ASRAC. 20 There is one remaining issue and maybe 21 we should cover that first and see if we want to 22 say anything in that to ASRAC about that, that's

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 130 1 the issue of the states and what they may be 2 doing. 3 So you comfortable with handling that 4 with a report to ASRAC? All right, hearing no 5 objection, on the report itself basically send up 6 these slides attached to a report describing the 7 process that we went through, etcetera, do you 8 want to take a vote now? 9 Recognizing that some of you objected, 10 with those objections recorded in here, not 11 objected, but objected and abstained, is there 12 any objection to the submission of this full 13 report to ASRAC? 14 MS. MEYERS: So Neil, this is Karen. 15 But again, I want to reiterate what Dave said. I 16 mean at least from my perspective my vote on this 17 package is contingent upon the guidance on 14 18 SEER being as we have agreed on, was it guidance 19 32 or 33, coming out as we have talked about in 20 this. And so I think that from my, I need that 21 in there. 22 MR. EISNER: Okay. Do you want to then

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 131 1 prepare one more slide that I could then include 2 in the report, not as a separate slide, with 3 these statements that you want to make about the 4 report that you voted for, and then take the vote 5 on the report? 6 We could start a blank slide and people 7 can put up some suggestions and we can agree to 8 wording. So if you want to start off with this 9 first one about the guidance, what would you like 10 to say? 11 MS. MEYERS: I mean -- 12 MR. PORTER: Manufacturers and 13 distributors -- 14 MS. MEYERS: Conditionally approve this 15 report contingent upon -- 16 MR. BALLO: The issuance of the final 17 guidance. 18 MS. MEYERS: The issuance of the final 19 guidance on 14 SEER. 20 MR. RAWALD: Right, and I would caution 21 you against saying guidance on 14 SEER, because 22 it's more broadly about how to rate, how to test

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 132 1 and rate. So let's maybe use a more broad term 2 so everyone knows exactly what you're talking 3 about here. 4 MS. MEYERS: I think it's 32 and 33. 5 MR. EISNER: Okay. 6 MR. WINNINGHAM: It's 32 and 33. 7 MS. DEGITZ: It's just 33 and 32, 8 there's no zero. 9 MR. RAWALD: It's double zero first, I 10 think. 11 MR. EISNER: All right. I'm asking for 12 everybody's concurrence in this, not just the 13 manufacturers and the distributors, is everybody 14 comfortable with putting this in the report to 15 ASRAC or do they want to word it differently? 16 MR. RAWALD: Neil, put on his 17 administrative law hat and wanted to remind 18 everyone that the department could, 19 administrative law-wise use the notice that we 20 issue regarding this rule that we eventually have 21 as the venue to finalize the guidance. 22 I don't think we'll probably do that. I

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 133 1 think we'll issue the guidance separate. I think 2 that's the way we usually do with this, but just 3 to let everyone know the administrative law 4 options that are out there. 5 But Karen, to your point, I've already 6 advised the department that this is a 7 precondition for your guys. 8 MR. ROY: Okay, so slide 4, we feel that 9 it's okay to release these two guidance 10 documents. You definitely need these two 11 guidance documents to be issued, but at the same 12 token the loop will finally be closed if you have 13 all those bullets in slide 4 also included at 14 some point in, let's say, you know, guidance 15 document 32 or 33. So if you could lump the 16 bullets in, I think the entire loop gets closed 17 because in the 14 SEER indications, bullet 4 18 covers the ICM bit as well, and I don't think 19 that's fully covered in guidance document 33. 20 MR. RAWALD: Right, so the intent of 21 those two guidance documents that were issued as 22 drafts were not entirely to cover the universe as

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 134 1 covered by this voting by our part. 2 I will ask the department to issue 3 guidance such as this, but for this particular 4 issue this may be something the department just 5 puts in the notice rather than issuing a separate 6 guidance. 7 The department, this is our position. I 8 mean we're taking this position as it's related 9 here. We're very public about it. But whether I 10 can get the guidance, the department to have the 11 inertia to issue a guidance document saying these 12 things when we're already going to be issuing a 13 notice that's going to say these things, that may 14 be more than I can do. 15 So I'll ask them if it's your request, 16 but I ask that you not precondition any solution 17 upon the issuance of guidance because we're going 18 to say this in the rule. This is going to be in 19 the rule, which is actually more important. And 20 this is actually going to be in the regulatory 21 text. I mean this is going to be, this is going 22 to be language that will more powerful than

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 135 1 guidance because it will actually be in the CFR. 2 And so we're going to have that. 3 And what I've explained to everyone is 4 that all of the agreements we have after slide 4 5 are predicated on slide 4. And so if we were to 6 change slide 4, the entire agreement would be 7 null and void. Everybody understands that and 8 we're all on that same page. 9 So we could of course make that our 10 point saying all agreements are predicated upon 11 slide 4 if that will satisfy people here. 12 MR. EISNER: Okay, anybody want to 13 change this bullet, add anything to this bullet? 14 Not the bullet up there but the slide we were 15 working on. 16 MR. PORTER: Can we take five minutes 17 off record? 18 MR. EISNER: Sure. We're off the 19 record. 20 (Off the record.) 21 MR. EISNER: We're all okay with this 22 first bullet?

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 136 1 MR. PORTER: Yes. 2 MR. EISNER: All participants 3 conditionally -- 4 MR. RAWALD: I think all nongovernmental 5 because it's hard for me to say that I'm 6 conditioning upon what my people do in this 7 thing. That's not going to work. 8 MR. EISNER: All except Doug. Okay, 9 first bullet, are there any other things you want 10 the working group to say to ASRAC? 11 Do you want to recommend Doug for an 12 immediate promotion for his great quality work or 13 that sort of thing (applause). 14 MR. ROCKY: No, I'm going to wait until 15 this thing gets published (laughter). 16 MR. EISNER: Nothing else you want to 17 say to them? Okay. All right, that brings us up 18 to -- 19 MS. NOLL: How is this presented to 20 ASRAC? Is it presented by (inaudible) or by you? 21 MR. EISNER: You know, it's on the list 22 of things that I might be asked to do. The last

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 137 1 one I did I did not however go to ASRAC. I think 2 it's submitted in writing and then of course DOE 3 sets the meetings up and in that meeting it's 4 discussed, but you might know more. 5 MR. RAWALD: Yeah, I don't know the 6 process we're going to take. I don't know if 7 there's going to be an ASRAC meeting required or 8 they can vote on it by email. 9 So it will go from here and John 10 Cymbalsky will then make sure it gets to ASRAC 11 and gets through them. 12 And then we're already starting on the 13 rule so that's not going to be an impediment. I 14 mean Laura has already been working on the rule 15 quite diligently. So we're moving on that. 16 MR. FERNSTROM: So this is Gary. We 17 have Dave Hungerford, the ASRAC representative to 18 this working group and, you know, he could well 19 respond to any questions the ASRAC committee 20 might have with respect to our activities. 21 MR. EISNER: As I said, there are 22 various ways, and it's in my statement of work,

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 138 1 so to speak, that if necessary I would be invited 2 to the meeting. But I think they're going to 3 have the right people there. I think a lot of 4 this stuff is self-explanatory. 5 Okay, so we're done with submissions, 6 we've got the package, we've got the one bullet 7 that you want in the report. 8 The rest of the report will probably be 9 a summary of the process we went through and the 10 different steps that we took, how many were 11 unanimous agreements, how many negative votes we 12 got, that sort of thing. 13 The next thing, the one last issue is 14 the issue on state government, state and local 15 government, actually enforcement. And a couple 16 of people, we talked about this a little bit at 17 the last meeting and left the rest of it for this 18 meeting. 19 So, Amy, it was you who put it on the 20 list -- 21 MS. SHEPHERD: It was me. Can I take a 22 manufacturer five? It really will be five.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 139 1 MR. RAWALD: So just so we -- we didn't 2 actually take a vote on the package in the total. 3 Can we do that? 4 MS. SHEPHERD: Oh, sure. 5 MR. EISNER: Oh, that's right. That was 6 going to be conditioned on the bullet. Now this 7 bullet is going to go with the package so with 8 this bullet accompanying the recommendations and 9 with negative votes and abstentions accounted 10 for, does anyone object to the submission of the 11 report? 12 MR. FERNSTROM: Well, this is Gary. 13 Before we, in effect, take a final vote on the 14 report, I'd like to hear their resolution of 15 Amy's question, as I think it might affect how I 16 would choose to vote on the entire term sheet. 17 MR. EISNER: Okay, Amy? 18 MS. SHEPHERD: Let's take five. 19 (Off the record.) 20 MR. EISNER: Okay, is everybody ready to 21 go? Amy? 22 MS. SHEPHERD: So we've discussed this

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 140 1 issue internally and we think that what we were 2 looking for was hopefully clarity on an issue 3 that I think maybe is not quite ready for the 4 clarity that we wanted to have, so I think we're 5 ready now. We don't need to discuss this issue 6 further. 7 MR. EISNER: Okay. Let the record show 8 that Gary is smiling. 9 All right, that brings us back to the 10 vote on the full package with the bullet to go in 11 the cover package, cover memo or whatever it's 12 going to be, does anybody object to our 13 submitting this report as it's identified with 14 the different votes on each of the 15 recommendations, to the full advisory committee, 16 ASRAC, to review and make a decision on? Does 17 anybody object to that? 18 So we unanimously agree to submit the 19 report as it's been presented? Yes. 20 MR. HUNGERFORD: This is David. I'd 21 just like to verbally confirm that I'm agreeing. 22 MR. EISNER: Thank you, David.

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 141 1 MR. BALLO: This is Tim. I'm going to 2 abstain from the vote. I don't object to the 3 report. I think it's a definite step towards an 4 effective enforcement regime. This is one of the 5 cases where maybe the sum is not quite equal to 6 all of its parts, or maybe the sum is less than 7 all of its parts or greater than the sum. I 8 don't know what I'm saying (laughter). 9 But I think there's still more that 10 needs to be done, but I think this is a definite 11 progress towards an effective enforcement regime. 12 So, you know, I just don't -- I feel like voting 13 for it sends the message this is all that needs 14 to be done. 15 MR. FERNSTROM: And this is Gary for the 16 California Investor Owned Utilities. I'm going 17 to abstain too. I think this group has done a 18 wonderful job and is certainly due compliments on 19 its efforts and the level of agreements that's 20 been reached. 21 I think we'll achieve a fairly high 22 level of compliance, especially in California and

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 142 1 across the country, primarily because of the 2 integrity of the market actors, the honor system, 3 if you will, and the market forces and logistics 4 of delivering noncompliant equipment into areas 5 that require compliant equipment. 6 I think we've made a lot of progress. 7 Just to name a few things, we've agreed on an 8 industry voluntary labeling that will allow us to 9 easily identify compliant equipment, we've agreed 10 on records, and DOE has conditionally promised to 11 be proactive in its search for noncompliant 12 installations. 13 But all those things considered, I think 14 it's going to be hard to find violators. There's 15 a fairly high hurdle associated with taking 16 action against them. That would be, they have to 17 be knowing and routine violators. There's a 18 difficult process for DOE to follow. 19 And there's a lack of symmetry and 20 severity of penalties, particularly with this 21 prohibited act as that penalty is distributed 22 across the difference market actors, the

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 143 1 contractors, distributors and manufacturers. 2 So my compliments to everybody's work on 3 this committee, but I'm abstaining. 4 MS. NOLL: So this is Elizabeth of NRDC. 5 I'm not abstaining, I'm not opposing. I support 6 the term sheet. 7 I just would like to state, you know, 8 for the record that we have come together to 9 create something brand new. I don't think anyone 10 knows what the outcome of this would be and the 11 extent to which it will be effective or not 12 effective. 13 We do know that the statute has said and 14 given DOE the authority to create an effective 15 enforcement plan. And so I would just like to 16 note that at some point in time when we determine 17 if we, in fact, have the means and ability to 18 determine, if pieces are missing or there's 19 opportunities to improve that, you know, that 20 this isn't necessarily complete, but I think it 21 is complete from the perspective of what we've 22 been able to accomplish over the past said months

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 144 1 and what we have been able to come up with. And 2 so I think that that is just worth noting. 3 MR. CLARK: This is Gary Clark from 4 Goodman. In regards to the abstentions, I guess 5 the question I would have is if we put in another 6 slide that said something to the effect that the 7 department will, within a given period of time, 8 assess the effectiveness of the regulation and if 9 they assess it's inadequate in some way that they 10 would, you know, enter into another rulemaking, 11 or review, or whatever process would be 12 appropriate, would that alleviate your concerns 13 about, you know, heading toward perfection, let's 14 say? 15 MR. FERNSTROM: Well, this is Gary. I 16 don't think it would alleviate my concerns 17 because I see two separate things here. You 18 know, one is achieving a high level of 19 compliance, perhaps mostly voluntarily, and 20 that's great and that's terrific, but I don't 21 think that relieves DOE from its obligation to 22 have a rigorous enforcement plan in place anyway.

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 145 1 The absence of violations doesn't eliminate the 2 need for rigorous enforcement plan. 3 So I would encourage DOE to follow-up 4 and see how it's doing certainly, and that would 5 give us all peace of mind but it still wouldn't 6 completely satisfy me. 7 MR. BALLO: You know, I think it maybe 8 could be convinced to support, depending on the 9 strength of what we'd agree to for further 10 follow-up. 11 I mean I guess I just want to emphasize 12 that abstaining is not voting against, and I have 13 no intention of making it difficult for DOE to 14 implement what we've agreed to here. It's just a 15 question of what I want to be on the record 16 endorsing as a complete unto itself enforcement 17 package. 18 MR. FERNSTROM: So this is Gary, and 19 that goes for me. Again, I think this group has 20 done a tremendous job and it's moved us way 21 forward. 22 MR. EISNER: Other comments? Does

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 146 1 anyone want to talk more about adding a 2 recommendation on a review of the rule within a 3 specified or described term? 4 MR. FERNSTROM: Well, this is Gary. You 5 know, whether we specify it in the term sheet or 6 not, I presume that from time to time DOE reviews 7 the effectiveness of its enforcement work and 8 obligation. 9 So I would expect that that would take 10 place anyway, and I'd ask Doug for some thoughts 11 on that. 12 MR. RAWALD: So we do consistently look 13 at our regulations and see where they fall short 14 and where we feel that there are gaps or needs we 15 initiate additional rulemakings. 16 Under the Administrative Procedure Act 17 any person has the ability to petition the 18 department to make changes. So if somebody 19 operating outside of the department views there 20 to be a gap based upon what's been going on, they 21 can of course come to the department and petition 22 us and say, department, we have noticed over the

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 147 1 past year and half this enforcement plan is not 2 so effective for these reasons, please initiate a 3 rulemaking, and we are required to consider that 4 by law. 5 As I think Neil has noted, oftentimes 6 with different administrations that come into 7 office they also often have the Office of 8 Management Budget initiate a desire to look back 9 at a particular regulation to see if it's working 10 or not. 11 So there's a number of things that act 12 externally to the department that would cause us 13 also to look at these. So we always want to 14 improve. We will look at things. The question 15 is whether we want to put anything into the rule 16 requiring such a look back or whether everyone 17 feels comfortable the department will respond to 18 requests to look at it, and we'll also take it 19 upon ourselves to look at it over time as things 20 go on. 21 MR. EISNER: Other comments? 22 MR. CLARK: This is Gary Clark. I

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 148 1 understand everything you said, Doug, and all 2 that I was trying to maybe enhance in the regular 3 process would be to have a statutory length of 4 time in the regulation, rather than, you know, 5 more ad hoc, let's say, than what the normal 6 process is. That's all that I was, I was trying 7 to enhance it a little bit. 8 MR. RAWALD: Right. And Gary, I get 9 that. And we had actually talked about this 10 quite a while back, early on about possibly this, 11 and we had teed it up for the end of the 12 discussion so you brought it back right at the 13 appropriate juncture. So if you want to discuss 14 it further, that's great. 15 I don't think it's going to, 16 unfortunately, change the votes of the two folks 17 who are abstaining. So with that in mind, I 18 don't think it's necessary but I'm open to the 19 idea if we want to talk about it. So please, I 20 don't mean to forestall discussion. 21 MR. EISNER: Other comments, thoughts? 22 MR. CLARK: I hate to say it, I'd like

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 149 1 to have another caucus with the other industry 2 participants for just a moment, just us 3 manufacturers. 4 (Off the record.) 5 MR. EISNER: All right. We're back on 6 the record. Somebody want to tell me where we 7 are? 8 MR. BALLO: This is Tim. You know, 9 having listened to the concerns of folks who were 10 in the room over the break, I think it impressed 11 upon me that I had not realized the value that 12 people in the working group placed on actually 13 voting for, as opposed to just not voting 14 against, so having heard those concerns, I'm 15 willing to change my vote and vote in favor. 16 MR. FERNSTROM: So this is Gary, me too. 17 MR. EISNER: Everyone want to say happy 18 birthday again? 19 Okay. We have a cover memo, we have a 20 package, are there any other issues anybody wants 21 to raise? 22 My understanding of timing is a package

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 150 1 will be prepared to submit to ASRAC, it will go 2 through John Cymbalsky, I think submits it. It 3 hopefully won't take more than a week or so. I 4 think that's the sense you have, but one thing we 5 both know from working in the government is 6 you're never sure. 7 But it should move. Everybody I think 8 is aware of the time constraints and the need to 9 get this document out. 10 So I want to tell you that most of you 11 don't know the details of my experience, but I 12 was one of the people who recommended that DOT 13 did the first advisory, did the first negotiated 14 rulemaking many, many years ago, pilot flight and 15 duty time limitation. 16 I was a very big advocate for it and I 17 was one of the people who testified on the hill 18 about the bill that eventually passed to make it 19 clear to people that they could use a process 20 that technically was already legally authorized. 21 I think it's a very valuable process and 22 my meetings, this is my second one for DOE as a

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 151 1 facilitator, has shown that it can be very, very 2 good if you get the right people to the table, 3 even if you don't reach an agreement. 4 People like Doug representing the 5 government walk away with a much better idea of 6 what it is to do. And I think it also gives 7 every one of you around the table an 8 understanding of the difficulty sometimes of 9 trying to get a rulemaking that can achieve 10 consensus or something close to consensus. 11 I think we all realized in this room 12 that this was a much more complex and difficult 13 issue than I think anybody thought at the 14 beginning. People started to raise very good 15 points on both sides of the table, of the 16 arguments, because there were different sides for 17 different issues. 18 And I personally think you did a great 19 job in negotiating. I think everybody was here 20 in good faith. I think everybody tried to put 21 good ideas on the table, they tried to work 22 things out, they understood the different

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202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 152 1 perspectives, and I think you're just a witness 2 for how valuable this process can be. 3 I don't know where it will end up in the 4 final rule, but I think we can all be assured 5 it'll be much better than it would have been if 6 we didn't go through this kind of a process in 7 the beginning. 8 So I thank you for your effort. I think 9 you all did a great job. 10 (Whereupon, at 2:42 p.m., the meeting 11 was adjourned.) 12 13 14 15 16 17 18 19 20 21 22

### Public Meeting October 24, 2014 153 1 CERTIFICATION 2 3 4 I, LYNNE LIVINGSTON, A Notary Public of 5 the State of Maryland, Baltimore County, do 6 hereby certify that the proceedings contained 7 herein were recorded by me stenographically; that 8 this transcript is a true record of the 9 proceedings. 10 I further certify that I am not of 11 counsel to any of the parties, nor in any way 12 interested in the outcome of this action. 13 As witness my hand and notarial seal 14 this 24th day of October, 2014. 15 16 17

.. 18 . . f Lynne Livingston 19 Notary Public 20 My commission expires: December 10, 2014 21 22



### Henderson Legal Services, Inc. 202-220-4158 www

### .hendersonlegalservices.com

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 1 A a.m 1:15 ability 6:15,16 18:22 33:20 34:16 44:4 65:17 70:5 105:9 121:15 143:17 146:17 able 34:13 36:14

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54:1 59:5 accepted 18:21

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35:4 126:21 146:15 address 6:21

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## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 2 117:16 118:8 119:1,6,13,16 121:1,1,12 122:12 124:4 125:14 126:2 126:16 127:1 135:12 140:12 140:17 149:20 151:13 anymore29:3,4

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69:20 appreciate

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80:14 articulating

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59:19 107:16 110:8 136:22 asking 25:15

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## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 3 boy 51:15 branch 8:15 13:1 20:19,21 22:7 42:5 48:6 48:6 68:1,4,5 70:10 branches 67:3 brand 143:9 break21:22

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65:6 148:12 Bryan2:15 7:20

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29:11 32:20 Builders 2:20

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63:2 certainly 17:22

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153:1 certified56:19

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26:4,5 37:14 52:1 72:13 75:22 clarify 17:20

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20:15 21:12 30:11,22 61:12 62:12,19 76:9 144:3,3 147:22 147:22 148:22 Clark's78:18 class 19:21 classes72:15

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55:12 56:18 62:4 108:21 110:16 Comfort76:9

76:10 comfortable 15:5 17:15 37:9 52:19 55:2 61:17 66:1 87:8 106:5 116:6

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 4 130:3 132:14 147:17 coming 17:8 104:12 112:5 124:3 130:19 comment 101:6 101:11 103:20 105:9 123:10 comments4:9 11:15 37:3 65:13 71:2 72:19 78:6 88:20 102:3 105:13 113:8,9 113:11,16 145:22 147:21 148:21 commerce8:7 commission 153:19 committee2:9 137:19 140:15 143:3 companies 10:7 14:1 16:8 36:9 75:10,20 company2:13

8:8,8,16 10:2,2 10:2,3,13,14 11:1 12:11,13 12:22 13:1,2,3 13:4,9,16,20 13:21 14:6,7 20:4,7 21:15 22:8,8,9 41:9 42:5 48:6 68:4 68:21 69:4 company-own...

31:4 competing69:4 complete63:20 143:20,21 145:16 completed63:22 64:10 completely 145:6 complex 151:12 complexity24:9 compliance

54:21 141:22 144:19 compliant 120:11,15,18 142:5,9 complicate 16:7 16:12 complicated

46:9 complicates 19:7 compliments 141:18 143:2 compromise

66:13 concept32:2,21

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81:14 105:21 115:11 144:12 144:16 149:9 149:14 conclusion 38:2 108:13 concurrence 132:12 condensing 58:9 58:11,13 111:20 conditionally 131:14 136:3 142:10 conditioned 139:6 conditioner

74:21 80:11 97:14 conditioners

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44:20 46:20 47:4 48:13 65:5 72:5 79:10 86:1 88:15 100:13 101:4,11,21 102:13 126:22 151:10,10 consequence

21:18 43:15 123:19 Conservation

8:3 consider42:14

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28:7 contact60:12,14

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41:14 55:22 continue24:16

69:5 72:7 92:4 continued 5:21 contractor

26:14 27:13 28:4,9,13 29:3 29:11 30:1 31:3,14 contractor's

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9:7,9,10 41:6 conversation

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85:21 87:17 corruption

36:20 cost29:12 Council 2:14 counsel 153:11 count78:19 country 142:1 County 153:5

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 5 couple 5:10,14 138:15 coupled 35:9 101:1 course72:6

83:10 93:8 96:16,19 97:1 123:6,10,15 135:9 137:2 146:21 court4:5 32:10

70:13 cover 129:21 133:22 140:11 140:11 149:19 covered41:11 104:16 122:18 133:19 134:1 covers 133:18 create37:1

86:11 143:9,14 crime33:21 cure28:17 62:2 current84:11 customer75:14 cut33:11 cuts 26:7 31:12 cutting43:18 103:7 Cymbalsky

137:10 150:2 Cynthia2:9 D D.C 1:14 Dallas 66:10 dash7:7 date53:11 64:17 Dave2:22 59:1

81:19 111:3 130:15 137:17 Dave's78:17 David 30:16 140:20,22 day 24:17 37:19 37:21 51:8,10 52:3 153:14 days4:11 6:9

51:10,14,16 52:22 53:10 54:4,5,11,20 55:6 63:2,11 64:2,10 84:5 86:22 113:21 117:2 122:17 de-list58:12 deal 101:8 109:16 127:16 dealer9:1,11 12:14 30:1 31:3 63:19 dealers 16:17

61:19 67:13 117:12 dealing 14:17 dealt9:2 11:11 101:9 debate 102:19 December 153:19 decide44:17

47:21 62:6 65:9 68:13 72:4 79:20 90:1,17 98:15 98:16 99:1,8 123:9 decided 93:1 128:2 decides 98:20 decision 65:11

90:4 98:12 108:8 140:16 deem76:1 default 19:17 Defense2:14 define 15:16,21

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2:3 7:17 15:5 19:13 21:20 22:2 32:22 33:19 37:8 38:4,12,20 39:2 42:10,16 43:4,21 44:8 44:13,19 45:3 45:21 46:2,11 46:21 47:5,20 48:14,21 49:14 50:11,20 51:18 57:4,16 63:12 63:21 65:6,7 68:3 70:4,13 71:19,20 72:5 72:11 73:16 74:8 76:22 77:1,8 78:1,10 79:10,18 81:18 83:13 84:3,5 84:11 88:14 89:16,22 99:18 104:13 110:1 110:11,17 112:7 121:14 123:2 132:18 133:6 134:2,4 134:7,10 144:7 146:18,19,21 146:22 147:12 147:17 department's

37:22 42:13 46:22 48:4 66:1 71:12 104:18,19 107:21 108:20 109:10 123:17 depending

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66:12 142:18 145:13 151:12 difficulty 151:8 diligently 137:15 directly9:1

77:19 disagree53:19 disagreement

86:20 104:3 disappears 28:4 disconnect

77:17

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 6 discretion 33:19

37:12 39:8 45:11 46:2 51:22 52:7 53:4 71:13 72:12 73:18 76:16 89:6 104:14,19,20 105:1,3,5 123:11 discuss41:2

74:1 140:5 148:13 discussed40:20

52:16 65:1 68:15 100:9 123:13 137:4 139:22 discussing 9:5 discussion 7:20

33:17 34:12 40:19 41:12,14 42:3 60:10 73:11 102:12 102:17 103:20 126:13 148:12 148:20 discussions 41:7

60:10 100:17 distinct9:22 11:21 12:1 distribute20:1 distributed 142:21 distributes 8:9 19:10 distribution

7:21 8:7,11,15 9:8 12:11 13:11,17 19:16 19:18 23:2,21 24:5,10,11 26:6 27:19 28:2,20 29:10 30:8 32:6 33:16 47:1 67:12 68:12,22 69:4 70:11 distributor 8:2

8:4,16 10:4,10 10:11,12 11:2 11:7 12:4,5,16 13:5 14:3,5 15:22 16:21,22 17:1,6,16 19:9 20:4 21:6,8 22:7,10,11,20 23:4 27:4,4,6,7 27:11,17 29:2 29:5,6,22 30:2 30:3,4 31:4,4 31:15 33:2,3 41:8 63:19 67:2 69:19 92:11 117:15 distributor's 17:5 distributors 16:9,17 22:18 23:12,20 26:2 30:7 39:16 61:20 90:1 106:3 131:13 132:13 143:1 document 107:17 108:3,6 110:4 111:9 128:21 133:15 133:19 134:11 150:9 documents 133:10,11,21 DOE 26:22 32:8

34:8,13,16 35:3,11 36:14 39:7 42:4,14 43:2 45:11 47:17 51:5 61:3,9 63:6 64:9 65:17 73:17 80:14 81:13 82:1,11 82:20 83:21 85:1 92:6 93:1 98:4,7,10,19 99:7 102:6 106:19 116:18 118:22 128:20 137:2 142:10 142:18 143:14 144:21 145:3 145:13 146:6 150:22 DOE's 100:20 doing 12:10 13:7,18 15:8 15:17 16:3 19:3 21:15 35:11 36:19 69:12 84:4 93:1 105:12 130:2 145:4 dollar 69:3 dollars 29:11

32:6,17 Don2:19 46:16 door 32:15 Doria2:6 14:9 15:3 22:4 24:14 82:2,2 86:18 87:6 93:21 94:7 103:9 107:12 122:19,19 DOT 150:12 double 132:9 Doug2:3 6:12

7:17 12:15 16:14 31:19 37:7 39:22 41:19 44:15 51:2 70:7 72:21 76:12 79:5 81:3 82:22 86:11 88:2 89:12 90:13 92:16 105:7 106:21 110:2 120:2 121:9 124:14 125:8 126:12 136:8,11 146:10 148:1 151:4 Doug's 15:3 Dr30:4 draft 111:12 112:16,19,19 112:22 113:2,3 113:12 125:10 drafted 12:5

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## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 7 115:18 116:2 116:10 117:4 118:8 119:6,12 119:16 120:22 122:8 124:4 125:1,14 126:14 127:6 128:1,4,7,11 128:15 129:1 130:22 132:5 132:11 135:12 135:18,21 136:2,8,16,21 137:21 139:5 139:17,20 140:7,22 145:22 147:21 148:21 149:5 149:17 either 19:5

26:13 28:22 31:20 59:2 72:4 75:5 95:11 104:14 113:10,13,15 eliminate 145:1 eliminated

53:15 Elizabeth 2:14

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2:3 7:17 8:2 89:16 124:10 enforcement 1:4 1:6 16:2 19:8 32:8 37:2,12 41:8 43:11 47:7 56:7,12 62:14,15 71:15 72:12 107:6 111:1 122:3 138:15 141:4 141:11 143:15 144:22 145:2 145:16 146:7 147:1 engineers 110:21 enhance 148:2,7 enter 144:10 Enterprises

2:22 entire 19:21

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20:7 36:4 43:1 57:1 74:4 85:4 90:11 101:15 132:2 example9:7

68:6 123:4 excuse47:8 existence 17:12 existing 80:6

87:12 expand 66:18 expect 112:9 129:9 146:9 experience 150:11 expires 153:19 explain 5:19 14:18 60:5 67:7,8 80:7 88:3 127:9 explained 19:2

37:10 45:17 52:20 53:4 135:3 explaining 18:22 explanation

48:8 explored 18:9 expressed95:1 extension41:19 extent77:15 104:2 143:11 externally 147:12 F face54:22 75:22 facilitator 1:15

2:2 151:1 fact25:13 26:1

43:6 56:16 87:1 123:18 143:17 factories75:13 factors 35:17

43:22 49:15 82:13,20 98:4 98:11,19 99:1 105:6 factory9:8 13:10 30:7 factory-owned

29:10 70:11 facts 34:9,11,17 101:1 123:2 fair29:8 36:15

36:17 62:17,18 63:3 77:17,19 fairly 141:21 142:15 fairness 37:1

44:8,12 faith 151:20 fall 23:1 75:21 146:13 false77:14 far 17:16 22:14

59:10 favor 149:15 feel 15:11 17:15

38:4 55:2 73:21 77:3 82:3 89:17 100:11 133:8 141:12 146:14 feels 110:15 147:17 felt 128:17 Fernstrom3:1

24:2,18 30:12 30:15 39:12,13 81:12 118:1,5 137:16 139:12 141:15 144:15 145:18 146:4 149:16 field 37:13 figure 19:4 figured 6:13 file7:3 54:12,18

55:4,5 filed 6:8 122:17 fill 31:7 final 111:17 112:16,17 113:5 125:10 129:16 131:16 131:18 139:13 152:4 finalize 132:21 finalized 111:17 113:5 finally 133:12 financial 16:4 find 51:5 57:2

70:15 142:14

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 8 finding 6:9 12:3

35:12 36:1 47:15 48:5 62:3,4 83:7,21 122:21 123:7 123:19 findings 83:5 fine 5:13 25:2

26:13,16 27:1 33:13 44:2 50:15 52:21 61:13 64:13 69:3 85:15 87:7 95:3 102:1 103:15 120:17,17,20 128:14 fined 26:16 84:4

88:8 fines 31:6 32:13 finish 112:10 first7:7,7 25:9

34:5,15 35:8,8 52:18 56:11 73:22 74:17 80:9 84:16,20 88:12 109:15 116:4,11 118:2 120:7 121:5 127:6 129:21 131:9 132:9 135:22 136:9 150:13,13 fit20:22 33:21 fits 39:21 five 63:16 64:19

66:7 126:7 135:16 138:22 138:22 139:18 fix 62:13 64:5 flesh 17:14 flexibility47:21

77:11 flight 150:14 flip 115:2 focusing 15:19 folks 18:16

20:13 22:1 24:5 37:15 38:14 42:11 43:14 56:21 79:12,18 83:13 101:4,5 108:4 109:20 121:10 148:16 149:9 follow 142:18 follow-up 11:17 12:15 41:21 64:9 145:3,10 following 110:12 force43:7 forced44:9 forces 142:3 forestall 108:12 148:20 forgot7:18 forgotten 17:9 form22:12,14 Forrestal 1:13 forth 31:16 114:9 forward41:2

42:7,12 72:3 92:18 145:21 found 8:17 10:12 28:5,9 34:21 37:15 38:6 67:15 69:12 83:11 93:6 four 82:1 fourth 56:6 frame63:6,18 frankly 21:3 Frederick78:3 freedom 108:15 129:2 Friday 1:8 front5:1 80:22 full 55:22 77:15 104:2 115:14 130:12 140:10 140:15 fully 133:19 functionally

20:6 fundamentally 111:4 further48:6 126:13 140:6 145:9 148:14 153:10 future 112:5 G gap 146:20 gaps 146:14 Gary2:5 3:1

21:2 24:2,19 25:17 30:12,15 39:12,13 56:7 62:10 63:5 78:18 81:12,21 118:1 137:16 139:12 140:8 141:15 144:3 144:15 145:18 146:4 147:22 148:8 149:16 Garys 30:13 general 88:13

93:6 129:14 get-go 100:21 getting49:13

50:1 63:8 Gibbons 2:7

4:15 60:20 114:4,8,18 give4:20 9:16

47:9 58:22 61:1 77:13 79:7 90:9 99:17 103:7 104:2 109:9 116:11 117:3 119:5 127:12 128:9 145:5 given25:5 33:16

40:17,18 53:3 67:8 73:15 79:11 100:17 100:20 104:8 143:14 144:7 gives 25:14

34:16 47:8,9 64:2 151:6 go4:18 5:4,12

7:11,14 15:1 19:22 20:13 22:1,21 32:22 42:8 44:18 45:2 47:4 48:13,20 51:5 52:16 53:21 60:2 67:6 73:13 76:16 77:15 79:4,10 80:14 84:15,19 85:2 86:9 87:19 89:14 91:20 97:22 100:21 101:12 104:14 105:15 106:2,4 107:11 110:17 115:12 115:14,17 116:14 117:6 120:12 124:21 125:4 129:16 129:18 137:1,9 139:7,21 140:10 147:20 150:1 152:6 goal 24:11 goes42:1 145:19 going4:4 5:1 9:18 16:7,12 21:14 22:21 25:7,12 28:14 31:10 32:17,19 35:13,13,18 36:12,21 38:5 38:20 40:3 41:17,21 43:10 48:12 51:15,18 52:7 53:21 54:9 55:2,3,6,8 56:22 57:10,13 60:16,21,22 63:15 65:19 70:13 73:18 78:19 81:6,15 81:16,20 82:19 83:7 91:6 92:1 92:3 95:21 96:4 98:17 99:7 100:12 104:7 108:20 109:3 110:3,4 110:13,13 112:11,12,13 113:12 114:5 123:22 129:1,3 134:12,13,17 134:18,20,21 134:21 135:2 136:7,14 137:6 137:7,13 138:2 139:6,7 140:12 141:1,16 142:14 146:20 148:15 good 36:13 56:2

76:4 79:1,2 102:19 126:12 151:2,14,20,21 Goodman2:5

2:16 20:16 144:4

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 9 gotten 67:1 government

138:14,15 150:5 151:5 grab 30:20 graduated 82:19 great 120:21

122:7 136:12 144:20 148:14 151:18 152:9 greater 141:7 Greg20:15 ground 100:19 group 1:4 5:3

15:19 31:8 44:17 45:1 46:20 47:3 65:4,9 72:4,9 108:17 110:12 110:12,13,15 111:13 115:3 128:22 136:10 137:18 141:17 145:19 149:12 group's45:3 guess 15:3 18:16

22:13 33:22 41:18 45:2,8 45:20 48:18 50:1 52:16 53:8 64:7 70:9 73:12 80:5 86:18 104:1,12 105:8 119:20 121:12 144:4 145:11 guidance 107:13

107:14,17 108:1,3,6,10 108:17 109:3 109:11 110:4 110:10,16,21 111:9,13,17,18 111:22 112:4,8 112:12,14,15 112:17,19 113:1,2,6 125:5,6,9 128:21 129:9 130:17,18 131:9,17,19,21 132:21 133:1,9 133:11,14,19 133:21 134:3,6 134:10,11,17 135:1 guidances 113:3

125:11 guide 124:11 gut 11:2 guy 36:19 guys 21:22

55:18 78:19 79:8 99:21 100:4 105:12 124:21 133:7 H hairs 104:11 half90:20 147:1 hammer87:19 hand 89:17 153:13 handled 10:18 handling 130:3 hands 78:8,22 Hang 91:9 happen 31:15

31:16 99:8 112:9 happened 52:5 happening

26:15 happens 61:5

65:21 92:11 happy45:21 149:17 hard 23:16 46:7 114:5 116:3 136:5 142:14 HARDI2:12

23:10,11 28:1 70:8 harsh 123:4 Harvey's 34:1 hat 132:17 hate 61:15 104:10 126:5 148:22 he'll 60:12 head 25:16 76:7 heading 5:20

38:18 144:13 headings 39:17 hear30:18,21

61:18 102:9 139:14 heard 39:3

73:15 85:20 149:14 hearing 30:17

41:21 92:15 118:10 123:5 130:4 heat75:1,3,4

92:4,12 94:9 97:8,9,14,20 heating97:6 heating's 97:7 held 1:13 68:2

83:3 87:1 help 19:2 68:20

70:14 90:10 95:16 114:17 120:16 127:16 helpful 14:11

31:1,17 38:3 39:19 44:16 90:11 99:22 124:20 helps 25:14

85:16 95:5 hey55:18 69:11 120:4,10 high75:5 141:21 142:15 144:18 highlight 81:1 hill 150:17 histories 20:18 history20:19 hit58:4 hoc 148:5 Hold 81:5 119:18 126:4 home2:19 31:10

46:17 honor 142:2 hope 107:21 108:11 hopefully 9:3

37:20 40:5 114:13 140:2 150:3 hour90:20,22

91:2 114:13,15 House2:9 Hsu 2:9 Hungerford

30:17 81:19,20 137:17 140:20 hurdle 142:15 Hurst2:8 32:14

32:16 50:7 52:17 53:2,5 81:10,10 126:12 hypothetical 9:5 10:1 13:6 hypothetically

29:9 hypotheticals

42:21 I ICM 133:18 idea21:22 33:18 34:3 37:9 39:7 98:22 102:19 148:19 151:5 ideas 18:16 151:21 identical 109:7 identified 140:13 identify 39:17 101:3 142:9 identifying 36:3 immediate 136:12 impact44:3 impacted 100:15 impediment 137:13 implement 145:14 implies95:19 import 18:15 important7:19

36:7,16 43:13 44:12 61:10 71:21 111:14 134:19 impressed 149:10 improve 143:19 147:14 inadequate 144:9 inaudible 78:14

83:8 87:6 114:3 124:15 136:20 incentive 32:19 inclined 86:19 include 97:14 128:18 131:1 included 74:21

97:15 127:14

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 10 133:13 includes 74:22 127:18 including 101:5 inclusion 112:2 incorporate 107:3 incorporated 12:21 incorporation

20:18 Independence 1:14 independent 10:7 23:4,5,19 24:11 30:6 31:3,15 41:10 67:12 independently

22:12 29:1 independents 16:11 indicate 66:4 indications 133:17 individual 121:18 indoor57:6,8,12 112:2 industry 89:16 108:1 116:21 126:6 142:8 149:1 inertia 134:11 inform 63:20 information

33:15 65:1 76:5 79:6,11 79:19 informed92:18 Ingersoll 2:6 initial 34:4,4 initially 51:13 initiate 146:15 147:2,8 injunction

70:17 injunctions 70:5 injunctive 32:8

69:9 70:3,8 inserted 80:22 inserts 80:10 insinuated 119:22 install 5:5 installations 142:12 installed 118:19 instance 67:20 instances 37:16 insulating 68:5 integrity 142:2 intelligent 113:10 intend 85:13 100:21 intended 80:17 intent6:8 15:16

54:12,15,19 89:5,6 100:20 122:16 133:20 intention 145:13 interacts41:20 interest63:7

64:6 interested 121:10 153:12 interim 110:16 internally 140:1 International

2:8 interpretation

71:14 116:5 intervening

52:11 inverted 85:19 investigation 119:1 Investor 141:16 invited 138:1 involved 61:9,10 IOUs 3:1 81:13 isolated 35:21

35:21 88:5 issuance 53:11 131:16,18 134:17 issue 11:10,12 18:4 23:13 41:7 42:6 45:12 46:9 56:3,6,10 57:17 59:9,20 62:10 75:16 77:7,21 82:15 82:18 93:21 94:11 96:4 100:11 101:3 101:10 102:5,8 102:12,15 107:6 108:21 109:11 111:19 111:22 112:19 112:20 129:20 130:1 132:20 133:1 134:2,4 134:11 138:13 138:14 140:1,2 140:5 151:13 issued 107:20 108:7,14 111:18 112:1 112:16 113:1 125:11 129:9 133:11,21 issues4:12 7:11

7:14 9:4 33:12 41:19 53:12 82:14 83:21 84:3 85:1 104:22 112:6 115:8,10 117:21 149:20 151:17 issuing 93:9 134:5,12 it'll 35:17 152:5 item 105:4 J J2:8 job 16:2 89:18 141:18 145:20 151:19 152:9 John 2:7,8 4:15

32:16 52:15,17 60:20,20 61:1 61:3 70:7 78:16,19 81:10 137:9 150:2 Johnson 2:15

9:7,9,10 41:6 Johnstone 2:17

26:13 68:19 join44:20 joint 10:17,21 11:2,6 Jon27:22 Jonathan 2:12 Jordan2:6 14:9 14:21 82:2 85:20 86:18 93:21 103:9 107:16 122:19 judgement

45:13 46:12 jump7:16 jumping 114:10 juncture 148:13 Justice's70:13 JVs 16:7 K Karen2:13

15:14 38:16 39:4 52:17 74:18 75:17 76:17 78:5 79:19 91:14 95:16 100:14 101:5 110:2 113:19 119:19 120:22 125:9 130:14 133:5 Karen's20:6

52:15 77:18,20 78:6 79:11 keep 55:2 59:16 keeping 59:17 key 64:16 kind 9:3 14:19 15:8,15,18 18:5,7 31:11 34:17 38:19 42:18 49:8 56:11 61:15 63:1,3 86:1 100:21 111:8 124:2 128:21 152:6 knew 9:11 32:11 know 5:12 10:19 10:20 11:9 13:5 14:16 15:6,10,11 16:1 18:3,12 20:1,16,19 23:11 26:4 28:4 30:5 31:11,12 35:5 36:7,12 39:3 44:11 46:7 58:4 60:15 61:7,15 62:14 66:10 68:11 79:1 82:8 86:14 90:16,22 92:1,2,10,13 95:14 98:10 113:7 123:1

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 11 125:5 127:17 128:20 129:2 133:3,14 136:21 137:4,5 137:6,18 141:8 141:12 143:7 143:13,19 144:10,13,18 145:7 146:5 148:4 149:8 150:5,11 152:3 knowing 27:4 142:17 knowingly 16:18 27:3,14 29:10 knowledge 27:2

83:2,9 84:2,6 85:7 known 27:17

48:20 knows 132:2 143:10 L label4:18 28:17

69:15,16,20 124:11,20 125:2,4,7,15 labeled 23:2,20

69:21 labeling 142:8 lack 142:19 laid76:17 language 14:13 14:22 42:3,7 42:11,13 45:11 45:22,22 46:4 46:19 47:4 50:3,13 53:15 54:5 56:16 59:21 60:4 64:8 65:4,8 66:20 71:3 73:12,15 76:15 77:10 79:5 83:17 88:3 91:11 102:7,10 102:22 103:17 103:22 119:22 126:15 128:18 129:5 134:22 large 83:6 larger42:5 64:4

66:4 late52:8 latitude47:8,9

47:10,15,16 Lattanzi 2:11 14:4 66:16,17 laughing 113:19 laughter 15:13

24:18 25:21 30:5 48:10 50:8 63:13 73:8 78:18 80:1 81:11 89:12,17,18 101:22 113:8 117:3 136:15 141:8 Laura 3:4 59:21

65:3 85:18 87:16 137:14 law 10:21 11:9 11:12 17:4,5 21:1 132:17 133:3 147:4 law-wise 132:19 lawyers 89:14 leads41:1 leave 19:14 91:1 100:3 101:11 leaving92:3 leeway70:9 left 138:17 legally 150:20 length 148:3 lenient52:13 Lennox 2:8 let's 14:18 26:18

65:20 70:1 79:15 86:19 99:20 103:7 116:14 117:6 121:5 129:16 132:1 133:14 139:18 144:13 148:5 letter61:1 64:17 level 13:16

26:14 54:21 141:19,22 144:18 liability 6:14 18:5 21:14 40:9 53:9 54:22 55:12 74:5 84:7,17 87:12,14 88:5 88:14,22 92:2 92:7 125:18 liable 60:7 83:3

87:1 95:11 light 113:11 limit72:12

79:21 98:8,9 98:17 99:2 limitation 36:3

62:2 150:15 limited4:3

44:10 65:17 66:2 68:3 70:10 100:19 104:18,18,19 120:4 121:17 limiting 67:21 line7:7 55:20

93:18 lines 129:12 link 122:4 list51:7 63:8 121:12 124:7 136:21 138:20 listened 149:9 little5:14 18:17

25:17 30:16 31:2 46:1 66:11 90:5,9 138:16 148:7 live47:6 Livingston 1:22 153:4,17 local 138:14 location 34:12

36:19 41:8,9 49:16 65:17,18 65:19 66:2,7,9 67:22 98:5 99:6,10 locations 35:21

66:4,6 lodge48:15 logistics 142:3 long 9:19 14:5

21:15 38:22 40:3 61:20 73:6 91:5 94:4 100:4 107:2 114:11 115:20 longer51:15 look4:11 11:10 11:10 34:17 35:13,13,17 43:21 65:2,8 70:1 72:9 82:20 88:1,13 88:17 89:2 91:21,22 93:2 98:10,22 99:7 100:1 102:16 103:17 114:16 146:12 147:8 147:13,14,16 147:18,19 looked 52:9 looking 5:2 7:18 35:16,17 60:4 62:20 77:2 89:4 98:13 126:14 129:11 140:2 looks 61:13

98:19 loop 133:12,16 lose96:18 lot31:12 36:9

51:15 72:8 73:11 92:12 125:4 138:3 142:6 lots 64:2 Louis 9:9 66:9

66:10 67:22 68:4,5 lower5:2 lump 133:15 lunch 31:21

40:4 90:4,17 90:20 91:2,3 106:10,15,17 113:22 114:3 Lynne 1:22 153:4,17 M mail 39:1 mailbox 106:13 main 33:18 35:7

87:13 111:22 maintain 118:6 118:9 majority 11:7 making 33:1

40:1 45:9 97:16 145:13 Management 147:8 mandatory

45:10

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 12

manner43:10 manufacture 18:14,14 manufacturer

4:18 6:13,16 8:5,10,14,22 10:3 11:1,4,21 12:2,14,18,19 13:4,5,13,19 14:2,6,7 17:2,7 17:20 18:10,13 19:9,11,20 21:6,7 22:8,10 22:13,15,19 23:4 26:3 27:3 27:8,11,12,16 27:18 28:6,12 29:21 30:2,3 31:5 33:3,16 38:7,8 40:9 47:1 52:2,3 53:8 54:21,22 55:1,6 57:7,20 60:7 68:12,22 69:1,16,18,19 74:5 75:7 83:2 83:10 84:1 85:7 87:12 88:5,13,22 93:14 95:10 123:21 125:2 125:15,17 138:22 manufacturer's

8:18,19 11:3 33:4,5 55:12 manufacturer...

7:21 19:16,18 20:1 23:12 24:10 26:6 28:2,19 32:5 manufacturers 16:16 20:17 25:6 26:3 30:10 32:19 36:7 37:14 39:16 42:15 47:17 48:2 59:10 69:17 72:14 75:8 78:4 81:14 87:1 90:1 100:10 101:14 104:22 117:18 128:19 131:12 132:13 143:1 149:3 manufactures

8:9 19:10 manufacturing

2:5,13,16 13:17 70:17 76:8 market38:16

75:9 142:2,3 142:22 Maryland 153:5 master40:2 match35:5

87:12 matched 87:17 Matt2:11 66:17 matter36:21

43:3 59:1 McCrudden 3:2

54:7 55:9,14 56:1 63:4 121:7,22 mean 11:6 17:21 19:2 20:5 22:19 23:16 25:13 26:13 29:20 32:11 33:3 43:2 44:2 45:21 46:12 47:8 58:17 62:1,22 64:5 68:20 83:19 84:14 90:19 105:13 106:21 125:10 126:7 130:16 131:11 134:8,21 137:14 145:11 148:20 Meaning 122:22 means 8:4 16:22 18:14 23:14 120:6 143:17 meant94:20 meet 115:1,5 meeting 1:7,13

9:19 17:10 40:5 41:19 137:3,7 138:2 138:17,18 152:10 meetings 137:3 150:22 Melchi2:12

27:22,22 28:11 28:13,19 29:8 29:15 70:7,7 70:15,22 78:20 90:8 91:5 memo 140:11 149:19 mentioned 101:6 110:7 mentioning42:2 merchandise

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8:12 15:14 22:16 23:19 29:20 30:6 52:17,21 67:11 67:17 68:7 74:18 76:3,6 76:10 90:16 91:12,15,19 92:21 93:3 94:18,22 95:4 96:2,7,9,21 97:3,7,22 99:14 110:2,20 112:13 114:2 119:19 120:9 120:16,18,21 125:3,12 126:5 126:9 130:14 131:11,14,18 132:4 mic9:16 33:14 microphone

30:20 46:14 59:1 microphones

4:3,4 middle 37:19,20 104:11 middleman 8:22 Mikado 33:22 mind 12:14 14:18 18:21 62:18,22 63:1 123:20 124:3 145:5 148:17 minimal 112:21 minimum 107:18 109:19 minor5:15,22

7:9 minute 18:7

63:16 64:19 minutes73:8 100:6 126:7 135:16 missing7:6,8 105:4,4 111:6 143:18 mistake4:16 mixed 64:22 model 32:20 57:4,11,18,18 models57:2,7 modification 113:11,16 modify73:14

79:4 moment72:1,11

77:16 79:22 149:2 monetary44:2 money21:9 month48:9 months 15:8 118:10 143:22 morning 67:1

68:15,21 71:12 72:20 122:13 122:16 125:19 126:1 move26:18 32:2 150:7 moved 145:20 moving 137:15 multiple 35:20

36:19 66:3 111:10 N name 12:17,17

36:8,10,11 142:7 narrow7:19

37:13 71:13 77:3,8,11 97:2 123:12 narrowing 86:1 123:14 national 2:19

46:16 57:2 59:8 76:9,10 95:20 Natural2:14 Navigant3:4 near5:2 112:5

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 13 necessarily

36:11 49:18 82:6 127:7 143:20 necessary40:17

67:8 70:20,20 110:18 127:9 138:1 148:18 need 23:8,10

41:13 54:12 68:9 71:9 73:4 73:7 74:16 86:16 99:14 100:4 108:10 114:3 115:8,10 118:7 126:6,13 130:20 133:10 140:5 145:2 150:8 needed 5:11

41:14 needs 19:1

36:14 73:17 110:15 141:10 141:13 146:14 negative 127:11 138:11 139:9 negotiated 86:4 108:13 109:12 129:4 150:13 negotiating 151:19 negotiations 112:10 Neil 1:15 2:2

5:10,19 118:1 126:5 130:14 132:16 147:5 network23:21 never 107:19 113:1 150:6 new 14:20 18:6

60:2 77:21 79:6,12 85:8 88:21 113:17 119:9 143:9 news 64:22 nice 127:9 nobody's 48:4 nodding 25:15 Noll 2:14 74:2

74:11 76:12 77:10 79:3 81:8 85:18 87:10 118:6 136:19 143:4 non-consensus

86:2 noncompliance

57:1,17 noncompliant

57:3,14,19 59:14 94:16 96:13,15 126:19 142:4 142:11 nongovernme... 136:4 noon 106:16 Nordyne2:11 norm35:3 normal 148:5 notarial 153:13 Notary 153:4,18 note 30:16 101:10 143:16 noted 69:22 100:15 147:5 notice 6:8,9 36:1

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48:19 77:21 86:6,7,14 127:1 130:5,12 objectionable

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64:17 110:10 oftentimes 108:19 147:5 Oh 80:20 107:15

139:4,5 okay 5:15 7:4,10

9:18 10:9,16 11:14,15,20 12:8 20:2,10 20:14 21:13,20 22:6 27:10,14 27:20,20 29:9 30:6 31:14 33:1,6 39:11 40:8 41:16 46:14 47:14 50:12 51:4 52:6 53:1,3,6,9 54:2,4 55:2,14 55:14 56:1,14 59:6,12,13,18 59:19 61:3 62:21 63:10 64:15,18 65:12 66:6 68:7,14 68:16,16 71:1 71:3 72:8,19 73:6 74:11 76:4,11 78:14 79:17 81:22 84:21 85:12,15 85:15,16 87:22 88:2 89:1,10 92:6,22 93:15 96:2,21 97:3 99:8,11,15,16 99:20 100:9 101:20 103:3 103:16 105:17 106:12 107:2 110:20 112:8 113:18 114:11 114:14,18,19 115:5,12 116:4 116:14,18,21 117:6,9,15,18 117:21 118:5 118:10,15,22 119:3,8,12,17 120:14,20 121:3 122:8,9 124:6,19 125:13,17,21 126:10,14,18 126:21 127:2,6 128:1,4,15 130:22 132:5 133:8,9 135:12 135:21 136:8 136:17 138:5 139:17,20 140:7 149:19 old 84:8 85:2,3

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 14

once 14:15

49:15 62:6 63:18,19 66:22 74:17 83:20 85:1 89:13 97:17 108:3 ones 115:18 online 30:20 open 18:16 19:13 60:10 109:21 121:20 148:18 operating 146:19 opinion 15:4 opportunities 143:19 opportunity 101:5 oppose 37:5

39:9 opposed40:16 114:9 149:13 opposing 143:5 options 72:2 133:4 order7:14

32:10 organization

20:20,21 35:20 121:18 original 124:7 ostensibly 69:17 outcome57:15 143:10 153:12 outcomes 113:15 outdoor57:6,8

57:12,22,22 58:5 outside 15:18 146:19 owned 22:8 26:2

27:7,12,17 28:22 29:1 30:8 33:5 68:22 69:19 141:16 owner41:10 ownership 16:10 23:14 owns 10:2 13:20

69:19P p.m 152:10 package 34:7

38:10 53:22,22 71:17 72:16 75:2,2 80:11 93:10,17 94:14 96:14 104:15 107:1,3,7,10 108:16 115:14 124:16 128:16 128:19 129:8 129:13 130:17 138:6 139:2,7 140:10,11 145:17 149:20 149:22 page 84:14,16

84:20 114:9 122:4 135:8 paid 26:15 paper 31:9,13 parallel 99:5 parameter 14:20 parenthetical

56:19 58:20 parsing 85:21 part7:2 17:2

22:9 23:21 33:4 62:12 63:22 83:9 86:7,8,14 100:16 109:12 121:17 129:10 134:1 participants 136:2 149:2 particular 13:6 16:3 32:2 34:20 35:22 37:16 43:20 72:3 86:15 101:7,16 112:3 127:13 129:14 134:3 147:9 particularly

35:1 36:8 44:5 59:21 142:20 parties 67:14 100:14 102:12 153:11 parts 141:6,7 party 64:9 pass46:14 76:5 passed4:13 150:18 pasting 103:7 pay 21:9 25:2

26:4 58:11 paying 27:18 peace 145:5 penalties 22:22

23:7 24:8,8 26:4,5 37:14 39:18 72:13 76:1 142:20 penalty 6:4 11:22 12:2,6 19:20 24:22 27:13,19 34:18 39:8,18 52:1 142:21 pendency 94:1,8 people4:7 14:19

21:18 25:7 48:12 50:3,4 70:1 71:20 83:8 87:22 89:15 90:9,22 105:9 106:5,9 108:3,11 115:14 121:17 127:7,7 131:6 135:11 136:6 138:3,16 149:12 150:12 150:17,19 151:2,4,14 percent38:15

38:17 perception

36:16 44:7,12 perfect25:12 perfection 144:13 perform57:9,10 performing 16:10 period 51:20

52:11 144:7 person 8:4 52:9

60:13 61:6,6 69:17 84:5,7 92:20 93:10,12 93:16,17,20 97:16,19 120:13 121:18 146:17 person's 60:20

84:2 personal 106:11 personally 151:18 perspective 128:19 130:16 143:21 perspectives 152:1 persuade44:20 pertinent5:6 petition 146:17 146:21 PHCC 2:21 64:2 phrase 80:21 picture7:18,19 piece 82:4 87:3 111:6 112:3,12 pieces 14:12

56:12 82:7 86:21 143:18 pilot 150:14 place9:21 14:1

52:18 61:9 101:16 108:4 144:22 146:10 placed 149:12 places 66:7,11

67:3 plan 1:6 109:11 110:19 143:15 144:22 145:2 147:1 play 26:5 28:17

75:8 123:9 played 104:8 playing42:20 please 30:19

39:3 58:4 60:17 89:17 115:17 147:2 148:19 plumbing 28:15 point4:16 19:8

20:6,16 29:8 31:18 32:5,9 32:17 33:18 35:7,9 38:21 44:16,18 52:18 57:21 66:1 77:18,19 112:1 127:19 129:1 133:5,14 135:10 143:16 pointed 5:10 points 77:20

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 15 151:15 policy 8:2 112:6 polite59:3 Porter2:17 7:1 10:17 11:5,14 24:16 25:22 26:12,12,18 55:20 63:11 68:18,18 70:2 78:2,2,22 84:17 85:11 87:5 89:9,11 97:4,9 99:13 99:19 113:20 115:4,17,19 116:7 117:1 119:5,18 120:14 126:4 131:12 135:16 136:1 Porter's78:20 portion 103:19 position 21:5,21

37:22 73:17 110:11 123:17 134:7,8 positions 71:21 possibility 84:1 possible 17:20

24:15 75:22 113:15 possibly 20:12 102:14 148:10 potential 92:2 potentially

32:10 123:1 powerful 134:22 practical43:3 preamble 15:1 15:10 46:6 102:7 103:22 125:22 126:15 preambular 14:13 precondition 133:7 134:16 predicated 83:4 135:5,10 prefer42:17

47:13 86:17 91:18 98:3 preference7:12

46:22 51:21 115:3 premise 83:22

88:13 premised 109:14 prepare 131:1 prepared72:12 150:1 present50:11

78:17,18,20 presented 63:9

79:13 136:19 136:20 140:19 presiding 1:16 pressure72:9 108:2,5,11 presume48:11 146:6 pretty 18:21

62:22 previous 83:14

91:21 previously

58:16 125:11 price 32:7 primarily 142:1 printed 114:21 printouts 115:22 prior5:21 proactive 117:9 142:11 probably 56:10

64:16 89:4 90:3 100:12 122:2,5 127:9 127:15 132:22 138:8 problem39:6

45:8 51:18 58:21 66:3,4 66:15 84:12 91:13,19 92:8 92:14,16 118:8 problems4:12

68:8 115:9 procedure 110:22 146:16 proceed45:13 125:7 proceeding24:4 proceedings4:1 153:6,9 process 12:12 13:22 26:8 34:15 36:17 43:10 59:8 61:8,21 98:18 103:6 113:4 122:20 130:7 137:6 138:9 142:18 144:11 148:3,6 150:19 150:21 152:2,6 processes59:11 101:15 produce 18:14 product 8:6

32:7 36:3,5 37:11 39:9 43:20 44:11 54:20 55:17,19 56:4 59:14 62:7,9 71:15 72:15 74:20 75:11,21 77:5 80:12,15,22 82:6,16,16,21 86:20 88:7,10 88:18,19 90:13 94:17 97:11,18 97:18 99:9 100:22 101:7 101:18 103:11 103:13 104:4 118:18 119:21 120:2,3,6,15 120:19 123:12 123:18,18 126:1,15,18 production

75:14 products 6:17

34:6 72:14 75:6,20 76:9 76:10,16 84:17 92:5 94:3 95:11,17 96:11 96:12,16 100:19 proffer49:22 program37:2 progress 141:11 142:6 prohibited 5:6

8:20 10:14 16:15,17 31:6 36:4 40:16 101:10 102:11 103:14 123:22 126:22 142:21 prohibiting

71:16 promised 142:10 promotion 136:12 properly 61:11 proposal 60:9 propose 87:18

91:10,11 101:8 104:7 proposed79:5 108:9 proposing76:14

76:15 prove27:1 provide 33:19 108:1 provided79:19 proving 27:2 provision72:3 public 1:7 69:11

69:13 121:15 134:9 153:4,18 publicly 69:22 published 110:5 136:15 pulling 103:1 pump 97:9 pumps75:1,3,4

92:4,12 94:9 97:8,14,20 punish 97:6 punishment

33:21 43:15 73:19 122:22 123:3 purchase54:17 purpose 8:6

54:14 60:22 69:15 80:21 purposes 15:20

35:4 71:15 88:5 push48:21 put 14:4 31:1

33:15 38:7 41:2 42:7,11 43:10 50:9 59:21 60:1,4 63:5 70:18 72:3 86:11 87:5 92:17 98:21 101:16 108:2,10 110:14 111:12

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 16 122:4 124:15 124:16 129:17 131:7 132:16 138:19 144:5 147:15 151:20 puts 134:5 putting 39:5

61:18 63:1 108:5 129:3 132:14 Q quality 136:12 quantity 64:4 question 10:20

12:16 13:8 16:13 20:9 32:21 37:17 54:8 57:15 61:12 65:14 66:16,17 67:21 73:11 74:3 82:3 87:11 94:7,11 101:17 103:10 107:17 110:8 114:1 116:1 121:8 122:20 139:15 144:5 145:15 147:14 questions 11:16

32:1 33:8 37:3 65:12 66:14 72:18 80:19 81:2 88:20 115:10 124:3 137:19 quick4:19

62:22 66:17 126:6 quicker 63:8 quickly 64:6

73:4 quite78:12 137:15 140:3 141:5 148:10 R R2:21 raise4:13 102:4

115:10,16 149:21 151:14 raised75:18 raising77:21 Rand 2:6 rate 131:22

132:1 rated58:7,15

96:1 109:18 Rawald 2:3 4:15

4:22 5:19 6:12 6:20 7:16 8:14 9:16 10:1,6,11 10:19 11:8 12:7,9,20 14:8 14:14 16:14 18:1,10,13,20 19:7,22 20:3,8 20:11 21:2,13 22:6 23:3,10 23:18,22 25:3 25:13 26:1,9 26:17 27:6,10 27:16,21 28:8 28:12,16,21 29:14,17,22 30:9,13 31:19 32:11,16 37:7 39:22 40:5,15 40:20,22 41:16 42:1 43:1 44:14 45:14 46:3,19 47:11 47:14 48:11 49:22 50:12,15 51:12 53:1,3,6 54:14 55:11,15 56:15 59:3,6 59:12,19 61:17 62:17,21 63:12 63:17 64:8,15 64:18,22 65:22 66:21 67:14,19 68:14 69:8 70:4,12,18 71:11 73:21 74:10,16 75:17 76:4,11,22 77:13 78:7,13 78:16 79:1,7 79:17 81:18 82:22 83:20 84:10,15,19,22 85:12,15,20 87:18 88:2 89:10,13,20 90:10,19 91:7 91:14,17 92:15 92:22 93:5 94:6,10,20 95:1,6,19 96:6 96:8,12,22 97:10 98:13 99:3,11,15,17 99:20 100:2 101:12,20 102:9 103:1,6 103:15,19 104:7 105:7,11 105:17,20 106:7,9,16,20 107:14,16 109:10 110:6 111:12,16 112:15 113:21 114:7,11,14,20 115:5,21 118:4 120:1,10,17,20 121:14 122:2 123:6 124:14 124:19 125:8 125:13 126:8 126:10 127:4 127:19 128:3,6 131:20 132:9 132:16 133:20 136:4 137:5 139:1 146:12 148:8 reach 100:13

101:4,10 102:13 151:3 reached 108:12

141:20 reaching 65:10 read 15:21

116:11 reading 119:14 reads 8:3 ready53:13

68:17 72:7 81:3 107:1 115:13 116:12 128:15 139:20 140:3,5 real4:18 42:18 reality 17:11

105:8 realized 149:11

151:11 really 14:16

16:6,6,12 18:3 20:21 35:3,9 36:10 37:1 42:17 43:14 44:3,12 62:20 66:8,22 76:20 82:4,18 111:19 126:7 138:22 reason28:5

47:14 66:18 67:5 81:21 102:18 123:8 reasonable

61:21 63:18 reasons 147:2 recall 121:4 receive69:10,14 received30:16

93:15 123:10 receives 60:13 receiving36:5

121:11 Recognizing 130:9 recollection

128:8 recommend

136:11 recommendat...

103:22 118:21 122:18 124:9 125:16,22 146:2 recommendat...

4:10,13 127:13 139:8 140:15 recommended

150:12 recommending

85:21 record41:4

50:17 64:21 73:9 79:16 86:8 87:19,21 89:19 91:16,17 100:8 115:6 125:6 126:11 135:17,19,20 139:19 140:7 143:8 145:15 149:4,6 153:8 recorded 130:10

153:7 records 118:7,9

118:9,12 142:10 redefined 17:16 refer 125:9 referencing

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 17 105:18 referring 120:7 reflect79:4

87:15 reflecting 15:6 reflective

113:10 regard 35:6 regarding42:4

121:16 132:20 regardless 38:10

41:9 48:4 regards 144:4 regime8:10

29:18 92:17 141:4,11 region 109:19

112:22 regional 1:4

16:19 57:14 59:9 72:15 75:15,22 76:2 77:6 94:4,5,17 95:12,21 107:18 111:1 122:3 regions 5:6 regular71:16

93:18 148:2 regulated75:21 regulation 144:8

147:9 148:4 regulations

146:13 regulatory

29:18 92:17 109:16 134:20 reiterate 130:15 relate 111:20 related7:20

85:4 107:17 134:8 relates 6:15

56:15 relationship 49:20 release 108:3

112:8 133:9 relief69:9 relieves 144:21 reluctance

42:19 remaining7:11

129:20 remediate28:6

28:20 29:5 59:20 60:7,12 60:14,15 61:6 62:5 remediated61:7

62:9 remediating

63:7 remediation

28:16 63:20,21 64:10,11 119:3 remember6:5 remind 17:8

132:17 reminder4:6 reminds59:7 removal 124:6 remove55:10

122:16 removed66:19

67:10 Renewable 1:3 repeat34:21

76:19 replace49:8

60:15 80:5 120:5 replacement

120:18 replacing 120:4 report71:9 86:8

127:10,14 129:6,13,18 130:4,5,6,13 131:2,4,5,15 132:14 138:7,8 139:11,14 140:13,19 141:3 Reported 1:22 reporter4:6 reporting 117:7 representative

137:17 represented

38:14 representing

151:4 request63:3,13

71:11 112:19 118:13 134:15 requests 147:18 require 142:5 required43:21

47:18 48:5 89:7 108:2 109:19 137:7 147:3 requirement

42:19 43:5 45:9 109:17 127:15 requiring

147:16 reserve 83:12 resolution

139:14 resolve23:15

24:19 58:20 resolves9:4 Resources2:14 respect41:22

137:20 respond 32:5

63:2 137:19 147:17 responding 59:4 62:22 response51:8

51:10,17 110:4 responsibility

18:6 responsible

35:19 48:7 57:20 68:2 rest38:1 80:16

103:18 138:8 138:17 retailer8:5 review 106:10

115:19 140:16 144:11 146:2 reviews 146:6 revised42:10,13 rewritten

105:21 Rheem2:13 15:15 74:19 119:20 riddle 30:4 right5:18 6:2,7

6:12 7:1 9:15 11:8 12:7 13:13 14:6,8 16:14 18:1,12 19:6 20:8 21:1 21:2,12 23:3,3 23:18 25:1,3 25:10,13,19 26:16,17 27:9 28:8,16 29:1 29:16,19 30:9 31:13,19 32:11 32:12,16 33:7 37:7 39:1 40:7 41:17 42:1,8 43:1 45:14 46:3 47:11 48:11,11 49:12 50:11,18 51:2 51:7,8,9,12 53:7,17 54:1,1 56:1,3,15 58:10 62:21 64:19 65:22 66:21 67:14 68:14 69:8 70:4,12 71:6 71:11 77:14 78:9 80:4 81:4 82:13,17 83:12 83:20 84:10,19 85:3 87:18 89:7,13 90:7 90:10,14 93:4 94:6,7 95:6 96:6,8 97:10 97:12 98:9 99:4 101:19 102:4,9 103:2 103:18,19 105:10,19,20 106:1 107:15 109:10,11 110:6,18 111:15,15 112:20 115:13 117:12 118:18 122:14,14 123:6,18,20 124:4,10 126:3 128:5 130:4 131:20 132:11 133:20 136:17 138:3 139:5 140:9 148:8,12 149:5 151:2 rigorous 144:22

145:2 risk55:8 67:15 roadblock22:21 Rocky2:15 9:7

41:5 42:2,22 58:22 59:4,7 95:17 136:14

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 18 Rocky's7:20

9:5 role 12:11 room4:5 30:18

38:1 51:1 99:21 100:3,16 101:6 110:21 149:10 151:11 routine5:16,21

5:22 6:10 8:17 9:10,12 10:12 12:3,4 19:19 23:2,6,20 25:2 26:15 27:17 28:3,3,10,18 29:6,21 30:1,7 30:8 34:10,21 34:22 35:10,12 36:2,18 37:15 38:6,12 40:10 41:22 54:13 60:5,11 62:3 62:13 63:8 67:15,17,19 69:14 71:6,16 72:14 73:20 75:15 76:2 77:4 80:11 83:4,5,9,11,21 84:2 85:1,7 93:7,9 95:9,12 121:3 123:7,20 123:21 124:7 142:17 routinely 16:18

16:19 69:5 Roy2:16 12:15 133:8 rule 15:21 21:17

56:12 80:21 97:5 108:21 132:20 134:18 134:19 137:13 137:14 146:2 147:15 152:4 ruled 123:2 rulemaking

72:7 108:9 109:13 121:16 123:11,16 129:5 144:10 147:3 150:14 151:9 rulemakings

86:5 146:15 rules 100:19 S safe 55:19 said,you 15:6 sale 12:13 61:5

72:13 76:1 97:15 sales 51:19 52:8

57:21 58:5 70:6 71:17 satisfies 129:15 satisfy 135:11 145:6 saw7:9 113:3 118:3 saying 14:18 15:2 20:3 21:13,18 22:17 25:16 26:2 27:10 28:9 47:20 48:4 49:14 54:11,18 69:11 92:16 96:4 97:12,19 98:14 102:10 102:11 108:12 109:2 110:3 120:10 131:21 134:11 135:10 141:8 says 5:21,22 6:8 16:16 21:8,19 28:13 29:2 43:2 61:3 62:4 83:20 98:9 110:13 116:11 120:2 scale49:17 scenario 10:10 11:18,19,20 28:2,9 schedule 64:3 Science2:9 scope 35:14,18

36:2 44:10 66:19 67:6,21 77:3,9 79:21 80:15 82:21 88:6,18 90:13 96:22 98:7,17 98:20 99:1 101:17 103:11 104:4 123:12 125:22 126:15 screen 15:1 42:8

88:1 103:17,18 scroll 5:2 seal 153:13 search 142:11 season's 52:10 second 5:4 6:3

6:19 7:2,7 41:18 44:21 80:13 85:8,8 89:2 91:9 93:2 119:5 122:11 150:22 see4:9 13:15 14:22 24:14 38:5 42:8 46:9 61:8 72:2 79:11 86:13 92:19 93:22 100:22 106:4 113:15 124:2 129:21 144:17 145:4 146:13 147:9 seek70:5,16 seemingly 88:4 SEER 38:10

94:13 107:12 107:18 111:6 112:20,21 116:4 120:5,5 130:18 131:19 131:21 133:17 self-explanato... 138:4 sell 6:16 9:11 13:12 17:6 29:3,4,10,14 36:8 38:8,13 38:21 50:16 55:7,18 69:17 83:8 92:4,19 93:16,16,20 94:3,9,12,15 95:5 96:5,9,10 96:13,15,18,19 97:20 109:17 selling 9:1 10:14 13:21 16:17 27:15 37:15 38:18 52:2 55:3 58:13 60:8 61:4 69:18 80:10 83:3 84:7 sells 28:3 92:12 123:22 send 128:12 130:5 sends 141:13 sense 14:10,15

26:10 27:21 37:1 49:17 62:11 92:14 150:4 sensitive 81:14 91:1 sent49:7 sentence55:22

86:10 sentences 102:20 127:12 separate 11:19 12:13,22,22 13:2,3 14:1 20:4 22:7 41:13,14 86:16 86:19 87:20 88:10 109:11 131:2 133:1 134:5 144:17 separated 88:9 separately 12:21 serious44:3 serve 121:13 serves 12:11 service 121:19 set39:8 71:8 100:18 sets 137:3 setting 65:16 settled54:6 Seuss 30:4 severe35:1 severity35:14

35:16 49:17 142:20 shape 22:12,13 she'd 102:10 sheet31:8,13 139:16 143:6 146:5 Shepherd 2:18

9:15,18 10:5,9 10:16 11:17,18 12:8 17:19,19 18:2,12,19 19:6,12 20:2,5 20:10,14 22:18 23:8,16 24:20

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 19 24:21 25:4,21 26:20,21 27:9 27:14,20 29:16 29:19 33:13 37:4 40:3,7,11 40:13,18,21 41:3 43:13 46:7 49:3,5 50:6,9,14,16 50:22 56:9 65:14,15 68:11 68:16 78:15 80:7,20 82:11 83:15 84:8,13 84:21 85:10,13 89:3,3 91:9 98:2,16 99:4 99:16,22 100:6 100:9 101:19 102:2 103:5 104:21 105:10 105:18 107:9 107:15 108:18 119:11,15 124:17 138:21 139:4,18,22 short40:6 146:13 show 39:15 78:8 140:7 showing43:8 shown 151:1 sides 151:15,16 sign 116:12 121:15,18,20 122:4 significant

74:12 similar 102:10 similarly 101:9 simple 13:14 simpler31:22 simplistic 19:8 simply 12:13 33:19 42:4 45:15 86:19 87:4 123:4 single 34:7 38:9

71:17 72:16 75:2,2 80:10 93:10,17 94:13 96:14 104:15 Sir22:4 sit 15:11 50:7 sitting78:22 situation 34:17

36:15 43:16 59:5 86:5 109:4 situations 80:14 slide4:18 5:15

5:18,20,22 6:2 6:15 7:4,15 16:1 35:8,9 39:6 40:9,10 41:18 49:4,7 49:13 51:8,9 51:11 53:13,14 53:18,18 54:3 54:6,10 55:9 56:16,17 59:13 59:22 60:2,3 63:9 65:2,3 71:5 74:4,5,12 74:13,19 78:9 79:4,9 80:5,6,9 82:4 83:1,14 84:9,11 85:3,8 85:9 86:12,15 87:5,12 88:1 88:10,11,14,17 88:21 89:2 90:12 91:21 93:2 94:19 97:18,18 98:1 100:1,10 101:13,15 102:5,11,15 109:15 111:5 111:11 115:15 115:15 116:14 116:17,18,21 117:8,15,21 118:15 119:3,9 120:1 122:11 122:14 125:17 125:21 126:6 126:18 127:21 129:17 131:1,2 131:6 133:8,13 135:4,5,6,11 135:14 144:6 slides4:16 5:3

6:14 7:13 33:10,14 41:3 49:4,6 59:22 71:8 73:13 74:4 87:20 114:7 115:16 121:4 127:4 130:6 small44:5 75:5 smaller48:5 smiling 113:20 140:8 smith 15:12 Smith's 60:16 sold 8:6 27:3,17

88:7,8 93:10 95:8,12 97:1 solely 10:3 75:8 solution 34:1

36:22 73:19 134:16 solve59:9 105:14 somebody 17:1 19:10 116:11 146:18 149:6 someone's44:4 somewhat 101:9 soon 62:8 sooner40:6 sorry 30:15 46:8

73:1 83:16 119:15 126:9 sort 18:6 26:7

39:18 49:12 56:13 79:14 82:15 98:9 100:20 104:11 110:16 119:20 136:13 138:12 soundly 112:7 sounds 22:20 105:2,3 south 57:22 58:1

58:6,13 109:18 southeast5:6,7

5:8 southwest5:7,8

5:8 space2:10 75:6

92:4 speak4:14 138:1 speaking 30:19 specific 18:2

36:10 50:19 specifically76:6 specificity 36:6 specified 146:3 specify 118:7 146:5 spend 19:3 spirit20:22 split49:12 74:22 104:11 split-system

34:7 38:9 72:17 75:1 80:10 96:14 split-systems

38:17 71:17 93:11,17 94:13 squarely 110:9 St9:9 66:9,10 67:22 68:4,5 standard 16:19

57:14 94:4 95:12,18,20,21 95:22 standards 1:4

72:16 75:15,22 76:2 77:6 94:5 94:17 107:19 122:3 stands 74:6 start4:9 7:12

33:10 66:5 131:6,8 started4:2 151:14 starting 137:12 state5:5 56:6,12 107:6 138:14 138:14 143:7 153:5 stated76:13

78:5 86:6 87:17 100:20 111:10 statement74:9 109:8,8 110:22 137:22 statements 131:3 states5:5 43:20 130:1 status 34:10

64:11 statute9:13 15:7 16:16,20 16:21 17:11,13 21:19 25:5 97:13 143:13 statute's 17:3 statutory 103:13 148:3 stay42:17

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 20 staying 6:4 stays74:6 122:9 stenographica... 153:7 step 26:8 34:15 141:3 steps 138:10 Steve2:17 26:12

68:18 78:2,20 stick28:14 stock 13:18,22 stop 70:5 stopped 101:22 108:5 stops 26:16 street69:3 strength 145:9 strong73:14 structure9:20 15:17 16:4,5 19:4 structured 10:22 stuck42:18 stuff38:20

41:20 96:10 138:4 sub-bullet 87:13

87:14 91:22 93:22 subject 11:22 12:2 19:19 22:22 24:7 92:13 95:17 96:11 102:21 submission 130:12 139:10 submissions 138:5 submit 140:18 150:1 submits 150:2 submitted 137:2 submitting 140:13 subsidiaries 16:8 subsidiary 12:11 14:5,6 21:6,15 substitute 103:4 suddenly 52:10 suggest 129:4,15 suggested 39:14 suggestion 6:7 suggestions 7:5 129:11 131:7 sum 141:5,6,7 summary 138:9 supply 2:17

43:19 support51:4

72:21 78:6 81:13 89:22 143:5 145:8 supportive 101:21 sure4:17 7:22 14:18 21:10,20 26:10 32:22 33:1 37:9 39:1 45:19 48:3,13 48:16 52:17,19 53:13,20 61:5 61:11 74:4 96:2 105:11 112:7 127:13 135:18 137:10 139:4 150:6 surge51:19 Surrena2:19

46:16,16 47:7 47:12 48:8 survive44:4 SW 1:14 sworn 110:7 symmetry 142:19 system75:1 142:2 systems75:6 T table 31:2 39:14

39:14 74:3 106:7,8 107:2 107:5 118:3 151:2,7,15,21 take4:11 9:6

35:5 40:1 42:9 44:11 51:15 53:13 58:18,19 69:6 70:3 79:6 87:22 90:20,22 91:2,6 102:14 103:17 106:17 110:9 114:12 115:13 119:9 129:16 130:8 131:4 135:16 137:6 138:21 139:2,13,18 146:9 147:18 150:3 taken7:10 56:4

69:2 74:7 108:4 takes44:1 62:15

68:4 talk 14:13 17:15 18:17 20:13 22:1 23:8,10 25:17 31:10 33:17 37:8,18 66:15 89:14 106:15 107:7,9 107:11 115:8 146:1 148:19 talked 17:9

24:21 67:9 68:21 71:18,19 79:18 83:6 109:6 125:3 130:19 138:16 148:9 talking 26:11

43:14,18 53:8 64:4 66:22 67:4 76:20 77:5 83:17 86:10 95:20 103:12 112:18 132:2 talks 35:10 technically 150:20 Technology

2:10 tee56:7 teed 148:11 teeing 105:8 tell 31:9 37:21

38:3 43:2 48:14 69:16 93:19 110:17 120:11,12 129:8 149:6 150:10 tells 11:2 17:5 template 102:16 term8:3 14:15 16:20,21,22 17:3 18:11 86:20 101:17 103:11 104:4 132:1 139:16 143:6 146:3,5 terms 18:20

35:16 36:14 39:8 44:7 128:22 terrific 144:20 test43:10 57:11 110:22 131:22 testified 150:17 tests57:13 text 134:21 thank 56:2 68:7

71:1 80:2 118:5 140:22 152:8 thanks 30:21 122:7 That'd 120:21

122:7 they'd 14:2 69:1 thing 5:15,22 16:10 26:21 34:15 38:19 49:14 61:4 62:19 63:1 80:21 90:6 94:12 98:2 109:6 115:12 120:12 136:7 136:13,15 138:12,13 150:4 things 7:9,19 16:12 17:14 32:12 35:13 37:13 41:22 43:4,9 49:10 51:20 52:4,12 54:17 58:10 64:4 67:2 82:10 86:1 87:2 96:20,22 97:15 99:8 106:18 109:14 115:3 134:12 134:13 136:9 136:22 142:7 142:13 144:17 147:11,14,19 151:22 think 6:14 7:1

9:3,14 14:9,10 14:14,16 15:7 15:9,15,15,18

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 21 16:6,11 17:10 18:3,7 19:1,12 20:6,11,18 21:3 24:3,20 25:12,15,18 26:10 31:17,22 32:7,18 33:10 33:11 34:16 36:6,13,16,22 38:16 39:13 40:15,16 41:11 41:13 43:12,13 43:17 44:6,7 44:11,16 45:4 45:14,16,18,18 46:10 47:18,19 47:22,22 48:18 49:18 50:10 52:14 56:4,10 58:20 61:9,20 62:7,12,13,16 63:5,7,22 64:14 66:12 71:5 72:5 73:1 73:3,10 74:3 77:17,18,19 81:22 82:11 83:6 85:18 86:4,10,21 89:5 90:6,7 91:5,10 97:12 98:8 99:13,14 100:6,10,14,17 101:1 102:18 103:10 104:2 104:13,21,22 105:15,16 106:20,22 107:9 108:18 109:1 110:8 111:4 112:4 114:2 115:13 119:8 122:2 123:3,8,14 124:2,19 127:15 129:3 129:13 130:20 132:4,10,22 133:1,1,16,18 136:4 137:1 138:2,3 139:15 140:1,3,4 141:3,9,10,17 141:21 142:6 142:13 143:9 143:20 144:2 144:16,21 145:7,19 147:5 148:15,18 149:10 150:2,4 150:7,21 151:6 151:11,13,18 151:19,20 152:1,4,8 thinking 66:5

75:9 89:15 117:1 thinks 51:6 68:3 third 91:21 thought4:8 5:11

45:22 77:22 79:13 91:15 109:14 128:1 151:13 thoughts45:5

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32:3,4,13 45:7 73:2,10 81:5 104:1,10 105:13 141:1 149:8 Tim's 25:15 time 19:3 30:14

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61:14 timeline62:8 times 36:20 68:1 timing54:17 149:22 Timothy2:4 today 11:11 15:12,13 24:19 34:19 37:21 46:13 67:9 71:20 102:15 108:6,13,14 112:6,10 123:17 token 133:12 told 10:13 71:22 111:13 112:9 112:22 top 65:3 76:7 103:19 total 139:2 touch 60:17 training 116:22 transcript 105:19 153:8 transferring 13:18 treat24:5 25:11 treated 19:17,21

20:20 22:9,19 24:6,12 25:9 treatment 19:15 tremendous 145:20 tried49:11 151:20,21 triggers 39:17 trouble 30:17 true29:18 153:8 try28:6 44:19

64:6 72:7 112:22 trying 19:4 28:1

28:17 44:15 51:20 52:4,11 56:20,20 98:6 148:2,6 151:9 turn43:6 51:14

51:20 52:4,12 84:4 turning45:9 twenty 100:6 twice78:19 two 14:1 15:8

35:13 41:21 49:9,20 50:7 65:20 71:8 76:6 77:5 82:14 86:6,11 102:20 104:21 113:3,15 121:4 125:10 127:4 127:12 133:9 133:10,21 144:17 148:16 type 122:1 typically 57:5 U U.S 1:1 2:9 ultimate36:22

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48:1 62:16 unanimous 51:4

53:18 59:15,17 59:18 65:10 71:7 72:20 78:11 116:5,16 116:19 117:4,7 117:10,13,16 117:19,22 118:13,16,19 119:1,4,17 121:6 122:13 122:15 124:8 124:11 125:2 126:1,17,19 138:11 unanimously

89:1 106:1 121:2 125:18 140:18 uncertain92:3,8 uncertainty

93:14 109:4 underneath

39:17 understand 14:19 17:21 21:11 24:1,9 28:8 39:21 40:14 43:15 44:14 50:6 68:20 75:19 93:8 111:21

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 22 148:1 understandably

48:2 understanding

53:21 71:14 78:16 79:12 108:20 128:22 149:22 151:8 understands 8:1

21:16 26:11 48:17 135:7 understood 108:22 151:22 unfortunately 18:11 115:21 148:16 Unico75:9 76:7 unit29:14 57:8

57:8,12,22 58:5,9,13 60:16 63:19 111:20 United43:20 units 58:11 60:6

75:14 125:4 universe 133:22 unowned 22:12

22:14 unreasonable

43:18 unwind 61:22 upstairs 89:14 use4:4 50:20

51:22 63:15 73:12 98:4 102:16,16 103:13 121:19 132:1,19 150:19 useful 15:9

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71:20 137:22 velocity75:5 venture 11:3 venture's 10:21 ventures 10:18 11:6 venue 132:21 verbally 140:21 versa24:8 versions 125:10 versus 59:8

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69:5 97:5 violates75:15 violating 32:10 violation 5:21

6:10 12:4 19:19 23:6 26:14 34:5 35:1,12 36:2 36:18 40:10 53:11 54:13 67:18,19 83:9 83:22 84:2 85:1,7 93:9 101:1 118:15 118:19 122:21 123:7,20 violations 35:10 145:1 violator5:16,22 8:18 9:10,12 10:13 23:2,21 25:2 27:18 28:3,4,10,18 29:7,21 34:10 34:21,22 37:16 38:7,12 41:22 60:5,12 62:3 62:13 63:8 67:16 69:15,16 71:7,16 73:20 76:2 77:4 80:11 83:4,5 83:11 93:7 95:9,12 121:4 123:21 124:7 violators 30:1,7

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50:5 53:14,18 68:17 72:4,22 74:7,11 78:17 78:18,20 81:3 81:7 85:22 87:2,20 89:12 90:16 107:1 108:4 114:6 115:1,14 116:5 116:8,12,13,16 116:17,19,20 117:4,5,7,8,10 117:11,14,16 117:17,19,19 117:22 118:11 118:13,14,16 118:17,19,21 119:1,2,4,7,9 119:13 121:5 122:9,12,13,15 124:5,7,8,11 124:12 125:2 125:15,19 126:1,2,16,19 126:20 127:2,3 127:11,20,20 127:22 128:6,8 128:15 129:16 130:8,16 131:4 137:8 139:2,13 139:16 140:10 141:2 149:15 149:15 voted59:15 125:18 127:7 131:4 votes 127:21 138:11 139:9 140:14 148:16 voting 50:19,19

81:11 86:12 107:22 134:1 141:12 145:12 149:13,13 W w 106:20 wait26:20 83:15 116:2 136:14 waiting 25:21

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5:12 6:6 7:22 15:13 17:14 18:17 19:3,22 21:4,10,18,19 24:12 25:17 26:10 29:3 32:2 34:13 37:2 38:22 40:10 41:2 43:5 44:9 45:10 47:21,22 48:3,13,16 49:1 50:2,3,4,9 50:14 52:16 53:20 56:7 60:15,15 61:18 62:5,6 66:5,15 67:6 68:9 70:18 72:4,22 73:1 74:1 77:2 77:13 79:4,6 83:12 89:11,21 90:21,22,22 91:2,10 92:18 95:2 98:6,10 99:9,21 102:6 102:7,8,21 103:3,16 105:11,12 106:2,4,14,15 106:16 107:4 109:20 114:22 115:14,15 116:2,13,17,19 117:5,8,10,13 117:16,19 118:14,16,20 119:2,6 120:4 120:11,14 122:8,12 123:11 124:5,8 124:12,21,21 125:14,19 126:2,16,20 127:1,11,17 128:9,12 129:12,21 130:8,15,22 131:3,8 132:15 135:12 136:9 136:11,16 138:7 145:11

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 23 145:15 146:1 147:13,15 148:13,19 149:6,17 150:10 wanted 29:13

32:4 49:19 80:22 132:17 140:4 wanting 81:13 wants 38:1

60:12,14 62:2 62:13 107:7 108:17 112:7 116:8 118:11 121:21 127:2 149:20 Washington 1:14 wasn't 83:18 water 82:9 way4:8 14:4 15:22 17:17 19:20 22:12,13 22:19,21,22 24:13 25:10,14 26:13 29:12 38:5 43:8 48:12 50:10 53:10 55:1 57:1 77:9 97:13 100:17 104:8,14 105:13,15 111:16 121:11 122:1,5 129:7 133:2 144:9 145:20 153:11 ways 111:10 137:22 we'll 21:17

24:19 31:20,21 33:14 34:1 40:6 45:18 51:5 57:16,18 58:19 63:2 114:20 117:3 122:2,4 132:22 133:1 141:21 147:18 we're 6:21 14:16 14:17 18:15 21:13,14 25:12 25:21 26:2,11 27:10 39:11 46:10,20 50:18 50:19 52:7,21 53:8,13,20,21 54:5,18 56:20 56:22 57:13 59:8 60:4 62:22 67:21 68:14 71:5 76:20 77:5,8 77:18 82:8,10 86:10 88:12 93:1 95:20 97:11,12 100:11 103:12 105:8,12 106:21 107:1,2 109:2,3 111:4 114:5 115:13 115:21 126:12 126:14 134:8,9 134:12,17 135:2,8,18,21 137:6,12,15 138:5 140:4 149:5 we've 15:8

22:20 24:20 30:13,15 33:20 41:6,20 53:15 56:4,17 58:3 67:9 71:3 73:15 86:21 102:5 115:19 123:12 138:6,6 139:22 142:6,7 142:9 143:21 145:14 web 122:4 website 116:18 117:2 wedded49:19 week 39:4 47:1 150:3 weigh 38:2 went42:16 128:3,4 130:7 138:9 White2:21 64:1

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9:9 19:19 23:1 65:20 69:14,20 70:18,19 83:3 86:12 97:20 123:16 145:5 wrangling 97:11 wrapped 107:10 write21:16,17 writing 15:5 137:2 written21:1

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37:19Z zero 132:8,9 0 1 1.2 56:11 1:15 115:4,5 1:30 115:1 1074:22 153:19 1000 1:14 11:3090:19 12:00 100:5 12:3090:21 91:3

91:8,8 13 34:14 94:13

120:5 13.8 57:13 58:8 14 34:14 57:11

## Public Meeting October 24, 2014

202-220-4158 www.hendersonlegalservices.com Henderson Legal Services, Inc. 24 58:2,7,15 96:15 107:12 107:18 111:6 112:20,21 113:21 116:4 120:5 130:17 131:19,21 133:17 15 84:5,18 2 2 87:13 91:22 2:42 152:10 200 29:11 32:6

32:14,17 69:3 2014 1:8 153:15 153:20 24 1:8 60:2 25 5:15 38:15

40:10 53:15 68:1 71:5 26 51:9 53:18

54:10 55:9 65:3 3 30 5:4 64:2,9 117:3 327:5 54:3 74:4

80:6 130:19 132:4,6,7 133:15 33 56:16 59:13 126:7,8,9 130:19 132:4,6 132:7 133:15 133:19 34 56:17,17 126:8 357:15 41:18 4 4 111:5,11 133:8 133:13,17 135:4,5,6,11 430.32 123:18 430.32(c) 37:11

38:14 74:22 48 118:9 5 6 6 56:10,14,15 7 75 38:17 8 8:27 1:15