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 U.S. DEPARTMENT OF ENERGY 

 + + + + + 

 EFFICIENCY & RENEWABLES ADVISORY COMMITTEE 

 (ERAC) 

 + + + + + 

 APPLIANCE STANDARDS SUBCOMMITTEE 

 + + + + + 

 NEGOTIATED RULEMAKING WORKING GROUP FOR 

 LIQUID-IMMERSED AND MEDIUM-VOLTAGE 

 DRY-TYPE TRANSFORMERS 

 + + + + + 

 PUBLIC MEETING 

 + + + + + 

 FRIDAY, 

 SEPTEMBER 16, 2011 

 + + + + + 

 The Working Group met in Room 

8E-089, 1000 Independence Avenue S.W., 

Washington, D.C., at 9:00 a.m., RICHARD 

PARKER, Facilitator, presiding. 

MEMBERS PRESENT: 

RICHARD ANDERSON, Manager of Electrical 

 Engineering, Fayetteville Public Works 

 Commission 

TIM BALLO, ESQ., Earthjustice 

SCOTT BECK, Product Engineering Manager, 

 Lakeview Metals 
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MEMBERS PRESENT (Continued): 

JOHN CASKEY, Assistant Vice President of 

 Industry Operations, National Electrical 

 Manufacturers Association 

JERRY CORKRAN, Staff Engineer, Cooper Power 

 Systems 

JOHN CYMBALSKY, Supervisory Operations 

 Research Analyst, U.S. Department of Energy 

ANDREW DeLASKI, Executive Director, Appliance 

 Standards Awareness Project 

THOMAS ECKMAN, Manager, Northwest Power and 

 Conservation Council 

CARLOS GAYTAN, Manager of Engineering, 

 Prolec GE 

ROBERT GREESON, Senior Electrical Design 

 Engineer, Federal Pacific Company 

GERALD HODGE, Consulting Engineer, Howard 

 Industries 

MICHAEL HYLAND, Senior Vice President, 

 American Public Power Association 

DAVID MILLURE, Senior Vice President, 

 Metglas, Inc. 

WES PATTERSON, Vice President of Technology, 

 ABB, Inc. 

ERIC PETERSON, Director of Customer Services 

 and Research, AK Steel Corporation 

RAY POLINSKI, General Manager of 

 Grain-Oriented Electrical Steels, 

 ATI-Allegheny Ludlum 

ART ROSENFELD, Ph.D., Lawrence Berkeley 

 National Laboratory, Efficiency and 

 Renewables Advisory Committee 

STEVE ROSENSTOCK, Manager of Energy Solutions, 

 Edison Electric Institute 

ROBIN ROY, Director, National Resources 

 Defense Council 

ROBERT SAINT, Principal Transmission and 

 Distribution Engineering, National Rural 

 Electric Cooperative Association 

CHUCK SIMMONS, Senior Engineer, Progress 

 Energy 
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ALSO PRESENT: 

RICHARD PARKER, Facilitator 

 Professor of Law, University of Connecticut 

ROBERT BERMAN, Berman Economics 

DAVID FLATEN, Xcel Energy (via telephone) 

BRIAN COFFEY, Consultant, Navigant Consulting 

DAN COHEN, ESQ., U.S. Department of Energy 

KATIE COUGHLIN, Lead Analyst, Lawrence 

 Berkeley National Laboratory 

GREG COULTER, Prolec GE 

JIM CREEVY, Director of Government Relations, 

 National Electrical Manufacturers 

 Association 

CHARLIE DREXLER, Kentucky Association of 

 Electric Co-ops (via telephone) 

BRENDA EDWARDS, Program Support Specialist, 

 U.S. Department of Energy 

CHUCK FOSTER, Edison Electric Institute 

JEREMIAH FREEMAN, Energy Analyst, New West 

 Technologies 

BRIAN KAJA, GE Energy (via telephone) 

ZHIMEI LUO, Consultant, Navigant Consulting 

KEVIN LOOBY, President, Lakeview Metals 

AARON MEYERS, Cooper Power Systems (via 

 telephone) 

MATTHEW NARDOTTI, Navigant Consulting 

TOM PETROSINO, Consultant, Prolec GE (via 

 telephone) 

MIKE RIVEST, Managing Director, Navigant 

 Consulting 

MAHESH SAMPAT, EMS Consulting 

JERRY SCHOEN, Principal Engineer, Product 

 Research and Applications Engineering, AK 

 Steel Corporation 

JOHN ROSSETTI, Memphis Light, Gas, and Water 

 (via telephone) 

PAUL RYAN, Hitachi Metals America 

MEG WALTNER, Energy Efficiency Advocate, 

 Natural Resources Defense Council 

KENNETH WINDER, Manager of Engineering, Moon 

 Lake Electric Association 

DANIEL YOUNG, Consultant, Pacific Gas & 

 Electric (via telephone) 
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1 P-R-O-C-E-E-D-I-N-G-S 

2 (9:09 a.m.) 

3 MR. PARKER: Welcome, everybody, to 

4 day two. So we have a lot to cover today. 

5 And so let's get right into it. We will start 

6 now. We will adjourn promptly at 3:30, again 

7 because people need to catch a plane and also 

8 because the computer turns into a pumpkin at 

9 that point. 

10 So we will break for an hour for 

11 lunch at 12:15, an hour and 15 minutes, 12:15 

12 to 1:30. Did that work out for people 

13 yesterday? Any problems? 

14 Okay. Just a couple of 

15 administrative things. First, please mute 

16 your cell phones. People on the phones, 

17 welcome. We're not going to take time to go 

18 around and announce ourselves. Do we need to 

19 for the phones? 

20 Everybody here has given a business 

21 card as security. So I think we have a record 

22 of attendance at these meetings, right, 
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1 without having to put it on the transcript. 

2 Is that right? Yes. We just need to have a 

3 record of who is at this meeting. I guess we 

4 should have the phone people announce 

5 themselves. 

6 So whoever is on the phone, could 

7 you please give us your name and affiliation 

8 for the record, speaking very clearly? 

9 MR. KAJA: Brian Kaja with GE 

10 Energy. 

11 MR. PARKER: Thank you, Brian. Can 

12 you spell your last name for the Court 

13 Reporter? 

14 MR. KAJA: Sure. It's K-a-j-a. 

15 MR. PARKER: Thank you. Who else? 

16 MR. FLATEN: David Flaten, Xcel 

17 Energy. 

18 MR. PARKER: Anybody else? 

19 MR. ROSSETTI: John Rossetti, 

20 Memphis Light, Gas, and Water. 

21 MR. PARKER: Sorry. One more time, 

22 please? 
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1 MR. ROSSETTI: John Rossetti, 

2 Memphis Light, Gas, and Water. 

3 MR. PARKER: Anybody else? 

4 MR. YOUNG: Daniel Young, 

5 consultant for Pacific Gas and Electric 

6 Company. 

7 MR. PARKER: Did you get that? 

8 Daniel Young. Sometimes there's static on the 

9 line. I'm just trying to make sure the Court 

10 Reporter gets the name clearly. Okay. 

11 Anybody else? 

12 MR. DREXLER: Charlie Drexler, 

13 Kentucky Association of Electric Co-ops. 

14 MR. PARKER: Okay. Anybody else? 

15 MR. PETROSINO: Tom Petrosino, 

16 consultant for Prolec GE. 

17 MR. PARKER: Tom Petrosino? 

18 MR. PETROSINO: Right. 

19 MR. PARKER: Okay. Thank you. 

20 Anybody else? 

21 MR. MEYERS: Aaron Meyers, Cooper 

22 Power Systems. 
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1 MR. PARKER: One more time, please, 

2 for the -- 

3 MR. MEYERS: Aaron Meyers. 

4 MR. PARKER: Aaron Meyers. 

5 MR. MEYERS: Cooper Power Systems. 

6 MR. PARKER: Okay. Anyone else? 

7 (No response.) 

8 MR. PARKER: Great. Welcome. A 

9 couple of other things that I have been asked 

10 to announce. People around the table, please 

11 -- again, this is for the Court Reporter, who 

12 has got headphones on -- please speak into the 

13 mike. 

14 If you don't speak into the mike, 

15 please make sure it's turned on with the green 

16 light illuminated. If you don't speak into 

17 the mike, the people on the phones can't hear 

18 you, the Court Reporter can't hear you, and 

19 even people in the back can't hear you. So 

20 please speak into the mike. 

21 People in the back, I really ask 

22 that you come to the mike. Don't speak from 
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1 your chairs. I know it's a pain. I'm sorry 

2 about that but absolutely have to have you 

3 come up to the mike so that the Court Reporter 

4 can get a record of your comments. 

5 Again, each time you speak, please 

6 announce yourself and your affiliation, 

7 whether you are at the table or in the chairs. 

8 Let's see. I think one other small 

9 issue. I consulted the statute, the 

10 regulations, the bylaws, the practices of 

11 previous negotiated rulemakings, and my 

12 colleagues at DOE. And I discovered that 

13 there is nothing in any of those legal 

14 authorities that preclude us from having a 

15 casual dress in our meetings. It is off the 

16 record that requires a unanimous vote or even 

17 a modified unanimous vote of this group to do 

18 that. 

19 So I will exercise my prerogative 

20 as facilitator, not that there are any 

21 prerogatives with that but to say that people 

22 should feel free to dress casually when they 
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1 come to our future meetings. I recognize that 

2 some people feel more comfortable in a suit 

3 and tie. And if that's the case, I'm more 

4 than happy to come dressed that way. Also 

5 people I know have other meetings to go to 

6 sometimes during the day that require 

7 different dress. 

8 So you are certainly welcome to 

9 wear a suit and tie, but I think we'll feel 

10 more comfortable and things will proceed more 

11 smoothly. And I, as an academic, have an 

12 aversion to coat and ties anyway. 

13 So let's just in the future if that 

14 suits feel free to come dressed down. I 

15 understand that DOE actually -- John has 

16 already preempted the conversation by doing 

17 that. 

18 So hopefully that will help us get 

19 more comfortable as we go through these longer 

20 and longer meetings that Andrew is insisting 

21 upon so that we can have fewer and fewer of 

22 them. 
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1 Okay. A lot to cover. Basically 

2 we're going to start off with Katie Coughlin 

3 from LBL to talk about her analysis. Oh, 

4 excuse me. Before I start that, I'm reminded 

5 that Dan Cohen from General Counsel's office 

6 -- here is your name tent, not that we don't 

7 know you already -- has a couple of comments 

8 about handling your business-proprietary 

9 information. 

10 MR. COHEN: Yes. Dan Cohen, DOE. 

11 So a question came up yesterday 

12 after the meeting after business-confidential 

13 information in these proceedings and how we 

14 will deal with the business-confidential 

15 information. 

16 So, remember, everything that we 

17 say here is public. So if something is 

18 business-confidential, don't say it here 

19 because it will then be public. 

20 To the extent that 

21 business-confidential information is sought by 

22 either the government or our contractors, that 
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1 information is protected. We have 

2 non-disclosure agreements. The Trade Secrets 

3 Act applies to us. 

4 Information can be shared with us. 

5 That information when we present it, we 

6 aggregate. We smooth. We do other things to 

7 make sure that it is not identifiable to any 

8 one particular submitter of that information. 

9 So you can feel free providing 

10 information to us or our contractors, but if 

11 you don't want it public, don't say it here. 

12 MR. PARKER: And also if you 

13 provide it to DOE or to contractors, you have 

14 to indicate that it is proprietary. They will 

15 have no way of reading your mind. Okay? So 

16 the burden is on you to indicate which 

17 information is proprietary. Okay? 

18 MR. SCHOEN: Jerry Schoen, AK 

19 Steel. 

20 Pursuant to that, do we contact you 

21 or do we contact Richard? Who do we approach? 

22 MR. COHEN: Dan Cohen, DOE. 
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1 Typically it would either be the 

2 program or the contractors, so either John's 

3 folks or Navigant or Berkeley Lab. 

4 MR. PARKER: But I operate under 

5 the same ground rules, by the way. So I will 

6 also. If you indicate to me that something is 

7 business-proprietary, I am not obliged to 

8 disclose information that is given to me 

9 confidentially. So I can and will respect 

10 confidentiality as well. 

11 MR. COHEN: Thank you. Richard is 

12 our contractor as well. So he has the same 

13 nondisclosure requirement. 

14 MR. SCHOEN: Does that require 

15 written notifications? Because at one time 

16 Navigant had a nondisclosure agreement that we 

17 looked at -- 

18 MR. COHEN: Yes. We will -- 

19 MR. SCHOEN: -- that was a little 

20 bit lacking in some of the coverage terms or 

21 can you do it verbal? 

22 MR. COHEN: No we would want you to 
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1 identify specifically on whatever piece of 

2 paper you give us what is proprietary 

3 information. 

4 MR. SCHOEN: I'm sorry. What I -- 

5 MR. PARKER: Can you speak into the 

6 mike again? I'm sorry. You have to be -- 

7 MR. SCHOEN: I'm sorry. Do we have 

8 to first have a nondisclosure agreement signed 

9 between our -- 

10 MR. COHEN: No, no, no, no. The 

11 nondisclosure agreement is our -- I'm sorry. 

12 Dan Cohen, DOE. 

13 The nondisclosure agreement is -- 

14 our contractors have that agreement with us. 

15 They have signed onto that as part of their 

16 contract. And then we have just the Trade 

17 Secrets Act applies to federal employees. 

18 MR. PARKER: Any other comments or 

19 questions on proprietary? Yes, sir? 

20 MEMBER DeLASKI: This is on a 

21 different topic. 

22 MR. PARKER: Go ahead. First, any 
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1 other questions or comments on the proprietary 

2 issue? 

3 (No response.) 

4 MR. PARKER: Okay. Andrew? 

5 MEMBER DeLASKI: So Andrew DeLaski, 

6 Appliance Standards Awareness Project. And I 

7 apologize. I have to leave at 1:00 today, 

8 even though I'm the one pushing for longer 

9 meetings. 

10 (Laughter.) 

11 MEMBER DeLASKI: So I'm all for 

12 pushing back 12:15 if you want. 

13 I thought we had a constructive day 

14 yesterday. And there were a couple of things 

15 I wanted to draw out to make sure that they 

16 were sort of recognized and I think our 

17 important dimension for our discussions going 

18 forward that I want to recognize the last 

19 couple -- ask the Department or others to 

20 think about. 

21 One is the issue of compliance 

22 dates. Dan mentioned this a couple of times 
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1 yesterday. So I guess I would ask the 

2 Department to consider or think about what is 

3 this Committee's flexibility with respect to 

4 compliance dates? 

5 And I want to give just a couple of 

6 examples from prior negotiated agreements that 

7 were implemented by DOE where they use 

8 compliance dates as a way to help get to yes 

9 in a negotiation. One was the ballast 

10 negotiation in the year 2000 between our 

11 coalition and NEMA, the NEMA manufacturers. 

12 And in that situation, we set two 

13 compliance dates. One was 2005. One was 

14 2010. Some ballasts had compliant in 2005. 

15 Other ballasts had compliant 2010. So that 

16 sort of stage implementation date is a 

17 question I guess for the Department. Is that 

18 something that, one of the things that we can 

19 be thinking about in this discussion? 

20 Another approach was one used for 

21 clothes washers, again, for clothes washers, 

22 we had a negotiated agreement in 2000 that 
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1 also went into effect in 2 stages in 2004 and 

2 2007 with increasing stringency, a modest 

3 standard initially and then a more stringent 

4 standard 3 years later. 

5 So it was a stepping up but issued 

6 as a single rule, as opposed to as two rules. 

7 So it gave certainty over a longer period of 

8 time but, yet, got to a higher level of 

9 efficiency than otherwise would have been 

10 possible if you were stuck with a shorter 

11 implementation date. 

12 And the final one I had mentioned 

13 is that for clothes washers, again, are we 

14 submitting for clothes washers, which is 

15 before the Department right now? We agreed on 

16 dates that were different for different 

17 product classes. 

18 So you have one product class that 

19 went into effect in three years, one product 

20 class that went into effect in five years. So 

21 these are some of the dimensions that I had 

22 asked you to think about. You could do 
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1 anything, but if there are limits, I want to 

2 know what they are so we don't go down a path 

3 that later on you say, "Well, that wasn't 

4 legal." 

5 MR. COHEN: Dan Cohen, DOE. 

6 So given the conversation 

7 yesterday, after the meeting was over, I went 

8 back and started looking into this question 

9 because I knew this was going to come up. 

10 I don't have an answer today, but 

11 either prior to or at the next meeting, you 

12 will have an answer. Before that meeting 

13 starts, we will have an answer to that 

14 question. 

15 MEMBER DeLASKI: Great. 

16 MR. COHEN: I will say in the past, 

17 when we have looked at this notion of tiered 

18 standards; what I mean by that is sort of the 

19 phased-in implementation date. We had taken a 

20 position in a rule dealing with lighting, 

21 actually the '09 lamps rule, that in that 

22 particular case, we did not have the authority 
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1 for tiered standards because in that provision 

2 of the statute, there were requirements for 

3 rulemaking which specifically authorized 

4 tiered standards but not the one that we were 

5 then operating under. 

6 So we concluded that Congress knew 

7 how to give us the authority for tiered 

8 standards and didn't in that particular case, 

9 but our opinion was that it wasn't an absolute 

10 that we couldn't do tiered standards. It was 

11 a question of the particular authority we were 

12 operating under in the particular rulemaking 

13 we were engaged in. 

14 MEMBER DeLASKI: So we'll ask you 

15 to report back at our next meeting. 

16 MR. COHEN: Okay. 

17 MEMBER DeLASKI: And then the other 

18 thing, other I think thing came out yesterday 

19 that may be of significant value in looking at 

20 product classes a little different than what 

21 the Department has structured thus far. 

22 So I would suggest there were four 
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1 that I heard discussed yesterday. One is that 

2 it may make sense to look at round tanks and 

3 square tanks separately, to evaluate those 

4 separately so that we can look at those 

5 numbers so we know how round tanks -- what the 

6 LCC is for round tanks and square tanks 

7 separately, so separating out those two 

8 classes, those two products, those two design 

9 lines as separate product classes I think 

10 could be constructive for our discussions. 

11 I think other ones that were raised 

12 yesterday that may be worth looking at 

13 separately would be network and substation 

14 transformers. Wes, I'm picking up on your 

15 conversation yesterday. 

16 MEMBER PATTERSON: Yes. 

17 MEMBER DeLASKI: And then I think 

18 it's worth taking a look at the bill-rating 

19 issue that Wes raised yesterday and do the 

20 bill ratings, take a look. Does that yield 

21 separate product classes or not? Points 

22 raised by the contractor, I think, by Mike are 
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1 well-taken. It is the increment that matters. 

2 Well, does it matter? 

3 You know, and Wes provided 

4 information this morning at 6:00 o'clock. 

5 He's burning the midnight oil, apparently, to 

6 give us information. So we appreciate that. 

7 MR. PARKER: Yes. I spoke with 

8 Brian this morning, Brian Coffey of Navigant. 

9 And they have the information and will 

10 respond between now and the next meeting. And 

11 I want to discuss when we get there about how 

12 we proceed between meetings, but we will. 

13 MEMBER DeLASKI: So from my 

14 perspective, maybe we can come at it this 

15 afternoon. Again, I won't be here. So I'm 

16 going to give my two cents right now but with 

17 some sense of the Committee about what 

18 additional product classes we would like the 

19 Department to go look at. So then we come 

20 back for the next meeting. We have data for 

21 product classes that help us try to chart a 

22 path forward. 
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1 MR. PARKER: Right. And one thing 

2 that came out on the substation issue was that 

3 the cost is not really something that affects 

4 the price of the transformer that goes into 

5 manufacturing selling price. It's more of an 

6 installation cost issue, right, because the 

7 transformer is too big. It won't fit. 

8 MEMBER DeLASKI: I'm fully aware of 

9 the issue. 

10 MR. PARKER: But it brings in the 

11 LBL analysis. Yes. 

12 MEMBER ROSENSTOCK: Steve 

13 Rosenstock. You've got network/vault 

14 transformers because, especially in urban 

15 areas, that's a very big issue. 

16 MEMBER DeLASKI: Help me with the 

17 terminology here. Is this one and the same 

18 thing? 

19 MEMBER PATTERSON: Network and 

20 vault are very similar products. They both go 

21 into -- 

22 MR. PARKER: You have to speak into 
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1 a mike, Wes. 

2 MEMBER PATTERSON: Network and 

3 vault transformers are very similar because 

4 they both go into a vault sitting in a hole in 

5 the ground. So they both have the same kind 

6 of restriction. Substation transformers do 

7 not have that restriction. 

8 MEMBER DeLASKI: So would you tend 

9 to treat vault and network together? 

10 MEMBER PATTERSON: I would. 

11 MR. PARKER: Again, if you're on 

12 the phone, please mute your speaker. We're 

13 getting ringing of phones in the background. 

14 Again, please mute your phones if you're on 

15 the line. Okay? If you're on the line? 

16 Thank you. 

17 MEMBER DeLASKI: I guess are there 

18 reactions from others? 

19 MR. PARKER: No. I think it's a 

20 good idea. I think we're committed to doing 

21 that. And that raises a general point. As we 

22 go through today, basically our function again 
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1 today, as I said yesterday, is to identify the 

2 issues that need to be looked at, either by 

3 this group in the future and, more 

4 specifically, the issues that are going to 

5 need further analysis or refinement of the 

6 analysis by the consultants. 

7 So we really need to end today with 

8 that business done. So please be thinking, 

9 you know, and jot down whatever you think. We 

10 got the issues from yesterday. Think about 

11 what issues you want to put on the table. 

12 I will mention that Tom Petrosino 

13 just put in a question about material price 

14 sensitivity that I will table when we get to 

15 that part of the discussion. Thank you, Tom. 

16 And feel free, anybody who is on 

17 the line, to continue to call in to Tatiana 

18 and give your questions. And we will make 

19 sure that they're included in the discussion. 

20 But we want to come up with a list. 

21 And ideally at the end of the 

22 session today after lunch, we will talk about 
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1 an order, you know, a schedule for working 

2 through the list. 

3 Steve, did you have a question? 

4 MEMBER ROSENSTOCK: I just want to 

5 follow up with Andrew. And I appreciate the 

6 comments. I guess one of the keys is, is 

7 there a way -- and, again, it all depends on 

8 turnaround; I'm not trying to put DOE or 

9 Navigant on the spot -- is, is there a way to 

10 easily disaggregate that data to break out? 

11 You know, we have the August data 

12 based on kind of the current ways of 

13 categorizing transformers. Is there a way to 

14 disaggregate the data to show results based on 

15 -- we have broken out by design lines, and now 

16 we're doing subgroups, let's say, or, you know 

17 -- 

18 MR. PARKER: Let me put this to the 

19 consultants. Do you have a way of knowing 

20 what use a transformer is going to be put to, 

21 what space it's going into when it's bought? 

22 Let the record reflect that Katie is shaking 
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1 her head yes. So that information could be 

2 supplied? Yes. Okay. 

3 Mike? 

4 MEMBER DeLASKI: Can we mute that? 

5 MR. PARKER: Are people still on 

6 the line? Can somebody who is on the phone 

7 unmute their phone just enough to tell us if 

8 you're on there? 

9 MR. KAJA: Yes. I'm on this. This 

10 is Brian with GE Energy. 

11 MR. PARKER: Okay. Could everybody 

12 who is on the line please hang up your phones 

13 and call in again? Of course, the person 

14 whose phone is ringing is the one who is not 

15 listening to this. 

16 (Laughter.) 

17 MR. PARKER: So that won't do any 

18 good. Oh, if we hang up, they will be gone. 

19 Okay. All right. Yes. Okay. So we're going 

20 to just disconnect you. Can we just hang up 

21 the line? 

22 (Whereupon, the foregoing matter 
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1 went off the record at 9:29 a.m. and went back 

2 on the record at 9:37 a.m.) 

3 MR. PARKER: Great. So why don't 

4 we, then, get started? So, anyway, as I was 

5 saying, think about issues. If you are on the 

6 phone, send them in to Tatiana. If you're 

7 around the table, jot them down. 

8 I'm going to be pretty straight 

9 about exploring the issue just long enough to 

10 satisfy the group that this is an issue. 

11 We're not going to try to resolve the merits 

12 of these issues. Okay? 

13 So that's the ground rules going 

14 forward. All right? All we're doing now is 

15 tabling issues and data needs. That's all 

16 we're doing. 

17 Let's set the table for that by 

18 having Katie if she could come up and give us 

19 her discussion, I think, of the LBL analysis, 

20 life cycle cost analysis, and national impacts 

21 analysis? She has had a rough morning at the 

22 hotel, but I appreciate her getting here. 
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1 Thanks. 

2 MS. COUGHLIN: Okay. So the goal 

3 this morning, I'm going to try to review. 

4 This diagram is from the presentation we did 

5 in April. So essentially we have this series 

6 of chevrons that give you the steps in the 

7 analysis -- can you see this? Okay. It's the 

8 pointer that doesn't seem to point. 

9 So, anyway, what I wanted to go 

10 through today very quickly is the energy use 

11 life cycle cost and national impacts analyses. 

12 Most of the complexity in the analysis comes 

13 into the life cycle cost. And in the April 

14 meeting -- so this is a diagram of all the 

15 steps that we go through to do the life cycle 

16 cost analysis. 

17 So the blue oblongs represent input 

18 data. The white ovals represent calculation 

19 steps that occur within the spreadsheets. The 

20 yellow boxes represent intermediate outputs. 

21 And then the final result is the LCC. And the 

22 LCC is what ends up in the tables that are 
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1 published in the TSD. 

2 So during the April meeting, we 

3 went through in a lot of detail all those blue 

4 boxes and all the input data. And based on 

5 comments, some of the inputs have been 

6 revised, but most of the revisions to those 

7 inputs are relatively minor. So in the big 

8 picture, they don't have a large impact on the 

9 results. 

10 Now, what I was hoping to do today 

11 is, rather than go over the inputs again, 

12 which I think most of the people in this 

13 audience have already seen, I wanted to 

14 discuss in a more intuitive way the mechanics 

15 of the LCC and how the information is used and 

16 how the results, some of the subtleties in 

17 interpreting the results. 

18 I think many of the issues that 

19 have come up represent more or less minor 

20 modifications to the inputs. And 

21 understanding the relative importance of some 

22 of those modifications might be easier if we 
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1 give a sort of clear picture of how the LCC 

2 functions. 

3 So that was what I wanted to try to 

4 do today. I'm happy to go over the inputs 

5 again in more detail if that's what people 

6 want to hear. So let me move on to the 

7 description of the LCC. 

8 So basically what we're trying to 

9 do in the life cycle cost analysis is simulate 

10 a large number of installations of 

11 transformers for a particular design line and 

12 estimate that -- you know, the LCC is 

13 conceptually very similar to the total 

14 ownership cost, but we use a different set of 

15 assumptions and a lot more variability in the 

16 inputs. So we're trying to estimate in sort 

17 of slightly more realistic conditions what the 

18 cost and benefits of improved efficiency are. 

19 So an LCC run -- and this is in one 

20 of these spreadsheets that you can download -- 

21 consists of some large number, 10,000 

22 representations of what I call transformer 
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1 installations. 

2 So an installation you can think of 

3 as a kind of space in which you can put a 

4 transformer. And there are characteristics of 

5 each installation that go with the owner of 

6 the transformer. And then there are other 

7 characteristics that go with the transformer 

8 load. And then there are characteristics that 

9 go with the transformer itself. 

10 So the way the LCC works is once we 

11 define the owner characteristics and the kind 

12 of loading characteristics, those don't change 

13 under different standard-level scenarios. 

14 It's just the transformer design parameters 

15 that change. 

16 So the owner characteristics 

17 include -- there's a geographic location. 

18 Most of the electricity prices and other data 

19 depend on the region that you're in. 

20 There's a question of whether or 

21 not the purchaser of the transformer an 

22 evaluator. That means whether or not they 
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1 simply buy the lowest-cost unit that meets 

2 their needs or whether they actually apply 

3 some valuation to the load losses and no load 

4 losses, in which case they will buy a 

5 higher-efficiency transformer. 

6 Then there's an electricity price, 

7 a discount rate and things that go with the 

8 owner of the transformer. 

9 MR. PARKER: Just for my knowledge 

10 -- my apologies if other people know the 

11 answer already, but why would they question 

12 whether an evaluator would impact the life 

13 cycle cost? 

14 MS. COUGHLIN: Because if you are 

15 buying a highly efficient transformer, then 

16 the existence of the standard may not affect 

17 your decision. So if that's the case, then 

18 essentially the impact of the standard on that 

19 owner is zero. 

20 MR. PARKER: I see. 

21 MR. COULTER: Excuse me. I have a 

22 question about that. Could we -- 
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1 MR. PARKER: Name and -- 

2 MR. COULTER: Greg Coulter with 

3 Prolec GE. 

4 How do you know if somebody is an 

5 evaluator in this -- 

6 MS. COUGHLIN: We have -- well, 

7 it's a statistical model. So based primarily 

8 on comments, we have statements about what 

9 fraction of purchasers evaluate different 

10 types of equipment purchased. And that's a 

11 parameter in the spreadsheet. 

12 I think it's 75 percent for 

13 liquid-immersed. And it's ten percent for 

14 low-voltage dry. 

15 MR. COULTER: Seventy-five percent 

16 are evaluators? Is that what you -- 

17 MS. COUGHLIN: Well, we do 

18 different runs with different values. But I 

19 think that the -- in the preliminary analysis, 

20 the default was 75 percent. And that is a -- 

21 you can set that parameter when you run the 

22 LCC. So it's relatively easy to change it. 
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1 MR. COULTER: Right. This 

2 particular thing is where we are very 

3 concerned because, I mean, we don't see 

4 anywhere near 75 percent evaluators. I mean, 

5 we have a lot of people who evaluate, but they 

6 buy the lowest -- you know, DOE minimum 

7 efficiency. 

8 MS. COUGHLIN: Right. 

9 MR. COULTER: You know, hey, we 

10 have an evaluation form. So they evaluate. 

11 That isn't what they're buying. They're 

12 buying the minimum efficiency, -- 

13 MS. COUGHLIN: Right. 

14 MR. COULTER: -- especially people 

15 who use the band of equivalence we talked 

16 about earlier. I mean, basically that just 

17 takes you down to you're going to buy minimum 

18 efficiency. 

19 We had a hard time getting that to 

20 correlate when we were trying to run this 

21 analysis. We think this is a major error on 

22 the percentage that -- 
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1 MS. COUGHLIN: Right, right. We do 

2 the sensitivity of zero and 100 to see the 

3 influence of that. And then, yes, I mean, 

4 that number if easily changed if you want to 

5 modify it. So we don't really have good data. 

6 It's really a matter of coalescing a variety 

7 of opinions. 

8 MEMBER DeLASKI: I don't know 

9 whether John -- 

10 MR. PARKER: For the Court 

11 Reporter, you have to give your name and -- 

12 MEMBER DeLASKI: Andrew DeLaski. 

13 Has NEMA submitted a comment on 

14 what you all think the percent of evaluators 

15 are? 

16 MEMBER CASKEY: John Caskey with 

17 NEMA. 

18 No, I don't remember us submitting 

19 a comment on this. But my first thought is 

20 that given the high levels of energy 

21 efficiency standards that became effective in 

22 January of 2010, if I were doing this, I would 
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1 start with basically zero. 

2 MR. COULTER: It's close enough to 

3 zero that we would suggest it would be -- you 

4 know, ten percent may be. 

5 MEMBER DeLASKI: I know there are 

6 some utilities -- 

7 MR. COULTER: There are some 

8 utilities -- 

9 MEMBER DeLASKI: -- that are 

10 aggressive in looking to get to the highest 

11 efficiency and who are truly doing a TOC 

12 without the BOE. But, you know, alas, you 

13 guys, you're selling them. So you've got a 

14 sense of who is really doing it and who is 

15 not. 

16 MR. PARKER: That's one of the 

17 comments that came up in my interviews with 

18 people, was that people are seeing more and 

19 more utilities just say, "We're complying with 

20 the regulation, and there's nothing to 

21 evaluate." 

22 MR. COULTER: In the listing 
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1 itself, there are evaluators, but in the end, 

2 that is not what they're buying to. 

3 MR. PARKER: Right. 

4 MR. COULTER: They're buying to 

5 minimum DOE efficiency. 

6 MR. PARKER: Thank you, Greg. 

7 MEMBER ROSENSTOCK: Steve 

8 Rosenstock, Edison Electric Institute. 

9 We made comments. We didn't give 

10 an exact percentage, but we thought 75 percent 

11 was far too high for base case based on some 

12 of our discussions with some members. So, 

13 again, I guess everything kind of leads up to 

14 the August 23rd revision. So I have to ask 

15 for the August 23rd revision of some of the 

16 outputs, of some of the summary outputs, did 

17 you use that same 75 percent as I'll say the 

18 baseline pivot point on which you did the 

19 sensitivity analysis? 

20 MS. COUGHLIN: I'm not 100 percent 

21 sure, but I don't think so. I think we 

22 lowered it to 50 percent, yes. 
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1 MEMBER ROSENSTOCK: Thank you. 

2 MS. COUGHLIN: I have to double 

3 check. 

4 MR. RIVEST: Katie, it's Mike 

5 Rivest, Navigant. 

6 Just to clarify, just because 

7 someone is an evaluator doesn't mean that they 

8 will buy a more efficient transformer than the 

9 minimum standard. Is that correct? 

10 MS. COUGHLIN: It depends on the 

11 standard level under consideration, but the 

12 difference between an evaluator and a 

13 non-evaluator is if they are evaluating, then 

14 we have a process for assigning an A and B 

15 value. And then that's the basis for the 

16 choice of the transformer. 

17 For a non-evaluator, you just go 

18 with lowest first cost. So it is very likely 

19 -- 

20 MR. RIVEST: The lowest first that 

21 complies to the minimum standard. 

22 MS. COUGHLIN: Yes, under the 
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1 standard. Yes. 

2 MR. RIVEST: So it may be that 

3 yesterday I heard that the current standard 

4 was equivalent to an A and B of $1, $4. So if 

5 you assign A and B values to an evaluator with 

6 lower values than that, they would default to 

7 -- 

8 MS. COUGHLIN: Possibly. 

9 MR. RIVEST: -- buying lowest first 

10 cost. 

11 MS. COUGHLIN: Yes. I mean, I will 

12 show some illustrations of how it works. Yes. 

13 It's difficult to generalize but definitely 

14 the -- 

15 MR. RIVEST: I mean, the dream data 

16 would be to have a distribution of sales -- 

17 MS. COUGHLIN: Right. 

18 MR. RIVEST: -- by product class, 

19 by efficiency. That would be the dream data. 

20 MS. COUGHLIN: Which we're not 

21 going to get. 

22 MR. PARKER: Yes, Bob? 
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1 MEMBER SAINT: And another comment 

2 to -- 

3 MR. PARKER: Sorry. You have to -- 

4 MEMBER SAINT: Bob Saint, NRECA. 

5 Another comment about the 

6 evaluation. I do think less utilities are 

7 evaluating because the evaluation results in a 

8 lower efficient transformer than the minimum 

9 standard. 

10 MS. COUGHLIN: Right. 

11 MEMBER SAINT: So if they were 

12 buying their optimal transformer, it would be 

13 less than the standard. 

14 MS. COUGHLIN: That's right. 

15 Right. And if that's the case in the LCC, 

16 then the evaluation is rejected. And you have 

17 just moved to the lowest cost that's available 

18 under that standard. 

19 MEMBER SAINT: Right. 

20 MEMBER PATTERSON: Katie, Wes 

21 Patterson. 

22 MR. PARKER: Okay. 
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1 MEMBER PATTERSON: I have a 

2 question. If you were to assume everybody was 

3 a non-evaluator, then what happens to the LCC 

4 value? Does it go up or does it go down? 

5 MS. COUGHLIN: It tends to -- the 

6 estimate of savings would tend to increase 

7 because in the base case, everybody is going 

8 down to the lowest cost. 

9 MEMBER PATTERSON: So if we assume 

10 no evaluators, then the savings increases? 

11 MS. COUGHLIN: They tend to, yes, 

12 although, again, given the complexity of the 

13 price efficiency, this is the sort of scatter 

14 of points in the price efficiency space. It's 

15 not always actually such a big effect. So 

16 yes. 

17 MR. PARKER: And as I understand 

18 it, just to clarify, this issue, this variable 

19 becomes relevant because you're trying to 

20 determine the life cycle cost of the standard. 

21 If we change the question to be 

22 "What is the life cycle cost of the 
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1 transformer that meets the standard?" then it 

2 doesn't matter whether they are evaluating or 

3 not. 

4 MS. COUGHLIN: No, not quite. 

5 We're trying to determine the distribution of 

6 life cycle costs over all possible transformer 

7 purchasers. So if some of those purchasers 

8 are not affected by the standard, we want to 

9 count that sort of zero impact in our 

10 statistics. 

11 So the life cycle cost, you know, 

12 there is transformer by transformer, but then 

13 we do this full statistical sample to look at 

14 all of the variability that affects the LCC of 

15 a single installation. 

16 MR. COULTER: And this is Greg 

17 Coulter from Prolec GE again. 

18 I just want to correct one thing. 

19 It appears to us that if you assumed there are 

20 less evaluators, what it does is it increases 

21 the benefit of life cycle cost -- 

22 MS. COUGHLIN: Yes. 
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1 MR. COULTER: -- for the lower 

2 efficiency levels because at higher efficiency 

3 levels, you've got even past -- 

4 MS. COUGHLIN: Right. High 

5 efficiency levels no one is evaluating up 

6 there anyway. 

7 MR. COULTER: Right. 

8 MS. COUGHLIN: So it has no impact. 

9 That's right. 

10 MR. COULTER: So it just improves 

11 the benefits at lower efficiency levels. 

12 MR. PARKER: Okay. So we've 

13 identified an issue. What is the right 

14 threshold evaluation to use as the baseline. 

15 I assume whatever is used, it will still be 

16 sensitivity analysis to capture. And then the 

17 question will be, as with any sensitivity 

18 analysis that gives a range, -- 

19 MS. COUGHLIN: Right. 

20 MR. PARKER: -- you know, what do 

21 you use as the basis for planning if it 

22 affects the outcome? But the question, what 
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1 is the base case, is a sensitive one. 

2 Do we have more data that would 

3 shed light on that that could be produced or 

4 do we have to just -- 

5 MS. COUGHLIN: We don't have any 

6 data on the fraction of purchasers who 

7 actually evaluate. It is a very difficult 

8 thing to come by. 

9 MR. PARKER: If we don't tell what 

10 they're saying? 

11 Yes, Rob? 

12 MEMBER GREESON: Rob Greeson, 

13 Federal Pacific Transformer. 

14 Just regarding the percentage of 

15 A/B evaluators on the medium-voltage dry, we 

16 also feel that it is a very low number. The 

17 numbers that we initially got from DOE were 

18 that for low-voltage, it was approximately ten 

19 percent evaluators. That should be zero. You 

20 know, in our opinion, on the medium-capacity 

21 dry-types, I think the number that we were 

22 given was used was 50 percent. Fifteen 
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1 percent is an aggressive number. 

2 And then on the high-capacity 

3 dry-type, I think it was 80 percent. And we 

4 went with 15 percent as just a rough guess on 

5 that one as well. 

6 And we have submitted that to 

7 Navigant. You may have our comments 

8 somewhere. 

9 MS. COUGHLIN: Yes. I think we ran 

10 those numbers as one of the cases. 

11 MEMBER GREESON: Okay. 

12 MS. COUGHLIN: Yes. 

13 MEMBER GREESON: Thank you. 

14 MS. COUGHLIN: Yes. I mean, in 

15 this type of situation, we can also if people 

16 want to agree on just a set of numbers to run 

17 and look at the dependence of the results on 

18 those numbers, we can do it that way, too. 

19 MR. PARKER: Let's not leave it 

20 hanging. Let's just say, why don't you -- can 

21 they just send this to you directly? Would 

22 that be all right? 
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1 MS. COUGHLIN: Sure. I'll set up a 

2 web page, and you can vote on your -- 

3 MR. PARKER: Yes. Please send your 

4 nominations for the right ratio to Katie 

5 directly with, please, a discussion of what 

6 supports this. Anecdotal gut is fine, but 

7 data is better. If there's anything that you 

8 can refer to? That said, I really don't want 

9 to discount gut. 

10 I mean, in the absence of firm 

11 data, the professional judgment of people who 

12 are in the industry, I think, you know, is 

13 valuable. It's better than nothing. 

14 So I don't want to diminish. This 

15 is my impression. I diminish that when there 

16 is data available. I don't diminish it when 

17 there isn't. 

18 MEMBER PATTERSON: Richard, Wes 

19 Patterson from ABB. 

20 MR. PARKER: Yes? 

21 MEMBER PATTERSON: My recollection 

22 is that during the analysis that the DOE has 
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1 done, when they visited the factories, they 

2 gathered input from the factories on what 

3 percentage of the market was doing evaluation. 

4 They have already got this data in the 

5 archive somewhere. 

6 MR. PARKER: Well, I think the 

7 point is people's answers are not necessarily 

8 reflective of their practice, I think. 

9 MEMBER DeLASKI: Yes. This is the 

10 thing. I get confused. Andrew DeLaski. 

11 I think there is a question, as has 

12 been pointed out several times, that we ask 

13 the question, "Do you evaluate?" The answer 

14 is yes. But they're not. There might be some 

15 confusion as to what -- right. 

16 The customers are evaluating. They 

17 think they are evaluating for buying the 

18 lowest LCC. 

19 MR. PARKER: Yes. So I guess, do 

20 you vote rationally? 

21 MEMBER DeLASKI: So the question 

22 is, is the data they got valid? What I'm 
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1 hearing, 35 percent of the use they didn't 

2 pluck it out of a hat. I mean, it was used 

3 because they heard it from somewhere. 

4 MS. COUGHLIN: Yes. 

5 MEMBER MILLURE: Dave Millure, 

6 Metglas. 

7 The percentage isn't so important 

8 as what the A and B factors are. You have to 

9 put them in buckets, right, because if 100 

10 percent of these evaluators have an A factor 

11 of one and a B factor of 25, then you're at 

12 DOE, right? 

13 So the percentage is one number, 

14 but you really need the buckets of the 

15 evaluation. 

16 MS. COUGHLIN: Right, right. So we 

17 have some surveys of A and B factors based -- 

18 and we use that data to estimate what those 

19 numbers will be. 

20 And, again, it's a finite data set. 

21 It's what we've got. So that was discussed 

22 in the April meeting. So the data is in that 
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1 presentation. 

2 MR. PARKER: Just to recap, is 

3 there a difference in the A and B factors for 

4 evaluators versus non? 

5 MS. COUGHLIN: Well, non-evaluators 

6 is effectively -- it's not exactly zero. It's 

7 just irrelevant. They don't think about it. 

8 MR. PARKER: What do you mean they 

9 don't think? We don't know. 

10 Yes? 

11 MR. SAMPAT: Mahesh Sampat, EMS 

12 Consulting. 

13 I think the better way to frame the 

14 question would be not whether you evaluate or 

15 not evaluate. If you ask people, "Do you 

16 evaluate?" everybody will say, "We evaluate." 

17 The question is, "Do you buy better 

18 than DOE minimum-required efficiency?" And 

19 they will separate it out. Okay? It doesn't 

20 matter how much better. Then because what I 

21 heard is only ten percent of people buy better 

22 than DOE. Ninety percent buy what is DOE 
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1 minimum requirement, minimum efficiencies. 

2 So I think what we heard is only 

3 ten percent of people buy better than DOE. 

4 Then whether they buy a little bit better than 

5 DOE or greatly better than DOE will have very 

6 little impact on the LCC numbers. 

7 MR. PARKER: Brian, could I put you 

8 on the spot, if I might? Was that question 

9 posed directly to the manufacturers in the 

10 surveys in those terms? 

11 MR. COFFEY: I can say that the 

12 general consensus was that, regardless of 

13 whether people were self-identifying as 

14 evaluators, they wound up purchasing, by and 

15 large, very close to the DOE standards. That 

16 seemed to be the consensus. 

17 MR. PARKER: Okay. Thank you. 

18 Helpful. 

19 Yes? Yes? Go ahead. Start with 

20 your name. 

21 MR. WINDER: Ken Winder, NRECA. 

22 One of the purposes of the 
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1 evaluations is to -- 

2 MR. PARKER: Could people on the 

3 phone please mute your phones? 

4 MR. WINDER: One of the purposes of 

5 evaluation is not necessarily buy higher 

6 energy efficiency transformers, but to select 

7 the current suppliers is to -- so you may say, 

8 "I evaluate," but you are trying to select 

9 between suppliers. And so that is another 

10 function of evaluation. 

11 MS. COUGHLIN: Yes. And it's also, 

12 you know, although we use a single number to 

13 represent efficiency, those are under test 

14 procedure conditions. So under real 

15 conditions, there are load losses and no-load 

16 losses. And you can evaluate because you have 

17 a different -- you have a different set of 

18 criteria for evaluating those two types of 

19 losses. So it isn't just an efficiency 

20 constraint. 

21 And, again, in terms of the LCC, 

22 it's relatively straightforward for us to do 
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1 these. You know, the two extreme cases are 

2 obviously zero percent and 100 percent. We 

3 can do anything in between, but we do need to 

4 retain within the LCC the ability to represent 

5 purchasers who are trying to minimize one type 

6 of loss versus the other. So that's one 

7 reason why it's in there. 

8 MEMBER PATTERSON: This is Wes 

9 Patterson with ABB. 

10 It would be very interesting to see 

11 what is the impact on the final analysis, if 

12 it's all zero or 100 percent. 

13 MS. COUGHLIN: Yes, right. 

14 MEMBER PATTERSON: If this is a 

15 small variation, it's not a point to belabor. 

16 MS. COUGHLIN: Right. 

17 MEMBER PATTERSON: You know, if 

18 it's a huge variation, then maybe we need to 

19 look at it in more detail. 

20 MR. PARKER: That's helpful, yes. 

21 MEMBER DeLASKI: And I guess I 

22 would just take it a little bit further, which 
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1 is that if we know there is a consensus around 

2 10-20 percent, why don't we just file it to 

3 that and then we'll see? You know -- 

4 MS. COUGHLIN: Yes. I mean, we 

5 could -- 

6 MEMBER DeLASKI: That could be the 

7 consensus. 

8 MS. COUGHLIN: Yes. If you -- 

9 MEMBER DeLASKI: I'm not hearing 

10 anybody say it's higher, it's way higher than 

11 20 percent. That should be the main case. 

12 And then you have sensitivities. 

13 MR. PARKER: Any others on that? 

14 Go ahead. 

15 MEMBER CASKEY: Yes. Excuse me. 

16 John Caskey with NEMA. 

17 It seems like you're using an 

18 estimation process of the evaluator when, in 

19 reality, Brian and maybe others already have 

20 sort of the answer. And the answer is that a 

21 relatively small number of people buy a higher 

22 efficiency than the 20/10 DOE rule. 
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1 So, I mean, it seems like you're 

2 using an approximation to get to a buying 

3 decision when, in reality, you already have 

4 the results of the buying decision -- 

5 MR. PARKER: Well, we have to know 

6 it's relatively small. I mean, is it zero? 

7 Is it ten? Is it 20? I mean, we just have to 

8 know. 

9 MS. COUGHLIN: Yes. And you have 

10 to be careful to make a distinction between 

11 statements made in interviews and a kind of 

12 rigorous statistical sample. So we don't have 

13 a rigorous statistical sample. 

14 So we can see what we can do with 

15 the information that has been gathered 

16 recently and what we can do to modify the -- I 

17 just don't want a claim that there is data 

18 that would settle the issue when really -- 

19 MR. PARKER: Right. 

20 MS. COUGHLIN: Even if you have 

21 interview responses, there's still going to be 

22 some uncertainty about how to interpret them. 
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1 But yes, we're continuing to -- 

2 MEMBER CASKEY: That makes sense. 

3 MR. PARKER: Right. 

4 MEMBER CASKEY: This is John Caskey 

5 again. But that methodology seems like you're 

6 taking it further away from statistical 

7 information that might be available. 

8 I mean, the sales information is 

9 available, you know, one way or the other. If 

10 you're using a methodology to get to a sales 

11 decision process to estimate that or represent 

12 that when, in reality -- 

13 MR. PARKER: You're saying you 

14 could just look at the sale and see if it 

15 comes in higher than the DOE -- 

16 MS. COUGHLIN: Right. We currently 

17 have very limited information on purchases as 

18 a function of efficiency. We have some 

19 information, but it's pretty limited. 

20 MR. PARKER: Okay. So we basically 

21 need to work with the data we've got. We 

22 can't go back and do additional manufacturer 
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1 interviews. 

2 Do you have actual sales data? 

3 MEMBER CASKEY: I don't. The 

4 manufacturers do. 

5 MR. PARKER: Yes. That would 

6 require -- I mean, we can't go back and do a 

7 new round of interviews, but -- 

8 MEMBER CASKEY: No. I agree. This 

9 is This is John Caskey with NEMA. 

10 But the manufacturers I think 

11 during the interviews have already shared this 

12 information with them. So what I am trying to 

13 get to is if we're doing an approximation 

14 method, a new methodology dealing with this 

15 evaluator decision-making process -- 

16 MR. PARKER: I see what you're 

17 saying. 

18 MEMBER CASKEY: -- when, in 

19 reality, you sort of know what decisions have 

20 been made over the last year and a half 

21 essentially relative to the DOE regulation. 

22 MR. PARKER: Okay. 
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1 MEMBER CASKEY: So why are you 

2 coming up with a secondary analysis. 

3 MR. PARKER: She doesn't know it 

4 based on any statistical data that she has 

5 that she can point to. So all we have to do 

6 is just be candid about the basis for our -- I 

7 think what she is saying is that we have to be 

8 candid about the basis for information. 

9 If it is based upon interviews with 

10 manufacturers according to their selling 

11 records, then we just indicate that. But if 

12 you don't have data, you don't have data, and 

13 we can't pretend that you do. 

14 MEMBER CASKEY: This is John Caskey 

15 with NEMA. 

16 You have the buyer, the 

17 representatives of the buyers also. 

18 MR. PARKER: Right. 

19 MEMBER CASKEY: So hopefully what 

20 the manufacturers are selling and what the 

21 buyers are buying, there is some truth in 

22 those two numbers. 
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1 MR. PARKER: Right, right, right. 

2 But I believe that they're emphasizing that 

3 the basis is, you know, in this room we are 

4 producing not only a standard, but we are 

5 producing a supporting analysis. And so we're 

6 generating a record that will, you know, 

7 hopefully support the recommendations that we 

8 come up with. 

9 So that is why and I think that is 

10 why John's point is particularly well-taken. 

11 You know, if the people come forward in our 

12 discussions and say, "This is our experience," 

13 that is part of the record. That is something 

14 that a court could consider when deciding 

15 whether what we have done is arbitrary of 

16 capricious or whether it passes judicial 

17 scrutiny. 

18 And, again, I should emphasize, by 

19 the way, that the results of this Committee if 

20 it's enacted into law won't get any greater 

21 deference from a court than it would if DOE 

22 enacted it on its own. 
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1 So it is incumbent upon us to 

2 produce, you know, not only a standard but an 

3 analysis that withstands scrutiny. That's why 

4 it's important to be very transparent about 

5 where our data is coming from and why we'll be 

6 very pedantic about that as we go forward. 

7 Okay. Anything else on this? Yes, 

8 Jerry? 

9 MEMBER CORKRAN: I brought it up 

10 yesterday -- 

11 MR. PARKER: Start with name and 

12 affiliation. For the record, you just have to 

13 give your name and affiliation. 

14 MEMBER CORKRAN: Okay. For the 

15 record, Jerry Corkran. Sorry about that. 

16 Yesterday I brought it up about the 

17 A and B factors, which is a very important 

18 part of your analysis up there. And I believe 

19 that if it would be focused on the cost of 

20 energy, the A and B factors, for the total 

21 earning cost, you could do a very good job and 

22 it would resolve the various problems that 
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1 happen when you carry it out kind of out on a 

2 tree limb to the 900 kinds of transformers 

3 that we have and try to create the 

4 efficiencies when, really, if you stop with 

5 the A and B factors, your cost of energy, 

6 that's what influences the efficiency of the 

7 transformer. 

8 So if we focused on creating a 

9 procedure where the manufacturers were 

10 required to use an optimized total earning 

11 cost with A and B factors, which were agreed 

12 on by the subcommittee, it would resolve all 

13 the variations which are going to happen with 

14 changes in material cost, changes in who knows 

15 what. 

16 But the further out we go out on 

17 the tree limbs trying to specify things, the 

18 more errors that are going to occur 

19 eventually. 

20 I don't know whether it needs one A 

21 or B factor or maybe two or something, but 

22 apparently if the cost of energy is what you 
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1 are focusing on, you could come up with an A 

2 and B factor which would solve the transformer 

3 energy efficiency problem. And we would have 

4 to use those in quoting transformers, just 

5 like now we have to meet the DOE efficiencies. 

6 I don't see why it wouldn't work very well. 

7 MS. COUGHLIN: I mean, that's not a 

8 technical issue. That's a process issue. So 

9 I will defer to -- 

10 MEMBER CYMBALSKY: I want to go 

11 back to the evaluator percent. I think Mike 

12 Rivest had a good point. I don't know what 

13 kind of -- what is the functional form for 

14 that? Is it for a choice? It is like a logit 

15 function or is it -- 

16 MS. COUGHLIN: No. It's just a 

17 probability. 

18 MEMBER CYMBALSKY: Okay. 

19 MS. COUGHLIN: So 30 percent or 20 

20 percent of -- 

21 MEMBER CYMBALSKY: So if we say 50 

22 percent go in this bucket where they evaluate, 
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1 of that 50 percent, still 90 percent could 

2 still choose the least efficient one. 

3 MS. COUGHLIN: I mean, it may be 

4 useful to move on and look at some of the 

5 diagrams before we spend too much time on this 

6 because it may be less important than you 

7 think it is. 

8 MEMBER CYMBALSKY: Yes. Let's go 

9 -- 

10 MS. COUGHLIN: Yes. 

11 MEMBER ROSENSTOCK: Just a quick 

12 question. We haven't seen these slides. So 

13 that's why we're -- 

14 MR. PARKER: Steve, your name and 

15 affiliation. 

16 MEMBER ROSENSTOCK: Sorry. Steve 

17 Rosenstock, EEI. 

18 How many slides are there? And are 

19 you talking about each of these 

20 characteristics in the future slides? 

21 MS. COUGHLIN: No. I have about 

22 ten slides that I wanted to get through this 
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1 morning. So we're on number 2. 

2 (Laughter.) 

3 MS. COUGHLIN: Most of the stuff, 

4 as I said, most of the -- the information 

5 about how these individual things were 

6 calculated was presented in April. So I won't 

7 review it unless people ask me to go over it 

8 again. That was my plan. 

9 So, you know, things about discount 

10 rates, lifetimes, how we did the energy use 

11 simulation. All that stuff was going in -- we 

12 went over that in a lot of detail in April. 

13 And that has not changed fundamentally since 

14 then. 

15 MEMBER ROSENSTOCK: Steve 

16 Rosenstock, EEI. 

17 Despite all the comments, those 

18 values really haven't changed? Is that what 

19 I'm hearing? 

20 MS. COUGHLIN: Well, we have 

21 responded to the comments, but they don't 

22 actually result in large impact changes to the 
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1 analytical inputs. So we have modified some 

2 of the markups. We have adjusted the way we 

3 do the transformer loads. We separated the 

4 commercial from the industrial buildings, as 

5 was requested. We looked at updated 

6 electricity price data. But none of these 

7 things end up having an enormous impact. 

8 So back to this scheme. So we have 

9 these characteristics that go with the owner 

10 and then the characteristics that go with the 

11 transformer installation, which include the 

12 lifetime and data about the loads on that 

13 transformer. This is where something like 

14 whether the transformer is in a 

15 space-constrained installation were to appear. 

16 So that is part of the installation 

17 cost. And you again track the number of 

18 installations that are space-constrained so 

19 that, if necessary, we can deal with 

20 additional costs that might be incurred by the 

21 standard. 

22 And then within the -- so the LCC 
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1 takes the base case, which is the current DOE 

2 standard, and then goes through these 

3 hypothetical efficiency levels that are 

4 attached to each design line. And, again, 

5 I'll illustrate in a graphic what happens when 

6 you move from the base case to a higher 

7 efficiency level. 

8 I just want to make a quick 

9 statement about the energy use. Because of 

10 no-load losses, that's not problematic. You 

11 have the engineering parameter that gives you 

12 the no-load loss rate. And that can be used 

13 to estimate the no-load losses. But the load 

14 losses depend on the actual shape of the loads 

15 on the transformer. 

16 So one of the biggest differences 

17 between what we do in a TOC is we actually try 

18 to capture two things. One is the variability 

19 in the population on those load shapes, and 

20 the other is the correlation between the time 

21 variation of the load on the transformer and 

22 time-varying electricity prices. 
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1 And, again, this is something that 

2 was reviewed in detail in the April meeting. 

3 In the model, this is where you get a 

4 significant difference between the dry-type 

5 transformers and the liquid-immersed 

6 transformers. 

7 So for liquid-immersed, the 

8 assumption is most of them are utility-owned. 

9 Therefore, you see these hourly varying kind 

10 of system-wide -- we used the day-ahead hourly 

11 market price to represent the marginal hourly 

12 varying price. And so we do that correlation 

13 with an hourly transformer load. 

14 And for dry-type transformers, if 

15 the assumption is that they're installed in 

16 buildings and the buildings are on tariffs, 

17 then the variability is at a monthly level. 

18 So we look at monthly variations in load 

19 factors and loss factors and how that 

20 correlates with monthly marginal electricity 

21 prices. 

22 MR. PARKER: Okay. Steve? 
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1 MEMBER ROSENSTOCK: Steve 

2 Rosenstock, EEI. 

3 In the April analysis, it looked 

4 like all the prices that were used were based 

5 on 2008 wholesale price data from markets. 

6 MS. COUGHLIN: Right. 

7 MEMBER ROSENSTOCK: And I didn't 

8 point out in my comments but I'll point out 

9 now that in 2008, there was a huge run-up in 

10 natural gas prices that had an effect on all 

11 wholesale prices -- 

12 MS. COUGHLIN: Right. 

13 MEMBER ROSENSTOCK: -- in the 

14 United States. And, in fact, they reached, I 

15 think it was, like $1.20 from them, $12 per 

16 million BTUs. And this year they have been 

17 average about $4 per million BTUs. 

18 So if you're using those, the 2008 

19 wholesale prices, as your base case and then 

20 using the EIA outlook to extrapolate in the 

21 future, you have a much higher base case. And 

22 then you're going up or kind of down and up 
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1 based on the EIA annual energy outlook versus 

2 using 2010 or 2011 data. 

3 So I'm kind of curious if you are 

4 going to use the hourly for some of this 

5 analysis, would you be able to use the 2010 

6 data on the hourly basis and then use the 

7 annual energy outlook for your projections? 

8 MS. COUGHLIN: Yes. Okay. So let 

9 me clarify a couple of things. First of all, 

10 we don't have -- FERC is pretty slow. And we 

11 get the data from the FERC 714. They're 

12 fairly slow. So they have released 2009, but 

13 we don't have 2010 complete. 

14 But I want to clarify that the 

15 hourly data is used to look at the correlation 

16 structure between prices and loads, but it is 

17 not used to set the kind of absolute level of 

18 the prices. And that's where the AEO comes in 

19 because we only start counting these costs at 

20 some future time, where we're using the AEO 

21 projection to set the electricity price kind 

22 of baseline level at that future time. 
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1 So what we use is the AEO average 

2 electricity price to ratio the data year to 

3 the beginning of the analysis period. 

4 MEMBER ROSENSTOCK: Steve 

5 Rosenstock, EEI. 

6 Again, I'm just trying to interpret 

7 what you are saying. So the AEO puts out 

8 average retail prices. 

9 MS. COUGHLIN: The AEO puts out 

10 everything, but yes, because, again, we need 

11 an indicator of general cost of production. 

12 And so we use the actual average electricity 

13 price. But we check to see whether there are 

14 significant differences depending on which 

15 index that you use. 

16 MR. PARKER: You can do a 

17 sensitivity on that, too, right? 

18 MS. COUGHLIN: Yes, you can do -- I 

19 guess I just want to say that the only thing 

20 that will affect this analysis is if I do a 

21 price load correlation plot that's normalized 

22 to, say, one for the average price if the 
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1 shape is different. That will affect this 

2 analysis. 

3 And we have checked for a couple of 

4 regions, the 2009 and 2008 data. And that 

5 shape has not changed significantly. 

6 MR. PARKER: Why did the absolute 

7 values not matter? I don't quite understand. 

8 MS. COUGHLIN: Because the absolute 

9 values are in the future. And they're set by 

10 the AEO forecasts. 

11 MEMBER ROSENSTOCK: Well, the 

12 reason I am discussing this is -- Steve 

13 Rosenstock, EEI -- the fact that, especially 

14 the last five years, the amount of renewables 

15 has gotten, especially in certain ISO markets, 

16 has been significantly increased. 

17 And, actually, for example, like in 

18 the Pacific Northwest and in Texas, there are 

19 times when it's at the margin, the actual 

20 wholesale price approaches zero. 

21 MS. COUGHLIN: Yes. 

22 MEMBER ROSENSTOCK: That's not 
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1 reflected in your analysis. And that is 

2 having an impact on the actual -- some of the 

3 output. Now, of course -- 

4 MS. COUGHLIN: It is in the 

5 analysis. ERCOT is one of the regions. 

6 MEMBER ROSENSTOCK: Yes. 

7 MS. COUGHLIN: Yes. It's true that 

8 there is some small change, but, again, it's 

9 not really going to make a huge difference 

10 because we are using these distributions of 

11 price load. So, you know, you're going to 

12 have a minor impact on that distribution 

13 function. And at the end of the day, it's not 

14 going to be very large. 

15 MEMBER ROSENSTOCK: Well, I have to 

16 respectfully disagree because there are so 

17 many states with renewable portfolio 

18 standards. And as renewables become bigger 

19 and bigger portion of either the peak load or 

20 the base load, I know they're intermittent, 

21 but that's going to have a huge impact on the 

22 wholesale prices. That will have an impact on 
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1 some of these results. And, again -- 

2 MS. COUGHLIN: Yes. That's where 

3 the AEO price forecast comes in. So we're not 

4 going to forecast. The price forecast itself 

5 comes out of the AEO. And, you know, you can 

6 look at the penetration of renewables that 

7 they're assuming and all of that. But all I'm 

8 saying is that the 2008 -- 

9 MR. PARKER: You're saying that 

10 historically it doesn't matter because you're 

11 just using AEO forecasts? 

12 MS. COUGHLIN: What I'm saying is 

13 that we have 2008 data that describes the 

14 correlation between the prices and loads. I 

15 can take everything out and replace it with 

16 2009 data, but if the correlation doesn't 

17 change, then the results won't change because 

18 the results -- we're only using the data to 

19 get that level of correlation. We're not 

20 using the data to set the absolute price 

21 level. 

22 MEMBER ROSENSTOCK: But okay. 
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1 Steve Rosenstock, EEI. 

2 But the wholesale prices drop. You 

3 know, say they went from five cents down to 

4 two and a half cents. 

5 MS. COUGHLIN: Then that will be 

6 reflected in the rescaling of the whole price 

7 function. 

8 MEMBER ROSENSTOCK: So are you able 

9 to rescale it based on more recent data? 

10 MS. COUGHLIN: We use AEO. So we 

11 use AEO 2011. 

12 MEMBER ROSENSTOCK: But if you were 

13 able to get -- I'm pretty sure that each of 

14 the -- I know FERC publishes, but also each of 

15 the ISOs publish their wholesale prices on 

16 their websites. Would you be able to rescale 

17 based on, let's say, the 2010 wholesale prices 

18 that have been published by the ISOs? 

19 MS. COUGHLIN: Let's see. If you 

20 can get 2010 data for every region of the 

21 country, you could do that. So we can look at 

22 the most recent -- I mean, we can also use -- 
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1 there are EEI reports that we could use to 

2 rescale the data. But, again, for the 

3 analysis, if you want to look out forward to 

4 the compliance data and beyond that, that's 

5 where we have to use AEO. 

6 MR. PARKER: When you say you "have 

7 to," why do you have to? 

8 MS. COUGHLIN: That's the 

9 Department policy to use AEO. 

10 MR. PARKER: Okay. 

11 MEMBER ROSENSTOCK: Steve 

12 Rosenstock, EEI. 

13 I don't mind using AEO projections. 

14 It's just a matter of depending on where you 

15 have that baseline of those prices. That will 

16 make a difference on life cycle cost analysis. 

17 MS. COUGHLIN: We set the baseline 

18 saying -- so we have the data year for prices. 

19 We take AEO. We look at the price that they 

20 claimed in that data year and then whatever 

21 year's dollars that we're using for the 

22 analysis. And we use that ratio to rescale 
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1 the absolute price. 

2 MEMBER ROSENSTOCK: So, again, 

3 Steve Rosenstock, EEI. 

4 Again, if the wholesale -- again, 

5 let me just -- so if AEO says the retail price 

6 -- again, I don't know whether it's commercial 

7 or industrial -- was I'll just say 10 cents 

8 and the wholesale price was 5 cents in 2008 

9 and in 2010, the wholesale price is down to 3 

10 cents but the retail prices are about the same 

11 but the transformer, the actual cost savings, 

12 you are going to have the wholesale side, not 

13 the retail side. Are you able to rescale it 

14 and then use the projections? 

15 MS. COUGHLIN: Yes. 

16 MEMBER ROSENSTOCK: Okay. And 

17 would you be able to do that over the next 

18 month or so? 

19 MS. COUGHLIN: It's done. That's 

20 what we do. That's the procedure that we use. 

21 MEMBER ROSENSTOCK: Okay. But I'm 

22 still saying, would you be able to use it, do 
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1 it as a sensitivity analysis using 2010 data? 

2 MS. COUGHLIN: You mean to use 

3 something other than AEO? 

4 MEMBER ROSENSTOCK: No. I'm sorry. 

5 MS. COUGHLIN: Because AEO 2011 

6 goes back to 2007, I think. Since our data 

7 year is 2008, we just take what is in AEO to 

8 do that rescaling. 

9 MR. PARKER: Bob, you were waiting 

10 patiently at the mike. And then go up. 

11 MR. BERMAN: Yes. Robert Berman, 

12 Berman Economics. 

13 Just a point of clarification, 

14 Katie. On the load losses, are you using a 50 

15 percent load factor or are you using your 

16 estimate of the actual RMS? 

17 MS. COUGHLIN: We're using an 

18 analysis of metered building data to look at 

19 the distribution of load factors. 

20 MR. BERMAN: No. I'm talking about 

21 liquid-filled. 

22 MS. COUGHLIN: We're using the same 
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1 information. It's the only hourly metered 

2 data that we have. So we're using a 

3 distribution that represents the relationship 

4 between load factors and loss factors to book 

5 it as a statistical model of what the loss 

6 factor is likely to be. 

7 So we have a distribution of loss 

8 factors. And then the median value of that 

9 distribution can be scaled to be, say, 35 

10 percent or 50 percent or whatever, again, is a 

11 consensus view of the average loading. And 

12 then within the simulation, you pick. You 

13 pick a loss factor from the distribution for 

14 each transformer. 

15 MR. BERMAN: Okay. What loss 

16 factor or what RMS load are you assuming? 

17 MS. COUGHLIN: I believe for the -- 

18 I have to look it up. Liquid-filled I think 

19 is 45 percent. It amounts to a 45 percent RMS 

20 load I think. 

21 MR. PARKER: So there's a general 

22 theme that I think is emerging from all of 
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1 these comments, which is that I think the 

2 group would benefit from having basically like 

3 a cheat sheet that just sets out in one place 

4 if it's not already there all of the key 

5 assumptions that go into the analysis and the 

6 origin of the data for those assumptions and 

7 then the results of any sensitivity analysis 

8 around the range of what you're using for the 

9 sensitivity analysis. 

10 MS. COUGHLIN: Yes. That's in the 

11 TSD basically. So we can try and shorten it, 

12 but it's going to be 50 pages of information. 

13 MR. PARKER: Right. And you're 

14 saying that it has not -- the TSD was in 

15 April. And you're saying it has not 

16 materially changed since then? 

17 MS. COUGHLIN: That's right. I 

18 mean, there have been certain changes made in 

19 response to comments, but they don't impact 

20 the quantitative results -- 

21 MR. PARKER: Okay. So it sounds to 

22 me, then, like the answer to a lot of these 
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1 questions, they're set forth in the TSD and 

2 people could be referred back to that? 

3 MS. COUGHLIN: Yes. 

4 MR. PARKER: Because I don't want 

5 to -- you know, we're spending a lot of time 

6 working out "Did you assume this?" or "Did you 

7 assume that?" If we can stipulate that the 

8 answer to all of these things is in the TSD, 

9 people need to refer back to it, we can do 

10 that, but I don't want to continue to consume 

11 time with the same genre of questions. 

12 Steve? 

13 MEMBER ROSENSTOCK: I'm sorry. 

14 Steve Rosenstock, EEI. 

15 The issue is we have this August 

16 23rd report with different levels and 

17 different LCC numbers than were in the TSD. 

18 So all we have is a summary. We have the 

19 April report, which shows a lot of the 

20 assumptions and how some of this was done. 

21 And that was fine, and it was a very good 

22 report. 
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1 The issue why these questions are 

2 coming up is that we have now different sets 

3 of numbers and different levels, where, you 

4 know, we don't have the details about what the 

5 underlying assumptions were that got to these 

6 new levels and the new life cycle costs and 

7 what parameters were changed. 

8 This is summary data. We don't 

9 have the detailed data for the August 23rd 

10 report. That's why a lot of us are asking 

11 questions. 

12 MR. PARKER: So could you 

13 regenerate it for the August 23rd report? 

14 MS. COUGHLIN: Well, again, that's 

15 not really my decision. 

16 MR. PARKER: Would that take a long 

17 time? 

18 MS. COUGHLIN: Yes. I mean, you 

19 know, we can provide whatever documentation 

20 the Committees agrees to publish, but, yes, 

21 this goes into the process more than -- 

22 MR. PARKER: Right. Well, I guess 
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1 the question is it would take a long time 

2 because you would have to rerun the 

3 sensitivity analysis? 

4 MS. COUGHLIN: No, no. I mean, I 

5 think the principal change in -- 

6 MR. PARKER: I know, but -- 

7 MS. COUGHLIN: -- between April and 

8 August was the changes to the engineering 

9 data. That's going to be the biggest 

10 contributor to changes in the LCC analysis. 

11 And there may be some minor but statistically 

12 insignificant changes due to these other 

13 modifications of inputs to the LCC. 

14 And we can prepare a memo that 

15 details the exact differences in the inputs to 

16 the LCC, but I think, again, one of the things 

17 that I wanted to try to move towards is to try 

18 to get a sense of the impact. 

19 There are a lot of inputs. And 

20 most of them are statistical distributions. 

21 So modifications to the shapes of those 

22 distributions don't always have a very large 
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1 impact on the results. 

2 So in some sense, even if, you 

3 know, we could spend a lot of time going 

4 through and detail all of these things, you 

5 would not be able to tell in the actual output 

6 that anything had been changed. 

7 I would like to try to clarify a 

8 little bit why it works that way. 

9 MR. PARKER: Okay. 

10 MEMBER GREESON: Rob Greeson, 

11 Federal Pacific Transformer. 

12 I keep hearing this over and over 

13 again. And a lot of the stuff we're talking 

14 about in the long run doesn't make a lot of 

15 difference. Would it be agreeable to most 

16 people if that's the viewpoint on a lot of 

17 these things to say, "Hey, that doesn't really 

18 make" -- in other words, let's identify what 

19 does make a huge difference on the life cycle 

20 cost and focus on that and then defer the 

21 other smaller detailed things maybe a little 

22 bit later and you could just kind of be more 
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1 -- push us around a little bit, say, "Oh, that 

2 doesn't make a difference. This is what does" 

3 or "This is what we have seen does. And let's 

4 focus on that"? Otherwise we might spend a 

5 little bit too much time talking about 

6 details. 

7 MR. PARKER: Brian, did you want to 

8 chime in there? 

9 MR. COFFEY: Sure. 

10 MR. PARKER: Thank you. 

11 MR. COFFEY: This is Brian Coffey, 

12 Navigant. 

13 Rather than spend a lot of time 

14 recapitulating all of the information through 

15 a cheat sheet, I know that Navigant and LBNL 

16 have prepared draft updates to several of the 

17 TSD chapters containing all of this 

18 information. So those could be made available 

19 well before the next meeting if that would be 

20 helpful and circumvent a lot of this back and 

21 forth about all of the assumptions that were 

22 made. 
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1 MR. PARKER: And that would answer 

2 the questions about the assumptions that were 

3 made? 

4 MR. COFFEY: I think it would 

5 probably answer many of them, yes. 

6 MR. PARKER: Do you agree with 

7 that, Katie? 

8 MS. COUGHLIN: It may be more 

9 efficient to just prepare a document that 

10 summarizes the changes, but we can discuss 

11 that later, I think. Yes, yes. 

12 MR. COFFEY: We'll touch base. 

13 MS. COUGHLIN: I mean, obviously 

14 eventually everything is documented in 

15 exhaustive detail. The question of within 

16 this process sort of how to present 

17 information in a way that is actually useful 

18 to the Committee in real time, I think we need 

19 to think a little bit more about how to do 

20 that. 

21 MR. PARKER: And you need to do it 

22 on the basis of a CSL, you know, a set of 
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1 CSLs, that we agree on. 

2 MS. COUGHLIN: Moving right along. 

3 MR. PARKER: That's our next 

4 presentation. Thanks. 

5 MS. COUGHLIN: Yes. 

6 MR. PARKER: Steve, let's hold off. 

7 Let's let her finish. Okay? Because we're 

8 running behind schedule. 

9 MS. COUGHLIN: Okay. So, again, 

10 this is from the -- I'm going to show three 

11 plots of the -- this is the price-efficiency 

12 design space. 

13 This is illustrative. This is 

14 design line 1, which is liquid-immersed. So 

15 the horizontal axis is the efficiency at the 

16 test procedure conditions. 

17 So one of the things to remember is 

18 that, really, the efficiency is a 

19 two-parameter function. It depends on the 

20 load losses and the no-load losses. 

21 So the test procedure represents a 

22 particular combination of those two components 
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1 of the efficiency, but the way we do the LCC 

2 simulation, you could have different levels of 

3 load losses. So in the field, you may have a 

4 different kind of practical efficiency for the 

5 product. 

6 And then these CSLs, which are now 

7 known as ELs, are simply divisions of this 

8 design space. And, you know, we try to 

9 essentially come up with a set of divisions 

10 that is relatively evenly spaced so that you 

11 kind of essentially can represent a relatively 

12 continuously the effective efficiency on these 

13 different outputs. But you also need to 

14 respect any significant engineering 

15 constraints. 

16 So these lines, you know, are going 

17 to be subject to some adjustment, but once 

18 they're set, they actually have an engineering 

19 significance. So we don't really want to move 

20 them around too much. 

21 And the way that the LCC works is 

22 that anything that is to the right of a dashed 
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1 line is available to be selected in an LCC 

2 run. 

3 So the line at the far left is what 

4 we call CSL-0. That's the base case. So 

5 everything is allowed in the base case. And 

6 then as you move to the efficiency level 1, 2, 

7 3, some of the lower efficiency designs drop 

8 out of the population. 

9 So the next slide, it's on a very 

10 different scale. So it's been really 

11 compressed in the vertical. 

12 So this is just an illustrative 

13 example of the output of one of the LCC runs. 

14 So what are we -- I think I picked CSL-5. So 

15 the green dots are that full design space. 

16 And the blue dots were the base case 

17 selections. 

18 So since this particular run has a 

19 high level of evaluators, you can see that, 

20 even in the base case, there's a fairly large 

21 number of choices of efficiency that are above 

22 the minimum price. 
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1 And then if you go past each one of 

2 those lines, the LCC is essentially forcing 

3 the choice of higher and higher efficiency. 

4 So up at CSL-5, you can see that there is a -- 

5 well, there is a limited number of designs 

6 that are available. And none of them would 

7 have been chosen in the base case. 

8 And for each, if you review the TSD 

9 again, the general idea of what is going on 

10 hasn't changed between April and August. So 

11 if you review the April TSD and -- the shapes 

12 of these price efficiency clouds of points can 

13 be quite variable from one design line to 

14 another. 

15 So in some cases, that lower 

16 boundary is very flat, which means there is 

17 very little cost differential between 

18 efficiency levels, at least for the lower 

19 standard level, for the lower efficiencies. 

20 And in those cases, the standard has very 

21 little impact. The number of evaluators has 

22 very little impact because the price 
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1 differentials are just not that significant. 

2 In other cases, these curves are 

3 very steep. And in those cases, then things 

4 like the evaluation rate are going to start to 

5 have an important influence on the results. 

6 So the next plot is the same data 

7 again. This is now looking at the two 

8 parameters of our two-parameter efficiency 

9 space. So the vertical axis is the load loss 

10 rate for the design. And the horizontal axis 

11 is the no-load loss rate. 

12 The full cloud of points is the 

13 full set of designs, again for design line 1. 

14 So now in this space, since the efficiency 

15 essentially depends on the sum of the load 

16 losses and the no-load losses, a single 

17 efficiency level is a diagonal line along that 

18 cloud. 

19 MEMBER PATTERSON: Excuse me, 

20 Katie. Is this load losses at 100 percent 

21 rate or is this a 50 percent or rate of load? 

22 MS. COUGHLIN: Rate of load I think 
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1 is full capacity. 

2 MEMBER PATTERSON: Okay. 

3 MS. COUGHLIN: So essentially 

4 anything that is along that, that red line is 

5 compliance with CSL-1, I think. But, again, 

6 that doesn't really matter. The main point is 

7 that any design along that line is going to 

8 have the same efficiency because the 

9 efficiency depends on the sum of the load 

10 losses and no-load losses. 

11 So, again, within the choice, even 

12 once you have chosen a design at a particular 

13 efficiency, you may or may not realize that 

14 efficiency in the field depending on the 

15 balance of load losses to no-load losses in 

16 the simulation. 

17 MEMBER PATTERSON: Just as a point 

18 of reference from an old engineer, in an 

19 unconstrained design environment, the ratio of 

20 the load loss to the no-load loss runs around 

21 8 to 1, which if I look at 100 and I go up, 

22 you're at 600. Okay. That's a factor of six. 
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1 If I look at 200 and then I'm down 

2 at 200, something doesn't feel good. I would 

3 expect to see the ratio of the two losses to 

4 be a ratio of about eight to one in an 

5 unconstrained environment, which is the top 

6 line, just as a technical point of reference. 

7 MS. COUGHLIN: Yes. I mean, that 

8 is more of an engineering point. This is just 

9 engineering data. 

10 MEMBER PATTERSON: Yes. That's 

11 what I am. 

12 MR. COULTER: Katie, I have a 

13 question. This is Greg Coulter with Prolec 

14 GE. 

15 It was not clear to me how you are 

16 using the no-load loss data and the load loss 

17 data in your model. 

18 MS. COUGHLIN: Okay. 

19 MR. COULTER: Because if I heard 

20 you right, it seemed to me you are using each 

21 one of those ratios. You have said, "We are 

22 going to pick this no-load and this load loss 
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1 so that you can make an adjustment on the 

2 loading and how it does affect this on 

3 loading. 

4 You're not just using efficiency. 

5 You're using the actual -- 

6 MS. COUGHLIN: Right, right. So 

7 the no-load loss rate is an engineering 

8 parameter. You just multiply by 8,760 to get 

9 the annual losses. And then for the load loss 

10 rate, we have this load simulation that tries 

11 to estimate what the actual load might be. 

12 And then you multiply that by the load loss 

13 rate to get the load losses. 

14 MEMBER PATTERSON: Which I 

15 understood you said earlier was roughly gave a 

16 mean of about 45 percent. 

17 MS. COUGHLIN: Yes. Again, that's 

18 one of those parameters that is -- 

19 MEMBER PATTERSON: And the standard 

20 is based on 50 percent. So it's a close 

21 match. 

22 MS. COUGHLIN: Well, the test 
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1 procedure is based on 50 percent. 

2 MEMBER PATTERSON: Right. 

3 MS. COUGHLIN: So the test 

4 procedure is just a way of assigning a number 

5 to a piece of equipment. 

6 MEMBER PATTERSON: Not totally true 

7 in this environment because that 50 percent 

8 was the industry's estimation of a typical 

9 load on a transformer. 

10 MS. COUGHLIN: Right, right. But 

11 the standard -- 

12 MEMBER PATTERSON: Your data is 

13 correlating well with the gut feel. 

14 MS. COUGHLIN: Right. But now we 

15 haven't set the standard. And the value that 

16 will be used to set the standard has not been 

17 finalized. So we're using for these runs 45 

18 percent for liquid-immersed. And low-voltage 

19 dry is much lower. And medium voltage I think 

20 is lower than 45 percent. 

21 MEMBER PATTERSON: And, Greg, if I 

22 may, could I back up two slides just for one 
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1 quick question? 

2 MR. COULTER: Why, of course, Wes. 

3 (Laughter.) 

4 MEMBER PATTERSON: Thank you. 

5 If we could back up two slides, 

6 please? 

7 MS. COUGHLIN: Let's see. 

8 MEMBER PATTERSON: Okay. What we 

9 said, if I understood correctly, if I look at 

10 CSL-1, we said everything that is considered 

11 under CSL-1 are all the dots to the left of 

12 the line. 

13 MS. COUGHLIN: To the right. 

14 Sorry. To the right. So that -- 

15 MEMBER PATTERSON: All the dots to 

16 the right? 

17 MS. COUGHLIN: With higher 

18 efficiency than that dashed line, yes. 

19 MEMBER PATTERSON: Okay. I'm 

20 comfortable with that. Thank you. 

21 MR. PARKER: Chuck? 

22 MEMBER SIMMONS: Excuse me. I'm 
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1 still a little unclear. I'm sorry. Chuck 

2 Simmons, Progress Energy. 

3 As far as all the candidates for 

4 CSL-1, would it be all of the dots to the 

5 right of the second left most vertical dotted 

6 line or is it -- 

7 MS. COUGHLIN: Yes. 

8 MR. PARKER: To the left of the 

9 line. 

10 MS. COUGHLIN: Yes. It's the 

11 dashed line that is to the right of the label, 

12 the -- 

13 MR. PARKER: Katie, do you want a 

14 laser pointer? Would that help? 

15 MS. COUGHLIN: Sure. 

16 MR. PARKER: One that works, 

17 actually. 

18 MEMBER SIMMONS: Thank you. Just a 

19 fine point. Just want to make sure that's -- 

20 MS. COUGHLIN: Okay. So this line 

21 is CSL-1, then CSL-2, et cetera. Now they're 

22 called efficiency levels. 
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1 MR. PARKER: It just varies for 

2 CSL-6 because there wasn't space for it. 

3 MS. COUGHLIN: No. Essentially in 

4 this particular design line, there is I think 

5 one dot there that meets that standard. So 

6 it's just there's not that many designs that 

7 are that efficient. That's a high number. 

8 MR. PARKER: Right. Okay? Steve 

9 has a question. 

10 MEMBER ROSENSTOCK: Well, no. I 

11 just want to say for everybody, remember, 

12 though, based on August 23rd, there might only 

13 be 5 vertical lines now. 

14 MR. PARKER: Right. 

15 MEMBER ROSENSTOCK: So this is from 

16 March. We don't have the lines for the August 

17 paper yet. 

18 MS. COUGHLIN: The five things in 

19 there are TSLs, not ELs. So we'll get into 

20 that. 

21 MEMBER ROSENSTOCK: Whatever the 

22 thing is, there might be five or six or seven 
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1 there. There's only five here. 

2 MS. COUGHLIN: They're not the same 

3 thing. They're not the same thing. 

4 MEMBER DeLASKI: Keep in mind TSL 

5 can gather together various CSLs. 

6 MEMBER ROSENSTOCK: I know, but my 

7 point was that those vertical lines might have 

8 shifted based on this document now. 

9 MS. COUGHLIN: I don't think they 

10 have shifted significantly. Yes. I think 

11 that engineering data has been released, and I 

12 don't think that they have moved around that 

13 -- they may have moved a little bit but not a 

14 lot. 

15 The inputs that generated this plot 

16 were updated, new materials, prices, et 

17 cetera, et cetera. So that this cloud of 

18 points I think has moved around a little bit. 

19 And then the lines would be shifted to meet 

20 whatever engineering criteria are logically 

21 consistent with the new distribution of 

22 points. Overall it's the same basic setup. 
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1 MR. PARKER: That's why the lines 

2 moved, because engineering criteria suggested 

3 a different -- 

4 MS. COUGHLIN: Well, for example, I 

5 mean, you know, you have these different 

6 designs that appear on the plot at a certain 

7 place. So there's a -- well, whatever. 

8 MR. PARKER: Right. 

9 MR. COULTER: Katie, this is Greg 

10 Coulter from Prolec GE again. 

11 I understand the generation of all 

12 of those dots. What I don't understand is 

13 when everything is finished for each CSL 

14 level, why you're not just choosing one dot 

15 and making all the analysis off of one dot 

16 inside that CSL. That's the part I'm having 

17 trouble with. 

18 MS. COUGHLIN: Because, first of 

19 all, you know, we don't have infinite 

20 precision in this plot. So one thing that we 

21 do is in the purchase prices that are produced 

22 by the -- this is the OPS output. 
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1 Without the LCC, we add a kind of a 

2 random 15 percent to the purchase price. It's 

3 similar to the band of equivalence idea. So 

4 you create a sort of fuzzy band at the bottom 

5 of that curve because it's not possible for 

6 the engineering to predict the purchase prices 

7 with that level of accuracy. 

8 And then the second thing is that, 

9 again, we do have some part of the market that 

10 does its own independent evaluation of what it 

11 wants to buy. 

12 So to allow that to be represented 

13 within the LCC, we need to include -- again, 

14 this is really a three-dimensional plot with 

15 the load loss and no-load loss rates that are 

16 correlated with the A/B values. So we allow 

17 the possibility of purchasers who use those 

18 criteria to choose something other than the 

19 cheapest thing at that CSL. 

20 MR. PARKER: Again, please mute the 

21 phones if you're on the phone. Please mute 

22 the phones. Thank you. 
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1 MR. COULTER: The issue is in the 

2 end now, as you try to make that fuzzy, what 

3 you're trying to do is put sensitivity before 

4 you have the data to do sensitivity analysis. 

5 What you ought to do is pick the best point 

6 in there. And then once chosen, the 

7 sensitivity analysis -- 

8 MR. PARKER: I guess what they're 

9 saying is -- 

10 MS. COUGHLIN: I disagree that that 

11 is analytically sound. I mean, what you have, 

12 in reality, is a lot of variability. And so 

13 the analysis should represent that variability 

14 as a fundamental component of the real world. 

15 So it's -- 

16 MR. PARKER: But in terms of a 

17 decision, it's hard to make a clear decision 

18 with cloudy data, even if the reality is that 

19 you have a cloud. 

20 So I guess the point is, you know, 

21 I think what Greg is saying is that if you 

22 look at the southeast line, that would be the 
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1 most efficient line. 

2 MS. COUGHLIN: Let's see. Let's go 

3 back to this one. Can we go back? Okay. So, 

4 again, these blue dots are what are being 

5 selected in the base case. 

6 And it's true. I could do the 

7 entire LCC with the single lowest value, but I 

8 don't think a lot of stakeholders would accept 

9 that as a realistic picture of the way the 

10 world works. 

11 So you guys can discuss among 

12 yourselves if you wish to go in between those 

13 two, but in these analyses, we have been doing 

14 Monte Carlo-type simulations for a long time 

15 to represent all of these sources of 

16 variability. And that is what we have applied 

17 here. 

18 MR. COULTER: Greg Coulter from GE. 

19 You know, obviously we are a 

20 manufacturer. We do this same thing. And we 

21 do it at one point because, you know, in the 

22 end -- pick whatever your best efficiency, 
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1 best unit is for that efficiency level. That 

2 is all we care about. We don't care about all 

3 of those other points, -- 

4 MS. COUGHLIN: Right. 

5 MR. COULTER: -- which only raises 

6 price the best I can tell. I mean, all you 

7 are doing is picking some -- you're putting 

8 noise in the equation. We pick the best 

9 design, whatever it is. 

10 And this is why, you know, we take 

11 all of your data and we're running through our 

12 own analysis to see, do we care? Right? 

13 Don't we see enough difference that it makes 

14 any -- 

15 MS. COUGHLIN: Okay. So -- 

16 MR. COULTER: Here's where we can't 

17 get correlation because we didn't on the -- I 

18 wasn't here at the earlier meeting. So I 

19 apologize for that, you know, the one you had 

20 in April. 

21 I mean, we aren't going to 

22 understand this, what is happening. But it 
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1 appears to me you're putting noise in the 

2 equation too soon. Hey, it is an absolute 

3 design. You want the lowest-cost design that 

4 meets that efficiency. You don't care about 

5 any other design in there, not one. 

6 MS. COUGHLIN: But your situation 

7 is -- 

8 MR. COULTER: The data, but you 

9 don't need to use it in this analysis. 

10 MS. COUGHLIN: But we are trying to 

11 model -- I mean, when you do that, you do that 

12 for a single client, right? We have to model 

13 the entire population of clients in all 

14 possible installation conditions. 

15 MR. COULTER: No, no. 

16 MS. COUGHLIN: So it's a -- 

17 MR. COULTER: No. I'm not doing it 

18 for a single client. I'm doing that because I 

19 have to meet DOE minimum efficiency for every 

20 client, 100 percent of everybody. So I'm 

21 using that for everybody. And it's the same 

22 point. 
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1 MR. PARKER: Okay. A note has been 

2 passed to me that Brian on the phone would 

3 like to comment. Please, Brian, go ahead. 

4 MR. KAJA: Yes. This is Brian Kaja 

5 with GE Energy. 

6 I want to highlight one thing about 

7 this plot and the plot where you showed which 

8 core steel was specific to the dots. I think 

9 when people look at this plot, they see a 

10 trend. 

11 But you have to look closely at 

12 core steel. And part of NEMA's -- yes, 

13 they're the yellow dots, which is 

14 representative of the steel that we have most 

15 readily available. It's very touchy to a 

16 small increase. And it's not following a 

17 narrow band of variance, like the others. 

18 So I do think that, Katie, your 

19 presentation is correct to show, you know, 

20 there's a lot of design that could go up and 

21 down for M-3 with just a small change; 

22 whereas, if you're with a ZDMH, you're 
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1 following a narrow increase. 

2 So, even though Greg's comments are 

3 correct, I think when I ran support, this 

4 analysis, there are small things that occur 

5 that give you a big variance. And one of 

6 those is that you don't have every single size 

7 of core steel available or every single wire 

8 size available. So you just aren't an open 

9 design. 

10 So when you go two slides forward 

11 and you remove the color of what is M-3 or M-2 

12 and it's just -- or the one before that. And 

13 now you aren't paying attention to is this 

14 M-3, is it M-2, is it ZDMH? And that's 

15 something that needs to be noted. 

16 This represents like you have every 

17 single steel, every single wire size available 

18 at any given time. And we do not have that 

19 available as a manufacturer. We have to work 

20 with standard sizes. And so I just think that 

21 needs to be noted. 

22 MR. PARKER: Okay. So I did want 
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1 to just -- first, I guess does that mean that 

2 -- are you disagreeing with Greg or is this a 

3 separate point? 

4 MR. KAJA: It's a little bit -- 

5 MR. PARKER: GE debate here? 

6 MR. KAJA: It's disagreeing from 

7 the point that when you do a small increase on 

8 a design rating, you can get a lot of variance 

9 because you have to jump to a non-standard 

10 size of wire because you don't have every 

11 single size available. So you do get great 

12 jumps, like the plot is showing. 

13 It doesn't follow this trend. It's 

14 like, you know, we can all see the trend line 

15 in there. It's more of a blob. And also if 

16 you focus on M-3, that's what I just want to 

17 highlight. 

18 MR. PARKER: Okay. 

19 MS. COUGHLIN: It's the yellow, I 

20 guess the yellow, dots. 

21 MR. KAJA: Yes. That's like if you 

22 put a trend line for the yellow dots, that 
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1 would be a much steeper line. 

2 MR. PARKER: Let the record reflect 

3 that I have asked our consultants to make the 

4 dots in the legend larger so that you can 

5 actually tell -- 

6 (Laughter.) 

7 MR. PARKER: -- what color 

8 corresponds to what design line. I've been 

9 promised that that will happen, but I haven't 

10 seen it yet. 

11 MS. COUGHLIN: So if I could just 

12 summarize, it sounds like the request is -- 

13 and, again, this is actually part of the 

14 engineering analysis. But what you want is to 

15 screen out some of these designs because you 

16 don't think they would ever actually be part 

17 of the manufacturer's sort of options. Is 

18 that what this is coming down to? 

19 MR. BERMAN: Let me try and get -- 

20 MR. PARKER: Okay. 

21 MR. BERMAN: -- an easier way to do 

22 it. 
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1 MR. PARKER: Name and affiliation. 

2 MR. BERMAN: Robert Berman, Berman 

3 Economics. 

4 I think what I am hearing Greg say 

5 and I'm thinking an easier way to do this is 

6 the variation comes in the designs narrowed 

7 down to one point at the bottom on each one. 

8 What could happen is that the cost 

9 because of material cost changes and so forth 

10 or price changes can cause some variation 

11 ultimately in that. But the variation in that 

12 is going to be a uniform up and down of the 

13 curve. 

14 So if you have a single line at the 

15 bottom, if you will, or a single point for 

16 each CSL, you can have that shift up or shift 

17 down within a band. You always want to take 

18 the lowest line. 

19 It can shift up. It could be 

20 anywhere in that band. But when it shifts up, 

21 you don't have one point shifting up in one 

22 CSL and another point shifting up in another 
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1 CSL. You still have the same relationships. 

2 It's just the line itself is shifting up and 

3 down so that the increment between the CSLs, 

4 between the costs ought to be the same. 

5 MR. PARKER: As I understand it, 

6 the argument is that actual experiment will 

7 sort of randomly fluctuate around the optimal 

8 line on the southeast corner -- 

9 MR. BERMAN: But not differently 

10 for each design in each CSL. In other words, 

11 if costs are going to be a bit higher, then 

12 all the points, all the minimum points move 

13 up. So the difference between the minimum 

14 points may always be the same. 

15 And I hate to say it. Greg is 

16 correct. 

17 (Laughter.) 

18 MR. BERMAN: It pains me to say 

19 that. Greg is correct when he says that you 

20 only want to base it on the minimum points. 

21 And then if you want to show variations in the 

22 results in terms of what absolute cost levels 
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1 may be or what absolute price levels might be, 

2 that's an after the fact. 

3 MR. PARKER: Okay. Got it. Got 

4 it. Brian, did you want to comment on that? 

5 No? 

6 MR. KAJA: I do. This is Brian 

7 with GE Energy. I do want to make one comment 

8 on that. 

9 That is correct to say if you can 

10 optimize every single parameter of a design, 

11 but it's easy to see the blue dots, which is 

12 ZDMH. And as you get higher efficiency, all 

13 of a sudden, the range of those blue dots 

14 spread out. And that is happening on an 

15 earlier point for M-3. But everyone can kind 

16 of see the blue dots easier. 

17 So where it happens for M-3, which 

18 is the main steel that we have available, the 

19 designs are very touchy to sudden increases. 

20 So I don't think it's exactly correct to 

21 consider the minimum dot at any point as 

22 obtainable. 
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1 That's just my -- that's what I 

2 found when I did runs. And I think the blue 

3 dots sort of demonstrate that. As you get 

4 higher, the steel loses. I just wanted to 

5 make a note on that. 

6 MR. PARKER: Thank you. Brian. 

7 Tom Eckman? 

8 MEMBER ECKMAN: Tom Eckman, Power 

9 Council. 

10 Yes. I think it seems to me that 

11 given the -- it's unlikely that the minimum 

12 dot in each CSL, EL is going to be stable with 

13 respect to the next level up or next level 

14 down because the design that is required to 

15 get there has a different mix of steel buy or 

16 whatever. 

17 And so, as prices change for those 

18 particular pieces of commodity, the 

19 relationship amongst the CSLs or ELs in this 

20 case is going to variety. The incremental 

21 cost is going to vary because you're going to 

22 have a different mix of the design to get to 
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1 that particular level of efficiency. So 

2 pricing impacts are going to be different 

3 depending upon -- you can see as you go out 

4 there the scatter gets different because 

5 you've got different product mix, different 

6 components of that product. 

7 MR. PARKER: They should be picked 

8 up, though, in your sensitivity analysis for 

9 prices from materials prices, right? 

10 MEMBER ECKMAN: If the 

11 relationship, the incremental cost 

12 differential between them is going to be 

13 impacted by the design of that particular -- 

14 required to get that particular level of 

15 efficiency and maybe differentially impacted 

16 by a difference in prices of wire, steel, or 

17 what have you. 

18 So I'm just saying I don't think 

19 it's a stable relationship, which is why 

20 you've got the scatter here if there are 

21 different designs that get to the same level 

22 of efficiency. You've got different prices 
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1 impacting that design. 

2 MR. PARKER: Okay. So I think 

3 we're going to have to move on. I think 

4 basically what we're saying is the issue for 

5 this group is do we want to consider a 

6 scenario, not necessarily the only scenario 

7 but do we want to explore a scenario where we 

8 are using essentially the southeast dot at 

9 each design level. Southwest. Sorry. 

10 MS. COUGHLIN: You need the whole 

11 space because you need to consider efficiency 

12 levels and you don't know a priori what 

13 efficiency levels are going to be. So you 

14 can't eliminate the designs because they use 

15 it to go in and restructure the LCC every time 

16 you change the efficiency level. 

17 So, really, I think the question 

18 is, you know, if I took this plot and, instead 

19 of having those slight, tilted price curves, I 

20 made steps so that the price was the same and 

21 we don't care about the details of the design, 

22 would that have any impact on the output 
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1 because that is equivalent to what you are 

2 suggesting, that there is just one price? And 

3 my claim is no, that would have no impact. 

4 So we can do something that tries 

5 to represent this, but, again, I don't think 

6 -- what we are trying to do here is that there 

7 is a lot of variability in the details of when 

8 a particular purchaser makes a purchase in the 

9 price that they pay. 

10 And what we're trying to capture 

11 with all the designs is many, many ways of 

12 meeting a standard level with tweaking a lot 

13 of this and that. 

14 Now, the engineering analysis uses 

15 a finite amount of information. But what we 

16 rely on is that it gives you a correct kind of 

17 ballpark figure for a design that meets the 

18 standard level and some measure of the range 

19 of variation around those prices. 

20 MR. PARKER: Okay. Wait a minute, 

21 Greg. There were some other people who I cut 

22 off. So let me get back. Wes, did you have a 
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1 comment? 

2 MEMBER PATTERSON: Can we go back 

3 to the slide before this? I think everybody 

4 should understand when we look at those blue 

5 dots, those dots were created by running an 

6 optimized design for a certain A/B ratio. 

7 Okay? 

8 So the reason why those dots go up 

9 and down for the exact same efficiency level. 

10 It's because they have different ratios of 

11 A/B factors when they were optimized. It 

12 doesn't reflect anything related to the cost 

13 of the unit to meet that efficiency level. It 

14 had to do with meeting an optimized design for 

15 an A/B ratio. 

16 MS. COUGHLIN: Right. That's 

17 right. So the A/B value, as I was saying, 

18 there's a whole series of designs that have 

19 the same efficiency under test procedure 

20 conditions. And that's what that variability 

21 represents, yes. 

22 MEMBER PATTERSON: But that does 
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1 not reflect trying to meet a design for a 

2 specific efficiency level. It has nothing at 

3 all to do with it. It's an apple and an 

4 orange. That's why we have that scatter in 

5 the diagram. 

6 MR. PARKER: Okay. 

7 MR. KAJA: This is Brian Kaja, GE 

8 Energy. 

9 The only error in that comment is 

10 that you do not have every single size 

11 available to go from point to point in the 

12 real world. 

13 MEMBER GREESON: Rob Greeson, 

14 Federal Pacific Transformer. 

15 MR. PARKER: Okay. 

16 MEMBER GREESON: I would just like 

17 to comment on the material variability. We 

18 are restricted in what sizes we have 

19 available: Strip widths, conductor sizes, and 

20 that sort of thing. 

21 It is true that that does introduce 

22 some variability; however, not the kind of 
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1 variability we are talking about here, which 

2 is 50 percent. I'm looking at these scatters, 

3 3,200 down to 2,200. Those material 

4 limitations in my best approximation would be 

5 no more than five percent, six, seven percent 

6 unless it's just a massive, you know, you have 

7 to go from a very, very small wire to a huge 

8 wire just because you can't get the small 

9 wire. 

10 I don't see material limitations 

11 causing that kind of variation. And that's 

12 where I would just make a finer point or a 

13 comment. Thank you. 

14 MR. PARKER: Okay. 

15 MEMBER PATTERSON: One other 

16 comment on the material variation. The 

17 thickness of the core steel is in defined 

18 increments as set by the core steel 

19 manufacturers. The width of the core steel is 

20 dependent on the manufacturing process you 

21 deploy. And you can make it any number you 

22 want. 
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1 When it comes to the conductor 

2 dimension, some folks have the capability to 

3 draw their own conductor at any essentially 

4 infinitely variable, down to one mil 

5 increments, where others because of their 

6 processes find it better to optimize their 

7 building on discrete increments. 

8 So my point is that infinite 

9 variability of the dimensions is possible in 

10 optimization. I don't know if the OPS 

11 software used thick sets or infinitely 

12 variable dimensions. But the only dimension 

13 that is really fixed is the thickness of the 

14 steel. 

15 MR. COFFEY: This is Brian Coffey, 

16 Navigant. I am hearing two over-arching 

17 concerns. They are unrelated. The first is 

18 whether we are using infinitely variable 

19 conductor gauges. The answer is no. All of 

20 these designs reflected use commonly available 

21 wire gauges that manufacturers would tend to 

22 have in stock. 
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1 Sure, it's true that manufacturers 

2 for bulk purchasing reasons may tend to stock 

3 more of one or the other, but these are all 

4 done using common standardized wire gauges. 

5 The second issue is that people are 

6 saying, well, what is the reason for ever 

7 purchasing a design that doesn't lie on the 

8 southeast frontier of that curve right there? 

9 The reason for that is that there is a third 

10 dimension to this plot that is maybe subtle. 

11 And that is that if you were to recast this 

12 plot using efficiency as measured at a 

13 different load, all of those points would 

14 shift. 

15 They're designed with different A's 

16 and B's in mind. And that is reflective of 

17 the fact that different purchasers, different 

18 utilities might specify different A's and B's. 

19 Now, we've just finished a 

20 discussion of whether or not a large 

21 percentage of customers are evaluating. If 

22 nobody is evaluating, then that point is moot. 
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1 And then everybody purchases at the front 

2 tier of the curve. 

3 But if everyone is evaluating, it's 

4 possible that they may use an A and B that 

5 implies a loading of other than 50 percent. 

6 Nonetheless, I think that this is set or has 

7 the possibility of being addressed in the LCC 

8 as we revisit the topic of what fraction of 

9 customers evaluate. I don't -- 

10 MR. PARKER: So if a section goes 

11 to zero, approaches that, this goes to -- do 

12 you concur with that, that this would be -- 

13 MS. COUGHLIN: Well, again, there's 

14 an uncertainty band on the price. I think 

15 there is another issue of it's possible that 

16 some of the designs that lie close to that 

17 boundary are not considered to be realistic 

18 alternates to the cheapest, the one that 

19 happens to be cheapest in this version of the 

20 engineering analysis. So that's something we 

21 would need to review with the engineering. 

22 MR. PARKER: Okay. So, Brian, 
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1 would it be feasible to run an analysis 

2 looking at the southeast boundary? 

3 MS. COUGHLIN: Well, no. You have 

4 to -- again, the analysis -- southwest. The 

5 analysis -- 

6 MR. PARKER: East/west. 

7 MS. COUGHLIN: The analysis is to 

8 look at the -- the analysis essentially for 

9 each installation does all the standard 

10 levels. 

11 MR. PARKER: Southwest is you are 

12 just meeting the standard. 

13 MS. COUGHLIN: Yes. 

14 MR. PARKER: Right. Sorry. 

15 MS. COUGHLIN: But we can eliminate 

16 some designs. Okay. It is straightforward to 

17 go through the design table and take some of 

18 them out if we can get a systematic statement 

19 of what the criteria for eliminating those 

20 designs are. That's a straightforward thing 

21 to do. 

22 MR. PARKER: Okay. 
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1 MS. COUGHLIN: I don't want to 

2 anticipate what it would end up looking like 

3 on this plot because, as Brian said and people 

4 have said, there are, really, three dimensions 

5 in this design picture, but if you want to 

6 provide some criteria, whether it's core 

7 materials or some other aspect of the design 

8 that you want to say, "Screen everything out 

9 that does this," then we can do that. 

10 MR. PARKER: Well, I guess what I 

11 heard Brian was saying is if you assume zero 

12 evaluators, that would have the impact of -- 

13 MS. COUGHLIN: No. Again, we have 

14 to consider the entire space in one LCC run. 

15 So the evaluator issue is a side thing. That 

16 doesn't really -- 

17 MR. COFFEY: So this introduced 

18 uncertainty. That's entirely separate from 

19 what I'm talking about. 

20 MR. PARKER: Okay. I got you. All 

21 right. Thank you. 

22 Any other comments? 
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1 (No response.) 

2 MR. PARKER: Go ahead. 

3 MS. COUGHLIN: It is complicated. 

4 So, anyway, after all of the selection of 

5 designs and the relative numbers -- okay. One 

6 thing I want to say -- and I encourage people 

7 to look at the data. 

8 There are some design lines where 

9 these curves have a fairly flat bottom 

10 boundary. And in those cases, it tends to be 

11 very -- it is very insensitive to a lot of the 

12 stuff that we have been discussing. 

13 So one of the things that we can do 

14 is to focus our attention on those design 

15 lines that do have much more sensitivity in 

16 the price-efficiency relationship. 

17 So these, again, are the -- so, 

18 again, after all of this, we go through all of 

19 this, so when you think of -- you know, we 

20 have picked an installation for our 

21 transformer, we have a load simulation that 

22 creates variability from one transformer to 
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1 another, we have variability on the lifetime, 

2 we have variability on the discount rate, so, 

3 in addition to the variability of the initial 

4 design, we have a lot of variability in the 

5 actual operating conditions over the lifetime 

6 of the transformer. 

7 So what you end up with is at each 

8 efficiency level a distribution of possible 

9 LCC results. And so this is a representation 

10 of those distributions. 

11 Again, I just lifted this slide out 

12 of the April presentation. Design line 1 is 

13 on the left, and design line 7, which is a 

14 dry-type, is on the right, I think low voltage 

15 dry-type. 

16 And then these efficiency levels -- 

17 so what we have is the -- it doesn't seem to 

18 be showing up. There should be a dot in the 

19 center that gives you the median and then a 

20 bar that gives you the average. 

21 The boxes represent the 25 percent, 

22 75 percent ranges of the distribution. And 
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1 then the bars at the far ends are the 5 

2 percent, 95 percent. 

3 So 90 percent of all of the LCC 

4 results are within those external bars. And 

5 then when you shrink down to the box, 50 

6 percent are centered within the box. And then 

7 you have the median and average. And this 

8 type of behavior is more or less what is 

9 expected. 

10 As you go up in efficiency, you 

11 know, there is a balance of energy savings and 

12 the cost savings associated with those and 

13 then additional purchase prices. So the net 

14 of those two gives you the LCC savings, tends 

15 to go up for some standard levels. And then 

16 it starts to decrease. And eventually you hit 

17 an efficiency level that is not 

18 cost-effective. 

19 And so in the current posting, the 

20 August 23rd, we have posted some point data 

21 from the updated LCC results. We have not yet 

22 posted the full distribution results, but 
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1 those can be made available. 

2 MR. PARKER: So you're saying, 

3 then, that for CSL, CSL-5 makes sense for more 

4 than 75 percent of the purchasers, life cycle 

5 cost savings? 

6 MS. COUGHLIN: Positive LCC savings 

7 in the simulation. And then, you know, you 

8 look at sensitivities and that sort of thing. 

9 And it's a challenge to think about how to 

10 represent the effective sensitivities in a way 

11 that -- 

12 MR. PARKER: Right. But those 

13 lines don't reflect sensitivities. Those just 

14 reflect the range of -- 

15 MS. COUGHLIN: The actual 

16 distribution of results under all the 

17 variables that are -- 

18 MR. PARKER: Right. 

19 MS. COUGHLIN: -- treated as 

20 random. 

21 MR. PARKER: Right. 

22 MS. COUGHLIN: Yes. 
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1 MR. PARKER: But with 

2 sensitivities, you have to have a completely 

3 different chart, in other words, run with -- 

4 MS. COUGHLIN: Yes. Essentially a 

5 sensitivity is going to move the whole 

6 distribution in a particular way. 

7 MR. PARKER: Right. Right. 

8 MS. COUGHLIN: And it may move it 

9 or it may widen it or it may narrow it or it 

10 can have different -- 

11 MR. PARKER: Right. 

12 MEMBER PATTERSON: Katie, the life 

13 of this life cycle cost was like 32 years. 

14 MS. COUGHLIN: I think that's the 

15 average, yes. And then there's, again, a 

16 distribution around it. 

17 MEMBER PATTERSON: I think that's 

18 also another issue that has been raised is the 

19 term that is used for this calculation, the 

20 32-year window. 

21 MS. COUGHLIN: Oh, okay. Let's 

22 see. So that's the LCC. And then there's the 
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1 national impacts analysis. And one of the 

2 things -- so when we do the LCC, we produce 

3 the numbers for each design line individually 

4 and for each of the efficiency levels. 

5 But to move to the national impacts 

6 analysis, this is where you have to combine 

7 the different design lines according to the 

8 market share that you think that they have. 

9 And the standard procedure is to 

10 produce national impacts numbers by equipment 

11 class. So in this case, we would do the 

12 national impacts for low-voltage dry-type, 

13 medium-voltage dry-type, and liquid-immersed. 

14 And, again, that is sort of an 

15 algebraic combination of the individual 

16 results. So we can modify that if that would 

17 turn out to be useful. 

18 MEMBER DeLASKI: Katie, so it's by 

19 each of the 14 equipment classes that the NIA 

20 -- 

21 MS. COUGHLIN: To do that? No. 

22 The design lines, there's terminology. I 
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1 believe we use equipment class as a very broad 

2 distinction between dry-type, low-voltage; 

3 dry-type, medium-voltage; and liquid-immersed. 

4 And then there are product classes and design 

5 lines. 

6 MEMBER ROSENSTOCK: Steve 

7 Rosenstock, EEI. 

8 For the equipment class for the 

9 liquid-filled, equipment class 1 is the 

10 single-phase. And class 2 is a three-phase, 

11 correct? That didn't change. 

12 MEMBER DeLASKI: Right. 

13 MS. COUGHLIN: Yes. I mean, I 

14 don't want to make a mistake on the 

15 terminology, but yes. We're -- 

16 MEMBER DeLASKI: There are ten 

17 equipment classes. 

18 MS. COUGHLIN: Ten equipment 

19 classes. 

20 MEMBER DeLASKI: Right. 

21 MS. COUGHLIN: But currently we're 

22 producing the national impacts for the 
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1 groupings, our liquid-immersed; 

2 medium-voltage, dry-type; and low-voltage, 

3 dry-type. 

4 MEMBER DeLASKI: Right. So right 

5 now we have just two equipment classes, Steve. 

6 Am I correct? 

7 MS. COUGHLIN: For this outfit, 

8 yes. 

9 MEMBER DeLASKI: For this, for the 

10 liquid-immersed. 

11 MS. COUGHLIN: Yes. I think the 

12 technical issue there is whether there is -- 

13 the degree to which equipment, these more 

14 precise equipment heads, are substitutable for 

15 one another. If they are, they have to be 

16 treated at the national level as one, as one 

17 category, so that the results at the end can 

18 simply be added to get the full standard 

19 impacts. 

20 So another thing that we have to 

21 add -- and this was discussed a bit yesterday 

22 -- is we have -- you know, the design lines 
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1 are particular capacities. And then we have 

2 to extrapolate the results to capacities that 

3 haven't been studied in detail. 

4 We have used the .75 scaling law. 

5 So what that ends up is that ends up with some 

6 problems because if you think of, for example, 

7 I've got two capacities where I've done a 

8 detailed calculation, if I take one capacity 

9 and rescale it using that scaling law, I get a 

10 different answer than what I did from the 

11 detailed calculation. 

12 So the way we handled the situation 

13 is we just essentially interpolate between the 

14 points that we have. So we assume that there 

15 is some scaling law and the exponent is close 

16 to .75, but we actually used the data, the 

17 engineering data, to determine what that 

18 exponent is. 

19 And so that essentially provides 

20 you with a -- if you look at the -- this is 

21 for the medium-voltage, dry-type, one of the 

22 design lines. These again are the efficiency 
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1 levels now as a function of kVA. 

2 So the dashed lines are where we 

3 have the representative units. So we have an 

4 interpolation so that you get a sort of smooth 

5 curve when you go across those representative 

6 units. And then when we have to extrapolate 

7 outside the range for which we have actual 

8 units modeled, we use the .75 scaling law. So 

9 this is slightly different from what was done 

10 in the preliminary analysis. 

11 So essentially what we do, then, 

12 for the national impacts analysis -- 

13 MEMBER PATTERSON: Just a point of 

14 -- go back to that one. If I understood -- 

15 MR. PARKER: Wes Patterson. 

16 MEMBER PATTERSON: Wes Patterson 

17 with ABB. 

18 If I'm between 300 kVA and 2,000 

19 kVA, you did a linear interpolation of the 

20 percent efficiency. 

21 MS. COUGHLIN: I did an 

22 interpolation that takes this point and this 
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1 point and assumes that there is a scaling law 

2 that matches them up that calculates the 

3 exponent in that scaling law from the data. 

4 MEMBER PATTERSON: You used the 

5 scaling law between the two points also and 

6 not a linear interpolation of the -- 

7 MS. COUGHLIN: That's right. 

8 That's right. 

9 MEMBER PATTERSON: -- efficiency? 

10 MS. COUGHLIN: That's right. 

11 MEMBER PATTERSON: Okay. 

12 MS. COUGHLIN: So to do the 

13 national -- 

14 MR. RIVEST: Katie, to tie this 

15 back to our conversation from yesterday, if we 

16 can come back to that slide? So yesterday 

17 what we were talking about was whether or not 

18 the representative units -- that those lines 

19 that you have coming down were the appropriate 

20 kVA ratings, for example, whether we should 

21 have more to make sure that we're anchoring 

22 that fit into some sort of real world data. 
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1 MS. COUGHLIN: Right. 

2 MEMBER GREESON: Rob Greeson, 

3 Federal Pacific. 

4 Just a real quick observation. And 

5 I agree with the way you interpolated between 

6 the two. I've talked about this a little bit 

7 before with different people. 

8 From what I have seen across the 

9 kVA range with the existing DOE levels, 

10 there's what I call kind of a skew to the 

11 curve. And I think it basically came from 

12 this point, 75 scaling factor. 

13 Certain ones of the trends, certain 

14 of the transformer kVAs are much more 

15 difficult to achieve at levels that were 

16 legislated than others. And I believe it's 

17 because, for example, in this one, we used a 

18 .75 scaling factor to go all the way down to 

19 15 kVA from a 300. 

20 What begins to happen on these 

21 smaller kVAs, particularly with higher voltage 

22 and the medium-voltage dry-type is you begin 
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1 to run into a lot of limitations on materials. 

2 One thing that DOE is probably not 

3 aware of is for a disc-wound construction for 

4 a medium-voltage, dry, when you get down to 

5 the smaller kVAs, we're not allowed to use any 

6 kind of round wire. OPS probably used 

7 whatever wire was available to them. 

8 When you restrict that particular 

9 parameter, about the smallest rectangle wire 

10 we can use is about .4 by .2. And what 

11 happens is the wire becomes extremely 

12 expensive to wrap, and it becomes extremely 

13 expensive to buy because it's so small. And 

14 you get these crazy points on the ends. And 

15 it affects the way that you have arrived at 

16 those efficiencies. 

17 And one of the problems that I've 

18 got with this whole discussion is if we try to 

19 move these curves up, it is going to work a 

20 lot better for some. And on others, it may 

21 make it near impossible. 

22 In other words, you may break the 
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1 ends of the curve. And we're going to have to 

2 figure out a way not to do that. And I'm not 

3 exactly sure how we're going to do that. But 

4 we may have to -- after we propose some sort 

5 -- and if it gets to the point where you 

6 propose an elevation, we need to check the 

7 endpoints. 

8 Any other comments from design 

9 folks would be welcome, but -- 

10 MR. PARKER: That seems like an 

11 important -- thoughts around the table? 

12 Reactions? People concur? Dissent? 

13 MEMBER PATTERSON: Wes Patterson 

14 with ABB. 

15 I think this goes back to the issue 

16 of how far can you extend the scaling rule. 

17 The scaling rule is based on a pure 

18 theoretical and doesn't reflect what actually 

19 occurs in practice of building transformers. 

20 MR. PARKER: I guess the question 

21 is, does it matter of the reason that I don't 

22 have data and had to use the scaling rule to 
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1 begin with is -- 

2 MEMBER PATTERSON: Rob's point is 

3 is that we could inadvertently set an 

4 efficiency level on this chart for the 15 kVA, 

5 150 BIL unit that is unattainable. It cannot 

6 be possibly built. 

7 MS. COUGHLIN: Right. 

8 MEMBER PATTERSON: And this is a 

9 result of trying to scale from a 300 kVA 

10 design down to 15 kVA using .75 exponent 

11 because, in reality, that .75 exponent is 

12 probably closer to about .9 for that dry-type 

13 transformer. 

14 MR. PARKER: So if the reason you 

15 don't have the data, though, because it's 

16 outside your range -- 

17 MS. COUGHLIN: That's an 

18 engineering question. 

19 MR. PARKER: And this is an 

20 engineering question -- 

21 MS. COUGHLIN: I defer to Brian. 

22 MR. PARKER: -- for Brian. If the 
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1 reason you don't have the data is because it 

2 is outside your range, does that mean that it 

3 is not something that matters because it is 

4 not -- it sounds like, Rob, you're saying it 

5 does matter, even though you were presumably 

6 talked to when you had that information in the 

7 manufacturing interviews? 

8 MEMBER GREESON: Rob Greeson, 

9 Federal Pacific. 

10 We had some data that we submitted 

11 to DOE. It showed some interesting plots on 

12 the lower kVAs, for example, how they just 

13 sort of went crazy. And this has to do with 

14 where we're constricted. A lot of our stuff 

15 has to be UL listed. We can't use round wires 

16 on a -- 

17 MR. PARKER: I guess what I'm 

18 trying to get at is if the reason for 

19 extrapolation is a lack of data, I'm wondering 

20 why there is a lack of data if the 

21 manufacturers were -- 

22 MEMBER GREESON: OPS generated. 
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1 Wouldn't they save several thousand designs 

2 per design line and for limited resources with 

3 most manufacturers, it's not possible for us 

4 to provide some of this design work -- 

5 MR. PARKER: Okay. 

6 MEMBER GREESON: -- that's 

7 required. And I'm going to comment a little 

8 bit more about that later in the day. 

9 MR. PARKER: Okay. Thank you. 

10 MR. RIVEST: Mike Rivest. 

11 So certainly as a general 

12 statement, I think we need to be exploring 

13 these end effects and making sure that our 

14 scaling relationships are accurate. 

15 And also in setting the standard, 

16 one thing to think about is the sales volumes 

17 associated with some of these transformers. 

18 What percentage of your sales are in the 15 

19 kVA? 

20 MEMBER GREESON: Rob Greeson, 

21 Federal Pacific. 

22 Even if the sales volumes are low, 
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1 still people need -- 

2 MR. RIVEST: Oh, I wasn't saying 

3 that. I wasn't saying that so that -- I'm not 

4 saying it doesn't matter if we regulate them 

5 out of business. What I'm saying is it may 

6 not have a large impact on energy savings if 

7 they were given a break from the standard. 

8 MEMBER GREESON: Oh, right. I 

9 agree with that part of it. 

10 (Laughter.) 

11 MEMBER GREESON: Here's my thing. 

12 We the designers have to live with these 

13 efficiency levels. And Navigant has a pretty 

14 daunting task. I can't imagine being in your 

15 shoes to do all of this. 

16 My only point was we have to be 

17 extremely careful when we set those efficiency 

18 levels. And, granted, they may represent a 

19 small volume. We just have to be careful 

20 where we put those efficiency levels. We'll 

21 break it. 

22 MR. PARKER: Okay. So this is a 
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1 great point. And, look, this is a data-driven 

2 process, right? In the absence of data, they 

3 are going to do the best they can. But they 

4 only have the data that you give them. 

5 So the point is with regard to 

6 supplying data for Navigant and LBL to work 

7 with, it's the time to step forward. Okay? 

8 It's a great point, but you've got to follow 

9 it up with some data. 

10 We can keep it confidential, as Dan 

11 was discussing earlier. It doesn't have to 

12 be, the data doesn't have to be, shared with 

13 the group. It's got to be put into the 

14 Navigant computer, the LBL computer so that 

15 they can figure out how to adjust based on the 

16 actual data. Does that make sense? 

17 MS. COUGHLIN: Yes. I mean, the 

18 standard -- 

19 MR. PARKER: This is for a small 

20 subset of -- 

21 MS. COUGHLIN: I know the standard 

22 way to deal with this type of situation is to 
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1 do a subgroup analysis, where you isolate the 

2 problematic part of the market and put 

3 different modeling conditions. 

4 MR. PARKER: Right. 

5 MS. COUGHLIN: So we can certainly 

6 set that up. We'll have to talk about what 

7 the appropriate way to fit it into the rest of 

8 the picture is. 

9 MR. PARKER: And this is a generic 

10 issue, right? This goes to the point that Wes 

11 made yesterday about the vaulted network 

12 versus pole, right? If there are subgroups 

13 that you want, now is the time to get them on 

14 the table. Okay? Speak now or forever hold 

15 your peace. We don't want to be revisiting 

16 this in the third session. 

17 So you have between now and the 

18 second session to get any subgroups that you 

19 want to put forward. Okay? And let's 

20 stipulate that if they're not put forward by 

21 the next session, they are off the table. 

22 Okay? So please do your homework between now 
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1 and the next session to identify any gaps in 

2 the analysis, any subgroups that you want. 

3 Send it directly to me, to DOE, to 

4 Brian Coffey, and Mike Rivest at Navigant. I 

5 guess, Brian, you will be the point person for 

6 Navigant? Katie Coughlin, you have her 

7 information. Send it directly there. 

8 And we will disseminate to the -- 

9 no. We will not disseminate it to the group 

10 because you may be supplying proprietary data. 

11 If you are, please indicate what is 

12 proprietary. And we will caucus and think of 

13 the right way to get the generalized, 

14 sanitized results of what you're trying to put 

15 out there to the group to discuss and also to 

16 modify the analysis. But this is the time to 

17 do it now. 

18 Steve? 

19 MEMBER ROSENSTOCK: Steve 

20 Rosenstock, EEI. 

21 Along with groups of utilities, in 

22 terms of the analysis, we did send in 
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1 clarifying questions on Tuesday. Some of them 

2 have been answered. Others have not been 

3 answered. So I hope that we will be able to 

4 get some answers before the next meeting. 

5 MR. PARKER: Right. And I would 

6 like to try to work through those questions. 

7 Some of them I think go to these points, 

8 right? And so as soon as Katie is done, we 

9 can turn to those questions in a structured 

10 way, which I had in mind. But let's let her 

11 finish her speech. 

12 MS. COUGHLIN: Yes. I just -- 

13 MR. PARKER: Thank you. 

14 MS. COUGHLIN: So I guess part of 

15 this is to -- I mean, we're in somewhat of a 

16 circular process because we do the NIA. A lot 

17 of people want to see the NIA results when 

18 they are considering what type of standard 

19 level that they would support. The NIA 

20 results depend on what standard level you put 

21 into the picture. 

22 So essentially to generate the NIA, 
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1 it's actually -- it's a complicated accounting 

2 problem, but it's fairly straightforward. You 

3 have a market share for each of the equipment 

4 types. And you have the energy savings. And 

5 you project the market share forward. And you 

6 add up all the energy savings from each class. 

7 And you get total energy savings. 

8 You get the net benefit, which is the sum of 

9 the additional purchase price and operating 

10 cost savings. 

11 And then further downstream from 

12 that in the standard DOE process there, there 

13 are the calculations of emissions impacts. 

14 And there's now the social cost of carbon and 

15 all that stuff. 

16 All of that is sort of downstream 

17 of the definition of a set of trial standard 

18 levels. And so what you have in the document 

19 that was posted from August 23rd are the NIA 

20 results for a set of what we're calling draft 

21 TSLs. So to generate those results, we need 

22 to make some decisions about what efficiency 
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1 level would be prescribed for each design 

2 line. 

3 These are lifted out of that 

4 document. I've grouped -- the two top tables 

5 are the liquid-immersed and medium-voltage, 

6 dry-type. 

7 So essentially you have this matrix 

8 that you fill in. So we have the design line 

9 on the row. And then the columns are these 

10 definitions of draft TSLs. We have five of 

11 them in this particular addition of the 

12 document. And then the boxes they correspond 

13 to actually an efficiency level for each one 

14 of the design lines. 

15 So in some sense, part of the 

16 Committee's activity is going to be filling in 

17 these matrices with suggestions about what the 

18 efficiency might -- which efficiency level 

19 should be chosen for which design line. 

20 And then we can generate results 

21 based on the filling in those boxes. But 

22 obviously there is a very, very, very large 
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1 set of possible combinations. So some type of 

2 process for setting up these draft TSLs and 

3 then summarizing the output that you would 

4 like to see would be very helpful. 

5 MR. PARKER: So this is very 

6 important. So basically what I understand you 

7 are looking for, then, is you aren't looking 

8 for absolute numbers from this group that you 

9 want. You are looking for sort of design 

10 criteria or not design criteria but parameter 

11 criteria to be applied to use like lowest life 

12 cycle cost. 

13 MS. COUGHLIN: Yes. I mean, one 

14 way to fill in the boxes is to specify 

15 criteria. So we go in and fill in this matrix 

16 by taking the minimum LCC from every design 

17 line. That would be one way. 

18 Another way -- 

19 MR. PARKER: That could be column 

20 2. We have the base. Column 1 could be that 

21 or column 1 could be something else. 

22 MS. COUGHLIN: Right. You could do 
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1 one with an LCC. You could do another one 

2 with maximum energy savings. You could do 

3 another one that's just take out certain 

4 material from consideration and do it that 

5 way. So yes. 

6 MR. PARKER: Right. Do we have a 

7 slide that lists the criteria? Is everybody 

8 already familiar? Am I the only one that's 

9 not? 

10 MR. COFFEY: Examples were passed 

11 out. 

12 MR. PARKER: Passed out? 

13 MS. COUGHLIN: Yes, yes. 

14 MR. PARKER: On the thing. That's 

15 right. Okay. 

16 MS. COUGHLIN: So I guess my point 

17 is that I think the role of the analysts in 

18 this is to take that input from you and 

19 produce the results. And I just want to make 

20 sure that -- there is such a thing as too much 

21 information. 

22 So, you know, we don't want to 
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1 overburden people with every possible 

2 combination. So essentially it's in trying to 

3 sort of sort out the assignment of efficiency 

4 levels to design lines. We need that 

5 information to generate the national impacts 

6 results. And then once we have that, we can 

7 produce those results that you can compare for 

8 different scenarios. 

9 And just I think the last slide, 

10 this is just -- essentially these are the 

11 results that come out of the NIA. 

12 This is again a typical picture. 

13 Over time you have an increasing penetration 

14 of the more efficient units. And you get -- 

15 as the penetration increases, you get the 

16 operating cost savings. 

17 So that's what the blue bars are. 

18 And sort of on the debit side of the account, 

19 you have the increased equipment price. 

20 And the way that the analysis is 

21 sort of formal requirements of how the 

22 analysis is set up is that we do the 
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1 replacement accounting over one lifetime of 

2 the equipment, but then we add up the energy 

3 savings until the equipment that is purchased 

4 in this year is actually out of the stock in 

5 the end year. 

6 And this is just an accounting 

7 convention to look at the long-term impacts of 

8 the standard. So these are the types of 

9 things that you -- you know, when we do 

10 produce the NIA. 

11 And then we have these tables. 

12 This table is in the August 23rd document. 

13 Again, under these draft TSLs, we have our 

14 shipments estimates. This is the base case 

15 equipment cost. And then this is a debit. 

16 This means it's a cost of implementing the 

17 standard. 

18 The operating cost savings are done 

19 in some nominal dollars. And then we have the 

20 net savings is the sum of the equipment and 

21 operating cost at different discount rates, so 

22 three percent and seven percent. 
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1 And then these are the cumulative 

2 energy savings over the lifetime of the 

3 equipment. So that's the type of results that 

4 you can get. 

5 And then one can add many rows to 

6 this type of table. And whatever type of 

7 summary quantity might be considered useful we 

8 can put out. 

9 So that's all I have to say. 

10 MR. PARKER: Great. Thank you for 

11 that presentation. 

12 First, could you send a copy of 

13 your slides to everybody in the room? Is that 

14 something that you could do if we supply you 

15 -- 

16 MS. COUGHLIN: I'm not really sure. 

17 We need to discuss I guess whether we want to 

18 do websites or -- 

19 MR. PARKER: I think it would -- 

20 MS. COUGHLIN: We can certainly do 

21 something. 

22 MR. PARKER: Or just post it on the 
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1 website. 

2 MS. COUGHLIN: Yes. I mean, I 

3 don't know what the process is for sharing the 

4 information that comes up in the meeting. 

5 Once that's decided -- 

6 MR. PARKER: That would even be 

7 more transparent. 

8 MS. COUGHLIN: -- we will deal with 

9 it. 

10 MR. PARKER: This is all public. 

11 MS. COUGHLIN: Yes. 

12 MR. PARKER: Everything that is 

13 said here is public. So if you wouldn't mind 

14 just posting this on the website? Maybe what 

15 we could do with the website is just set up a 

16 thing for each meeting that would have a link 

17 they could click on or a box or something for 

18 each meeting so it would be categorized that 

19 way and there would be a record of what was 

20 presented at each meeting. 

21 So all of the exhibits and 

22 everything for each meeting will be posted on 
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1 the website so that anybody who was not at the 

2 meeting will be able to at least get what was 

3 done in writing. 

4 Great. So, as I understand it, 

5 then, what we need to do at this meeting 

6 before we conclude to make your analysis 

7 possible going forward is agree on criteria 

8 for -- they don't have to be five, right? 

9 MS. COUGHLIN: Yes. No. 

10 MR. PARKER: That's just an 

11 example? 

12 MS. COUGHLIN: You can add as many 

13 columns there as you want. 

14 MR. PARKER: Or fewer. 

15 MS. COUGHLIN: Yes. 

16 MR. PARKER: We could have fewer. 

17 There are some that are statutorily required. 

18 I think base case is one. Max tech I'm 

19 understanding from John is the other. So that 

20 would be five, right? 

21 One through four is basically for 

22 this group to decide. Once this group 
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1 decides, LBL is off and running to do their 

2 analysis on what would be the LCC for TSL. Is 

3 that right? 

4 MS. COUGHLIN: It just affects the 

5 NIA, the national -- 

6 MR. PARKER: Right. For the 

7 national impact assessment. 

8 So there are various -- I'm sorry. 

9 Go ahead. 

10 MS. COUGHLIN: Yes. There are 

11 other things that have come up over the last 

12 couple of days that may require modifications 

13 to the engineering and the LCC. So we would 

14 have to do all of that first. 

15 MR. PARKER: Right. 

16 MS. COUGHLIN: Then we can get to 

17 this stuff. 

18 MR. PARKER: Right. 

19 MS. COUGHLIN: Yes. 

20 MR. PARKER: Okay. 

21 MR. COULTER: This is Greg Coulter, 

22 Prolec GE. 
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1 I do have a question on where in 

2 this analysis various other things go, like in 

3 a national impact analysis. It would seem to 

4 me we would somehow have to put all of the 

5 costs associated with us converting, us 

6 transforming, converting to amorphous because 

7 if you look at some of those ELs, they're all 

8 amorphous ELs. And we're not anywhere near 

9 all amorphous manufacturers. 

10 MS. COUGHLIN: Right. 

11 MR. COULTER: So there are a lot of 

12 equipment costs associated with us. My guess 

13 is there are equipment costs associated with 

14 amorphous guys. 

15 MS. COUGHLIN: Yes, yes. 

16 MR. COULTER: My guess is there are 

17 costs associated with steel guys as they exit 

18 steel. 

19 MR. PARKER: Absolutely. 

20 MR. COULTER: Yes. I don't know 

21 where that is. 

22 MS. COUGHLIN: That's in the 
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1 manufacturer impact analysis. 

2 MS. COUGHLIN: When I look on the 

3 national impact -- 

4 MS. COUGHLIN: Well, what we need 

5 to do -- 

6 MEMBER DeLASKI: Could I just say 

7 it is a misnomer -- okay? -- national impact 

8 analysis because it doesn't -- there are lots 

9 of impacts that are certainly happening to 

10 people that are in the nation, like your 

11 company, that aren't reflected in that. 

12 MR. COULTER: Kind of important to 

13 us. 

14 MEMBER DeLASKI: Right. 

15 (Laughter.) 

16 MEMBER DeLASKI: There are other 

17 impacts, too. There are a pollution impacts 

18 that have a dollar impact that aren't 

19 reflected in this particular impact number. 

20 MS. COUGHLIN: Right. Right. So 

21 there's a number of additional -- there are 

22 manufacturer impacts. There is utility. 
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1 There is impacts. Those are sort of further 

2 downstream still of this particular piece of 

3 the calculation. So this is the nationalized 

4 energy and LCC savings calculation. 

5 MR. PARKER: So for the 

6 cost-benefit analysis that you have to do 

7 under the executive order, that is -- 

8 MS. COUGHLIN: Yes. That's -- 

9 MEMBER CYMBALSKY: Greg, the answer 

10 is there is a manufacturer impact analysis 

11 which accounts for everything you just stated: 

12 the cost to convert your product lines, all 

13 that. And we look at each of the industries 

14 that way. It's not reflective -- 

15 MR. COULTER: All summarized in the 

16 end. 

17 MEMBER CYMBALSKY: Yes, it's all 

18 summarized, absolutely. 

19 MR. COULTER: You know, you've got 

20 to -- 

21 MR. PARKER: Mike. 

22 MR. COULTER: I don't see how you 
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1 can -- 

2 MEMBER CYMBALSKY: It's part of the 

3 seven criteria, the impact on -- 

4 MR. COULTER: I don't see how. I 

5 mean, at some point there has to be -- okay. 

6 We just had the energy savings. Now, I mean, 

7 I'm glad you clarified that, but there still 

8 needs to be like another chart like this. 

9 Okay? 

10 Bottom line, what is it? You know, 

11 it's -- everything has got to be put on an 

12 apples and apples basis, right? You can't 

13 have one. Okay. Here is the cost to 

14 manufacturers. How does it fit if you 

15 amortize that over the time that, you know, 

16 manufacturers do? We're seeing this, the 

17 total benefit or cost, you know, whatever -- 

18 MS. COUGHLIN: Right. So all of 

19 those and, as I was saying, all of those 

20 additional analyses require a set of draft 

21 TSLs, which is what this Committee is 

22 discussing. So once you settle on your 
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1 complete set of those scenarios, we can go and 

2 complete the actual impacts analyses. 

3 MEMBER DeLASKI: I have a process 

4 question, which is that we have two parallel 

5 processes going on, right? There's a process 

6 of this Negotiating Committee, and there's a 

7 process the government has to fulfill to carry 

8 out its obligations to set a rule or not set 

9 or to decide not to set a modified standard. 

10 And so, John, what you are 

11 describing is that we will see a manufacturer 

12 impact analysis at the NOPR stage typically. 

13 Will we have one to look at as part 

14 of this negotiation? I mean, will there be a 

15 draft that the agency is able to share with 

16 the Committee or is that something that is not 

17 far enough along? 

18 MR. COFFEY: As Katie mentioned, 

19 there are various impacts analyses that take 

20 as one of their inputs a proposed TSL. 

21 Normally that would be set forth in the NOPR. 

22 For the purposes of these 
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1 negotiations, we could try one on for size and 

2 then run the manufacturer impacts analysis and 

3 see what the results look like. That is 

4 something that we could supply. 

5 MS. COUGHLIN: But realistically 

6 you can only do that for a few TSLs. So if we 

7 could get some consensus on what those 

8 proposed TSLs should look like, that would be 

9 a lot more efficient. 

10 MEMBER DeLASKI: I'll put a few on 

11 the table. I think the Department's 

12 traditional approach to this is a good one, 

13 what you have historically done. So I 

14 wouldn't want us to diverge far from that 

15 because that's what you're going to look at 

16 absent this Committee coming to an agreement. 

17 So I don't think we should get a 

18 dozen. I think we should have something on 

19 the order of five. 

20 MR. PARKER: This is John's slide 

21 from yesterday that contains I think sort of 

22 the usual suspects, shall we say, for TSL. 
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1 MEMBER DeLASKI: My view is the 

2 usual suspects are pretty good. You know, max 

3 tech, as you said, is statutorily required. 

4 We think that that next level is a very 

5 important level to evaluate. We think it's 

6 you attempt to look at the land absent other 

7 factors, the level that is the maximum level. 

8 It's cost-effective, maximum savings that are 

9 cost-effective. 

10 We think the minimum LCC point is 

11 also a very important point and a point at 

12 which historically many standards have landed. 

13 We think that looking at points that clearly 

14 the point that you can get to short of 

15 amorphous is an important point in our 

16 discussions. 

17 MR. PARKER: So that's the 

18 noteworthy technologies point, right? 

19 MEMBER DeLASKI: What is a 

20 cost-effective level short of amorphous or 

21 short of the ZDMH question, short of a sole 

22 source supplier in the market today? That's 
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1 an important point, it seems to me. 

2 MR. PARKER: Could you unpack the 

3 last bullet a bit, Katie? 

4 MS. COUGHLIN: Well, that's the 

5 matrix that I -- 

6 MR. PARKER: If we can set that 

7 with the large gaps? 

8 MS. COUGHLIN: Oh, the large gap? 

9 Well, if you end up with a huge chunk of the 

10 design space that doesn't have a proposed 

11 standard, we just put one in there to see what 

12 the numbers look like. 

13 MR. PARKER: Okay. 

14 MEMBER ROSENSTOCK: As long as 

15 we're thinking about ideas, again, just for 

16 the possible potential list, why don't we 

17 think out of the box a little bit? How about 

18 lowest incremental cost to manufacturers? How 

19 about lowest incremental costs to customers? 

20 How about lowest job losses, domestic job 

21 losses is another possibility. 

22 No. That was incremental costs 
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1 based on a higher level. 

2 MR. PARKER: Zero. 

3 MEMBER ROSENSTOCK: Okay. Above 

4 the baseline. Above the baseline. 

5 MEMBER DeLASKI: But that's still 

6 the baseline for our statistical purposes, 

7 right? So what do you mean? 

8 MEMBER ROSENSTOCK: Okay. Instead 

9 of going from 99.08 to 99.16, maybe the lowest 

10 incremental cost could be at 99.1. Do you 

11 know what I'm saying? 

12 MS. COUGHLIN: It tends to be a 

13 smooth function. So it's always going to be 

14 zero. 

15 MEMBER CYMBALSKY: Remember how we 

16 do the walk-down. It starts from the top to 

17 the bottom. So you can't -- 

18 MEMBER ROSENSTOCK: I know, but in 

19 terms of one of the levels, in terms of 

20 highlighting one of the levels during -- 

21 MR. PARKER: Yes. 

22 MEMBER ROSENSTOCK: -- the 
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1 walk-down, I was suggesting a few other 

2 potential -- 

3 MR. PARKER: There's not a 

4 non-arbitrary selection. 

5 MEMBER CYMBALSKY: We should really 

6 focus -- 

7 MR. PARKER: It's either zero or -- 

8 MEMBER CYMBALSKY: -- focus the 

9 analysis. We don't want to do 50 things here, 

10 right? So we need to focus on what the 

11 reality is going to be coming out of this. 

12 And so if we do just a little bit above the 

13 baseline, I'm not sure what purpose that 

14 serves. 

15 MEMBER DeLASKI: What I would add 

16 is that there should be a gap fill. I think 

17 the gap fill notion is correct, but if there 

18 is a big gap between the baseline and the 

19 other levels that I described, I would be 

20 really in favor of -- let's make sure we've 

21 got some options in that gap. You don't want 

22 ten options in that gap. You want an option 
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1 in the gap. 

2 MEMBER PATTERSON: Andrew, could 

3 you repeat your levels quickly? 

4 MR. PARKER: They are the bullets 

5 that are here, the bullets under -- 

6 MEMBER PATTERSON: They didn't 

7 match those. 

8 MEMBER DeLASKI: Well, the one that 

9 wouldn't match those would be the maximum 

10 level, the maximum level that you can get to 

11 without forcing amorphous. 

12 MS. COUGHLIN: Yes. That would be 

13 a noteworthy technology. 

14 MEMBER PATTERSON: So maintaining 

15 multiple vendors. 

16 MEMBER DeLASKI: Yes. And then I 

17 elaborated on that. They maintain multiple 

18 vendors for the core material. 

19 MS. COUGHLIN: Yes. 

20 MR. PARKER: Wes is making a good 

21 point. Maybe we should clarify. But there is 

22 a vague list of noteworthy technologies. 
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1 MEMBER CYMBALSKY: Right. This was 

2 -- 

3 MR. PARKER: Let's see if we can 

4 eliminate that. 

5 MEMBER CYMBALSKY: This was just 

6 meant to be an example for like everything we 

7 do, not just transformer-centric. 

8 MR. PARKER: Right. 

9 MEMBER CYMBALSKY: So these bullets 

10 were written if we were doing refrigerators or 

11 whatever. 

12 MS. COUGHLIN: Yes. 

13 MEMBER CYMBALSKY: But just plug in 

14 whatever you want for -- 

15 MR. PARKER: Okay. So that -- 

16 MEMBER CYMBALSKY: -- the phrase 

17 "noteworthy technology." 

18 MR. PARKER: First off, before we 

19 get there, just from a parliamentary 

20 standpoint, can we all agree on the three 

21 bullets above? 

22 I'm sorry. Tatiana, is there a way 
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1 to zoom this so we can get larger? I'm just 

2 sorry. I can zoom on an Apple but not a Dell. 

3 Yes, and then make it bigger. I mean, can 

4 you enlarge the print? In a Mac, you push 

5 CTRL+P. 

6 (Laughter.) 

7 MR. PARKER: Make it bigger, yes. 

8 Sorry. Change the font size. There. Good, 

9 good. Beautiful. Thank you. 

10 Okay. Can everybody see that now? 

11 Jim? All right. Now we need to scroll down. 

12 How do you scroll? Okay. 

13 So max tech, energy efficiency 

14 level with greatest national energy savings, 

15 maximum net benefit. Is that -- 

16 MS. COUGHLIN: Yes. Those are 

17 well-defined. We can do those. 

18 MR. PARKER: You can do that? But 

19 is that covered by the second bullet, "maximum 

20 net benefit"? This is maximum net energy 

21 savings. 

22 MS. COUGHLIN: The second and third 
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1 bullets are different. 

2 MR. PARKER: Okay. Various life 

3 cycle cost savings. Is that maximum net 

4 benefit? 

5 MS. COUGHLIN: Yes. 

6 MR. PARKER: Because cost and 

7 benefits are, as we just described, different 

8 from -- 

9 MS. COUGHLIN: Yes. 

10 MR. PARKER: -- life cycle cost. 

11 MS. COUGHLIN: Life cycle cost is 

12 usually a net benefit analysis. 

13 MR. PARKER: Okay. All right. So 

14 can we agree on the top three bullets? Let's 

15 discuss that first before we get to the 

16 noteworthy technologies point because that is 

17 going to require a longer discussion. 

18 Tim? 

19 MEMBER BALLO: Tim Ballo with 

20 Earthjustice. 

21 On the second bullet point, the 

22 level with the greatest energy savings, 
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1 provide greater consumer benefits. You have 

2 the three percent and seven percent discount 

3 rate that you use in the NIA. Would you do 

4 that analysis at three and at seven or pick a 

5 winner? 

6 MS. COUGHLIN: We tend to do it at 

7 three and at seven because OMB is eventually 

8 going to make us do it. So we want to -- 

9 MEMBER BALLO: Then that seems like 

10 four. 

11 MS. COUGHLIN: That's right. There 

12 will be -- 

13 MEMBER DeLASKI: Yes. But the 

14 point from an analytic point of view, you've 

15 got to do it that way anyway. The model setup 

16 is just once you plug it in, it just fits it 

17 out, I assume. 

18 MS. COUGHLIN: Yes. 

19 MEMBER DeLASKI: Right, Katie? I 

20 mean, am I making some -- 

21 MS. COUGHLIN: Yes. And 

22 eventually, irrespective of what happens here, 
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1 we end up with OMB. And they want everything 

2 at three percent and at seven percent. So 

3 we'll just do it all. 

4 MEMBER DeLASKI: It's not 

5 negotiating discount rates. 

6 MR. PARKER: You can't do that 

7 anyway. The life cycle cost we went through 

8 this a little bit last night. Life cycle cost 

9 is a little bit different from net benefits 

10 because net benefits includes social cost of 

11 carbon, right; whereas, life cycle costs -- 

12 MS. COUGHLIN: Not at this stage, 

13 they don't. Yes. That's done at the end. 

14 MR. PARKER: Okay. Done at the 

15 end. All right. But this is for the net 

16 impact analysis, isn't it? 

17 MS. COUGHLIN: This is for the -- 

18 again, it's taking the LCC and generalizing 

19 them to the nation over the analysis period. 

20 MR. PARKER: Okay. Got it. So any 

21 other comments on the top -- 

22 MEMBER ROSENSTOCK: Steve 
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1 Rosenstock, EEI. 

2 On the second bullet, when you say 

3 "Consumer Savings," are you saying a positive 

4 LCC? 

5 MS. COUGHLIN: Yes. 

6 MEMBER ROSENSTOCK: And it could be 

7 anything above zero? Is that what you're 

8 saying? 

9 MS. COUGHLIN: That's right. 

10 MEMBER ROSENSTOCK: So one dollar, 

11 and that counts? 

12 MS. COUGHLIN: In this definition, 

13 yes, anything that's above zero. 

14 MR. PARKER: Over the life of the 

15 transformer. 

16 MS. COUGHLIN: LCC is for the life 

17 of the transformer. 

18 MR. PARKER: Right. 

19 MEMBER DeLASKI: That's why I think 

20 you may need a gap fill between those two, but 

21 you don't know until you look at what the gap 

22 is. 
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1 MR. PARKER: Right. Okay? 

2 MS. COUGHLIN: Yes. 

3 MR. PARKER: So could we take a -- 

4 just so we get a feeling of momentum here, can 

5 we take a vote on the top three as criteria 

6 and adopting them? And then we'll add. 

7 Basically what Katie needs is, are 

8 these three criteria acceptable as bases for 

9 establishing TSLs for purposes of their 

10 analysis? 

11 MEMBER ROSENSTOCK: Steve 

12 Rosenstock, EEI. 

13 It all depends on how many we're 

14 allowed to use. If we're only allowed to use 

15 three, I -- 

16 MR. PARKER: No, no, no. 

17 MEMBER ROSENSTOCK: -- we have more 

18 flexibility. 

19 MR. PARKER: No, we're not required 

20 to use three. Well, just what's there, the 

21 first three. As I said, then we'll go on to 

22 the others. And we can add more if we want. 
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1 I'm just trying to get something down so we -- 

2 MEMBER CYMBALSKY: I think we're 

3 going to do these anyway because just in case 

4 this breaks down, our NOPR is still hanging 

5 out there. 

6 MR. PARKER: Right. 

7 PARTICIPANT: We can vote for this, 

8 then. 

9 MR. PARKER: Right. 

10 MS. COUGHLIN: You can all vote for 

11 this. It doesn't deprive you of anything. 

12 MEMBER CYMBALSKY: Can I cast my 

13 100 percent vote? 

14 MR. PARKER: You still only get one 

15 vote around this table. Sorry. So DOE will 

16 be doing this anyway, but does the group 

17 concur that these are relevant because I just 

18 want to hear from you. Shaking your heads? 

19 Yes? All in favor, aye? 

20 (Whereupon, there was a chorus of 

21 "Ayes.") 

22 MR. PARKER: Opposed? 
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1 (No response.) 

2 MR. PARKER: Okay. So these three 

3 are adopted. Now let's talk about noteworthy 

4 technologies. Basically this is the point at 

5 which you start impacting the steel makers. 

6 Is that the way we basically are defining 

7 this? 

8 I just toss that out for 

9 discussion. This is the shift between 

10 amorphous and conventional. 

11 MEMBER DeLASKI: Obviously we 

12 impact steel makers at all levels. And I want 

13 to be -- 

14 MR. PARKER: Right. 

15 MEMBER DeLASKI: The point I think 

16 is that I think we're interested. I am 

17 interested in what are the levels that are 

18 cost-effective but short of a sole source 

19 supplier, a single source supplier in today's 

20 market. 

21 MS. COUGHLIN: Okay. 

22 MR. PARKER: Is there a way to pin 
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1 that down? That's what we need to discuss. 

2 Robert? 

3 MR. BERMAN: Robert Berman, Berman 

4 Economics. 

5 Could we talk about market share of 

6 the various materials; that is to say, 

7 categories which have 20 percent, 40 percent, 

8 60 percent of -- 

9 MR. PARKER: Based on shipments 

10 analysis, for example? 

11 MS. COUGHLIN: Yes. There are the 

12 beginnings of that type of analysis in this 

13 document, I believe. There are some tables of 

14 steel requirements for different standard 

15 levels. Is that -- so it's a combination of 

16 the market share of the design and the 

17 standard -- 

18 MR. BERMAN: No. It gets back to I 

19 guess it's slide 3. 

20 MS. COUGHLIN: You don't have the 

21 presentation up anymore. 

22 MR. BERMAN: Big scatter plot. At 
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1 different CSLs, the higher efficiency 

2 materials -- that's the one -- get larger and 

3 larger market shares. So it seems that you 

4 want to start looking, say, at CSLs 2, 3, and 

5 4, for example, and see what the market shares 

6 are for the -- say, even just for 2, 3, and 4, 

7 what the market shares are for the various 

8 materials, not the tonnage. 

9 MR. PARKER: Do we want to talk 

10 about a threshold market share because 

11 otherwise that last one could be a series of 

12 things? 

13 MS. COUGHLIN: Yes. You can 

14 represent it as total demand or you can 

15 represent it as market share, so one or the 

16 other. We have put, I believe, the demand for 

17 particular materials in the current document. 

18 That could be converted to market share. 

19 MEMBER MILLURE: This is Dave 

20 Millure, Metglas. 

21 We have to be careful. These are 

22 based on the old CSLs. 
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1 MS. COUGHLIN: Well, this picture 

2 is based on the old -- 

3 MEMBER MILLURE: Those pictures. 

4 MS. COUGHLIN: Yes, but they're -- 

5 MEMBER MILLURE: And that's what 

6 most of us have on our mind, -- 

7 MS. COUGHLIN: Yes. 

8 MEMBER MILLURE: -- are these older 

9 pictures. But right now with the new ELs for 

10 design line 1, CSL-4 is actually less than in 

11 efficiency the old CSL-3. 

12 MS. COUGHLIN: That's TSL. That 

13 TSL is a collection of CSLs for all the design 

14 lines. So yes. I guess the -- I don't know 

15 if the design line specific efficiency level 

16 numbers are in these documents, but they're -- 

17 so yes. So the -- 

18 MR. PARKER: We have to be 

19 sensitive to that difference. 

20 MEMBER PATTERSON: If I may, 

21 there's a lot of confusion. 

22 MR. PARKER: Wes Patterson? 
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1 MEMBER PATTERSON: Wes Patterson. 

2 There's a lot of confusion on CSLs 

3 version 1, -- 

4 MR. PARKER: Right. 

5 MEMBER PATTERSON: -- CSL version 

6 2, and TSL -- 

7 MS. COUGHLIN: Right. 

8 MEMBER PATTERSON: -- pre-version. 

9 MS. COUGHLIN: Right. So, again -- 

10 MEMBER PATTERSON: So there's a lot 

11 of confusion on this. But if you go to your 

12 chart, your chart on the bottom looks a 

13 scatter diagram. It has a continuous spectrum 

14 of per-unit efficiencies. 

15 MS. COUGHLIN: Yes. 

16 MEMBER PATTERSON: So going back in 

17 the next chart -- 

18 MS. COUGHLIN: Yes. It's stuck. 

19 MEMBER PATTERSON: Yes. So on the 

20 bottom axis, I've got per-unit efficiencies. 

21 And then Andrew's point was if you look at 

22 that chart, you can see somewhere between 99.3 
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1 and 99.4, there is a break point where, all of 

2 a sudden, there is only one kind of material 

3 available. That's what I can obviously see on 

4 that chart by your determination, your data 

5 set. 

6 MS. COUGHLIN: Right. 

7 MEMBER PATTERSON: They're both SA. 

8 One is -- 

9 MS. COUGHLIN: So those two -- 

10 MEMBER PATTERSON: So Andrew's 

11 point was maybe there should be -- you know, 

12 draw a line down there, right? And consider 

13 what is the influence of everything to the 

14 left of that line if I understood you 

15 correctly. 

16 MEMBER DeLASKI: Yes. I am very 

17 interested in -- 

18 MS. COUGHLIN: Yes. 

19 MEMBER PATTERSON: If we can stop 

20 talking about the CSLs because I am totally 

21 confused with them anymore? 

22 MS. COUGHLIN: Okay. 
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1 MEMBER PATTERSON: And if we talk 

2 about an efficiency number, we could say, 

3 "Okay. Let's draw a slice of that efficiency 

4 number." 

5 MS. COUGHLIN: Right. But, again, 

6 the way the standard works is that TSL, which 

7 is what the law specifics, has to provide 

8 efficiency levels for each design line that's 

9 included in the equipment class. 

10 So what we would need to do -- and 

11 this is essentially -- you know, even though 

12 we have the criteria, you make the 

13 technological break point where you want it. 

14 And then you do that consistently on each 

15 design line. And then we can assemble a TSL 

16 that way. 

17 So if you tell us which materials 

18 you want, you know, how you want to do that, 

19 we can go through and set that up. 

20 MR. PARKER: So the question is, 

21 how do you define a technological break point? 

22 You could do it on the basis of market share. 
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1 You could do it on the basis of total 

2 shipments. It looks to me like from this, you 

3 could also do it on the basis of selling 

4 price. 

5 MS. COUGHLIN: Technology is 

6 basically materials, I think. So it's just 

7 which materials, how many of the materials you 

8 want to look at. 

9 MR. PARKER: Right. You could also 

10 do it I suppose of the basis of take some 

11 average of selling price differential. No? 

12 MS. COUGHLIN: When I say 

13 technology options, I mean actually just, you 

14 know, something about the actual transformer 

15 design that determines -- 

16 MR. PARKER: Right. 

17 MS. COUGHLIN: -- a particular 

18 technology needs to be used. So advanced 

19 materials is the most important one for -- 

20 MR. PARKER: What I'm saying is 

21 that this is -- at a certain distance between 

22 the blue and the purple or pink, whatever you 
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1 call it, people just shift over from 

2 conventional metal to amorphous. 

3 PARTICIPANT: Where would you draw 

4 the line? 

5 MR. PARKER: Well, at this point, 

6 you can't make it, but at this point, you 

7 could do both. It just costs more, right? At 

8 this point, you could do conventional or you 

9 could do amorphous, but it just costs more. 

10 So if a TSL is set here, so the 

11 question is, at what point is amorphous, in 

12 effect, so much cheaper than conventional or 

13 in this case it's high-b, that essentially 

14 high-b doesn't compete anymore? So you could 

15 say, you know, based on the market analysis, 

16 competitiveness analysis, at this point the 

17 whole market shifts because this differential 

18 is too great, right? 

19 MEMBER PATTERSON: This is high-b 

20 on a TVA round port. You're saying it's 

21 high-b material? 

22 MR. PARKER: This is high-b on a 
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1 copper, copper-copper, right? That's the 

2 blue? 

3 MS. COUGHLIN: Yes. I mean, you 

4 can do anything you want. I mean, it's 

5 basically not my decision. It's your decision 

6 how you would like to see the results broken 

7 down. 

8 So clearly there is a bit of 

9 overlap in terms of -- it's very rare to have 

10 an efficiency level or a particular number 

11 split completely the design options. So, you 

12 know, we need reasonable criteria for dropping 

13 those lines at a particular place and 

14 combining them. 

15 MR. PARKER: Because I think if the 

16 utilities are -- they don't really care. 

17 They'll go with the best numbers, right, and 

18 -- 

19 MEMBER ROSENSTOCK: Well, the other 

20 issue is it's the other design issue, the 

21 installation and the weight and the loading. 

22 There are other issues besides the efficiency 
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1 that are going to make a big difference. 

2 MR. PARKER: Right. 

3 MEMBER ROSENSTOCK: If some of 

4 those designs on the right are significantly 

5 bigger in size, heavier, won't fit in current 

6 vaults, that's huge -- 

7 MR. PARKER: That should be 

8 captured by life cycle cost, though, right? 

9 MS. COUGHLIN: That is included in 

10 life cycle cost. 

11 MEMBER PATTERSON: If we can 

12 introduce additional product lines, hopefully 

13 we could address that in those additional 

14 product lines, where we have vaults and we try 

15 to put in something that's to the far right 

16 that won't fit -- 

17 MR. PARKER: Right. 

18 MEMBER PATTERSON: -- in the vault. 

19 MR. PARKER: Right. 

20 MS. COUGHLIN: We have a subgroup. 

21 We have a subgroup analysis for that. 

22 MEMBER PATTERSON: Cost is 
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1 ludicrous. 

2 MS. COUGHLIN: Yes. 

3 MR. PARKER: Right. 

4 MS. COUGHLIN: So that's 

5 essentially treated separately. And then we 

6 already have variability on the loading and 

7 all that other stuff. 

8 MR. PARKER: It doesn't get 

9 captured, the manufacturing selling price, 

10 here, but it will be captured downstream or 

11 when we do the life cycle cost analysis. 

12 MR. FLATEN: A question from David 

13 Flaten. 

14 MR. PARKER: Yes? 

15 MR. FLATEN: If you change that 

16 efficiency at 50 percent load and put in some 

17 other number, does it completely change that 

18 graph? 

19 MS. COUGHLIN: Well, yes. I mean, 

20 it will move the dots around, but you have to 

21 define completely. It's not going to change. 

22 Depending on -- yes. 
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1 Again, this is a two-dimensional 

2 flattening of a three-dimensional space. So 

3 it's going to have some effect, and it's 

4 difficult to anticipate what exactly that 

5 would be. 

6 MR. KAJA: So you need accurate -- 

7 so if you had accurate data about what the 

8 average transformer load is, that would be 

9 important? 

10 MS. COUGHLIN: Well, again, in the 

11 LCC, there's a range of average transformer 

12 loads in the simulation. So the LCC accounts 

13 for the fact that transformers may not be 

14 loaded at test procedure conditions. 

15 MR. KAJA: Oh, yes. If you had a 

16 national average for what the average 

17 transformer was loaded at, that would be 

18 important. 

19 MS. COUGHLIN: I think it needs to 

20 be specified by equipment type to be -- so we 

21 do have estimates for the different categories 

22 of equipment. And any additional information 
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1 is always useful. 

2 MR. KAJA: Okay. Thank you. 

3 MR. PARKER: Okay. Bob? 

4 MR. BERMAN: Robert Berman, Berman 

5 Economics. 

6 I think a range of different load 

7 factors would be helpful. I know, for 

8 example, we have got a number of public power 

9 representatives here who would love to see a 

10 load factor in their districts of 45 or 50 

11 percent but are probably seeing something more 

12 like mid to high 20s in a lot of areas. 

13 So we probably want to see what -- 

14 if there is some way to -- you can take the 

15 same designs using the 50 percent design 

16 criteria and just use a different load factor 

17 to see what the cost -- 

18 MS. COUGHLIN: Right. 

19 MR. BERMAN: -- to see what the 

20 spreads look like. 

21 MS. COUGHLIN: We have currently a 

22 subgroup analysis from municipal utilities. 
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1 And that is one of the changes that is made to 

2 that subgroup. And if you wanted to define a 

3 more general subgroup, we could do that. The 

4 main consideration is whether there are 

5 particular design lines that correspond to 

6 those purchasers or whether you do all of 

7 them. 

8 MR. PARKER: Guys, listen up. Go 

9 ahead, Mike. 

10 MR. RIVEST: Mike Rivest. 

11 I want to make sure there's no 

12 confusion here. So there are two different 

13 things: something called a subgroup analysis 

14 and something called product class. So we 

15 have been talking about both. And sometimes I 

16 get the sense that we're talking about both at 

17 the same time. 

18 So setting a separate product class 

19 for vaults, for example, would mean setting a 

20 separate standard for transformers that go 

21 into vaults, presumably lower. 

22 MR. PARKER: Right. 
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1 MR. RIVEST: What Katie has been 

2 talking about is sometimes we look at subgroup 

3 of the population to see how the standard will 

4 impact them differently from other groups. 

5 But we're not setting a separate product class 

6 for them. We're setting a separate standard 

7 level. 

8 MS. COUGHLIN: Right. 

9 MR. PARKER: Can DOE actually set a 

10 standard that depends upon the end user? 

11 MEMBER ROSENSTOCK: They've only 

12 done retrofit versus new. That's the only 

13 change that's been -- that's the only 

14 breakout. 

15 MEMBER CORKRAN: Jerry Corkran, 

16 Cooper. 

17 Regarding the ideas for looking at 

18 variations, I find a 30-year life to be maybe 

19 extremely optimistic. And I would suggest the 

20 IEEE 20.5-year life, you look at that. And 

21 that says that the maximum unit is going to 

22 last 41 years, instead of right now you're 
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1 saying 60 years. 

2 MR. PARKER: Okay. 

3 MEMBER CORKRAN: Our paint is good, 

4 but I don't think it's that good. 

5 The other thing is the 50 percent 

6 load, which is where we're at right now, we 

7 have electric ties looming on the horizon. I 

8 can't imagine a utility company expecting for 

9 the next six years the transformer is going to 

10 be loaded at 50 percent. So I would suggest 

11 you look at 60 percent load, too, if you're 

12 going to do some variations at looking at the 

13 designs you have created. 

14 MS. COUGHLIN: Actually, we have 

15 the LCC can actually specify a low growth rate 

16 over the analysis period. So, again, it's 

17 just a matter of choosing. 

18 MEMBER ROSENSTOCK: Or decline 

19 rate. Or decline rate, which is what a lot of 

20 our members have been seeing. 

21 MS. COUGHLIN: Yes. 

22 MR. PARKER: So I think basically 
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1 the overwhelming direction of what we are 

2 hearing is that we really do need a quick and 

3 easy sort of cheat sheet of key assumptions. 

4 MS. COUGHLIN: There is no quick 

5 and easy -- 

6 MR. PARKER: Well, it is possible 

7 to say -- 

8 MS. COUGHLIN: It's not -- 

9 MR. PARKER: No, no, no. It is 

10 possible to say we are assuming 50 percent 

11 load factor. 

12 MS. COUGHLIN: We are not assuming 

13 50 percent load factor. 

14 MR. PARKER: What's that? 

15 MS. COUGHLIN: We are not assuming 

16 50 percent load factor. 

17 MR. PARKER: You're not? 

18 MR. COFFEY: No. 

19 MS. COUGHLIN: We are not. The 

20 test procedure is defined -- 

21 MR. PARKER: The test procedure is 

22 different. Okay. 
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1 MS. COUGHLIN: The test procedure 

2 is -- 

3 MR. PARKER: Right, right, right. 

4 I got you. Sorry. Okay. 

5 MS. COUGHLIN: So the things that 

6 we are assuming are there are lots of 

7 complexities in what we are assuming. 

8 MR. PARKER: Materials? Prices? 

9 MS. COUGHLIN: Materials, prices 

10 generate the cloud of designs, but then the 

11 cloud of designs has the variability on the 

12 purchase price. 

13 MR. PARKER: So you can't just 

14 specify your key assumptions in a -- 

15 MS. COUGHLIN: That's what the TSD 

16 -- I mean, we don't write the TSD for fun, 

17 right? We try to make it complete but as 

18 short as possible. And that is kind of what 

19 is in the -- that is what is in the TSD. 

20 MR. PARKER: All right. 

21 MS. COUGHLIN: So I have to also 

22 remind people that every sensitivity will 
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1 generate a new set of results for each TSL. 

2 So, you know, we can do all these things with 

3 sensitivities, but then there is going to be 

4 -- 

5 MR. PARKER: Okay. So the more 

6 broad point that I wanted to make before I got 

7 shanghaied on my quest for a cheat sheet is 

8 that if you have issues about methodology, we 

9 need to foreground them. 

10 You know, put them forward in a 

11 document, send them to us. And at the end of 

12 this meeting, we'll try to capture before we 

13 leave the stuff that has come up in the 

14 meeting, the issues and methodology that need 

15 to be explored, the basis for it. 

16 And we'll try to recap, I think, 

17 you know, what tweaks to the analysis we can 

18 do to capture those concerns. I'm going to 

19 try to go away from the meeting with that 

20 rehash, but let's set that aside for right 

21 now, not review questions about methodology 

22 and assumptions but just focus on what should 
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1 be -- if we can go back to the previous slide? 

2 There. Great. Thanks. 

3 MEMBER CYMBALSKY: Let me say while 

4 we are on the topic of TSDs, we do have 

5 several chapters of the TSD complete with the 

6 new analysis, which we will post. And I will 

7 also ask the team to develop maybe a two-page 

8 summary on the key changes between the March 

9 analysis and the August analysis. 

10 MR. PARKER: Okay. Excellent. 

11 Thank you. 

12 MEMBER ROSENSTOCK: Steve 

13 Rosenstock, EEI. 

14 Does that include chapters 7 and 8 

15 with energy use and then the life cycle cost 

16 analysis? 

17 MR. PARKER: Yes I am hearing from 

18 Katie. Is that right? 

19 MEMBER CYMBALSKY: If she is saying 

20 yes, she is the one who -- 

21 MS. COUGHLIN: Yes. Those have 

22 been drafted. 
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1 MEMBER ROSENSTOCK: Thank you. 

2 MR. PARKER: Great. Does that 

3 satisfy everybody? 

4 (No response.) 

5 MR. PARKER: Good. 

6 MEMBER PATTERSON: So Andrew made a 

7 recommendation a while back about trying to 

8 consider a break point related to the core 

9 steel supply, right? 

10 MR. PARKER: Right. 

11 MEMBER PATTERSON: And we never 

12 made any kind of a movement or -- 

13 MR. PARKER: Well, that is what I 

14 am trying to get back to. 

15 MEMBER PATTERSON: Okay. 

16 MR. PARKER: That is what I am 

17 trying to get back to. I was trying to set 

18 aside the questions about methodology again 

19 that bubbled up. And I'm trying to get back 

20 to this issue of how do we define the break 

21 point on core steel supply? 

22 And I think what we've got so far 
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1 is you could talk about impact on selling 

2 price. When it reaches a certain point, you 

3 say that the market has tipped or you could 

4 talk about forecasts for absolute shipments 

5 when -- 

6 MEMBER DeLASKI: Those are 

7 different than what I, what you're saying is 

8 different than what I, said. 

9 MR. PARKER: Oh, sorry. 

10 MEMBER DeLASKI: Are you trying to 

11 elaborate on my point or are you trying to 

12 make a different point? 

13 MR. PARKER: I'm trying to say that 

14 there are different ways that you could, 

15 different specific break point at which you 

16 could define a shift form conventional steel 

17 to amorphous. Is that right? 

18 MEMBER DeLASKI: That's right. 

19 MR. PARKER: Your general point was 

20 that let's figure out at some point where 

21 things tip in a large-scale way from -- 

22 MEMBER DeLASKI: No, no. My point 
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1 was a different point. My point, it's a 

2 simpler point, much simpler, -- 

3 MR. PARKER: Okay. 

4 MEMBER DeLASKI: -- which is that I 

5 want to know the maximum level at which there 

6 are multiple suppliers of core steel that can 

7 make compliant transformers. I don't care 

8 which one is the most cost-effective. 

9 MR. PARKER: But can make at what 

10 price? 

11 MEMBER DeLASKI: I don't care. 

12 MS. COUGHLIN: As long as it's more 

13 than one supplier. Okay. 

14 MEMBER DeLASKI: I want more than 

15 one supplier. I want multiple suppliers. I 

16 don't care what the price is for that. 

17 MR. PARKER: Comments? Yes, 

18 Carlos? 

19 MEMBER GAYTAN: Carlos Gaytan, 

20 Prolec GE. 

21 I would like to suggest to consider 

22 like a bandwidth of ten percent of price in 
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1 order to have that window of consideration for 

2 an equivalency on the designs for the 

3 different grades of core steels. 

4 MEMBER DeLASKI: So that would be a 

5 different -- that might be a different 

6 grouping. That would be a little different 

7 grouping than what I have suggested. 

8 MEMBER GAYTAN: Well, it's trying 

9 to elaborate on your proposal, with which I 

10 agree, because we said we will look at the 

11 graphs and consider looking for the maximum 

12 efficiency level where we have a variety of 

13 core steel grades that can mean that 

14 efficiency. Then comes the question about at 

15 what price. 

16 And in order to have certain 

17 equivalency between the different grades of 

18 core steels, I would like to suggest using a 

19 criteria on the bandwidth of price of a ten 

20 percent. 

21 MR. PARKER: So, in other words, if 

22 the price of one material is ten percent 
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1 higher than the price of a -- 

2 MEMBER GAYTAN: No. Transformer 

3 price -- 

4 MR. PARKER: If the price of -- 

5 MEMBER GAYTAN: -- on the vertical 

6 axis. 

7 MS. COUGHLIN: If it's more than 

8 ten -- 

9 MR. PARKER: Transformer with one 

10 material is ten percent higher than the 

11 transformer with another material. Is that 

12 right? 

13 MS. COUGHLIN: If it's more than 

14 ten percent, more expensive, you don't count 

15 it as a potential substitute. I think that's 

16 what you're saying. 

17 MEMBER GAYTAN: Yes. If it is like 

18 more than ten percent higher than the 

19 lowest-price transformer, then you discard 

20 that consideration. 

21 MR. PARKER: That goes into what is 

22 the elasticity of demand for transport. 
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1 MR. BERMAN: Robert Berman, Berman 

2 Economics. 

3 It's more than an issue of 

4 elasticity of demand. It's also an issue of 

5 elasticity of supply. That is to say we've 

6 got a set of relative prices at this point. 

7 And to do a bandwidth around what 

8 Andrew is saying based on today's prices 

9 doesn't tell us anything because that's 

10 assuming that there will be no additional 

11 price competition from the steel industry, 

12 that they won't respond in some way to the 

13 efficiency levels or we know that they -- you 

14 know, as history has shown us in the past in 

15 the data, there is this. There is this 

16 effect. 

17 So what I am saying is, rather than 

18 try to guess the -- what the response could be 

19 or, worse yet, rather than try to ask these 

20 people how they would respond in a public 

21 forum and violate the antitrust laws, that we 

22 do what Andrew is suggesting, saying, "All 
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1 right. Can we see some mix of materials, 

2 regardless of what the price is? At what 

3 point could we technologically see a mix of 

4 materials?" 

5 MR. PARKER: Okay. Eric? 

6 MEMBER PETERSON: Eric Peterson, AK 

7 Steel. 

8 I think another way of trying to 

9 say it would be there is going to be a 

10 capability line associated with when a 

11 grain-oriented electrical steel could no 

12 longer make a transformer and you would have 

13 to move in an amorphous metal. There is that 

14 line which is strictly associated with 

15 technical capability. 

16 Then as you begin to walk backwards 

17 from that line, you start to introduce issues 

18 associated with competitiveness, -- 

19 MR. PARKER: Right. 

20 MEMBER PETERSON: -- that being 

21 that, even though you may take one step back 

22 from the line, there is still the ability of 
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1 an amorphous metal to control price because of 

2 size of transform design needs versus relative 

3 competition. 

4 As you continue to take another 

5 step back, then, instead of just having one 

6 principal material that could choose which way 

7 the market went based upon what price they set 

8 their material, if you step back enough, you 

9 could essentially have a multiple number of 

10 materials that could be competitive with one 

11 another such that you could provide a 

12 transformer manufacturer with a variety of 

13 prices. 

14 So I think it's important to 

15 recognize there is an issue, one, of 

16 capability and then after you step back from 

17 capability, to ask the question associated 

18 with which material has the ability to set the 

19 market based upon whether or not they raise 

20 price or lower prices such that their material 

21 would be chosen. 

22 If you step back one step further, 
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1 now you've got the ability of several 

2 different materials to compete and provide a 

3 product variety to transformer manufacturers. 

4 MEMBER DeLASKI: I think that's 

5 very well put. 

6 MR. PARKER: Very well put. 

7 MEMBER DeLASKI: And I think you 

8 would want to evaluate. I would like to have 

9 TSLs that show us, you know, those points. 

10 And I don't know whether we -- you suggested 

11 ten percent as being the point that -- I don't 

12 know what those points are. 

13 MEMBER PETERSON: Agreed. I'm not 

14 sure. We've got some data for some specific 

15 sizes, which we would be willing to share as 

16 we continue on. I think that's kind of just 

17 the guiding principle, so to speak, of what 

18 we're looking at. Exactly how we get it into 

19 the model, et cetera, I'll leave to people who 

20 are much more intelligent along these details. 

21 MR. PARKER: Well, I'm not sure 

22 that we can. We need to have a number. 
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1 MS. COUGHLIN: No. 

2 PARTICIPANT: No, we don't. 

3 MS. COUGHLIN: We'll talk about it. 

4 MR. PARKER: Okay. 

5 MS. COUGHLIN: We may need to come 

6 back with a proposal about how to do it. And 

7 then you guys can -- 

8 MR. PARKER: Okay. 

9 MEMBER CASKEY: This is John Caskey 

10 with NEMA. 

11 MR. PARKER: Yes? 

12 MEMBER CASKEY: I fully support 

13 what Andrew is trying to say and what is Eric 

14 is saying or trying to say. I mean, I think 

15 that is a good choice. And I would like to 

16 see the answer taking that factor into 

17 account. 

18 MR. PARKER: Absolutely. So what 

19 we're talking about, then, is maybe a couple 

20 of TSLs, one of which would be focused on the 

21 capacity factor that Eric and Andrew -- it 

22 sounds like they -- capability factor, excuse 
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1 me -- that Eric and Andrew have I think agreed 

2 on. 

3 And so then the next question is, 

4 how do we define -- 

5 MEMBER PETERSON: The term we've 

6 used is -- 

7 MR. PARKER: -- competitiveness? 

8 MEMBER PETERSON: -- capability 

9 versus competitive. 

10 MR. PARKER: Do you feel like that 

11 there are two lines or it could be found one 

12 additional TSL that would satisfy -- 

13 MEMBER PETERSON: As we have done 

14 some analysis, we can actually see what I 

15 would define as two lines, one where our 

16 product -- it's not capable anymore to be able 

17 to make the efficiency standard. There is 

18 only one material that can do it. 

19 MR. PARKER: That's the capability. 

20 MEMBER PETERSON: And that's the 

21 capability side. 

22 MR. PARKER: Right. Beyond that. 
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1 MEMBER PETERSON: If you step back, 

2 there's a window associated with 

3 competitiveness. When does the relative worth 

4 kick in -- 

5 MR. PARKER: Right. 

6 MEMBER PETERSON: -- enough such 

7 that -- 

8 MR. PARKER: Right. 

9 MEMBER PETERSON: -- more than one 

10 supplier has the ability to define the product 

11 usage based on upon the price of supply. 

12 MR. PARKER: And what would be the 

13 proxy for defining the product usage? Would 

14 it be a proportionate market share? Would it 

15 be -- 

16 MEMBER PETERSON: We use something 

17 that's called relative worth, a relative worth 

18 model, which essentially takes a look at the 

19 size of the transformer with one material 

20 versus the other material, the core product, 

21 versus the price of that. 

22 And there's a price cost valuation 
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1 that you can go through that helps to define 

2 where those curves intersect such that they 

3 become competitive, so to speak. It's part of 

4 really what the industry uses in regards to 

5 how we price our product, one product versus 

6 another, et cetera. 

7 MR. PARKER: So could you all -- 

8 and, Ray, I assume that Allegheny wants to be 

9 a part of this as well. Did you have any 

10 thoughts that you wanted to share? 

11 MEMBER POLINSKI: Yes. Ray 

12 Polinski of Allegheny Ludlum. 

13 I think Eric points it out well. 

14 The problem -- and I think Mr. Berman talked 

15 about it, too -- is that there are just so 

16 many variables, though. What is the -- you 

17 know, we talk about market prices. 

18 We're not going to talk about that, 

19 but there is -- at some price, everything is 

20 competitive. There's also a cost factor where 

21 the steel companies -- any producer has to 

22 make a profit to be sustainable as well. 
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1 MR. PARKER: Right. 

2 MEMBER POLINSKI: You know, there's 

3 the other component of -- 

4 MR. PARKER: Right. 

5 MEMBER POLINSKI: -- puts some 

6 limit -- 

7 MR. PARKER: Right. 

8 MEMBER POLINSKI: -- as to, you 

9 know, at some price level; that's just not -- 

10 you know, if the price of steel was a penny a 

11 pound, that it has the capability issue. Then 

12 there is the -- 

13 MR. PARKER: Right. 

14 MEMBER POLINSKI: We talk about 

15 price. We don't talk about profits, just a 

16 point. 

17 MR. PARKER: Right. Exactly. But 

18 you need a TSL to go at some particular point 

19 for each design line, right, some particular 

20 efficiency for each design line? And so we 

21 have to figure out where to put that line, 

22 right? 
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1 MS. COUGHLIN: No. Actually, I 

2 mean, again, we don't want to move the 

3 efficiency levels too much because, again, 

4 they are already trying to take into account 

5 some of the manufacturing issues. 

6 So, I mean, I can discuss this with 

7 the Navigant people, but, really, what we're 

8 talking about is picking the existing 

9 efficiency levels and dropping them into that 

10 table that defines the TSLs. 

11 MR. PARKER: Okay. 

12 MS. COUGHLIN: And so, you know, 

13 it's really, although there are many, many 

14 factors that come into it, ultimately it's 

15 going to come down to a choice between two or 

16 three efficiency levels. And so I think we 

17 should probably make a draft proposal of -- 

18 MR. PARKER: Okay. 

19 MS. COUGHLIN: -- TSLs that attempt 

20 to meet these requirements and you reflect on 

21 that and then -- I think that might be a 

22 better way to proceed. 
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1 MR. PARKER: Okay. And -- 

2 MEMBER DeLASKI: Could I just ask 

3 one question for clarification for Eric? 

4 MR. PARKER: Andrew DeLaski. 

5 MEMBER DeLASKI: Capability I 

6 understand. And then I think I many have 

7 gotten confused about your next two. 

8 Competitiveness. Define that one for me 

9 again. 

10 MEMBER PETERSON: I would say the 

11 next one would be competitiveness. And what I 

12 would mean by that, if we just picked an 

13 extreme as an example, we understand 

14 capability. If you're to step back one size 

15 where a grain-oriented electrical steel could 

16 be capable of making a transformer, the 

17 transformer manufacturer would have to look at 

18 the size of the transformer I'm going to have 

19 to build with that grain-oriented electrical 

20 steel, would require a larger coarse steel. 

21 Therefore, I'm going to have to buy 

22 a greater degree of volume versus an amorphous 
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1 metal, where I could decrease the size of the 

2 total volume of my coarse steel because of 

3 that higher efficiency. 

4 So for us to be able to be 

5 considered, we would have to price our product 

6 -- we couldn't price it equivalent to 

7 amorphous material because you could buy less 

8 of the amorphous and at the same price -- you 

9 know what I'm saying? And so your overall 

10 cost would be less. 

11 So there has to be a relative worth 

12 associated with recognizing that the amorphous 

13 metal has superior electrical properties. So 

14 with those superior prices, if there is a 

15 price level here, we have to have a price 

16 level such that is below it so that it would 

17 be considered. But, yet, if we price it too 

18 low, obviously there is a cost aspect 

19 associated for us, regardless of whether or 

20 not it is profitable. 

21 If we price it too high, the volume 

22 of the material that a transformer 
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1 manufacturer would have to purchase is greater 

2 for our actually grain-oriented steel such 

3 that they would be better off to go with an 

4 amorphous metal. 

5 So within that relative pricing 

6 between the two is where the question of 

7 combativeness gets. And the farther back you 

8 go provides a greater ability for electrical 

9 steel to have a window of pricing such that 

10 they could compete. 

11 MR. PARKER: Right, right. 

12 MEMBER DeLASKI: So there's some 

13 magic point, which is, of course, very hard to 

14 put your finger on. 

15 MEMBER PETERSON: Well, basically 

16 what it is -- 

17 MR. PARKER: How much market share 

18 do you lose before it's too much? 

19 MEMBER PETERSON: It's not only 

20 market share. It becomes a question, frankly, 

21 just associated with what is my best business 

22 opportunity because I've got other markets 
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1 that I can provide that to. This is a global 

2 market for these products. 

3 MR. PARKER: Right. 

4 MEMBER PETERSON: And so what you 

5 have to take an assessment of is if the 

6 standard level is high enough here such that I 

7 have to price it so low to compete with 

8 amorphous metals, I'm going to be looking at 

9 my overall market. 

10 MR. PARKER: How much U.S. market 

11 share. 

12 MEMBER PETERSON: Exactly. 

13 MR. PARKER: How much U.S. market 

14 share do you lose? 

15 MEMBER PETERSON: So ultimately 

16 what I would end up defining is whether or not 

17 I participated in the U.S. market really would 

18 come down to where the amorphous material is 

19 priced. 

20 If it was priced high enough so 

21 that I could maintain a relative worth such 

22 that a U.S. manufacturer would consider my 
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1 product, I do it, but the amorphous was priced 

2 low enough such that I can get a better 

3 business opportunity elsewhere, I wouldn't 

4 supply this market. It's just flat out an 

5 aspect associated with the business value of 

6 my product. 

7 MEMBER DeLASKI: That's the 

8 competition point. Then there's a third point 

9 that you were trying to define. 

10 MEMBER PETERSON: No. That's 

11 really what I meant. 

12 MEMBER DeLASKI: That one 

13 competition point. Okay. 

14 MEMBER PETERSON: And what I would 

15 try to say by that is it's not necessarily a 

16 magical number associated with right here, I'm 

17 absolutely competitive. There's a degree of 

18 competition. 

19 MR. PARKER: Right. 

20 MEMBER PETERSON: The closer to the 

21 cliff I am, amorphous metal would really 

22 control my ability of whether or not I am 
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1 going to compete. The farther back you go, 

2 the less influence amorphous pricing has on my 

3 ability to compete. 

4 MR. PARKER: The problem is, 

5 though, that that makes the TSL dependent upon 

6 assumptions about amorphous prices under any 

7 -- 

8 MEMBER PETERSON: I think it does 

9 get into some aspects associated -- 

10 MEMBER MILLURE: This is Dave 

11 Millure, Metglas. 

12 MR. PARKER: Yes? 

13 MEMBER MILLURE: Maybe I could 

14 address that. 

15 I agree with Eric. He was talking 

16 about the weight. The core weights are about 

17 the same, will be competitive. And I'm a 

18 little hesitant to use the transformer price, 

19 like Carlos suggested, because, quite frankly, 

20 a $1.88 a pound for M-3 assumption in this 

21 analysis, I'm not so sure that's accurate. It 

22 seems a little high to me. 
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1 But if you go on weight, it's real 

2 world, right, instead of the pricing, because 

3 I don't know about the pricing and assumptions 

4 that went into this. So if we could pick a 

5 TSL level where the core weights are within 25 

6 percent or 20 percent of each other and then 

7 that could put the stake in the ground and at 

8 that TSL, we would be competitive. 

9 MR. PARKER: How do you feel about 

10 that, Eric? 

11 MEMBER PETERSON: I would have to 

12 think about that a little bit. 

13 MR. PARKER: Okay. 

14 MEMBER PETERSON: For the exact 

15 same weight, I think if you had -- well, then 

16 it's just going to come down to pricing. 

17 MEMBER MILLURE: At that point, 

18 it's a pricing policy. 

19 MR. PARKER: Twenty-five percent? 

20 Okay. So we're not going to take a vote 

21 because people have to think about it. But 

22 the idea, the suggestion has been that a 25 
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1 percent difference in core weight would be a 

2 threshold for analysis. 

3 Does that make sense from the 

4 standpoint of what you can do analytically? 

5 MS. COUGHLIN: I have no idea. 

6 MR. PARKER: It's a Brian issue? 

7 Brian, can you? What's that? Can you deal 

8 with that? Okay. Brian is shaking his head 

9 yes. 

10 MS. COUGHLIN: Okay. 

11 MR. PARKER: However, this is still 

12 something that Eric has to think about and Ray 

13 has to think about. How do you feel, Ray? 

14 MEMBER POLINSKI: Ray Polinski, ATI 

15 Allegheny. 

16 Again, just maybe taking a step 

17 back -- and I don't want to -- I think we're 

18 trying to -- there are so many variables. And 

19 we're trying to make this thing simple, I 

20 mean. 

21 The one thing that I haven't seen 

22 -- and I can honestly say I'm sure I haven't 
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1 read all of this as thoroughly and as much as 

2 everyone around the table here or whatever, 

3 but just from the standpoint we're talking 

4 about the steel guys. That's the term I 

5 think, Richard, that you used or whatever. 

6 But going back a step back to the 

7 transformer producers, I mean, when I am out 

8 there in transformer plants, I see maybe five 

9 or ten percent of amorphous material out there 

10 today at max. 

11 I mean, part of the whole cost 

12 analysis, I mean, the cost analysis, we have 

13 talked to transformer producers about the 

14 capital investments they have to make to go 

15 from getting away from using grain-oriented to 

16 go a manufacturing process is all amorphous. 

17 I mean, the cost analysis, is there 

18 something that we can read that shows, you 

19 know, also with -- you know, we talked about 

20 poles and pole transformers getting so large 

21 that you can't -- you've got to place all of 

22 the poles in vaults. 
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1 I mean, there are so many costs 

2 that I keep hearing, that seems that -- how 

3 did we ever define the cost on some of these? 

4 I saw a sheet up there that they would say, 

5 18, you know, 16 billion and it cost us 10 

6 billion or something. Do we have a pretty 

7 good handle on that? 

8 MR. PARKER: Katie, do you want to 

9 explain it? 

10 MS. COUGHLIN: Yes. I mean, 

11 currently for the installation issues, such as 

12 poles and vaults, those are folded into the 

13 existing LCC. And then there's -- I think in 

14 the next stage of set of publications -- 

15 MR. PARKER: For any given TSL, 

16 once the TSL is set, all of those things will 

17 be folded in? 

18 MS. COUGHLIN: Yes, yes. 

19 MR. PARKER: Yes. 

20 MS. COUGHLIN: Because you don't 

21 need TSLs to do the LCC. 

22 MR. PARKER: Yes. Right. Got you. 
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1 MS. COUGHLIN: So yes. The 

2 percentage of installations that are affected 

3 by those concerns has already been counted. 

4 And then the details are written up in the 

5 subgroup analysis, which will be published. 

6 So that's for those particular 

7 issues. And then things to do with 

8 manufacturing and core steel are treated in 

9 the manufacturer impact analysis. 

10 MR. RIVEST: So it's treated in 

11 both places in the sense that part of the 

12 manufacturer's sales price includes 

13 appreciation costs factored into a markup of 

14 raw material costs and then to evaluate the 

15 magnitude of the impact of the investment, 

16 which is really more like a cash flow impact, 

17 if you will. That is done in the 

18 manufacturing impact analysis. 

19 MEMBER POLINSKI: Ray Polinski, 

20 Allegheny. 

21 I mean, we have interviewed a lot 

22 of people. We have done a lot of work. And, 
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1 as everyone said, it's a very daunting task. 

2 I mean, we have talked to some transformer 

3 producers and asked them, "What would be your 

4 estimated capital cost to have to go to 100 

5 percent amorphous design?" I mean, customers 

6 have done that engineering analysis and have 

7 given you data on that. 

8 MS. COUGHLIN: I think that's the 

9 engineering. So yes. Okay. 

10 MEMBER POLINSKI: Okay. Well, Ray 

11 Polinski again. 

12 Just something I'll throw out 

13 there, you know, trying to go back to the 

14 question about the crossover and capabilities 

15 of amorphous and the price performance, you 

16 know, relationship. 

17 You know, we certainly don't want 

18 to talk about it here today, but is there a 

19 way we can back-calculate, you know, what is 

20 the price? At some point, what does the price 

21 of grain-oriented have to be? 

22 And then certainly under 
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1 confidentiality, we could then talk with 

2 people about our costs, which we wouldn't do 

3 in an open -- you know, we could -- and see if 

4 it is -- you know, there's a point in time 

5 where, again, we're not in the business 

6 because it's not cost-effective for us. 

7 And I think we need to work back to 

8 find a price point and then come back to us 

9 and say, "Hey, at that price point, can you 

10 guys invest? And can you be a reliable 

11 supplier moving forward?" Maybe that's a way 

12 to work backwards. 

13 MR. PARKER: Okay. I think the 

14 idea was that weight would be a proxy, weight 

15 differentials would be a proxy, for price 

16 points or -- that was the recommendation? 

17 Yes? 

18 MEMBER PATTERSON: Not if we 

19 consider the product that is sensitive to the 

20 weight as a separate product list. If we do 

21 that step, then the weight issue does not come 

22 into effect across everything. 
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1 MS. COUGHLIN: I think we're -- 

2 MEMBER PATTERSON: If we keep the 

3 weight issue in there, right, then we 

4 effectively try to take the standard to the 

5 lowest common denominator in the marketplace, 

6 which is the weight of the pole, what the pole 

7 -- 

8 MR. PARKER: Yes. Here I think 

9 weight is doing something different, isn't it? 

10 It's serving as a proxy for the amount of 

11 material which affects the price, not -- 

12 MS. COUGHLIN: Yes. We have the 

13 prices, right. The OPS software generates for 

14 the design the weight of the transformer, the 

15 materials used, and the price. So we don't 

16 need weight as a proxy for price. 

17 MR. PARKER: Okay. 

18 MS. COUGHLIN: I don't know what 

19 the -- 

20 MEMBER PATTERSON: And from a 

21 technical point of view, when I run my 

22 optimization, right, I will vary that weight 
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1 dramatically based on the price of the steel. 

2 MS. COUGHLIN: Okay. So -- 

3 MEMBER PATTERSON: The price of the 

4 steel relative to the price of the conductor. 

5 My operation algorithm will take the weight 

6 of the steel in half based on the relative 

7 cost between copper and steel costs. 

8 MR. PARKER: Okay. 

9 MEMBER POLINSKI: We're talking 

10 about the relative costs between silicon steel 

11 and amorphous in this case. 

12 MR. PARKER: Okay. We're going to 

13 have to move on very quickly. 

14 MEMBER GREESON: Rob Greeson, 

15 Federal Pacific. 

16 Sort of in follow-up with what Eric 

17 was saying and the steel guys and this is just 

18 kind of an opinion. If we do not find the 

19 common ground with the competitiveness issue 

20 or we have this window where there is some 

21 participation for all the steel manufacturers, 

22 we're going to run into serious problems. 
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1 The manufacturers, speaking at 

2 least for Federal Pacific, we want at Federal 

3 Pacific the ability to use different types of 

4 steels. 

5 And I would say further to the 

6 amorphous product, it's an excellent product. 

7 And I think, even though the graphs don't 

8 show it, they're kind of separated out to the 

9 top. They're going to be a very competitive 

10 part of the market, no matter where we set the 

11 standards. 

12 Even now, if you don't change them 

13 at all, there's going to be a tendency to 

14 shift different segments of the market towards 

15 this amorphous metal. So the amorphous guys 

16 stand to win, in my opinion, no matter what 

17 happens, but we need to find that common 

18 ground. Otherwise I think the Committee is 

19 going to -- we're going to find some places 

20 where we can't really come into agreement. We 

21 need to find that sweet spot that Eric 

22 discussed. 
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1 MR. PARKER: Look, we're running -- 

2 go ahead, very quickly. Yes? 

3 MR. SAMPAT: Yes. Mahesh Sampat, 

4 EMS Consulting. 

5 I think this very issue has come up 

6 quite a few times. And I have got some 

7 information I would like to share with the 

8 Committee which says weight is not an issue 

9 for pole-type transformer. It will not result 

10 in pole changeout. 

11 So whenever you have an 

12 opportunity, I should be given the opportunity 

13 to share the information. 

14 MR. PARKER: Again, I think weight 

15 was being used for a different purpose in this 

16 context. 

17 MR. SAMPAT: No, no. I'm talking 

18 about -- 

19 MR. PARKER: Yes, yes. 

20 MR. SAMPAT: -- his comment. 

21 MR. PARKER: Yes, yes. 

22 MR. SAMPAT: Okay? 
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1 MR. PARKER: Same thing applies to 

2 Wes. Let's move on. Let's go ahead, Steve, 

3 very quickly. 

4 MEMBER ROSENSTOCK: And I won't 

5 respond to that, but are we still asking for 

6 possible considerations for efficiency levels? 

7 MR. PARKER: Yes. Yes, we are. 

8 MEMBER ROSENSTOCK: Okay. I would 

9 like to go back in terms of -- 

10 MR. PARKER: Before we leave 

11 noteworthy technologies -- were you going on 

12 to something else because -- 

13 MEMBER ROSENSTOCK: I'm going on to 

14 something else, yes. 

15 MR. PARKER: Yes. So did you have 

16 something, Tim? 

17 MEMBER BALLO: On noteworthy 

18 technologies. There are several pages in the 

19 August data that concerned the estimated 

20 amorphous steel demand for various types of 

21 transformers at different efficiency levels. 

22 Someone obviously thought this was 
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1 of enough importance to include it in here. 

2 And I know there is a chapter in the TSD from 

3 last March on the total amorphous production 

4 capacity globally. 

5 It seems, even at some of the lower 

6 energy levels for liquid-immersed 

7 transformers, that the August data projects 

8 that we will use up a substantial amount of 

9 the total amorphous capacity. 

10 And I'm just wondering. I don't 

11 know, but is this a constraint that we should 

12 be looking at in defining a TSL as far as 

13 projecting reasonable assumption -- 

14 MR. PARKER: Capacity constraint? 

15 MEMBER BALLO: -- about amorphous 

16 capacity in 2016 and selecting TSLs that 

17 leverage that capacity or project what the 

18 capacity might be most advantageously. 

19 MEMBER MILLURE: Dave Millure, 

20 Metglas. 

21 I do have an issue with those 

22 tables. Again, I don't know who is paying 
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1 $1.88 for M-3 these days, but I'm sure that 

2 comes into that skew toward amorphous in those 

3 tables. 

4 But that said, I have talked to our 

5 upper management in Tokyo because they will 

6 make the investment decisions for Metglas. We 

7 can just submit the projects. 

8 And they have made a commitment to 

9 support this market. They would look at 100 

10 kilotons of capacity, which is for the U.S. 

11 market, because it's 3 years to do that. It 

12 depends on what this Subcommittee does, 

13 obviously. 

14 So amorphous expansion has been a 

15 key element of Hitachi Metals' investment 

16 philosophy since they purchased us from 

17 Honeywell in 2003. We have gone from two 

18 casks to seven. And we would certainly look 

19 at adding more depending, again, on what the 

20 Subcommittee does. 

21 MR. PARKER: Okay. Listen, we're 

22 going to have to cut off. I'm going to have 
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1 -- okay. One more, Steve, very quickly. 

2 MEMBER ROSENSTOCK: But wait a 

3 minute. What about if people have other 

4 ideas? This is very important. 

5 MR. PARKER: No, no, no. We're not 

6 stopping the other ideas. I just want to cut 

7 off on noteworthy technologies. Okay? So 

8 what I would like to do is suggest a process 

9 for moving forward because I think we have had 

10 a long discussion on noteworthy technologies. 

11 And I don't want us to get bogged down. 

12 What I would suggest is that the 

13 steel manufacturers, Eric, Ray, Dave, caucus 

14 with Katie and Brian and try to come up with a 

15 criterion that they could propose to the 

16 group, hopefully electronically. 

17 I'll ask them what is a reasonable 

18 time frame for doing that? But it could be a 

19 price point. It could be a shipments, 

20 forecast shipments, gap, whatever works for 

21 the manufacturers and for the availability of 

22 the data. 
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1 I gather from Andrew I assume he is 

2 speaking for his colleagues that -- 

3 MEMBER DeLASKI: Just myself, 

4 actually. 

5 MR. PARKER: You are speaking for 

6 yourself? Okay. All right. So holler if you 

7 differ on it, but there is some openness from 

8 the standpoint of the advocates to consider 

9 competitiveness impacts. I think they have to 

10 be considered anyway. So we just have to 

11 figure out what is the right variable because 

12 there has got to be some kind of quantitative 

13 variable. 

14 What would be a reasonable time 

15 frame for reporting back to the group, 

16 hopefully in time for us to respond to it 

17 before the next meeting, which is scheduled 

18 for October 12th. Any thoughts? 

19 MEMBER PETERSON: We've done some. 

20 We have some modeling capability. So I've 

21 already got some data for like the specific 

22 transform design that we can share with the 
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1 group and then determine some type of means of 

2 how to take what we've got. 

3 So I think we should be able to 

4 certainly provide our rough draft proposal by 

5 the end of next week. 

6 MR. PARKER: End of next week? So 

7 that would be -- 

8 MEMBER PETERSON: A week from 

9 today, the 23rd. 

10 MR. PARKER: The 23rd? 

11 MEMBER PETERSON: We've put 

12 together a kind of -- 

13 MR. PARKER: Supply it to the group 

14 or supply it to Katie to be in the discussion 

15 with her. 

16 MEMBER PETERSON: Katie I would 

17 recommend and just to see if this is even 

18 within the framework of what you feel 

19 data-wise, et cetera, you could pull together. 

20 MS. COUGHLIN: Probably it should 

21 go to Navigant because -- 

22 MEMBER PETERSON: Okay. 
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1 MS. COUGHLIN: -- I think this is 

2 more of an engineering discussion. 

3 MR. PARKER: Navigant? Okay. 

4 MS. COUGHLIN: It's product price, 

5 yes. 

6 MEMBER PETERSON: So Brian or -- 

7 MS. COUGHLIN: We'll be working 

8 together. So yes. 

9 MEMBER PETERSON: Okay. 

10 MS. COUGHLIN: I also want to 

11 remind everybody that there were other issues 

12 brought up about the analysis. 

13 MR. PARKER: Absolutely. 

14 MS. COUGHLIN: So if we were to go 

15 back and redo everything to deal with those 

16 issues, that's going to push forward. It's 

17 going to slow down the process of dealing with 

18 this issue. 

19 MR. PARKER: Yes. What would be 

20 the right order in your view? To deal with 

21 the other issues first? 

22 MS. COUGHLIN: Well, it's just, you 
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1 know, there's a feed-through of information. 

2 And if you go back to that first slide of the 

3 -- 

4 MR. PARKER: Get the LCC done. So 

5 you need that before -- 

6 MS. COUGHLIN: Even a substream of 

7 the LCC. 

8 MR. PARKER: Okay. 

9 MS. COUGHLIN: If there are going 

10 to be modifications, that has to be done 

11 before we arrive at this. 

12 MR. PARKER: Okay. So that will 

13 give you a little bit more time, I guess. And 

14 that's the other question. Will we get to the 

15 net impacts analysis before next meeting? 

16 Maybe that could be tabled for a later meeting 

17 and focus next meeting on LCC? 

18 MS. COUGHLIN: I think if you're 

19 going to discuss -- well, I don't know how 

20 many meetings you're planning on having. 

21 MR. PARKER: Yes. 

22 MS. COUGHLIN: But, again, to 
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1 discriminate between proposed standard levels, 

2 you need the national impacts version of the 

3 analysis. 

4 MR. PARKER: Right. 

5 MS. COUGHLIN: I mean, my 

6 inclination is to try to meet these criteria 

7 for composing draft TSLs with the existing 

8 efficiency levels. So it will be somewhat 

9 approximate, but you can chose an efficiency 

10 level where you've got only amorphous and to 

11 compare that to what happens when you choose 

12 an efficiency level where you have multiple 

13 steels that meet the efficiency. 

14 And if we proceed that way, we can 

15 look at sort of the net national cost-benefit 

16 differences. If they end up being very large, 

17 then we can kind of drill down and look in 

18 more detail. 

19 I think that can move forward to 

20 some degree on coming up with, like I said, 

21 trial standard levels out of the existing 

22 efficiency levels with the existing data that 
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1 take into consideration the issues that have 

2 been raised here but possibly not at the level 

3 of detail that -- 

4 MR. PARKER: So, in other words, 

5 what you could do is you could work on the 

6 suggestions from people considering the 

7 various assumptions. 

8 MS. COUGHLIN: Yes. I mean, we 

9 could come back with the -- 

10 MR. PARKER: The LTC office. 

11 MS. COUGHLIN: No. Forget the LTC. 

12 This is just leaving everything alone. 

13 MR. PARKER: Okay. 

14 MS. COUGHLIN: So come back with a 

15 list of proposed TSLs based on the existing 

16 analysis. 

17 MR. PARKER: Right. 

18 MS. COUGHLIN: So there will be the 

19 one from LCC. There will be the one for 

20 maximum energy savings. 

21 MR. PARKER: Right. 

22 MS. COUGHLIN: There will be the 
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1 max tech. And then there will be attempts to 

2 take into account these market issues. And 

3 that will give us the fastest way of providing 

4 information on kind of in the big picture, how 

5 much difference does it make? 

6 And then once you have that, then, 

7 you know, we can decide if we need to focus 

8 our attention on which aspect of the problem 

9 because the level of detail is so high that I 

10 don't think we can do everything in the 

11 existing meeting schedule. 

12 So I think we need to move to some 

13 bigger picture numbers and then kind of go 

14 through that loop a couple of times. That is 

15 the idea. 

16 MR. PARKER: What I guess I am 

17 trying to get a handle on is -- sorry if I am 

18 being obtuse here, but you said that there 

19 were the concerns with the LCC methodology 

20 that we discussed earlier that would need to 

21 be worked through. And that was one source to 

22 work for you. 
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1 MS. COUGHLIN: There are concerns 

2 with the choice of designs that are being 

3 used. 

4 MR. PARKER: Right, the subgroups, 

5 right, and all of that. 

6 MS. COUGHLIN: And that is more of 

7 an engineering issue. 

8 MR. PARKER: Right. 

9 MS. COUGHLIN: So if we are going 

10 to change the choice of designs that are put 

11 into the LCC, we need to do that first. 

12 MR. PARKER: First. Okay. All 

13 right. So I see what you are saying. That's 

14 upstream. Okay. So we need to do that. I 

15 guess the question is, can you do that and 

16 work with Eric on the TSL issue before the 

17 next meeting? Do you guys have the capability 

18 to handle both before the next meeting or is 

19 that too much work? I guess that's what I'm 

20 trying to figure out. 

21 MEMBER MILLURE: You mean work with 

22 Eric and Ray and Dave? 
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1 MR. PARKER: What's that? 

2 MEMBER MILLURE: Dave Millure, 

3 Metglas. 

4 You mean work with Eric and Ray and 

5 Dave? 

6 MR. PARKER: Yes, yes. 

7 MEMBER MILLURE: Okay. 

8 MR. PARKER: Is it reasonable? Is 

9 it a reasonable request from the standpoint of 

10 Navigant's and LBL's capacity to have both of 

11 those done in time for us to discuss at the 

12 next meeting? 

13 MS. COUGHLIN: Well, we can 

14 certainly -- again, what I would suggest is 

15 that we discuss the issues and see if we can 

16 come up with a way of representing 

17 approximately those concerns within the 

18 existing framework that we have. And if we 

19 can do that, then we can produce some numbers. 

20 But otherwise the problem is you 

21 need to go all the way to the NIA to get at 

22 what you're after. So we have to sort of 
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1 carry the whole thing through that we have 

2 now, figure out what's wrong with it, and then 

3 go back and loop back and do it again. And 

4 that I don't think is feasible before the next 

5 meeting. 

6 MR. PARKER: Okay. I've got it. 

7 So what is the best way to handle it? Yes? 

8 MEMBER GREESON: Rob Greeson, 

9 Federal Pacific Transformer. 

10 To what Katie is saying -- and I 

11 could maybe get into time to get into this 

12 detail later, but on the medium-voltage 

13 dry-type of this analysis, I've got a lot of 

14 questions about some of the data that I have 

15 recently been able to see. That is going to 

16 affect everything that Navigant has done, the 

17 inputs, the inputs that go into what she is 

18 doing. 

19 And so she said, you know, first 

20 thing, let's straighten out the inputs I think 

21 is what I heard you say. Because I sure would 

22 hate for Navigant to do a lot of tweaking of 
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1 everything and then I come to the next meeting 

2 and I said, "You know, we need to redo all of 

3 this again because I don't agree with the 

4 inputs." 

5 MR. PARKER: Right, right. 

6 MEMBER GREESON: We have got to 

7 solve the problem about the designs first, 

8 liquids and dries. Are we okay with what OPS 

9 has presented with regard to liquid? Are we 

10 okay with what OPS has presented with regard 

11 to dry? Until we get that straightened out, I 

12 think we're spinning our wheels to go further 

13 beyond that because that is extremely key to 

14 get those inputs correct first. 

15 MR. PARKER: Okay. Good. Greg? 

16 MR. COULTER: I hate to wander back 

17 into this. This is Greg Coulter, Prolec GE. 

18 I am still trying to find that 

19 point that everybody is trying to find where 

20 silicon and amorphous cross over. And I am a 

21 transformer guy. I am not real comfortable 

22 with the steel guys sitting around deciding 
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1 where it crosses over for a transformer guy. 

2 But I am comfortable with Navigant picking 

3 that point. They have all of the technical 

4 data. They have all the designs. I think 

5 they can define that point. 

6 They don't need the steel guys. I 

7 have the data, but you wouldn't like it if I 

8 picked it. But I think, you know, they have 

9 the data. They can pick. And we would be 

10 comfortable with Navigant deciding where that 

11 point is where silicon-amorphous compete. 

12 MR. PARKER: Okay. 

13 MR. COULTER: And that's peg the 

14 point and let them do it. 

15 MR. PARKER: Does the word 

16 "compete" have any specificity to -- 

17 MR. COULTER: And they don't need 

18 these guys doing it. They -- 

19 MEMBER MILLURE: Dave Millure, 

20 Metglas. 

21 You have to define "compete." 

22 MR. COULTER: Greg Coulter, Prolec. 
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1 I agree. You have it on those 

2 charts up there. They've got to get the LCC 

3 right, but they have -- I mean, I don't like 

4 those scatter plots she uses. I mean, I bring 

5 them down to single points of that thing. 

6 But it crosses over, does an 

7 absolute crossover. You can see it on her 

8 charts. We've got to go back. I was the one 

9 who brought up some questions about all that 

10 data. We get that data right, which is what 

11 they're going to recycle. That point comes 

12 out. 

13 You're going to have that point 

14 where all the steels kind of cross over. 

15 Amorphous can still compete. Silicon can 

16 still compete. And that's just -- by the way, 

17 Dave, that's just one point. We're not 

18 choosing that point as the final thing. 

19 MR. PARKER: So in your world, on 

20 the left side of the point, you go from your 

21 current market share to the right point, you 

22 go to zero? I mean, is it really that sudden 
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1 a jump? 

2 MR. COULTER: Well, it's within 

3 reason. That's why Carlos was proposing, you 

4 know, ten percent. Of course, it's fuzzy, but 

5 yeah, it really is that simple. That's 

6 exactly right. Within the accuracy of the 

7 numbers, it is that simple. 

8 MR. PARKER: Yes. 

9 MEMBER ROSENSTOCK: Just the bigger 

10 picture. You also have to remember as part of 

11 this process, later on the Justice Department 

12 does do an analysis of the impact on 

13 competition. And basically if they write 

14 strongly that, yes, they will hurt 

15 competition, then DOE really has to consider 

16 -- 

17 MR. PARKER: Yes. 

18 MEMBER ROSENSTOCK: -- its levels. 

19 MR. PARKER: Yes. 

20 MEMBER ROSENSTOCK: And they have 

21 to review the levels. 

22 MR. PARKER: Well, they have an 
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1 antitrust analysis that involves, you know, 

2 enough from my private practice days. What is 

3 this Herfindahl-Hirschman, HHI, Index, which 

4 is reasonably arbitrary. I mean, it could be 

5 a little bit more, a little bit less. It's 

6 arbitrary in that sense, the point at which 

7 they decide that there is significant 

8 anti-competitive concerns, right? 

9 And we can talk to DOJ and say, you 

10 know, "That's the point. You can look at the 

11 market share analysis, the shipments 

12 analysis." 

13 MS. COUGHLIN: Well, again, we're 

14 getting way ahead of -- we are just trying to 

15 do information, right? The draft TSL is 

16 information. And the important thing for the 

17 information is that it meaningfully 

18 discriminates between different scenarios. 

19 So, you know, if we do a draft TSL 

20 that's on amorphous, that doesn't mean DOE is 

21 going to pass a standard that is on amorphous. 

22 That just means that I can present you with 
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1 numbers that give you the energy savings under 

2 that scenario. So the technology options are 

3 really -- 

4 MR. PARKER: Right. 

5 MS. COUGHLIN: It's not a question 

6 of whether it's realistic or likely to happen. 

7 It's a question of, does it meaningfully 

8 discriminate between, you know, TSL-2 and -- 

9 MR. PARKER: But I think that's the 

10 point. I think the point is that people 

11 aren't -- you know, on the one hand, they want 

12 to have the capability thing at which market 

13 share goes to zero, but they would also like 

14 to explore realistic intermediate scenarios. 

15 And the question is, what is a good 

16 point at which one says there are significant 

17 competitive impacts that really have to be a 

18 source of concern, right, as between amorphous 

19 and conventional steel? 

20 MS. COUGHLIN: Competitive impacts 

21 are an output of the analysis after you have 

22 taken a trial standard level. So, again, 
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1 we're going in a circle. So we need trial 

2 standard levels to work with to generate the 

3 information about competitiveness. 

4 So what we need is to make sort of 

5 possibly crude but kind of informationally 

6 useful -- 

7 MR. PARKER: I see. I see what you 

8 are saying. 

9 MS. COUGHLIN: -- distinctions 

10 between -- 

11 MR. PARKER: I finally get it. 

12 Okay. So you have to basically do this 

13 iterative thing. You just sort of keep 

14 keeping up with the trial standard level, do 

15 the run, see what the competitiveness impacts 

16 are. And then at some point you say they're 

17 too great, we back off. 

18 MS. COUGHLIN: Well, yes. And, 

19 again, you have multiple criteria that are in 

20 the law that define what is an acceptable 

21 standard, not just competitiveness. 

22 So we don't have a lot of time to 
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1 keep redoing the analysis over one aspect of 

2 one of the seven criteria. So, again, what 

3 we're trying to do is map out the sites of 

4 possibilities. 

5 MR. PARKER: Right. 

6 MS. COUGHLIN: And I say, "Compare 

7 this TSL and this TSL." We understand 

8 meaning. You know, what's the meaningful 

9 difference between those two? 

10 The question of what will happen 

11 once the TSLs have been analyzed, that's a 

12 whole different story. 

13 MR. PARKER: Except that people are 

14 concerned about what happens once a TSL is 

15 adopted. And they want to make that a big 

16 point. 

17 MEMBER DeLASKI: Of course they 

18 are. That's what we're all here for, right? 

19 MR. PARKER: Yes, yes, right. 

20 MEMBER DeLASKI: I guess where I 

21 think this is closing -- and maybe we kind of 

22 need to figure out -- 
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1 MR. PARKER: Yes. 

2 MEMBER DeLASKI: To those this, I 

3 would suggest given where we are in time 

4 today, but I thought I heard a proposal that 

5 Navigant and LBL together should come up with 

6 a level that attempts to capture this concept 

7 that we have been talking about of a level 

8 that supports both core materials, can likely 

9 compete knowing that the market is dynamic, 

10 right? You know, we can't pick over a long 

11 period of time. Bob is shaking his head, but 

12 I -- 

13 MR. PARKER: I thought Katie's 

14 point was that -- 

15 MEMBER DeLASKI: I would like to 

16 put that on the consultant to come up with 

17 that level. I'm not sure whether the -- 

18 MEMBER MILLURE: I woke up this 

19 morning, and I opened up Mr. Patterson's 

20 presentation. And throughout that, it said 

21 that the prices in all these analyses of the 

22 silicon steel transformers are overstated and 
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1 the prices of the amorphous, at least in the 

2 one case I saw him reference, it was 

3 understated. 

4 So I have some severe concerns 

5 looking for a crossover point using price data 

6 for transformers that I don't think is 

7 accurate. 

8 MR. PARKER: So there are two 

9 separate issues here. 

10 MEMBER MILLURE: That's why I am 

11 looking for some -- 

12 MR. PARKER: There are two separate 

13 issues here. One is the -- 

14 MEMBER PATTERSON: That's a 

15 different question. 

16 MEMBER MILLURE: No. I'm 

17 addressing Greg's question. 

18 MEMBER PATTERSON: The discussion 

19 here was on, where should we pick appropriate 

20 TSL levels? 

21 MEMBER MILLURE: That's exactly 

22 what I was talking about. 
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1 MS. COUGHLIN: The issue that I 

2 believe is being raised is that if the 

3 materials prices that we used to generate the 

4 cloud of designs were different, you would 

5 have a different set of engineering options. 

6 So the question to be decided is, 

7 are we going to go back and redo that work? 

8 We have different materials prices. And if we 

9 are, then that is the first thing we have to 

10 do. Everything else is downstream. 

11 And so it's partly a practical 

12 question of, you know, within the schedule, is 

13 it possible for OPS to do that work? And it's 

14 partly a question of, would it really make 

15 that much difference? 

16 MR. PARKER: Right. People don't 

17 really know that. 

18 Robert? 

19 MR. BERMAN: Very quickly. Robert 

20 Berman, Berman Economics. 

21 It's fine for Navigant to pick the 

22 competitiveness range, but for market reasons, 
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1 you have to do it independent of cost and 

2 price. And doing it within a certain boundary 

3 based on weight, then you're allowing the 

4 material manufacturers, then, to adjust their 

5 prices consistent with the TSLs and the 

6 pricing and everything else. And you don't 

7 have to be concerned with that in picking 

8 where they are competitive. 

9 If the weights are similar, -- 

10 MR. PARKER: Right. 

11 MR. BERMAN: -- within 25 percent, 

12 then let them in the market deal with what the 

13 pricing issue is. You can't predict that. I 

14 mean, the market is dynamic. 

15 MR. PARKER: Yes. 

16 MR. BERMAN: So if you abstract the 

17 market dynamics, you can do it. 

18 MR. PARKER: Okay. So I think what 

19 we should do is basically come upon a process. 

20 I agree with Andrew we really, really need to 

21 move on here. 

22 So I guess the question is -- and, 
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1 again, we're not leaving your concept, Steve, 

2 -- don't be alarmed -- or other concepts. But 

3 I am trying to close on noteworthy 

4 technologies. 

5 So is it feasible for -- and your 

6 point about the other stuff is well-taken. 

7 Over the next week, what I am going to do is I 

8 am going to ask everybody to table by a week 

9 from today any concerns you have with the 

10 methodology, all concerns you have with the 

11 methodology, that had been expressed at this 

12 meeting, the life cycle cost analogy, the 

13 upstream stuff. Put it online. Send it to 

14 us. We will post it on the website. 

15 And we can have a -- actually, 

16 maybe what we should do is try to resolve that 

17 today, get an agreement on, you know, what are 

18 the concerns with methodology that really need 

19 further analysis. Actually, we should 

20 probably do that today before we leave. Is 

21 that -- 

22 MS. COUGHLIN: I'm going to make a 
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1 counter-proposal -- 

2 MR. PARKER: Okay. Go ahead. 

3 MS. COUGHLIN: -- which is that we 

4 will go through the issues. I think some 

5 measure of quantitative impact on the results 

6 should be used in focusing attention on -- 

7 MR. PARKER: Okay. How do people 

8 around the table know what matters and -- 

9 MS. COUGHLIN: We can go through 

10 that. 

11 MR. PARKER: Okay. 

12 MS. COUGHLIN: So we can provide 

13 again -- 

14 MR. PARKER: Do you mean here today 

15 or later? 

16 MS. COUGHLIN: Later. 

17 MR. PARKER: Later? Okay. 

18 MS. COUGHLIN: Yes. 

19 MR. PARKER: So, then, you would 

20 like the idea of them doing this by email? 

21 MS. COUGHLIN: Yes. Make a list of 

22 all of the issues. And then for the ones -- 
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1 MR. PARKER: Okay. 

2 MS. COUGHLIN: -- where we feel 

3 confident that we can say, "This is going to 

4 have less than X percent impact on the 

5 results," -- 

6 MR. PARKER: Okay. 

7 MS. COUGHLIN: -- they are going, 

8 you know -- 

9 MR. PARKER: Okay. So the next 

10 meeting is October 12th. That's almost a 

11 month away. I'm going to say by the end of 

12 next week, that is the deadline for submitting 

13 all of the concerns that you have expressed 

14 around the table today in writing to 

15 everybody. 

16 It will be posted. We will figure 

17 out the web interface to do this so that 

18 everybody can see it, but it will be posted on 

19 the website. We may create a space on the 

20 website. I don't know. I'm speaking for DOE 

21 here. I shouldn't. But figure out a way to 

22 post it. 
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1 Deadline of a week from today. At 

2 that point we will shift it over to LBL and 

3 Navigant to respond with an initial screening 

4 feedback on sensitivity basically and perhaps 

5 skew. Those are the two really criteria. 

6 Does altering this actually skew the analysis? 

7 And does it matter for the market in terms of 

8 shipments? 

9 And we'll try to conduct sort of an 

10 online discussion and see how far we get if 

11 it's -- I will make a decision about whether 

12 the discussion is productive, whether it's 

13 moving forward or now. 

14 If we could get closure on that, on 

15 what variables really require new analysis, if 

16 any, and what concerns with the variables, 

17 that would be very helpful. 

18 I think the changes analysis, the 

19 short memo that John talked about earlier to 

20 be posted, what would be a reasonable time to 

21 get that posted, the two-pager that John 

22 mentioned about the changes from the prior 
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1 analysis and the chapters for the TSD that are 

2 out, the new chapters? How soon could that be 

3 up? Anybody? Brian? 

4 MR. COFFEY: I think we would want 

5 to caucus tomorrow. 

6 MR. PARKER: Okay. 

7 MR. COFFEY: I would say very 

8 shortly. 

9 MR. PARKER: Okay. Very shortly. 

10 Do people need that in order to do their own 

11 submissions on the basis of concerns about 

12 methodology? I'm seeing yes? Okay. 

13 So the critical path, then, is LBL 

14 and Navigant post everything that they can 

15 post about updates to the TSD, changes between 

16 the TSD, the new TSD and the old TSD, 

17 everything that is ready to go. 

18 And I guess maybe we should then 

19 trigger the timetable. A week from the date 

20 of that posting, which we hope will be very 

21 soon will be your time frame for getting your 

22 critique of the analysis in. 
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1 This is a proposal for me. I'm not 

2 depicted here. I am proposing this. Do 

3 people think this is a -- and then after that, 

4 once that is in, they can start. We will try 

5 to close online. We will try to come up with 

6 an agreement online about what changes need to 

7 be reflected in further analysis, what 

8 concerns need to be reflected in further 

9 analysis so that they can get that started 

10 before the next meeting and hopefully have it 

11 concluded by the next meeting. 

12 That would allow us to discuss at 

13 the next meeting all concerns with the 

14 analysis and hopefully close in the next 

15 meeting on the concerns with the analysis. 

16 Time permitting, we would continue 

17 on a parallel track the discussion about TSLs. 

18 I think we have made great progress in 

19 getting three of them on board. 

20 They can start with that if they 

21 have time with the other stuff. Once that's 

22 done, once the upstream stuff is done, they 
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1 can start with the three TSLs that we have and 

2 start working those through as well as the 

3 capability TSL and the max tech. So we 

4 actually have five TSLs now that are already 

5 on board. 

6 The steel maker TSL still needs to 

7 be decided. And I think the remaining 

8 question would be what would be the time frame 

9 for and the process for deciding on how to 

10 define quantitatively that TSL, right? 

11 I'm comfortable if others are 

12 leaving it up to Navigant and LBL to come up 

13 with a proposal for that based upon whatever 

14 proprietary consultations they may want to 

15 make with the parties. Is everybody 

16 comfortable with that as an approach, that 

17 we'll just table that? 

18 And we still have Steve's point 

19 about additional TSL criteria that we might 

20 want to table. But does that make sense so 

21 far? 

22 MEMBER DeLASKI: It makes sense to 
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1 me. I guess what I would also add to that is 

2 that, Katie, I don't think this is for the 

3 next meeting. Coming out of that meeting, if 

4 we decide we have to make some adjustment to 

5 it, then there could be another run between 

6 the second and third meeting, right? It isn't 

7 like we're locked in now to negotiation. 

8 MS. COUGHLIN: Oh, yes. No, no, 

9 no. Yes, yes. 

10 MEMBER DeLASKI: It's not the end 

11 game. 

12 MR. PARKER: Remember now we're 

13 talking about another run between the second 

14 and third meetings. We're only giving 

15 ourselves four meetings, Andrew, but okay. 

16 MEMBER DeLASKI: You know, you can 

17 keep bringing it up, Richard, but -- 

18 MR. PARKER: Sorry. 

19 MEMBER DeLASKI: -- let's not 

20 because this process was started when it was 

21 started. 

22 MR. PARKER: Yes, yes, yes. Fair 
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1 enough. Fair enough. 

2 MEMBER DeLASKI: There are not 

3 fingers to point if you want to -- 

4 MR. PARKER: Well, I'm not pointing 

5 fingers. 

6 MEMBER DeLASKI: Let's not go 

7 there. 

8 MR. PARKER: Okay. Sorry. Okay. 

9 MEMBER CASKEY: John Caskey, NEMA. 

10 It seemed like a lot of that you 

11 spelled out a process. We have some 

12 SharePoint or something like that that we 

13 would have access to? 

14 MR. PARKER: Yes. 

15 MEMBER CASKEY: We would post 

16 information there and then comment on it? Is 

17 that SharePoint up and running today or when 

18 will we get passwords and access? I mean, I 

19 can't necessarily post comments a week from 

20 now if the SharePoint and that stuff isn't up 

21 and running until two weeks from now. 

22 MR. PARKER: Well, I don't know 
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1 that we need password access or anything like 

2 that. It is all public, right? What you are 

3 submitting for this process is going to be 

4 public. It could just go up on the website 

5 along with all the other analysis. 

6 MEMBER CYMBALSKY: Yes. I think 

7 it's just email. We don't have a shared space 

8 where people are posting things. So you email 

9 it, and we'll post it on the website or share 

10 it with -- 

11 MEMBER CASKEY: Okay. So we email 

12 it to Navigant or you guys? 

13 MR. PARKER: Right. 

14 MEMBER CASKEY: You guys post it. 

15 And then we provide comments back to you 

16 directly? And then you post those comments? 

17 MR. PARKER: Right. 

18 MEMBER CASKEY: And we go back and 

19 forth like that? 

20 MR. PARKER: Yes. It's crude, but, 

21 you know, we can't redesign the DOE website 

22 around the table. So we have to do something. 
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1 And Andrew's point is well-taken. 

2 And also I am liking the fact that we have a 

3 month until the next meeting because there is 

4 a lot of work to be done between now and then. 

5 So your point is very, very well-taken. 

6 MEMBER CYMBALSKY: May I suggest 

7 that since we are going to wrap up here, I 

8 think it would be useful if we sort of have 

9 closure, go around the table? Maybe people -- 

10 MR. PARKER: Well, before we do 

11 that, John, there is Steve's point about 

12 additional criteria that you wanted to raise? 

13 MEMBER ROSENSTOCK: Yes. If we're 

14 done with the other discussion about the -- 

15 MR. PARKER: Anything on noteworthy 

16 technologies? Is that -- 

17 MEMBER ROSENSTOCK: -- steel or 

18 noteworthy technologies, I don't -- 

19 MR. PARKER: Are we satisfied 

20 there? 

21 (No response.) 

22 MR. PARKER: Okay. 
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1 MEMBER ROSENSTOCK: Okay. One 

2 possibility for criteria -- 

3 MR. PARKER: Wait a minute. Katie, 

4 I'm sorry. You were still -- you're not off 

5 the hot seat yet. 

6 MS. COUGHLIN: Okay. 

7 MEMBER ROSENSTOCK: Because Steve 

8 wanted to table some additional possibilities 

9 for TSL criteria. 

10 MEMBER ROSENSTOCK: I don't want to 

11 table them. I wanted to suggest them. 

12 MR. PARKER: Suggest them. Right. 

13 Put them on the table. 

14 MEMBER ROSENSTOCK: Yes. Thank 

15 you. 

16 Looking at table 3.1 in the revised 

17 analysis, it is interesting how the estimate 

18 of equipment cost goes up from level 1 to 2. 

19 Then it goes down for level 3. 

20 So one criterion that could be 

21 considered is for levels above the baseline, 

22 again, speaking as a customer, representing 
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1 customers who area actually buying this 

2 equipment and installing it, is, could there 

3 be one level that shows the minimal equipment 

4 cost increase above the baseline I'm saying? 

5 That would be kind of important for us as a 

6 customer to kind of see that as part of this 

7 analysis. 

8 MR. PARKER: Minimal equipment 

9 cost? Again, I guess the minimal equipment 

10 cost increase would be zero. Right? 

11 MEMBER ROSENSTOCK: No. Above the 

12 baseline, above the baseline. 

13 MR. PARKER: Plus a penny. 

14 MS. COUGHLIN: Yes, I think 

15 technically we can do it. Yes. 

16 MR. PARKER: So how do define 

17 minimal? 

18 MEMBER ROSENSTOCK: Again, it would 

19 be, you know, we have these numbers, let's 

20 say, from 99.08 to 99.5, let's say, for design 

21 line 1, maybe an iteration in between the 

22 draft efficiency levels. What happens if you 
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1 go to 99.12 or 99.2 or 99.24? 

2 Maybe there's a sweet spot that 

3 minimizes cost. As a customer, as someone who 

4 represents customers, that's kind of important 

5 because, yes, price is important. And that 

6 would be a criterion that would be helpful for 

7 some of these discussions. 

8 Again, above the baseline, not only 

9 penny, but, again, it's a matter of minimizing 

10 cost can be very important these days. Thank 

11 you. 

12 MEMBER DeLASKI: Steve, like I 

13 said, I don't still get the concept. I mean, 

14 if you -- the key criteria is to minimize 

15 cost. And the selection is no change to the 

16 standard. 

17 MEMBER ROSENSTOCK: Again, I'll 

18 reiterate above the baseline. We're saying 

19 not using the base case, but is there a level? 

20 For example, you are talking anywhere from 

21 $7.4 billion in increased costs, up to $33.8 

22 billion, table 3.1, for all distribution 
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1 transformers. That's the estimated 

2 incremental cost to the consumers, to the 

3 customers. 

4 Is there another efficiency level 

5 that is less than $7.4 billion significantly? 

6 MEMBER DeLASKI: Of course. 

7 There's a million, right? 

8 MEMBER ROSENSTOCK: Well, again, 

9 no. I'm trying to say, is there something in 

10 between the base and one or one and two or two 

11 and three, where there is a sweet spot, even 

12 lower incremental cost? 

13 MR. PARKER: I think I take it 

14 that's -- 

15 MEMBER ROSENSTOCK: Well, again, 

16 it's a matter of that somehow, you know, when 

17 they chose 99.16, then they did their runs. 

18 And they got that equipment cost. Is there 

19 another run that shows minimal equipment cost 

20 increase? That's what I'm asking for. 

21 MR. BERMAN: Robert Berman, Berman 

22 Economics. 
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1 Yes. I think if we focus on the 

2 fact that the ultimate customer here is not 

3 the person that's buying the transformer but 

4 the person who is buying me electricity. And 

5 what is the cost of the additional efficiency 

6 is effectively what we are talking about from 

7 one CSL to the next. That is to say, 

8 additional efficiency levels will save 

9 additional amounts of energy but may come at a 

10 higher cost. 

11 So if we look over the 30-year life 

12 of the transformer, we save X amount of 

13 kilowatt hours per year at a certain cost of 

14 capital. So that gives us, then, a cost per 

15 kilowatt hour very similar to what is on an 

16 appliance standard for the Energy Star 

17 appliance, as compared to the standard. 

18 So that's one measure. A second 

19 measure related to the same thing is when we 

20 save energy, we're also saving fuel costs. So 

21 what is the effect on the consumer's bill is 

22 another thing we can look at with using less 
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1 fossil fuel to generate? 

2 There is a savings there. And 

3 there is a savings to the -- and there is a 

4 cost to the additional transformer. What is 

5 the ultimate effect of that on the customer 

6 bill based on standard utility accounting 

7 procedures? 

8 MEMBER ROSENSTOCK: Steve 

9 Rosenstock. 

10 That really isn't where I was 

11 going, but that is another way to look at the 

12 analysis. But I was thinking much less 

13 sophisticated than that. 

14 Again, it is a matter of is there a 

15 way that Navigant can do it, again with these 

16 efficiency levels? You are going in between 

17 efficiency levels to show the spot that 

18 minimizes the increase in equipment costs 

19 above the baseline. 

20 MEMBER MILLURE: Dave Millure from 

21 Metglas. 

22 MEMBER ROSENSTOCK: It's not linear 
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1 because otherwise it would show level 3 being 

2 higher than level 2. This shows level 3 being 

3 less than level 2 in terms of equipment costs. 

4 MEMBER PATTERSON: If you look at 

5 the incremental improvement of efficiency for 

6 the incremental dollars spent and scatter that 

7 over the 40,000 designs, I think you're going 

8 to get to what he's trying to achieve. What's 

9 the maximum efficiency gain for the smallest 

10 dollar spent? 

11 MEMBER ROSENSTOCK: Thank you. 

12 MEMBER PATTERSON: And this is not 

13 a linear number over these 40,000 designs, I 

14 can tell you. It's an analysis that needs to 

15 be run. It's a very good point. 

16 MEMBER ROSENSTOCK: And the NIA 

17 shows it. 

18 MR. COHEN: Dan Cohen. Dan Cohen, 

19 DOE. 

20 I just want to remind. We talked a 

21 little bit about this yesterday. And I know 

22 as the lawyer, I get to be kind of the pesky 
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1 fly at the picnic or something. 

2 But the way we have to do the 

3 analysis when we're actually selecting a level 

4 is from the top down. And it sounds to me 

5 without understanding all of the complete 

6 details of the economic analysis that you're 

7 talking about here, that you're looking from 

8 the bottom up. 

9 When we are actually getting to 

10 selecting a level here, we do it the other 

11 way. 

12 MEMBER PATTERSON: His point is not 

13 looking at the lowest cost. He's looking at 

14 the maximum efficiency gain per dollar spent. 

15 MR. COHEN: Right. So that sounds 

16 like a comparison as between different levels 

17 to decide sort of that maximum amount. But we 

18 start at the top and say, "Is it economically 

19 justified to be max tech?" If not, go down. 

20 MEMBER ROSENSTOCK: We're not 

21 required to look at the top here, are we? 

22 MR. COHEN: We start at the top. 
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1 MEMBER ROSENSTOCK: We're not. For 

2 this Committee, we're not starting at the top 

3 necessarily. 

4 MR. COHEN: Right. 

5 MEMBER ROSENSTOCK: We're going to 

6 decide a number that's out at the top. We're 

7 not negotiating the top level. 

8 MR. COHEN: No, no. I'm talking 

9 about a different thing. What I'm trying to 

10 say is just in terms of the legal constraint 

11 that we have on us when it comes to actually 

12 proposing -- 

13 MEMBER ROSENSTOCK: Right. 

14 MR. COHEN: -- a standard is we 

15 have to do the analysis. 

16 MEMBER ROSENSTOCK: But that's not 

17 a constraint on our Negotiation -- Steve 

18 Rosenstock, EEI. 

19 That is not a constraint on the 

20 Negotiation Committee, correct? 

21 MR. COHEN: Only to the extent that 

22 at some point if we want to be able to adopt 
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1 it, we have to be able to justify it -- 

2 MEMBER ROSENSTOCK: To justify it. 

3 MR. COHEN: -- to justify it under 

4 our standards. 

5 MR. PARKER: Right. So we have 

6 agreed on max tech being one of the things 

7 because it dictates -- so the question is, 

8 what are the break points below that at which 

9 we want to do analysis? 

10 MEMBER DeLASKI: I am not sure I 

11 understand the concept. I am not sure. To 

12 me, it sounds an awful lot like the minimum 

13 LCC point. I'm not sure it's different than 

14 that. 

15 MR. PARKER: Well, I guess he's 

16 looking at the differential, at the slope. At 

17 what point does the slope of incremental 

18 efficiency for incremental price increase 

19 taper off so that you're looking at a 

20 sublinear slope? 

21 PARTICIPANT: I don't know what the 

22 answer is, but I think it's worth looking at. 
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1 MR. PARKER: Is that conceptually 

2 relevant? Do you want to comment on that, 

3 Katie? 

4 MEMBER ROY: Robin Roy, NRDC. 

5 MR. PARKER: Sorry. 

6 MEMBER ROY: Is what you are saying 

7 sort of what we would call cherrypicking or 

8 what you would have as the greatest life cycle 

9 cost savings with a higher discount rate? Is 

10 that sort of what you are getting to? 

11 MR. PARKER: I'm just not sure that 

12 that -- 

13 MEMBER PATTERSON: Maximum 

14 efficiency per dollar spent. 

15 MR. BERMAN: Robert Berman, Berman 

16 Economics. 

17 I think what Wes is saying, if I am 

18 understanding correctly -- 

19 MR. PARKER: At what point do you 

20 reach diminishing returns, right? 

21 MR. BERMAN: It's not so much 

22 diminishing returns. It's he's looking at 
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1 marginal cost very marginal benefits for each 

2 move. Where does it cost you more? Where do 

3 your costs go up higher, as opposed to your 

4 benefits? Are your costs going up higher than 

5 your benefits at some point? 

6 MEMBER DeLASKI: Robert, I hear 

7 you, but that's the minimal LLC point the way 

8 I see the world. But I am open to seeing it. 

9 So I am all for this if you can -- 

10 MEMBER PATTERSON: It's something 

11 I'll play with for two weeks. 

12 MR. BERMAN: There may be some 

13 redundancy. 

14 MR. PARKER: Okay. I'm just 

15 concerned that whatever we put out on the wish 

16 list, first, that it not overtax the 

17 consultants; second, you know, in terms of how 

18 many analyses they run; and, secondly, that it 

19 be something that they have data to work with. 

20 MEMBER DeLASKI: I think 

21 historically the way the government in prior 

22 rulemakings has found is that, as the slide 
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1 shows, between the way that you find places in 

2 between here is through a gap fill. And you 

3 just pick a middle. You just pick a -- you 

4 want to have a couple of points in between. 

5 And I think those points in between I think 

6 will address Steve's concern. 

7 MEMBER ROSENSTOCK: I would like to 

8 see a gap in between the base and 1 and 2 just 

9 to see if there is a point where the equipment 

10 cost relative to the energy savings is 

11 minimized. 

12 MR. PARKER: Okay. Duly noted. 

13 Can you put that into an email that we can 

14 share in writing? I think it would help us 

15 all absorb it. 

16 MEMBER ROSENSTOCK: I'm happy. So 

17 you're saying that this is still open. So 

18 other people can suggest other TSLs. That's 

19 not going to close today. I just want to make 

20 sure that we're not closing out. 

21 MR. PARKER: No. We are working on 

22 the noteworthy technologies, TSL. So that's 
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1 still open. So we are not closing out all 

2 TSLs at this meeting. We are closing out the 

3 ones we have agreed on. We are not going to 

4 -- I am going to try not to reconsider any 

5 that we have agreed on. 

6 Any additional TSLs have to be 

7 weighed in terms of their value of information 

8 compared to the cost of collecting that 

9 information, recognizing that we are already 

10 spending some effort to get the existing TSLs. 

11 But no, the door is not closed to 

12 suggestions. That said -- 

13 MEMBER PATTERSON: From your 

14 understanding, what have we agreed on? 

15 MR. PARKER: What we've agreed on 

16 is max tech. We've agreed on the top three 

17 bullets. 

18 MEMBER PATTERSON: Okay. 

19 MR. PARKER: We voted on it. We 

20 agreed on it. And I think we have agreed we 

21 should vote on the large gaps, but I think -- 

22 any objection to the large gaps? What's that? 
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1 MEMBER PATTERSON: What about 

2 voting on Andrew's original single vendor 

3 space. 

4 MR. PARKER: We could do that. I 

5 guess -- yes, that's fine. Andrew, do you 

6 want to have a vote on your single vendor 

7 space, get that adopted? 

8 MEMBER DeLASKI: Sure. 

9 MR. PARKER: All in favor, aye? 

10 (Whereupon, there was a chorus of 

11 "Ayes.") 

12 MR. PARKER: Any opposition? 

13 PARTICIPANT: Rephrase that again. 

14 Rephrase it. 

15 MR. PARKER: I'm sorry. I'm sorry. 

16 PARTICIPANT: We've had a lot of 

17 discussion since then. 

18 MR. PARKER: Okay. I'm assuming 

19 infinite perfect recall. So Andrew's point -- 

20 do you want to present your own proposal, 

21 Andrew? 

22 MEMBER DeLASKI: Sure. Andrew 
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1 DeLaski, Appliance Standards Awareness 

2 Project. 

3 So I think it would be useful to 

4 have a TSL that shows us the level at which, 

5 the maximum cost-effective level at which, 

6 there are multiple suppliers capable of 

7 providing core material. 

8 MR. PARKER: Okay. 

9 MEMBER ROSENSTOCK: And any minimum 

10 number for that? 

11 MEMBER DeLASKI: What do you mean 

12 "minimum number"? 

13 MEMBER ROSENSTOCK: One? Two? 

14 Three? At least three suppliers? At least 

15 two suppliers. Does it matter? 

16 MEMBER DeLASKI: Two is multiple. 

17 So -- 

18 MEMBER ROSENSTOCK: I think three. 

19 MEMBER DeLASKI: Technologies is 

20 what I mean. 

21 MEMBER ROSENSTOCK: Oh, three 

22 materials or suppliers? 
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1 MR. RIVEST: Can you bring up the 

2 slide with the locusts there, the points? 

3 Andrew, can you just go draw it? 

4 MEMBER DeLASKI: Sure. I would 

5 like to see a TSL that captures this, this 

6 line. 

7 MR. RIVEST: That line? 

8 MEMBER DeLASKI: That is the point 

9 where we've got -- I'm assuming this is all 

10 amorphous, right? These are all amorphous? 

11 MR. PARKER: Somewhat to the left 

12 of that line. 

13 MEMBER DeLASKI: We've already 

14 defined this line a couple -- this is max tech 

15 out here somewhere. I'm very interested in 

16 the level somewhere that captures this. 

17 MR. RIVEST: Not quite two but not 

18 three. 

19 MEMBER DeLASKI: Yes. I'm 

20 accustomed to Katie's point about not always 

21 moving these lines around. So I would want to 

22 see a TSL that groups up all -- if the designs 
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1 can't be moved, if the ELs can't be moved, I'm 

2 okay with that. Then I would want to have one 

3 that groups up the ELs to capture this 

4 happening here. 

5 MR. RIVEST: Are you okay with the 

6 way it is now? 

7 MEMBER DeLASKI: What is happening 

8 here is that we have got more -- it's not just 

9 amorphous. It's amorphous. And there are 

10 some silicon steel options. 

11 MR. RIVEST: So the line that's 

12 there. 

13 MEMBER DeLASKI: TSL. 

14 MR. PARKER: If the TSL corresponds 

15 to a CSL. 

16 MEMBER DeLASKI: No. Every TSL 

17 groups up CSLs, grouping up CSLs that have 

18 this characteristic. 

19 MR. RIVEST: Okay. 

20 MEMBER DeLASKI: That means the 

21 low-cost option is this, the best way to do it 

22 according to this model. It's not the only 
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1 way to do it. I don't have any information. 

2 What this tells me is that everyone is going 

3 to buy amorphous if they could. 

4 MR. RIVEST: And looking at the 

5 cost just for fun here, what is the delta on 

6 cost? It's not that much. How much is it? 

7 MEMBER ROSENSTOCK: Two thousand to 

8 2,600. 

9 MR. RIVEST: I'm looking at the gap 

10 between the technologies. 

11 MR. PARKER: That's a great point, 

12 Mike. 

13 MEMBER DeLASKI: From the minimum 

14 to the minimum is like -- 

15 MEMBER ROSENSTOCK: So, Andrew, 

16 this is Steve Rosenstock, EEI. 

17 If you could, you would want to 

18 move that line to the right maybe a little bit 

19 or -- 

20 MEMBER DeLASKI: That's not my 

21 proposal. 

22 MEMBER ROSENSTOCK: Oh, okay. 
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1 MEMBER DeLASKI: I thought that 

2 Katie said that the lines shouldn't be moved. 

3 Katie, are you still here? 

4 MR. PARKER: Because this is 

5 another thing on design line. You want to 

6 have the lines -- 

7 MEMBER DeLASKI: I thought the 

8 proposal was, how could people -- I mean, I 

9 guess we could move the lines, but also in 

10 terms of the uncertainty and the analysis, I'm 

11 not trying to go to this point, right? To the 

12 uncertainty analysis, I'm not trying to say we 

13 should go. 

14 MR. RIVEST: Okay. That's what I 

15 thought you wanted originally, that outer 

16 point there. 

17 MEMBER DeLASKI: Well, yes. I 

18 mean, if we knew 100 percent that that outer 

19 point is real, I want to have some robustness 

20 of supply, you know, not conceptually, but I'm 

21 thinking -- 

22 MR. PARKER: It's a concession, 
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1 yes. 

2 MEMBER DeLASKI: It's a chance for 

3 -- but I thought we had the ELs. Stuff would 

4 be for the ELs. But, you know, that's what I 

5 was saying. Those were my words, but I was 

6 thinking that they're controlled by the ELs. 

7 I am interested in the point, but I 

8 am also interested, is this a point? Do we 

9 have robust enough confidence in the data that 

10 we know that that is, in fact, true? That was 

11 the only point I -- 

12 MR. PARKER: Okay. How do people 

13 feel? Comments on this? This is important. 

14 MEMBER PATTERSON: Didn't he say 

15 that he would like to have a TSL established 

16 where an existing CSL has multiple vendors? 

17 If I take CSL-2 as that dotted line, that is 

18 the last dotted line with multiple vendors. 

19 So he would like a TSL built around existing 

20 CSLs, the highest CSL with multiple vendors. 

21 MR. RIVEST: Is that what you are 

22 saying, Andrew? 
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1 MR. PARKER: That works for this 

2 design line. Is that a generalizable concept? 

3 MEMBER DeLASKI: Not right now, but 

4 that is what they will do. 

5 MR. PARKER: Okay. So that will be 

6 a place to start. But that's Andrew's 

7 concept. It still doesn't capture, as Andrew 

8 pointed out, Eric's point about the 

9 competitiveness. 

10 MEMBER PETERSON: That would be the 

11 immediate point we end up doing because we did 

12 an analysis almost similar like that where, 

13 although we're capable, we would actually have 

14 to write you a check to get you to use our 

15 steel. 

16 MR. PARKER: Right. But for you, 

17 is 250 basically that point anyway? I mean, 

18 given how fast this thing moves as you go from 

19 one to another, would you end up with a 

20 different TSL under your analysis than 99.3? 

21 MEMBER PETERSON: Yes. I think my 

22 point was that even though if you just pick 
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1 that CSL-3 as an example, although you've got 

2 multiple potential materials you could make -- 

3 MR. PARKER: I think that actually 

4 is CSL-2. 

5 MEMBER PETERSON: Okay. Whichever 

6 they'll -- 

7 MR. PARKER: Yes. 

8 MEMBER PETERSON: I'm looking at 

9 the bar, that category right there to the 

10 right of that. 

11 MR. PARKER: Yes. 

12 MEMBER PETERSON: Even though you 

13 have multiple materials out there based on -- 

14 I don't know which design line it is -- I've 

15 got it in my data -- actually shows that we 

16 would not be competitive. There's no way 

17 based upon the prices and the DOE modeling -- 

18 MR. PARKER: Right. 

19 MEMBER PETERSON: -- the product 

20 would be considered. 

21 MR. PARKER: Right. But his 

22 criterion of multiple vendors captures that 
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1 anyway. And your approach wouldn't go to 

2 99.2. So for this scale, it sounds like you 

3 and he are ending up with the same TSL. 

4 MEMBER DeLASKI: And that might be 

5 true for this design line but not for another 

6 one. 

7 MR. PARKER: Right. So we have to 

8 do the design line analysis. So maybe that 

9 would be a way forward, though, to just look 

10 at the other graphs and see to what degree 

11 your analysis differs from Andrew's for the 

12 other design lines because it looks to me like 

13 for this one, it doesn't. Does that make 

14 sense? 

15 MEMBER PETERSON: I can tell you 

16 that we did a price-comparing analysis based 

17 on the DOE data versus an amorphous metal for 

18 a specific design line. And our data agreed 

19 in regards to capability, that once you got 

20 past a certain CSL, you would no longer use 

21 grain-oriented electrical steel. When you 

22 went back one CSL, the price essentially was 
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1 such that we would have had to write a check. 

2 MR. PARKER: Okay. Okay. 

3 MEMBER PETERSON: You go back one 

4 more. We're not competitive one more. 

5 MR. PARKER: Okay. So you're 

6 saying for all the design lines, different 

7 story? 

8 MEMBER PETERSON: Exactly. 

9 MR. PARKER: Okay. All right. So 

10 that is where we need to -- what you need to 

11 do is then focus on those particular design 

12 lines, highlight those issues with regard to 

13 those design lines where it matters. 

14 MEMBER PETERSON: And that's what 

15 we'll put together. 

16 MR. PARKER: And put together 

17 something. Okay. Good. 

18 Steve? 

19 MEMBER ROSENSTOCK: Steve 

20 Rosenstock, EEI. 

21 Again, I did print out all the 

22 design line graphs. And it does look like for 
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1 all of them, there is a break point at a 

2 certain CSL where afterwards it's just 

3 amorphous -- 

4 MR. PARKER: Yes. 

5 MEMBER ROSENSTOCK: -- across all 

6 the design lines 1 through 5. I didn't do the 

7 medium-voltage, dry-type. 

8 MR. PARKER: Good. And could we 

9 get bigger circles on the legend, Brian? I 

10 cannot tell what the colors are in those 

11 legends. And it's all color-coded. 

12 Okay. Anything else? So let's 

13 take -- it is now 1:20. I need to do some 

14 homework for you guys for the wrap-up. I 

15 think people can use a bathroom break or 

16 coffee break. Why don't we take a 20-minute 

17 break and then come back for a 30-minute 

18 wrap-up and then adjourn? The 30-minute 

19 wrap-up will consist of basically a rehash of 

20 our marching orders going forward. Yes? 

21 PARTICIPANT: I just want to see if 

22 there's anyone else with other TSL 
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1 suggestions. I want to be -- I think it's 

2 fair to let people give other suggestions. 

3 MR. PARKER: I didn't get the sense 

4 that there was a burning desire to add other 

5 TSLs. Are there any other suggestions for 

6 TSLs? 

7 PARTICIPANT: Audience members may 

8 have some. 

9 MR. PARKER: Robert? 

10 MR. BERMAN: Robert Berman, Berman 

11 Economics. 

12 I would like to see something based 

13 on cost to the consumer, to the ultimate 

14 consumer, whether it be energy savings -- 

15 MR. PARKER: Well, that raises the 

16 question, who is the consumer under the 

17 existing -- can you get back to the -- 

18 MR. BERMAN: Each of these 

19 transformers -- 

20 MR. PARKER: The lowest life cycle 

21 cost -- 

22 MR. BERMAN: Each of these 
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1 transformers gets put into a rate base and 

2 charged to the consumer. So for additional 

3 energy savings, there is a cost of some sort. 

4 There is also a benefit in terms of fuel save 

5 that gets reflected in the consumer's bill. 

6 So ultimately whatever these costs 

7 and benefits are, they're passed on to the 

8 consumer. 

9 MR. PARKER: Yes. 

10 MR. BERMAN: So what I would like 

11 to see -- to the ultimate consumer, who is -- 

12 MR. PARKER: Yes. Fair point. 

13 And, actually, from a political standpoint, it 

14 may behoove us in selling our results to show 

15 that we actually gave some attention to 

16 impacts on the Joe Blows who vote for our 

17 elected representatives out there. 

18 But that raises the question. 

19 Katie, could I ask you a question in the back 

20 there? In your life cycle cost analysis, when 

21 you say with cost savings to the consumer, is 

22 the consumer for that purpose the utility -- 
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1 because that's the consumer of the transformer 

2 or is the consumer the ratepayer? 

3 MS. COUGHLIN: Life cycle cost for 

4 the utility. 

5 MR. PARKER: Okay. So that 

6 existing TSL does not really necessarily 

7 capture identically Robert's point because 

8 there is the additional question of how much 

9 higher cost to utilities are passed through to 

10 consumers. Is that the point? 

11 MR. BERMAN: Yes. The calculation 

12 is a simple calculation that you can do on the 

13 existing data. It's just a couple of 

14 transformations. 

15 MR. PARKER: Katie, would that be 

16 hard to factor in to do or -- 

17 MS. COUGHLIN: These things are not 

18 -- 

19 MR. PARKER: I'm sorry. You need 

20 to come to the mike. I'm sorry. 

21 MS. COUGHLIN: I think the issue is 

22 not whether it's hard to do. The issue is 
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1 that this is a standards rulemaking. And 

2 there are many, many rulemakings that follow 

3 standardized procedures for calculating 

4 cost-benefit metrics. 

5 So we are considering within the 

6 national impacts analysis looking at these 

7 generalized price effects that to date DOE has 

8 not come up with a procedure for taking that 

9 into account. 

10 There are many methodologies we 

11 could use, but I think we need to have some 

12 discussion within DOE about how they are going 

13 to approach this issue because it isn't 

14 something that just applies to this product. 

15 MR. PARKER: Is there a rule that 

16 says that there has to be a standardized 

17 approach to it? 

18 MS. COUGHLIN: Yes. 

19 MR. COHEN: This is Dan Cohen, DOE. 

20 So the way we have set up a 

21 standardized approach so that we are 

22 consistent across our rules that there is a 
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1 question of methodology as we go into setting 

2 up a rulemaking. 

3 So Katie is getting at some issues 

4 that have been raised recently in some of our 

5 rules dealing with consumer welfare. We have 

6 asked a bunch of questions around that, and we 

7 have gathered some data and whatever. And we 

8 are looking into it -- 

9 MR. PARKER: Consumer welfare, 

10 though, is one step beyond consumer price 

11 impacts because -- 

12 MR. COHEN: No. 

13 MR. PARKER: -- when you look at 

14 the impacted prices on welfare -- 

15 MR. COHEN: The way we phrased the 

16 question, it is sort of considered in this. 

17 We haven't come to a conclusion on how we 

18 would consider those. 

19 MR. PARKER: I guess what I'm 

20 puzzled about is if we're bound by DOE policy 

21 on that TSL, why aren't we constrained by DOE 

22 policy on all bad choices of TSLs? 
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1 MS. COUGHLIN: We are constrained. 

2 That's what I'm saying. We're not talking 

3 about a TSL here. We're talking about 

4 producing another metric to discriminate 

5 between TSLs. 

6 To produce another metric, that's 

7 something that DOE has to consider in the 

8 context of all the rulemaking. 

9 MR. PARKER: Does that apply to the 

10 competitiveness metric that you're working on 

11 with the steel people and -- 

12 MS. COUGHLIN: Yes. I mean, if 

13 it's going to end up being something that 

14 influences the choice, it will have to go 

15 through its own process, I think. But, I 

16 mean, the issue -- I mean, this is very much a 

17 secondary impact on society as a whole, right? 

18 So in that sense, it's different from the 

19 competitiveness issue. 

20 MR. PARKER: Right. I guess the 

21 question is, are we prohibited from choosing 

22 certain criteria for TSLs because that would 
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1 conflict with Department policy? 

2 MR. COHEN: We have very specific 

3 criteria. Dan Cohen, DOE. 

4 We have very specific criteria in 

5 the statute for how we determine economic 

6 justification. We have analyses that we have 

7 built over time that get us to be able to 

8 answer the questions that are raised by the 

9 criteria that are in -- 

10 MR. PARKER: Right. 

11 MR. COHEN: To the extent that we 

12 want to add to those methodologies, we can do 

13 that. In fact, we recently have started -- 

14 for instance, we used to consider manufacturer 

15 cost as a constant over a 30-year time 

16 horizon. 

17 MR. PARKER: I see. 

18 MR. COHEN: And we have recently 

19 started dealing with who we refer to as 

20 experience codes -- 

21 MR. PARKER: I see. 

22 MR. COHEN: -- as prices. There's 
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1 -- 

2 MR. PARKER: So you're saying the 

3 competitiveness issue we're dealing with with 

4 Eric is something for which there is already 

5 existing framework within DOE policy -- 

6 MR. COHEN: Correct. 

7 MR. PARKER: -- because 

8 competitiveness is one of the things you are 

9 statutorily supposed to look at. 

10 MR. COHEN: Yes, yes, yes. 

11 MR. PARKER: And consumer welfare, 

12 consumer price impact may or may not be 

13 something -- 

14 MR. COHEN: Well, we can factor it 

15 in, but we have to do it in a way that we do 

16 it across all of our rules. 

17 MR. PARKER: Okay. 

18 MR. COHEN: So we have to be 

19 consistent about how to do it. 

20 MR. PARKER: Okay. Okay. Got it. 

21 So does that answer your question? So I 

22 think we'll have to ponder it, in fact, and 
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1 get back on that. 

2 MR. BERMAN: Robert Berman, Berman 

3 Economics. 

4 I think there is a way to do both, 

5 if you will. That is to say, there are 

6 specific measures that you use for particular 

7 appliances that fall within the category. 

8 This happens to be one that is specific for a 

9 particular product but reflective of a general 

10 notion. 

11 So while it may not be a defined 

12 metric within the policy, it may be something 

13 that is of interest to the Committee and in 

14 terms of what it may want to consider in 

15 adopting a standard is what the impact is 

16 likely to be on the consumer, even though we 

17 don't have that as a specific category. 

18 MR. PARKER: Yes. 

19 MEMBER ROSENSTOCK: Steve 

20 Rosenstock, EEI. 

21 I think that would be a big change 

22 because with other commercial industrial 
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1 products that are analyzed by DOE, I suppose 

2 we're talking about a commercial heating 

3 system or commercial cooling system. 

4 You look at the savings to the end 

5 use commercial customer. Say it's a Wal-Mart 

6 or another retailer or something like that. 

7 There is no other analysis that asks "Okay. 

8 They have saved that energy. How much is it 

9 going to reduce their prices to the consumer?" 

10 That's never done. And it would be 

11 very, very hard for anyone to analyze because 

12 there are so many other factors involved with 

13 that secondary analysis. 

14 MR. COHEN: Dan Cohen, DOE. 

15 MR. BERMAN: That's specifically 

16 done, though, with respect to Energy Star 

17 appliances. This is the equivalent, if you 

18 will, of the Energy Star appliances. 

19 MEMBER ROSENSTOCK: Energy Star 

20 appliances are voluntary. They're voluntary 

21 for -- 

22 MR. PARKER: Well, I don't know why 
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1 that would matter. I mean, the fact that 

2 they're mandatory [sic.] I would think would 

3 make you more sensitive to consumer impacts, 

4 not less. 

5 MEMBER ROSENSTOCK: Well, they're 

6 not using any of these methodologies to 

7 necessarily -- 

8 MR. PARKER: Yes. 

9 MEMBER ROSENSTOCK: -- be creating 

10 the Energy Star levels. 

11 MR. PARKER: I mean, I think 

12 estimating pass-through gets you into a kind 

13 of a can of worms. And, you know, that's one 

14 of the issues that people had in the 

15 interviews was the question about how much 

16 they pass through. That was one of the 

17 reasons that I would discuss bringing NARUCA 

18 [National Association of Regulatory Utility 

19 Commissioners] into the discussion because 

20 there is an issue of how much can utilities 

21 pass through red costs, right? 

22 So I would think that the utilities 
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1 would -- this would be something that you 

2 would actually want to consider because it 

3 would actually -- 

4 MR. BERMAN: There's a specific 

5 formula. In a regulated industry, there's a 

6 specific formula for what they can pass 

7 through. 

8 MEMBER ROSENSTOCK: And also it 

9 depends on the rate case because different 

10 rate cases will have different results and 

11 different pass-throughs so it can be a huge 

12 impact in terms of what happens in the rate 

13 case in terms of what is actually passed 

14 through. Sometimes the costs are denied. 

15 MR. PARKER: Yes. 

16 MEMBER ROSENSTOCK: And DC can deny 

17 the cost pass-through. 

18 MR. BERMAN: Only in the case of 

19 management. 

20 MR. PARKER: It is. In the stuff 

21 that was gathered, do we have data on 

22 pass-through? No? Excuse me, guys. Can I 
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1 ask Katie a question? Okay. Listen, so we 

2 don't have data? 

3 So I think the answer is that while 

4 it might be nice, there are two problems with 

5 that. One is the question of DOE policy. 

6 The second is that, even if DOE 

7 policy permitted it, we don't have data on 

8 pass-through. And I don't think we have the 

9 time to gather such data in time for our 

10 rulemakings. 

11 MR. SAMPAT: Yes. Excuse me. 

12 Mahesh Sampat. 

13 If this is a mandated standard, 

14 whatever is the cost increase, the regulator 

15 has to pass through if it is mandated. 

16 MR. PARKER: Okay. 

17 MR. SAMPAT: If it's mandatory, 

18 then regulator can question, was that a 

19 prudent expenditure or not? 

20 MR. PARKER: I'd like to hear that 

21 from NARUCA, but is that consistent with your 

22 experience? 
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1 MEMBER HYLAND: This is Mike, APPA. 

2 I'll be real clear. We don't have 

3 NARUCA, anybody regulating us. We're 

4 regulated by ourselves. And 100 percent of 

5 all costs of all things are passed on to the 

6 consumer. That's not a question. Okay? 

7 Everything you spend is paid for. 

8 MR. PARKER: Okay. 

9 MEMBER HYLAND: So, I mean, it's a 

10 great thing to see. Some of the analysis I've 

11 seen on the last rule states that some of the 

12 dollars you are putting towards the 

13 transformers would be better spent somewhere 

14 else when you start looking at the actual 

15 savings per consumers. 

16 MR. PARKER: Well, I don't know 

17 what the impacts would be. I mean, the life 

18 cycle cost depends -- you know, I don't know 

19 which way that cuts. In the absence of the 

20 analysis, it could cut one way or the other. 

21 So we'll caucus about that. Obviously there 

22 are larger issues that we have to discuss. 
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1 You know, I'm thinking that we may 

2 not need to adjourn and reconvene. We might 

3 just be able to wrap up. Would people like to 

4 try to do that, just leave? 

5 I think, actually, we've got our 

6 marching orders. We don't have a total 

7 blueprint and timetable for all four meetings, 

8 which I was kind of hoping, but we're under 

9 conditions of some uncertainty here. And we 

10 have to kind of work things out as we go. 

11 We do have what I hope is a clear 

12 plan for preparing for the next meeting. And, 

13 just to recap, Navigant and LBL will post 

14 their revised -- I'll interrupt a second. I'm 

15 just passing around the meeting schedule that 

16 came from Jeremiah, going forward. Come back 

17 to that at the end. 

18 In terms of preparing for the next 

19 meeting, Navigant, LBL will post their revised 

20 TSD along with a small, a short summary of the 

21 differences between the revised TSD and the 

22 April TSD. When I say, "revised TSD," I mean 
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1 those chapters that they have available in 

2 draft. I understand that not all chapters are 

3 ready to be posted. So whatever they have 

4 available will come up. 

5 And we will notify you as soon as 

6 that is done. That will be their top 

7 priority. Let's not bother them with anything 

8 else until they can get that done. 

9 Once that is done, two things will 

10 take place. One is you will then have a week 

11 to post all of your -- send in email to me, 

12 simultaneously, please, to DOE and to Brian 

13 Coffey and to Katie Coughlin. 

14 You have all of our emails. Send 

15 an email, one sheet, please, that indicates 

16 your concerns with the LCC analysis, the 

17 upstream analysis, whether it's assumptions 

18 about materials prices, assumptions about 

19 other variables, methodology, anything that 

20 you think is a source of concern. 

21 And I will hope that what they post 

22 will enable you to do your work that week. 
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1 All right? And if it doesn't, if the material 

2 assumptions aren't clear or whatever, then 

3 we're going to have to come back and have this 

4 discussion online. But one week to get your 

5 concerns in. Okay? Because that's going to 

6 be the week that we focus on the LCC 

7 methodology. 

8 They will then have a week to 

9 respond. Is a week enough time or do you need 

10 more time? Okay. They will respond as soon 

11 as they can about, first, whether the concern 

12 is valid from their perspective; secondly, 

13 whether it has an impact on the analysis. 

14 And, of course, validity is 

15 affected by whether it has an impact on the 

16 analysis. I mean, it may be conceptually 

17 valid but materially irrelevant or trivial. 

18 So they will do that. And we hope 

19 that that will be done within a couple of 

20 weeks. 

21 What is a reasonable time frame for 

22 getting this stuff posted -- can I put you on 
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1 the spot a little bit -- the updated TSD 

2 chapters as well as the discussion of 

3 differences? I'll come back to that. Okay. 

4 So, then, after that we will have 

5 an online discussion. And we'll try to come 

6 up with the right forum for it to make 

7 progress between now and the next meeting 

8 about what adjustments to the analysis need to 

9 be made, what adjustments need to be done to 

10 the analysis in order to accommodate the 

11 concerns that are shown to be both valid and 

12 material. 

13 And if we can get concurrence on 

14 that, they will go ahead and start the 

15 analysis to reflect that. Okay? So that's 

16 the end of week two after the trigger date of 

17 the posting of the TSD chapters. And that 

18 takes us out to, well, two weeks plus a few 

19 days, the end of the month basically. 

20 Concurrently with that, Navigant 

21 and LBL will work with all interested 

22 stakeholders. Anybody can weigh in, but I 
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1 assume the steel makers will weigh in. 

2 Anybody can weigh in on what would be an 

3 adequate way of defining this competitiveness, 

4 TSL criteria. 

5 And concurrently with that also I 

6 will work with DOE to explore whether there is 

7 scope for having an ultimate consumer impact 

8 over whether there is not. And if there is 

9 not, there is nothing more that needs to be 

10 said. We were bound by DOE policy with regard 

11 to that. 

12 Then the next meeting will be to 

13 put to bed all concerns dealing with the 

14 methodology, the upstream, and to arrive at 

15 closure on the choice of TSLs so that in the 

16 following meeting, we can actually have a 

17 final analysis of national impact assessment 

18 for the various TSL levels that we have chosen 

19 and can get into the real business, then, of 

20 choosing a standard. This is all to get the 

21 framework right. 

22 Scott, you are looking puzzled. 
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1 MEMBER BECK: We're going to pick 

2 for TSLs by the next meeting? 

3 MR. PARKER: No, no. We're going 

4 to pick -- no -- the criteria, the criteria 

5 for the TSLs. Right. Once the criteria are 

6 put in, it's up to the consultants to actually 

7 show, you know, what the numbers are for each 

8 design line. 

9 Brian? 

10 MR. COFFEY: I was just going to 

11 follow on the TSD chapters. We'll certainly 

12 have them within a week. And I can say that 

13 the tweaks to all chapters will be relatively 

14 minor. 

15 So if you wanted to give yourselves 

16 a running head start, there were a lot of 

17 issues brought up today. And you could also 

18 look at the chapters from the preliminary 

19 analysis. They're going to be very, very 

20 similar in content and substance. 

21 The updated versions would be 

22 available before the end of -- 
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1 MR. PARKER: But you're not going 

2 to tweak anything based upon what was said 

3 today, right? You're just posting them as 

4 they are. 

5 MR. COFFEY: That's right, leaving 

6 them open for discussion. 

7 MR. PARKER: Right. Okay. So 9-16 

8 is today. By 9-23, post the updated chapters, 

9 of the updated TSD. By 9-30, September, your 

10 comments on method and assumption are due 

11 9-30. And then by -- excuse me. I guess 

12 there are no more 9's. Is there? 

13 By 10-7, we will try to have, that 

14 week, we will try to have our discussion about 

15 the September 30th and October 7th. We'll see 

16 how it goes within a week, but stay tuned. 

17 We will have an online discussion 

18 about what changes to the analysis, how the 

19 analysis needs to be tweaked in order to -- 

20 oh, gosh. I'm not giving us enough time here. 

21 Working backwards, 10-7 gets us 

22 awfully close to -- our meeting is 10-12, 
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1 October 12th? That's not quite enough time. 

2 So if we can get the TSD posted a few days 

3 sooner, that would be great. We'll start it 

4 from then. 

5 And we may have to compress these 

6 times frames a bit. But let's say by -- how 

7 much time do you need once we have with 

8 different parameters -- it's really hard to 

9 know, I guess, until we have really seen what 

10 the comments are, right, how much time is 

11 going to be required to move on the analysis. 

12 So let's just say we can't really 

13 game that out, I don't think. I think 

14 basically September 30th is the latest date. 

15 And it will be a week from whenever we 

16 actually get the updated TSD to get your 

17 comments in. 

18 And then, you know, we'll just have 

19 to see on the basis of the comments how long 

20 it takes: a) for us to get conclusion on 

21 which comments matter and need to be 

22 accommodated; and b) to rerun the analysis. 
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1 Do you have to run the analysis to 

2 figure out the sensitivity? I mean, is that 

3 -- 

4 MR. COFFEY: Which sensitivity is 

5 that? 

6 MR. PARKER: I'm sorry. Once they 

7 have the comments in, then you have to do a 

8 sensitivity analysis, I guess, to figure out 

9 if these things matter. That's what we agreed 

10 or can you tell right away? Brian is saying 

11 you can tell right away. 

12 MR. COFFEY: You would probably 

13 have a good sense right away of what level of 

14 rework it would require. I think that based 

15 on our schedule, we're probably not going to 

16 be able to start from the ground up in very 

17 many places. 

18 MR. PARKER: Right. 

19 MR. COFFEY: But we can look for 

20 creative ways to solve the problem without -- 

21 MR. PARKER: Right. 

22 MR. COFFEY: -- reinventing the 
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1 wheel at every turn. 

2 MR. PARKER: Right. Yes. And the 

3 other thing is 9:30 is the -- you know, please 

4 don't wait until the last minute. As soon as 

5 you have something to submit, submit so that 

6 they can get going on a rolling basis and so 

7 that we can have a discussion about it. 

8 So then I guess for a couple of 

9 days, then you could -- within a few days, you 

10 can respond on materiality significance. 

11 Okay. So maybe we don't need a full week for 

12 that. So say by October 2nd, materiality. 

13 So after October 2nd, we are kind 

14 of in unchartered waters in terms of -- but 

15 we'll try to make a decision basically by the 

16 5th of October as to what are the areas that 

17 need to be tweaked. 

18 And then hopefully between the 5th 

19 and the 12th, you can get the revised 

20 analysis. That's still not going to be enough 

21 time, though, is it? I'm struggling, guys. 

22 Help me out. 
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1 Working backwards from the 12th, 

2 how much time do we need to look at the 

3 revised analysis in order to be ready to 

4 discuss it on the 12th? Steve? 

5 MEMBER ROSENSTOCK: Steve 

6 Rosenstock, EEI. 

7 I would say at least a week and a 

8 half just to give people enough time to review 

9 everything, especially if they're revising the 

10 technical support document. You know, there 

11 is a lot of information in there, support 

12 spreadsheets, so at least a week or a week and 

13 a half to be fair to everybody. 

14 MR. PARKER: Well, again, the 

15 changes to the TSD are going to be relatively 

16 small, right? 

17 MEMBER ROSENSTOCK: But will we 

18 have other suggestions, where we would like to 

19 say, "Can you tweak this a little bit just 

20 based on this information?" I mean, we don't 

21 know. 

22 MEMBER CYMBALSKY: I think until we 
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1 see the list, we've got to -- you know, we 

2 really need to keep these changes to a 

3 minimum. We really, really do. We have to -- 

4 if we're looking at a small tweak and we know 

5 it's not going to have a major impact on the 

6 way things look, we can't do that. We don't 

7 have the time. We're out of time. We'll get 

8 bogged down in the analysis and not actually 

9 see any results of what we're doing. 

10 So let's see the list first. I 

11 mean, we're going to sit here all day and talk 

12 about if we have enough time to review, I 

13 think. We haven't had a break since 9:00 a.m. 

14 MR. PARKER: Yes. 

15 MEMBER ROSENSTOCK: I have one 

16 question. Brian, I am not sure what cost 

17 projection you used for all of the 

18 transformers going forward. Did you keep it 

19 general with the rate of information basically 

20 for a lot of the cost projections for the 

21 transformers? I mean, that was one of my -- 

22 MR. PARKER: Again, are these 
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1 questions answered in the TSD? I mean, that's 

2 the real -- because if so, we can just refer 

3 people to the TSD. 

4 MR. COFFEY: Katie, the cost 

5 projections he's asking about into the future. 

6 MR. PARKER: Okay. 

7 MR. COFFEY: The methodology should 

8 be similar to what is posted in the April TSD. 

9 MEMBER ROSENSTOCK: Okay. But what 

10 about the number? 

11 MS. COUGHLIN: We have looked into 

12 the issue, the growth rate. The impact seems 

13 to be minimal. So the answer is yes, we have 

14 included that effect, but the effect is 

15 essentially zero. 

16 MEMBER ROSENSTOCK: So, even if the 

17 cost increases were faster than inflation, 

18 it's no impact on life cycle cost? 

19 MS. COUGHLIN: What we have -- 

20 okay. It doesn't go into any of the life 

21 cycle costs. It goes into the NIA. 

22 MEMBER ROSENSTOCK: Right. 
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1 MS. COUGHLIN: And we base our 

2 analysis on TPI data for the electric 

3 industry. And according to that -- so this is 

4 for the price projections because we haven't 

5 done a commodity price projection. We're just 

6 looking at the learning effect. 

7 MEMBER ROSENSTOCK: So you have 

8 already added in a learning effect to the 

9 transformers when you did this NIA? 

10 MS. COUGHLIN: No. We have looked 

11 at what that effect might be quantitatively 

12 based on the data. So we're doing the 

13 preliminary analysis of the data on the price 

14 of electric distribution equipment. 

15 And it looks like sort of the 

16 experience effect itself is very small based 

17 on that data. 

18 MEMBER ROSENSTOCK: Okay. 

19 MS. COUGHLIN: But since the NIA is 

20 still preliminary, we have got no settled 

21 answer for that yet. 

22 MEMBER ROSENSTOCK: Would you be 
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1 able to do a sensitivity analysis based on a 

2 higher projected cost increase? 

3 MS. COUGHLIN: Yes, you can do a 

4 sensitivity analysis on a different -- 

5 MEMBER ROSENSTOCK: Great. Okay. 

6 Thank you. So we can add that to the list 

7 that based on -- if we have data that we can 

8 show you that shows higher than inflation, 

9 then you can add that into your cost 

10 projections? 

11 MS. COUGHLIN: Yes. 

12 MEMBER ROSENSTOCK: Thank you. 

13 MR. PARKER: Good. Good. Okay. 

14 So as soon as that is up, you have a week to 

15 get all of this in. And they will come back 

16 within a few days of that with their response. 

17 We'll try to reach agreement as quickly as 

18 possible. I think that's just what we have to 

19 do. 

20 We can't really game it or time it 

21 exactly and get closure online about what 

22 tweaks will be made to the analysis. And we 
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1 just have to do that in time for them to 

2 actually do it and turn it around in time for 

3 us to respond to it. 

4 We have to be flexible. This can't 

5 be done instantly. So the chances are you're 

6 going to get the analysis, the revised 

7 analysis at the end of the day fairly soon 

8 before the last meeting. You're not going to 

9 have a week and a half to do it. That's my 

10 guess. 

11 But we'll do the absolute best we 

12 can to get everything back to you as soon as 

13 possible. And a lot depends upon the 

14 efficiency of this group in working together 

15 online between now and the next meeting. So 

16 hopefully we'll be able to move forward 

17 quickly. 

18 Okay. We're a little bit over time 

19 but not too bad. I think we made great 

20 progress at this first meeting. I hope you're 

21 satisfied with how it went. If you have 

22 suggestions for me in moderating this or for 
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1 the process, I'm always happy to hear them. 

2 Either publicly or privately is your choice. 

3 And I want to thank you guys for 

4 coming out. Have a great trip back. We'll 

5 get you out of here way before rush hour. So 

6 that will be nice. And we'll see you next 

7 week, next time, next month. 

8 (Whereupon, the foregoing matter 

9 was concluded at 1:44 p.m.) 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22
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A

Aaron 3:13 6:21

7:3,4

ABB 2:13 45:19

51:9 131:17

135:14

ability 51:4 200:22

201:18 202:1

205:10 211:8

213:22 214:3

224:3

able 67:5 72:8,13

72:16 74:13,17,22

81:5 143:3 152:2

158:15 204:16

210:4 231:3

239:15 271:22

272:1 295:7 303:3

311:16 317:1

318:16

absence 45:10

140:2 302:19

absent 159:16

160:6

absolute 18:9 67:17

69:6,8 71:20 74:1

102:2 108:22

109:1 146:8 195:4

242:7 318:11

absolutely 8:2

154:19 156:18

203:18 213:17

232:13

absorb 275:15

abstract 251:16

academic 9:11

accept 100:8

acceptable 171:8

246:20

access 260:13,18

261:1

accommodate

306:10

accommodated

310:22

account 148:18

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client 102:12,18,20

clients 102:13

cliff 213:21

close 35:2 49:15

91:20 119:16

130:15 252:3

257:5,14 275:19

309:22

closed 276:11

closely 103:11

closer 136:12

213:20

closing 247:21

275:20 276:1,2

closure 255:14

262:9 307:15

317:21

clothes 15:21,21

16:13,14

cloud 88:12,18

96:17 99:19

191:10,11 250:4

clouds 87:12

cloudy 99:18

coalescing 34:6

coalition 15:11

coarse 209:20

210:2

coat 9:12

codes 295:20

coffee 288:16

Coffey 3:4 20:8

49:11 82:9,11,11

83:4,12 117:15,15

121:17 142:4

147:10 158:18

190:18 256:4,7

304:13 308:10

309:5 311:4,12,19

311:22 315:4,7

Cohen 3:4 10:5,10

10:10 11:22,22

12:11,18,22 13:10

13:12 17:5,5,16

18:16 269:18,18

269:18 270:15,22

271:4,8,14,21

272:3 292:19,19

293:12,15 295:2,3

295:11,18,22

296:6,10,14,18

298:14,14

colleagues 8:12

230:2

collecting 276:8

collection 176:13

color 104:11 106:7

colors 288:10

color-coded 288:11

column 146:19,20

146:21

columns 145:9

152:13

combativeness

211:7

combination 84:22

127:15 148:2

174:15

combinations

146:1

combine 127:6

combining 182:14

come 7:22 8:3 9:1,4

9:14 17:9 20:14

20:19 23:20 26:18

28:19 43:8 57:8

57:11 60:1 85:9

132:16 148:11

153:11 192:13

203:5 208:14,15

212:18 215:16

221:8,21 224:20

225:5 229:14

235:9,14 238:16

240:1 248:5,16

251:19 257:5

258:12 267:9

288:17 291:20

292:8 293:17

303:16 304:4

305:3 306:3,5

317:15

comes 27:12 54:15

67:18 71:3,5

107:6 117:1 151:4

197:14 228:2

242:11 271:11

comfortable 9:2,10

9:19 93:20 240:21

241:2,10 258:11

258:16

coming 56:2 58:5

79:2 106:18

132:19 159:16

163:11 234:20

259:3 319:4

comment 34:13,19

39:1,5 103:3

109:4,7 114:1

115:9,17 116:13

116:16 138:7

225:20 260:16

273:2

comments 8:4 10:7

13:18 14:1 24:6

28:5 32:8 35:17

36:9 44:7 62:17

62:21 66:8 77:1

77:19 104:2

121:22 135:8

169:21 196:17

260:19 261:15,16

283:13 309:10

310:10,17,19,21

311:7

commercial 63:4

74:6 297:22 298:2

298:3,5

Commission 1:19

Commissioners

299:19

commitment 228:8

committed 22:20

Committee 1:3

2:17 20:17 57:19

83:18 157:21

158:6,16 159:16

224:18 225:8

271:2,20 297:13

Committees 79:20

Committee's 15:3

145:16

commodity 110:18

316:5

common 118:4

222:5 223:19

224:17

commonly 117:20

companies 206:21

company 2:9 6:6

155:11 189:8

compare 148:7

234:11 247:6

compared 267:17

276:8

comparison 270:16

compete 181:14
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completely 126:2

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complexities 191:7

complexity 27:12

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compliance 14:21

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compressed 86:11

computer 4:8

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concern 245:18

275:6 304:20

305:11

concerned 33:3

226:19 247:14

251:7 274:15

concerns 117:17

192:18 219:3

236:19 237:1

238:17 244:8

249:4 252:9,10,18

254:13 255:16

256:11 257:8,13

257:15 304:16

305:5 306:11

307:13

concession 282:22

conclude 152:6

concluded 18:6

257:11 319:9

conclusion 293:17

310:20

concur 119:12

135:12 172:17

concurrence

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concurrently

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conditions 29:17

50:14,15 84:16

102:14 114:20

123:5 141:3

185:14 303:9

conduct 255:9

conductor 115:19

117:1,3,19 223:4

confidence 283:9

confident 254:3

confidential 140:10

confidentiality

12:10 221:1

confidentially 12:9

conflict 295:1

confused 46:10

178:21 209:7

confusion 46:15

176:21 177:2,11

187:12

Congress 18:6

Connecticut 3:2

consensus 49:12,16

52:1,7 76:11

159:7

Conservation 2:7

consider 15:2

57:14 109:21

112:5,11 121:14

178:12 194:8

196:21 197:11

212:22 221:19

230:8 243:15

293:18 294:7

295:14 297:14

300:2

consideration

37:11 147:4 187:4

197:1 198:20

235:1

considerations

226:6

considered 93:10

119:17 150:7

210:5,17 230:10

263:21 285:20

293:16

considering 143:18

235:6 292:5

consist 288:19

consistent 96:21

251:5 292:22

296:19 301:21

consistently 179:14

consists 29:21

constant 295:15

constrained 293:21

294:1

constraint 50:20

227:11,14 271:10

271:17,19

constraints 85:15

constricted 137:14

construction 134:3

constructive 14:13

19:10

consultant 3:4,12

3:14,22 6:5,16

248:16

consultants 23:6

24:19 106:3

274:17 308:6

consultations

258:14

consulted 8:9

Consulting 2:9 3:4

3:12,14,16,16

48:12 225:4

consume 78:10

consumer 168:1

170:3 289:13,14

289:16 290:2,8,11

290:21,22 291:1,2

293:5,9,10 296:11

296:12 297:16

298:9 299:3 302:6

307:7

consumers 266:2

291:10 302:15

consumer's 267:21

290:5

contact 11:20,21

containing 82:17

contains 159:21

content 308:20

context 225:16

294:8

continue 23:17

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Continued 2:1

continuing 54:1

continuous 177:13

continuously 85:12

contract 13:16

contractor 12:12

19:22

contractors 10:22

11:10,13 12:2

13:14

contributor 80:10

control 201:1

213:22

controlled 283:6

convention 149:7

conventional

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195:16 245:19

conversation 9:16

17:6 19:15 132:15

convert 156:12

converted 175:18

converting 154:5,6

cooling 298:3

Cooper 2:3 3:13

6:21 7:5 188:16

Cooperative 2:20

copper 182:1 223:7

copper-copper

182:1

copy 150:12

core 103:8,12 104:7

116:17,18,19

121:6 164:18

194:8,21 196:6

197:3,13,18

205:20 214:16

215:5 216:1 219:8

248:8 278:7

Corkran 2:3 58:9

58:14,15 188:15

188:15 189:3

corner 108:8

Corporation 2:14

3:18

correct 37:9 41:18

103:19 104:3

108:16,19 109:9

109:20 113:16

128:11 129:6

163:17 240:14

271:20 296:6

correctly 93:9
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27:11,13,16 29:9

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148:16 149:15,16

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267:5,10,13,14

268:4 270:13

273:9 274:1,2

275:10 276:8

281:5,6 289:13,21

290:3,20,21 291:3

291:9 295:15

300:17 301:14

302:18 314:16,20

315:4,17,18 317:2

317:9

costs 41:6 63:20

67:19 79:6 108:4

108:11 154:5,12

154:13,17 161:19

161:22 169:11

181:7,9 218:1

219:13,14 221:2

223:7,10 265:21

267:20 268:18

269:3 274:3,4

290:6 299:21

300:14 302:5

315:21

cost-benefit 156:6

234:15 292:4

cost-effective

124:18 160:8,9,20

173:18 196:8

221:6 278:5

Coughlin 3:5 10:2

27:2 31:14 32:6

32:17 33:8,13

34:1 36:20 37:2

37:10,22 38:8,11

38:17,20 39:10,14

40:5,11 41:4,22

42:4,8,19 43:5

44:9,12,14 45:1

47:4,16 48:5

50:11 51:13,16

52:4,8 53:9,20

54:16 60:7,16,19

61:3,10,21 62:3

62:20 66:6,12

67:8 68:9,18 69:8

69:21 70:4,7 71:2

71:12 72:5,10,19

73:8,17 74:15,19

75:2,5,17,22

76:17 77:10,17

78:3 79:14,18

80:4,7 83:8,13

84:2,5,9 88:22

89:3 90:7,18 91:6

91:17,22 92:3,10

92:14 93:7,13,17

94:7,10,15,20

95:3,18 96:2,9

97:4,18 99:10

100:2 101:4,15

102:6,10,16

105:19 106:11

112:10 114:16

119:13 120:3,7,13

120:15 121:1,13

122:3 125:6,15,19

125:22 126:4,8,14

126:21 127:21

128:13,18,21

129:7,11 131:21

132:7,10,12 133:1

136:7,17,21

140:17,21 141:5

142:6 143:12,14

146:13,22 147:13

147:16 150:16,20

151:2,8,11 152:9

152:12,15 153:4

153:10,16,19

154:10,15,22

155:2,4,20 156:8

157:18 159:5

161:4,8 162:12

164:12,19 165:12

166:16,22 167:5,9

167:11 168:6,11

168:18,21 169:12

169:17 170:5,9,12

170:16 171:2

172:10 173:21

174:11,20 175:13

176:1,4,7,12

177:7,9,15,18

178:6,9,18,22

179:5 180:5,12,17

182:3 183:9,20

184:2,4,19 185:10

185:19 186:18,21

188:8 189:14,21

190:4,8,12,15,19

191:1,5,9,15,21

193:21 196:12

198:7,13 203:1,3

203:5 208:1,12,19

216:5,10 218:10

218:18,20 219:1

220:8 222:1,12,18

223:2 231:20

232:1,4,7,10,14

232:22 233:6,9,18

233:22 234:5

235:8,11,14,18,22

237:1,6,9 238:13

244:13 245:5,20

246:9,18 247:6

250:1 252:22

253:3,9,12,16,18

253:21 254:2,7

259:8 263:6

264:14 291:3,17

291:21 292:18

294:1,12 304:13

315:11,19 316:1

316:10,19 317:3

317:11

Coulter 3:6 31:21

32:2,2,15 33:1,9

33:14 35:2,7,22

36:4 41:16,17

42:1,7,10 90:12

90:13,19 93:2

97:9,10 99:1

100:18,18 101:5

101:16 102:8,15

102:17 153:21,21

154:11,16,20

155:12 156:15,19

156:22 157:4

240:16,17 241:13

241:17,22,22

243:2

Council 2:7,19 3:20

110:9

Counsel's 10:5

count 41:9 198:14

counted 219:3

counter-proposal

253:1

counting 67:19

country 72:21

counts 170:11

couple 4:14 7:9

10:7 14:14,19,22

15:5 67:9 69:3

153:12 203:19

236:14 275:4

279:14 291:13

305:19 312:8

course 25:13 70:3

93:2 211:13 243:4

247:17 266:6

305:14

court 5:12 6:9 7:11

7:18 8:3 34:10

57:14,21

cover 4:4 10:1

coverage 12:20

covered 166:19

Co-ops 3:8 6:13

crazy 134:14

137:13

create 59:3 98:4

254:19

created 114:5

189:13

creates 122:22

creating 59:8 299:9

creative 311:20

CREEVY 3:6

criteria 50:18

96:20 97:2 98:18

120:19 121:6

146:10,10,11,15

147:7 152:7 157:3

171:5,8 179:12

182:12 186:16

197:19 234:6

246:19 247:2

255:5 258:19

262:12 263:2,9

265:14 294:22
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cross 240:20

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crosses 241:1 242:6

crossover 220:14

242:7 249:5

crude 246:5 261:20

CSL 83:22 97:13

97:16 98:19

107:16,22 108:1

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125:3 177:5 267:7

280:15 283:16,20

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CSLs 84:1 85:6

96:5 108:3 110:19

175:1,4,22 176:13

177:2 178:20

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CSL-0 86:4

CSL-1 89:5 93:10

93:11 94:4,21

CSL-2 94:21

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CSL-3 176:11

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CSL-4 176:10

CSL-5 86:14 87:4

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CSL-6 95:2

CTRL+P 166:5

cumulative 150:1

curious 67:3

current 24:12 38:3

50:7 64:1 124:19

175:17 183:5

242:21

currently 54:16

128:21 186:21

218:11

curve 98:5 107:13

118:8 119:2 131:5

133:11 135:1

curves 88:2 112:19

122:9 134:19

206:2

customer 2:13

263:22 264:6

265:3 267:2 268:5

298:5

customers 46:16

118:21 119:9

161:19 220:5

264:1 265:4 266:3

cut 113:21 228:22

229:6 302:20

cuts 302:19

cycle 26:20 27:11

27:13,15 29:9

31:13 40:20,22

41:6,11,21 73:16

79:6 81:19 125:4

126:13 146:12

167:3,10,11 169:7

169:8,11 183:8,10

184:11 193:15

252:12 273:8

289:20 290:20

291:3 302:18

315:18,21

CYMBALSKY 2:4

60:10,18,21 61:8

156:9,17 157:2

162:15 163:5,8

165:1,5,9,13,16

172:2,12 193:3,19

261:6 262:6

313:22

D

Dan 3:4 10:5,10

11:22 13:12 14:22

17:5 140:10

269:18,18 292:19

295:3 298:14

Daniel 3:22 6:4,8

dashed 85:22 93:18

94:11 131:2

data 20:20 24:10

24:11,14 26:15

27:18 28:4 30:18

34:5 38:15,19

43:2,6 45:7,11,16

46:4,22 47:18,20

47:22 53:17 54:21

55:2 56:4,12,12

58:5 63:6,12 66:5

67:2,6,11,15 68:2

69:4 71:13,16,18

71:20 72:9,20

73:2,4,18,20 75:1

75:6,18 76:2 77:6

79:8,9 80:9 88:6

90:9,16,17 92:12

96:11 99:4,18

101:11 102:8

122:7 124:20

130:16,17 132:3

132:22 135:22

136:15 137:1,10

137:19,20 140:2,4

140:6,9,12,16

142:10 178:4

185:7 199:15

202:14 220:7

226:19 227:7

229:22 230:21

234:22 239:14

241:4,7,9 242:10

242:10 249:5

274:19 283:9

285:15 286:17,18

291:13 293:7

300:21 301:2,7,9

316:2,12,13,17

317:7

data-driven 140:1

data-wise 231:19

date 15:16 16:11

17:19 256:19

292:7 306:16

310:14

dates 14:22 15:4,8

15:13 16:16

daunting 139:14

220:1

Dave 47:5 175:19

214:10 227:19

229:13 237:22

238:2,5 241:19

242:17 268:20

David 2:11 3:3 5:16

184:12

day 4:4 9:6 14:13

70:13 138:8

314:11 318:7

days 153:12 228:1

244:2 265:10

306:19 310:2

312:9,9 317:16

day-ahead 65:10

DC 300:16

deadline 254:12

255:1

deal 10:14 63:19

140:22 151:8

216:7 232:15,20

251:12

dealing 17:20

55:14 232:17

293:5 295:19

296:3 307:13

debate 105:5

debit 148:18

149:15

decide 152:22

158:9 236:7 244:7

259:4 270:17

271:6

decided 151:5

250:6 258:7

decides 153:1

deciding 57:14

240:22 241:10

258:9

decision 31:17 53:3

53:4 54:11 79:15

99:17,17 182:5,5

255:11 312:15

decisions 55:19

144:22 228:6

decision-making

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decline 189:18,19

decrease 124:16

210:1

default 32:20 38:6

Defense 2:19 3:20

defer 60:9 81:20

136:21

deference 57:21

define 30:11

179:21 184:21

187:2 194:20

195:16 204:4,15

205:10 206:1

209:8 213:9 218:3

241:5,21 246:20

258:10 264:16

defined 116:17

190:20 279:14

297:11

defines 208:10

defining 173:6

205:13 212:16

227:12 307:3

definitely 38:13

definition 144:17

170:12

definitions 145:10

degree 129:13

209:22 213:17

234:20 286:10

DeLASKI 2:5

13:20 14:5,5,11

17:15 18:14,17

19:17 20:13 21:8

21:16 22:8,17

25:4 34:8,12,12

35:5,9 46:9,10,21

51:21 52:6,9 96:4

127:18 128:12,16

128:20 129:4,9

155:6,14,16 158:3

159:10 160:1,19

162:5 163:15

164:8,16 168:13

168:19 169:4

170:19 173:11,15
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delta 281:5

demand 175:14,16

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denied 300:14

denominator 222:5

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Department 1:1

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depending 68:14

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depends 24:7 37:10

84:19 88:15 89:9

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deprive 172:11

described 163:19

167:7

describes 71:13

describing 158:11

description 29:7

design 2:8 19:8

24:15 29:11 30:14

64:4 84:12,14

85:8 86:15 87:13

88:10,13 89:7,12

89:19 95:4 101:9

102:3,3,5 103:20

104:9 105:8 106:8

108:10 109:10

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112:1,9,21 113:17

114:6,14 115:1

118:7 120:17

121:5,7 122:8,14

123:4,12,13 127:3

127:7,22 128:4

129:22 130:22

135:8 136:10

138:2,4 145:1,8

145:14,19 146:9

146:10,16 148:4

161:10 174:16

176:10,13,15

179:8,15 180:15

182:11,20 186:15

187:5 201:2

207:19,20 220:5

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monthly 65:17,18

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Moon 3:21

moot 118:22

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nondisclosure

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13:13

non-arbitrary

163:4

non-disclosure

11:2

non-evaluator

37:13,17 40:3

non-evaluators

48:5

non-standard

105:9

NOPR 158:12,21

172:4

normalized 68:21

Normally 158:21

Northwest 2:6

69:18

note 103:1 110:5

noted 104:15,21

275:12

noteworthy 160:18

164:13,22 165:17

167:16 173:3

226:11,17 229:7

229:10 252:3

262:15,18 275:22

notifications 12:15

notify 304:5

notion 17:17

163:17 297:10

no-load 50:15

64:10,12,13 84:20

88:11,16 89:10,15

89:20 90:16,22

91:7 98:15

NRDC 273:4

NRECA 39:4 49:21

number 29:10,21

34:4 43:16,21

44:1 47:13 50:12

52:21 62:1 63:17

86:21 87:5,21

92:4 95:7 116:21

155:19,21 179:2,4

182:10 184:17

186:8 201:9

202:22 213:16

269:13 271:6

278:10,12 315:10

numbers 19:5

43:17 44:10,16,18

47:19 49:6 56:22

78:17 79:3 122:5

127:3,10 146:8

161:12 176:16

182:17 236:13

238:19 243:7

245:1 264:19

308:7

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obligations 158:8

obliged 12:7

oblongs 27:17

observation 133:4

obtainable 109:22

obtuse 236:18

obviously 51:2

83:13 100:19

145:22 173:11

178:3 210:18

226:22 228:13

302:21

occur 27:19 59:18

104:4

occurs 135:19

October 230:18

254:10 309:15

310:1 312:12,13

312:16

office 10:5 235:10

oh 10:3 25:18 82:1

126:21 139:2,8

161:8 185:15

195:9 259:8

278:21 281:22

309:20

oil 20:5

okay 4:14 6:10,14

6:19 7:6 10:1

11:15,17 14:4

18:16 22:15 25:2

25:11,19,19 26:12

27:2,7 39:22

42:12 44:11 48:19

49:17 54:20 55:22

58:7,14 60:18

65:22 67:8 71:22

73:10 74:16,21

76:15 77:21 81:9

84:7,9 89:2,22

90:18 93:8,19

94:20 95:8 100:3

101:15 103:1

104:22 105:18

106:20 109:3

112:2 113:20

114:7 115:6,15

116:14 119:22

120:16,22 121:20

122:5 126:21

132:11 138:5,9

139:22 140:7

141:14,19,22

147:15 153:20

155:7 157:5,9,13

161:13 162:3,8

165:15 166:10,12

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169:20 171:1

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Operations 2:2,4

opinion 18:9 43:20

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opinions 34:7

opportunity 211:22

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opposed 16:6

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opposition 277:12

OPS 97:22 117:10

134:6 137:22

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250:13

optimal 39:12

108:7

optimistic 188:19

optimization

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optimize 109:10

117:6

optimized 59:10

114:6,11,14

option 163:22

280:21

options 106:17

163:21,22 180:13

182:11 245:2

250:5 280:10

orange 115:4

order 24:1 156:7

159:19 197:1,16

232:20 256:10

306:10 309:19

313:3

orders 288:20

303:6

origin 77:6

original 277:2

originally 282:15

ought 99:5 108:4

outcome 42:22

outer 282:15,18

outfit 129:7

outlook 66:20 67:1

67:7

output 70:3 81:5

86:13 97:22

112:22 146:3

245:21

outputs 27:20

36:16,16 85:13

outside 131:7

136:16 137:2

ovals 27:18

overall 96:22 210:9

212:9

overburden 148:1

overlap 182:9

overstated 248:22

overtax 274:16

overwhelming

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over-arching

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owner 30:5,11,16

31:8,19 63:9

ownership 29:14

o'clock 20:4

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115:14 133:3

137:9 138:21

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page 45:2

pages 77:12 226:18

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paint 189:3

paper 13:2 95:17

parallel 158:4

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109:10 134:9

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PARKER 1:16 3:2

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7:4,6,8 11:12 12:4

13:5,18,22 14:4

20:7 21:1,10,22

22:11,19 24:18

25:5,11,17 26:3

31:9,20 32:1

34:10 35:16 36:3

36:6 38:22 39:3

39:22 40:17 42:12

42:20 43:9 44:19

45:3,20 46:6,19

48:2,8 49:7,17

50:2 51:20 52:13

53:5,19 54:3,13

54:20 55:5,16,22

56:3,18 57:1

58:11 61:14 65:22

68:16 69:6 71:9

73:6,10 75:9

76:21 77:13,21

78:4 79:12,16,22

80:6 81:9 82:7,10

83:1,6,21 84:3,6

93:21 94:8,13,16

95:1,8,14 97:1,8

98:20 99:8,16

103:1 104:22

105:5,18 106:2,7

106:20 107:1

108:5 109:3 110:6

111:7 112:2

113:20 115:6,15

116:14 119:10,22

120:6,11,14,22

121:10,20 122:2

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154:19 156:5,21

159:20 160:17

161:2,6,13 162:2

162:21 163:3,7

164:4,20 165:3,8

165:15,18 166:7

166:18 167:2,6,10

167:13 169:6,14

169:20 170:14,18

171:1,3,16,19

172:6,9,14,22

173:2,14,22 174:9

175:9 176:18,22

177:4 179:20

180:9,16,20 181:5

181:22 182:15

183:2,7,17,19

184:3,8,14 186:3

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189:2,22 190:6,9

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217:11 219:11

224:10 243:10

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288:21 289:7

participated

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participation

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17:22 18:8,11,12

29:11 33:2 84:22

86:18 89:12 95:4

110:18 111:1,13

111:14 113:8

126:6 130:1 134:8

145:11 155:19

156:2 175:17

180:17 182:10,13

187:5 207:18,19

219:6 287:11

297:6,9

particularly 57:10

133:21

parties 258:15

partly 250:11,14

pass 244:21 299:16

299:21 300:6

301:15

passed 103:2

147:10,12 290:7

291:9 300:13

302:5

passes 57:16

passing 303:15

password 261:1

passwords 260:18

pass-through

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301:8

pass-throughs

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path 17:2 20:22

256:13

patiently 75:10

Patterson 2:12

19:16 21:19 22:2

22:10 39:20,21

40:1,9 45:18,19

45:21 51:8,9,14

51:17 88:19 89:2

89:17 90:10 91:14

91:19 92:2,6,12

92:21 93:4,8,15

93:19 114:2,22

116:15 126:12,17

131:13,15,16,16

132:4,9,11 135:13

135:13 136:2,8

164:2,6,14 176:20

176:22 177:1,1,5

177:8,10,16,19

178:7,10,19 179:1

181:19 183:11,18

183:22 194:6,11

194:15 221:18

222:2,20 223:3

249:14,18 269:4

269:12 270:12

273:13 274:10

276:13,18 277:1

283:14

Patterson's 248:19

PAUL 3:19

pay 113:9

paying 104:13

227:22

peace 141:15

peak 70:19

pedantic 58:6

peg 241:13

penetration 71:6

148:13,15

penny 207:10

264:13 265:9

people 4:7,12,16

5:4 7:10,17,19,21

8:21 9:2,5 25:5

28:12 29:5 31:10

33:5,14 35:18,18

44:15 45:11 48:15

48:21 49:3,13

50:2 52:21 57:11

62:7 78:2,9 81:16

103:9 113:21

118:5 121:3 122:6

133:7 135:12

139:1 143:17

148:1 155:10

181:1 191:22

199:20 202:19

208:7 215:21

219:22 221:2

229:3 235:6

245:10 247:13

250:16 253:7

256:10 257:3

261:8 262:9

275:18 282:8

283:12 288:15

289:2 294:11

299:14 303:3

313:8 315:3

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34:14 35:4 36:10

36:17,20,22 43:19

43:22 44:1,3,4

47:1,10 48:21,22

49:3 51:2,2,12

52:2,11 60:11,19

60:20,22 61:1,1

75:15 76:10,10,19

76:19 88:20,21

91:16,20 92:1,7

92:18,20 98:2

102:20 116:2,5,5

119:5 123:21,22

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131:20 149:22,22

168:2,2 169:2,2

172:13 174:7,7,8

184:16 186:11,15

189:5,10,11

190:10,13,16

196:22 197:20,22

198:10,14,18

202:11 215:6,6,19

216:1 217:9 220:5

243:4 251:11

254:4 282:18

302:4

percentage 33:22

36:10 43:14 46:3

47:7,13 118:21

138:18 219:2

perfect 277:19

performance

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period 16:7 68:3

169:19 189:16

248:11

permitted 301:7

permitting 257:16

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philosophy 228:16

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pictures 176:3,9

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156:2

pieces 110:18

pin 173:22

pink 180:22

pivot 36:18

place 77:3 97:7

182:13 217:21

284:6 304:10

places 219:11

224:19 275:1

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plan 62:8 303:12

plane 4:7

planning 42:21

233:20

plants 217:8

play 274:11

please 4:15 5:7,22

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25:12 45:3,5 50:3

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118:10,12 121:3

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plug 165:13 168:16

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point 4:9 22:21

27:8 36:18 46:7

51:15 56:5 57:10

60:12 66:8,8

75:13 89:6,17

90:6,8 94:19 96:7

99:5,20 100:21

102:22 105:3,7

107:7,15,21,22

109:15,21 115:11

115:11 116:12

117:8 118:22

124:20 131:13,22

132:1 133:12

135:5 136:2

139:16 140:1,5,8

141:10 142:5

147:16 157:5

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168:14,14 173:4

173:15 177:21

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181:11,16 192:6

194:8,21 195:2,11

195:12,15,19,20

195:22 196:1,1,2

199:6 200:3

202:11 207:16,18

211:13 213:8,8,13

215:17 220:20

221:4,8,9 222:21

229:19 240:19

241:3,5,11,14

242:11,13,17,18

242:20,21 244:6

244:10 245:10,10

245:16 246:16

247:16 248:14

249:5 252:6 255:2

258:18 260:3

262:1,5,11 269:15

270:12 271:22

272:13,17 273:19

274:5,7 275:9

277:19 279:8,20

281:11 282:11,16

282:19 283:7,8,11

284:8,11,17,22

288:1 290:12

291:7,10

pointed 46:12

284:8

pointer 27:8 94:14

pointing 260:4

points 19:21 40:14

87:12 88:12 96:18

96:22 101:3

108:12,12,14,20

118:13 130:14

132:5 134:14

143:7 160:13

202:9,12 206:13

221:16 242:5

272:8 275:4,5

279:2

pole 141:12 217:20

222:6,6 225:10

poles 217:20,22

218:12

pole-type 225:9

policy 73:9 215:18

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296:5 297:12

301:5,7 307:10

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206:11,12 207:2,5

207:8,14 216:14

216:14 219:19,19

220:10,11 223:9

political 290:13

pollution 155:17

ponder 296:22

population 64:19

86:8 102:13 188:3

port 181:20

portfolio 70:17

portion 70:19

posed 49:9

position 17:20

positive 125:6

170:3

possibilities 247:4

263:8

possibility 98:17

119:7 161:21

263:2

possible 16:10 41:6

98:5 102:14 117:9

119:4,15 123:8

138:3 146:1 148:1

152:7 161:16

190:6,10 191:18

226:6 250:13

317:18 318:13

possibly 38:8 136:6

235:2 246:5

post 150:22 193:6

252:14 254:22

256:14,15 260:15

260:19 261:9,14

261:16 303:13,19

304:11,21 309:8

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144:19 151:22

254:16,18 255:20

255:21 304:3

305:22 310:2

315:8

posting 124:19

151:14 256:20

261:8 306:17

309:3

potential 161:16

163:2 198:15

285:2

pound 207:11

214:20

power 2:3,6,11

3:13 6:22 7:5

110:8 186:8

practical 85:4

250:11

practice 46:8

135:19 244:2

practices 8:10

precise 129:14

precision 97:20

preclude 8:14

predict 98:6 251:13

preempted 9:16

preliminary 32:19

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presiding 1:16

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113:2,9 119:14

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180:4,11 184:9

191:12 195:2

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198:1,3,4 199:11

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73:18 74:10 96:16

97:21 98:6 110:17

111:9,9,16,22

113:19 124:13

191:8,9 199:6,8

201:13,20 206:17

210:14 214:6

222:13 248:21

249:1 250:3,8

251:5 285:17

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price-comparing

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price-efficiency

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pricing 111:2 211:5

211:9 214:2 215:2

215:3,16,18 251:6

251:13

primarily 32:7

principal 2:19 3:17

80:5 201:6

principle 202:17

print 166:4 287:21

prior 15:6 17:11

255:22 274:21

priori 112:12

priority 304:7

private 244:2

privately 319:2

probability 60:17

probably 83:5

134:2,6 136:12

186:11,13 208:17

231:20 252:20

311:12,15

problem 60:3

144:2 206:14

214:4 236:8

238:20 240:7

311:20

problematic 64:10

141:2

problems 4:13

58:22 130:6

134:17 223:22

301:4

procedure 50:14

59:9 74:20 84:16

84:21 92:1,4

114:19 127:9

185:14 190:20,21

191:1 292:8

procedures 268:7

292:3

proceed 9:10 20:12

208:22 234:14

proceedings 10:13

process 37:14

52:18 54:11 55:15

60:8 79:21 83:16

116:20 140:2

143:16 144:12

146:2 151:3 158:3

158:5,7 217:16

229:8 232:17

243:11 251:19

258:9 259:20

260:11 261:3

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processes 117:6

158:5

produce 58:2 127:2

127:10 147:19

148:7 149:10

238:19 294:6

produced 43:3

97:21

producer 206:21

producers 217:7,13

220:3

producing 57:4,5

128:22 294:4

product 1:20 3:17

16:17,18,19 18:20

19:9,21 20:18,21

38:18 85:5 111:5

111:6 128:4

156:12 183:12,14

187:14,18 188:5

202:3 204:16

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Professor 3:2

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Prolec 2:8 3:6,14

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proprietary 11:14

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protected 11:1

provide 11:13

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provided 20:3

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providing 11:9

236:3 278:7

provision 18:1

proxy 205:13

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public 1:10,19 2:11

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putting 101:7

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P-R-O-C-E-E-D-...

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quantity 150:7

quest 192:7

question 10:11

15:17 17:8,14

18:11 23:13 24:3

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250:12,14 251:22

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questions 13:19

14:1 23:18 78:1

78:11 79:1,11

83:2 143:1,6,9

192:21 194:18

239:14 242:9

293:6 295:8 315:1

quick 61:11 64:8

93:1 133:4 190:2

190:4

quickly 27:10

164:3 223:13

225:2 226:3 229:1

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318:17

quite 41:4 69:7

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225:6 279:17

310:1

quoting 60:4

R

raise 201:19 262:12

raised 19:11,19,22

126:18 235:2

250:2 293:4 295:8

raises 22:21 101:5

289:15 290:18

ran 44:9 104:3

random 98:2

125:20

randomly 108:7

range 42:18 77:8

109:13 113:18

125:14 131:7

133:9 136:16

137:2 185:11

186:6 250:22

ranges 123:22

rare 182:9

rate 31:7 64:12

88:4,10,11,21,21

88:22 91:7,10,13

123:2 168:3

189:15,19,19

273:9 290:1 300:9

300:10,12 314:19

315:12

ratepayer 291:2

rates 62:10 98:15

149:21 169:5

rating 105:8

ratings 19:20

132:20

ratio 45:4 68:2

73:22 89:19 90:3

90:4 114:6,15

rationally 46:20

ratios 90:21 114:10

raw 219:14

Ray 2:14 206:8,11

216:12,13,14

219:19 220:10

229:13 237:22

238:4

reach 273:20

317:17

reached 66:14

reaches 195:2

reactions 22:18

135:12

read 217:1,18

readily 103:15

reading 11:15

ready 256:17 304:3

313:3

real 50:14 83:18

99:14 115:12

132:22 133:4

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realistic 29:17

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54:12 55:19 99:12

99:18 136:11

163:11

realize 89:13

really 7:21 21:3

23:7 34:5,6 35:14

45:8 47:14 53:18

59:4 62:18 70:9

79:15 81:17 84:18

85:19 86:10 89:6

98:14 112:17

117:13 121:4,16

150:16 163:5,20

182:16 190:2

206:4 208:7,13

212:17 213:11,21

219:16 224:20

242:22 243:5,15

245:3,17 250:14

250:17 251:20,20

252:18 255:5,15

268:10 291:6

310:8,9,12 314:2

314:3,3 317:20

reason 51:7 69:12

114:8 118:6,9

135:21 136:14

137:1,18 243:3

reasonable 182:12

227:13 229:17

230:14 238:8,9

255:20 305:21

reasonably 244:4

reasons 118:2

250:22 299:17

recall 277:19

recap 48:2 192:16

303:13

recapitulating

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recognize 9:1 14:18

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recollection 45:21

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referred 78:2

refinement 23:5

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reflected 70:1 72:6

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regenerate 79:13

region 30:19 72:20

regions 69:4 70:5

regulate 139:4

regulated 300:5

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regulating 302:3

regulation 35:20

55:21

regulations 8:10

regulator 301:14

301:18

Regulatory 299:18

rehash 192:20

288:19

reinventing 311:22

reiterate 265:18

rejected 39:16

related 114:12

194:8 267:19

Relations 3:6

relationship 76:3

110:19 111:11,19

122:16 220:16

relationships 108:1

138:14

relative 28:21

55:21 122:5 199:6

201:2 205:3,17,17

210:11 211:5

212:21 223:4,6,10

275:10

relatively 28:7

32:22 50:22 52:21

53:6 85:10,11

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released 67:12

96:11

relevant 40:19

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reliable 221:10

rely 113:16

remaining 258:7

remember 10:16

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259:12

remind 191:22

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reminded 10:4

remove 104:11

renewable 70:17

renewables 1:3

2:17 69:14 70:18

71:6

repeat 164:3

Rephrase 277:13

277:14

replace 71:15

replacement 149:1

report 18:15 78:16

78:19,22 79:10,13

Reporter 5:13 6:10

7:11,18 8:3 34:11

reporting 230:15

reports 73:1

represent 27:17,18

27:20 28:19 50:13

51:4 54:11 65:11

85:11 99:13

100:15 113:5

123:21 125:10

139:18 175:14,15

representation

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representations

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representative

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132:18

representatives

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290:17

represented 98:12

representing

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represents 76:3

84:21 104:16

114:21 265:4

request 106:12

238:9

requested 63:5

require 9:6 12:14

55:6 153:12

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311:14

required 59:10

110:14 111:14

138:7 152:17

160:3 171:19

270:21 310:11

requirement 12:13

49:1

requirements 18:2

148:21 174:14

208:20

requires 8:16

rerun 80:2 310:22

rescale 72:9,16

73:2,22 74:13

130:9

rescaling 72:6 75:8

Research 2:5,14

3:17

resolve 26:11 58:22

59:12 252:16

resources 2:18 3:20

138:2

respect 12:9 15:3

85:14 110:13

298:16

respectfully 70:16

respond 20:10

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230:16 255:3

305:9,10 312:10

318:3

responded 62:21

response 7:7 14:3

77:19 122:1 173:1

194:4 199:18

262:21 317:16

responses 53:21

rest 141:7

restrict 134:8

restricted 115:18

restriction 22:6,7

restructure 112:15

result 27:21 62:22

136:9 225:9

results 24:14 28:9

28:16,17 39:7

44:17 53:4 57:19

71:1,17,18 77:7

77:20 81:1 88:5

108:22 123:9

124:4,21,22

125:16 127:16

129:17 130:2

142:14 143:17,20

144:20,21 145:20

147:19 148:6,7,11

150:3 159:3 182:6

192:1 253:5 254:5

290:14 300:10

314:9

retail 68:8 74:5,10

74:13

retailer 298:6

retain 51:4

retrofit 188:12

returns 273:20,22

review 27:3 62:7

87:8,11 119:21

192:21 243:21

313:8 314:12

reviewed 65:2

revised 28:6 263:16

303:14,19,21,22

312:19 313:3

318:6

revising 313:9

revision 36:14,15

revisions 28:6

revisit 119:8

revisiting 141:15

rework 311:14

Richard 1:16,18

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45:18 217:5

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right 4:5,22 5:2

6:18 16:15 20:16

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26:14 33:1,8,13

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281:18 282:11

284:3,16 285:9,10

285:18,21 286:7

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295:10 299:21

305:1 306:6

307:21 308:5

309:3,5,7 310:10

311:10,11,13,18

311:21 312:2

313:16 315:22

rigorous 53:12,13

ringing 22:13

25:14

Rivest 3:15 37:4,5

37:20 38:2,9,15

38:18 60:12

132:14 138:10,10

139:2 142:4

187:10,10 188:1

219:10 279:1,7,17

280:5,11,19 281:4

281:9 282:14

283:21

RMS 75:16 76:16

76:19

Rob 43:11,12 81:10

115:13 133:2

137:4,8 138:20

223:14 239:8

Robert 2:8,19 3:3

75:11 107:2 174:2

174:3 186:4 199:1

250:18,19 266:21

273:15 274:6

289:9,10 297:2

Robert's 291:7

Robin 2:18 273:4

robust 283:9

robustness 282:19

Rob's 136:2

role 147:17

rolling 312:6

room 1:15 57:3

150:13

ROSENFELD 2:16

Rosenstock 2:17

21:12,13 24:4

36:7,8 37:1 61:11

61:16,17 62:15,16

66:1,2,7,13 68:4,5

69:11,13,22 70:6

70:15 71:22 72:1

72:8,12 73:11,12

74:2,3,16,21 75:4

78:13,14 95:10,15

95:21 96:6 128:6

128:7 142:19,20

161:14 162:3,8,18

162:22 169:22

170:1,6,10 171:11

171:12,17 182:19

183:3 188:11

189:18 193:12,13

194:1 226:4,8,13

229:2 243:9,18,20

262:13,17 263:1,7

263:10,14 264:11

264:18 265:17

266:8,15 268:8,9

268:22 269:11,16

270:20 271:1,5,13

271:16,18 272:2

275:7,16 278:9,13

278:18,21 281:7

281:15,16,22

287:19,20 288:5

297:19,20 298:19

299:5,9 300:8,16

313:5,6,17 314:15

315:9,16,22 316:7

316:18,22 317:5

317:12

Rossetti 3:18 5:19

5:19 6:1,1

rough 26:21 44:4

231:4

roughly 91:15

round 19:2,5,6

55:7 134:6 137:15

181:20

row 145:9

rows 150:5

Roy 2:18 273:4,4,6

rule 16:6 17:20,21

52:22 135:16,17

135:22 158:8

292:15 302:11

rulemaking 1:7

18:3,12 292:1

293:2 294:8

rulemakings 8:11

274:22 292:2

301:10

rules 12:5 16:6

26:13 292:22

293:5 296:16

run 29:19 32:21

33:20 44:16 81:14

86:2,18 120:1

121:14 126:3

134:1 159:2

222:21 223:22

246:15 259:5,13

266:19 269:15

274:18 311:1

running 84:8

101:11 114:5

153:1 225:1

260:17,21 308:16

runs 32:18 86:13

89:20 92:17 110:2

266:17

run-up 66:9

Rural 2:20

rush 319:5

RYAN 3:19

S

SA 178:7

Saint 2:19 39:1,4,4

39:11,19

sale 54:14

sales 38:16 54:8,10

55:2 138:16,18,22

219:12

Sampat 3:16 48:11

48:11 225:3,3,17

225:20,22 301:11

301:12,17

sample 41:13 53:12

53:13

sanitized 142:14

satisfied 262:19

318:21

satisfy 26:10 194:3

204:12

save 138:1 267:8,12

267:20 290:4

saved 298:8

saving 267:20

savings 40:6,10

74:11 124:11,12

124:14 125:5,6

139:6 144:4,6,7

144:10 147:2

148:16 149:3,18

149:20 150:2

156:4 157:6 160:8

166:14,21 167:3

167:22 170:3

235:20 245:1

268:2,3 273:9

275:10 289:14

290:3,21 298:4

302:15

saw 218:4 249:2

saying 26:5 43:10
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scale 86:10 136:9

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schedule 24:1 84:8

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scheduled 230:17

scheme 63:8

Schoen 3:17 11:18

11:18 12:14,19

13:4,7

scope 307:7

Scott 1:20 307:22

screen 106:15

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screening 255:3

scroll 166:11,12

scrutiny 57:17 58:3

seat 263:5

second 94:5 98:8

118:5 141:18

166:19,22 167:21

170:2 259:6,13

267:18 274:17

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secondary 56:2

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secondly 274:18

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Secrets 11:2 13:17

section 119:10

security 4:21

see 8:8 27:7 31:20

33:3 34:2 51:10

52:3 53:14 54:14

55:16 60:6 65:9

68:13 72:19 86:19

87:4 90:3 93:7

100:2 101:12,13

103:9 105:14

109:11,16 111:3

116:10 126:22

143:17 146:4

156:22 157:4

158:11 159:3

161:11 165:3

166:10 175:5

177:22 178:3

182:6 186:9,13,17

186:19 188:3

200:1,3 203:16

204:14 217:8

221:3 231:17

237:13 238:15

239:15 242:7

246:7,7,15 254:18

255:10 264:6

274:8 275:8,9

279:5,22 286:10

288:21 289:12

290:11 295:17,21

302:10 309:15

310:19 314:1,9,10

319:6

seeing 35:18

157:16 186:11

189:20 256:12

274:8

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91:20 92:1,7

116:2 119:5 124:5

163:9 184:16

186:10,15 189:5

189:10 190:10,13

190:16

6

6:00 20:4

60 174:8 189:1,11

600 89:22

7

7 123:13 193:14

7th 309:15

714 67:11

75 32:12,20 33:4

36:10,17 123:22

125:4 130:4,16

131:8 133:12,18

136:10,11

8

8 89:21 193:14

8E-089 1:15

8,760 91:8

80 44:3

9

9 136:12

9's 309:12

9-16 309:7

9-23 309:8

9-30 309:9,11

9:00 1:16 314:13

9:09 4:2

9:29 26:1

9:30 312:3

9:37 26:2

90 61:1 124:3

900 59:2

95 124:2

99.08 162:9 264:20

99.1 162:10

99.12 265:1

99.16 162:9 266:17

99.2 265:1 286:2

99.24 265:1

99.3 177:22 284:20

99.4 178:1

99.5 264:20
NEAL 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 

357

Liquid Immersed and Medium Voltage

Dry Type Transformers

US DOE

09-16-11

Washington, DC