### 202-234-4433 Neal R. Gross & Co., Inc. Page 1 U.S. DEPARTMENT OF ENERGY + + + + + PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT + + + + + TUESDAY, APRIL 19, 2011 + + + + + The Public Meeting met at the U.S. Department of Energy, Room 8E-089, 1000 Independence Avenue, S.W., Washington, D.C., at 9:00 a.m., Doug Brookman, Chair, presiding. PRESENT: DOUG BROOKMAN, Chair KARIM AMRANE, PhD ASHLEY ARMSTRONG TIMOTHY BALLO SATISH BAPANAPALLI, PhD WARREN BEETON ALAN COOKE STEVEN COUSINS, PE LAURA DEGITZ REBECCA DUFF CHARLES HON ELIZABETH JOYCE ELIZABETH KOHL CHRISTOPHER KENT CHRISTOPHER LAU CHARLES LLENZA ZHIMEI LUO DAN MANOLE ARIS MARANTAN JOANNA MAUER SCOTT MORRIS ANDREW NAWROCKI MASSOUD NESHAN

### 202-234-4433 Neal R. Gross & Co., Inc. Page 2 CARL ROBERTS

CHARLIE STEPHENS

KNUTE SVENSON

COLLIN WEBER

### 202-234-4433 Neal R. Gross & Co., Inc. Page 3 TABLE OF CONTENTS

Opening Remarks and Introductions..........4

Brief Overview on Standards Rulemaking................................13 Market and Technology Assessment Screening Analysis, Engineering Analysis, Markups Analysis, Energy Use Analysis, Life-Cycle Cost and Payback Period Analysis...................17 Shipments Analysis and National Impacts Analysis, Manufacturing Impact Analysis..........................116 NOPR Analyses............................168 Utility Impact, Employment Impact, Environmental Assessment, and Regulatory Impact Analyses...............171 Test Procedure Rulemaking Overview, Information on Certification, Compliance, and Enforcement..............174

Adjourn

### 202-234-4433 Neal R. Gross & Co., Inc. Page 4 1 P-R-O-C-E-E-D-I-N-G-S 2 (9:01 a.m.) 3 CHAIR BROOKMAN: Good morning, 4 everyone, and welcome. This is the U.S. 5 Department of Energy's public meeting on 6 energy conservation standards for commercial 7 refrigeration equipment. 8 Today is Tuesday, April 19th, here 9 in Washington, D.C., 2011. 10 Thanks for joining us. I want to 11 get an early start on the day. We are going 12 to start off this morning with welcoming 13 remarks from Ashley Armstrong.

14 MS. ARMSTRONG: Sure. Good 15 morning, everyone. I would just like to 16 welcome you to the public meeting for 17 commercial refrigeration equipment. We are 18 happy to have you here, and we hope you will 19 utilize this opportunity to ask lots of 20 questions about the analysis and/or test 21 procedures and/or certification requirements

22 towards the end.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 5 1 I am going to turn it over to 2 Charles Llenza, who is going to give you an 3 overview of today's proceeding. Thanks. 4 MR. LLENZA: Okay. 5 CHAIR BROOKMAN: Okay. Or do you 6 want to do introductions first?

7 MR. LLENZA: Let's do 8 introductions.

9 CHAIR BROOKMAN: Let's do 10 introductions first. You might as well start. 11 Please say your name and organizational 12 affiliation. 13 MR. HON: Charles Hon, True 14 Manufacturing. 15 MS. MAUER: Joanna Mauer, 16 Appliance Standards Awareness Project. 17 MR. BALLO: Tim Ballo, 18 Earthjustice. 19 MR. COUSINS: I'm Steve Cousins 20 with the Coca-Cola Company. 21 DR. AMRANE: Karim Amrane, Air 22 Conditioning, Heating and Refrigeration

### 202-234-4433 Neal R. Gross & Co., Inc. Page 6 1 Institute. 2 MS. JOYCE: Elizabeth Joyce, 3 Energy Solutions, on behalf of the Pacific Gas 4 & Electric Company. 5 MR. NESHAN: Massoud Neshan, 6 Southern Store Fixtures. 7 DR. MANOLE: Dan Manole, Hussmann. 8 MR. ROBERTS: Carl Roberts, Zero

9 Zone. 10 MS. KOHL: Betsy Kohl, DOE General 11 Counsel's Office. 12 MR. LLENZA: Charles Llenza, 13 Project Manager, from DOE. 14 MS. ARMSTRONG: Ashley Armstrong,

15 DOE.

16 CHAIR BROOKMAN: Please stand. 17 MR. MARANTAN: Aris Marantan, 18 Navigant Consulting. 19 MR. WEBER: Collin Weber, Navigant 20 Consulting. 21 MR. NAWROCKI: Andrew Nawrocki, 22 Navigant Consulting.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 7 1 MR. LAU: Chris Lau, Navigant. 2 MR. COOKE: Alan Cooke, Pacific 3 Northwest National Lab. 4 DR. BAPANAPALLI: Satish 5 Bapanapalli, Pacific Northwest National Lab. 6 CHAIR BROOKMAN: I think all of 7 you received a packet -- oh, we didn't finish 8 yet. I'm sorry, go ahead. 9 MR. KENT: Christopher Kent, EPA 10 Energy Star Program. 11 CHAIR BROOKMAN: Thank you. 12 MR. STEPHENS: Charlie Stephens, 13 Northwest Energy Efficiency Alliance. 14 MR. BEETON: Warren Beeton,

15 Emerson. 16 MR. MORRIS: Scott Morris, Pacific 17 Northwest National Laboratory. 18 CHAIR BROOKMAN: We are already so 19 disciplined in the use of these microphones. 20 It augurs well for the day. 21 All of you received a packet of 22 information when you registered this morning.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 8 1 I am going to do a very brief agenda review, 2 and then I am going to turn it back over to 3 Charles Llenza. Immediately following this 4 agenda review, we are going to have a very 5 brief overview on the standards rulemaking. 6 Following that, there is an 7 opportunity for anybody that wishes to do so 8 to make brief opening remarks to focus in on 9 key issues that you think need to be mentioned 10 here at the outset, things that you think 11 require some additional emphasis. 12 From there, we will go into the 13 detailed description that is typical of these 14 meetings. You can see in the agenda market 15 and technology assessment, screening analysis 16 and engineering analysis, markups analysis, 17 energy use analysis, life-cycle cost/payback 18 period analysis. I note that the agenda does 19 not include a mid-morning break. We will take 20 a mid-morning break around about 10:30 or so. 21 And then, following that, if we 22 stay on schedule as we hope, shipments

### 202-234-4433 Neal R. Gross & Co., Inc. Page 9 1 analysis and national impacts analysis, 2 manufacturing impact analysis. We will take 3 lunch midday, and then immediately following 4 lunch, NOPR analyses -- you can see them 5 listed there -- utility impact, employment 6 impact, environmental assessment, and 7 regulatory impact. And immediately following 8 that, test procedure rulemaking overview, 9 information on certification, compliance, and

10 enforcement. 11 As the agenda reflects, the 12 Department thinks we are going to finish today 13 around about 2:00 or 2:30 or so. We will try 14 to stay on schedule and be as efficient as 15 possible. 16 Questions and comments about the 17 agenda? I would ask that for your 18 consideration, if you would, please, speak one 19 at a time. Please say your name for the 20 record each time you speak. I think all of 21 you have gotten used to these microphones. 22 They actually work pretty well now. They

### 202-234-4433 Neal R. Gross & Co., Inc. Page 10 1 didn't in the past all the time. 2 You don't need to say your 3 organizational affiliation, but please do say 4 your name. I'm going to be queuing 5 individuals to speak by name as best I can. I 6 also want to encourage -- and I think the 7 Department benefits from follow-on comments, 8 the kind of back and forth that improves the

9 record. 10 There will be a transcript of this 11 meeting. It will be posted on the EERE 12 website. I would ask for your consideration. 13 Please be concise, share the airtime. And if 14 you would keep the focus here, please turn 15 your cell phones on silent mode and limit 16 sidebar conversations. If you need to have a 17 lengthy conversation with the person next to 18 you and can't do it quietly, then take it out 19 of the room. That will be fine. 20 Yes, Massoud? 21 MR. NESHAN: I'm Massoud Neshan, 22 Southern Store Fixtures. I'm looking at this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 11 1 agenda. I'm kind of surprised, and I'm also 2 disappointed to see that at the last minute 3 something has been added without giving us 4 enough time to prepare for the last two items, 5 one regarding test procedures, and also 6 certification and compliance was added at the 7 very last minute without any prior notice to 8 allow us to prepare. 9 CHAIR BROOKMAN: Ashley Armstrong. 10 MS. ARMSTRONG: The last two items 11 were really added in response to the number of 12 questions we have been getting in the past 13 couple of weeks, and it is more an overview. 14 It is not part of this rulemaking proceeding, 15 so you are going to hear -- the majority of 16 what you are going to hear about today really 17 focuses on the standards preliminary analysis. 18 But we thought as an extra bonus, 19 because everyone is so interested in test 20 procedures and certification and enforcement 21 for commercial refrigeration equipment, we 22 would utilize this opportunity that everyone

### 202-234-4433 Neal R. Gross & Co., Inc. Page 12 1 is in the room to kind of give you an 2 overview. 3 Since you have been at the recent 4 meetings the Department has been holding, you 5 are not going to hear anything all that 6 different, but it gives you another 7 opportunity to ask us questions, to the extent 8 you may still have them, and for those that 9 haven't been involved to ask their initial 10 questions on those topics. 11 CHAIR BROOKMAN: You might -- 12 MS. ARMSTRONG: Hopefully, you see 13 it as a good addition and not a bad one. The 14 notices relating to those proceedings have 15 been out for quite a while. There is nothing 16 new for you to review. 17 CHAIR BROOKMAN: You might 18 characterize this as dessert. 19 MS. ARMSTRONG: This is dessert, 20 yes. 21 (Laughter.) 22 That's a good characterization.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 13 1 CHAIR BROOKMAN: Okay. Good, 2 good. Okay. So, then, we have reviewed the 3 agenda, we have gone through the ground rules,

4 then to Charles Llenza. 5 If you look on page 3 of your 6 packet, the PowerPoint slides, you will see 7 that there is an illustration of an issue box. 8 This, of course, is how the Department wishes 9 to call your attention to a specific question 10 or two that they would like you to try and 11 address. So that is how they call out an 12 opportunity for a specific comment, and we 13 will be observing them as we go along in the 14 meeting today. 15 So, then, now to Charles Llenza.

16 MR. LLENZA: Welcome to the 17 Department of Energy, and these are the 18 proceedings for the preliminary analysis for 19 the commercial refrigeration equipment 20 standard, energy conservation standards. 21 We are here to present the 22 approach for the -- in terms of the energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 14 1 conservation standards that the team has come 2 up with. In addition, we are here to have 3 discussions on the issues. We also encourage 4 the exchange of information and data, et 5 cetera, and this is in part done to facilitate 6 the entire rulemaking. 7 As we have presented before, EPACT 8 2005 amended EPCA to prescribe standards for 9 self-contained commercial refrigeration 10 equipment. EPACT 2005 also directed DOE to 11 set standards by January 1, 2009, which we

12 have set. 13 The things to keep in mind for 14 this particular slide -- it gets pretty busy, 15 and it has some additional dates -- is that 16 the EPACT 2005 standards became effective 17 January 1, 2010. The standards that the 18 Department passed January 1, 2009, are 19 effective 2012.

20 And the standards that we are 21 today here to discuss will -- the actual 22 rulemaking will be issued January 1, 2013, but

### 202-234-4433 Neal R. Gross & Co., Inc. Page 15 1 the standards will not be effective until 2 January 1, 2016. This is a timeline of how 3 this all impacts through 2016. 4 I have also put together a 5 comprehensive rulemaking overview of the 6 timelines for the test procedure and the 7 standards, so that people could see how it 8 works together. 9 Today, we are at the Energy 10 Conservation Standards preliminary analysis 11 public meeting. So that is April 19, 2011, 12 and then, what you can see is that we have 13 planned another meeting for the energy 14 conservation standards NOPR in the spring of

15 2012. 16 We also should have in the spring 17 of 2012 -- at the latest have a final rule for 18 the test procedure, which might come sooner. 19 It all depends on how that rulemaking evolves. 20 It is in a parallel track, but it is not the 21 same rulemaking as what we are discussing 22 today.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 16 1 And then, again, as you can see, 2 the effective date for the 2013 standards, 3 which is the final rule date, will be 4 January 1, 2016. 5 The famous chevrons that we always 6 use in our presentations -- we basically have 7 gone through the framework document process,8 and now this is the second phase of a four9 phase rulemaking process, and it is the 10 preliminary analysis. 11 And as you can see from the 12 chevrons, the areas of discussion are what is 13 underneath. It is highlighted in blue. We 14 are going to discuss market technology 15 assessment, screening analysis, engineering 16 analysis, preliminary manufacturing impact 17 analysis, and energy use analysis, in addition 18 to markups, life-cycle cost, shipment 19 analysis, and then national impact analysis. 20 So these are the topics of the 21 analysis that the Department has done so far 22 on the energy conservation standards that we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 17 1 are here to present today. 2 At this time, I would like to 3 welcome opening remarks from all the parties 4 attending here. 5 CHAIR BROOKMAN: Opening remarks? 6 And also, we -- I wanted to welcome anybody 7 that is joining us via the Web, and the 8 Department is trying to make Web access 9 available to anybody that wishes to join in, 10 and also wants to extend the invitation to 11 submit questions and seek clarification during 12 the course of the proceeding today. So we 13 will try and fit those in where appropriate. 14 Opening statements, brief 15 introductory remarks about key issues? 16 (No response.) 17 Okay. I see none at this time. 18 Then, Charles, should we --

19 MR. LLENZA: Yes. 20 CHAIR BROOKMAN: I guess we will 21 just launch right square into the material. I 22 think all of you have a copy of these slides

### 202-234-4433 Neal R. Gross & Co., Inc. Page 18 1 that are about to be presented. 2 MR. WEBER: Good morning. So now 3 we will begin with a discussion of the 4 analyses and assessments that were performed 5 as part of the preliminary analysis process, 6 beginning with Chapter 3 of the preliminary 7 analysis TSD, which is the market and 8 technology assessment, which is, as the name 9 implies, twofold, consisting of a market 10 assessment and a technology assessment. 11 So, first, to discuss the market 12 assessment for CRE, the purpose is to 13 characterize the market and the manufacturers, 14 the composition of the market, to determine 15 the scope of coverage under the DOE's 16 authority as granted by statute, and then to 17 categorize covered equipment and to determine 18 appropriate equipment classes for that 19 equipment. 20 The methodology that DOE employs 21 is to identify manufacturers of CRE equipment 22 by conducting a market study, such as going on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 19 1 interviews, searching -- performing literature 2 search, reading trade magazines, that sort of 3 thing -- using available, publicly available 4 or otherwise obtainable shipments data to 5 characterize trends within the market, where 6 possible, and then to develop appropriate 7 equipment classes to classify the covered 8 equipment. 9 Detailed descriptions of all the 10 methodology employed by the Department at this 11 stage, as well as the results, are contained 12 in Chapter 3 of the preliminary TSD. 13 So one of the major aspects of the 14 market assessment is the development of 15 equipment classes. In the 2009 commercial 16 refrigeration equipment final rule, there were 17 38 explicitly stated covered classes for which 18 the Department set standards. 19 However, there was nomenclature 20 developed which allowed for a total of 48 21 potential named equipment classes. This 22 consisted of eight equipment families, three

### 202-234-4433 Neal R. Gross & Co., Inc. Page 20 1 rating temperatures, and two operating modes, 2 those being the differentiation between remote 3 condensing and self-contained equipment. 4 EPACT 2005, the standards that, as 5 Charlie mentioned, went into effect -- or 6 became effective January 1, 2010, set 7 standards for five specific groups of 8 equipment. Those were called out differently 9 using more plain language, if you will, such 10 as just saying commercial refrigerators with 11 transparent doors, for example. 12 However, using the DOE equipment 13 class nomenclature developed in the 2009 final 14 rule consisting of the families, rating 15 temperatures, and operating modes, plus the 16 addition of a separate equipment family for 17 pull-down equipment, which was named 18 explicitly and called out separately in the 19 EPACT 2005 standards, DOE is able to classify 20 this new equipment from EPACT 2005 as 11 21 additional classes. 22 So for this rulemaking, DOE is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 21 1 currently considering 49 covered classes, 2 which is the 38 from the first CRE rulemaking, 3 and 11 more to cover the EPACT 2005 equipment. 4 And, of course, a full listing of the 5 equipment classes is shown in Chapter 3 of the

6 TSD. 7 So just to give a further overview 8 of the equipment classes, here are the 9 equipment families, the names and 10 abbreviations. These are divided by the 11 physical orientation of the case and the 12 design of the case. 13 There is the eight classes, which 14 are the first eight -- or the eight families, 15 excuse me, which were developed in the 200916 rulemaking, and then the ninth which is pull17 down equipment, which as I mentioned was 18 specifically called out separately in EPACT

19 2005. 20 Here we see the rating temperature 21 designations as specified in the test 22 procedure -- medium, low, and ice cream

### 202-234-4433 Neal R. Gross & Co., Inc. Page 22 1 temperature -- and the operating mode2 designations, remote condensing, and self3 contained equipment. 4 At this time, DOE seeks comment on 5 the equipment class nomenclature and on the 6 appropriateness of the state of equipment 7 classes for classifying the CRE market. 8 CHAIR BROOKMAN: Tim Ballo. 9 MR. BALLO: Tim Ballo with 10 Earthjustice. I saw, Doug, you mouthed the 11 word "wow" when seeing the number of equipment 12 classes for the rulemaking. 13 CHAIR BROOKMAN: He wanted that in 14 the record, obviously. 15 (Laughter.) 16 That's a lot of equipment classes. 17 MR. BALLO: Well, we provided the 18 Department with an opportunity to narrow that 19 somewhat in our comments, arguing that in fact 20 products with and without doors should be 21 grouped together in a single product class. 22 And the Department's rationale --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 23 1 I think in part for refusing to do that -- was 2 that -- well, we submitted some studies that 3 showed that there was no impact on sales for 4 equipment with or without doors. It was sort 5 of interchangeable on that ground. 6 But the equipment without doors 7 provides some unique features in the form of 8 unobstructed view of, and access to, product, 9 and in the form of simplified stocking, 10 cleaning, and maintenance. And I'm wondering 11 what evidence you have, what studies actually 12 show that utility, because I didn't see 13 anything in the record.

14 CHAIR BROOKMAN: Charles Llenza. 15 MR. LLENZA: I think our options

16 were based more on some of the do's and don'ts 17 of the legislation. And part of our mission 18 was to preserve features. 19 MR. WEBER: Yes. Betsy, I was 20 hoping that you could speak better to the 21 statute itself and the way that it explains 22 utility and the presence of features or

### 202-234-4433 Neal R. Gross & Co., Inc. Page 24 1 performance attributes on the market, 2 preservation thereof. 3 MS. KOHL: Well, sure. I mean, I 4 think we have -- 5 CHAIR BROOKMAN: Betsy KOHL. 6 MS. KOHL: Betsy Kohl, Department 7 of Energy, General Counsel's Office. I think 8 -- and I'm sure you've seen this argument 9 before -- but the statute itself sets out 10 those equipment classes and makes a 11 distinction between with and without doors. 12 So there is that argument, too. 13 But, well, I guess we would have 14 to go back and look through the record,

15 because I don't know whether there was 16 anecdotal or comments or other evidence to 17 support what we had written, too. So we will 18 go back and take a look at it. 19 CHAIR BROOKMAN: Karim? 20 DR. AMRANE: Karim Amrane, AHRI. 21 Well, I agree, the distinction comes from the 22 EPACT language in 2005, which I have to,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 25 1 again, remind everybody was negotiated with -- 2 between AHRI and many other interested 3 parties, including the ACEEE and OGC, and so 4 on. So that's how we together agreed on what 5 the language should be. 6 CHAIR BROOKMAN: Tim, in what you 7 have said, are you making a recommendation to 8 the Department? 9 MR. BALLO: Well, I think we want 10 to renew our request that the Department 11 consider grouping the products together. I 12 just want to remind the Department that any 13 determination that there is some utility I 14 believe under EPCA is required to be based on 15 substantial evidence. I just didn't see 16 anything in the record, other than an 17 assertion, that there was that utility. 18 CHAIR BROOKMAN: Thank you. 19 Charlie Stephens. 20 MR. STEPHENS: Charlie Stephens. 21 During the earlier public meetings for this 22 rulemaking and the test procedure, there was

### 202-234-4433 Neal R. Gross & Co., Inc. Page 26 1 quite a bit of discussion about high 2 temperature applications. And I think the 3 test procedure at this point has settled on 4 testing them, for instance, at the lowest 5 temperature that they are capable of being set 6 for the application. 7 But as I look at a particular 8 family of product, say VCTs, and look at 9 temperature ranges and the energy use -- pick 10 remote or self-contained, either one -- and 11 you look at the energy use between the 38- 12 degree or, say, medium temperature and low 13 temperature, it is enormous. 14 And I presume that most of that 15 stems from the delta T between the application 16 temperature and the environmental temperature. 17 And while the difference between 38 degrees, 18 say, and 45 or 50 or 54 degrees or, you know, 19 for wine storage or whatever, is not as large, 20 it strikes me that if the allowance for these 21 things, the daily energy use allowance is 22 based on a 38-degree product for any given

### 202-234-4433 Neal R. Gross & Co., Inc. Page 27 1 volume and size, that it is -- I'm not sure we 2 need any insulation or maybe more than the 3 worst compressor out there to meet a standard 4 that might be set on the basis of 38 degrees, 5 if what you are holding is 54. 6 And so I'm kind of wondering how 7 come the Department -- I didn't find anything 8 in the TSD so far that really adequately 9 explained why these things weren't put in a 10 class by themselves. 11 MR. WEBER: So in the 2009 12 rulemaking I can speak to, the Department 13 addressed this issue by looking at the 14 shipments data that was provided by some 15 interested parties. And the vast, vast 16 majority of the equipment was found to operate 17 at one of the three rating temperatures, with 18 I believe on the order of two percent of the19 equipment operating at one of those other so20 called application temperatures. 21 Therefore, the Department 22 determined at that time that they did not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 28 1 warrant separate, specific classes, and the 2 Department is moving to address coverage of 3 that equipment proposed in its test procedure 4 rulemaking, with the application temperature 5 provision that you mentioned. 6 CHAIR BROOKMAN: Thank you, 7 Collin. I saw Massoud first, then Elizabeth. 8 MR. NESHAN: Massoud Neshan, 9 Southern Store Fixtures. A couple of things. 10 First of all, I have seen consistently that 11 every time that you show the temperature -- 12 product temperature as far as the different 13 categories, you always delete the plus or 14 minus two degrees. I brought this up last 15 time in the meeting. Please include that plus 16 or minus two degrees, because before we -- 17 before too long, all of a sudden that 38 18 degrees or zero becomes the absolute 19 temperature requirement. Okay? Number one. 20 Number two, as far as the -- 21 putting the open and door cases together as 22 one category, I would disagree with the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 29 1 statement that you indicated. You cannot put 2 them together. They are two different, 3 distinct products and for different 4 applications. 5 And you also indicated there is 6 kind of a study done to indicate there is no 7 sale loss as far as the impact of the doors. 8 As you have required DOE to show the 9 substantial analysis that they have done, I 10 would request you to also show the substantial 11 study that has been done, to show that there 12 is no product loss or sales loss as a result 13 of putting doors in the display case in a 14 supermarket. 15 Do you have such a study, numerous 16 studies that have been done? 17 MR. BALLO: This is Tim Ballo with 18 Earthjustice. We supplied a study done by 19 ASHRAE, and also one that I believe was done 20 in Sweden, if I remember correctly. 21 CHAIR BROOKMAN: Okay. Massoud, 22 do you want to keep going?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 30 1 MR. NESHAN: I would dispute the 2 ASHRAE paper that was presented, and I have 3 reasons to say that. I will go through it at 4 a later date, if the time permits. But one 5 study, is that all you have to substantially 6 back your claim that the door case -- putting 7 doors on an open display case would not have 8 impact on the sales of product in a 9 supermarket?

10 CHAIR BROOKMAN: Let's not have a 11 debate here. You've made your point I think, 12 okay? Elizabeth.

13 MS. JOYCE: Just wanted to also 14 request, as DOE looks at this, if you can 15 comment on what constitutes utility in this 16 case, because there were a lot of things 17 mentioned like the ability of a customer to 18 see a product which isn't easily quantifiable. 19 And so we would suggest that what 20 seems most obvious in terms of utility is the 21 sales, and then of course the ability of the 22 equipment to keep the product at the specified

### 202-234-4433 Neal R. Gross & Co., Inc. Page 31 1 temperature. But we would like DOE to comment 2 on that and kind of, in its discussion, be 3 able to specify what constitutes utility in 4 this case as far as quantifiable measures. 5 CHAIR BROOKMAN: Okay. 6 MR. WEBER: The Department will 7 take your comment into consideration. But 8 also, while I don't wish to quote the statute, 9 because I don't have it in front of me, it 10 also uses the phrase, I believe, "absence of 11 performance features," which is different than 12 utility specifically. 13 MR. LLENZA: This is Charles 14 Llenza, Department of Energy. Would there be 15 some value added if in the TSD we provided a 16 little bit of the description of utility as 17 the Department sees it? 18 MS. JOYCE: That would definitely

19 be useful. 20 MR. LLENZA: Okay. 21 MS. JOYCE: Thank you. 22 CHAIR BROOKMAN: Okay. Thank you.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 32 1 Carl.

2 MR. ROBERTS: Carl Roberts. You 3 know, I think at one time there may have been 4 some utility differences between open and door 5 cases, but I think the market has changed, and 6 that that utility no longer exists. And I 7 would support the comments I am hearing today 8 to combine those equipment classes. 9 CHAIR BROOKMAN: Okay. Thank you.

10 Yes? Joanna Mauer. 11 MS. MAUER: And I would just note 12 that we think this issue is very important 13 from a national energy savings perspective. 14 The DOE preliminary analysis indicates that 15 open cases use about two to three times the 16 amount of energy as closed cases, so we think 17 there are definitely significant national 18 energy savings at stake here. 19 CHAIR BROOKMAN: Thank you. Okay. 20 Other comments related to these equipment

21 classes? Because we are about to move on. 22 (No response.)

### 202-234-4433 Neal R. Gross & Co., Inc. Page 33 1 Okay. 2 MR. WEBER: All right. Thank you. 3 The Department appreciates your comments. 4 Next, we would like to discuss the 5 technology assessment, which is the second 6 half of Chapter 3 of the market and technology 7 assessment. The function of this assessment 8 is to develop a preliminary list of technology 9 options that could be potentially used in an 10 analysis or in the real world to improve the 11 efficiency of commercial refrigeration 12 equipment that is on the market. 13 The methodology employed by the 14 Department is, first, to identify technology 15 options from literature review, academic 16 papers, trade magazines, trade publications, 17 that sort of thing, to use manufacturer 18 brochures and specification sheets for 19 commercially available equipment to look at 20 features and technologies offered on the 21 market, and to also of course consider 22 comments and input from stakeholders as part

### 202-234-4433 Neal R. Gross & Co., Inc. Page 34 1 of the rulemaking processes, both past and 2 ongoing. 3 And all the technology options 4 that DOE has discovered are described in 5 Chapter 3 of the preliminary technical support

6 document. 7 So at this time I would like to 8 just show the technology options that were 9 listed in the technical support document, 10 Chapter 3. First, a listing for options that 11 are applicable to all equipment classes. 12 Then, technologies applicable to equipment 13 with doors only, equipment without doors, and 14 specific to self-contained equipment.

15 And those of course are all 16 available for review with greater detail and 17 specific descriptions in Chapter 3 of the 18 technical support document. 19 At this time, DOE asks interested 20 parties to comment on technologies listed and 21 other technologies that DOE could or should 22 consider.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 35 1 CHAIR BROOKMAN: Tim Ballo. 2 MR. BALLO: Tim Ballo, 3 Earthjustice. I'm wondering on the issue of 4 night curtains, there was an awful lot in the 5 test procedure that the Department proposed 6 for this equipment that dealt with night 7 curtains. Is that going away as part of the 8 final test procedure rule, do you know? 9 MR. WEBER: The Department 10 published the test procedure NOPR last year. 11 We had the test procedure public meeting on 12 January 6th of this year, and the Department 13 has not published anything additionally with 14 respect to the test procedure at that time. 15 We will, as mentioned earlier, 16 review what was proposed in the test procedure 17 NOPR later in today's meeting. 18 MR. BALLO: Okay. 19 CHAIR BROOKMAN: It will be on 20 what you published previously. 21 MR. WEBER: Yes. The Department 22 has made no further publications with respect

### 202-234-4433 Neal R. Gross & Co., Inc. Page 36 1 to the test procedure since then. 2 CHAIR BROOKMAN: Go ahead, Tim.

3 MR. BALLO: In the TSD -- I 4 haven't read the screening analysis chapter, 5 but in Chapter 2 you all mentioned that night 6 curtains was screened out, because 7 manufacturers do not install night curtains, 8 but that they are -- I may be getting this 9 wrong, but that they are put on by the -- 10 MR. WEBER: This is strip 11 curtains. 12 MR. BALLO: Okay. I'm just 13 wondering about that rationale, though, if -- 14 I mean, if the issue is what manufacturers do 15 presently, if that's all they have to do is 16 not do something presently, then why are we 17 here? I mean, you know, if it's 18 technologically feasible to install strip 19 curtains for the manufacturers, and if they 20 reduce energy consumption, are economically 21 justified. I mean, that should be the 22 criteria, not that they don't presently use

### 202-234-4433 Neal R. Gross & Co., Inc. Page 37 1 them. 2 MR. WEBER: The Department will 3 consider your comment. 4 MR. LLENZA: Yes. This is Charles 5 Llenza, Department of Energy. When we analyze 6 equipment and how it is used, it doesn't 7 necessarily mean that it is optimally used, 8 but it is just a description of how the actual 9 use of the equipment is. So part of our 10 descriptions did not necessarily mean it's our 11 recommendation that that's the way it should 12 be used. It is just describing the equipment 13 as presently used. 14 So what will happen is that at 15 some point when we recommend TSL levels for 16 all these equipments, one of the options will 17 be to either use that piece of equipment or 18 not as part of your mix for energy saving 19 devices for that equipment. 20 So it really ends up being an 21 option of the -- it is -- not manufacturer but 22 the person who purchases the equipment on the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 38 1 utility on how to use that equipment, and in

2 terms of the features how the manufacturer 3 will sell that equipment, with what features, 4 in order to achieve the energy conservation 5 levels that we end up proposing. 6 CHAIR BROOKMAN: Your name, 7 please.

8 MR. BEETON: Warren Beeton. A 9 question on the self-contained equipment only. 10 You list a technology option higher 11 efficiency compressors. Can you briefly 12 explain -- number one, are those compressors 13 available today or compressors that could be 14 developed with the application of new 15 technology? 16 And if it is compressors today, 17 are you referring to minor differences between 18 manufacturers, or are you referring to 19 different technologies that are -- might be 20 available such as variable speed? 21 MR. WEBER: The Department 22 welcomes any and all comment with respect to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 39 1 that. Within the development of the 2 engineering analysis, the Department, after 3 taking into account stakeholder comment and 4 the literature search, effectively 5 approximated potential compressor developments 6 or the use of advanced compressors that are on 7 the market with a multiplier on the -- with a 8 multiplier on the compressor power 9 consumption. 10 It didn't allude to any specific 11 technology on the market, although the 12 Department did seek comment and discuss 13 variable speed, for example, with interested 14 parties. And that, for example, at the time 15 does not seem to be a widely used option on

16 the market. 17 But this is certainly an area 18 where the Department would welcome comment 19 because of the various nuances within that 20 subsection of the market -- for example,

21 manufacturer to manufacturer and also 22 potential and emerging technologies within the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 40 1 market. 2 CHAIR BROOKMAN: Charlie. 3 MR. HON: Charlie Hon. A quick 4 one for you. Night curtains -- well, the 5 strip curtains. We do not presently install 6 those on units for one simple reason: our 7 customer can get a secondary rebate program 8 going on those strip curtains as an additional 9 rebate above the program rebates, which are 10 presently available in most states on the unit 11 themselves. And, as such, they pretty much 12 pay for themselves if installed after the 13 fact, but are an add-on cost, which has not 14 been rebated if we put them on original 15 equipment. 16 CHAIR BROOKMAN: Okay. Carl 17 first.

18 MR. ROBERTS: Carl Roberts. Back 19 to the issue of night curtains, I understand 20 that in assessing that technology it is 21 reasonable that they are used on open cases 22 when they are used. And although it may seem

### 202-234-4433 Neal R. Gross & Co., Inc. Page 41 1 counterintuitive, they are applicable to

2 doored cases as well. 3 Although the doored cases use a 4 lot less energy, one thing they have in common 5 with open cases is that the energy profile is 6 on the front end of the case, and so it is 7 possible to use night curtains on doored cases 8 and save a significant amount of energy. So 9 it might be reasonable to include those as an 10 applicable technology for doors.

11 CHAIR BROOKMAN: Massoud. 12 MR. NESHAN: A question. Are we 13 going to come -- Massoud Neshan, Southern 14 Store Fixtures. Are we going to come back and 15 talk about any of these individual 16 technologies, or this is the time that we need 17 to discuss it? 18 CHAIR BROOKMAN: This is the time 19 in the program for discussion. 20 MR. NESHAN: A couple of things. 21 When you look at these different technologies, 22 do you also look at the economic impact on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 42 1 both manufacturers and the end users? Or is 2 it just you are looking simply at energy 3 saving? 4 MR. WEBER: Oh, no. The 5 Department considers financial and 6 manufacturing impacts in its analyses, in its 7 downstream analyses -- life-cycle cost, 8 payback period, manufacturer impact analyses 9 that include things such as cost of updating 10 tooling to manufacturer. All of these things 11 are definitely taken into consideration.

12 MR. NESHAN: Downstream.

13 MR. WEBER: Downstream.

14 MR. NESHAN: Yes. 15 MR. WEBER: And it will be spoken 16 about in greater detail today for certain. 17 MR. NESHAN: Neshan again. As a 18 follow up, how is it that your analysis has 19 shown that a night curtain is a possible 20 option or a technology that could be used on 21 open cases, while the California Energy 22 Commission has figured that it is not cost

### 202-234-4433 Neal R. Gross & Co., Inc. Page 43 1 effective to use night curtain in open display 2 case? I mean, there is -- I mean, which one 3 do we have to believe? 4 MR. WEBER: Well, the Department 5 has not proposed anything or made any 6 determination at this time. We are simply 7 considering them as technology options, and 8 the downstream analyses and other analyses 9 later in the rulemaking will -- you know, will 10 come to pass. 11 MR. NESHAN: Okay. 12 CHAIR BROOKMAN: So your comments 13 on that -- your specific comments -- will be 14 helpful. 15 MR. NESHAN: Yes. Also, I have 16 another question. Liquid suction heat 17 exchangers, which is a pretty good device for 18 certain applications, but have you looked at 19 the impact those heat exchangers have on a 20 possible increase in leak rate of refrigerant 21 in the display cases? 22 MR. WEBER: The Department has not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 44 1 seen anything on that explicitly. However, 2 the Department has seen various papers on 3 liquid suction heat exchangers, which propose 4 and discuss various benefits and potential 5 downsides to that technology. It seems to be 6 a very application-specific technology. 7 MR. NESHAN: Again, I recommend 8 following up with the California Energy 9 Commission, because they have decided not to 10 use the liquid suction heat exchanger at this 11 time due to the potential leak rate increase 12 in the display cases. 13 MR. WEBER: Thank you. 14 CHAIR BROOKMAN: Thank you. 15 Warren, and then back to Elizabeth. 16 MR. BEETON: A follow-up question 17 on the higher efficiency compressors. Warren 18 Beeton. Since you may be looking at 19 compression technologies that are not 20 currently on the market, you -- I think I 21 heard you say that is one option that you are 22 looking at -- that means that you need input

### 202-234-4433 Neal R. Gross & Co., Inc. Page 45 1 as to the cost for development of those 2 technologies and the cost of the results 3 versus baseline. 4 Do you attempt to get that 5 information from the manufacturers, or do you 6 use other sources? Or do you just take 7 whatever sources happen to give you input?

8 MR. WEBER: It would be the latter 9 specifically. The Department, of course,

10 would welcome comment from actual -- from 11 refrigeration equipment manufacturers, 12 component manufacturers, such as compressor 13 manufacturers. The Department also considers, 14 you know, academic studies, available 15 literature from retailers and wholesalers, 16 whatever it can obtain. 17 CHAIR BROOKMAN: Elizabeth. 18 MS. JOYCE: Just a follow up on 19 Southern Store Fixtures' comment, that right 20 now the California investor-owned utilities 21 are investigating a number of energy 22 efficiency measures for supermarket

### 202-234-4433 Neal R. Gross & Co., Inc. Page 46 1 refrigeration for the current rulemaking for 2 the California Building Code, including 3 measures such as liquid suction heat 4 exchangers. 5 And we do plan to submit that 6 draft analysis to the DOE to inform some of 7 the energy savings and to inform some of the

8 feedback.

9 CHAIR BROOKMAN: You do on behalf 10 of PG&E, is that correct? 11 MS. JOYCE: Yes. Yes. And this 12 information is already publicly available -- 13 CHAIR BROOKMAN: Okay.

14 MS. JOYCE: -- on the CEC's 15 website, so it will be easy to find. 16 CHAIR BROOKMAN: Thank you. 17 Karim. 18 DR. AMRANE: Karim Amrane, AHRI. 19 I have a follow-up question on -- later on you 20 are going to go through the LCC analysis, and 21 so on, and you have different CSL levels, 22 Level 2, Level 3, Level 4. And you have done

### 202-234-4433 Neal R. Gross & Co., Inc. Page 47 1 -- you have done some analysis, so those -- 2 information about, you know, the cost of 3 higher -- of better technology or more 4 efficient technology has been taken into 5 account in the analysis already, right? 6 MR. WEBER: Oh, certainly, yes. 7 DR. AMRANE: Okay. And those 8 costs are documented in the TSD?

9 MR. WEBER: Yes. 10 DR. AMRANE: Okay. Thank you.

11 CHAIR BROOKMAN: That was a 12 productive comment. Carl Roberts. 13 MR. ROBERTS: This is Carl 14 Roberts. I would like to just make a quick 15 comment about one of the technologies 16 mentioned for doors. Anti-fog film on 17 transparent doors -- there has been a frequent18 claim that that allows the reduction of anti19 sweat heat, and the pitfall to avoid would be 20 to model it that way. In fact, it doesn't, 21 and there is some research from SCE, Southern 22 Cal Edison, by Mitchell and others, that has

### 202-234-4433 Neal R. Gross & Co., Inc. Page 48 1 looked into that. So that would be worthwhile 2 to keep in mind. 3 MR. WEBER: Thank you.

4 CHAIR BROOKMAN: Warren? 5 MR. BEETON: Warren Beeton, one 6 more time. Question: one technology not 7 listed are refrigerants. And we are still 8 faced with the possibility of action by EPA in 9 the near future to prohibit certain 10 refrigerants from being used, which can affect 11 energy efficiency negatively. 12 So is that something you are going 13 to consider in your analysis? 14 MR. WEBER: The Department has 15 received similar comments in the past, and 16 generally the position is that the Department 17 considers what the current state of the market 18 is at this time with respect to what 19 technologies are available, instead of 20 speculating or projecting things such as 21 potential future legislation which are not 22 currently on the horizon.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 49 1 CHAIR BROOKMAN: Warren, you are 2 welcome to join us at the table, if you want 3 to not be jumping up and down. 4 MR. LLENZA: This is Charles 5 Llenza, Department of Energy. There is a 6 certain amount of time here -- before the NOPR 7 comes out. So if they are going to enact any 8 kind of legislation at some point, then, we 9 will have to consider it. But, you know, 10 since the NOPR isn't coming out until spring 11 next year, unless it is enacted by then, it 12 won't be something we -- we won't consider it 13 until it's enacted. That's just the way that 14 these proceedings go as we go through the 15 rulemaking process. 16 CHAIR BROOKMAN: So additional and 17 perhaps final comments on these technologies? 18 (No response.) 19 MR. WEBER: Okay. Thank you, 20 Doug. 21 Next, we would like to discuss the 22 screening analysis, Chapter 4 of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 50 1 preliminary technical support document. The 2 purpose of the screening analysis is to 3 determine which technologies previously 4 identified will be considered in a downstream 5 analysis, such as the engineering analysis, 6 life-cycle cost, and payback period analysis, 7 other analyses. 8 Technology options are screened 9 out if they do not pass the four screening 10 criteria laid out in the statute, which is 11 that they must be technologically feasible, 12 practicable to manufacturer, install, and 13 service. They cannot have adverse impacts on 14 equipment utility or availability to 15 customers, and they cannot have adverse 16 impacts on health and safety. 17 In this analysis -- in this 18 chapter of the TSD, DOE also removes from 19 consideration technologies which do not affect 20 calculated energy consumption of the unit per 21 the requirements of the DOE test procedure. 22 The methodology and the results are explained

### 202-234-4433 Neal R. Gross & Co., Inc. Page 51 1 in greater detail, of course, in Chapter 4 of 2 the preliminary TSD. 3 DOE found that technologies that 4 do not affect calculated energy -- calculated 5 daily energy consumption per the DOE test 6 procedure, as it stands, include higher 7 efficiency expansion valves, variable speed 8 condenser fans, as well as condenser fan motor 9 controllers, anti-sweat heater controllers, 10 and liquid suction heat exchangers. DOE also 11 screened out a technology, which is advanced 12 air curtain design for open cases. 13 CHAIR BROOKMAN: Elizabeth. 14 MS. JOYCE: So I just wanted to 15 bring this up, and this might also be better 16 discussed at the test procedure section of 17 this presentation. 18 But I wanted to get clarification 19 from DOE on its position towards these 20 technologies per the test procedure, because 21 in the test procedure NOPR, and also in 22 Chapter 2 of the preliminary TSD, DOE

### 202-234-4433 Neal R. Gross & Co., Inc. Page 52 1 mentioned that, while obviously these 2 technologies can't be explicitly measured in 3 the steady-state ASHRAE test, that door 4 openings in the test procedure for those units 5 with doors may be able to cause enough impacts 6 to get some sort of energy measurement from 7 these technologies, and that they could, 8 therefore, be accounted for in some way in the 9 test procedure. 10 However, then, in the screening 11 analysis, DOE seems to say the opposite, that, 12 you know, such-and-such steady-state test 13 procedure, these items can't be measured, and, 14 therefore, they are screened out. So I want 15 to get a sense from DOE on what its official 16 position is, and then to ask that if it does 17 determine that these items can be measured, at 18 least in a small way in the test procedure, 19 that it consider them in its screening and 20 engineering analysis. 21 MR. WEBER: DOE will take that 22 comment into consideration.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 53 1 MS. JOYCE: Thank you.

2 CHAIR BROOKMAN: Carl.

3 MR. ROBERTS: Carl Roberts. The 4 anti-sweat heater controllers I believe do 5 have the potential to save energy, to reduce 6 the CDEC, because anti-sweat heaters can be 7 designed to have additional capacity for more 8 humid conditions. So that would seem to be an 9 oversight. 10 MR. WEBER: Okay. 11 CHAIR BROOKMAN: Yes. Aris. 12 MR. MARANTAN: Aris Marantan. 13 Thank you, Carl. I wonder if you could 14 provide any data that you might have that 15 could help the Department estimate the energy 16 savings from that technology.

17 MR. ROBERTS: I can't. 18 CHAIR BROOKMAN: Thank you. 19 Okay. So why don't you finish, 20 Collin, with the next slide or two, and then 21 we will entertain additional comments and 22 questions after that. Okay?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 54 1 MR. WEBER: This would be -- for 2 the screening analysis, this is the last 3 slide. 4 CHAIR BROOKMAN: Okay.

5 MR. WEBER: So we would welcome 6 comments at this time. 7 CHAIR BROOKMAN: Then, Joanna, 8 please. 9 MS. MAUER: I was wondering if DOE 10 might be able to comment on -- I know in the 11 proposed rule for residential refrigerators 12 that was released last fall, variable speed 13 compressors was included as a design option. 14 And as far as I understand, the residential 15 refrigerator test procedure is also considered 16 to be a steady-state test. 17 So I was wondering if DOE could 18 comment on why the variable speed compressors 19 can be captured -- or the potential energy 20 savings benefits can be captured for 21 residential refrigerators and not commercial 22 refrigeration equipment.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 55 1 MR. WEBER: In order to answer 2 that, the Department would need to look into 3 the analyses performed for that rulemaking. 4 We haven't currently compared the residential 5 refrigerators because it is obviously a very 6 different market. 7 CHAIR BROOKMAN: Additional 8 questions on screening analysis, or comments? 9 (No response.) 10 Okay. Then, moving on to 11 engineering analysis. 12 MR. WEBER: All right, thank you. 13 We would next like to briefly discuss the 14 engineering analysis performed for the 15 preliminary analysis stage of the rulemaking. 16 The purpose of the engineering analysis is to 17 characterize the relationship between 18 manufacturer selling price of the equipment 19 and the calculated daily energy consumption of 20 the equipment per the DOE test procedure. 21 The methodology employed -- DOE 22 selected primary equipment classes. Someone

### 202-234-4433 Neal R. Gross & Co., Inc. Page 56 1 mentioned earlier how there was a large number 2 of equipment classes. Well, in the 2009 3 rulemaking, and then continuing on through 4 this rulemaking, DOE selects specific primary 5 equipment classes for direct analysis in the 6 engineering analysis. 7 In the 2009 rulemaking, DOE then

8 took those results and extended those 9 standards with a methodology that is explained 10 in that TSD to the other equipment classes. 11 That is the methodology that DOE, as stated in 12 this TSD Chapter 5, is planning to continue. 13 So DOE selected 24 primary 14 equipment classes to analyze directly in this 15 analysis, and for each of those, DOE chose 16 representative units. These are specific 17 sized units which DOE wished to model that DOE 18 felt or believed well represented a typical or 19 average size unit for that equipment class, 20 and then performed analyses on each of these 21 representative units. 22 For each unit, before doing that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 57 1 analysis, DOE also determined a baseline 2 configuration package of technologies that was 3 representative of a unit at the baseline for 4 that size and configuration. And then, DOE 5 also analyzed the technology options 6 applicable to each class. 7 Detailed methodology, including 8 engineering assumptions, data, representative 9 unit specifications, are all presented in 10 detail in Chapter 5 of the TSD, as well as in 11 Appendix 5A, which is engineering data. 12 For this rulemaking preliminary 13 analysis, DOE used a design option approach to 14 estimate the effect and model the effect of 15 implementing advanced technologies above the 16 baseline. First, for that given baseline 17 representative unit that I mentioned earlier, 18 DOE first calculated daily energy consumption 19 as calculated per the test procedure, as well 20 as a baseline cost to manufacture. 21 DOE then added technology 22 sequentially -- technology options -- to the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 58 1 baseline, and for each level calculated the 2 reduction in daily energy consumption or the 3 new calculated daily energy consumption value, 4 as well as incremental differential cost to 5 add that technology. 6 Finally, DOE then sorted all of 7 the technology options in order from most to 8 least cost effective. The result of this is a 9 set of cost efficiency curves visible in 10 Chapter 5 of the TSD, which describe the 11 relationship between energy consumption, as 12 calculated, and manufacturer's selling price. 13 So here we have a list of the 14 engineering design options that were 15 considered at this point in the analysis. 16 These are the technology options discussed in 17 the MTA chapter, passed through screening and 18 other measures, to arrive at the options that 19 DOE considered in its analytical methodology 20 for the engineering analysis. 21 CHAIR BROOKMAN: Karim? 22 DR. AMRANE: Karim Amrane, AHRI.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 59 1 I guess I have a question about the baseline. 2 Okay? For most of the product, what 3 standards are not yet effective? Are they 4 going to be effective in 2012? What is the 5 baseline that DOE used?

6 MR. WEBER: The DOE used a market 7 baseline in terms of what is out there, what 8 DOE understands to be out there in the market, 9 available at this time.

10 CHAIR BROOKMAN: Massoud? 11 MR. NESHAN: Massoud Neshan, 12 Southern Store Fixtures. I have looked at 13 your Chapter 5 where you have the analysis 14 showing. And I refer you to Table 5.6.1 in 15 Chapter 5 where you are showing that the LED 16 lights, having lumens of almost a third of 17 what the fluorescent light has, consequently 18 has lower lumens efficiency compared to a 19 fluorescent T8 lamp. 20 If that's the case, I don't 21 understand why you are pushing the use of LEDs 22 when it is less efficient, less lumens, and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 60 1 lower lumens per watt. What is the sense of 2 pushing LED and saying that it is more 3 efficient lighting in the display case? 4 MR. WEBER: Well, first of all, 5 DOE would welcome any technical data that you 6 have regarding LED lighting. 7 MR. NESHAN: No, I am referring to 8 your table. I am not showing -- do not have 9 anything to present, other than what you have 10 yourself and the document is showing to be the 11 energy usage or the lumens per energy usage of

12 the fluorescent bulb. 13 MR. WEBER: Well, the DOE would 14 need specifically to review its source data in 15 regards to that comment to analyze that 16 comment, which we will take into 17 consideration. One aspect of LED lights is 18 that they are indeed more directional. So 19 when you have lower absolute lumen output, it 20 is indeed more focused on the product, instead 21 of even with a reflector being more heavily 22 dissipated.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 61 1 CHAIR BROOKMAN: Charlie? 2 MR. HON: Charlie Hon. The lumens 3 are part of the issue, because they are highly 4 directional. Also, the heat load from the 5 lamp itself, because it puts an additional 6 heat load into the compressor system, which is 7 far less efficient than the lights. 8 CHAIR BROOKMAN: Charlie Stephens, 9 did you want in here? No. Aris? 10 MR. MARANTAN: Aris Marantan. I 11 do recall that this discussion also came up in 12 the 2009 rulemaking, so I know we have a lot 13 of discussion about the comparison between LED 14 lighting and fluorescent lighting in those 15 cases as well. So I would also refer you to 16 the 2009 rulemaking TSD Chapter 5 and its 17 associated appendix for additional discussion. 18 CHAIR BROOKMAN: Thank you. We 19 also have a question from someone who is 20 joining us via the web. Andrew Sullivan 21 writes the following question. "DOE currently 22 has many waivers approved for adaptive anti-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 62 1 sweat heaters on domestic product." Maybe

2 that's a comment. 3 MR. WEBER: I would consider that

4 to be a comment. 5 CHAIR BROOKMAN: Okay. 6 MR. WEBER: Since this does not 7 relate to domestic products. 8 CHAIR BROOKMAN: I just thought -- 9 so then, Elizabeth. 10 MS. JOYCE: No, I don't -- 11 CHAIR BROOKMAN: Okay. Massoud, 12 you had an additional question?13 MR. NESHAN: Yes, just one follow14 up. And this is Massoud Neshan, Southern 15 Store Fixtures again. Given the LEDs have 16 directional lumens as far as the illuminating 17 of the product, what one thing is missing here 18 is not necessarily the energy usage of LED, 19 but really the energy usage of the driver that 20 is providing the power to LEDs. 21 If they are inefficient, it 22 doesn't matter how efficient your LED light

### 202-234-4433 Neal R. Gross & Co., Inc. Page 63 1 is. It does back to the driver of that LED, 2 and something needs to be done about the 3 drivers and not necessarily the LED 4 themselves, or the use of the LEDs. 5 MR. WEBER: Thank you. 6 CHAIR BROOKMAN: Okay. Charlie. 7 MR. HON: That same application 8 holds true in fluorescents as well. You have 9 high efficiency ballast versus normal ballast 10 versus old-fashioned metal long ballast. And 11 there are -- it changes the efficiency 12 completely in the same way.

13 CHAIR BROOKMAN: Carl? 14 MR. ROBERTS: Carl Roberts, Zero 15 Zone. Yes, it's worth mentioning, too, that 16 the fluorescent is a mature technology. The 17 LEDs are still maturing as a technology, and 18 so the efficiency is a moving target, and it's 19 getting better and better over the years. 20 CHAIR BROOKMAN: Okay. Thank you. 21 Additional comments on this section, on these 22 design options? You have no additional

### 202-234-4433 Neal R. Gross & Co., Inc. Page 64 1 comments? 2 (No response.) 3 MR. WEBER: Thank you. And here 4 we have a diagram of the energy consumption 5 model that DOE used in its engineering 6 analysis for calculating daily energy 7 consumption of the various representative 8 units that were directly analyzed. And this 9 is the similar model to what was used in the 10 2009 rulemaking, and it's based off of the DOE 11 test procedure. 12 So we just do the various thermal 13 loads, do the radiation and infiltration, for 14 example, and also component energy 15 consumption, such as due to the fan motors and 16 lighting. So this just gives an overview of 17 the methodology used, which is the same 18 effectively as what was used in the 2009 19 rulemaking. 20 And DOE at this time, of course, 21 seeks comment on its energy consumption model 22 and its general engineering approach for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 65 1 analyzing commercial refrigeration equipment.

2 CHAIR BROOKMAN: Steve? 3 MR. COUSINS: I'm sorry, I haven't 4 had a chance to review the details around the 5 model, so perhaps you could tell me -- does 6 the model consider condensing the moisture in 7 the air as a part of the heat load? 8 MR. WEBER: That is a part of the 9 infiltration load. 10 MR. COUSINS: Okay. 11 MR. WEBER: Yes, infiltrated air

12 mass. 13 MR. COUSINS: Thank you. 14 CHAIR BROOKMAN: Thank you. Carl. 15 MR. ROBERTS: Carl Roberts. Is it 16 safe to assume that anti-sweat energy 17 consumption is part of the model as well? 18 MR. WEBER: Very much so. That's

19 correct.

20 CHAIR BROOKMAN: Joanna Mauer. 21 MS. MAUER: Just getting back to 22 the issue of capturing technologies that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 66 1 improve part load performance, the test 2 procedure does in fact capture part load 3 performance to some extent. Does that mean 4 that the model would also capture that 5 similarly? 6 MR. WEBER: The model is based 7 upon the stipulations of the test procedure in 8 the manner that the test procedure calculates 9 the loads. DOE would need to determine 10 specifically what technologies need to be 11 modeled and in what manner. DOE -- 12 MS. MAUER: Okay. But the model 13 takes into account the door openings, for 14 example.

15 MR. WEBER: Yes. 16 CHAIR BROOKMAN: Additional 17 comments on the model? And as it states here 18 in the comment box, the general engineering 19 approach? One or two individuals have 20 signaled to me that they would like to take a 21 short break, even though -- we are making good 22 progress, so let's take a short break now.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 67 1 Try for 10 minutes, and then -- what? 2 MR. WEBER: Yes, we only have a 3 few more slides on the engineering analysis. 4 CHAIR BROOKMAN: You want to hang 5 in there for two more slides? We'll hang in 6 there for two more slides, then. Hopefully, 7 and anybody that needs to leave can go ahead. 8 Just a couple more slides. 9 MR. WEBER: All right. Thank you. 10 So we will just go ahead and wrap up the 11 engineering analysis discussion before we take

12 a break. 13 CHAIR BROOKMAN: Okay. We are 14 continuing on. 15 MR. WEBER: So the second output 16 of the engineering analysis is the 17 manufacturer's selling price as determined 18 using a cost model. So to build this up, the 19 cost for implementing design options are 20 derived from a review of publicly available 21 cost information, such as from online 22 wholesalers, trade publications, that sort of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 68 1 thing, as well as discussions with 2 manufacturers from which data were collected 3 and assimilated to maintain, of course, 4 confidentiality and that sort of thing. 5 Core case costs, those being the 6 costs for the actual refrigerated cabinet, 7 absent features that are modulated or changed 8 as design options, such as fan motors, for 9 example, the core case costs were for this 10 stage of the rulemaking developed -- derived 11 from a manufacturing cost model that was used 12 and prepared for the 2009 rulemaking for those 13 equipment families. 14 In preparation for the NOPR 15 analyses, NOPR analysis, DOE is performing 16 teardowns of representative units and plans to 17 develop a new cost model to model those base 18 case costs for its different representative 19 units. 20 Manufacturer markups and outbound 21 freight costs are applied to the manufacturer 22 production costs to arrive at manufacturer's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 69 1 selling price. And the diagram here just 2 shows the different constituent components of 3 the manufacturer production costs, the 4 manufacturer markup, and then the added 5 outbound freight cost to arrive at a 6 manufacturer's selling price. 7 DOE at this time seeks comments 8 regarding its costs, markups, and outbound 9 freight methodologies. 10 CHAIR BROOKMAN: Charlie Stephens. 11 MR. STEPHENS: Charlie Stephens. 12 Could you describe how you apply the factory 13 overhead in detail in your model, and what 14 it's applied to? 15 MR. WEBER: I believe Chris Lau is 16 going to take that question. 17 CHAIR BROOKMAN: Chris? Yes. 18 MR. LAU: Chris Lau. Factory 19 overhead is applied to everything related to 20 the production line. So factory floor, labor, 21 manufacturing. It's -- what we consider 22 overhead doesn't include things such as back

### 202-234-4433 Neal R. Gross & Co., Inc. Page 70 1 office and stuff. 2 MR. STEPHENS: Okay. But it's not 3 applied to the materials cost, the direct 4 materials cost, or it is? 5 MR. LAU: It is applied to direct 6 materials. 7 MR. STEPHENS: Okay. In a recent 8 DOE rulemaking, it was pointed out by the 9 manufacturers of transformers, which I admit 10 are somewhat different than refrigeration, 11 that they actually don't apply overhead to 12 materials. They apply it to labor only. So 13 I'm wondering whether or not your practice and 14 your model matches up with what the 15 manufacturers actually do. 16 MR. LAU: We can adjust that as 17 necessary, and we can take that into 18 consideration. 19 MR. STEPHENS: Yes, it makes a big 20 difference, depending on what fraction of the 21 cost of the product is materials and what 22 fraction is labor, obviously, so transformers

### 202-234-4433 Neal R. Gross & Co., Inc. Page 71 1 being heavily materials-intensive it made a 2 rather large difference in the numbers that 3 were coming out of it when -- where the 4 manufacturers suggested that the prices that 5 were derived through that model were probably 6 a factor in some cases of 1.6 or 1.7 times too 7 high. 8 So I don't know if you are 9 arriving at, you know, that level of 10 discrepancy here, but I would take a look at 11 that before you proceed too much further. 12 MR. LAU: We appreciate that 13 comment. And in my section we will talk about 14 the status of the manufacturer impact 15 analysis. At this point, for this rulemaking, 16 for the preliminary phase, we haven't put 17 together those models yet. But your comments 18 will be certainly taken into account as we put 19 those together for the NOPR phase. 20 CHAIR BROOKMAN: Thank you.

21 Massoud? 22 MR. NESHAN: Yes. Massoud Neshan,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 72 1 Southern Store Fixtures. I'm looking at the 2 breakdown of what is listed under 3 manufacturer's markup, and I'm kind of amazed 4 that the research and development, it would be 5 considered markup on the equipment? Or a 6 sales and marketing cost would be part of the 7 markup? Engineering, I'm assuming, is part of8 the markup as well? Freight incoming, in9 bound freight, I mean, there are a lot of 10 things that really is a cost of doing 11 business. 12 You have direct -- you have 13 overhead, you have direct and indirect costs, 14 and rather than saying manufacturer's markup, 15 maybe it should be considered indirect cost. 16 Markup does not apply to these categories. 17 MR. LAU: The goal of the markup 18 is to take -- to get us from manufacturer 19 production costs to costs that represent the 20 manufacturer's sale price to their first 21 customer. And so though it is a 22 simplification, our goal or our intent is to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 73 1 produce MSP that is representative of what the 2 manufacturers are selling their products at. 3 CHAIR BROOKMAN: Thanks, Chris. 4 Thank you.

5 Other comments on the cost model 6 as shown here in 27? Yes, Carl. 7 MR. ROBERTS: Carl Roberts, Zero 8 Zone. Is the cost of testing for compliance 9 included in this model? 10 MR. WEBER: That is not an 11 explicit -- that is not explicitly included in 12 specific. 13 MR. ROBERTS: Okay. 14 MR. WEBER: That will be taken 15 into account in other analyses. 16 MR. ROBERTS: Okay. Thank you.

17 CHAIR BROOKMAN: Joanna Mauer. 18 MS. MAUER: Could you explain how 19 the cost for LEDs was developed?

20 MR. WEBER: Cost for LEDs were 21 developed in a sense -- through discussion -- 22 first of all, let me rephrase this. The

### 202-234-4433 Neal R. Gross & Co., Inc. Page 74 1 Department reviewed available literature, both 2 in terms of products available to the public 3 for sale on things such as wholesaler sites, 4 and also conducted numerous interviews with 5 manufacturers in this market. 6 The cost for LEDs were derived 7 largely based on a combination of publicly 8 available prices and aggregate data from 9 speaking with manufacturers. The Department 10 realizes that this is an evolving technology. 11 It is a technology where different parties 12 approach it in different manners in terms of 13 where they source their product from. 14 And DOE welcomes technical 15 comments, pricing-related issues, and that 16 sort of thing, with respect to LEDs, because 17 as someone very articulately stated earlier, 18 it is a moving target. 19 CHAIR BROOKMAN: Okay. Massoud. 20 MR. NESHAN: Follow-up on the 21 question, what price did you use, current day 22 price or the price five years from now or 10

### 202-234-4433 Neal R. Gross & Co., Inc. Page 75 1 years from now, for your analysis on the LED 2 lights? 3 MR. WEBER: Current day prices 4 were used in this analysis. 5 MR. NESHAN: Thank you. 6 MR. WEBER: All right. Thank you. 7 Okay. So with the two outputs of 8 the engineering analysis being the daily 9 energy consumption for each efficiency level, 10 and the manufacturer's selling price for each 11 efficiency level, the DOE then put together 12 for each of the classes directly analyzed a 13 cost efficiency curve. 14 Basically, each point on the cost 15 efficiency curve is called an efficiency 16 level. The lowest starting point is the 17 baseline, maximum technologically feasible, 18 according to the -- you know, as modeled, is

19 the max tech. And DOE then conducted 20 downstream analyses, which we will speak to 21 later in the meeting, at each efficiency level 22 for the representative units modeled.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 76 1 And, of course, all of this -- all 2 of the complete results, the cost efficiency 3 curves for each representative -- for each 4 class in the representative unit analyzed are 5 available in Chapter 5. 6 That concludes the specific slides 7 that we had for the engineering analysis, but 8 DOE, of course, would welcome comments before

9 we take a break. 10 CHAIR BROOKMAN: Any additional 11 comments on this section? 12 (No response.) 13 Okay. Let's take a break now for 14 -- let's try for 15 minutes, and wear your 15 badge while you're inside the Forrestal 16 Building, if you would, please. And there are 17 restrooms on both ends of the hall. I think 18 many of you are aware there is a coffee shop 19 on the ground floor, straight down. If you 20 get off the elevator banks, hang a left. If 21 you're going to get coffee, go quickly. It 22 takes a little while to get back. And we'll

### 202-234-4433 Neal R. Gross & Co., Inc. Page 77 1 resume at about 10:20. 2 (Whereupon, the proceedings in the foregoing

3 matter went off the record at

4 10:08 a.m. and went back on the 5 record at 10:21 a.m.) 6 CHAIR BROOKMAN: Okay. We are 7 going to start back up, and we are going to8 hear about markups analysis, energy use, life9 cycle cost, and payback period analyses. 10 DR. BAPANAPALLI: Okay. Good 11 morning, everybody. My name is Satish 12 Bapanapalli from Pacific Northwest National 13 Lab. Today, I will be talking about the 14 markups analysis, energy use analysis, and 15 life-cycle cost and payback period analysis. 16 First of all, markups analysis. 17 The purpose of markups analysis is to first 18 determine the weighting factor of each of the 19 distribution channels, and then, based on 20 that, develop the overall markups, and also we 21 develop the baseline and incremental markups 22 for each of the distribution channels.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 78 1 DOE identified three major 2 distribution channels that cover almost all of 3 the equipment in the market. Here I am 4 showing contractor channel, which is also 5 sometimes for two -- there's two intermediates 6 or two channels, and here we have wholesalers 7 and mechanical contractors as intermediaries

8 between manufacturer and customer. 9 Wholesaler channel, there is one

10 wholesaler between the manufacturer and 11 customer, and national account is directly

12 from the manufacturer to the customer.

13 DOE used these values for the 14 weighting factors for each of these 15 distribution channels. For remote condensing, 16 remote condensing commercial refrigeration 17 equipment, 70 percent was allocated to 18 national account channel, and 15 percent each 19 to wholesaler and mechanical contractor

20 channel. 21 Self-contained equipment, 60 22 percent was allocated to wholesaler channel,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 79 1 30 to national account channel, and 10 percent 2 to the contractor channel. And DOE would like 3 to receive comments on these values.

4 CHAIR BROOKMAN: Ten for 5 contractor, 60 for wholesaler, and 30 for 6 national account? Is that what you said? 7 Okay.

8 DR. BAPANAPALLI: For self9 contained, yes. Sixty for wholesaler --

10 CHAIR BROOKMAN: Yes.

11 DR. BAPANAPALLI: -- 30 for -- 12 CHAIR BROOKMAN: Oh, I see it. I 13 was on the -- I was back one slide. I see 14 that. Okay. There we go. 15 MR. HON: Question. Is this an 16 average between glass-doored and solid-doored 17 units? 18 DR. BAPANAPALLI: We did not look 19 at it. DOE did not look at it in terms of 20 glass-doored and solid door. It was more in 21 terms of remote condensing and self-contained. 22 MR. HON: Because under glass-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 80 1 doored and solid door you'll have a reverse of

2 the numbers. 3 DR. BAPANAPALLI: Okay. Thank you

4 for the comment. 5 CHAIR BROOKMAN: Be more specific, 6 Charlie.7 MR. HON: And they're self8 contained units. National chains are a very 9 major part of glass-doored refrigeration. 10 Under kitchen equipment, self-contained -- I 11 mean, national accounts are limited. So 12 you've got a reversal of roles in the way they 13 are distributed. 14 DR. BAPANAPALLI: Thank you, 15 Charlie.

16 CHAIR BROOKMAN: Massoud. 17 MR. NESHAN: Massoud Neshan, 18 Southern Store Fixtures. On your remote 19 condensing unit, we see a high percentage of 20 the equipment going directly to the end users, 21 rather than going through the wholesalers and 22 contractors. And even those self-contained --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 81 1 again, depending on type of the equipment, as 2 it was stated earlier, we see a higher 3 percentage going directly to the end users 4 than going through the wholesaler channel, 5 because of the nature of the equipment. 6 DR. BAPANAPALLI: Just to clarify, 7 you were saying even for self-contained 8 equipment, even for --9 MR. NESHAN: This is for self10 contained. We sell a lot to supermarket 11 people -- self-contained. We sold directly to 12 the end user being the supermarket chain or 13 convenience stores. Those do not go through a 14 middle person at all. And when you sell to 15 these chains, you usually -- not only there 16 are no markups, but actually you have to give 17 them a credit or rebates as far as -- 18 (Laughter.) 19 -- the equipment. No, I mean -- 20 (Laughter.) 21 CHAIR BROOKMAN: Okay. Thank you.

22 DR. BAPANAPALLI: Yes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 82 1 CHAIR BROOKMAN: So additional 2 comments on these distribution channels and 3 the figures represented here, the weighting

4 factors? 5 (No response.) 6 DR. BAPANAPALLI: Thank you. 7 Going along with the markups analysis, the 8 inputs that we used for -- to determine the 9 wholesaler and the contractor channel markups, 10 for the wholesaler proffered data, we use the 11 industry balance sheet that we obtained from 12 HARDI, which is the Heating, Air Conditioning, 13 Refrigeration Distributors International. 14 It's an association of distributors. 15 And for the proffered data for the 16 mechanical contractor channel, we used the 17 U.S. Census Bureau data. And the methodology 18 that we applied was to first -- the costs and 19 profit were listed in -- as shown here -- cost 20 of goods sold, labor expenses, occupancy 21 expenses, other operating expenses, and 22 profit.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 83 1 We expressed the expenses -- all 2 the expenses in terms of per dollar cost of 3 goods sold. And when we sum it up, we obtain 4 the baseline markup. 5 Then, for the incremental markups, 6 the assumption was that labor and occupancy 7 expenses do not scale with the higher 8 efficiency equipment, higher cost. But the 9 other operating expenses and profits do scale 10 with the manufacturer's selling price of the 11 higher efficiency equipment. 12 Based on this, we obtained 13 incremental markups. Just to clarify, the 14 incremental markups are applied to only the 15 cost increase for higher efficiency equipment, 16 cost increase from the baseline equipment. So 17 those markups only apply to the increment of

18 cost. 19 On the national account markup, it 20 was assumed -- because data was very difficult 21 to obtain for this channel, it was assumed 22 that the national account markup is about half

### 202-234-4433 Neal R. Gross & Co., Inc. Page 84 1 of the wholesaler channel markup.

2 CHAIR BROOKMAN: We have a 3 question that came in from someone listening 4 in on the web from Deann Swofford. "Did the 5 Department adjust the 2009 cost model for 2011 6 or today's cost materials? The 2011 cost 7 structure has greatly increased." 8 DR. BAPANAPALLI: The majority of 9 the analysis was done in 2010, and I will 10 defer to Collin to answer that question. 11 MR. WEBER: I'm Collin Weber. I 12 believe that was directed probably towards the 13 engineering analysis and just came in late. 14 The core case costs that were developed for 15 the 2009 rulemaking using an engineering cost 16 model were inflated to current -- today's 17 dollars using the BLS GDP deflator. 18 But DOE, as we stated, is 19 intending to develop a new cost model based on 20 teardown data for the NOPR analyses at this 21 time. Design option costs were based on 22 modern-day or today's present data obtained

### 202-234-4433 Neal R. Gross & Co., Inc. Page 85 1 from manufacturer interviews and online 2 wholesaler prices and other available prices. 3 CHAIR BROOKMAN: Charlie Stephens. 4 MR. STEPHENS: Charlie Stephens. 5 That brings up some things that I guess this 6 is a hazard of going to all of DOE's public 7 meetings, you know, every other week for 8 months. But we have had other discussions in 9 the other rulemakings about trying to account 10 for materials costs, and it is a very 11 difficult thing to do in a market that is as 12 volatile, thanks to the commodities market

13 that we have. 14 There is some literature out there 15 that allows you to consider using, if you do 16 it well, futures costs for some of these 17 things, but only in a long-term trend basis. 18 And I think there has been a tendency to look 19 at, well, here were the prices in 2006, here 20 were the prices in 2010, let's average them. 21 And, quite frankly, I think a 22 better way to be doing this is to somehow

### 202-234-4433 Neal R. Gross & Co., Inc. Page 86 1 figure out what the long-term trend is in real 2 dollars and extend that trend. We are talking 3 about a 30-year analysis here. And trying to 4 use volatile materials prices even in the 5 space of a five-year interval is just not very 6 useful in a 30-year analysis. 7 So I would suggest that the 8 adjustments that occur should probably be done 9 on a long-term basis and can be done. And I 10 have submitted on the other docket some of the 11 literature that might help you do that, and I 12 will do the same here. 13 CHAIR BROOKMAN: Thank you.

14 Massoud. 15 MR. NESHAN: Massoud Neshan, 16 Southern Store Fixtures. Since the analysis 17 was based on the 2010 prices, I'm assuming, 18 and while this equipment -- we have to comply 19 come January 1st with the higher energy 20 efficient requirement, and whatever is 21 discussed here would be impacting that kind of 22 equipment, would be advisable to use the kind

### 202-234-4433 Neal R. Gross & Co., Inc. Page 87 1 of costs we would be seeing in 2011 and use 2 the equipment that has to comply with the 3 minimum energy requirements, and not what 4 currently is being used. 5 DR. BAPANAPALLI: Yes. This is 6 for the preliminary analysis, all these costs. 7 And for NOPR analysis we will be updating. 8 And I think we do have guidelines from OMB 9 specifically to this subject about what costs

10 to be used.

11 CHAIR BROOKMAN: Charles Llenza. 12 MR. LLENZA: Yes. We always try

13 to use the most current base case from OMB. 14 So, and it is currently changing, so we always 15 end up picking the one closest to the release 16 of the data. It is quite challenging at 17 times. 18 CHAIR BROOKMAN: Okay. Additional 19 comments on this section? 20 (No response.)

21 DR. BAPANAPALLI: So here I am 22 presenting the results of our markups

### 202-234-4433 Neal R. Gross & Co., Inc. Page 88 1 analyses, and I am presenting both the 2 baseline and the incremental markups. And DOE 3 split it according to each of the channels -- 4 wholesaler, mechanical, and national account. 5 One thing to note is the 6 mechanical contractor channel includes the 7 wholesaler channel, because it is a two 8 intermediate channel. 9 The sales tax multiplier is 1.07, 10 which is a national average value. And DOE 11 would like to receive comments on the analysis 12 and assumptions are for -- of the markups 13 analysis. 14 Okay. Then, we move on to the 15 next section, which is the energy use 16 analysis. Energy use analysis is generally -- 17 the purpose is to translate the equipment 18 efficiency, just calculated as part of the 19 engineering analysis, and to translate into 20 real-world energy use. 21 In the case of CRE, the efficiency 22 is expressed already in terms of energy use

### 202-234-4433 Neal R. Gross & Co., Inc. Page 89 1 per day, which is kilowatt-hours per day. And 2 during the 2009 rulemaking analysis, the 3 energy consumption model from the engineering 4 analysis was validated using whole building 5 simulations. DOE did not repeat this 6 validation process for the preliminary 7 analysis here. 8 Instead, DOE used -- evaluated the 9 impact of -- incremental impact of the 10 improved efficiency on building heating and 11 cooling loads using a restaurant building and 12 self-contained equipment. 13 The findings and conclusions -- 14 DOE found that the impact was not significant, 15 and also DOE does not intend to formally 16 investigate this subject matter. 17 Moving on to the LCC and PBP 18 analysis, which is short for of course for 19 life-cycle cost and payback period analysis, 20 the purpose here of this analysis is to 21 estimate the financial impact of standards on 22 individual customers, so that when I -- in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 90 1 case of commercial equipment, individual 2 customers is building establishment, generally 3 speaking. 4 The metrics that are used to 5 quantify these impacts are life-cycle cost 6 savings and payback period. Life-cycle cost 7 is made up of equipment installed price, plus 8 the operating cost. Equipment installed price 9 includes manufacturer's selling -- customer 10 purchase price, plus the installation cost. 11 And the operating costs involve repair and 12 maintenance cost, plus the energy cost. 13 So LCC savings is the difference 14 between the base case life-cycle cost and the 15 standards case life-cycle cost. Base case of 16 course is the case when there are no new 17 standards prescribed, and the standards case 18 is with the new standards prescribed. 19 Payback period is the ratio of 20 increase in equipment installed price to the 21 first year operating cost savings. LCC is 22 presented in -- is discounted, but the payback

### 202-234-4433 Neal R. Gross & Co., Inc. Page 91 1 period is not discounted, as DOE uses first 2 year operating cost. It is a simple payback 3 period. 4 Here, DOE is presenting the LCC 5 and PBP flowchart. All the boxes with the 6 yellow shade, they are the inputs to the 7 analysis, and the inputs include the 8 manufacturer's selling price, markups, energy 9 consumption, electricity prices, installation 10 cost, repair cost, and maintenance cost. 11 And using these values, the total 12 installed cost and the annual operating cost 13 can be calculated, and using those DOE 14 calculated the payback period. 15 When we add the other inputs like 16 lifetime discount rate and electricity price 17 trend, future price trend, and we can -- DOE 18 can calculate the lifetime operating expense, 19 and together with the total installed cost, 20 life-cycle cost was calculated. 21 The efficiency levels and effect 22 of the current standard -- this is also to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 92 1 answer one of the questions that was brought 2 up earlier. So standards set in the 2009 CRE 3 final rule go into effect on January 1, 2012, 4 and the baseline efficiency of the market is 5 -- will be altered in 2012 when these 6 standards go into effect. 7 So in cases where the current 8 market baseline was less efficient than the 9 2009 final rule standard, or the EPACT 2005 10 standard, the corresponding standard value was 11 used as the market baseline and -- was used as 12 the baseline and this is referred to as 13 standards baseline, which, consequently, 14 implies that all the engineering design 15 options, which are less efficient than the 16 standards, were not considered for the 17 downstream analysis. 18 And DOE would welcome questions on 19 -- clarification on this one, since this is 20 not as easily understood as possible. And we 21 have -- DOE has presented details in Chapter 22 8, LCC analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 93 1 CHAIR BROOKMAN: Elizabeth? 2 MS. JOYCE: I was just going to 3 ask, engineering design option levels that are 4 less efficient, can you give any examples of 5 those, or are those just in Chapter 8? 6 DR. BAPANAPALLI: They are in 7 Chapter 8, and there is a table which, for 8 each equipment class, is indicating which is 9 standard baseline, which is a market baseline. 10 MS. JOYCE: Okay. Thank you.

11 CHAIR BROOKMAN: Massoud? 12 MR. NESHAN: Massoud Neshan, 13 Southern Store Fixtures. Satish, if I may, I 14 would like to go back a couple of slides where 15 you were talking about the energy use analysis 16 and looked at the self-contained equipment. 17 The slide was saying that the DOE concluded18 that the efficiency improvements in self19 contained equipment do not have a noticeable 20 impact on building heating and cooling loads, 21 obviously which makes sense. 22 The question is: what are you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 94 1 going to do with this? What impact this has 2 on the self-contained? Are we going to give 3 up on improving self-contained cases, energy 4 efficiency of the self-contained cases, then? 5 DR. BAPANAPALLI: This is only a 6 secondary effect of the efficiency improvement 7 in self-contained cases. Of course, the 8 direct refrigeration savings are taken into 9 account in the other analysis. This is only 10 looking at the secondary impact of the 11 efficiency improvement.

12 MR. NESHAN: Correct. If I follow 13 up, I mean, obviously, this was done, as I 14 recall, in a restaurant setting, which has 15 kind of -- in a kitchen area, limited space 16 and limited equipment. Whereas, in larger 17 settings such as supermarkets, where there is 18 a lot of self-contained equipment, has anybody 19 looked at the impact of that as far as the 20 impact of self-contained equipment on the 21 heating and cooling load at that envelope?

22 DR. BAPANAPALLI: Yes. So the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 95 1 analysis -- the evaluation that was collected 2 as part of energy use analysis, DOE did place 3 the refrigerators in the kitchen area, and 4 also in the dining area of the restaurant, and

5 both effects were evaluated. 6 CHAIR BROOKMAN: Go ahead, 7 Charlie. 8 MR. STEPHENS: Charlie Stephens. 9 If I add up the ratings of the compressors in 10 all of these things, and I -- like Massoud 11 says, you put enough of these things, 12 especially the low temperature cases, in the 13 middle of a supermarket, I'm having trouble 14 believing that there is not some impact on the 15 HVAC load that when you further modify that by 16 the efficiency of whatever the systems are 17 that are working there, we take certainly the 18 lighting contribution to the heating load -- 19 every engineer takes the lighting load into 20 account when they size an HVAC system. 21 I can't imagine not taking the 22 refrigeration loads. That is kind of like not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 96 1 counting the weight of the books when you 2 calculate the structural capacity of a 3 library, in a way.

4 And I know there are several small 5 places where I sometimes go to eat or have 6 coffee that my colleagues won't go to in the 7 summertime, because the heat given off by the 8 self-contained equipment in that tiny little 9 space can't be addressed by the cooling 10 system, if any, and they lose business because 11 of it. I have actually talked to people who 12 just plain won't go there, because it is too

13 warm. 14 So, you know, to argue that it 15 doesn't have an impact to me seems way off 16 base. And if I were you, I would take another 17 look at this and get outside the restaurant 18 business to look at this stuff.

19 CHAIR BROOKMAN: Charles Llenza. 20 MR. LLENZA: Charles Llenza, 21 Department of Energy. We currently do not 22 have a good model to describe that and the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 97 1 process. And so we looked at the effect in a 2 small environment, and within that small 3 environment we didn't find it to be of any 4 kind of impact. 5 We realize what you're saying for 6 a larger environment, but we also believe that 7 the systems for heating and cooling in these 8 very large supermarkets and warehouse-type 9 environments, the systems are -- usually have 10 overcapacity to absorb that. 11 And so if the industry feels that 12 there is some good models out there that we 13 could be applying to be able to quantify those 14 loads, then I think that the best thing we can 15 do at this point is, you know, get that 16 information and then see how we can use it in 17 evaluating ours. 18 DR. BAPANAPALLI: I would like to19 add -- yes, when you combine a lot of self20 contained equipment in a building, the 21 cumulative effect is large. But when you look 22 at the effect of one self-contained equipment,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 98 1 and the difference is only the difference 2 between the equipment and the higher 3 efficiency, whatever is the difference in 4 energy. 5 So when you take the difference in 6 the conservation, that is what we found, that 7 -- in this case. 8 CHAIR BROOKMAN: Charlie, go

9 ahead. 10 MR. STEPHENS: Yes. Charlie 11 Stephens again. I think the models that 12 everybody uses every day, the mechanical 13 engineers that I work with on code issues are 14 using DOE2, and, you know, it works, you know? 15 You put that load in a supermarket and DOE2 16 will tell you exactly how many tons -- I mean, 17 you know, plus or minus always -- of energy is 18 being donated to that space during the cooling 19 system -- or during the cooling season and 20 heating season, and, you know, you stuck this 21 in a restaurant, which typically has pretty 22 high ventilation loads.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 99 1 And I can sort of believe that, 2 given the ventilation load in that space, you 3 might have, you know, less -- eventually less 4 of an impact because of that ventilation load. 5 But in a more normal space, like a 6 supermarket, where the refrigeration loads are 7 approximating the ventilation loads, I think 8 you are off base. 9 You know, at the very least, run 10 it through DOE2 and see what you get in a 11 commercial end use application that isn't a 12 restaurant, specifically supermarkets, 13 convenience stores, and small food retail, 14 where you've got 250 square feet, and an eight 15 foot self-contained case in July. 16 CHAIR BROOKMAN: Okay. Thanks, 17 Charlie. Yes, Karim. 18 DR. AMRANE: Karim Amrane, HRI. 19 I'm trying to understand the baseline here for 20 your LCC analysis, and so on, in particular 21 for products for which standards are not yet 22 effective. So you say that you are using the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 100 1 market baseline, right, which would be at 2 lower than what the new standard is going to 3 be next year, right? 4 Do you intend to update this 5 analysis once the standards become effective 6 to change the baseline? 7 DR. BAPANAPALLI: Yes, that is 8 what DOE is saying here is that market 9 baseline was used for the engineering 10 analysis. So, and if it was found that the 11 market baseline, which is the design option 12 Level 1, from the engineering analysis, if it 13 is less efficient than the standards that are 14 going into effect in 2012, then the 2012 15 standard was used as the baseline, and then it 16 becomes a standards baseline. Then, the 17 market baseline was not -- no more applicable 18 for the analysis.

19 CHAIR BROOKMAN: We have a 20 question from someone listening in on the web 21 that refers to Slide 35. This is from Jamy 22 Bacchus. "On Slide 35, were only self-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 101 1 contained units reviewed? Were any rack-based 2 units reviewed? Why not?" 3 DR. BAPANAPALLI: Yes, rack-based 4 units were reviewed in the 2009 CRE rulemaking 5 analysis, and it was a pretty extensive 6 analysis. I would say -- refer you to the 7 2009 final rule TSD. 8 CHAIR BROOKMAN: Okay. Thank you. 9 Final comments on this section? 10 (No response.) 11 Okay.

12 DR. BAPANAPALLI: So here -- and 13 moving on from the effective standard slides, 14 then, we go on to the inputs for the LCC and 15 PBP analysis, and one of the major inputs is 16 the electricity price. Current electricity 17 prices that were used were based on the Energy 18 Information Administration Form 826 data, and 19 specific to the state and the sector was used. 20 Growth rates, which is the future 21 prediction, was based on the EIA's Annual 22 Energy Outlook 2010. And, again, here is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 102 1 specific to sector and region of the country. 2 Both of these values will be 3 updated for the NOPR analysis based on the

4 latest EIA data. 5 Energy prices -- CRE is concerned 6 -- CRE is used for 24 hours a day, so time of 7 use pricing or marginal pricing were not used 8 for the energy cost. 9 Installation, maintenance, and 10 repair cost -- the installation cost and 11 average value and national average value of 12 $2,106 for remote condensing and $790 for 13 self-contained equipment was used. And the 14 installation costs varied by state based on 15 the state level index, and those indices were 16 developed using the RS Means data. 17 Repair costs -- the annualized 18 repair costs, the inputs were probabilities of 19 failure of replacing the component during the 20 equipment lifetime. And the repair costs were 21 calculated based on the original equipment 22 manufacturer costs and applying markups to it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 103 1 and markups including labor. 2 So based on this, since the repair 3 costs are based on the original equipment 4 manufactured cost, they vary with efficiency 5 level, unlike installation costs, which were

6 assumed to be constant. 7 Annual maintenance cost -- DOE 8 spread the maintenance cost in line with the 9 2009 rulemaking analysis, into lighting 10 maintenance cost and preventative maintenance. 11 The lighting maintenance cost was based on 12 the rated life of the lights and the ballast, 13 where they were applicable. So they were 14 replaced based on the rated life in a 15 preventative fashion. 16 And the preventative maintenance 17 was obtained from RS Means data, $220 per year 18 for remote condensing equipment, and $35 per 19 year for self-contained equipment.

20 CHAIR BROOKMAN: Joanna Mauer. 21 MS. MAUER: So you're saying that 22 the lighting maintenance costs are annualized?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 104 1 DR. BAPANAPALLI: Yes. 2 MS. MAUER: And can you explain 3 why they are annualized?

4 DR. BAPANAPALLI: All costs are 5 annualized for the sake of the analysis -- 6 energy costs. When the -- not energy costs, 7 the operating costs are annualized over the 8 lifetime of the -- that is the LCC analysis. 9 That's how it is structured. 10 MS. MAUER: The reason I'm asking 11 is because it seems like if you annualize it, 12 then the present value is larger than what it 13 would be if you actually applied the lighting 14 replacement cost in the year that it actually 15 occurs. So I think it makes a difference in

16 the LCC result. 17 CHAIR BROOKMAN: Okay. Charlie? 18 MR. STEPHENS: Charlie Stephens. 19 I would like to second that. I mean, when -- 20 we don't -- if it is an annual cost where 21 literally the cost is expended annually, then 22 that is an appropriate thing to do.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 105 1 But where it's a capital 2 replacement cost, like a compressor or 3 something every 12 years or every seven years, 4 or whatever it is, when we do this kind of 5 analysis, we regard those things, those large 6 expenditures that occur on an assumed schedule 7 or a planned schedule as a capital cost that 8 occurs X number of years out. 9 And it does make a difference in 10 the net present value calculations, and I 11 would suggest that you try to be as accurate 12 as you can and characterize the maintenance 13 costs that really are annual as annual costs, 14 and the others that are large, relatively 15 large, and occur every seven years, or 16 whatever, as capital equipment costs. 17 DR. BAPANAPALLI: Okay. Thank 18 you, sir. 19 CHAIR BROOKMAN: Yes, please. 20 MR. HON: A question. On your 21 first line up there, average cost of remote 22 condensing system of $2,100, and then the --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 106 1 for self-contained $790, is the self-contained 2 a one-time cost for the installation only?

3 DR. BAPANAPALLI: Yes. 4 MR. HON: There is a real problem 5 with that number, because the average 6 restaurant, non-chair restaurants, individual 7 stores, a Mom and Pop type store, 90 percent 8 of those fail in the first year. And, as 9 such, the equipment is quite often installed 10 and installed and installed, and we have many 11 pieces of equipment that have had 10 and 12

12 owners. 13 CHAIR BROOKMAN: Ninety percent. 14 MR. HON: Non-affiliated

15 restaurants.

16 CHAIR BROOKMAN: You're next. 17 MR. MORRIS: Scott Morris, PNNL. 18 I was asked this same type of question 19 concerning annualized cost yesterday in the 20 lamp fixtures public meeting. And I think the 21 best answer from DOE's perspective for now is 22 that annualizing maintenance costs has been

### 202-234-4433 Neal R. Gross & Co., Inc. Page 107 1 something that DOE has done in rulemakings for 2 quite some time. 3 But as Satish mentioned, we are 4 definitely open to other ideas. It's just -- 5 it's hard to estimate when those capital costs 6 are going to occur. That's a function of 7 lifetime distributions. Thanks. 8 MR. NESHAN: Doug? 9 CHAIR BROOKMAN: Yes, Massoud. 10 MR. NESHAN: Massoud Neshan, 11 Southern Store Fixtures. Regarding lighting 12 maintenance costs, it is a very common 13 practice in supermarkets that they do have a 14 lighting contract, and they go around and 15 twice a year, or whatever the frequency is, 16 they just change all the lights. Whether they 17 are broken or not, they are replaced. And 18 that is a very annual cost that you can add to 19 your analysis, which is very correct. 20 Second, did you include, as part 21 of your maintenance cost, your current 22 maintenance cost, the refrigerant replacement

### 202-234-4433 Neal R. Gross & Co., Inc. Page 108 1 cost for these equipments or not?

2 DR. BAPANAPALLI: No. 3 MR. NESHAN: Because according to 4 EPA, and DOE has accepted that that there is 5 18 percent leakage rate, if that is going to 6 happen on an annual basis, or a regular basis, 7 that should be included in your repair costs

8 as well.

9 DR. BAPANAPALLI: Yes. DOE -- I 10 think the refrigerant replacement does not 11 apply for self-contained equipment. 12 MR. NESHAN: Why not? 13 (Laughter.)

14 DR. BAPANAPALLI: And for remote 15 condensing equipment, we will take that into 16 consideration, your comment into 17 consideration. 18 CHAIR BROOKMAN: I was going to 19 say, Steve is going to follow-on here. 20 MR. COUSINS: Yes, just to muddy 21 the waters a little bit more. 22 (Laughter.)

### 202-234-4433 Neal R. Gross & Co., Inc. Page 109 1 Here in the U.S., we have probably 2 just shy of a million commercial 3 refrigerators. Our largest maintenance cost 4 is condenser cleaning. It is not lighting at 5 all, not by a long shot. But that is -- I see 6 that is not included, more than likely not 7 included in this figure, but this figure is 8 something that was put together a few years 9 back. I'm only saying this in support of some 10 of these other comments that perhaps it needs 11 to be reexamined. 12 MR. LLENZA: This is Charles 13 Llenza, Department of Energy. These are good 14 inputs, and I would like written comments, so 15 that we have something reaffirming what the 16 numbers also involved in terms of what kind of 17 expenses we are incurring to do these things. 18 So the Department can reevaluate its 19 modeling. 20 CHAIR BROOKMAN: Charlie, I wanted 21 to turn to you. Yes. 22 MR. HON: This is Charlie Hon

### 202-234-4433 Neal R. Gross & Co., Inc. Page 110 1 again. A quick one, I just wanted to confirm 2 one item here. Well, two statements on the 3 one item. I just reconfirmed to one of our 4 customers that -- and it paralleled with other 5 information I already knew -- that the average 6 glass-doored merchandiser gets placed twice in7 its lifetime, and the self-contained solid8 doored units, which are basically commercial 9 kitchens, would be replaced -- moved to 10 different locations probably at least three 11 times during their lifetime. So double or 12 triple your $790. 13 CHAIR BROOKMAN: Thank you.

14 DR. BAPANAPALLI: Yes. In 15 response to Steve Cousins' comment on the 16 condenser cleaning, DOE -- the numbers reflect 17 mainly the $35 per year for self-contained. I 18 believe that expense is mainly for the 19 condenser cleaning. 20 MR. COUSINS: I wish I could get 21 away for something that cheap. No, I 22 understand you are open to more input, so --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 111 1 DR. BAPANAPALLI: Yes. 2 MR. COUSINS: -- we will do that. 3 CHAIR BROOKMAN: So either now or 4 in written comments, that would be great. 5 Okay. So other comments on the 6 costs listed and also the approach that is 7 being suggested by DOE? 8 (No response.) 9 DR. BAPANAPALLI: Okay. Yes, this 10 was basically seeking the comment.

11 CHAIR BROOKMAN: Yes.

12 DR. BAPANAPALLI: The next 13 important inputs for the LCC and PBP analysis, 14 the discount rate, and the real rates were 15 used based on the weighted average cost of 16 capital, and different discount rates were 17 applied to different business establishments. 18 And for this purpose, DOE 19 classified the business establishments that 20 use CRE into seven categories -- large grocery 21 store, multi-line retail store, convenience 22 stores with gas station, convenience stores

### 202-234-4433 Neal R. Gross & Co., Inc. Page 112 1 without gas station, and also the small food 2 sales establishment, full service restaurants, 3 limited service restaurants, and other food 4 service establishments like cafeterias. 5 Lifetimes -- average lifetime of 6 10 years was used for majority of the 7 equipment, but 15 years was used for equipment 8 used in convenience and small food sales 9 establishments. 10 So in the majority of the inputs 11 for the LCC and PBP analysis, there are a lot 12 of uncertainties. Using one value doesn't 13 really justify the value. So in order to 14 account for the uncertainties in the input, 15 DOE used a Crystal Ball analysis or what is 16 more generally known as Monte Carlo analysis, 17 to vary some of the inputs. 18 And some of the inputs that were 19 varied were state or the location in which it 20 was installed, which changes the installation 21 cost, markups due to the tax rate -- different 22 tax rates, and electricity cost. Then,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 113 1 building type where building type was varied, 2 that affects the discount rate, and 3 electricity cost. 4 Equipment lifetimes -- the 5 lifetimes were specified using a survival 6 function for the 10-year average and the 15- 7 year average. And also, the base case 8 efficiency level distribution, which is 9 efficiency level distribution in case of no

10 new standard. 11 CHAIR BROOKMAN: Karim? 12 DR. BAPANAPALLI: DOE would like 13 to obtain comments on the Monte Carlo 14 analysis. 15 CHAIR BROOKMAN: Karim? 16 DR. AMRANE: Karim Amrane, AHRI. 17 I have a question about the lifetime of the 18 equipment. Why is it that you have 10 years 19 and 15 years? Can you explain the difference? 20 DR. BAPANAPALLI: Yes. This is 21 value consistent with the 2009 final rule 22 analysis, and there has been good discussion

### 202-234-4433 Neal R. Gross & Co., Inc. Page 114 1 in the TSD and the 2009 final rule. So we -- 2 DOE used the same reasoning for this. 3 DR. AMRANE: Okay. I guess this 4 was a few years back, so I don't remember the 5 discussion.

6 DR. BAPANAPALLI: Yes. So based 7 on various references that we -- that DOE 8 evaluated, 10 years was accepted value for 9 majority of the equipment. And I think for 10 remote condensing equipment, 10 years was an 11 accepted value when all -- a store is 12 renovated. And 15 years for small food sales 13 places, because they -- small food sale places 14 tend to use the equipment for longer time 15 compared to the large grocery stores. 16 CHAIR BROOKMAN: Charlie Stephens. 17 MR. STEPHENS: Yes, Charlie 18 Stephens. One of the most important things 19 that you did reveal in the analysis was that 20 the -- you can write off and depreciate the 21 cost of store fixtures, which includes this 22 stuff, in five years, which for large chains

### 202-234-4433 Neal R. Gross & Co., Inc. Page 115 1 and larger buyers of equipment makes keeping 2 it longer than 10, through a remodel, which 3 seems to occur in that sector every eight or 4 10 years, they don't. They essentially just 5 get new. So that is not true in the smaller 6 retail operations. 7 CHAIR BROOKMAN: So are you 8 endorsing these -- 9 MR. STEPHENS: Yes, I am pretty 10 comfortable with what they are using here, 11 knowing what I know about real estate tax law.

12 Yes. 13 CHAIR BROOKMAN: Additional

14 comments? 15 (No response.) 16 We are going to keep pressing on. 17 DR. BAPANAPALLI: Okay. Here I am 18 just showing a sample results the way we -- 19 DOE summarized the LCC and PBP results for 20 each of the 24 equipment classes. I am 21 showing it here with the VCT.SC.L freezer. 22 And since inputs were in the form of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 116 1 distributions, the outputs were of course in 2 the form of distributions, and, where 3 applicable, the results are presented in the 4 form of average, which is mean or median

5 values. 6 And such summary of results for 7 each of the equipment classes is presented in 8 the appendix of Chapter -- to Chapter 8. 9 CHAIR BROOKMAN: Okay. 10 DR. BAPANAPALLI: Thank you. 11 CHAIR BROOKMAN: Thank you. Next, 12 we are going to hear about shipments analysis 13 and national impact analysis. 14 MR. COOKE: Good morning. My name 15 is Alan Cooke from the Pacific Northwest 16 National Lab, and I am here today to talk 17 about shipments analysis and the national 18 impacts analysis. 19 So I will start with the shipments 20 analysis. The purpose of the shipments 21 analysis is to create inputs for some of the 22 downstream analyses, like the national impacts

### 202-234-4433 Neal R. Gross & Co., Inc. Page 117 1 analysis and some of the others like the 2 environmental impacts analysis that we will be 3 doing at the NOPR stage. 4 So the purpose of the shipments is 5 to estimate the future stock of equipment that 6 we will be looking at under this rulemaking 7 and to estimate the shipment of products in 8 each year by equipment class. 9 There is another purpose that is 10 stated here, and this second purpose actually 11 really takes place more in the NIA analysis -- 12 and I will get to that in a few minutes -- but 13 it is to estimate the efficiency mix of stock 14 that is being -- of the stock over time, but 15 also of the shipments that are being purchased 16 in any given year. 17 So the methodology is as follows. 18 We base our forecast of shipments on two 19 pieces of key information, one of which is 20 historical shipments and one of which is a 21 growth rate in the affected building stock. 22 So we will look at the Energy Information

### 202-234-4433 Neal R. Gross & Co., Inc. Page 118 1 Agency's Annual Energy Outlook and find in 2 there growth rates in building stock of 3 grocery stores and also of the food service 4 outlets. And that becomes a key driver for 5 our forecast of shipments. 6 The historical data that we used 7 was 2009 shipments by equipment class. We 8 listed three sources here. Unfortunately, we 9 did not have one place that we could turn to 10 find good quality information about shipments 11 for all of the equipment classes. So we had 12 to combine several sources to put that 13 together. 14 The first source was information 15 provided by AHRI for 2005 shipments, and this 16 was provided as part of the 2009 rulemaking 17 procedure. Since that rulemaking really dealt 18 largely with remote condensing equipment, the 19 information that AHRI provided was largely 20 remote condensing equipment.21 To get at some of the self22 contained equipment, we have supplemented that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 119 1 with the North American Association of Food 2 Equipment Manufacturers 2008 report. That got 3 us a lot of information about some of the 4 self-contained units that are used in the food 5 service industry.

6 But now we have data for 2005 and 7 2008, and we needed to put that onto a 8 comparable basis, and that was where the 9 middle piece of -- the middle source, our 10 Freedonia Group, came into play. They provide 11 really high-level information, historical 12 information, on the value of shipments per 13 year and the total number of units shipped. 14 For purposes of our downstream 15 analysis, we can't really use that for very 16 much. But for this purpose, it was great, 17 because it gives us an idea of what the 18 historical trends were up and down from one 19 year to the next, so we could take that 2005 20 data and, using this trending information, 21 estimate a 2009 value. And using that 2008 22 data from NAFEM, we were able to estimate a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 120 1 2009 value. So that was how we estimated our 2 2009 shipments by equipment class. 3 We used that information, and also 4 the information from the Annual Energy 5 Outlook, the commercial building stock 6 information, to estimate a stock of equipment 7 in 2009. Combining those pieces of 8 information again, we then were able to put 9 together our forecast of shipments going 10 forward over time. 11 Should I stop here for questions? 12 Was that clear? Any clarification needed? 13 (No response.) 14 The result of our estimation of 15 2009 shipments is summarized here, so you can 16 see that some of the classes of equipment are 17 very important as a percentage of the total 18 shipments. The VOP -- the vertical open 19 cases, remote condensing, medium temperature, 20 are almost 11 percent of the stock -- or of 21 the shipments, excuse me. 22 VCT, which is the vertical closed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 121 1 transparent, remote condensing, low 2 temperature was 13 percent. Vertical closed 3 solid door, self-contained, medium temperature 4 was also very important. Some of these others 5 are fairly important as well, but those were 6 the three big ones. 7 These are the percentages that we 8 applied to our forecast over time. We kept 9 this percentage split constant over time, 10 because we have no information upon which to 11 base changes in those percentages. 12 When you do all of the analyses 13 and add up all of the pieces by type of 14 building -- large grocery, which is also large 15 grocery/multi-line retail, like, say, Costco 16 or Wal-Mart, that is more than just a big 17 grocery store.

18 You can see the forecast for the 19 new equipment, which would serve the growth of 20 growing floor space in that market, and 21 replacement, which would be to replace the 22 existing stock that was existing in 2009, plus

### 202-234-4433 Neal R. Gross & Co., Inc. Page 122 1 over time to replace the new purchases. 2 If you buy a piece of equipment in 3 2016 and it has a 10-year life, you are going 4 to be replacing it two or three or maybe even 5 four times over the course of our 30-year 6 analysis. 7 So you can see large grocery, 8 small grocery which is the smaller markets, 9 like I say, a meat market on the corner or 10 whatever, and convenience stores, and then 11 food service, which is restaurants, limited 12 service, full service, and other food service 13 establishments. 14 So this is our forecast of 15 shipments that is used for the NIA analysis. 16 I don't know if I have a slide that -- oh, I

17 do. So DOE would seek comments on the sources 18 of information that we used for this analysis 19 and the methodologies. Seeing nobody -- oh.

20 CHAIR BROOKMAN: Massoud. 21 MR. NESHAN: I am going to jump. 22 Massoud Neshan, Southern Store Fixtures. I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 123 1 see your difficulty in getting the information 2 you need. However, I am looking at some of 3 these percentages that you have listed here. 4 I'm surprised to see that 1.9 5 percent of the equipment is vertical open 6 remote low temperature. I'm not sure there is 7 a whole lot of end users who are using that 8 style case, and there are other manufacturers

9 who would manufacture that much for the 10 industry. It's a pretty high percentage. 11 MR. COOKE: So you think that's 12 too high. 13 MR. NESHAN: It is too high. It 14 is too high. If you walk into any 15 supermarket, all the display cases you see in 16 the supermarket, you might see only one open 17 freezer case. You may find one open vertical

18 freezer case. 19 MR. COOKE: Are you thinking that 20 they are being largely replaced these days by 21 vertical closed freezer cases? 22 MR. NESHAN: Usually, floor cases

### 202-234-4433 Neal R. Gross & Co., Inc. Page 124 1 or coffin-style display cases. 2 MR. COOKE: Is this where I get to 3 make my shameless appeal for data? 4 (Laughter.) 5 CHAIR BROOKMAN: Do it. 6 MR. COOKE: Because it -- I have 7 to say, it was a challenge to splice these 8 pieces of information together to put together 9 2009 shipments. So I would welcome -- believe 10 me, I would welcome data.

11 MR. NESHAN: And one other 12 question. Earlier it was stated that the 13 life-cycle for the new equipment, large 14 supermarkets and also the smaller markets, 10 15 years and versus 15 years before they would 16 replace or do something with that equipment, 17 which is three to one ratio basically, if I 18 look at that 15 to 10, but when I look at the 19 numbers that you have in the total estimated 20 shipment displays in the table, when I look at 21 large grocery stores and small grocery stores,

22 and I look at the number of new stores versus

### 202-234-4433 Neal R. Gross & Co., Inc. Page 125 1 replacement, I do not see that ratio at all. 2 I was expecting a much, much higher number or 3 ratio for new equipment in the smaller markets 4 versus supermarkets. 5 MR. COOKE: So you think there

6 should be more or -- 7 MR. NESHAN: If in smaller 8 establishments they use the equipment much, 9 much longer, okay, so there would be less of 10 replacement versus the new stores. 11 MR. COOKE: Okay. 12 MR. NESHAN: Okay? And it should 13 be the other way around in a large grocery 14 store. If I look at -- for example, I'll just 15 pick one year -- 2016, which is the closest to 16 us. In large supermarkets, 290 1,000 units 17 for new stores versus 1,042, which is roughly 18 three to one ratio, right? 19 MR. COOKE: Yes, I -- 20 MR. LLENZA: This is Charles 21 Llenza. I think what he is trying to say 22 basically is that the data that you are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 126 1 showing here does not reflect that 10- to 15- 2 year -- 3 MR. NESHAN: That is correct. 4 MR. LLENZA: And so we can go back 5 and validate it that way also. That is 6 actually a good way of looking at those. And 7 what did you consider? 8 MR. COOKE: Well, I guess I can 9 say I know for a fact that it includes the 10 impact of the differential lifetimes. I 11 suspect that what might be going on is the 12 assignment of stock or shipments to those 13 relative building process to start with. But 14 I do know that the small food service -- or, 15 excuse me, the small grocery is based on a 15- 16 year life. And the large grocery is based on 17 a 10-year life. 18 So there may be something going on 19 in terms of how much stock was actually 20 assigned to those markets. But we'll go back 21 and look at it and take that into account. 22 CHAIR BROOKMAN: Did you want to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 127 1 comment here? No? Okay.

2 So other comments on both the 3 methodology and the figures here? 4 (No response.) 5 No additional comments? Okay. 6 MR. COOKE: So the next analysis I 7 am going to talk about is the national impacts 8 analysis. And if I slip into rulemaking speak 9 and refer to it as the NIA, please excuse me. 10 We get into this acronym speak. The NIA 11 yields the NES, which is the national energy 12 savings, and the NPV, which is the national -- 13 or the net present value, and after a while it

14 becomes natural. 15 So what we are looking at here is 16 the impacts at the national level. Satish 17 talked a little while ago about the impacts at 18 the customer level, the impact on the person 19 or the company who is buying this 20 refrigerator. In this analysis, we are 21 aggregating that -- those impacts up to the 22 national level, hence the need for shipments,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 128 1 so we can do our multiplication and come up 2 with these numbers. 3 I think the easiest way to explain 4 this is to just talk about the methodology. 5 For each year, we will look at a base case -- 6 and I really want to explain this -- and we 7 will look at a standards case. 8 The EPACT 05 standards went into 9 effect 1/1/2010, if I remember what I heard 10 earlier today. And the 2009 rulemaking 11 standards, they will go into effect 1/1/2012. 12 So at that point in time, there will be a 13 base case where you can only buy equipment of 14 this efficiency or greater. And in any given 15 year, there may be -- for any given piece of 16 equipment, there may be several different 17 levels of efficiency available in the market. 18 So some percentage will always buy 19 the cheapest piece of equipment, the least 20 efficient piece of equipment, and some 21 percentage of the people out there are going 22 to always buy the most efficient. So when I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 129 1 say "base case," I am talking about all of the 2 equipment that is purchased in that year 3 distributed across the efficiency spectrum. 4 We compare that case to a 5 standards case where we start to eliminate 6 some of those efficiency levels as options. 7 So if we were to set the standard at Level 2, 8 we would eliminate Level 1 as an option, 9 redistribute the equipment across the 10 remaining efficiency levels, and that is what 11 our comparison is. It is that base case 12 efficiency distribution versus that standards 13 case efficiency distribution. 14 So in the base case, you have a 15 number of units shipped at each level of 16 efficiency, and each level -- each one of 17 those costs a certain amount of money to 18 install. Each one of those costs a certain 19 amount of money to operate and maintain and to 20 repair, and the energy costs a certain amount 21 of money. 22 When you aggregate all of those

### 202-234-4433 Neal R. Gross & Co., Inc. Page 130 1 up, and you compare the costs and the benefits 2 of the energy savings, you can get at the net 3 present value of that equipment. When you 4 compare the energy usage between those -- the 5 base case and the standards case, you get an 6 estimate of the national energy savings. 7 We do a 30-year analysis. It 8 starts in the year 2016, which is the first 9 year that the standard would be in effect. 10 Under our 30-year analysis, you can buy -- we 11 model customers buying equipment for 30 years. 12 At the end of December 31, 2045, 13 they stop buying equipment, but anything that 14 was purchased in that year is allowed to 15 continue to operate until it would die its 16 natural death, so that we can capture the 17 energy savings that goes along with that piece 18 of equipment. So we have the cost and the 19 benefits for that piece of equipment. All 20 this is aggregated up -- discounted back to 21 the year 2011. 22 I'm going to stop right here. I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 131 1 don't see any glassy stares, so I'm not sure 2 it has been unclear. But I just want to ask 3 if that makes sense. 4 CHAIR BROOKMAN: Any questions at 5 this point? Charlie Stephens? 6 MR. STEPHENS: Charlie Stephens. 7 Is this where you talk about your shift and 8 your roll-up scenarios in terms of 9 redistributing the equipment that is 10 eliminated by the various standards levels? 11 MR. COOKE: I am only going to 12 talk about a roll-up scenario, to be honest, 13 because you saw how much of a challenge that 14 we had putting together a 2009 base case. And 15 I will talk just a minute about what we did 16 with that efficiency distribution. 17 At this point in time, we are just 18 doing a roll-up. For those who haven't gone 19 to all of these standards workshops that 20 Charlie Stephens was telling us he has been 21 going to, there is two different scenarios, 22 one of which is, as you eliminate an

### 202-234-4433 Neal R. Gross & Co., Inc. Page 132 1 efficiency level, you just kind of roll the 2 stock up to the higher levels. The other of 3 which is a shift scenario, which hypothesizes 4 that people buy efficiencies for a specific 5 reason. "I only buy two levels of efficiency 6 greater than the minimum. And if you raise 7 that minimum, I am going to continue buying 8 two levels above the efficiency." 9 So rather than just rolling up to 10 the next level, I am going to shift. So there 11 is two basic scenarios there. 12 At this point in time, we are just 13 doing a roll-up. And that is a great segue 14 into this next slide here, which is some of 15 the key inputs. From a previous analysis we 16 had -- I talked about stock and shipments. 17 And I talked about the efficiency 18 distribution. 19 Given that we have no real-world 20 information about the efficiency distribution 21 of what is being purchased out there -- we 22 have some fairly high-level things, like I can

### 202-234-4433 Neal R. Gross & Co., Inc. Page 133 1 look at Energy Star and see that some 2 percentage of the manufacturer shipments for 3 the people who are participating in their 4 program qualified for Energy Star, but that is 5 really all I have. That's really all we had. 6 So we had to estimate the 7 distribution that we are using for our base

8 case and our standards cases. And to do that

9 we took a module out of the NEMS model. It 10 looks at the economics of the equipment from 11 the customer's perspective, and it applies a 12 wide range of discount rates from a low 13 discount rate of something like two percent. 14 And this is what you might call an 15 apparent discount rate. If you look at what 16 people are buying and their choices, implicit 17 in that is the discount rate. You don't 18 necessarily know what their discount rate is, 19 but implicit in it is a discount rate. 20 This module applies a low discount 21 rate of -- a low of two percent and a high of 22 something like 1,000 percent. So that would

### 202-234-4433 Neal R. Gross & Co., Inc. Page 134 1 be the person who is always buying the least 2 efficient, least expensive piece of equipment, 3 and it develops a distribution for us. 4 So as we eliminate a level, say 5 Level 1 or Level 2 or Level 3, we rerun this6 routine. And it tends to be more of a roll7 up. As you eliminate Level 1, the customers 8 who are buying Level 1 probably aren't going 9 to start buying Level 5, because the economics 10 are still the same. So it tends to be more of 11 a roll-up, if that answers your question. 12 There are some additional cost 13 information that is needed here. I actually 14 just mentioned that we needed the economic 15 costs of this equipment for purposes of this 16 modeling. We also need it for purposes of 17 calculating the NPV. So the installation 18 costs, the operating and maintenance costs, 19 and the energy costs come directly from the 20 LCC payback period analysis. So those numbers 21 are consistent. 22 The future energy cost that the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 135 1 customer will be paying comes directly from 2 the LCC analysis. There are a few inputs that 3 do not come from the upstream analysis, that 4 come from different sources. 5 Since this is at a national level 6 and not at the individual customer level, the 7 weighted average cost of a customer's capital 8 no longer applies. We are looking at more of 9 a national level discount rate, and we use two 10 discount rates, so you will see two different 11 scenarios presented in that -- one where we 12 discount all of the costs and benefits at 13 seven percent, and one where we discount it at 14 three percent. And this is following the 15 Office of Management and Budget's latest 16 guidelines. 17 I have already mentioned that 18 everything is discounted to 2011, to this 19 year. It is expressed in 2010 real dollars. 20 There is one other factor, and 21 that is the site-to-source conversions. We 22 are not looking at energy at the customer

### 202-234-4433 Neal R. Gross & Co., Inc. Page 136 1 level. We are looking at it at the national 2 level, which means we step it up to the actual 3 source where the energy is coming from, where 4 the electricity is coming from. 5 What that means is that there are 6 a lot of inefficiencies and a lot of losses in 7 the system that we need to capture, line 8 losses on the distribution system and the 9 transmission system. Generation is not 10 perfectly efficient. One BTU of energy in and 11 one BTU of kilowatt hour out, it is -- some of 12 it is actually very inefficient, but there is 13 a range of efficiencies. 14 So when we do this translation, we 15 need to know something about our end use of 16 energy and also how that affects the 17 generation mix. 18 I'm going to skip to the bottom 19 line here where it says, "In the NOPR, a new 20 analysis will be performed." When we do the 21 NOPR analyses, we will take our estimated 22 energy savings by year, and we will put those

### 202-234-4433 Neal R. Gross & Co., Inc. Page 137 1 into NEMS and run NEMS, with and without the 2 energy standards and the savings that come 3 from it. 4 And NEMS will give us an estimate 5 of what that looks like at the generation6 level, and from that we will derive site-to7 source conversion factors that really 8 correspond to our end use and how it is 9 deployed and what it does to generation. 10 For the preliminary analysis, we 11 don't do that. So what we have done instead 12 is we have looked at secondary sources of 13 information that are available to us, and we 14 have looked at the conversion ratios that have 15 been used in other recent rulemakings. 16 Because CRE is a 24 hour a day, 17 seven day a week, 365 day a year consumption 18 pattern, it really appeared that the most 19 recent CRE rulemaking conversion factors were

20 about the most reasonable ones that we could 21 find. So we used those for purposes of this 22 preliminary analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 138 1 I have one last slide to show you. 2 And from the back of the room, this is 3 probably really heinous. But this is one of 4 the three main results tables that you will 5 see in the NIA analysis. This happens to be 6 the estimated energy savings or quads. You 7 will also see a table that looks a lot like 8 this, but has dollar signs on it that says NPV 9 at seven percent, and another one that says 10 NPV at three percent. 11 Since at this point in time we 12 really aren't discussing results so much as we 13 are discussing our methodology, I just really 14 throw this up for an illustration. 15 And this is the last slide I had 16 for the NIA, so I would welcome any comments, 17 any questions, any feedback.

18 CHAIR BROOKMAN: Steve. 19 MR. COUSINS: All right. I have 20 listened to your presentation, and I am -- and 21 you made an appeal for information. And I'm 22 sitting here thinking, okay, how can I provide

### 202-234-4433 Neal R. Gross & Co., Inc. Page 139 1 you with information that you need? I have 2 information. I don't know if you need it or 3 not. It sounds like you do. But I am sitting

4 here and I don't know or understand -- all 5 right, let me back up. 6 We are big in the commercial 7 refrigeration. Most of what we have are self 8 -- is self-contained. It is in convenience 9 retailers and it is -- it's everywhere. What 10 we have is everywhere. So we replace, we 11 restock, we are increasing our volume, but I 12 am -- I don't know if the information I have 13 is going to be of any use to you. 14 It looks like you are looking for 15 industry-wide -- you want the total picture. 16 You know, I am just one guy with my niche. I 17 don't know if -- I don't understand or know if 18 the information we have is going to be of any 19 use to you.20 MR. COOKE: So you are with Coca21 Cola, which is actually an end use customer of 22 this equipment as opposed to a manufacturer.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 140 1 MR. COUSINS: Right. But the 2 reason why I bring this up is you -- we have a 3 population of commercial refrigerators out 4 there, and if you want to know what the energy 5 consumption is, of course it -- not everything 6 was purchased last year, not everything was 7 purchased 10 years ago. 8 And you said you want to know what 9 the efficiency distributions are. Well, we 10 have that kind of information, but I'm just 11 one customer, one person, with one niche, and 12 I don't know if that information is going to 13 be of any use to you. 14 I'm wondering if I should go 15 through the exercise of generating information 16 to give you, if it's not needed. 17 MR. COOKE: I have several kind-of 18 knee-jerk responses to what you are saying, 19 one of which is I really think that we are 20 looking for information at an industry level. 21 So I'm trying hard to not look at Karim when 22 I say I really would like to see shipments

### 202-234-4433 Neal R. Gross & Co., Inc. Page 141 1 information, because AHRI, of course, is one 2 of the trade groups that is in a position to 3 kind of broker the development of that 4 information. 5 If you provided information, I 6 would suggest that you need to clearly 7 indicate what information you considered to be 8 proprietary, because if you give me 9 information and I think I can use it, I'm 10 going to use it. 11 So if you don't want it to be 12 publicly available, unless of course enough 13 information comes in that we can compile 14 things and mask things -- the one key piece 15 that I could see you might have some real 16 insight into is there is a linkage in the 17 shipments forecasting process that I really 18 didn't hit upon, but that is we have developed 19 2009 shipments by equipment type. 20 And for purposes of forecasting 21 that based on building types, we have had to 22 make some assumptions about where some of this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 142 1 equipment -- what kind of buildings this 2 equipment goes into. And that is discussed in 3 the chapter -- TSD Chapter 9, the shipments 4 chapter. 5 So if you have insights into how 6 this equipment is used, efficiency 7 information, that you are willing to share, 8 please share it. 9 CHAIR BROOKMAN: Okay. So, yes, 10 Satish? 11 DR. BAPANAPALLI: This is Satish 12 Bapanapalli, PNNL. Steve, if you could let us 13 know what information you can give us, and 14 then we can let you know -- we have had a back 15 and forth saying you may not need to go 16 through the trouble of some of the 17 information, but maybe this information would

18 be useful to us. 19 CHAIR BROOKMAN: Okay. Other 20 comments? So comments on the methodology as 21 described? 22 (No response.)

### 202-234-4433 Neal R. Gross & Co., Inc. Page 143 1 No additional comments? Okay. 2 Thank you. 3 We are moving on to manufacturer 4 impact analysis. And I think after this 5 segment we will take lunch. 6 MR. LAU: Please ignore the 7 agenda. We are not setting you free for lunch 8 yet. 9 (Laughter.) 10 My name is Chris Lau. I am with 11 Navigant Consulting, and I will be leading the 12 manufacturer impact analysis or the MIA for 13 this rulemaking. 14 The MIA is an analysis that 15 focuses on the impacts of the rulemaking on 16 manufacturers and on the industry as a whole. 17 It includes both qualitative and quantitative 18 assessments of the impacts of energy 19 conservation standards on manufacturers. 20 The output of this analysis is 21 summarized by a change in industry net present 22 value or INPV. However, in addition to INPV,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 144 1 the Department also considers -- takes into 2 account conversion costs, cumulative 3 regulatory burden, small business concerns, 4 capacity constraints, and employment impacts. 5 Normally, the Department pursues 6 or performs MIA in three phases. The industry 7 starts by creating -- or, sorry, the 8 Department starts by creating an industry 9 profile based on the market and technology 10 assessment, which we covered earlier today. 11 The Department also attempts to identify key 12 manufacturer concerns that require additional 13 investigation. 14 In Phase 2, the Department builds 15 a strawman industry cashflow model called the 16 government regulatory impact model, and does 17 this for both the base case and the standards 18 case, and calculates a change in INPV, which 19 is the main output of the model. 20 Also, in Phase 2, the Department 21 develops an interview guide, which guides our 22 subsequent discussions of manufacturers during

### 202-234-4433 Neal R. Gross & Co., Inc. Page 145 1 MIA interviews. The interviews are conducted 2 under a non-disclosure agreement, and we do 3 this so you can provide information that is 4 valuable to the analysis process but is 5 proprietary. And so the information disclosed 6 during MIA interview process is confidential, 7 is not made part of the public record. 8 We plan to begin contacting 9 manufacturers and scheduling these interviews 10 in the weeks following today's public meeting. 11 For manufacturers that wish to participate, 12 please speak with me after the meeting, and we 13 will make sure that you are put on the 14 interviewee contact list. 15 So the interviews are done in 16 Phase 3. Also, in Phase 3, the Department 17 refines the agreement, and evaluates other 18 qualitative issues such as employment impacts 19 and impacts on competition. 20 So this phase -- in discussions 21 with manufacturers, we have identified four 22 key issues. One is testing burden.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 146 1 Manufacturers have stated they are very 2 concerned about the high cost of testing and 3 compliance, and these high costs could lead to 4 changes in the way that industry manages 5 product lines and customization. 6 Two, manufacturers have said they 7 are concerned about a potential change in 8 refrigerant. Although there is no federal 9 regulation that bans HFCs today, manufacturers 10 have expressed concern that potential 11 regulation can significantly increase 12 compliance costs. 13 Three, manufactures have stated 14 that they are concerned about conflicts 15 between the DOE test procedure and food safety 16 standard test procedures. There is a lack of 17 harmonization between the two that creates 18 conflict and could increase testing costs. 19 And, number four, manufacturers

20 are concerned that there could be a 21 disproportionate impact on small businesses 22 and large businesses. Based on feedback from

### 202-234-4433 Neal R. Gross & Co., Inc. Page 147 1 industry thus far, small businesses tend to 2 carry the same number of product lines as 3 larger businesses, but may not have the same 4 resources to deal with those compliance

5 burdens. 6 So at this time, the Department 7 requests comment on the characterizations of 8 these key issues, and on regulations 9 contributing to the issue of regulatory

10 burden. 11 And, actually, I would like to 12 make some specific requests, either in your 13 statements today or in written comments, for 14 testing burden. Any high confidence estimates 15 of the total testing costs and breakdown of 16 those costs would be helpful. 17 In terms of refrigerants, as we 18 said earlier today, it is not -- typically, 19 the Department does not analyze pending 20 legislation or legislation that has not 21 passed. However, if you have specific data on 22 the costs of moving to HFC substitute, we will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 148 1 accept that and would use it if that type of 2 analysis becomes appropriate. 3 MR. LLENZA: Also, in terms of 4 DOE, I guess one of the things that I am 5 concerned about is efficiency losses if we do 6 change refrigerants, and that is the biggest 7 thing that I have heard more than anything 8 else is that some of the new -- proposed 9 alternatives do have some associated loss of 10 efficiency in terms of the sytem and I think11 that is important because we do have anti12 backsliding requirements. 13 And so the most important thing 14 for us to think about is the efficiency levels 15 in terms of for the next set of -- the next 16 set of efficiency levels, and that to me would 17 be more important. Cost is there always, but 18 in terms of if we have some good information 19 on the efficiency impacts, that would be 20 great. 21 MR. LAU: All right. Thanks,

22 Charles.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 149 1 In terms of conflicts of other 2 certifications, I mean, written comments, 3 please indicate which specific tests are in 4 conflict and cite the specific sections of the 5 relevant test procedures that conflict. Like 6 I said, we have heard some general comments

7 about NSF standards versus the DOE test 8 procedure. 9 And, finally, for small 10 manufacturers, this -- we will gather some of 11 this information in the MIA interviews, but 12 getting a detailed breakdown of the conversion 13 costs, both capital conversion costs and 14 product conversion costs, would help us

15 understand the burden on small manufacturers 16 versus larger manufacturers.

17 CHAIR BROOKMAN: So several 18 specifics there. Massoud? 19 MR. NESHAN: Yes, Massoud Neshan, 20 Southern Store Fixtures. As far as the 21 testing burden, it is kind of very difficult 22 for us to submit any information for your use,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 150 1 since we still do not know what is going to be 2 the ultimate ruling as far as the testing 3 requirements and the certification requirement 4 regarding our equipment. 5 So unless -- until that is kind of 6 settled, it would be very difficult for us to 7 be able to figure what is the overall cost and 8 the impact on us. 9 Second comment regarding the 10 impact on the smaller -- small manufacturers. 11 As you have stated, small manufacturers may 12 not necessarily have the full product. But 13 another additional factor is the fact that not 14 only we do have the same or maybe even larger 15 a variety of models, but we manufacture less 16 quantity of each model compared to larger 17 manufacturers, which puts additional burden on 18 the cost of development, research and 19 development, as well as the testing 20 requirement that is yet to follow. So it is 21 -- the impact is even more on the smaller

22 manufacturers.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 151 1 MR. LAU: Thank you. 2 CHAIR BROOKMAN: Okay. Thank 3 you. I saw Charlie next. 4 MR. HON: Okay. Give you some 5 information, because there are several 6 comments in here that are true for certain

7 markets and not true for others. Let me start 8 off. As far as impacts to small manufacturers 9 and different things, that is an opinion that 10 I really can't -- because we are a large 11 manufacturer, we don't fall into that 12 category. We are the other end of the 13 spectrum. 14 Do I believe there is economies of 15 scales in testing? Yes, there are. 16 Second thing is that you are 17 discussing potential refrigerant penalties. 18 We have done extensive research. We were one 19 of the SNAP submitters. We have got a very 20 large database testing foreign equipment,21 which is basically propane-driven, isobutane22 driven, and in reality there is a positive

### 202-234-4433 Neal R. Gross & Co., Inc. Page 152 1 effect of energy efficiency on the small 2 equipment. 3 One-, two-door freezers, one-door,4 two-door, even three-door refrigerators, self5 contained, you will gain seven to 11 percent 6 efficiency with propane on those units. And 7 then, we run into the SNAP limit on total 8 charge size. At that moment, you have a 9 problem because you can't build anything. 10 Next comment, and because the 11 compressors are common in other parts of the 12 world, there is no major -- there is 13 significant cost increase in some components, 14 other components it does not exist, because 15 you have to build them intrinsically safe, 16 because the flammable refrigerant -- there is 17 a cost burden involved. 18 The compressor system is not a 19 cost burden. The refrigerant itself is not a 20 cost burden. Previously, it was, but due to 21 the increases in HFC prices the last year of 22 33 percent, the cost differential has

### 202-234-4433 Neal R. Gross & Co., Inc. Page 153 1 disappeared. 2 You get into large equipment, 3 remote equipment, all bets are off, because we 4 are in a state right now that I am seeing is 5 that these changes, the potential removal of 6 HFCs from the remote systems, the back room 7 package systems, you are looking at total 8 redesign of a system probably, a much greater 9 chance of a cascade system, which is not 10 regulated at all. Do you agree with that,

11 Dan?

12 DR. MANOLE: Dan Manole. I know 13 that in California, Title 24 Part 11 allows --

14 recommends the use of -- or allows the use of 15 CO2. So we should consider that if we need to 16 comply with both, with Part 11 of Title 24 on 17 energy consumption, we might not be able to 18 build a system for CO2. 19 So I agree. Yes, you are right. 20 We encounter more and more these situations 21 where we have a cascade system, so secondary 22 cooling is CO2.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 154 1 MR. HON: And that -- Charlie Hon. 2 That effectively circumvents the regulations 3 in total, because cascade systems are not 4 presently regulated. There is no test 5 procedure for the cascade system. There is no 6 -- and, therefore, there was no consideration 7 of cascade-type systems in the system, in the 8 entire program. 9 I believe that in the very near 10 future you will see 134A, because there is 11 proposals that EPA has published under the 12 SNAP asking for it to be removed from the list 13 of approved refrigerants. That is in effect 14 right now. It is not done, but it is 15 certainly being reviewed. 16 So 134A in most conditions could 17 be replaced, 404A very, very difficult at this 18 time. 19 CHAIR BROOKMAN: Karim? One 20 follow-on question. So is there, as Charlie 21 -- can you quantify the efficiency loss as -- 22 that was part of Charlie's question.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 155 1 MR. HON: I do not have enough 2 experience with it. The alternate 3 refrigerants in the CO2 categories, we are --4 90-plus percent of our market is self5 contained, and 85 percent of our product can 6 be converted to alternate refrigerant with 7 marginal cost increases and efficiency gains. 8 CHAIR BROOKMAN: Okay. 9 MR. LLENZA: Charles Llenza, 10 Department of Energy. Does that include CO2 11 refrigerant?

12 MR. HON: It does not. 13 MR. LLENZA: Okay. 14 CHAIR BROOKMAN: Karim? 15 DR. AMRANE: No, I was just -- 16 this is Karim with AHRI. With respect to 17 134A, the petition that is being evaluated by 18 EPA right now is only for air conditioners, so 19 it does not really apply to other products, 20 although you're right, I mean, it could be in 21 the future -- I don't know -- but right now 22 that's not what EPA is doing.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 156 1 MR. HON: The petition does

2 state -- 3 DR. AMRANE: No, no, not -- the 4 petition, yes, but EPA responded to the 5 petition saying that they are looking only at 6 automotive right now, not the other end use. 7 So look at the response from EPA.

8 MR. HON: I understand that. But 9 I also spoke to EPA on that topic. Okay.

10 Steve? 11 MR. COUSINS: Well, I guess it is 12 no secret that 10 years ago the Coca-Cola 13 Company announced that with regard to our 14 sales and marketing equipment that we want to 15 be in a position where our equipment was 16 environmentally benign with regard to direct 17 impact of equipment greenhouse gas emissions. 18 And to that end, two years ago we 19 announced that we are phasing out of HFCs for 20 all of our equipment, self-contained or 21 otherwise. Next year, as a matter of fact, at 22 least half of what we buy globally will not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 157 1 use an HFC when it comes to chilling or 2 refrigerating product. 3 Here in the United States, we have

4 elected to use CO2 as an alternate 5 refrigerant, transcritical CO2. 6 Unfortunately, I cannot give you -- if you 7 want efficiency data, that is something I 8 cannot provide. We don't have that 9 information. 10 We do believe that we will be able 11 to meet all of the current energy targets and 12 mandates with transcritical CO2. But all bets 13 are -- well, I can't say that. We don't have 14 the efficiency data to provide, but I -- the 15 point I do want to make is that the Coca-Cola 16 Company has announced that by 2015 we are not 17 going to purchase anything with an HFC 18 anywhere in the world, and that the way we 19 have been transitioning I think will be there

20 well before 2015. 21 CHAIR BROOKMAN: Okay. Thank you.

22 Warren?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 158 1 MR. BEETON: Just a couple of 2 comments. One is that -- I think the Navigant 3 gentleman used the word "speculative" before, 4 and I think it is an accurate word, because if 5 it turns out EPA uses total emissions as a 6 basis for SNAP regulations to phase out HFCs, 7 they've got to consider energy efficiency in 8 that equation. 9 So it could mean energy efficiency 10 might not change, and I don't think any of us 11 know how they are going to approach the 12 problem. So whether or not it causes losses 13 of efficiency or raises or -- it depends on 14 the alternatives that come forth as well as 15 the EPA's methodology. 16 The other thing I would say is 17 that on the smaller equipment that -- for 18 propane there is a standard, as was implied, 19 for using propane and equipment up to 150 20 grams. What I don't know -- and I just throw 21 it out here for people to think about -- is 22 whether or not building codes can be changed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 159 1 to allow lots of 150-gram charges of propane 2 in a supermarket. 3 CHAIR BROOKMAN: Do you want to 4 follow-on, Charlie? 5 MR. HON: We've done extensive 6 work in that area as well, because it doesn't 7 do us any good at all to build a unit that 8 can't be placed. Propane, at this time, is 9 not excluded from most building codes, but 10 that is part of the reason for the EPA's 11 discussion of 150 grams or less, because 12 almost all spaces fall within the safe zone in 13 a grocery store type environment, because of 14 the minimal charge that if you would have a 15 leak, it wouldn't be a major risk factor. 16 We look at other risk factors in 17 the industry as well, because I heard an 18 interesting statistic the other day. Our 19 dryer systems in our homes, there is 15,000 20 fires a year in dryers. 21 CHAIR BROOKMAN: It's the lint,

22 huh?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 160 1 MR. HON: Yes. 2 CHAIR BROOKMAN: Charlie Stephens, 3 do you have a comment? 4 MR. STEPHENS: Yes. I think -- I 5 have two things. One, DOE's listing of 6 manufacturers was a little curious. I just 7 heard Charlie Hon say that True was a large 8 manufacturer, but they are listed in the TSD 9 as a small one. So I'm not quite sure -- 10 (Laughter.) 11 -- you know, what -- the list of 12 small manufacturers is very long, and I don't 13 know if that's because it's 750 employees and 14 smaller, and that's just a really ridiculous 15 number, or -- I mean, do you have more than --

16 MR. HON: Yes. 17 MR. STEPHENS: Oh, okay. 18 (Laughter.)

19 MR. HON: That can be corrected. 20 MR. STEPHENS: So there is a 21 little bit of an error there. I just wonder 22 how many other errors were there. I looked at

### 202-234-4433 Neal R. Gross & Co., Inc. Page 161 1 all of those characterizations, and some of 2 them were rather surprising as manufacturers 3 shifted back and forth between large market 4 share, but they're small, and small market 5 share but they're huge, and I didn't -- I 6 would look at that very carefully. 7 The other thing is I just wanted 8 to add, the largest air conditioning 9 manufacturer in the world -- Daikin -- is also 10 headed toward nothing but non-halogen-related 11 refrigerants. Well, yes, they are headed 12 there. I didn't say they were there, but they 13 -- I just had that conversation three weeks 14 ago with their New York office, so I think 15 that needs to be taken into account. How you 16 do it, I don't have any suggestions right now. 17 CHAIR BROOKMAN: Okay. This has 18 been productive. Joanna. 19 MS. MAUER: Joanna Mauer. I just 20 -- I was wondering if any of the manufacturers

21 could comment on the status of the test 22 procedure development for secondary cooling

### 202-234-4433 Neal R. Gross & Co., Inc. Page 162 1 systems. 2 CHAIR BROOKMAN: Charlie? 3 MR. HON: I would like to state a 4 couple of things. First off, we have a group 5 studying that program right now under 6 ASHRAE 72. Two of the members of the study 7 group are here. 8 CHAIR BROOKMAN: Would you state 9 again what you're studying? 10 MR. HON: The process for test 11 procedure to study secondary refrigerants 12 loops. 13 CHAIR BROOKMAN: Okay. 14 MR. HON: In some areas, the 15 existing systems work, as long as we are 16 running certain types of secondary 17 refrigerants. If you are studying a brine 18 solution, the delta T methods work fairly

19 well. 20 Any time you are in a situation 21 where you are running a slurry or 22 transcritical operation, either one of those,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 163 1 it doesn't work. And Carl and Dan I'm sure 2 have some opinion on how -- what direction, 3 because they were part of the study group 4 working on it, and they have yet to come up 5 with a valid -- completely valid system. 6 There was one study done in ASHRAE 7 which was presented in ASHRAE's Journal -- 8 well, not in the journal, excuse me -- as a 9 presentation in January ASHRAE meetings, which 10 developed a process which we are looking at 11 right now, but I -- I am trying to reproduce 12 the results, and I'm not sure whether it is 13 going to be valid or not. But it is certainly 14 a process that we can look at. 15 CHAIR BROOKMAN: Okay. Thank you. 16 MR. LLENZA: Department of Energy, 17 Charlie Llenza. If the industry could provide 18 us some timelines. Part of the issue with the 19 test procedure is that we do have a spring 20 release of 2012, so we want to know if we 21 should be factoring this in or not. 22 MR. HON: Charlie Hon. I can

### 202-234-4433 Neal R. Gross & Co., Inc. Page 164 1 guarantee that it will not be there, because 2 we are coming to -- we are in the process of 3 coming to print on the existing standard. 4 Hopefully, it will be a 2011 standard, and it 5 does not include it.

6 CHAIR BROOKMAN: Yes. 7 MR. NESHAN: Massoud Neshan, 8 Southern Store Fixtures. There is also a 9 group -- part of the -- it's part of the AHRI 10 CRMD group, working on developing a standard 11 for the secondary cooling display cases. That 12 is by far -- as progress -- I mean, we are 13 very closely -- I think we have already voted 14 on the final version, and it is just a matter 15 of having the SI version versus the -- you 16 know, the English dimension. So that work is 17 going on, and before too long it will be

18 released. 19 DR. AMRANE: It will be released

20 soon. 21 MR. LLENZA: So what timeframes

22 are we --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 165 1 DR. AMRANE: Oh, we are talking, 2 you know, I don't know, a month, two months, 3 something like that. 4 MR. LLENZA: Okay. And then, in 5 terms of the ASHRAE process, then does that 6 roll into the ASHRAE process? 7 DR. AMRANE: That is what I'm not 8 so sure about, the 72 in there. 9 CHAIR BROOKMAN: Massoud, please. 10 Yes, Massoud. 11 MR. NESHAN: What AHRI is doing, 12 what -- the standards being developed is 13 really for when you have a fluid -- when you 14 have no phase change, and there is liquid-only 15 like -- such as a glycol as a secondary fluid. 16 That is what is being developed, not when you 17 have a two-phase -- possible two-phase flow 18 scenario. 19 MR. LLENZA: Charles Llenza, 20 Department of Energy. Again, it would just be 21 partial, but there is more to this than just 22 that part of it.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 166 1 DR. AMRANE: Right. I mean, it is 2 linked with what ASHRAE is doing, too, so 3 eventually we will have to wait for the test 4 method, too, so -- 5 CHAIR BROOKMAN: Okay. Thank you, 6 Karim. 7 So this is good discussion. 8 Please scan back through these four elements 9 -- testing burden, potential changes in 10 refrigerants, conflicts with other 11 certification testing parameters, and impacts 12 on small manufacturers -- any additional 13 comments on those four elements? Charlie? 14 MR. HON: I have a question of 15 you. Number one is, have you done any studies 16 -- has anybody given you any information -- I 17 doubt if they will -- as far as the cost of 18 in-house testing with third party verification 19 of the in-house testing versus third party 20 testing at an individual third party certified

21 lab? 22 MS. ARMSTRONG: So, I would say

### 202-234-4433 Neal R. Gross & Co., Inc. Page 167 1 probably not for CRE equipment specifically, 2 although the way the regulations currently 3 allow it's at the manufacturer's discretion 4 whether you use your own in-house lab or 5 whether you use the third party lab. So that 6 is more a decision for you. 7 MR. HON: My question was -- this 8 is Charlie Hon. My question was not 9 necessarily whether we did it or didn't do it. 10 We are all aware that we can do it, but my 11 question is, have you done a cost differential 12 between the two? Because that is going to be 13 driving a lot of cost issues. 14 The certification process includes 15 17025 certification, which is very expensive 16 to develop. Once you get to that level, you 17 are okay, you can save yourself a tremendous 18 amount of money by testing in-house. But when 19 you don't have that certification, or you 20 don't have the potential to get that 21 certification, it is very difficult and your 22 cost comparisons will be tremendously

### 202-234-4433 Neal R. Gross & Co., Inc. Page 168 1 different between a company that has the 2 capability to do in-house testing versus 3 external testing. 4 MS. ARMSTRONG: So can I ask you 5 one follow-on question? Where do you think 6 the 17025 requirement comes from? The 7 Department doesn't have a requirement that 8 your manufacturer follows 17025, although I 9 understand that there are other perhaps 10 voluntary programs that -- 11 MR. HON: Of the third party 12 certification programs, everyone we have 13 looked at so far requires 17025 certification 14 to validate the laboratory's practices and 15 procedures and capabilities, so that they can 16 do these tests, so that the third parties, 17 like ULs and ETLs, will allow and accept your

18 data. 19 MS. ARMSTRONG: Right. 20 MR. HON: That's where it comes

21 from.

22 MS. ARMSTRONG: And that comes

### 202-234-4433 Neal R. Gross & Co., Inc. Page 169 1 from if you are going to -- you know, 2 Christopher -- is he here? No? Okay. I was 3 going to say Christopher at EPA might be 4 better able to speak to this, because that is 5 associated with the Energy Star requirements 6 and not DOE's regulatory program. 7 MR. HON: Charlie Hon again. It 8 is not just DOE versus Energy Star. 9 MS. ARMSTRONG: Oh, I understand. 10 I understand it's a cumulative regulatory 11 burden, and the manufacturing impact analysis, 12 that could be an issue. I get it. 13 MR. HON: And also Canadian.

14 MS. ARMSTRONG: Correct. 15 MR. HON: Because the Canadian 16 standard requires third party, Energy Star 17 requires third party.

18 MS. ARMSTRONG: Yes.

19 MR. HON: DOE does not.

20 MS. ARMSTRONG: Correct. 21 MR. HON: But if you are doing 22 testing, and if you want to be able to --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 170 1 MS. ARMSTRONG: Harmonize. 2 MR. HON: -- organize and 3 harmonize, you have to do it. 4 MS. ARMSTRONG: Okay. Thank you. 5 MR. LLENZA: This will be part of 6 more of the discussion this afternoon. I 7 think we want to wrap up, and we are going to 8 move up the 11:15 test procedure -- I'm sorry, 9 the NOPR analysis part? 10 CHAIR BROOKMAN: We're going to do 11 one more segment before we pause for lunch. 12 MR. LLENZA: And then we are going 13 to pause for lunch.

14 CHAIR BROOKMAN: Yes. 15 MR. LLENZA: And then we will come 16 back and we can really have a robust 17 conversation about all of this. 18 CHAIR BROOKMAN: Okay. So, 19 Satish, we are back with him on just NOPR 20 analysis overview. 21 DR. BAPANAPALLI: Okay, yes. This 22 is Satish Bapanapalli, Pacific Northwest

### 202-234-4433 Neal R. Gross & Co., Inc. Page 171 1 National Lab. So I am just going to stand in 2 here. The analysis, the NOPR analysis that we 3 presented during the framework, and it is -- 4 it remains the same. So any comments on these 5 analyses are welcome. 6 So, specifically, in order to 7 facilitate the discussion, I will specifically 8 mention the LCC subgroup analysis where we -- 9 where DOE will look at certain national 10 consumer subgroups, which may be differently 11 affected compared to the larger groups. 12 Manufacturing impact analysis, of 13 course, Chris Lau talked about it a little 14 while ago. Utility impact analysis, effect on 15 the generation capabilities of the utility 16 companies. Employment impact analysis, 17 environment impact -- environment assessment, 18 and regulatory impact analysis.

19 CHAIR BROOKMAN: So that's the 20 list. Those of you that have participated 21 previously, no surprises there I don't think. 22 Okay?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 172 1 Okay. So final comments? We have 2 covered a lot of ground in this morning. We 3 are about to pause for lunch. Additional 4 things you want to say before we head out of

5 here for lunch? 6 (No response.) 7 It is now just about noon. Let's 8 return at 1:00. I think everybody is -- most 9 everybody is familiar with walking around in 10 the Forrestal Building. You need to wear this 11 badge. There is a big cafeteria, if you go 12 down to the ground floor and walk about 100 13 yards that way. You may need an 14 identification card to get back through 15 security when you walk out of the cafeteria. 16 Brenda, do you want to distribute 17 those now? Let's -- yes, okay. 18 Let me see what else. Do you know 19 where the restrooms are? Say it again? We 20 can leave -- you can leave your stuff here. 21 Thanks, Karim, yes. You can leave -- this 22 room will be locked.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 173 1 And thanks for a good start on the 2 day. There is more to be covered. We will 3 see you back here at 1:00. 4 (Whereupon, at 11:58 a.m., the 5 proceedings recessed for lunch.)

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### 202-234-4433 Neal R. Gross & Co., Inc. Page 174 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:02 p.m.) 3 CHAIR BROOKMAN: So let's resume, 4 shall we? Welcome back. Hope you had a good

5 lunch. 6 Just prior to the lunch break, we 7 received a comment -- I think it's a comment, 8 not a question -- from someone who is joining 9 us online. This is from Jamy Bacchus. "As 10 noted in my comments August 2010, a TEWI 11 analysis would look at direct and indirect 12 emissions. When supermarket rack-based CRE 13 has leakage rates of 15 to 30 percent, and use 14 HFC refrigerants with GWPs, global warming 15 potentials, in the range of 2,000 to 3,400, 16 then direct emissions can be as large as the 17 indirect emissions due to energy use. DOE or 18 EPA should review energy and emissions due to 19 leakage. Correction: R404 has global warming 20 potential of 3,922." That's from Jamy

21 Bacchus.

22 So I don't know whether the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 175 1 Department wishes to respond at this point

2 or -- 3 MR. LLENZA: This is Charles 4 Llenza, Department of Energy. I think we will 5 take the comment under advisement -- 6 CHAIR BROOKMAN: Okay. 7 MR. LLENZA: -- and put it in the 8 docket at this point. 9 CHAIR BROOKMAN: Okay. Thank you. 10 And once again, for those joining 11 us online, as is the case with everybody here 12 in the room, the Department would really 13 appreciate your detailed written remarks sent 14 in to them, so they will have a complete

15 record of that. 16 Okay. So we are going to proceed 17 where we left off with Andrew, test procedure 18 rulemaking. 19 MR. NAWROCKI: All right. Welcome 20 back from lunch. My name is Andrew Nawrocki, 21 and I will be presenting some information 22 about the test procedure.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 176 1 In this section, I would like to 2 discuss the current test procedure as well as 3 proposed amendments to the test procedure as 4 described in the test procedure NOPR which was 5 presented on January 6th of this year. 6 I would like to stress that 7 representations of energy use used in this 8 analysis are based on the current test 9 procedure, which is of course based on ARI 10 1200-2006, which references ASHRAE Standard 72 11 as the method of test, and the Department has 12 also adopted AHAM HRF-1 as the method for 13 measuring refrigerator compartment volume. 14 Yes, so we have adopted HRF-1 for measuring 15 the refrigerator compartment volume. 16 The current test procedure also 17 contains the following rating temperatures, as 18 you have seen -- 38 degrees for commercial 19 refrigerators and refrigerator compartments, 20 zero degrees for freezer and freezer 21 compartments, and negative 15 for ice cream 22 freezers. And this can all be found under 10

### 202-234-4433 Neal R. Gross & Co., Inc. Page 177 1 CFR 431, Subpart C. 2 Next, I would like to take this 3 opportunity to discuss the proposed test 4 procedure amendments as described in the test 5 procedure NOPR. I would also like to stress 6 the Department has not yet finalized its 7 stance on these amendments, and is just taking 8 this opportunity to collect any additional

9 comments. 10 So there is three main amendments. 11 The first one, I would like to -- we are 12 proposing to update the reference industry 13 test procedures to the current versions, and 14 that includes AHRI 1200-2010 and AHAM HRF-1 15 2008. Another provision the Department is 16 considering is to incorporate energy 17 conservation features that are not currently 18 accounted for in the DOE test procedure, and 19 that includes night curtains and lighting 20 occupancy sensors and scheduled controls. 21 And, finally, the Department is 22 considering allowing commercial refrigeration

### 202-234-4433 Neal R. Gross & Co., Inc. Page 178 1 equipment that cannot be tested at the 38 2 degree rating temperature to be tested at its 3 lowest application product temperature. 4 CHAIR BROOKMAN: I spotted Charlie 5 first. Charlie Hon. 6 MR. HON: A quick one. Last time 7 we had meetings on this topic, item number 3, 8 the 38 degrees, lowest application 9 temperature, also included another category 10 which would be ice storage, which would be in 11 the mid-twenties, which would have to be then 12 considered as a freezer. 13 MR. NAWROCKI: Yes. This is 14 Andrew Nawrocki. I do recall this comment, 15 and we are currently looking into that, taking 16 that into consideration. And, again, we would 17 appreciate any more feedback on that as well. 18 CHAIR BROOKMAN: Elizabeth? 19 MS. JOYCE: I just wanted to 20 reiterate my previous comment to request that 21 DOE be consistent in its approach towards 22 technologies that maintain energy savings at

### 202-234-4433 Neal R. Gross & Co., Inc. Page 179 1 variable ambient load or -- variable ambient 2 conditions, pardon me, or variable load, and 3 to maintain a consistent approach between the 4 test procedure and the engineering analysis. 5 CHAIR BROOKMAN: Charlie Stephens. 6 MR. STEPHENS: Charlie Stephens. 7 To follow up on what Charlie Hon was saying, 8 not only does that product he mentioned have a 9 different application temperature, but it is 10 frequently more than other products found in 11 ambient conditions that are not really very 12 close to the test procedure. 13 I think Mr. Cousins probably is -- 14 has to deal with that as well, but it is in 15 that category where some look at the ambient 16 conditions for the test procedure for certain 17 classes might be appropriate as well. 18 CHAIR BROOKMAN: Thank you. 19 MR. NAWROCKI: Thanks for your 20 comment. And just to reiterate, the night 21 curtain proposed test method, which is adapted 22 from Section 7.2 in ASHRAE Standard 72, calls

### 202-234-4433 Neal R. Gross & Co., Inc. Page 180 1 for "For open display cases sold with night 2 curtains, the night curtain shall be employed 3 according to manufacturer instructions for a 4 total of six hours, three hours after the 5 start of the defrost period. And upon 6 completion of the six-hour period, the night 7 curtain shall be raised until the completion 8 of the 24-hour test period." 9 So a little bit more detail about 10 the lighting occupancy sensor and scheduled 11 control proposed test method. This consists 12 of three calculations. The first one is to 13 calculate the direct energy use of lighting 14 with occupancy sensors or scheduled controls 15 installed. And this requires specifications 16 for the timed lighting as off or dimmed due to 17 the sensors or controls. And we'll get into a 18 little more detail in the following slide. 19 And the second calculation is to 20 calculate the reduced refrigeration load when 21 the energy use of lights within the 22 refrigerated volume is decreased, so the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 181 1 reduced compressor load. And this relies on 2 some basic assumptions about the EER of the 3 equipment, and I will go into more detail in 4 the following slides. 5 And, finally, the adjusted daily 6 energy consumption is based on the decreased 7 lighting energy, as well as the decreased 8 compressor energy use. 9 So here is a little more detail 10 about the default specifications for the time 11 that lighting is off or dimmed. So depending 12 on the case configuration, there can be either 13 only scheduled lighting controls, only 14 occupancy sensors, or a combination of both. 15 And there are different times allotted for 16 each technology. There is eight hours for 17 scheduled lighting controls, 10.8 hours for 18 occupancy sensors, and a total of 10.8 hours 19 for occupancy sensors and controls. 20 And the time off period for 21 scheduled controls was chosen to approximate 22 the usage of lighting control products based

### 202-234-4433 Neal R. Gross & Co., Inc. Page 182 1 on comments received during the previous DOE 2 rulemaking, and the time off period for 3 lighting occupancy sensors was derived based 4 on a demonstration project conducted through 5 the DOE gateway program. 6 So here is a little more detail 7 about calculating the reduced refrigeration 8 load, and the EER for self-contained 9 commercial refrigerated display merchandiser 10 storage cabinets is listed for each operating 11 temperature class -- medium, low, and ice

12 cream. 13 And the EER for remote condensing 14 equipment is listed in Table 1 and AHRI 1200, 15 and these both feed into -- or this feeds into 16 the alternate compressor energy consumption 17 metric shown in this formula, which can also 18 be found in more detail in the test procedure

19 NOPR.

20 So that's all I have for the test 21 procedure. 22 CHAIR BROOKMAN: Okay. So, yes,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 183 1 take comments here. Yes, please. 2 MR. NESHAN: A question I have.3 How did you calculate the EER of the self4 contained display merchandiser? 5 MR. NAWROCKI: This was based on 6 an average EER value for all equipment of that 7 class. This was part of the previous 8 rulemaking. That's where this came from. 9 MR. NESHAN: I understand. But, I 10 mean, when you have an EER, obviously, there 11 is an output -- input and output. So I know 12 what the input is, but I don't know what the 13 output is here. 14 MS. ARMSTRONG: Well, just -- 15 CHAIR BROOKMAN: Ashley Armstrong. 16 MS. ARMSTRONG: Ashley Armstrong. 17 This might be a question directed back there. 18 But did you just average market values in

19 2009? 20 CHAIR BROOKMAN: Collin. 21 MR. WEBER: Collin Weber from 22 Navigant. So both for the 2009 rulemaking and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 184 1 the ongoing engineering analysis, compressor

2 EERs were calculated based on the ARI 540 3 curve fits coefficients available publicly 4 from manufacturers of compressors. 5 MR. NESHAN: Massoud Neshan, 6 Southern Store Fixtures again. I understand 7 the EER for compressor. I'm looking at the 8 EER of a self-contained commercial display 9 case. The question is not the EER of the 10 compressor. The question is: what is the EER 11 of a display case? Because the only thing you 12 can measure is the energy consumption of a 13 display case, and not the EER of a display 14 case. Is that clear? I mean, for display 15 cases you only have energy consumption, not 16 inefficiency. 17 CHAIR BROOKMAN: Your point is 18 clear, I think. 19 MR. NESHAN: Okay. 20 CHAIR BROOKMAN: Okay? 21 MR. NAWROCKI: Thank you for your

22 comment.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 185 1 MR. NESHAN: Yes. I have other 2 questions I would like to ask. 3 CHAIR BROOKMAN: Please, go ahead, 4 keep going.

5 MR. NESHAN: On the -- 6 MS. ARMSTRONG: Well, it says on

7 there -- 8 CHAIR BROOKMAN: Ashley. 9 MS. ARMSTRONG: So I think the 10 title is just -- if you look at footnote -- 11 two of these values only represent compressor 12 EER. So I think it is just the title needs to 13 be clarified, that it is just compressor EER. 14 And the methodology for which Collin just 15 explained is how it was calculated. 16 MR. WEBER: Collin Weber again. 17 So I'm not sure if this will clarify, but the 18 change in heat load due to the lighting being 19 off is fed through this EER to account for a 20 reduction in energy consumption. 21 MR. NESHAN: Correct. Again, 22 Massoud Neshan. I mean, for a compressor, the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 186 1 things that are -- impacts the EER of a 2 compressor or condensing unit are the ambient 3 conditions or the operating conditions 4 basically, not reducing the load of a display

5 case. 6 If you change this saturated 7 suction temperature, or if you change the 8 ambient conditions, that would have impact on 9 the compressor efficiency, not turning off the 10 light. Okay? The efficiency stays the same. 11 The energy consumption of that condenser unit 12 or compressor unit would be reduced. 13 CHAIR BROOKMAN: Okay. 14 MR. NESHAN: Okay? I have other 15 questions I would like to ask.

16 CHAIR BROOKMAN: Yes. 17 MR. NESHAN: Regarding the night 18 curtain proposed testing, and also the light 19 occupancy sensor, are you considering the 20 economical impact -- the cost of doing this 21 and the economical impact on the equipment and 22 the operating cost of the equipment, or not?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 187 1 MR. NAWROCKI: Yes. I believe 2 that will be taken care of in the engineering 3 analysis. 4 MR. NESHAN: So that is yet to 5 come, then. Thank you.

6 MR. NAWROCKI: Yes. 7 CHAIR BROOKMAN: So additional 8 comments on this series of slides? Yes, Carl.

9 MR. ROBERTS: Carl Roberts. Are 10 we going to have an opportunity at this point 11 to talk about the key issues of the 12 preliminary manufacturer's analysis that we 13 were talking about before lunch? 14 CHAIR BROOKMAN: Which -- can you

15 refer us -- 16 MR. ROBERTS: Slide Number 57. 17 CHAIR BROOKMAN: Thank you for 18 that. 57. If you feel like we weren't 19 finished with that, then we should return to 20 it. 21 MR. ROBERTS: Yes, I feel like we 22 weren't finished with that, because these are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 188 1 pretty important issues from the point of view 2 of a small to middle-sized manufacturer like

3 ourselves. 4 CHAIR BROOKMAN: Okay. Well, just 5 hold for just a second. Let's go -- let's -- 6 before we return to Slide 57, let's see if 7 there are any additional issues related to 8 this description of test procedure potential 9 changes and also details that are listed here. 10 And then we will return. Warren? 11 MR. BEETON: I just have a 12 question. I'm still not clear on that EER 13 chart, and maybe it's not that important. But 14 if you -- there we go. The 11.26, as an 15 example, is that a number that you assume when 16 you calculate the impact of turning the lights 17 out or having a different lighting load on the 18 case? Then, you simply use that EER number to 19 calculate the reduction in energy? 20 CHAIR BROOKMAN: Collin. 21 MR. WEBER: That's approximately 22 correct, yes. The -- Collin Weber. The EER

### 202-234-4433 Neal R. Gross & Co., Inc. Page 189 1 number just simply uses a conversion from 2 reduction in load due to lighting reduction. 3 MR. BEETON: Okay. 4 MR. WEBER: Conversion to energy 5 savings in the case as a credit for said 6 lighting reduction. 7 MR. BEETON: Okay. And then, you 8 got these numbers that you list up there by 9 simply going to compressor curves and trying 10 to figure out what the compressor -- what 11 conditions the compressor would be operating 12 at and finding an EER. 13 MR. WEBER: They were based on the 14 operating conditions used in the engineering 15 analysis, which approximates -- 16 MR. BEETON: Okay. 17 MR. WEBER: -- the test procedure. 18 MR. BEETON: Okay. Thank you. 19 CHAIR BROOKMAN: Okay. Carl, yes.

20 MR. ROBERTS: Carl Roberts. On 21 the determination of the lighting occupancy 22 sensor and scheduled controls, one thing that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 190 1 isn't clear here is when we can apply this, 2 and what is meant by only scheduled lighting 3 controls installed. Does that mean that field 4 installed lighting controls do not permit the 5 use of this energy determination? 6 And the reason I ask is because 7 with remote cases -- they are really all 8 remotes -- often it is part of the building 9 energy management system. We may or may not 10 know whether these are going to be installed, 11 but in some cases we do know that they are 12 going to be installed. Under that 13 circumstance, could we apply this model? 14 MR. NAWROCKI: It's my 15 understanding that this is -- the current 16 proposal is just to apply to the two cases 17 sold with occupancy sensors and scheduled 18 controls. We welcome comment as well, though. 19 MR. ROBERTS: Okay. I think it -- 20 you know, it may be -- it may be important to 21 allow this to be used with cases that have 22 case controllers installed that will be used

### 202-234-4433 Neal R. Gross & Co., Inc. Page 191 1 in conjunction with a PC elsewhere in the 2 store that actually selects the schedule. It 3 is something to be aware of. 4 Occupancy sensors, that is pretty 5 straightforward, because they are typically 6 installed on the cases. 7 CHAIR BROOKMAN: Okay. 8 MR. NAWROCKI: Thank you for your

9 comment.

10 MR. ROBERTS: You're welcome. 11 CHAIR BROOKMAN: So, then, 12 confirming -- other comments, final comments, 13 on these slides on test procedure? Okay.

14 Massoud? 15 MR. NESHAN: Yes. Massoud Neshan, 16 Southern Store Fixtures. There are certain -- 17 in supermarkets, there are certain end users 18 or operators who actually use a central energy 19 management system that controls the lighting 20 schedule in their store. Would that be 21 considered in lieu of putting occupancy 22 sensors in the -- on these display cases or

### 202-234-4433 Neal R. Gross & Co., Inc. Page 192 1 not?

2 MR. NAWROCKI: The case would have 3 to be sold with the sensors installed on the 4 case. So a separate management system would 5 be something different. But we welcome 6 comment on incorporating that. 7 MR. NESHAN: So you would like to 8 have a redundancy in -- on the lights. 9 CHAIR BROOKMAN: Okay. 10 MR. NESHAN: Because they are 11 already controlling the lighting and the 12 display cases to the energy management -- 13 central energy management system that they 14 have. So now you are also asking an 15 additional sensor to be added -- motion sensor 16 or occupancy sensor -- on the display case to 17 turn off the lights or dim them.

18 MS. ARMSTRONG: So to the extent

19 -- 20 CHAIR BROOKMAN: Ashley? 21 MS. ARMSTRONG: This is Ashley, 22 Department of Energy. To the extent that you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 193 1 are suggesting that the Department should 2 consider controls that are part of an actual 3 building, the Department regulates stuff at 4 the point of manufacture. So the stuff is 5 actually installed with the commercial 6 refrigeration equipment itself. 7 To the extent the building has 8 separate controls, that is beyond I think the 9 Department's purview. And Betsy can follow up 10 with that, but -- 11 CHAIR BROOKMAN: Charlie Stephens. 12 MR. STEPHENS: Charlie Stephens. 13 May I can redirect here to get a little more 14 discussion. My concern is when you do control 15 a series of cases with a building automation 16 system, do they just turn off all the power to 17 the case? Is that how it's done? Or does it 18 -- or do you ship something as a component in 19 the case that responds to only the lighting to 20 turn the lighting off? 21 And if all you are doing is 22 killing the power to the case because the only

### 202-234-4433 Neal R. Gross & Co., Inc. Page 194 1 thing that is powered is the lighting, like in 2 a remote condenser type case, that is one 3 thing. You might not -- then you really can't 4 tell for regulatory purposes whether you ship 5 this thing in a condition that could be

6 schedule controlled or not. 7 But if there is a component in 8 there that allows that case to respond to a 9 building automation system of varying kinds 10 and with varying protocols, it seems to me if 11 you ship it with that, then it falls into the 12 category. Am I misreading this? Or how many 13 other options are there? 14 MR. HON: I would like to -- you 15 have several other components that if you are 16 killing the whole power you would be killing 17 the fans and the heaters and everything else 18 on it. So that is a highly debatable point, 19 depending on your system. 20 CHAIR BROOKMAN: So, then, in some 21 respect that control feature in that unit is 22 going to be operating. Massoud?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 195 1 MR. NESHAN: Massoud Neshan, 2 Southern Store Fixtures. When we know or the 3 customers ask us to supply the case that is 4 going to be controlled by a sensor energy 5 management system, the case has to be wired 6 differently, so that they can power the lights 7 separately than the fan, separate than the 8 anti-sweat heaters, and separate than other 9 options that might be in a display case. 10 And there are always some 11 temperature probes for sensing the 12 temperature, so there are other things that

13 has to be done that would allow them to turn 14 off just the lights and not impact the rest of 15 the display case. 16 CHAIR BROOKMAN: Go ahead, 17 Charlie. 18 MR. STEPHENS: Okay. Charlie 19 Stephens again. So that seems like that would 20 meet the criteria, then, in the first column 21 of that table. If you have to wire the case 22 differently in order to enable lighting

### 202-234-4433 Neal R. Gross & Co., Inc. Page 196 1 controls, I'm not sure I see that that is 2 different than having a self-contained set of 3 controls that do the same thing, because even 4 if you ship it with self-contained controls 5 that do the same thing, it doesn't necessarily 6 mean they are used in either case. Am I right

7 about that? 8 MR. NESHAN: Massoud Neshan, 9 Southern Store Fixtures. You are correct. 10 And putting the sensor on the display case 11 doesn't assure that it is going to be used for 12 dimming the lights. 13 CHAIR BROOKMAN: Okay. Yes, Carl. 14 MR. ROBERTS: Yes, I would agree. 15 You know, putting a night curtain on a case 16 doesn't assure it is going to be used -- the 17 night curtain either. Some customers -- in 18 large lineups in grocery stores, some 19 customers do have us install a case controller 20 that has the ability to turn off the lights 21 from a remote computer. 22 And typically we do break out the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 197 1 lighting circuit separately, so you can 2 interrupt power to that by various means and 3 turn out the lights remotely. 4 CHAIR BROOKMAN: So if I'm not 5 mistaken, you are confirming what the 6 Department has shown here in 67. 7 MS. ARMSTRONG: I think --

8 CHAIR BROOKMAN: Yes. 9 MS. ARMSTRONG: I think the answer 10 is yes and no, right? Clarify for me if I'm 11 wrong, the answer is yes. But to the extent 12 that there are controls integrated into the 13 unit which would then hook up into like a 14 building control system, which could then 15 operate the lighting, say, with like the 16 Department to further consider that. Is that 17 fair? 18 MR. ROBERTS: That's fair enough. 19 It is going to generate an interpretation 20 request, and we might as well make the request

21 now. 22 MS. ARMSTRONG: I got it. Thank

### 202-234-4433 Neal R. Gross & Co., Inc. Page 198 1 you.

2 CHAIR BROOKMAN: Massoud. 3 MR. NESHAN: Yes. Massoud Neshan, 4 Southern Store Fixtures. To add to that, 5 California Energy Commission is considering 6 the same thing. If there is a central energy 7 management system, that could work in lieu of 8 putting occupancy sensors in every display 9 case for the lighting control.

10 CHAIR BROOKMAN: We have a 11 question from the -- from someone online who 12 hasn't given his or her name. "What is the 13 origin of the minus 15 degree Fahrenheit test 14 temperature specific to ice cream bunkers? 15 Why not zero degrees F? Is it to simulate 16 energy use assuming frequent door/lid openings 17 in the field?" Aris. 18 MR. MARANTAN: Yes, Aris Marantan. 19 The 15 degrees was decided upon in the 2009 20 rulemaking, and it had to do with the 21 definition of ice cream freezer. The ice 22 cream freezer definition evolved in that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 199 1 rulemaking and ended up describing a set of 2 equipment that was mainly used for ice cream 3 hardening cabinets, I believe.

4 We had a lot of stakeholder 5 feedback on this issue. We originally -- DOE 6 originally suggested a zero degree temperature 7 as the rating point, but ended up having 15 8 degrees -- minus 15 degrees Fahrenheit as the 9 final rating point for ice cream freezers. 10 CHAIR BROOKMAN: Okay. Thanks for 11 that. Should we go now to 57 and make sure we 12 finished that off? That's the -- can you put 13 that up? 14 MR. NAWROCKI: Yes, it's 15 already -- 16 CHAIR BROOKMAN: The four key 17 issues listed in preliminary MIA. Carl, you 18 wanted to -- go ahead. 19 MR. ROBERTS: Carl Roberts. Yes, 20 I appreciate your coming back to this, because 21 it is a huge issue for a smaller manufacturer. 22 And we do appreciate the opportunity to be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 200 1 involved in this process, but the burden that 2 comes up for us is huge. 3 The impacts on the small 4 manufacturer, the last bullet point there, I 5 think maybe a specific example would be the 6 foam fixtures. Typically, the foam panels are 7 made out of urethane foam, foamed in place. 8 Those fixtures are very expensive, so the 9 capital expense there can be huge. 10 We estimated -- and we have had 11 this in written comments before -- I think it 12 was something on the order of a quarter of a 13 million dollars to rework that if that became 14 a requirement to use thicker foam. 15 But the biggest issue by far, 16 probably more than the other three issues put 17 together, are the testing burden, because we 18 sell a variety of combinations of features. 19 And so our situation from a regulatory 20 standpoint is probably more like the walk-ins 21 than it is like the -- than it is like the 22 mass produced HVAC and such.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 201 1 We have various fan motors and 2 various door styles, and a wide variety of LED 3 lighting systems now -- fan motors, two-door,4 three-door, four-door, five-door, window5 downs. All of these features affect the 6 energy, and so we end up with an astronomical 7 number of possible combinations.

8 And we had looked at that 9 mathematically, and the possible requirement 10 that two tests be required. And what we had 11 for a sum at the end of the equation was 12 237,000 possible tests. And, you know, that's 13 just not practical at all for any size

14 manufacturer. 15 And so in order to get our arms 16 around this, we have tried to pare it down and 17 come up with what -- you know, what would be 18 practical. And also, for the next round of 19 rulemaking, that should be part of the 20 analysis is the cost of testing. 21 And I think -- so looking forward 22 to, you know, how can we address this in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 202 1 next round of rulemaking, probably the 2 important thing is to allow us to use a 3 combination of physical testing and analytical 4 methods, all of which are based on physical 5 testing. And sample sizes should be 6 considered as a whole. 7 The conclusions that you can reach 8 by testing several different combinations of 9 features actually represent a larger sample. 10 That is to say, it's a factorial statistical 11 model that instead of being a 2K, it's a much 12 larger number of variables. 13 And in comparing lots of single 14 runs, which is what we set out to do in 2010 15 when we set out to be ready for 2012, that is 16 really what we need. And maybe this is a 17 segue into the next part of the conversation. 18 (Laughter.)

19 MS. ARMSTRONG: Yes. You 20 announced me very well. I appreciate that 21 lead-in. We are going to get to that issue -- 22 MR. ROBERTS: Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 203 1 MS. ARMSTRONG: -- in a couple of 2 slides, more or less. 3 CHAIR BROOKMAN: I think Massoud 4 has got a final comment here. 5 MR. NESHAN: Yes. Massoud Neshan, 6 Southern Store Fixtures. I want to just say a 7 couple of words as it -- in regard to the 8 impacts on small manufacturers. I know that 9 the DOE has maintained that the number of 10 units produced in a year is not a factor in 11 figuring whether there needs to be a standard 12 forward going on. So the size doesn't matter. 13 However, and I can reference these 14 pages that I have been reading, this document 15 that was published, that in many instances, 16 however, DOE has used the market share or the 17 size of the equipment manufacturer to be a 18 factor in deciding whether it needs to be 19 regulated, at least at this time or not. 20 And if you want, I will mention 21 one example is on the secondary cooling 22 display cases. Since the market share was

### 202-234-4433 Neal R. Gross & Co., Inc. Page 204 1 somewhere between five and 10 percent roughly, 2 it was deemed not big enough to be regulated 3 at this time. 4 Or there was another part of the 5 document that indicates that in the 2009 6 rulemaking DOE figured out that the high temp 7 units, such as unit coolers, they do not 8 require or it doesn't warrant to have a 9 separate equipment class for rating 10 temperature, because it compromises -- it 11 comprises a very small share of the market. 12 However, for a small manufacturer, 13 those -- if we are to use that definition, 14 five to 10 percent of the market could not be 15 considered because it's small. It might be 16 the entire or maybe two or three times the 17 size of what we manufacture per year, and that 18 has to be regulated. 19 If I'm going to -- if a customer 20 comes to us and asks us to design and 21 manufacture a display case, that can only be 22 sold two of them per year, the burden on us is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 205 1 extremely high compared to those people who 2 have an assembly line manufacturing and the 3 manufacture those cases day in and day out. 4 Consequently, please consider for 5 small equipment manufacturers the size of the 6 equipment, quality of the cases manufactured, 7 and the burden and impact it has financially 8 on us, and the burden that we have to absorb 9 and go through this process. Okay? 10 CHAIR BROOKMAN: Yes, Karim. 11 DR. AMRANE: Karim Amrane, AHRI. 12 Before we go to this topic, I would like to 13 raise, again, the issue of the remote cases. 14 Again, in 2005 when this legislation was 15 drafted, the language -- the intent was not 16 for DOE to start a rulemaking on remote cases 17 in 2010. That was not the intent at all. The 18 intent was to start the rulemaking on the 19 self-contained units, because those were 20 regulated well before, and their standard 21 became effective well before. 22 Now, here we are starting

### 202-234-4433 Neal R. Gross & Co., Inc. Page 206 1 rulemaking on products for which the standards 2 are not yet effective. Okay? So we are 3 talking about 2012, and we are trying to 4 regulate products for which standards are not 5 yet effective. This is the first in the 6 history of the rulemaking process of DOE, I 7 believe. Maybe you can contradict me here. 8 So I think it is very important 9 here that DOE look at the impact on 10 manufacturers of this double-dipping here 11 because there are redesigned products for 12 2012, and then four years later they will have 13 to redesign again probably -- I don't know, 14 maybe -- for this second round of efficiency 15 standards. And that has to be factored in

16 somehow. 17 And I don't know if it has been 18 done before, but it is something that you guys 19 need to look at it seriously. 20 Thank you. 21 CHAIR BROOKMAN: Charlie, do you 22 want in here?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 207 1 MR. HON: The comment that I 2 disagree with is that it is -- when you are 3 making very small runs of specialty product, 4 it is irrelevant whether it is a big

5 manufacturer or a small manufacturer. If 6 you're only making two or three, the cost is 7 still the cost. 8 If we make it or you make it -- 9 either one -- we are a larger manufacturer, 10 but when you are making very small runs, the 11 cost is still the cost because of tooling 12 cost, setup cost. The large run production is 13 what makes a difference. It does not make any 14 difference on smalls. 15 And the basic answer we incur on 16 small product purchases, if it's a special and 17 it looks like we're going to only make two or 18 three, the answer is no. It's a business 19 decision that every company has to make. Will 20 you accept an order that is not profitable 21 with incurred cost? 22 MR. LLENZA: Unless they are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 208 1 willing to pay the cost. This is Charles

2 Llenza.

3 CHAIR BROOKMAN: I saw Warren 4 first. 5 MR. BEETON: Well, you know, my 6 comment I think supports his, and that is that 7 for many companies in this room that are part 8 of bigger corporations their operations in 9 this market are small and could be considered 10 small businesses. 11 And yet just because they are 12 owned by a larger corporation has no meaning 13 as far as the impact on employment, 14 production, the chances of going out of 15 business. It is all the same. So I really 16 support what you said on this -- that point. 17 The manufacturer, it seems to me, ought to be 18 classified based on the size of their 19 operations in this market segment. 20 CHAIR BROOKMAN: Okay. Well -- 21 MR. LLENZA: Charles Llenza, 22 Department of Energy. And I think this is a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 209 1 good segueway into the next segment here, 2 because I think that one of the things that 3 should be explored in this process of 4 modeling, and not having to do all of the 5 testing, is that if we have a way of capturing 6 in a model these onesies and twosies that are 7 oddballs, let's say, you are not making a 8 large production, and it is a way -- and we 9 find an acceptable way through the modeling to 10 categorize these equipment, so that you can 11 rate them, then you wouldn't have to 12 necessarily incur the burden of testing if you 13 had a model that was acceptable enough. That 14 could be used in order to certify this 15 equipment. So this is a good segue back into 16 I think the next segment for this. 17 MR. NESHAN: I just need to make a 18 correction, please. This is Massoud Neshan, 19 Southern Store Fixtures. It was stated that 20 cost is cost. But if the -- when you do 21 onesie/twosie for companies that manufacture 22 larger quantities of display cases, that is a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 210 1 small portion of their business. However, for 2 a company like us, that is more than 80 3 percent of our business. 4 So overall cost is -- the model is 5 a little bit different when you are looking at 6 the -- you know, a larger company or a company 7 that manufacturers, you know, a lot of the

8 same case. 9 MR. HON: I think that you are 10 misconstruing my comment. I said that the 11 cost of onesie/twosie manufacturing is going 12 to be the same for you or me, either one. If 13 we are only producing less than 20 a year of 14 any model, the cost is still the cost. 15 If we get into grandiose scale, 16 when a small manufacturer is producing a 17 hundred and we are producing a thousand, there 18 is a cost advantage. But when you are down at 19 the 20-piece run, those small special orders 20 are still a cost, and the same regulatory 21 burden, the same testing burden, the same 22 fixturing burden, falls on us as well.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 211 1 CHAIR BROOKMAN: Okay. So now we 2 are going to hear from Ashley. 3 MS. ARMSTRONG: Okay. Everyone's 4 favorite topic. Hi, I'm Ashley Armstrong. 5 I'm going to talk about certification and 6 compliance and enforcement, just give you a 7 brief overview of some of the provisions that 8 are now in DOE's regulations as a result of 9 the recent CCE rulemaking. 10 So a concept that everyone has a 11 lot of questions about. What is a basic 12 model? A basic model is a term that DOE has 13 used for certification purposes. Here are 14 some of the highlights. A basic model may 15 contain multiple models and/or model numbers. 16 It is at the discretion of the manufacturer. 17 It is manufactured by a single 18 manufacturer, although it may be distributed 19 under different brand names, has the same 20 primary energy source, i.e. electric or gas, 21 it is made up of models that have essentially 22 the same identical physical, electrical, or

### 202-234-4433 Neal R. Gross & Co., Inc. Page 212 1 functional characteristics that affect energy 2 consumption in your case. 3 It may not contain models from 4 multiple product classes. It can be made up 5 of one model and/or multiple models, and it 6 must contain individual certified ratings that 7 are identical and must be based on the least 8 efficient model within all the models of the 9 basic model. 10 So that is an overview of the 11 concepts. I know there are a lot of questions 12 as it relates to how our basic model may 13 relate to commercial refrigeration equipment. 14 So I will address those at the end. 15 So another question we get is: 16 how do I get my certified ratings? What do I 17 have to do to actually certify compliance with 18 the Department? Right now, the regulations, 19 as they stand on the books, you must have at 20 least two units of each basic model. Using 21 the DOE test procedure, the maximum number of 22 units you may test for each sample is at the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 213 1 discretion of you. 2 You must determine which of the 3 federal conservation standards apply, so in 4 your case they are in 431.66. They are an 5 energy consumption standard. You must 6 calculate the product-specific certification 7 statistics. That includes the mean and the 8 upper confidence limit, and then you must 9 determine your certified rating. 10 And your certified rating must be 11 less than or equal to the mean or the upper 12 confidence limit, depending on which is lower. 13 You actually calculate the statistics for 14 your two units that you test for each basic 15 model, and then you can certify a conservative 16 rating, as we call it, if you would like. 17 So what do you have to do 18 currently under the Department's certification 19 requirements? The current effective date for 20 compliance with the certification provisions 21 is July 5th. I will get to the potential 22 extension in a minute.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 214 1 Right now, we only accept -- or as 2 of July 5th we will only accept electronic 3 submissions, and they must be done through our 4 certification online system. We will have 5 product-specific templates for commercial 6 refrigeration equipment available shortly for 7 you to use that pretty much lays out exactly 8 the information that you have to submit to the 9 Department. 10 You must submit certification 11 before distribution and commerce for all 12 models. You are required annually to submit 13 all carryover products. You can submit the 14 same Excel sheet if nothing has changed. If 15 things have changed, you must modify that 16 accordingly. 17 There is no additional testing 18 requirement with the annual certification 19 submission, and you must recertify if you 20 redesign an existing model which increases the 21 energy consumption and results in a rewriting 22 of that product.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 215 1 So some of -- the two new 2 initiatives, as a result of some of the 3 feedback we have been getting from the 4 certification, compliance, and enforcement 5 rule -- this is the one Charlie just 6 mentioned. We have sent out a request for 7 information. It was actually published 8 Monday, so the 30-day comment period has

9 started. 10 We are seeking data on the current 11 procedures you all use to rate your equipment. 12 How do you currently get your certified 13 ratings? Do you test everything? Do you use 14 simulations? Do you use mathematical models? 15 What do you currently do? And, you know, as 16 detailed a description as you can provide the 17 Department would be very helpful. 18 Currently, commercial 19 refrigeration doesn't have an approved method 20 of alternative ratings other than what is 21 already built into the AHRI test procedure, 22 which is you can switch out some components

### 202-234-4433 Neal R. Gross & Co., Inc. Page 216 1 without a complete retest. 2 So we are -- there is a variety of 3 questions in that RFI. I believe there is 15 4 or 16 of them. And to the extent they are 5 applicable to commercial refrigeration 6 equipment, I encourage you to try to address 7 any and all of them. 8 The data we receive from this -- 9 this is not only for commercial refrigeration 10 equipment, but this is going to be applicable 11 to many of our products, especially those that 12 are custom-built, low volume products for 13 which the testing burden could be considered 14 quite high due to the low volume 15 manufacturing. But this information is 16 actually going to inform a rulemaking on such 17 alternative rating methods. 18 So the next one is the -- we 19 recently issued today, this morning, a notice 20 of proposed -- well, it was published this 21 morning, issued last week -- a notice of 22 proposed rulemaking which was proposed to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 217 1 extend the certification date by 18 months, so 2 18 months from July 5th. 3 That is out for public comment as 4 well. We are considering -- we proposed the 5 18-month data. We are considering a longer or 6 a shorter period based on the comments and 7 data submitted. To the extent you can explain 8 why to us you need less or more time to comply 9 with the certification provisions in the July 10 5th certification provisions, that would be 11 very helpful. 12 And this is just in general, if I 13 have questions, if I have a complaint, if I 14 need a test procedure waiver, where do I find 15 stuff, contact information, with regards to 16 certification, compliance, and enforcement. 17 So with that, I am going to turn 18 it over for questions that you may have, or 19 comments, at this time. Really? 20 CHAIR BROOKMAN: They are just 21 getting going. Charlie? 22 MR. HON: A question for you.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 218 1 Would it be beneficial for the DOE to allow a 2 temporary certification of one unit with a 3 later recertification instead -- on an 4 annualized basis with -- because everyone 5 should have one unit data, correct? So with 6 the two unit certification, that is a problem 7 I'm sure to a lot of manufacturers, because 8 there is a lot of retesting. 9 But a one unit certification on a 10 temporary basis with a follow-up requirement 11 is an alternate method for getting the data to 12 DOE, which would then give you some working 13 base. The question I have is: how many 14 manufacturers do not have the single unit 15 data, and that is why the delay?

16 CHAIR BROOKMAN: Charles Llenza. 17 Hold on. Ashley. 18 MS. ARMSTRONG: I mean, I think 19 that is a question -- a good question for your 20 colleagues in the room as far as how many 21 manufacturers actually have the test data to 22 certify compliance now. But I think that is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 219 1 great suggestion as far as the -- you know, 2 that should be included in your comments to

3 the NOPR.

4 CHAIR BROOKMAN: Massoud. 5 MR. NESHAN: Massoud Neshan, 6 Southern Store Fixtures. I don't think it is 7 an issue of having or not having test data for 8 a case. But the bigger issue is: what is the 9 definition of a basic model for us to know if 10 you have a test data or not? 11 I mean, that is really the one 12 that is an issue here. It is not whether we 13 have test data or not. We do have, because 14 for years and years we have been manufacturing 15 and providing information to the industry. 16 That is not the point. The point is, what is 17 the basic unit and how that applies to our 18 equipment. 19 The way it is defined, as it was 20 stated earlier, as Carl mentioned, there are 21 an unbelievable number of basic models that we 22 have to have that information.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 220 1 CHAIR BROOKMAN: But, Massoud, as 2 you look at Slide 70, where that --

3 MR. NESHAN: Yes. 4 CHAIR BROOKMAN: -- that is 5 defined, that still doesn't provide you the 6 guidance you need to choose if -- 7 MR. NESHAN: No, not -- absolutely

8 not. 9 CHAIR BROOKMAN: Karim. 10 DR. AMRANE: Karim Amrane, AHRI. 11 I think there are some issues with the 12 definition as proposed by DOE. And because of 13 what Massoud just said, I mean, he knows -- if 14 you have to apply the definition, then the 15 number of basic models increases 16 exponentially. I mean, you are talking about 17 hundreds of thousands of models for which now 18 you have to provide -- you have to test, 19 because there is no ADM right now, which of 20 course there will be maybe in the future, 21 hopefully there will be. So it's a game of 22 testing every basic model twice.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 221 1 And actually, surprisingly, one 2 test would be problematic in this particular 3 case, because we are talking about hundreds of 4 thousands of basic models. So I think we need 5 to address this issue of basic models. I 6 honestly believe that it is not like it was 7 developed 30 years ago for mass produced 8 product, like household refrigerators. But 9 that does not apply for commercial equipment. 10 MS. ARMSTRONG: All right. So I 11 want to ask a couple of questions. If we 12 separate the basic model concept from -- there 13 is testing, what you have to test, how many 14 models you have to test, and then 15 certification. Is there an issue with 16 actually certifying, actually telling DOE the 17 basic models that you rate, what your ratings

18 are? 19 CHAIR BROOKMAN: Carl, go ahead. 20 MR. ROBERTS: No, we don't have a 21 problem with that. 22 MS. ARMSTRONG: Anybody else?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 222 1 Everyone agree? 2 CHAIR BROOKMAN: Charlie, go

3 ahead. 4 MR. HON: The only problem we are 5 facing right now is getting all of the 6 secondary testing done on product. 7 MS. ARMSTRONG: So irrespective of 8 testing, if you had all the test data today, 9 if you had everything, is there an issue with 10 just telling the Department if it's a couple 11 -- if it's thousands of models, is there an 12 issue with telling the Department what your 13 ratings are for those models? 14 MR. HON: And how you -- 15 MS. ARMSTRONG: No, I don't want 16 to know how you got them. 17 MR. HON: Okay. 18 MS. ARMSTRONG: I just want to 19 know what the ratings are, if you have all of

20 the test data.

21 MR. HON: We have test data on 22 every model that we make.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 223 1 MS. ARMSTRONG: So assuming you 2 had all of the -- in your case you do, do you 3 have a problem with telling us that? 4 MR. HON: If the law requires us 5 to submit, it is our responsibility to submit. 6 I don't know how clear it can be. 7 CHAIR BROOKMAN: Carl, go ahead. 8 MR. ROBERTS: To clarify, we don't 9 have all the data yet. 10 MS. ARMSTRONG: I get that part. 11 I got that part. So we'll address that in a 12 minute, but if you did have all the data, can 13 we -- do we have a fundamental issue with 14 telling the Department by basic model, using 15 this definition of basic model, what your 16 ratings are? 17 MR. HON: If the Department 18 requires it, then you will do it. 19 MR. ROBERTS: Why would we have an 20 issue with it? 21 MS. ARMSTRONG: Okay. I just want 22 to make sure I understand the point. Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 224 1 So --

2 CHAIR BROOKMAN: Massoud Neshan. 3 MR. NESHAN: If you refer to this 4 basic model --

5 MS. ARMSTRONG: Yes. 6 MR. NESHAN: -- if that is the 7 basic model, yes, because your basic model 8 definition says -- even though it says 9 "essentially identical," but you are referring 10 to a physical aspect of the display case. A 11 display case could be two-foot long, could be 12 three-foot long, could be four-foot long, 13 could be 12-foot long, or even longer. Each 14 one of those under this definition means a 15 basic model. 16 What we have done in the industry, 17 we tested an eight-foot case or a 12-foot 18 case, and whatever we get for those cases are 19 applied to these different sizes. 20 MS. ARMSTRONG: So I get that. 21 MR. NESHAN: But under this 22 definition, that is not good enough. We have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 225 1 to have an actual number for the different 2 sizes of the display case, and obviously 3 different options that would go along with it. 4 MS. ARMSTRONG: But you just told 5 me you do have a different number. 6 MR. NESHAN: No. No, no. I have 7 it for an eight-foot case, for example.

8 MS. ARMSTRONG: You have test

9 data.

10 MR. NESHAN: Correct. 11 MS. ARMSTRONG: But you have a 12 rating? 13 MR. NESHAN: Yes, we do have a 14 rating. 15 MS. ARMSTRONG: Yes, so that's 16 what I'm looking at. There's a difference. I 17 want to separate the two issues. There is 18 ratings and then there is test data. I don't 19 want to talk -- assuming you have all the test 20 data you need, is there a fundamental issue 21 with telling the Department what your ratings 22 are, just telling us? For this basic model

### 202-234-4433 Neal R. Gross & Co., Inc. Page 226 1 definition. 2 MR. NESHAN: Okay. Massoud 3 Neshan, Southern Store Fixtures. It is in the 4 standard that we -- that the Department has 5 accepted the AHRI Standard 1200, has given us 6 a vehicle to calculate the energy consumption, 7 and that is what we are using.

8 MS. ARMSTRONG: I understand. The 9 Department has adopted that. That is the test 10 procedure. We allow you to do that. 11 MR. NESHAN: Okay. Then, why are 12 we talking about this procedure? If already 13 adopted that one, then what are we talking

14 about? 15 MS. ARMSTRONG: I want to -- okay. 16 There is two issues here, right? Okay. I 17 would just say assume -- everyone else is 18 pretty much shaking their heads. I know you 19 can't see that on the Webinar, but everyone 20 else is pretty much shaking their heads. 21 We are okay with telling the 22 Department what we make as long as we have the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 227 1 test data. The issue is coming up with the 2 test data underlying the certification. And 3 let's talk about that. That is the whole idea 4 behind this request for information. 5 It is -- if I don't have time, if 6 I don't have the physical test data to test 7 two units, I don't have it yet for whatever 8 reason, the basic model definition is so 9 disaggregated that I just don't have the data 10 that is required, this is what this is doing. 11 How do you get your ratings right now? This 12 is what we want to know. How do you come up 13 with them? How did you determine them? 14 And then, once we deal with that 15 through that rulemaking, then I understand 16 that there won't be a problem telling us what 17 your ratings are. 18 CHAIR BROOKMAN: Charlie Stephens. 19 MR. STEPHENS: I guess even I'm 20 confused here about how you apply basic model. 21 I listened to Massoud, and I'm thinking that 22 he may be confused about whether his 48-inch

### 202-234-4433 Neal R. Gross & Co., Inc. Page 228 1 or his 60-inch of the same kind of case is two 2 different basic models or one. And so -- and

3 he --

4 MS. ARMSTRONG: I can answer that 5 if you'd like me to. 6 CHAIR BROOKMAN: Try and answer 7 it. 8 MR. STEPHENS: Okay. What is it?

9 MS. ARMSTRONG: So I would make 10 the argument, to the extent that he wants to 11 claim different certified ratings for those 12 cases, they are different basic models. To 13 the extent he wants to group them all with the 14 least efficient one, he can do that. And they

15 can be the same one.

16 MR. STEPHENS: But -- 17 MS. ARMSTRONG: It is at his 18 discretion. 19 MR. STEPHENS: True, but that -- 20 but given -- that's a problem. 21 MS. ARMSTRONG: Why? 22 MR. STEPHENS: That's a major

### 202-234-4433 Neal R. Gross & Co., Inc. Page 229 1 problem. And I -- well, because the 54-inch 2 model that he has never made yet, but might 3 make sometime later this year under order from 4 some customer, would then be yet another basic 5 model because the energy use of those 6 different models that he is -- that we are 7 talking about here is substantially enough 8 different, especially for a low temperature 9 case, that the numbers you report is in energy 10 use per day to the nearest significant digit 11 is going to be pretty different.

12 MS. ARMSTRONG: I understand that. 13 MR. STEPHENS: Okay. So what 14 you've got here is a window manufacturer 15 problem. We have already been through this 16 with windows, and there are -- if you think 17 you make a lot of refrigeration models, you 18 ought to look at the window market and look at 19 how many models they make. 20 Now, all of those windows, every 21 single window, has a rating on it. But the 22 number of basic models is not anywhere near

### 202-234-4433 Neal R. Gross & Co., Inc. Page 230 1 that size, and the testing is nowhere near the 2 number of models that they produce. But they 3 manage to come up with a rating, but it's 4 using tools that were developed in conjunction 5 with the industry ahead of time, before they 6 were required to certify anything. So, and I 7 think -- 8 MS. ARMSTRONG: I think that's the 9 reason for this. 10 MR. STEPHENS: Well, that's nice, 11 but it -- but I'm still -- but the basic model 12 question, I still have a problem with your 13 definition of basic model, because you haven't 14 resolved it for these folks. 15 And it was resolved for the window 16 industry at one point, again, ahead of time, 17 and I think before you go much farther you 18 really need to sit down with the industry and 19 resolve just the one question about how you 20 are going to treat basic model, because I 21 think there is a line missing. Somewhere in 22 your definition of basic model there is a line

### 202-234-4433 Neal R. Gross & Co., Inc. Page 231 1 missing, or there is an extra line that throws 2 everybody kind of into this window bucket 3 without a solution. 4 And so is “made up of models that 5 have essentially identical electrical, 6 physical, and functional characteristics that 7 affect energy consumption and/or efficiency.” 8 You need to fix that line or adjust that line 9 somewhere to where the number of basic models 10 for each manufacturer of any size isn't

11 thousands. 12 CHAIR BROOKMAN: Warren, go ahead. 13 MR. BEETON: Yes, I'm going to try 14 to answer your question, Ashley, as if you are 15 trying to regulate compressors, which 16 thankfully you are not yet. 17 (Laughter.) 18 Because I don't think we are 19 answering your question. I think you are 20 asking us if -- let's assume that we could -- 21 we have ratings for if we -- do we have 22 ratings for all our products that we use, even

### 202-234-4433 Neal R. Gross & Co., Inc. Page 232 1 if a product is a four-foot case, a three-foot 2 case, a two-foot case, a five-foot case, those 3 are all different basic models by your 4 definition. 5 Number one, do we have that 6 information? However we got it, we didn't get 7 it by -- all by testing those specific cases. 8 Do we have an objection to supplying you with 9 that -- with those ratings? 10 MS. ARMSTRONG: That is the 11 question. 12 MR. BEETON: Right. And I will -- 13 for compressors, we have the same thing. We 14 have tens of thousands or more models which 15 are derivatives of a few basic models, and 16 they all have different energy efficiencies. 17 If you ask us, would we mind supplying you 18 that rating information, as long as we didn't 19 have to test every one, we would not object. 20 MS. ARMSTRONG: Okay. 21 CHAIR BROOKMAN: And those ratings 22 that are derived, that are derivatives, you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 233 1 are comfortable with those ratings. 2 MR. BEETON: Not to a one percent

3 tolerance.

4 MS. ARMSTRONG: That's out for

5 comment. 6 CHAIR BROOKMAN: Okay. Okay. 7 Karim is next. 8 DR. AMRANE: Karim Amrane, AHRI. 9 But, again, I think there are implications 10 beyond just DOE that --

11 MS. ARMSTRONG: I understand. 12 DR. AMRANE: -- that are very 13 important. Energy Star, for example, is very 14 important. Energy Star requires that 10 15 percent of your basic model be tested every 16 year. If your basic model never increase 17 exponentially, you will have to test many, 18 many more units. 19 So I think DOE has to look at this 20 definition, just for that reason alone.

21 CHAIR BROOKMAN: We have -- a 22 person listening in on the web has a question

### 202-234-4433 Neal R. Gross & Co., Inc. Page 234 1 or a comment, and Ashley is going to read it. 2 MS. ARMSTRONG: So this is from 3 Stephen Schaefer. I apologize if I 4 mispronounced your name, but -- so his comment 5 is, "There is no problem with reporting 6 certification of units. There is an issue 7 with testing two samples of each model. The 8 main issue is the time it would take to test 9 two samples of each model within a year. We 10 achieve test data before we start mass 11 producing each individual unit. 12 So I am trying to distinguish the 13 issue between actually sending out a piece of 14 paper and telling the Department what the 15 ratings are for the products versus actually 16 generating the test data and the methods you 17 use for testing. And I think the Department 18 wants to work with industry. 19 I think we have sent a strong 20 signal there by issuing these two -- the RFI 21 and the NOPR in response to your feedback. 22 But we need to understand, really, what you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 235 1 are doing now to get those ratings, because if 2 you had all the ratings and could just send 3 this information in, it seems like it would be 4 okay with you guys. 5 CHAIR BROOKMAN: Go ahead, Warren. 6 MR. BEETON: Well, I -- in my 7 comments, I neglected to consider the EPA 8 Energy Star issue, and we can't -- and as 9 manufacturers, we can't ignore that. That is 10 a big one. 11 CHAIR BROOKMAN: Okay. Okay. 12 Yes, Carl. 13 MR. ROBERTS: You mentioned, are 14 we confident with our ratings, even if we 15 don't test every single one? And, yes, we 16 are, maybe not to the one percent, but I would 17 -- to put a number out there, I would say we 18 are more confident than within five percent.

19 CHAIR BROOKMAN: Massoud? 20 MR. NESHAN: Yes, I have two -- 21 one question and one comment. Not only the 22 basic model definition is important right now

### 202-234-4433 Neal R. Gross & Co., Inc. Page 236 1 to see what we have to do for testing and 2 certification and compliance with the 3 requirements, but what also we are looking not 4 -- again, down the road, as refrigeration 5 changes, or other regulatory stuff comes into 6 the picture, we have to -- if the basic model 7 definition cover -- is a large number of 8 cases, I have to go back and retest or do the 9 -- whatever analysis that we have to run. 10 That is what also we are concerned about, 11 because whatever is established now, it is 12 going to be snowballing down the road as there 13 are going to be other things coming into the 14 picture. 15 MS. ARMSTRONG: So I think this is 16 something -- and, Betsy, please chime in if I 17 mischaracterize this in any way, but, you 18 know, irrespective of whether the Department 19 has a certification requirement which requires 20 you to send something in, if you are going to 21 make a representation of the energy use of 22 your product, it has to be with the test

### 202-234-4433 Neal R. Gross & Co., Inc. Page 237 1 procedure, and it has to be, you know, with 2 the attributes of the product at that day. 3 So if you go through a redesign, 4 and you redesign your refrigeration equipment, 5 and you want to put -- you know, that results 6 in a change in efficiency, you are -- and you 7 want to make marketing materials claims of 8 that, you are going to have to do it anyway, 9 irrespective of whether you actually have to 10 send in that information to the Department. 11 So, you know, what I'm trying to 12 tell you is that while I realize this is -- at 13 least upon first glance, this seems like a 14 huge burden, testing and otherwise, the 15 Department wants to work with all of the 16 manufacturers as well as other interested 17 parties in the room to come up with a solution

18 that works for all of us. 19 We want to know what you are 20 making, and you guys need a way to test that 21 is reasonable and/or rate your equipment that 22 is reasonable. And this is the two reasons

### 202-234-4433 Neal R. Gross & Co., Inc. Page 238 1 for these two notices. 2 MR. NESHAN: Okay. Can I make my

3 comment now?

4 CHAIR BROOKMAN: Yes.

5 MR. NESHAN: Please. Massoud 6 Neshan, Southern Store Fixtures. Obviously -- 7 and I am reading this from the document that 8 was published, that the U.S. Department of 9 Energy is required to design each standard for 10 the equipment, and they have listed seven 11 different factors as part of this 12 consideration. 13 The number one factor that is 14 listed is the economic impact of the standard

15 on the manufacturers and on the consumers of 16 the product subject to the standards. 17 Based on what I have heard in the 18 past, or I have seen in the past month, I am 19 not sure the Department of Energy did truly 20 realize the economical impact on 21 manufacturers, because right now we are 22 discussing testing of the equipment, and we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 239 1 still do not know the economical impact that

2 that has on the manufacturers. 3 How did we develop this standard, 4 then, without really considering this cost? 5 Because from the comments I have heard, you 6 want to understand, you want to have an 7 understanding of what we do for testing. This 8 should have been done two, three years ago to 9 understand what we do and what is the impact 10 on us. Not now after the standard has already 11 been developed. 12 MR. LLENZA: Let me speak to this, 13 Ashley.

14 CHAIR BROOKMAN: Charles Llenza. 15 MR. LLENZA: When we adopted the 16 en masse in 2006, we had to adopt a series of 17 energy standards, testing standards, that were 18 industry-based. And the Department, in order 19 to kickroll this whole process, because we 20 were under a consent decree, packaged all 21 these standards, put them in an en masse test 22 procedure, and we published that.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 240 1 Now, you know, this comes out -- 2 what comes first is, did the tail come before 3 the dog came? Okay. So we have reached a 4 point now where this -- CREs in particular are 5 mature. We have gone through the first round. 6 We are fixing the test procedure. Okay? We 7 are updating the test procedure. The 8 Department now is involved in some serious 9 business for certification and enforcement. 10 And I think that part of this is, 11 you know, when we start getting our house in 12 order, there are some things that we have to 13 work through. And there is no doubt, there 14 are some issues that we have to address. 15 Now, we have the proceedings here 16 for the standards to go through, and we still 17 have plenty of time to fix some of these 18 issues. And it is not necessarily going to 19 fix all the issues for C&E. But I don't want 20 anybody to panic, because the test procedure 21 is still out there. It's not final. We can 22 still do things for the test procedure to fix

### 202-234-4433 Neal R. Gross & Co., Inc. Page 241 1 these things. We also have the energy 2 conservation standards where we can fix some 3 of these issues also. 4 So the most important thing here 5 is, Ashley's attempt here with these two RFIs, 6 these two notices we put out, is to fix 7 components. And I'm sure this is not going to 8 fix everything. Okay? 9 Part of what I think that the 10 industry should do, and the people attending 11 this meeting and participating at the Webinar, 12 is that please provide your comments in terms 13 of the definition of the basic model to see if 14 that can -- if we can work with the C&E folks, 15 and my standards group here, to see if we can 16 first fix the basic model definition. 17 That can be fixed within the 18 standard, and in time so that we can at least 19 for the next round fix this whole process, in 20 addition to provide her feedback for what is 21 broken, because part of our problem is until 22 we have had to implement these things in a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 242 1 serious manner now, because the EPACT 2005 2 standards now have to be implemented, we are 3 finding these issues. 4 So work with us. We will work 5 with you. We are not out here to try to get 6 you, okay? We are out here to try to fix the 7 problem, so that we can get our books in 8 order, and at the same time, you know, provide 9 a better standard the next go-around. 10 So, yes, there are some issues 11 here. This is our first salvo of attempts. 12 There is a definition out there that is not 13 very good. Maybe we need to have some 14 refinements on that. 15 I suggest that the comment period 16 we have is open until May 16th -- that you 17 guys provide us some serious comments on 18 fixing this. And I'm not just saying fix the 19 issue, I'm saying what are the fixes in order 20 to narrow down the amount of basic model, so 21 the industry doesn't incur in testing of the 22 -- in terms of the burden for testing, et

### 202-234-4433 Neal R. Gross & Co., Inc. Page 243 1 cetera. 2 As far as the project manager is 3 concerned, I do have this as part of my 4 regimen for the standard. We do look at this. 5 We are trying to make a better regulation 6 next time, so that the impact and the burden 7 of testing is not something that overwhelms 8 the industry. 9 CHAIR BROOKMAN: Charlie Stephens. 10 MR. STEPHENS: Charlie Stephens. 11 It is kind of discouraging to me how often I 12 have to convey this in all kinds of forums 13 lately. But I just want to go back to the 14 window situation and talk about process. I'm 15 not convinced you are going to get where 16 you're going with the process you are using. 17 The window situation was resolved 18 not through meetings and not through comment 19 periods and publishing in the Federal 20 Register. It was resolved in a series of 21 conversations and working group meetings over 22 a period of time by industry members, by

### 202-234-4433 Neal R. Gross & Co., Inc. Page 244 1 Lawrence Berkeley Labs in that case, by a

2 bunch of other stakeholders who had an 3 interest in understanding how windows would be 4 labeled and rated sitting around the table 5 over a period of time and figuring out 6 together how this would best work for 7 everybody. I'm not seeing that, and I -- 8 MS. ARMSTRONG: Well, I will jump 9 in on that, and I think Karim can back me up 10 on this. The Department has had CRE 11 manufacturers in to meet with them about these 12 issues. So I don't think that is a fair 13 assessment of the situation -- 14 MR. STEPHENS: Well, I guess it 15 surprises me that -- 16 MS. ARMSTRONG: -- because you

17 were not there. 18 MR. STEPHENS: Well, no, it 19 surprises me, then, that we are still here 20 talking about this. It didn't take that long. 21 I mean, we -- I'm looking at what happened 22 with the window manufacturers and the fact

### 202-234-4433 Neal R. Gross & Co., Inc. Page 245 1 that in very short order, like in 18 months, 2 they had a tool, they had a rating tool, they 3 had an agreement on how it would be rated, how 4 it would be labeled, who would be responsible 5 for compliance and enforcement, and this has 6 been going on now for about 18 months, and it 7 almost seems like we are still just beginning

8 here and we don't even understand how these 9 guys work. 10 MS. ARMSTRONG: The final rule has 11 been out for one month. And I think since 12 then you have seen the Department is very 13 responsive to people's requests.

14 CHAIR BROOKMAN: Let's hear from

15 Dan. 16 MS. ARMSTRONG: I think that is a 17 fair characterization.

18 CHAIR BROOKMAN: Dan has been 19 patient. Go ahead. Did you -- Dan, yes. 20 DR. MANOLE: I have a two-part 21 question --

22 MS. ARMSTRONG: Sure.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 246 1 DR. MANOLE: -- related to the 2 logistics, where are going to report energy 3 rating. Let's suppose you have a hundred 4 models. I will place all of them in a base 5 model group. All of them will have the same 6 energy rating. What I understand is that I 7 will need to test only one of them, two 8 samples. 9 MS. ARMSTRONG: Yes, the least 10 efficient one. 11 DR. MANOLE: Right. 12 MS. ARMSTRONG: Yes, that is

13 correct.

14 DR. MANOLE: What about the other 15 hundred? Would you ask us to report what -- 16 even by calculation if we have what is energy 17 rating, or just put it in a bucket and that's 18 it? 19 MS. ARMSTRONG: If you put them in 20 the bucket, they are certified ratings, which 21 means those on marketing materials, et cetera, 22 are the same. And you test the -- the test

### 202-234-4433 Neal R. Gross & Co., Inc. Page 247 1 data underlying those certified ratings is 2 just based on one unit, one model, the least 3 efficient model of all of them, and of that 4 basic model, two samples. 5 So, and then to the extent, 6 hopefully, this never happens to anyone -- I 7 doubt it will -- but to the extent the8 Department tests one and finds any non9 compliance issues, all one hundred would be 10 disqualified. 11 DR. MANOLE: And the second part 12 is related to that conservative rating, I have 13 a hundred models, I will pick one, test it. I 14 am not really sure that that is really the 15 worst-case scenario, that would be the 16 largest. If my conservative rating is -- has 17 to be in that limit -- lower confidence limit, 18 upper confidence limit, it is a risk that I 19 may be off. Do I have to be in that limit, or 20 I will just pick a conservative rating? 21 MS. ARMSTRONG: The Department 22 allows you to conservatively rate for your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 248 1 products the upper confidence limit and the 2 mean are the two statistics that need to be 3 calculated between -- once you calculate the 4 mean and the upper confidence limit, whichever 5 is lower between the two, is the maximum that 6 you could rate, and then you can always rate

7 below. 8 DR. MANOLE: So I cannot pick a 9 conservative rating higher than the upper 10 confidence level.

11 MS. ARMSTRONG: You have to 12 compare the mean and the upper confidence 13 level. You cannot pick -- I mean, you 14 wouldn't want to, right? That would mean you 15 are overrating.

16 DR. MANOLE: If I'm less than the 17 energy allowance and it gives me confidence 18 that the other 99 models will not, by chance,

19 be less -- 20 MS. ARMSTRONG: Let me just say 21 some numbers. Say the standard level is five. 22 DR. MANOLE: Right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 249 1 MS. ARMSTRONG: Say you calculate 2 your upper confidence limit to be -- well, 3 let's give some more room. Let's say 10. You 4 calculate your mean to be 11. You have to 5 pick whichever is less, depending on how the 6 -- I'm just making up numbers -- so depending

7 on how the stats are done. 8 You must rate it at 10, between 9 five and 10, between the standard level, and 10 you cannot rate it higher than 10. 11 DR. MANOLE: I think you are 12 referring -- you are using energy efficiency 13 instead of energy consumption, which might

14 be -- 15 MS. ARMSTRONG: I don't think so. 16 DR. MANOLE: -- confusing to me. 17 Okay. I will -- 18 MS. ARMSTRONG: I am using -- 19 CHAIR BROOKMAN: Charlie, say it 20 into the record, please. 21 MR. HON: There is two different 22 things here. Number one is self-contained

### 202-234-4433 Neal R. Gross & Co., Inc. Page 250 1 units are maximum power, so you would have 2 reverse numbers of that. Energy efficiency is

3 reverse of that. 4 MS. ARMSTRONG: Right. So that is 5 the consumption. 6 MR. HON: Right. 7 MS. ARMSTRONG: Right. I did the 8 consumption. 9 DR. MANOLE: Right. 10 MR. HON: Okay. 11 DR. MANOLE: So can I report that? 12 MS. ARMSTRONG: Just generally, 13 you can report a conservative rating. And if 14 you want to walk through the facts one day 15 with actual numbers, give me a call. 16 DR. MANOLE: Okay.

17 MS. ARMSTRONG: How about that? 18 So we have a question from online that I do 19 want to answer, and I might need someone from 20 the test procedure team to help me out. But 21 it says, "Please explain how you can determine 22 a rating without executing the actual energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 251 1 test, i.e. what's allowed in AHRI 1200?" 2 So it's my understanding -- and 3 someone hopefully from the team can step up 4 and provide the specifics -- is that the AHRI 5 1200 contains certain components that allows 6 you to do switches and estimate the energy 7 consumption rather than, one example I think 8 is lighting systems, but without actually 9 retesting the whole machine -- and I'm going 10 to let Collin maybe give -- fill you in on a 11 little bit more of the detail there. 12 MR. WEBER: Sure. Collin Weber 13 here. So AHRI 1200, the version from 2006, I 14 believe, and also the new version that DOE is 15 proposing to incorporate into its test 16 procedure, has these so-called alternate 17 component methodologies built into it where it 18 calls out specific components for different 19 system types. 20 Fan motors, heaters, lighting, 21 where you can explicitly use manufacturers‘ 22 nameplate rated wattages, for example, and do

### 202-234-4433 Neal R. Gross & Co., Inc. Page 252 1 calculations to switch those out. Those are 2 an example that is already built into AHRI 3 1200, which is already incorporated by 4 reference into the DOE test procedure of an 5 alternate calculation methodology. 6 Now, that said, in order to do 7 that, per the stipulation of AHRI 1200, those 8 calculations have to be predicated upon a 9 physical test result. So one physical test 10 would still have to be done at some point. I 11 mean, one for the purposes of AHRI 1200, not 12 for the purposes of DOE certification and 13 compliance enforcement. 14 For the record, Charlie Hon is 15 saying two tests would have to be performed. 16 CHAIR BROOKMAN: Okay. So we 17 covered a lot of ground in that last half an 18 hour or so. Are there additional questions? 19 Elizabeth, do you have a comment or question? 20 MS. JOYCE: On a different topic, 21 not on compliance. 22 CHAIR BROOKMAN: Let's see if we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 253 1 can get any remaining issues out on top of the 2 table here. Charlie. 3 MR. HON: I just have one really 4 silly question. How did we get this far when 5 the standard was put in in 2006? 6 MS. ARMSTRONG: So part of the 7 issue was that for your equipment, I think, 8 the standards and the test procedures were in 9 the energy bill. So it is not like the 10 Department actually went through a rulemaking 11 proceeding to get there. 12 So a lot of these issues are now 13 coming up now, because the Department has gone 14 through rulemaking proceedings. And as we 15 start to execute these, while the 16 certification rulemaking that just came out a 17 month ago didn't necessarily require 18 additional testing, it made clear that the 19 Department wanted to know what these ratings 20 are and made it a little bit more clear what 21 the -- maybe the requirements were.

22 CHAIR BROOKMAN: So that was

### 202-234-4433 Neal R. Gross & Co., Inc. Page 254 1 Ashley. And now additional questions or

2 comments?

3 MS. ARMSTRONG: Does that answer 4 your question? 5 MR. HON: In part it does, but it 6 is frightening that we have had so many

7 manufacturers who have been -- not understood 8 what the standard said for this long a period 9 of time, basically four to five years, and now 10 it is coming to light because we were subject 11 to this standard in 2005 to meet the standard. 12 DR. AMRANE: No, you were not. 13 They became effective in 2010. 14 MR. HON: In 2010, you're correct. 15 You are also in California in 2005. 16 DR. AMRANE: Yes, but California 17 was not requiring all the certification and 18 reporting and everything that DOE is -- 19 MR. HON: But we were required a 20 year, almost a year and a half ago, to be in 21 compliance. 22 DR. AMRANE: Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 255 1 MR. HON: And we still don't know

2 what that means.

3 CHAIR BROOKMAN: Massoud. 4 MR. NESHAN: Yes. Massoud Neshan, 5 Southern Store Fixtures. One comment that -- 6 I mean, it was mentioned very briefly, but I 7 would like to mention it again, and that is 8 getting the testing and certification of a 9 piece of equipment done before it is marketed 10 into the field. 11 That puts additional burden on the 12 small manufacturers or basically anybody, 13 because we are working on a very short 14 turnaround as far as the developing, 15 manufacturing, and supplying the equipment to 16 the end user, and trying to get the 17 certification done prior to marketing that 18 equipment, at least the very first few of 19 them, it is very difficult and very expensive 20 -- would be very expensive for us. 21 MR. HON: Charlie Hon. It would 22 be very expensive for us as well.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 256 1 MR. NESHAN: Yes. 2 MR. HON: Large company, small 3 company, the same burden applies. If you have 4 a time window, you have manufacturing 5 responsibilities, tooling, everything is the

6 same cost. 7 CHAIR BROOKMAN: So, yes, Carl. 8 MR. ROBERTS: Carl Roberts. Yes, 9 I think the methodology and the general game 10 plan that we are talking here is doable. From 11 our perspective as a manufacturer, we have 12 seen multiple indications that the Department 13 is interested in finding a solution to this 14 challenge. 15 We have got a national energy 16 plan. We have got to figure out a way to 17 implement it. And I think the idea of using 18 Appendix E in AHRI 1200 has a lot of 19 potential. Allowing us to apply what we 20 learned from one test to the next test is 21 going to be very important. 22 Just a quick example would be if I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 257 1 test a certain case with electronic fan 2 motors, however many samples I need to have 3 the certainty that I need, and then I test it 4 with PSC fan motors, it doesn't make sense to 5 look at the PSC test as though I didn't learn 6 anything that I couldn't apply to the PSC when 7 I ran the electronic fan motors. 8 The ability to interrelate a 9 series of tests is very important, and that is 10 something that I'm not seeing in writing yet. 11 And I think that is part of the solution. 12 Also, AHRI 1200's Appendix E, 13 while it is moving in the right direction, it 14 has some -- it needs some more basically 15 coefficients in there that would allow us to 16 use it for things like lights. And we need to 17 be able to apply similar analytical methods to 18 other -- to other features of the case, such 19 as window-downs. But I think it is all quite

20 doable. 21 One question I had was, to what -- 22 is there a percentage anymore? At one time we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 258 1 were talking about plus or minus five percent 2 on our confidence level. I know we are more 3 confident than that, but has this been 4 replaced with the talk of upper confidence

5 level and mean?

6 PARTICIPANT: It hasn't.

7 MS. ARMSTRONG: So the -- 8 CHAIR BROOKMAN: Ashley Armstrong. 9 MS. ARMSTRONG: Ashley Armstrong. 10 Okay. So it works a couple of different 11 ways. One is there are certification 12 tolerances, which is what you are talking 13 about. They are based on a T statistic, and 14 when you calculate the upper confidence limit 15 those tolerances are taken into account. So 16 they vary by product.

17 I would -- I have the actual 18 reference in the presentation, so if you go 19 back you can look at the exact value for your 20 products. And the T table is in there, is 21 actually the CFR now. 22 If we are talking about tolerances

### 202-234-4433 Neal R. Gross & Co., Inc. Page 259 1 for if you do a simulation, how close does it 2 have to be to actual test data, currently 3 there are no -- since there are no provisions 4 for alternative rating methods for CRE 5 equipment; there is no tolerances in DOE's 6 regulations. 7 However, that exact topic is one 8 of the key issues we asked for comment on. 9 How close do you think you have to be to the 10 simulation, to the actual test method when you 11 compare the simulation? 12 So if you think it is greater than 13 five percent -- I mean, if you think you are 14 better than five percent, we would like to 15 know what you think that threshold should be. 16 CHAIR BROOKMAN: Charlie. 17 MR. HON: Charlie Hon. I have a 18 couple of comments. Number one, to Ashley's 19 statement on tolerances, we have run tests in 20 our own labs, which we were coordinating with 21 UL as far as some of their verification 22 procedures, and we have run the same equipment

### 202-234-4433 Neal R. Gross & Co., Inc. Page 260 1 at different windows within the 38 plus or 2 minus two window and found eight or nine 3 percent variation from one of the standard to

4 the other. 5 So you have to be very cognizant 6 that that can happen, just on your -- within 7 the test window, because it is a fairly open 8 window of tolerance. So if you run your 9 equipment at the very warm end of the 10 standard, you can pick up some decent number 11 improvements. 12 So it is a very touchy subject 13 there. I would say seven or eight percent is 14 realistic in that number. Those same 15 organizations are requiring five percent 16 variation, so we tend to get near the mean. 17 Second item -- DOE is presently 18 allowing us to bucket things, from what I am 19 hearing here, throw a big bucket of stuff 20 together. We have a base model -- this is 21 purely conjecture -- idealistic number. We 22 have a base model which has inefficient fans,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 261 1 inefficient lighting system. 2 We take that same unit, put in 3 high efficiency fans, high efficiency 4 lighting, and it now will pass Energy Star. 5 But Energy Star requires special testing. How 6 do you deal with the number differences with a 7 more efficient unit being Energy Star labeled 8 versus a DOE rating into a large bucket, which 9 is less efficient? Or do we need to list it 10 separately?

11 MS. ARMSTRONG: To the extent that 12 you were certifying the level with Energy 13 Star, that represents that it has a different 14 what I would call certified energy rating. 15 You would need to list them as two separate 16 basic models. 17 MR. HON: There is a difference in 18 how many tests.

19 MS. ARMSTRONG: I understand. 20 CHAIR BROOKMAN: Warren, and then 21 Karim. Okay. Go ahead, Karim. 22 DR. AMRANE: I just wanted to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 262 1 follow up on this. I mean, the idea that you 2 were saying why don't you -- you grouped them 3 together and used the least efficient product, 4 I mean, does not make sense. 5 Why would you, as a manufacturer, 6 do that? And actually, even for consumers, 7 why would you want to mislead consumers about 8 products that are more efficient or less 9 efficient? I mean, that is -- you know, you 10 shouldn't be able to do that. I mean, because 11 it does not make sense.

12 CHAIR BROOKMAN: Warren. 13 MR. BEETON: Yes, I just wanted to

14 comment on the test tolerances shown. We can 15 provide some written input later, but there 16 have been some studies done recently by some 17 of the compressor manufacturers on test

18 tolerances. 19 And just the test variation that 20 you get from sensing the pressures of the 21 refrigerant, and inferring the temperatures 22 and the cycle, forgetting about product

### 202-234-4433 Neal R. Gross & Co., Inc. Page 263 1 variation, just simply the refrigerant 2 measurements, introduces something like three 3 and a half percent, if I remember correctly, 4 in air conditioning. 5 In refrigeration, low temperature 6 -- it is a much larger number, and so I -- the 7 idea of even a five percent tolerance is a 8 challenge, I think. A one percent is 9 impossible. So that is something that I think 10 maybe some of the study, if it's complete -- I 11 don't know if it's complete yet -- we should 12 try to provide you, so you could use it. 13 CHAIR BROOKMAN: That's good. 14 Yes, the Department would really welcome 15 seeing that in writing. That would be good. 16 Tim Ballo. 17 MR. BALLO: Tim Ballo. Just 18 looking at some of the things, the bullet 19 points on Slide 73 regarding the use of an 20 AEDM or ARM, it seems like a lot of those you 21 can trade off against each other. I mean, if 22 you are concerned about the accuracy of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 264 1 ratings, if the AEDM or ARM could apply to a 2 whole bunch of products, you are less -- you 3 know, you are more concerned about the 4 accuracy. 5 Or if there is a procedure in 6 place to approve or disapprove the particular 7 methodology, you know, you have an ability to, 8 you know, ensure the accuracy of it. So it 9 just seems like it is hard to even comment on 10 it without knowing -- 11 MS. ARMSTRONG: So I think the 12 Department did not intentionally -- if you 13 actually read the RFI, which is only -- 14 luckily, unlike most Federal Register notices, 15 it is only a couple of pages long. 16 We actually, you know, tried to 17 put it -- keep it as open-ended as possible. 18 We want to know -- we want to know everything. 19 Well, how do you think we should do it? What 20 tradeoffs should be made? We realize it's 21 kind of a balancing act, and we are opening 22 the door to everything at this point to inform

### 202-234-4433 Neal R. Gross & Co., Inc. Page 265 1 our proposals. 2 MR. LLENZA: This is Charles 3 Llenza, Department of Energy. I think also, 4 if you look at how AHRI 1200 had allowed you 5 to do this a little bit in a limited way, 6 maybe there is some potential here in adding 7 more variables to that methodology that has 8 already been expressed with the AHRI 1200. So 9 it's something to look at.

10 CHAIR BROOKMAN: We have another 11 comment from someone attending via the 12 Webinar. Joe Sanders writes, "We have tested 13 and found greater than 10 percent variance 14 within the scope of the specifications in the 15 standard (plus or minus voltage, room, 16 ambient, and cavity temperature)." So that's

17 the other comment on that.

18 MR. NESHAN: Massoud Neshan. We 19 support that. We back that. We have seen the 20 same variation. 21 CHAIR BROOKMAN: Okay. Steve. 22 MR. COUSINS: Yes, let me beat

### 202-234-4433 Neal R. Gross & Co., Inc. Page 266 1 this dead horse a little bit more. Those of 2 you who do business with us, and even our 3 competition, know that on top of -- even 4 before this government certification came in, 5 we had our certifications that -- but we do 6 correlation testing along with receiving data 7 from our suppliers on performance tests. And 8 our standard of acceptances is 10 percent, and 9 we do push that 10 percent. 10 CHAIR BROOKMAN: Okay. Okay. So 11 this has been pretty detailed and perhaps even 12 comprehensive for where we are. Final 13 comments on this subject? We're about to go 14 in a different direction. Elizabeth, you were 15 going to raise something else, I thought. No 16 additional comments on this? Okay. Do you 17 want to -- yes, Elizabeth. 18 MS. JOYCE: I'm Elizabeth Joyce. 19 I just wanted to quickly raise the issue of 20 remote condensing units. The Department has, 21 you know, obviously decided not to cover them 22 in this rulemaking and has suggested that it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 267 1 may open up a new rulemaking to address them. 2 I wanted to bring this up in the 3 context of the recently released walk-ins 4 final test procedure, which I haven't had the 5 chance to read thoroughly, so pardon me if I 6 am iffy on the details. 7 But as far as I understand, it 8 does contain a provision for walk-ins to test 9 dedicated remote condensing units. And I just 10 wanted to raise the issue to the Department 11 and kind of ask, then, how that would work in 12 the context of relating to CRE or opening a 13 new rulemaking for remote condensing units. 14 CHAIR BROOKMAN: Collin. 15 MR. WEBER: Collin Weber here. I 16 can't speak personally, and I don't think 17 anyone can here, to the Department as to 18 future plans for, say, opening new 19 rulemakings. But I can speak to the walk-ins 20 test procedure, which incorporates AHRI 21 Standard 1250, which includes that specific 22 provision for testing of dedicated, detached,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 268 1 remote condensing units. So that is just an 2 incorporated stipulation of an AHRI industry 3 test procedure. 4 CHAIR BROOKMAN: Okay. Yes,

5 Joanna.

6 MS. MAUER: Joanna Mauer. I was 7 just wondering, to follow up on Elizabeth's 8 question, if any of the manufacturers could 9 comment on what portion of the market of 10 remote condensing commercial refrigeration 11 equipment is operated with dedicated remote 12 condensing units as opposed to rack system. 13 Is there a significant portion that uses 14 dedicated condensing units as opposed to rack 15 systems? 16 CHAIR BROOKMAN: I see Charlie, 17 Charlie Hon. 18 MR. HON: I think you can 19 correlate that the smaller the unit, the more 20 likely you are to have an individual. Any of 21 the large units will be rack systems, because 22 they are running multiple racks, multiple

### 202-234-4433 Neal R. Gross & Co., Inc. Page 269 1 compressors, and demand load situations. But 2 there are a lot of small units which are 3 installed with individual.

4 CHAIR BROOKMAN: Massoud. 5 MR. NESHAN: Yes. Massoud Neshan, 6 Southern Store Fixtures. I am not sure any of 7 the manufacturers who are present here are 8 manufacturing that kind of a condensing unit 9 to be able to answer that question. The 10 refrigeration companies who manufacture that, 11 you know, can only speak on behalf of the 12 companies who supply to supermarket people. 13 They tend to use other suppliers, other 14 manufacturers of condensing units, and usually 15 when we supply a case, we have no clue whether 16 the case is going to be used on an individual 17 condensing unit or it will be part of a rack. 18 CHAIR BROOKMAN: Charlie. 19 MR. HON: I think that continuous 20 cases are almost exclusively rack, or you 21 wouldn't buy a continuous case. 22 Secondly, we do manufacture those,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 270 1 and a lot of those are because of energy 2 efficiency. If you take the total package, 3 you have a small unit with an external 4 condensing unit on it, it is built that way so 5 that one simple thing happens. You throw the 6 heat to the outside of the building, and you 7 don't extract it with the air conditioner. 8 It is a cost savings in the long 9 term for energy efficiency, but the 10 installation costs are astronomical. So you 11 may not benefit from it economically. 12 CHAIR BROOKMAN: So, yes, Carl. 13 MR. ROBERTS: Yes, I think in our 14 case, maybe 20 to 40 percent of the units that 15 we sell are condensing units -- are served by 16 condensing units and the remainder would be 17 racks. Considering things like convenience 18 stores and dollar stores, and that sort of 19 thing, there is a lot of applications where 20 condensing units are used to keep it simple. 21 CHAIR BROOKMAN: Okay. So now is 22 another opportunity, as was promised first

### 202-234-4433 Neal R. Gross & Co., Inc. Page 271 1 thing this morning, for anybody to raise 2 additional issues that haven't been raised 3 fully, and to confirm points to be made. 4 Karim. 5 DR. AMRANE: I guess before we 6 leave this subject, but regardless of whether 7 the case is really made for dedicated 8 condenser unit or not, this case will be 9 regulated under this rulemaking, so the case 10 will have to meet those energy efficiency 11 standards. So it's not like they are not 12 regulated. 13 CHAIR BROOKMAN: Okay. So, then, 14 closing remarks, final comments, for the day 15 before we turn it back to Charles Llenza? 16 Yes, please. 17 MR. MORRIS: Scott Morris, PNNL. 18 I am probably a little bit out of my league. 19 But by training I'm a statistician, and to 20 Charlie's point earlier, about the Department 21 working with manufacturers to figure out what 22 can done for a certification and enforcement,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 272 1 from a statistician's point of view, our whole 2 livelihood and where we get a lot of our most 3 important information from is simply sitting 4 down with our clients and trying to gather the 5 information from them, talk about the issues 6 that they are having. 7 So I guess if I could just I guess 8 reiterate what you said, I actually read over 9 this documentation a couple of months ago, and 10 I was kind of flabbergasted by page after page 11 after page of, well, for this particular piece 12 of equipment, these are the standards. 13 It is just -- yes, I guess I would 14 just like to reiterate the point that to make 15 everybody happy I think it is important that 16 we all communicate well with each other to 17 decide what is best for everybody. 18 MR. LLENZA: I want to -- this is 19 Charles Llenza. I want to add to that point. 20 We have an opportunity during the 21 manufacturing interviews to express your 22 comments about the concept of basic model, et

### 202-234-4433 Neal R. Gross & Co., Inc. Page 273 1 cetera, at that opportunity, and we are sure 2 they will be collecting that kind of 3 information also. 4 So don't underestimate. We have a 5 lot of time in this rulemaking. I think I 6 have heard some of the problems here. I am 7 not the type of person that is going to let a 8 lot of loose ends at the end of my rulemaking. 9 So one of the things that I can 10 try to commit here at this time is to work 11 with you, if you work with us, in cleaning up 12 the issues that are outstanding on the 13 rulemakings here, on not only the test 14 procedure but also on the standard. 15 And so take the opportunities here 16 that the Department has. We have a comment 17 period that is open. We have a comment period 18 that is open for the two products that Ashley 19 has put out. Take advantage of the 20 manufacturing interviews to make comments to 21 these effects on some of the issues here, and, 22 you know, have some faith. I think we can

### 202-234-4433 Neal R. Gross & Co., Inc. Page 274 1 move forward to try to close the loop on some 2 of these issues in the next six to 12 months 3 here. So I just wanted to add that commitment

4 here. 5 CHAIR BROOKMAN: So closing 6 remarks, final comments on the day? Carl

7 Roberts. 8 MR. ROBERTS: I just wanted to say 9 that we appreciate the opportunity to work 10 together towards a practical solution to this. 11 CHAIR BROOKMAN: Thank you. Okay? 12 I'm going to put the last slide up for you. 13 MR. LLENZA: Yes. Again, the 14 comment period is open, and it ends May 16, 15 2011, and here is the way to communicate back 16 to the Department your comments. No comment 17 is not a good comment, so we appreciate all 18 your comments and additional information on 19 these other issues that Ashley has with the 20 CCE. And also, we will welcome all your 21 comments in terms of the basic model 22 definitions. We are more than glad to handle

### 202-234-4433 Neal R. Gross & Co., Inc. Page 275 1 those also as part of this process. 2 CHAIR BROOKMAN: Charlie. 3 MR. HON: Will these interviews be 4 -- I assume the interview process would be 5 well past the comment period. 6 MR. LLENZA: Yes, but this is just 7 another opportunity within the process to 8 comment even though you may miss the window on

9 the 16th. 10 And, again, these are the germane 11 website links. Also, my link, my phone number 12 is here, my boss's link and phone number is 13 here, and feel free to contact me on these 14 issues. 15 I don't know -- I think part of 16 what I think that I'm hearing here is that we 17 may have to have some ad hoc meeting. And I 18 don't think that the Department should say 19 that we could discourage that. It may be one 20 of the things that I could hear from the 21 stakeholders is we want a separate meeting to 22 discuss these issues, and nothing else. And I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 276 1 would welcome those comments and encouragement 2 to me to get this organized for the 3 stakeholders if needed. 4 I don't see an issue with that. 5 We have enough time in this rulemaking. I 6 certainly would make the time if the 7 stakeholders think it is worth the time. And 8 that's all I've got. 9 A list of the comments is at the 10 end; we did that for convenience. Please make 11 sure you address these at some point in time, 12 and I'm glad that you attended. Thank you for 13 all your comments today. 14 (Whereupon, at 2:36 p.m., the 15 proceedings in the foregoing 16 matter were concluded.)

17

18

19

20

21

22

### 202-234-4433 Neal R. Gross & Co., Inc. Page 277

A abbreviations

21:10 ability 30:17,21 196:20 257:8 264:7 able 20:19 31:3

52:5 54:10 97:13 119:22 120:8 150:7 153:17 157:10 169:4,22 257:17 262:10 269:9 absence 31:10 absent 68:7 absolute 28:18

60:19 absolutely 220:7 absorb 97:10 205:8 academic 33:15

45:14 accept 148:1 168:17 207:20 214:1,2 acceptable 209:9

209:13 acceptances 266:8 accepted 108:4 114:8,11 226:5 access 17:8 23:8 account 39:3 47:5

66:13 71:18 73:15 78:11,18 79:1,6 83:19,22 85:9 88:4 94:9 95:20 112:14 126:21 144:2 161:15 185:19 258:15 accounted 52:8 177:18 accounts 80:11 accuracy 263:22

264:4,8 accurate 105:11 158:4 ACEEE 25:3 achieve 38:4 234:10 acronym 127:10 act264:21 action48:8 actual 14:21 37:8

45:10 68:6 136:2 193:2 225:1 250:15,22 258:17 259:2,10 ad 275:17 adapted 179:21 adaptive 61:22 add 58:5 91:15

95:9 97:19 107:18 121:13 161:8 198:4 272:19 274:3 added 11:3,6,11

31:15 57:21 69:4 192:15 adding 265:6 addition 12:13 14:2 16:17 20:16 143:22 241:20 additional 8:11 14:15 20:21 40:8 49:16 53:7,21 55:7 61:5,17 62:12 63:21,22 66:16 76:10 82:1 87:18 115:13 127:5 134:12 143:1 144:12 150:13,17 166:12 172:3 177:8 187:7 188:7 192:15 214:17 252:18 253:18 254:1 255:11 266:16 271:2 274:18 additionally 35:13 address 13:11 28:2

201:22 212:14 216:6 221:5 223:11 240:14 267:1 276:11 addressed 27:13 96:9 add-on40:13 adequately 27:8 Adjourn 3:15 adjust70:16 84:5

231:8 adjusted 181:5 adjustments 86:8 ADM 220:19 Administration 101:18 admit70:9 adopt239:16 adopted 176:12,14

226:9,13 239:15 advanced 39:6

51:11 57:15 advantage 210:18

273:19 adverse 50:13,15 advisable 86:22 advisement 175:5 AEDM 263:20

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116:8 8E-089 1:8 80 210:2 826 101:18 85 155:5 9 9 142:3 9:00 1:9 9:01 4:2 90 106:7 90-plus 155:4 99 248:18NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of:

Before:

Date:

Place:

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

----------------------- Court Reporter 313

Energy Conservation Standards for Commercial Refrigeration Equipment

US DOE

04-19-11

Washington, DC