From: Kenneth Winder [mailto:kwinder@mleainc.com]

Sent: Tuesday, November 15, 2011 6:31 PM

To: Richard Parker

Cc: Corkran, Jerry L; Caitlin Johnson; rick.a nderson@faypwc.com; tballo@earthjustice.org; ScottB@lvmetals.com; john.caskey@ne ma.org; john.cymba lsky@ee.doe.gov; adelaski@standardsasap.org; Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; rgreeson@federalpacific.com; bruce.r. hirsch@bge.com; mhyland@appanet.org; dave.millure@metglas.com; Nadel, Steve; wes.patte rson@us.abb.com; Eric.Petersen@aksteel.com; Raymond.Polinski@atimetals.com; rroy@ nrdc.org; robert.saint@nreca.coop; chuck.simmons@pgnmail.com; mark.stoering@xcelener gy.com; cabolduc@lbl.gov; kcoughlin@lbl.gov; Brian Coffey; gjrosenquist@lbl.gov; Rosens tock, Steven; Michael Rivest; Jerry Hodge; jrossetti@mlgw.org; Jim.creevy@nema.org; Me yers, 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@hitmet.com ; jerry.schoen@aksteel.com; mwaltner@nrdc.org; chad.kennedy@us.schneider-electric.com; Kampa, Michael; Marusinec, Richard M Subject: Re: Used Distribution Transformer market and prices

Richard and Colleagues:

Discussion with a national firm involved w ith the used-distribution transformer market has provided a look into what is pres ently happening there. Accordi ng to them, the used transformer market has certainly been impacted by the Ru le making on efficiency effective on January 1, 2010. The demand for used transformers has escalated rapidly.

There are basically three (3) categories for used distributio n transformers described as follows per discussion with them: Category I: Distribution transformers that have been purchased as used equipment from industry and utilities that have cores in operating condition. The original primary and secondary windings are both removed and are replaced with new windings of copper. Insulating fluid is replaced, original tank is re-use d but is re-painted, bushings ar e replaced, new gaskets installed,

etc. This rebuilt transformer is tested and sold at approximately the same cost (maybe slightly higher) than newly manufactured tr ansformer prices available at large-quantity purchases at the present minimum efficiency standards. Category II: Distribution transformers that have been purchase d as used equipment from industry and utilities that are wo rking properly and do not require un-tanking. Insulating fluid is replaced, re-gasketed, original ta nk used but is re-painted, bush ings are replaced, etc. This

rebuilt transformer is tested and sold at be tween 60 and 75% of new transformer cost. Category III: Owners of distribu tion transformers send their used transformers to maintenance shops for minor repairs, fluid repl acement, re-painting, replacement of bushings, gaskets, etc. Cost for such repairs and transpor tation costs to and from shop are acceptable up to a set level (not to exceed 50% of new cost as an example). If transformer maintenance and improvements are estimated to ex ceed that value, the maintenan ce shop buys the unit and it may end up in Category I above or be scrapped and salvaged depending upon its condition.

The owner's of this nation-wide business expressed their excitement about the prospective business that will be created for them as pri ces increase for newly manufactured distribution

transformers.

Ken--



### Kenneth A. Winder, P.E.
Manager-Engineering

Moon Lake Electric Association 800 W Hwy 40

PO Box 278

Roosevelt UT 84066

435.722.5406 Office

435.724.1539 Cell

435.722.5466 Fax

E-Mail: kwinder@mleainc.com

Web Site: www.mleainc.com