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

Sent: Friday, September 23, 2011 3:06 PM

To: 'richard.parker@law.uconn.edu'

Cc: Caitlin Johnson; 'rick.anderson@faypwc.com'; 't ballo@earthjustice.org'; 'ScottB@lvmetals.com'; 'john.caskey@nema.org'; 'john.cymbalsky@ee.doe.gov'; 'adelaski@standardsasap.org'; 'Teckman@nwcouncil.org'; 'gbf1@pge.com'; 'carlo s.gaytan@ge.com'; 'rgreeson@federalpacific.com'; 'bruce.r.hirsch@bge.com'; 'mhyland@appanet.org'; 'dave.millure@metglas.com'; 'snadel@aceee.org'; 'wes.patterson@us.abb.com'; 'Eric.Petersen@aks teel.com'; 'Raymond.Polinski@atimetals.com'; 'srosenstock@eei.org'; 'rroy@nrdc.org'; 'robert.sa int@nreca.coop'; 'mark.stoering@xcelenergy.com'; 'cabolduc@lbl.gov'; 'kcoughlin@lbl.gov'; Brian Coffe y; 'gjrosenquist@lbl.gov'; Michael Rivest; 'Jerry Hodge'; 'jrossetti@mlgw.org'; 'Jim.creevy@nema.org '; 'Meyers, Aaron'; 'Daniel.Cohen@hq.doe.gov'; 'jmauer@standardsasap.org'; 'greg.coulter405@ gmail.com'; 'bsmith@federalpacific.com'; 'pkumar@publicpower.org'; 'Trujillo, Antonio'; 'Phil Hopkinson'; 'ahofmann@publicpower.org'; 'BermanEconomics@gmail.com'; 'Paul.Ryan@h itmet.com'; 'jerry.schoen@aksteel.com'; 'mwaltner@nrdc.org'; 'kwinder@mleainc.com'; 'chad.kennedy@us.schneider-electric.com';
'eduardorobles@eaton.com'; ' vijay.tendulkar@onyxpower.com'; 'carlosgsiqueiros@eaton.com'; 'thomas.patzner@us.schneider-electric.com'; 'Marusin ec, Richard M'; 'Schneider, Jeffrey A'; 'Loomans, Michael T'; 'Poole, Raymond L'; 'Moore, Jack C'; 'Smith, Jennifer' Subject: General Comments to the Liquid-Immersed an d Medium Voltage Dry-Type Distribution Transformers Negotiated Rulemaking Working Group

Mr. Parker:

Following up on your request that members of the Liquid-Immersed and Medium Voltage Dry-Type Distribution Transformers Negotiated Rulemaking Working Group submit questions and concerns

relative to our discussions.

1) Progress Energy does not currently use A and B factors for distribution transformer purchases that are covered by the DOE Final Ruling efficiency requirements. We performed an evaluation

of what the cost would be and determined that the payback would be way out in the 40-50 year range for most designs. We expected this as the payback for the DOE requirements was in the 30-40 year range. Comparing pre-2010 designs with those that fall under the Final Ruling requirements (with compliance date of 1/1/2010), we have not seen any significant deviation in

the ratio of No Load to Load loss values. But si nce the use of “A” and “B” factors is no longer a viable choice for many utilities or other users due to the potential cost increases, there could be drastic inefficiencies with future distribution transformer designs that only have to meet a single efficiency value. By using A and B factors (as previously done by a large number of distribution transformer buyers), a weighting could be assigne d to No Load and Load losses depending on a utilities cost of capital, cost of generation, transformer loading factor, cost of transmission, and many other important factors to utilities require d to determine the relative economic value of various transformer designs. Since both No Load and Load losses cost users, Users are very interested in ensuring that a method is arrived at that gives the same consideration as the A and B factors did in the past and maintains re asonable costs for customers.



### 2) I think the average load estimate of 45% used in the analysis is incorrect. Progress Energy Carolinas reviewed system peak da ta from this past summer (2011) and determined that during the system peak, the average load realized by distribution transformers was 34% of the available namepl ate kVA of all distribution transformers on the system. Based on discussions with other utilities, the DOE should model distribution transformers being loaded between 25-35% of the rated nameplate kVA value as this appears to be typical for most utilities. As some of the transformer vendors indicated

### during the subcommittee’s previ ous (first meeting), using th e 45% average load factor forces distribution transformer designs that ar e oversized which cost more money to build

and creates issues with material availabilit y. Accurate transformer loading values should be confirmed and used in the modeling process.

3) I would like to re-emphasize comments from Wes Patterson and others on the most recent analyses. The subcommittee should be provided with information as to the rationale used by both Navigant and Lawrence Berkley Laboratories (LBL) for determining the efficiency levels arrived at in Tables 1.1, 1.2 and 1.3 of the “Analytical Results In Support of Stakeholder Negotiations on Amended Energy...” dated August 23, 2011. Additionally, both consultants should prepare and provide replies to all questions related to the desi gns used and referenced in this document. Many valid questions have been subm itted by subcommittee members and need to be addressed such that we can ascertain the validity of the analyses to date and what changes may be necessary in

the future.

4) The DOE needs to require completely separat e designs for each type of design (1-phase rectangular, 1-phase overhead, 3-phase padmount, 3-phase network, and 3-phase vault type transformers) as well as corroborate these designs with vendors as the program used by the DOE consultants does not appear to line up with what the vendors designs reflect. Any lines that result from interpolation should also be verified with input from vendors. The scaling factors don’t appear to be very accurate. Additionally, designs need to be created for both network and vault type transformers as these are different from 3-phase rectangular type designs (scaling from 3- phase rectangular designs isn’t acceptable fo r networks and vau lt type designs).

5) The DOE needs to investigate and revise, as needed, market estimates as reflected in Wes Patterson’s comments on the most commonly purchased distribution transformers.

6) Some items that DOE should take into account w ith network type transformers are; a) the requirement that tanks be constr ucted of copper-bearing steel, b) availability issues with network protectors and/or switches, c) sensitivity to dime nsions since these units need to fit into an existing vault / hole.

7) Some items that DOE should take into account with vault type transformers are; a) Requirement of stainless steel tank and external parts (typically 304L), b) Requirement for a high fire-point fluid (which is typically on the order of 11-15 $/gallon, c) sensitivity to dimensions since these units need to fit into an existing vault / hole.

8) The percentage of distribution transformer buyer s that actually evaluate transformer purchases with A and B factors needs to be confirmed. Some of the data provided by the DOE’s consultants has been questioned and needs to be verified.

9) The average life of a transformer should be confirmed. The DOE analysis was based on 32 years (this is what Navigant used) and that lifetime is not accurate based on the experience of most utilities. The C57.91 Loading Guide average life is approximately 21 years. I believe 21 years to be more accurate. Sensitivity analysis should be performed with the transformer life being between 20-40 years.

10) Core steel availability is a significant concern fo r both manufacturers and utilities. Prior to the current economic slump, core steel prices were at their highest levels ever due to limited supply

and record demand. Transformer manufacturers were allotted a certain amount of core steel,which created availability issues. Since ther e has not been a signi ficant increase in the availability of core steel (either grain oriented silicon or amorphous), so there should be a great effort expended to fully consider all implications in core steel requirements. Under no circumstances should any efficiency standard be set that limits the number of core steel suppliers to any number less the current three. The last th ing we need are efficiency requirements result in only one core steel supplier being a sole source. The core steel required by the DOE’s efficiency requirements infringes upon those of medium and large power transformers, such that if demand of either increases (which history tells us both will), there will be issues with adequate supply.

11) Does the DOE have information regarding the expect ed life of amorphous core steel? It appears that amorphous core steel was used in distribu tion transformers for a period of time and then usage slowed down (at least in distribution transf ormers) quite a bit. Progress Energy, as do most utilities, hope that amorphous core steel proves to be as good, if not better, than grain oriented core steel, but that needs to be substantiated first.

Regards, Chuck Simmons, P.E.

Distribution Standards Progress Energy

14 18 Mechanical Boulevard Garner, NC 27529

Phone: 919-662-6033