### 202-234-4433 Neal R. Gross & Co., Inc. Page 1 UNITED STATES OF AMERICA DEPARTMENT OF ENERGY

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PUBLIC MEETING ON THE PROPOSED POLICY FOR ADOPTING FULL-FUEL-CYCLE ANALYSES INTO ENERGY CONSERVATION STANDARDS PROGRAM + + + + + THURSDAY OCTOBER 7, 2010

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WASHINGTON, D.C.

+ + + + + The Public Meeting convened in Room 1E-245 of the Forrestal Building at 1000 Independence Avenue, Southwest, at 9:00 a.m., Doug Brookman, Facilitator, presiding. PRESENT: DOUG BROOKMAN, Facilitator KARIM AMRANE, Air-Conditioning, Heating and Refrigeration Institute KEN BARKER, Dominion Virginia Power ROBERT BEAUREGARD, American Public Gas Association DONALD BRUNDAGE, Southern Company MICHAEL CALDARERA, National Propane Gas Association OWEN COMSTOCK, DOE ROBERT ELLIOT, National Propane Gas Association

PRESENT (Cont'd):

### 202-234-4433 Neal R. Gross & Co., Inc. Page 2 MARK FRIEDRICHS, DOE AMI GRACE-TARDY, DOE JEROME HINKLE, American Clean Skies Foundation ALEX HOFMANN, American Public Power Association TED MARKS, JVC Company DAVID MOHRE, National Rural Electric Cooperative Association ANTHONEY PERKINS, DOE DAN REIDINGER, Edison Electric Institute STEVEN ROSENSTOCK, Edison Electric Institute ANDREW SOTO, American Gas Association FRANK STANONIK, Air-Conditioning, Heating and Refrigeration Institute GREGORY STAPLE, American Clean Skies Foundation CHARLIE STEPHENS, Northwest Energy Efficiency Alliance RICK TEMPCHIN, Edison Electric Institute MEG WALTNER, Natural Resources Defense Council MICHAEL WANG, Argonne National Laboratory JOANMARIE WEISS, Weiss Farm ROGER WEISS, Weiss Farm TED WILLIAMS, American Gas Association JIM WOODWARD, Deloitte ERIC WOYCHIK, Black & Veatch

### 202-234-4433 Neal R. Gross & Co., Inc. Page 3 C-O-N-T-E-N-T-S WELCOME, ATTENDEE INTRODUCTIONS, AGENDA REVIEW ....................................4 Doug Brookman OVERVIEW OF KEY PROPOSALS/QUESTIONS.......13 Anthoney Perkins/Mark Friedrichs

BRIEF OPENING STATEMENTS FROM INTERESTED PARTIES...................................19 Doug Brookman

SHIFT FROM PRIMARY ENERGY TO FULL-FUEL-CYCLE ENERGY, USING GREET MODEL, FOLLOWED BY DISCUSSION................................49 Anthoney Perkins/Michael Wang/ Mark Friedrichs

ADDITION OF ENERGY-RELATED EMISSIONS OF METHANE AND NITROUS OXIDE TO ESTIMATED IMPACT ON CO2 EMISSIONS, FOLLOWED BY DISCUSSION.147 Mark Friedrichs IMPROVING INFORMATION AVAILABLE TO CONSUMERS, FOLLOWED BY DISCUSSION...................153 Anthoney Perkins/Mark Friedrichs FINAL REMARKS AND QUESTIONS FROM INTERESTED PARTIES..................................158 Doug Brookman NEXT STEPS AND CLOSING...................191 Anthoney Perkins/Doug Brookman

ADJOURNMENT..............................192

### 202-234-4433 Neal R. Gross & Co., Inc. Page 4 1 P-R-O-C-E-E-D-I-N-G-S 2 (9:02 a.m.) 3 MR. PERKINS: Good morning. I'm 4 Anthoney Perkins with Department of Energy, 5 and the Energy Conservation Program for 6 Consumer Products and Certain Commercial 7 Equipment. Today we're here to take comments 8 and discuss the Full-Fuel-Cycle proposed 9 policy. 10 To start it off, I'm going to go 11 ahead and introduce Doug Brookman, who will be 12 the facilitator today, and he will take us 13 from here for a little while. 14 MR. BROOKMAN: Thank you. Good 15 morning, glad you could join us. It is our 16 tradition to do introductions around the room. 17 Also, as you registered this morning, I 18 believe you handed in a business card to 19 Brenda Edwards, or someone who registered you. 20 If you did not, then let's do that by lunch. 21 And, typically, the Department makes a xerox 22 copy of the attendees that are here present.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 5 1 So, please, your name and organizational 2 affiliation, and I'll go around the room this 3 way. You need to push the button on the 4 microphone. We can get in the habit of 5 getting a little green light working. Your 6 name and organizational affiliation. 7 MR. MARKS: Ted Marks with JVC 8 Company. 9 MR. WOODWARD: Jim Woodward from 10 Deloitte. 11 MR. STAPLE: Greg Staple, American 12 Clean Skies Foundation. 13 MR. STEPHENS: Northwest Energy 14 Efficiency Alliance. 15 MR. CALDARERA: Mike Caldarera, 16 National Propane Gas Association. 17 MR. ELLIOT: Bob Elliot, National 18 Propane Gas Association. 19 MR. BEAUREGARD: Bob Beauregard, 20 American Public Gas Association. 21 MR. SOTO: Andrew Soto, American 22 Gas Association.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 6 1 MR. WILLIAMS: Ted Williams, 2 American Gas Association. 3 MR. TEMPCHIN: Rick Tempchin, 4 Edison Electric Institute. 5 MR. BARKER: Ken Barker, Dominion 6 Virginia Power. 7 MR. HOFMANN: Alex Hofmann, 8 American Public Power Association. 9 MS. GRACE-TARDY: Ami Grace-Tardy, 10 DOE, in the General Counsel's office. 11 MR. FRIEDRICHS: Mark Friedrichs. 12 I had been in the Policy and International 13 Affairs office for many years, but I'm now in 14 the Office of Energy Efficiency in the 15 Building Regulatory Programs. 16 MR. PERKINS: Anthoney Perkins, 17 also in the Department of Energy, Energy 18 Efficiency. 19 MR. WANG: Michael Wang from 20 Argonne National Lab. 21 MR. ROSENSTOCK: Steve Rosenstock, 22 Edison Electric Institute.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 7 1 MR. BRUNDAGE: Don Brundage, 2 Southern Company.3 MR. AMRANE: Karim Amrane, Air4 Conditioning, Heating and Refrigeration 5 Institute.6 MR. STANONIK: Frank Stanonik, Air7 Conditioning, Heating and Refrigeration 8 Institute. 9 MR. HINKLE: Jerome Hinkle, 10 American Clean Skies Foundation. 11 MS. WALTNER: Meg Waltner, National 12 Resources Defense Council. 13 MR. COMSTOCK: Owen Comstock, 14 Energy Information Administration. 15 MR. REIDINGER: Dan Reidinger, 16 Edison Electric Institute. 17 MS. WEISS: Joanmarie Weiss, Weiss

18 Farm. 19 MR. WEISS: Roger Weiss, Weiss

20 Farm. 21 (Off mic comment.) 22 MR. BROOKMAN: Once again, thanks

### 202-234-4433 Neal R. Gross & Co., Inc. Page 8 1 to all of you for joining us, being here on 2 time so we can get an early start on this day. 3 I think all of you received a packet of 4 information as you came in this morning. In 5 the packet is an agenda, a series of 6 PowerPoint slides, which will be the basis for 7 presentation and discussion today, as well as 8 the proposed rule, so all of you will have a 9 copy of that. 10 I'm going to run through the 11 agenda real quick, and then we're going to 12 move to the substantive issues. Immediately 13 following this agenda review, there'll be a 14 brief overview of key proposals and questions, 15 and following that there's an opportunity for 16 anybody that wishes to do so, to make brief 17 opening remarks, brief summary remarks. I 18 have a copy, I believe, of eight -- 19 (Off the record comments.) 20 MR. BROOKMAN: So, immediately 21 following this agenda review, there's an 22 opportunity -- there's going to be a brief

### 202-234-4433 Neal R. Gross & Co., Inc. Page 9 1 overview of the key proposals and questions 2 that the Department wishes to have you respond 3 to. And then following that, there's an 4 opportunity for anybody that wishes to do so 5 to make brief summary statements about the key 6 issues and concerns. 7 I have in front of me the 8 statements of at least eight individuals that 9 sent comments in advance. That's very helpful 10 to the Department. These written statements 11 will be a part of the complete record. I'm 12 hoping that as you make your statements, 13 you're not going to read these all the way 14 into the record; that is, you can condense 15 these comments for the purposes of this 16 hearing today. 17 Following that, there's a 18 significant amount of time allotted for that. 19 If it goes a whole hour, then we'll take a 20 break midmorning, around about 10:45, or so. 21 And then immediately following that, we'll 22 move to the Shift from Primary Energy to Full-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 10 1 Fuel-Cycle Energy using GREET model. And 2 there's an opportunity for discussion and Q&A 3 following that. Also, we'll break around 4 about 12:15, or so, for lunch, depending on 5 when we're at a natural stopping point, and 6 return from lunch. As we get to the lunch 7 hour, those of you that are not familiar with 8 the way it works here at the Forrestal 9 Building, we'll acquaint you with the way to 10 get back and forth. 11 Immediately following lunch, 12 Addition of Energy-Related Emissions of 13 Methane and Nitrous Oxide to Estimated Impacts 14 on CO2 Emissions, followed by discussion. And 15 then Improving Information Available to 16 Consumers, followed by discussion. There's an 17 opportunity, again, at the end of the day for 18 any additional comments, final remarks, and 19 questions, issues that you do not think have 20 been covered sufficiently. We intend to 21 finish today Next Steps, and closing 3:15, 22 3:30, or so. So, that's the plan for today.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 11 1 Questions and comments about the agenda? 2 I'd ask for your consideration, 3 what have emerged as norms, courtesies, if you 4 will, for the conduct of these public 5 meetings, please speak one at a time, please 6 say your name for the record each time you 7 speak. You don't need to say your 8 organizational affiliation again. Some of you 9 are in the habit of doing that, but please 10 speak each time. There will be a complete 11 record, a transcript of this meeting today. 12 I'm going to be queuing people by name as best 13 I can to speak. I also wish to encourage 14 follow-on comments. Sometimes the back and 15 forth is very helpful to the Department. 16 Please be as concise as you can, 17 share the air time with your colleagues here. 18 And if you can keep the focus here, please 19 turn your cell phones on silent mode, and 20 limit the sidebar conversations. These 21 microphones work pretty well, but they need to 22 be turned on to work. Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 12 1 So, that's the general plan for 2 today. Questions and comments before we 3 launch into it? Mark Friedrichs.

4 MR. FRIEDRICHS: Just a note that 5 the public transcript, as well as all the 6 statements and public comments will be on 7 www.regulations.gov as soon as they become 8 available. Some comments are already in the 9 docket section of regulations.gov for this 10 proposed policy. 11 MR. BROOKMAN: Thank you. And I 12 should also welcome those that are joining us 13 via webinar. This is a new practice over the 14 last several meetings that the Department has 15 initiated web contact, so I hope that the web 16 portion of this engagement works well for 17 those that have dialed us up and are tuned in 18 via computer. 19 So, having said that, let's -- 20 MR. PERKINS: Do you want to 21 mention where the restrooms are?

22 MR. BROOKMAN: Sure. Yes. The

### 202-234-4433 Neal R. Gross & Co., Inc. Page 13 1 restrooms are at both ends of the hall, and as 2 we get to the coffee break, we'll describe 3 where to get coffee. 4 MR. PERKINS: Hello, again. My 5 name is Anthoney Perkins, as I've already 6 stated, but I just want to go ahead and, first 7 of all, start out giving you a background of 8 what the proposed policy is all about, and 9 then I'll turn it over to Mark to give you 10 some further information. 11 We started out with Section 1802 12 of EPACT 2005, which directed DOE to contract 13 with the National Academy of Sciences to 14 examine whether the goals of energy efficiency 15 standards are best served by measurement of 16 energy at the actual site of energy17 consumption, or through the FFC, the Full18 Fuel-Cycle. 19 The National Academy of Sciences

th 20 transmitted its report to DOE on May 15 of 21 2009, and you'll notice in the Federal 22 Register Notice, as well, there is a link that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 14 1 you can go see the full report, so you can 2 look there if you want to see the full report. 3 A key recommendation was to use 4 the FFC measures of energy consumption to 5 assess national environmental impacts of 6 standards, and to provide more comprehensive 7 information to the public through labels, and 8 other means. This DOE Notice of Proposed 9 Policy addresses this, and other NAS 10 recommendations. 11 So, from there, I'm going to go 12 ahead and turn it over to Mark, and he's going 13 to talk a little bit about what our proposal 14 is. 15 MR. FRIEDRICHS: Just very briefly 16 before we get on to the general statements, I 17 thought I'd refresh your memory about what the 18 proposal covers. While we are trying to 19 respond to the NAS recommendations, we've 20 structured the proposal differently, and we've 21 addressed some issues that weren't raised, 22 specifically, in the NAS report.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 15 1 The first and primary focus, which 2 you'll hear about much this morning, is our 3 proposal to shift from the focus on primary 4 energy as the basis for national energy 5 savings, and environmental impacts of 6 efficiency standards to Full-Fuel-Cycle 7 energy, and emission impacts. 8 A second focus, which we'll get to 9 either late in the morning, or early in the 10 afternoon, is a proposal to add two new 11 greenhouse gases to our consideration. These 12 are Methane and Nitrous Oxide, often 13 associated with the production and 14 distribution of energy, and that's why they15 are especially relevant with a shift to Full16 Fuel-Cycle. 17 And, finally, a fairly open-ended 18 proposal for improving the information 19 available to consumers on the Full-Fuel-Cycle 20 energy and emission impacts of appliances with 21 some new ways of, hopefully, comparing across 22 classes. But this is really, we hope, an

### 202-234-4433 Neal R. Gross & Co., Inc. Page 16 1 open-ended discussion later today. 2 I just wanted to kind of quickly 3 summarize the key kinds of questions that we 4 would like to address today. We not only want 5 to address our proposal to shift to the 6 consideration of Full-Fuel-Cycle energy and 7 emissions, but we'd also like to have some 8 discussion of the methodology. And, 9 obviously, we've chosen right now to use the 10 GREET model, an Argonne National Lab model, as 11 the basis for our estimates, but we'd like to 12 hear your views on that. 13 Similarly, for the addition of 14 Methane and Nitrous Oxide, not only that 15 addition, but the methodology for calculating 16 those impacts. And for consumer information, 17 not only what kind of information consumers 18 should be provided, but the mechanisms that 19 are likely to be most effective in providing 20 that information. 21 We're going to consider all 22 comments that are made today, and that we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 17 1 receive over the next couple of weeks, before

th 2 the comment period closes October 19 , in 3 developing a Final Statement of Policy on 4 these issues, which we hope to issue before 5 the end of the year. But it's important to 6 keep in mind that that Statement of Policy is, 7 itself, not a regulatory action, actually. It 8 will be reflected in future rulemakings, 9 future proposed rules, future Regulatory 10 Impact Analysis. And, at that time, there 11 will be some further opportunity to get into 12 some of the details of how we apply our policy 13 in this area. So, keeping that in mind, I'd 14 like to begin hearing the general statements. 15 MR. BROOKMAN: And it's very 16 helpful to the Department, those of you that 17 have submitted written comments in advance, 18 and I have a stack of them here, and I thought 19 as a way of beginning, I'd simply start at the 20 top and work my way through it. Rick, before 21 we begin. 22 MR. TEMPCHIN: I have a question.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 18 1 MR. BROOKMAN: Say your name, Rick. 2 MR. TEMPCHIN: Rick Tempchin, 3 Edison Electric Institute. I have a question

4 for Mark. 5 Mark, the -- I just want to 6 clarify the National Academy recommendation 7 was to consider moving over time. Correct? 8 Rather than to use. I'm not trying to mince 9 words here, but it was consider moving over 10 time, and also to clarify, it was not a 11 unanimous recommendation, there were two 12 strong dissents. Correct? 13 MR. FRIEDRICHS: I think you are 14 correct on both counts. And, obviously, this 15 will be an extended process that the16 Department is now beginning to move to Full17 Fuel-Cycle, both in our regulatory analyses, 18 and in consumer information activities. 19 MR. BROOKMAN: And you'll describe 20 what the adoption time frame is, and all that 21 during the course of the day. 22 MR. FRIEDRICHS: Yes. I think I've

### 202-234-4433 Neal R. Gross & Co., Inc. Page 19 1 already begun to talk about that. 2 MR. BROOKMAN: Right. Okay. Just

3 wanted to be clear. 4 The first statement I have in 5 front of me is from David, is it Mohre, 6 National Rural Electric Cooperation 7 Association. Is he here in the room? Then, 8 I'll move on. How about a statement by the 9 American Gas Association. Who is here 10 representing them? Is that you, Andrew? 11 Please. Can you do this in the span of -- can 12 you do it rather succinctly? 13 MR. SOTO: I'll be very brief. 14 MR. BROOKMAN: Thank you. 15 MR. SOTO: Let me just highlight, 16 we did submit a statement in the record, and 17 let me just highlight a few points. First of 18 all, my name is Andrew Soto, I'm with the 19 American Gas Association. 20 AGA supports the Department's 21 proposal in this proceeding. Fundamentally, 22 customers should understand the energy use and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 20 1 environmental impacts associated with their 2 appliance choices, so we encourage the 3 Department of Energy to work with the Federal 4 Trade Commission to provide customers the 5 information they need to make smart decisions 6 about the appliances they purchase. 7 The current site-based efficiency 8 standards in appliance labels are, at best, 9 misleading, and they are not fuel-neutral. 10 Site energy metrics provide incomplete 11 information regarding energy consumption and 12 emissions, because they emit all of the 13 upstream energy and emissions needed to 14 deliver the fuel to its point of use. They 15 advantage appliances where the fuel emissions 16 and impacts are upstream, and they 17 disadvantage appliances, such as natural gas 18 appliances, where the energy consumption and19 emissions occur at the site. Therefore, Full20 Fuel-Cycle metrics enable a more complete 21 analysis of the total energy and environmental 22 impacts of the energy efficiency standards.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 21 1 They would level the playing field for 2 appliances that use different fuels, and would 3 make the Department's appliance standards 4 truly fuel-neutral.

5 It's for these reasons that the 6 National Academy of Sciences recommended that 7 the Department consider moving over time to 8 the use of a Full-Fuel-Cycle measure of energy 9 consumption for assessment of national energy 10 and environmental impacts. And they also 11 recommended, Recommendation Three, that the12 Department immediately implement a source13 based metric for appliances for which there is 14 a choice of fuels. 15 In addition, AGA also supports the 16 Department's use of the GREET model to derive 17 Full-Fuel-Cycle conversion factors. There has 18 been some debate in years past over how best 19 to derive those factors for converting site 20 energy to Full-Fuel-Cycle energy consumption. 21 AGA believes that the GREET model is 22 sufficient for DOE's purposes. In fact, the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 22 1 gas industry is united on this point. On

th 2 September 30 , AGA, along with 12 other gas 3 industry associations and organizations sent a 4 letter to the Department acknowledging that 5 the GREET model can produce appropriate 6 conversion factors for the Department's 7 National Impact and Environmental Assessments. 8 The gas industry recognizes that 9 as with all models, refinements can be made, 10 and up-to-date information can be added as it 11 is developed, and we encourage the Department 12 to continue to look at those ways to improve 13 the model, and update the information. But, 14 at present, the conversion factors that the 15 GREET model has produced adequately reflect 16 the differences in energy consumption and 17 emissions of the various fuel sources. 18 As I indicated, the ultimate goal 19 should be to provide consumers with better 20 information. Working with the FTC, the 21 Department should provide customers the 22 information they need to make smart appliance

### 202-234-4433 Neal R. Gross & Co., Inc. Page 23 1 choices. So, we support the Department's 2 proposal to improve the Federal Trade 3 Commission's online information. Moreover, we 4 urge the Department to work with the FTC to 5 provide emissions information on the energy 6 guide labels, so that customers can better 7 understand the emissions implications of their 8 appliance choices. 9 AGA believes that any concerns 10 regarding the complexity and utility of any 11 particular energy guide label can, and should 12 be addressed in a rulemaking proceeding by the 13 FTC, when it revises those labels. The 14 potential that some labels may be perceived by 15 some users as less than clear should not be a 16 basis for denying customers the emissions 17 information they need to make environmentally 18 sound appliance choices. 19 With that, I'll submit the rest of 20 my statement, and we'll have further comments th 21 by October 19 . And I thank you for the 22 opportunity to address these issues of great

### 202-234-4433 Neal R. Gross & Co., Inc. Page 24 1 importance to AGA members. 2 MR. BROOKMAN: Thank you. The next 3 statement that I have is from, I believe, CECA 4 Solutions, and these were submitted by Ellen 5 Berman. Is there a representative from CECA 6 Solutions here in the room? Then I'll move 7 on. The next statement is from the American 8 Public Gas Association. Do we have a 9 representative? Yes, your name, please. 10 MR. BEAUREGARD: Yes, good morning. 11 My name is Robert Beauregard with the 12 American Public Gas Association. I appear in 13 support of the EERE Notice of Proposed Policy, 14 proposing to incorporate a Full-Fuel-Cycle or 15 FCC analysis in the methods it uses to 16 estimate the likely impacts of energy 17 conservation standards on energy use and 18 emissions. 19 That said, I'm sorry, such 20 analysis provides a better basis for comparing 21 the energy use and overall emissions 22 associated with products that use different

### 202-234-4433 Neal R. Gross & Co., Inc. Page 25 1 fuels, such as electric and natural gas water

2 heaters. 3 That said, APGA recognizes that 4 energy costs remain an important metric for 5 consumers to compare their product purchases. 6 APGA also speaks in support of the proposed 7 collaboration between DOE and FTC to make FTC 8 energy and emissions data available to the 9 public to enable consumers to make cross-class 10 comparisons. 11 As AGA stated, we joined in that 12 letter to Assistant Secretary Zoi in support 13 of the NEMS and GREET models. We stated, as 14 well, that APGA believes the conversion 15 factors produced by the models based on 16 current data are sufficient for DOE's purposes 17 in this docket. 18 That said, APGA anticipates 19 ongoing improvements over time to the models, 20 and encourages DOE to be diligent in 21 considering industry and government efforts to 22 update the information on emissions. For

### 202-234-4433 Neal R. Gross & Co., Inc. Page 26 1 example, the Gas Technology Institute, through 2 comments filed by Neil Leslie in this 3 proceeding, has offered DOE its Source Energy4 and Emissions Analysis Tool or SEEAT, S-E-E-A5 T, and its underlying methodology for 6 consideration as further evidence of the 7 technical validity of using the GREET 8 methodology. 9 SEEAT allows calculation of the 10 source energy, and greenhouse gas emissions 11 related to appliance site energy consumption 12 by fuel type for each energy consuming device, 13 and for the whole building. 14 While DOE already incorporates 15 source or primary energy analysis into its 16 assessment of the impact of minimum efficiency 17 standards, proposed move to FTC requires a 18 wholly different approach if the resulting 19 standards are to achieve the greatest possible 20 reduction in energy consumption, and 21 greenhouse gas emissions. 22 For appliances with fuel options,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 27 1 DOE should perform a side-by-side analysis on 2 an FCC basis of each proposed standard. The 3 conversion factors produced by the NEMS and 4 GREET models can be used to yield consistent 5 results on an FCC basis. 6 The new comparative FTC analysis 7 is the needed prescription against standards 8 that exacerbate significant fuel switching, 9 that in turn increases primary energy use, 10 operating costs, and greenhouse gas emissions. 11 DOE has the opportunity in collaboration with 12 the FTC to add meaningful FCC energy and 13 emissions information to the energy guide 14 label. The information will give consumers 15 and their contractors critically needed 16 information about the true efficiency and 17 environmental impact of their appliance 18 purchases. 19 This factual efficiency and 20 emission information is critical given DOE's 21 current legislative restriction on rating 22 appliances based on site energy. The proposed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 28 1 online database and related tools need to link 2 appliance labels so consumer can clearly 3 distinguish among the various alternatives, 4 both during the research, and while making 5 their purchases. 6 If DOE were to access output from 7 the SEEAT tool, the source energy factor, and 8 carbon emissions factors derived from SEEAT 9 can be easily added to the label. The 10 supplemental information is meaningful, easy 11 to incorporate, and it provides an immediate 12 helpful step until the flawed site-based 13 energy factor can be addressed. The 14 importance of providing consumers with 15 credible and verifiable information on the 16 greenhouse gas emissions of any appliance on 17 an FCC basis cannot be overstated. 18 In conclusion, APGA strongly 19 encourages DOE to urge broader adoption of the 20 full FCC methodology. Thank you for this 21 opportunity to speak on a very important

22 matter to our members.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 29 1 MR. BROOKMAN: Thank you. The next 2 written statement I have was submitted by a 3 representative of the Gas Technology 4 Institute. Is there anybody here representing 5 those statements? Nobody in the room 6 presently. Okay. Next, I have a statement 7 from the Edison Electric Institute. 8 MR. BARKER: Good morning. My name 9 is Ken Barker, and I'm representing Dominion 10 Virginia Power, and members of the EEI. 11 Dominion is a large electric and 12 gas company, one of the largest in the nation. 13 I'm Vice President of Customer Solutions and 14 Energy Efficiency for Dominion. We are a 15 member in good standing of AGA and EEI. 16 Dominion, on behalf of EEI and its member 17 companies, many of which are combination gas 18 and electric energy suppliers, have several 19 key concerns about the proposed policy, and 20 would like to highlight some of those 21 concerns. I'd like to go over, briefly, five 22 concerns we have that are outlined in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 30 1 material we presented. 2 First of all, the proposed policy 3 change would inflate the economic benefits of 4 high efficiency appliances beyond what the 5 customer would actually save. DOE is looking 6 to change its analysis to a Full-Fuel-Cycle 7 type of analysis to go back to the point of 8 extraction of fossil fuels and uranium. 9 Unfortunately, in doing so, DOE's proposal 10 would lead consumers to believe they will save 11 more energy than is this case, and could cause 12 them to make inappropriate economic decisions. 13 Concern number two, appliance 14 efficiency standards should not eliminate 15 entire classes of appliances. Customer choice 16 must be preserved. Weighting the analysis too 17 heavily with the Full-Fuel-Cycle analysis can 18 lead to eventual elimination of entire classes 19 of electric products, and produce undue 20 hardships on consumers.21 Concern number three, Full-Fuel22 Cycle analysis penalizes electricity generated

### 202-234-4433 Neal R. Gross & Co., Inc. Page 31 1 from renewables, and nuclear. The DOE analysis 2 assigns a fossil fuel heat rate to renewables, 3 and nuclear resources; however, the assigned 4 source BTUs for these resources provide an 5 inflated result to the national energy savings 6 portion of electric appliance energy standard 7 analysis. This, inappropriately, penalizes 8 electricity generated from these sources. 9 Concern number four, DOE should 10 not attempt to use imputed costs in the 11 appliance efficiency standard setting process. 12 Imputed greenhouse gas costs can become a 13 lightning rod for consumer backlash against 14 appliance standards. Customers must be 15 assured they can save their own money over 16 time by using a more efficient appliance. 17 Their confidence in efficiency labeling will 18 decline if they find out they will not 19 actually save their own money, and, instead, 20 are subsidizing projected social costs. 21 And, lastly, concern number five, 22 appliance emissions labeling is confusing, and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 32 1 misleading for consumers. DOE should not work 2 to include emissions labeling on the energy 3 guide labels. Greenhouse gas emissions 4 reporting are extremely complex for electric 5 utilities. Each utility has its own distinct 6 GHG emission mix, so national, or even 7 regional average data can be very misleading. 8 If customers are interested, most electric 9 utilities publish their fuel content and 10 emission data. We agree with DOE that it 11 would be way too confusing to customers and, 12 potentially, very misleading to place GHG data 13 on energy guide labels. 14 However, for those customers who 15 are interested in GHG emissions information, 16 EEI would be pleased to work with DOE, or 17 other interested parties, to develop simple, 18 utility-specific GHG emissions information 19 that can be made available on a website. Such 20 information must take into account all fuel 21 sources, and be individualized for each 22 utility, and be simple to access and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 33 1 understand. 2 Thank you for your time and 3 consideration of our input. 4 MR. BROOKMAN: Thank you. The next 5 statement I have is from the National Propane 6 Gas Association. Your name, please. 7 MR. CALDARERA: Good morning. My 8 name is Mike Caldarera, with National Propane 9 Gas Association. 10 NPGA supports DOE's efforts to 11 adopt the recommendations of the National 12 Academy study regarding the Full-Fuel-Cycle 13 approach to energy conservation standards and 14 greenhouse gas emissions. Site or point of 15 use energy measurements fail to provide a 16 complete energy consumption, and greenhouse 17 gas emissions profile, because they do not 18 account for all the upstream energy use and 19 emissions associated with delivering the fuel 20 to its point of use. 21 Limiting the analyses to end-use 22 metrics ignores the fact that most energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 34 1 losses associated with non-gaseous fuels occur 2 upstream. For example, using the site-based 3 approach gives the impression that electricity 4 has zero end-use emissions, and mask the large 5 fraction of emissions caused by the combustion 6 of fossil fuels for the purpose of electricity 7 generation. Whereas, under a Full-Fuel-Cycle 8 approach, the delivery process for at least 9 our industry, the propane industry, is 10 relatively efficient, about 87 or 88 percent 11 of energy produced reaching the consumer as 12 useable energy. 13 Also, with regard to greenhouse 14 gas emissions, propane is not a greenhouse 15 gas. Its GHG footprint is small compared to 16 other fuel sources, and is second only to 17 natural gas in its on-site emission rate. 18 NPGA also supports DOE's use of 19 the GREET model for developing conversion 20 factors to assess the Full-Fuel-Cycle energy 21 impacts. In fact, the propane industry 22 utilized GREET to perform a comparative

### 202-234-4433 Neal R. Gross & Co., Inc. Page 35 1 analysis of propane to other fuel sources with 2 regard to greenhouse gas emissions. The study 3 looked at annual energy use, and annual life 4 cycle greenhouse gas emissions for a variety 5 of applications that included space heating 6 and water heating, among others. Sample 7 results showed a propane furnace produced less 8 than one-third the total amount of annual life 9 cycle greenhouse gas emissions that an 10 electric furnace would. But more broadly 11 speaking, we believe that the conversion 12 factors developed by the GREET model 13 adequately reflect the differences in energy 14 consumption and emissions of various fuel 15 sources. This includes the ability of GREET 16 to account for non-combustion-related sources 17 of electric power generation, such as nuclear, 18 hydro power, or renewables. As per this 19 propane study using GREET, we will provide an 20 electronic copy of this study with our

th 21 comments by the October 19 deadline, so that 22 the Agency can review it in more detail.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 36 1 NPGA also supports DOE's efforts 2 to work with the Federal Trade Commission in 3 developing a means of providing consumers with 4 energy use information and environmental 5 assessments when making appliance purchasing 6 decisions. We believe DOE should work with 7 the Federal Trade Commission to provide such 8 information on energy guide labels, so that 9 consumers can better understand the emissions 10 implications of their choices. 11 Thank you for the opportunity to 12 comment. And, again, we will provide 13 supplemental or additional written comments by 14 the October deadline. 15 MR. BROOKMAN: Thank you. The next 16 statement I have is from the American Clean 17 Skies Foundation. 18 MR. STAPLE: Yes, thank you. My 19 name is Greg Staple. I'm the CEO of the 20 American Clean Skies Foundation. We are a 21 non-profit organization based in Washington, 22 that was founded to promote America's energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 37 1 independence, and measures to achieve a 2 cleaner environment through greater use of 3 natural gas and renewables. 4 We support, in broad terms, the 5 Department of Energy's proposed policy shift 6 to move toward a Full-Fuel-Cycle standard, 7 rather than a point of use standard. We think 8 it is a warranted change in policy based upon 9 the strong recommendations made by the 10 National Academy of Sciences. 11 It is important for consumers to 12 know the full energy environmental impacts 13 that flow from the purchase of home and 14 business appliances. It's often said that 15 information is power, and here information can 16 spur significant power savings, while also, 17 potentially, helping the environment.

18 I want to stress that the stakes 19 are very large here, and the time really is 20 short for moving forward. Millions and 21 millions of appliances are purchased each 22 year, which have expected lifetimes often of a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 38 1 decade or more. Current federal efficiency 2 standards have done a remarkable job over the 3 years in savings, consumers, country, fuel, 4 and in contributing to a cleaner environment. 5 We believe that new standards based on a 6 Full-Fuel-Cycle approach can continue to yield 7 additional benefits. 8 Most importantly, I think, and 9 perhaps this is underscored by the National 10 Academy's report, Full-Fuel-Cycle-based 11 standards have the potential to facilitate 12 apples-to-apples comparisons of competing 13 fuels and appliances that are powered or use 14 different fuels. We haven't had that ability 15 before, as a result of which we suspect that 16 consumer purchasing decisions have been 17 distorted. 18 The fact is there is significant 19 variation in the energy and environmental cost 20 of appliances and commercial equipment powered 21 by different fuels, and by different types of 22 power generation. Operating efficiencies and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 39 1 pollution, NOx, SOx, greenhouse gases vary 2 considerably, and the social costs can be 3 considerable. For example, as many people in 4 this room know, electricity generated by 5 modern combined cycle gas turbine emits 6 substantially lower NOx and CO2, and virtually 7 no SO2, as compared to coal-fired generator. 8 Accordingly, switching from coal to natural 9 gas, which is underway in many parts of the 10 United States, is likely to achieve 11 substantial reductions in pollution, 12 particular matter, reductions in ozone, and 13 the like. 14 What does this all mean for 15 appliance standards? Well, let's take the 16 current Energy Star program, and clothes 17 dryers, something that most of us have in our 18 homes. There is no Energy Star label covering 19 clothes dryers at the moment, because most of 20 them use similar amounts of electricity, but 21 whether a clothes dryer is powered by gas or 22 electricity, whether the electricity comes

### 202-234-4433 Neal R. Gross & Co., Inc. Page 40 1 from gas, or coal, or wind, or nuclear can 2 make a big difference in the total energy 3 used, and the resulting emissions. It is our 4 hope that Full-Fuel-Cycle-based labeling will 5 make these differences visible to consumers so 6 that the information can be factored into 7 appliance choices. 8 So, given that the United States 9 is committed to reducing various kinds of 10 harmful emissions, and to improve public 11 health more Full-Fuel-Cycle standards are 12 plainly desirable, in our view. We believe 13 they offer a much stronger means of assessing 14 appliance options, and may facilitate 15 significant health and climate benefits. 16 We're going to submit more 17 detailed comments for the record, but I would 18 like to stress the urgency of this. We are 19 responding today, speaking today to something 20 that was written into a piece of legislation 21 better than five years ago. We're now 22 contemplating changing a policy in 2010 that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 41 1 will lead, we hope, to a policy change by the 2 end of the year, and future proposed 3 regulations based upon this new standard in 4 2011, and beyond. Let's get on with it. 5 We're talking about tens of millions of 6 dollars, potentially, in savings, and a huge 7 impact, potentially, on the environment if, as 8 we suspect, consumers will tend to make some 9 different choices as a result of having better 10 information. Thank you. 11 MR. BROOKMAN: Thank you. Other 12 brief summary remarks here at the outset? One 13 or two individuals did not get a chance to 14 comment. If anybody additional wishes to 15 comment at this time? Yes, please. 16 MR. MOHRE: Thank you. I'm sorry, 17 I must have submitted comments late. My name 18 is Dave Mohre. I'm Executive Director of the 19 Energy Power Division for National Rural 20 Electric Cooperative Association. 21 Cooperatives, basically, supply electricity in 22 all parts of 83 percent of the counties in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 42 1 United States, and they're consumer-owned, 2 consumer-controlled, not-for-profit utilities. 3 We've been involved with DOE for the last 30 4 years encouraging and supporting the 5 implementation of increased energy efficiency, 6 and this view is supported by our membership 7 through resolutions and other things 8 cooperatives do. 9 By being market and fuel neutral, 10 we think these standards of maximized energy 11 savings, while minimizing the effect of 12 supporting markets, the effects on supporting 13 markets. We, as we said in our written 14 comments, are gravely concerned about the 15 August 2010 Federal Register Notice moving 16 toward Full-Fuel-Cycle. And let me tell you 17 very quickly why we are. 18 First, we think you've done very 19 well, DOE has done very well. First, the 20 Energy Policy and Conservation Act of `75, and 21 the National Energy Conservation and Policy 22 Act of `78 provided DOE with authorization to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 43 1 set standards. Since that time, DOE has, 2 obviously, used site-specific standards, and 3 we think that's been a success. Clearly, 4 energy efficiency has improved dramatically in 5 that time, and based on what the manufacturers 6 have responded, we think they understand 7 those, and have responded very well. So we 8 think, first, the system works. 9 Second, as consumer-owned, 10 consumer-controlled electric cooperatives, we 11 believe that the analysis and cost 12 effectiveness of the efficiency standards must 13 be based on cost and savings that customers 14 directly experience. Okay? We believe that 15 basing standards on a difficult, constantly 16 changing set of calculations that consumers 17 may or may not fully understand may confuse 18 and, candidly, we think amounts to an attempt 19 to direct market outcomes. 20 But, more importantly, how useful 21 is it to show that an electric water heater, 22 for instance, is 27 percent efficient, instead

### 202-234-4433 Neal R. Gross & Co., Inc. Page 44 1 of 95 percent at the site, and emits X amount 2 of greenhouses gases when the customer may be 3 located in Pacific Northwest, where most of 4 the electricity comes from hydro power, clean, 5 non-polluting hydro power. So, locational 6 issues are clearly an issue. 7 Third, as mentioned just before, 8 given the rapid current changes in industry 9 generation resources, we see older, smaller, 10 less efficient coal units shutting down. We 11 see fewer new ones in the pipeline. We see 12 far more new natural gas-fired generation, and 13 significant coal-to-gas switching. We see 14 nuclear units under construction, and a lot 15 more planned. And most importantly, perhaps, 16 substantially increased renewable generation. 17 So, to us, placing source energy consumption 18 on a label for consumers can be very 19 misleading over the life cycle of the 20 appliance. In other words, yes, it's nice to 21 know, but when and where are also needed. 22 Fourth, we believe that site

### 202-234-4433 Neal R. Gross & Co., Inc. Page 45 1 energy can be very easily measured and 2 verified, as the National Academy's report 3 demonstrated. There was a lot of give and 4 take on whether to support this, and 5 eventually did, but it issued a caution. Do 6 this gradually. We don't really know how to 7 do it yet. Things may change over time. We 8 don't think the notice expressed that caution, 9 nor a full understanding of the changes that 10 are going on within the industry. 11 Fifth, DOE is planning to place an 12 estimated value on the global cost of 13 greenhouse gas emissions. We have some 14 problems with that. Until such time as there 15 is a valid legislation in place that places 16 the cost of carbon on the U.S., not the world, 17 the U.S., we think DOE is premature in adding 18 this to the calculation. 19 And let me get to the final point. 20 Six, certainly last, but certainly not least, 21 and this is a function of my age, and the fact 22 that I used to work at DOE back in the day, we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 46 1 do not believe DOE should be in the business 2 of picking technology winners or fuel winners 3 and losers, particularly based on estimates of 4 such unknowable cost, the greenhouse gases, 5 unknowable resources, the structure of the 6 future generation supply, and, again, citing 7 this personally, we only have to refer back to 8 the off-gas provision of the Industrial Fuel 9 Use Act of 1978 to remember what happens when 10 government does pick winners and losers. That 11 was a very painful lesson to the entire 12 country, and particularly to consumers. So, 13 apples-to-apples, yes, if there's a way to do 14 it, that would be great, but this is a very 15 difficult thing. We think that it's a bad 16 idea at this point in time. Thank you. 17 MR. BROOKMAN: Okay. Thank you. 18 Other comments? Yes, please, your name. 19 MR. HOFMANN: Alex Hofmann, 20 representing the American Public Power 21 Association. We represent about 15 percent of 22 the electricity sold in the U.S., and about 15

### 202-234-4433 Neal R. Gross & Co., Inc. Page 47 1 percent of our members are both gas and 2 electric utilities. They're consumer-owned, 3 consumer-controlled, non-profit utilities, and 4 we would like to come on record as being in 5 general support of what the EEI and the NRECA 6 have said here today. 7 Also, we'd like to say that site 8 works very well. The Department of Energy -- 9 well, first, I should say that we run an 10 energy efficiency research and demonstration 11 program called DEED. We work with the 12 Department of Energy almost constantly 13 promoting energy efficiency on various 14 projects, and various stages of research 15 across the U.S. We're huge supporters of 16 energy efficiency, in general. In fact, I, 17 personally, have lobbied -- well, not 18 necessarily lobbied, but have worked with 19 various environmental organizations in this 20 room right now to promote energy efficiency. 21 But what I'm trying to underline here is that 22 site works very well.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 48 1 The Department of Energy has 2 driven the amount of energy it takes to 3 produce a unit of work down significantly, but 4 the idea, what we're discussing here today, a 5 partial life cycle assessment with a limited 6 scope has created a few concerns for us. And 7 I'd just like to offer up a question, just 8 because I don't want to take up all your time 9 today, but can a static label reasonably used 10 to represent a continuously changing energy 11 mix, not only that, but the physical path of 12 electrons delivered, can a credible and 13 verifiable label be created using this 14 methodology that's proposed as a policy? So, 15 that's a big concern for us. 16 Thank you very much for allowing

17 us to -- 18 MR. BROOKMAN: Thank you. Other 19 comments here at the outset, brief summary 20 statements, issues you wish to flag here at 21 the opening? Okay. 22 Then let's proceed with the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 49 1 presentation of material. All of you have a 2 copy of these PowerPoint slides that we'll be 3 following on the screen up here. And I should 4 note for those that are joining us via the 5 web, as these presentation content blocks are 6 completed, I think the Department is going to 7 try to answer a few questions that come in via 8 the web. If you can type then in, then Hoi 9 will do her best to see if she can get them 10 reviewed. So, we'll try this and see if it

11 works. 12 MR. FRIEDRICHS: Hello again. This 13 is Mark Friedrichs. So, we're now going to 14 begin the part of today's meeting that focuses 15 a little bit more in detail on our proposal to 16 shift from the consideration of primary energy 17 to the consideration of Full-Fuel-Cycle 18 energy, and emission impacts in our 19 development of future product efficiency

20 standards. 21 Certainly, this proposal reflects 22 a belief by the Department that Full-Fuel-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 50 1 Cycle analyses would provide us with better, 2 more comprehensive information on the likely 3 impacts on energy and emissions of future 4 efficiency standards. So, that's the 5 fundamental reason why we're proposing this 6 shift. It is consistent with the NAS 7 recommendation. 8 I want to make a couple of things 9 clear, though. One, the way in which we're 10 proposing to make this shift would not require 11 any fundamental change in the analytical 12 methods we now use to calculate the energy and 13 emissions impacts of standards. Primarily, 14 those analytical methods are rooted in the 15 EIA's NEMS model. They produce estimates of 16 primary energy, and of emissions, such as CO2 17 that are associated with that primary energy. 18 And, ultimately, what we are proposing to do 19 is to use the GREET model to develop factors 20 that would be used to modify those primary 21 energy and emission impacts generated by NEMS 22 to Full-Fuel-Cycle values. So, I think it's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 51 1 important to understand that kind of 2 methodological approach that we are 3 recommending. 4 Second, we are not proposing any 5 change in the reliance on site-based measures 6 of efficiency, as the metrics used in 7 efficiency standards. We are required to use 8 site-based methods by law, but there's still a 9 strong feeling that all of the -- each of the 10 standards should be fuel-specific standards. 11 In other words, gas water heater standards 12 would be evaluated in terms of their cost, and 13 other impacts relative to other gas water 14 heaters, and electric water heaters would be 15 evaluated in terms of their energy and 16 emission, and cost impacts relative to other 17 electric water heaters. So, at least at this 18 time, there's no change in that policy or 19 approach in our efficiency standards program. 20 And, finally, while the shift to 21 the Full-Fuel-Cycle will have some effects on 22 our total impact assessments, we think those

### 202-234-4433 Neal R. Gross & Co., Inc. Page 52 1 impacts are actually comparatively modest. 2 I'll talk about those briefly. 3 MR. BROOKMAN: Let's just pause 4 right there for just a moment. 5 MR. FRIEDRICHS: Okay.

6 MR. BROOKMAN: Steve Rosenstock. 7 MR. ROSENSTOCK: Yes. This is on 8 the previous slide. Steve Rosenstock, Edison 9 Electric Institute. For the second bullet, 10 where "not requires significant change to 11 methods used to estimate energy and emissions 12 impacts of standards," when you look at13 primary energy and then go into Full-Fuel14 Cycle, doesn't Full-Fuel-Cycle really -- isn't 15 primary energy really mostly a domestic type 16 of analysis; whereas, Full-Fuel-Cycle, since 17 you're going back to the extraction of 18 wherever it is, isn't that more of an 19 international type of analysis? And wouldn't 20 that be, in my mind, a significant change? 21 MR. FRIEDRICHS: Yes, if you 22 consider that as significant change. For

### 202-234-4433 Neal R. Gross & Co., Inc. Page 53 1 example, if we imported electricity right now, 2 I believe the NEMS model, the way in which we 3 calculate primary energy -- and we do import 4 electricity -- assesses the primary energy 5 used to generate that electricity. In a 6 similar way, the GREET model, I believe, 7 estimates the energy associated with the 8 production and transport of fuels from 9 wherever they originate. 10 Michael Wang from ANL will be 11 speaking just after we get through this 12 initial part, and he can get into a little bit 13 more of the details of exactly how the GREET 14 model makes those estimates. 15 MR. ROSENSTOCK: So, it is going, 16 basically, domestic to international with some 17 of these analyses, isn't it? 18 MR. FRIEDRICHS: I believe so. 19 And, as I indicated, some of the current 20 estimates also involve international data. 21 Okay? Next slide. 22 You can see this both in later

### 202-234-4433 Neal R. Gross & Co., Inc. Page 54 1 slides in this presentation, and in the2 notice. We believe the shift to Full-Fuel3 Cycle will, in the end, result in a roughly 7 4 to 15 percent increase in our estimates of the 5 energy savings likely to result from different 6 standard levels, as well as the emissions 7 associated with those different standard 8 levels. But they would not alter the consumer 9 life cycle cost analyses, or the net present 10 value of consumer savings analyses, or the 11 manufacturer impact analyses, which are also 12 key analyses in any efficiency standards 13 regulatory impact assessment. 14 MR. BROOKMAN: Let's pause there. 15 Frank Stanonik. 16 MR. STANONIK: Frank Stanonik, 17 AHRI. We've, obviously, been trying to figure18 out what exactly the impact of this Full-Fuel19 Cycle change in policy would be, and so my 20 question is, based on these two slides, and 21 perhaps I've oversimplified this, but my 22 experience is that when DOE does an appliance

### 202-234-4433 Neal R. Gross & Co., Inc. Page 55 1 rulemaking, that I'll say the primary criteria 2 is the life cycle cost, if you will, the 3 direct consumer benefit. These two bullets 4 seem to suggest to me that this policy change 5 really doesn't change that, except that 6 whatever level DOE picks, they would indicate 7 well, on the national level we've actually 8 saved this bigger amount of energy, or this -- 9 or we've reduced this amount of emissions. Am 10 I misconstruing this? 11 MR. FRIEDRICHS: No, I don't think 12 you are. There is one economic factor which 13 the Department has been considering as a part 14 of its efficiency standards development 15 process for the last several years, and that 16 is the estimated monetary value of CO2 17 emission reductions likely to result. And 18 because the CO2 emission reductions associated 19 with a particular efficiency standard would 20 likely increase by roughly that amount, 7 to 21 15 percent, then that monetary value 22 associated with those reductions would

### 202-234-4433 Neal R. Gross & Co., Inc. Page 56 1 increase. That's an economic factor that we 2 consider in the development of our standards, 3 and in selection of the standard that's most 4 likely to maximize energy efficiency. But 5 that's the single monetary value change 6 affected by this rule, or proposal. 7 MR. BROOKMAN: So, Rick, follow-on. 8 MR. TEMPCHIN: Yes. To follow-up on

9 that -- 10 MR. BROOKMAN: Rick, say your name. 11 MR. TEMPCHIN: Rick Tempchin, 12 Edison Electric Institute. So, what you're 13 saying is you're monetizing the costs of 14 greenhouse gas emissions and you're assigning 15 a value where this has not been done before, 16 or assigning a value and rolling it into the 17 economic analysis that customers -- so, it 18 affects customer's economic cost and benefit.

19 MR. FRIEDRICHS: We have been 20 integrating that value into our consideration 21 of efficiency standards for several years now, 22 actually. It has been a part of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 57 1 regulatory impact analyses. Some of the 2 monetary values that we use for that purpose 3 have shifted, but that has become standard 4 practice in all of our rulemakings, so it's 5 not associated with this proposal. 6 MR. TEMPCHIN: So, what's the 7 change here in terms of monetizing and 8 incorporating social costs into the analysis, 9 what's the change? 10 MR. FRIEDRICHS: There's no change 11 in our basic methodology that we would 12 consider the monetary value of greenhouse gas 13 reductions likely to occur as a result of a 14 new efficiency standard. The one change is 15 that the -- our estimated greenhouse gas 16 impacts associated with a particular standard 17 is likely to increase because of the shift18 from primary energy emissions to Full-Fuel19 Cycle emissions. And it's likely to increase 20 by roughly that amount that I indicate, 7 to 21 15 percent.

22 MR. BROOKMAN: Andrew.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 58 1 MR. SOTO: Andrew Soto, AGA. As I 2 understand the Technical Support documents on 3 this point in prior rulemakings, there is an 4 interagency working group that establishes 5 these costs for carbon emissions. Could you 6 explain that process a little bit more, 7 please?

8 MR. FRIEDRICHS: I'm not sure I'm 9 the best person to explain it. I'm not expert 10 on that process, but yes, there was an 11 interagency process. It did result in a range 12 of values, which we have been considering 13 since approximately February of this year. 14 There had been previous interagency processes, 15 each of which produced different sets of 16 values that we previously considered in 17 rulemakings, and there may be future 18 interagency processes that change those values 19 in the future. The Department of Energy is 20 one of the agencies that participates in the 21 development of those values, and likely would 22 in the future.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 59 1 MR. BROOKMAN: Steve Rosenstock. 2 MR. ROSENSTOCK: Steve Rosenstock, 3 Edison Electric Institute. Just referring to 4 the proposed rule on refrigerators that came 5 out a couple of weeks ago, it looks like the 6 Department, when they're looking at the 7 annualized benefits and costs, is using a 8 range of $4.70 per ton up to $64.90 per ton9 for CO2. So, in effect, with this Full-Fuel10 Cycle, for every ton, you have that range of, 11 I'll say $5 to $65 to round off, then you add 12 the other 10 or 15 percent on top of that in 13 terms of your numbers that you're going to 14 come out with in terms of monetized benefits. 15 Is that a good way to summarize? 16 MR. FRIEDRICHS: Yes, I think

17 that's correct. 18 MR. ROSENSTOCK: Thank you. 19 MR. BROOKMAN: Yes, Rick. 20 MR. TEMPCHIN: Rick Tempchin, 21 Edison Electric Institute. Also, I just want 22 to clarify, am I right to say that your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 60 1 monetizing the value in a present value sense 2 out to year 2300; in other words, the present 3 value of the benefits of CO2? 4 MR. FRIEDRICHS: I'm actually not 5 an expert on the various climate impact 6 models, and the length of time they look out, 7 but they do look out into the distant future 8 to assess the likely economic, and other 9 impacts of greenhouse gases. 10 MR. TEMPCHIN: It looks to me like 11 it's looking at 290 years. 12 MR. FRIEDRICHS: You may be 13 correct, but I am not aware of that number. 14 MR. BROOKMAN: Additional comments 15 before we move on? Okay. Let's proceed. 16 MR. FRIEDRICHS: Actually, we're at 17 a point where we wanted to break, not break, 18 not for coffee, I'm sorry, but to ask for 19 comments on this part of our proposal, the 20 shift to the Full-Fuel-Cycle before we get 21 into the details of the GREET model. And, 22 although, it's a little bit misplaced in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 61 1 PowerPoint presentation, I'm going to -- this 2 is a list of questions, some of which are 3 relevant to this part of our morning. 4 MR. BROOKMAN: Are they in the 5 slides? 6 MR. FRIEDRICHS: They are in the

th 7 slides. They're on about the 20 slide. 8 MR. BROOKMAN: Okay. 9 MR. FRIEDRICHS: Unfortunately. 10 MR. BROOKMAN: Okay. Well, they 11 can look at them up on the screen. Then let's 12 do -- yes, receive comments that the 13 Department has prompted, and other additional 14 comments on the slides we just completed. 15 Please say your name. 16 MS. WEISS: Joanmarie Weiss. I'm a 17 dairy farmer from Michigan. And, I guess, I 18 came to Washington to visit, and have been 19 encouraged to be involved in the politics of 20 Washington, so we selected this meeting to sit 21 in on today. Did a little research, and a 22 little research can be a dangerous thing, but

### 202-234-4433 Neal R. Gross & Co., Inc. Page 62 1 I do understand that we're discussing site 2 consumption, which is the label that's on the 3 appliances that I purchase for my farm, like 4 the electric resistant water heater that we 5 have, versus a full carbon footprint, which is 6 what the Full-Fuel-Cycle would show. And in 7 your 447-page paper that's on the internet, I 8 took the summary of it, which I'm going to 9 just even abbreviate the paragraph. It says, 10 "The Energy Policy and Conservation Act is 11 designed to achieve the maximum improvement in 12 energy efficiency, which the Secretary of 13 Energy determines is technologically feasible, 14 and economically justified." 15 I think that's a noble thing for 16 the government, but I'm in business, and it's 17 more important to me, as someone up here said 18 earlier, to know the actual cost of that 19 product that -- appliance on my farm than to, 20 necessarily, know the cost of the whole carbon 21 cycle. So, I would say that for business, the 22 need is to study the -- for my business, my

### 202-234-4433 Neal R. Gross & Co., Inc. Page 63 1 need is to study the economic feasibility, so 2 that I can justify a new technology on my 3 farm. And I'm not sure that your labels that 4 you're talking about are going to do that. 5 And I'm hearing a lot of variance in $5 to $65 6 for the cost of the carbon footprint. 7 As I dairyman, I live on about a 8 10 percent margin. We make about $250,000 a 9 year. Our family lives on about $25,000 a 10 year. I need to have very small margins, so 11 if you're going to use something like this, 12 you need to get as precise as you can, not $5 13 to $65. And I agree that you may need to do a 14 little more research before you jump in and do 15 this. Thank you very much. 16 MR. BROOKMAN: Thank you. 17 MR. FRIEDRICHS: I just wanted to 18 say welcome. It's unusual that we have a real 19 user attend our meetings. I'm from Michigan, 20 so I'm glad to see you. 21 (Laughter.) 22 MR. FRIEDRICHS: I should also say

### 202-234-4433 Neal R. Gross & Co., Inc. Page 64 1 that on the labels, and in our standards 2 development process, the cost of the product, 3 and the energy cost savings that are likely to 4 result are really the primary focus of our 5 efforts. We do consider a lot of other 6 impacts, environmental impacts, greenhouse 7 gases, and so forth, but costs, and cost 8 impacts on consumers remain a central focus. 9 MR. BROOKMAN: So, looking at the 10 slide, I think that in opening remarks, 11 several people addressed these things, but FFC 12 measures of energy use and emissions in these 13 analyses in the GREET model, and also DOE 14 seeks comments on proposed methodology for 15 converting primary energy, and determining FFC 16 greenhouse gases and other emissions, and any 17 other related issues. So, do we have 18 additional comments on that? Let's hear from 19 this gentleman first. 20 MR. WOYCHIK: Good morning. Yes, 21 I'm Eric Woychik with Black & Veatch. I just 22 wanted to ask if capacity benefits are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 65 1 included in the calculations. And I would 2 suggest if they're not, capacity benefits 3 being a very important part of the electricity 4 equation, so I think if you're leaving those 5 out, and I would suggest you are, it's a big 6 problem when you're trying to consider the 7 value of various appliances and whether they 8 can be used, for example, for demand response, 9 not just for their energy consumption, 10 including electric water heaters, HVAC, et 11 cetera. Those benefits can be very large, and 12 they're increasingly important as we integrate 13 more renewable energy. You need more what is 14 called dispatchable ramping capacity, and 15 those appliances can provide that. For 16 example, electric water heaters probably 17 10,000 megawatts. If you just extrapolate a 18 few short years, five years, 10,000 megawatts 19 to integrate at a much lower cost renewable 20 energy means you have a very different cost 21 for those supply resources as we're trying to 22 get more clean. So, to the extent you ignore

### 202-234-4433 Neal R. Gross & Co., Inc. Page 66 1 those costs, and ignore the opportunities of 2 using those appliances in different forms, 3 that's a real mismatch in the cost-benefit 4 equation. 5 By the way, my background is 6 writing the original California Standard 7 Practice Manual for Cost-Benefit Analysis of 8 Conservation Load-Management programs in 1983, 9 and I'm in a project in California for the 10 three IOUs, the statewide integrated demand 11 side management task force to revise that. 12 And this is one of the things that we want to 13 do, is better include all the benefits and

14 costs. 15 MR. BROOKMAN: So, in your written 16 remarks to the Department, specifying how that 17 would get done I think would be very helpful. 18 MR. WOYCHIK: Thank you. 19 MR. BROOKMAN: Rick. 20 MR. TEMPCHIN: Yes, Rick Tempchin, 21 Edison Electric Institute. Mark, just a 22 question. One of the earlier slides talked

### 202-234-4433 Neal R. Gross & Co., Inc. Page 67 1 about Full-Fuel-Cycle providing more complete 2 information. Could you talk about the range 3 of uncertainty in some of these estimates that 4 are being made? 5 MR. FRIEDRICHS: I'd like to defer 6 to Michael Wang, who will be up shortly, and 7 can talk a little bit more about the inherent 8 uncertainties in the GREET model. There is 9 some discussion of that in some of the 10 underlying papers documenting the National 11 Energy modeling system, NEMS, that we use for 12 our primary energy estimates. All of our 13 estimates have some uncertainties, some 14 significant uncertainties, so it's something 15 that we deal with. And perhaps Michael can 16 address this issue later.

17 MR. BROOKMAN: I'll make a note. 18 We'll make sure we cover it. Frank Stanonik. 19 MR. STANONIK: Frank Stanonik of 20 AHRI. Since we're at the comment point here, 21 first want to indicate that AHRI, we're having 22 a very difficult time understanding the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 68 1 benefit of this policy change to the 2 rulemaking process. I understand all these 3 other things about trying to look at total 4 energy savings, reducing emissions, but in 5 terms of, specifically, the rulemaking 6 process, and if you remember my previous 7 question, we're having a very difficult time 8 understanding where that's really going to 9 benefit the rulemaking process. So, I would 10 tell you at this point, obviously, we're 11 looking for more information. We just don't 12 see any reason to go to this step. 13 I'll also raise an example -- 14 well, our main concern as we think of that, it 15 adds a lot of complexity, and potential 16 confusion to the process. And, again, we're 17 not seeing the benefit. I'll just give you 18 one example. If you're not aware of it, 19 there's a furnace rulemaking process going on 20 that's going to have, very likely, regional 21 standards. And everything I've heard about 22 the GREET in the Full-Fuel-Cycle is on a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 69 1 national basis. How is that going to be 2 addressed when you're looking at regional 3 standards? So, that's just one aspect of what 4 becomes a more complex process, again, looking 5 at where does it -- how does it really affect 6 the bottom line, which is -- again, appliance 7 rulemakings, that's our concern. So, anyhow, 8 we're really concerned about why do this? 9 On the question of the labels, 10 that becomes particularly troublesome to us, 11 because the current energy guide label, 12 manufacturers identify the efficiency of that 13 model. They do a number of tests, thanks to 14 some recent activities at DOE, it's even going 15 to be more closely scrutinized, that label 16 information. And now the suggestion is to add 17 this other piece of information, which is 18 nothing more than a factor. It has nothing to 19 do with the actual -- there's been no 20 measurement on that appliance. There's been 21 no measurement of that appliance in wherever 22 it's going. It's just saying okay, if this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 70 1 product had an efficiency of X, we're now 2 going to add this Full-Fuel-Cycle factor of Y, 3 and you're just going to put this number that 4 is a generic estimate, and really doesn't add 5 anything as far as what the energy guide label 6 is intended to convey, which is information 7 about that specific model. So, we have a real 8 concern about that point. 9 And I can't help but mention that 10 we've heard a lot about consumers wanting this 11 information. If you look at the National 12 Academy's report, the only person on that 13 committee that was a consumer representative, 14 in fact, was opposed to this idea. 15 MR. BROOKMAN: Thank you. 16 MR. FRIEDRICHS: We hope to get 17 into those consumer information-related issues 18 in a little bit more detail later. Thanks. 19 MR. BROOKMAN: Other comments, and 20 specific -- try to address the questions that 21 the Department has posed here. Steve

22 Rosenstock.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 71 1 MR. ROSENSTOCK: Steve Rosenstock, 2 EEI. GREET, I know Mr. Wang from the 3 Laboratory will be talking about it, but GREET 4 has been around since 1995. And I think it's 5 up to Version 1.8D.1, I believe is the latest 6 one. And I think it's been changed or updated 7 because they're trying to get all the analyses 8 of the information for the T transportation, 9 by the way, the last 15 years. It's been 10 updated probably once a year, I would guess, 11 if not more, by the experts at the Laboratory. 12 So, one big question is, which version of 13 GREET are you going to use? And if GREET 14 changes during a rulemaking, what happens, 15 because the numbers could change, the 16 uncertainty could change, that could affect 17 all the end outputs, as well. So, there is 18 that issue of how often does the Department 19 need to evaluate GREET, which version does it 20 use, does it stick with the same version 21 during a rulemaking, does it update it between 22 the preliminary analysis and the NOPR, and the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 72 1 Final Rule? There's those issues, as well, 2 that could be coming up with this. Thank you. 3 MR. BROOKMAN: Okay. Thanks. 4 MR. FRIEDRICHS: Yes, just to 5 answer that. Of course, we wrestle with those 6 same issues with the NEMS model, and with a 7 lot of the other analytical tools, which are 8 regularly updated, and our general answer is 9 that we use the most recent methodology and 10 forecast that is available, but during a 11 particular rulemaking process, sometimes we 12 need to freeze that methodology and forecast 13 to enable us to complete the rulemaking. 14 MR. BROOKMAN: Don Brundage. 15 MR. BRUNDAGE: Don Brundage, 16 Southern Company. A related question to that. 17 I did sort of a deep dive a few months ago on 18 NEMS with some of your contractors on how it 19 handled electricity, and I was impressed with 20 the level of customization in including the 21 various regulatory drivers, and they're not 22 just federal, but state level. Will you have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 73 1 the same flexibility to customize GREET that 2 you did with NEMS to handle those sorts of 3 issues?

4 MR. FRIEDRICHS: I want to 5 emphasize something I tried to say earlier, 6 and that is, we are not moving away from NEMS. 7 All right? We will continue to rely on NEMS 8 as the primary method for generating our 9 energy and emission impact estimates. We will 10 use GREET to generate conversion factors that11 move us from primary energy estimates to Full12 Fuel-Cycle estimates. But those primary 13 energy estimates will continue to be generated 14 by NEMS with all of the benefits that that 15 brings with it. 16 MR. BRUNDAGE: All right. Thank 17 you. 18 MR. BROOKMAN: Additional comments, 19 because we're about to move on. Okay. 20 MR. FRIEDRICHS: So, I'd like to 21 turn it over to Michael Wang. 22 MR. WANG: Yes, thank you, Mark.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 74 1 And I'm glad to be here to address some of the2 technical questions for GREET model, and Full3 Fuel-Cycle analysis. What I want to do is 4 I'll finish my slides first, and I've already 5 wrote down several questions from the previous 6 period, and I'll address those three questions 7 as they open the floor for more questions. 8 Okay. The GREET model developed 9 at Argonne National Laboratory is already 10 capable of estimating the Full-Fuel-Cycle 11 energy use and emissions of all forms of 12 energy covered by this program. Later on, 13 I'll show you what we have in the GREET model. 14 The model is in public domain, and 15 has been used previously to support other 16 federal and state regulatory activities; 17 namely, EPA has been using GREET for some of 18 the transportation regulation development,

19 such as the renewable fuel standard 20 development on the 2007 ESA requirement, and 21 California's lower carbon fuel standard 22 development in California. The model can

### 202-234-4433 Neal R. Gross & Co., Inc. Page 75 1 generate factors that would be used to convert 2 primary energy use and emission values 3 currently generated by DOE's NEMS model, 4 specifically, to the Full-Fuel-Cycle analysis. 5 And I have some details about the conversion 6 process we worked to DOE's Buildings program. 7 As many of you are aware, the 8 GREET model development effort has been about 9 15 years at Argonne with DOE's EERE support. 10 The model, as I mentioned, is in public 11 domain, so the model and its document are 12 available at Argonne's great website. It is a 13 long web address here you see, but if you just 14 simply Google GREET in the web, the first line 15 you are going to see is Argonne's GREET 16 website. 17 The most recent version, as Steve 18 Rosenstock point out, is GREET 1.8D.1, which 19 we released in August of this year. As of 20 now, there are over 14,000 GREET users 21 worldwide. They are primarily concentrated in 22 North America, Europe, and some Asian

### 202-234-4433 Neal R. Gross & Co., Inc. Page 76 1 countries. The flowchart here you see show 2 you what is covered in GREET, an off-cycle 3 analysis. From left to right on the flowchart 4 is the so-called Fuel Cycle Analysis, from top 5 to bottom is the so-called Vehicle Cycle 6 Analysis. So, what we did for this proposed 7 rule was the Fuel Cycle Analysis, namely from 8 left to right on this chart. 9 The model, as the name implies, 10 covered energy, greenhouse gases are the 11 criteria in producing emissions. For energy, 12 we separate energies into the so-called fossil 13 energy, which include petroleum, natural gas, 14 or coal. We estimate each of the three 15 separately, so you will be able to get the

16 result for each of the three. There we have 17 the so-called renewable energy, which would 18 include the biomass, hydro power, wind power, 19 and solar energy. Then we have nuclear 20 energy, so this is energy embedded in the 21 uranium, but as of now, we combine the nuclear 22 energy together with renewable energy, so we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 77 1 do not separate these two. But we do have the 2 ability in GREET to separate nuclear energy 3 from renewable energy. 4 For greenhouse gases, we cover the 5 three major greenhouse gases besides some 6 other optional greenhouse gases. The major 7 ones, as we all know, are CO2, CH4, and N2O. 8 Furthermore, we combined the three greenhouse 9 gases with the IPCC Global Warming potential 10 factors to generate the so-called CO211 equivalent greenhouse gas emissions, the so12 called CO2e. 13 For criteria pollutant, we have 14 VOC, CO, NOx, PM10, PM2.5, and SOx. And for 15 the six criteria pollutant we separate into 16 the so-called total and urban emissions. So, 17 of course, as we all know, urban emissions are 18 a subset of total emissions. 19 This chart summarize the GREET 20 fuel production pathways already included in 21 GREET. As you see, we have over 100-some fuel 22 production pathways already included in GREET.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 78 1 These are from petroleum, conventional crude, 2 and Canadian oil sand. We have natural gas 3 both from North America, and non-North America 4 to different liquid fuels, gaseous fuels. 5 And, of course, for non-North America, we go 6 through a liquefaction to bring to North 7 America as they produce different product. We 8 have different biofuels which are irrelevant 9 for this group today. We have hydrogen 10 production pathways which we include in GREET 11 for evaluation fuel cell because with 12 different hydrogen production pathways. But 13 most relevantly, we have different electricity 14 generation technologies and pathways included 15 in GREET. 16 This slide summarizes the electric 17 generation technologies we include in the 18 current GREET version. As you can see, we19 have coal-based power generation, natural gas20 based power generation, and, of course, we 21 have nuclear power, we have petroleum, 22 primarily steam boiler for power generation.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 79 1 We all know, the petroleum based power 2 generation shows very small in the U.S. We 3 have biomass power generation, hydro power, 4 wind turbine, solar photovoltaics, and 5 geothermal. These are the new pathways we 6 added in GREET, this version. And for these 7 so-called renewable powers, we know that 8 greenhouse gas emissions are zero during power 9 plant operation. But what we did this time 10 was to add the so-called infrastructure into 11 GREET; namely, the concrete used to build 12 hydro dams, the nuclear plant construction, 13 the coal plant construction, and so on. So, 14 now for power sector we have both plant 15 operation and plant construction. And, of 16 course, plant construction most relevant issue 17 is the lifetime of the plant, because you add, 18 you level your one-time burden over the 19 lifetime of the facilities. 20 So, what was the process to expand 21 from primary energy use to the Full-Fuel-Cycle 22 energy use. This flowchart show you what we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 80 1 did. The first group is crude oil from well 2 all the way to the site, versus the primary 3 energy use, or site-specific energy use as 4 some of us use this model in this meeting.5 So, EIA's NEMS generate the result for site6 specific energy use, which are highlighted in 7 yellow. But what we did was this time extend 8 to the Full-Fuel-Cycle to cover all the stages 9 above the yellow box. So, as you can see, we 10 have crude recovery, crude transportation, 11 petroleum refining, and residual oil 12 transportation to the site, so these are 13 additional activities we included. 14 The next group is natural gas, so, 15 again, from site combust -- natural gas 16 combustion, and to the applied site to all the 17 way to natural gas on the ground that gets 18 that gas all the way to the site, so, namely, 19 we have natural gas recovery processing, 20 natural gas transport, transmission and 21 distribution. 22 For coal, we all know coal is used

### 202-234-4433 Neal R. Gross & Co., Inc. Page 81 1 for power generation. The NEMS simulation, 2 coal combustion is included for electricity 3 generation, as they, of course, electricity is 4 used in appliance, so what we did, again, this 5 time is to include coal mining, coal cleaning, 6 and coal transportation, so these are three 7 stages we included for coal-based electricity 8 generation. 9 For biomass combustion, previously 10 in NEMS simulations only combustion only, but 11 this time we push all the way to fertilizer 12 production, and fertilizer transportation, 13 biomass farming, and biomass collection, and 14 transportation. 15 The last study for nuclear power, 16 besides the nuclear plant operation, we push 17 all the way to uranium mining, uranium 18 transportation, the enrichment, and uranium 19 rod transportation to the power plant. So, the 20 boxes on the left side of the yellow boxes are 21 what we expanded from primary energy use to 22 the Full-Fuel-Cycle energy use.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 82 1 MR. BROOKMAN: Pause right there 2 for a moment, if you would. 3 MR. WANG: Okay. 4 MR. BROOKMAN: We have a question. 5 Charlie Stephens. 6 MR. STEPHENS: Yes. Charlie 7 Stephens, Northwest Energy Efficiency 8 Alliance. Would you do me a favor, please, and 9 define for me crude oil recovery, or natural 10 gas recovery? What do you mean by "recovery?" 11 MR. WANG: The recovery means all 12 activities in oil and natural gas field, so 13 the pumping energy used to recover the energy 14 from underground to the surface, and put into 15 a pipeline or ocean tanker. 16 MR. STEPHENS: So, that includes 17 drilling? 18 MR. WANG: It does. It include 19 drilling, but it does not include exploration, 20 so we have not include oil field exploration. 21 MR. STEPHENS: So, it doesn't 22 include exploration drilling.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 83 1 MR. WANG: Yes, that's right, it

2 does not. 3 MR. STEPHENS: Okay. Interesting. 4 I'm having a little problem with where you 5 get to, ultimately, because I'm looking at 6 this concept of energy returned on energy 7 invested, and I don't know how many people are 8 familiar with that, but it's, basically, the 9 amount of units you get at the burner tip, or 10 the gas pump for the amount of energy compared 11 to the total energy you found. And it's going 12 down fairly dramatically, and has been 13 recently in Canada. I'll use natural gas, 14 just because I have those numbers at the top 15 of my head, but in 1995, Canada's estimated 16 EROEI was about 45 units at the burner tip for 17 each one invested in getting it. In 2007, the 18 last year I have numbers for, it was about 15.19 And if I plot that curve, it arrives at one20 to-one in about 2014, about four years from 21 now. Now, it'll never get there, production 22 will taper off first, but I'm having trouble

### 202-234-4433 Neal R. Gross & Co., Inc. Page 84 1 reconciling some of your numbers with those 2 numbers that I'm getting from the National 3 Energy Board in Canada. 4 MR. WANG: I think later on when 5 you see the table I have slides, you are going 6 to see our numbers in some way consistent with 7 what you got from Canada. Of course, we all 8 know Canada has a large share of oil sand 9 recovery, which is somewhat energy intensive 10 relative to conventional crude recovery. But 11 you're right, in Canada it is about 15 12 percent, this is efficiency number rather than 13 energy input, versus energy output number. 14 MR. BROOKMAN: Let's wait and see 15 what his table reveals. Steve Rosenstock, and 16 I'll return to you, Charlie. 17 MR. ROSENSTOCK: Steve Rosenstock, 18 EEI. You talked about power plant 19 construction for nuclear and renewables, and, 20 again, with the drilling. Are there similar 21 things for like the methods for hydraulic 22 fracturing, and deep water drilling, where

### 202-234-4433 Neal R. Gross & Co., Inc. Page 85 1 you're taking some of those energy -- do you 2 have some of that information, as well? I'm3 just trying to see how far in terms of apples4 to-apples that you have that. That's one 5 question. And then I'll wait, and I have a 6 second follow-up question. 7 MR. WANG: Let me address this 8 question. Right now for in my term I use 9 operation-related activities versus 10 infrastructure-related activities. Plus, 11 constructions are infrastructure-related 12 activities. So far in GREET, we address 13 biofuel infrastructure activities, and now we 14 address power sector infrastructure-related 15 activities. We have not addressed 16 infrastructure-related activities for other17 sectors yet. What we do in GREET is, piece18 by-piece we add in, but when do the so-called 19 apple-to-apple comparisons we take 20 infrastructure-related activities out, so all 21 the groups would be on a comparable basis. 22 So, for example, for this proposed rule, the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 86 1 numbers we generated did not include 2 infrastructure-related activities. We did 3 this for the power sector, because we have 4 some ongoing efforts to evaluate renewable 5 power versus conventional fossil power. And 6 for some renewable powers, such as 7 photovoltaics and wind turbine, the 8 infrastructure could be significant. So, for 9 the within sector comparison, we do so. For 10 cross-sector comparison, we do not include

11 that. 12 MR. ROSENSTOCK: Okay. The second 13 thing, and I really like the models that you 14 have here, the various supply chains. I think 15 it would be of interest if there was another 16 summary slide that showed how many possible 17 inputs at each point of the chain, for 18 example, biomass farming, that could be 50 or 19 75 countries that could be doing the biomass 20 farming, where we're importing that supply 21 chain. So, if there is a way to figure out 22 how many I'll say different inputs at each

### 202-234-4433 Neal R. Gross & Co., Inc. Page 87 1 part of the chain, I think it would be very 2 helpful for the stakeholders just to see in 3 terms of if they want to do their own 4 sensitivity analysis, it would be very 5 helpful. Thank you. 6 MR. BROOKMAN: Let's go to Dave

7 next. 8 MR. MOHRE: Mike, I just have this 9 question. I'm looking at your slide that 10 shows the outcome of these models, and I'm 11 going in 2030 our models show a very different 12 energy mix. Thank you. A very different 13 energy mix, so I have two questions. First, 14 is that a capacity slide or an energy slide 15 for electricity? 16 MR. BROOKMAN: Since you've raised 17 it, Michael, why don't you present the content 18 on this slide, so we're informed. 19 MR. MOHRE: Okay. I -- 20 MR. BROOKMAN: No, let's do that 21 first. Go ahead, I'm coming to you next. 22 MR. WANG: Yes. Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 88 1 MR. MOHRE: Sorry. 2 MR. BROOKMAN: It's okay. No, it's 3 good. 4 MR. WANG: This slide presents -- 5 several people already commented on the 6 complication of generation mix in the U.S. for 7 the power sector. This slide summarize the 8 AEO 2010 generation mix, the 2010 generation 9 mix, and the projected 2030 generation mix. 10 So, when we generated the FFC conversion 11 factors for the electricity, we use the EIA 12 generation mix for these two years. So, these 13 are what we used. And, of course, as some of 14 the comments alluded to us, generation mix is 15 a very dynamic situation. First, we have 16 geographic variations. Then we have for type 17 of variations over time, because now we have 18 the renewable portfolio requirement in United 19 States. We have efficiency requirement for 20 the power sector in United States, and we have 21 potential greenhouse gas regulations for the 22 power sector. We have potential mercury

### 202-234-4433 Neal R. Gross & Co., Inc. Page 89 1 regulations for the power sector. All this 2 will have critical roles in the future power 3 sector's generation mix, so it is a dynamic 4 process. And this is what EIA predict based 5 on what EIA assumes the power sector could be 6 in 2030. 7 MR. MOHRE: Okay. Can I ask my 8 question now? Okay. I'm looking at these 9 numbers, and these numbers show way more coal, 10 and way less biomass and others than anything 11 I've seen from the industry for a long time. 12 It seems to me that this is the, what they 13 call the EIA business-as-usual-case.

14 MR. WANG: Yes. 15 MR. MOHRE: Okay. At the same 16 time, you're modeling up to $64 per ton of 17 CO2. There's an inconsistency here, isn't

18 there? 19 MR. WANG: I think, yes. 20 MR. MOHRE: The business-as-usual 21 case, and then imputing as high as $64, or am 22 I missing something? Very possible.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 90 1 MR. BROOKMAN: Mark Friedrichs. 2 MR. FRIEDRICHS: The $64, that 3 range, the $4 to $64 is not actually any 4 projection about what kind of carbon value 5 would be placed on CO2 emissions by public 6 policy. It is simply an estimate of the 7 economic and other costs that would result 8 from the emission of that CO2 over a long 9 period of time. So, it makes no presumption 10 about what future public policy is regarding 11 CO2 emissions. 12 MR. MOHRE: I understand that, but

13 who --

14 MR. BROOKMAN: You mean the

15 absolute -- 16 MR. MOHRE: I hate to say, who pays

17 those costs?

18 MR. BROOKMAN: The absolute cost of

19 the CO2. 20 MR. FRIEDRICHS: Obviously, if, for 21 example, we imposed -- we, the U.S. 22 government, imposed a tax on CO2 emissions of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 91 1 $64 per ton, the emission -- the generation 2 mix in 2030 would likely change considerably, 3 as a result of such a public policy. But we 4 are not in the business in the efficiency 5 standards program, and neither is the EIA 6 through the NEMS model, of trying to predict 7 what kinds of public policy changes there 8 would be in the future. So, all of NEMS 9 forecasts, and all of the energy efficiency 10 standards impact analyses are based on a kind 11 of fundamental presumption that existing 12 federal law and regulation remains unchanged. 13 That may be -- that, of course, is 14 unrealistic, but we don't know -- we don't 15 have the ability to know -- how public policy 16 may change over time. 17 MR. MOHRE: That's a fine answer, 18 and thanks for the clarification. But it 19 seems to me that these numbers compared to 20 what the industry, itself, is projecting are 21 very different, but that's a discussion we'll, 22 apparently, have to have with EIA.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 92 1 MR. WANG: Let me make an 2 observation here. I'm not in the position to 3 make any policy statement, but I made a 4 technical observation. If we look at the CO2 5 values or greenhouse gas values, monetary 6 values, those are my observations, the 7 societal cost of greenhouse gas. When we look 8 at what EIA predicts, the power sector is 9 business-as-usual, it is assuming those 10 societal costs that were not internalized, so 11 meaning we do not internalize those societal 12 costs, so they predict the generation mix as 13 business-as-usual.

14 MR. MOHRE: Just one more -- I'm 15 sorry.

16 MR. BROOKMAN: Yes. 17 MR. MOHRE: A quick question. How 18 many regions do you model?

19 MR. WANG: For U.S.? 20 MR. MOHRE: For the U.S. electric 21 system. 22 MR. WANG: For the U.S. electric

### 202-234-4433 Neal R. Gross & Co., Inc. Page 93 1 system, we study 13 NERC regions as EIA 2 defined. I think EIA expands to 14 recently. 3 MR. MOHRE: Thank you. 4 MR. COMSTOCK: My name is Owen 5 Comstock. I'm from the Energy Information 6 Administration, and I work on the end-use 7 modeling for the residential sector, so, 8 unfortunately, I can't answer too many 9 questions about the electricity market module, 10 or oil and gas, or whatever other components. 11 But just to clarify, that EIA does not have a 12 business-as-usual case, we never have. It's a 13 reference case based on current policies, so 14 it is an important distinction. And we don't 15 make predictions, we make projections, so it's 16 all based on current policy. And, of course, 17 it is going to be outdated as soon as new 18 policies are issued, but these are -- what 19 you've shown are projections from last year, 20 which went out to 2030. So, I just want to 21 make some of those clarifications. 22 As far as what regions we have, on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 94 1 the end-use side, demand is modeled based on 2 census divisions, so that's nine divisions. 3 Our electricity market is, I believe, 4 expanding from 13 different areas to 22 areas 5 for year 2011. And I'm not sure how many oil 6 and gas regions we have, but it is -- 7 typically, results are presented as national 8 aggregations, but we do have regional detail 9 that I believe could inform additional inputs

10 to the GREET model. 11 MR. BROOKMAN: Thank you. Let's go 12 to this next gentleman next. Thank you for 13 being patient. Your name? 14 MR. WEISS: Roger Weiss, Weiss 15 Farm. I have a question on agricultural 16 biomass generation. Now, you're talking the 17 way through fertilizer production, 18 transportation, all the way down. On my 19 understanding, biomass is from many sources, 20 such as sugarcane, switchgrass, residual from 21 corn and things. You actually can factor in 22 all the things, like I harvest the grain corn,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 95 1 sell that over here, and I just have the 2 biomass left, and you can get an accurate 3 model on that versus the man that grows the 4 switchgrass, and hauls it maybe 150 miles to 5 that? I can't see how you can get some 6 numbers in that GREET model that actually -- 7 and that's just the line that gets to me. I 8 don't know. I mean, there is such a 9 variability in agriculture, that I can't -- 10 the man across the road grows corn for a much 11 different price than I do. I mean, our input 12 costs are different. You can't just say 13 fertilizer costs. I'm a dairy farmer, I've got 14 manure for fertilizer. That cost would have 15 be traced back through feeding the cow. Way 16 over my head, just thought that, you know -- 17 MR. WANG: That's right. Yes, 18 that's a different topic at a different time. 19 I spent half of my time on biofuels, and yes, 20 for corn, you have stored the corn grain, we 21 allocate the burden to store it different 22 ways.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 96 1 MR. WEISS: Okay. 2 MR. WANG: And for residue we do 3 not have any fertilizer use at all. For the 4 so-called dedicated energy crops, such as 5 switchgrass, we do apply some large bin 6 fertilizer in order to enhance yield. And 7 they, of course, will presume that sugarcane 8 is a different story.

9 MR. WEISS: Yes. 10 MR. WANG: We produce SNo there, 11 but move SNo to North America. We do import 12 some through the Caribbean Basin Initiative, 13 so those are all the calculations I spend half 14 of my time to work. 15 MR. WEISS: All right. Good luck 16 with that. 17 MR. WANG: Thank you for your 18 holding up the complicated issue. 19 MR. BROOKMAN: Charlie Stephens. 20 MR. STEPHENS: Charlie Stephens, 21 Northwest Energy Efficiency Alliance. I just 22 wanted to make the observation that I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 97 1 understand the policy implications. I think 2 what the point might have been, that certain 3 modeling assumptions are incompatible with 4 others. When you're doing your scenario 5 analysis, essentially, a notion of a $65 a ton 6 carbon tax is incompatible with half of the 7 generation in 20 years from now being coal. I 8 think you just have to make sure when you're 9 doing your modeling and your scenarios, like 10 we do with the Crystal Ball-type analysis that 11 comes out of the modeling, that your 12 assumptions are consistent. There are certain 13 of them that will be null sets, that won't 14 occur at the same time, and I'm hoping we're 15 not relying on those. 16 MR. BROOKMAN: Mark Friedrichs. 17 MR. FRIEDRICHS: Again, on that 18 point, as Michael pointed out, that $64 is 19 simply an estimate of the uninternalized 20 societal cost associated with CO2 emissions. 21 It does not bring with it any presumption 22 about what public policy affecting CO2

### 202-234-4433 Neal R. Gross & Co., Inc. Page 98 1 emissions would be, or might be. 2 MR. BROOKMAN: Steve Rosenstock, 3 and then I'll come to this gentleman. 4 MR. ROSENSTOCK: Steve Rosenstock, 5 EEI. I know those costs might, was it 6 uninternalized, but if you look at the rules, 7 especially, I'll just say the refrigerator 8 rule, in particular, in the summary table, 9 those values, those CO2 values are shown as an 10 annualized benefit of the new rule. And for 11 refrigerators, let me just throw out some 12 numbers for you. At a 3 percent discount 13 rate, DOE estimated for the new 14 refrigerator/freezer rule, primary estimates, 15 kind of midrange estimate of $2.9 billion for 16 the operational cost savings, but the carbon 17 savings at 3 percent discount, I want to be 18 apples-to-apples here, at $21 a ton, they 19 monetize that at $316 million, compared to the 20 $2.9 billion, and at $65 a ton, it was $963 21 million. Basically, it adds I'll say anywhere 22 from about 11 percent to 33 percent to the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 99 1 estimated annualized benefits. That's 2 significant. And, yes, I know it's not 3 internalized, but it's being shown by the 4 Department in their proposed rule as an 5 annualized benefit. 6 MR. BROOKMAN: Okay. 7 MR. ROSENSTOCK: So, it is 8 significant. Thank you. 9 MR. BROOKMAN: Let's hear from this 10 gentleman. 11 MR. WOYCHIK: Thank you. Eric 12 Woychik from Black & Veatch, again. Mr. Wang, 13 I'm just going to, I believe back to a point I 14 made, and I think Mr. Mohre commenting asked 15 the question, I didn't hear an answer. Are 16 capacity benefits, not just energy benefits 17 used, evaluated, brought forward in the model? 18 MR. WANG: No, we have not 19 addressed the capacity benefit. I think 20 capacity benefit more so economic benefit for 21 the power sector, the consumers. It should 22 have effect on emissions estimate because now

### 202-234-4433 Neal R. Gross & Co., Inc. Page 100 1 you are going to operate different facilities 2 at different capacity factors, so that should 3 have some effect on what I am doing with the 4 GREET, the model. But capacity factor benefit 5 itself, to me, is more direct economic 6 benefit. 7 MR. WOYCHIK: Okay. So, we're not 8 just talking about the capacity factor of 9 units, we're talking about the capacity value 10 that you get if you have air conditioner 11 cycling, or you have water heater cycling, and 12 that's very significant. I'm formerly with 13 Cumbrage, one of the NASDAQ traded largest 14 demand response companies, that's all they do, 15 and that's a multi-hundred million dollars, is 16 a billion dollar industry just for two 17 companies. I mean, that must be ten -- it's 18 $10 billion for just water heating in the next 19 10 years, so something that I think needs to 20 be considered. Thank you. 21 MR. BROOKMAN: Thank you. Mark 22 Friedrichs.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 101 1 MR. FRIEDRICHS: Yes. On that 2 point, we do attempt to estimate the impacts 3 on capacity, but I think you're focusing on a 4 new focus of utility load-management 5 activities, and capability that is becoming 6 more and more prevalent in the use of certain 7 products that are regulated by efficiency 8 standards. And we are trying to think about 9 new ways of assessing those kinds of benefits. 10 For example, if a product is made with a chip 11 that enables it to be more easily controlled 12 by a utility management system, should that be 13 recognized somehow in our standards 14 development process? So, this is a difficult 15 issue that we're at least beginning to think 16 about, and how we resolve it, we're not sure. 17 MR. BROOKMAN: Let's let Michael 18 finish. I believe you have three more slides, 19 Michael. Let's get through the rest of this 20 presentation. 21 MR. WANG: Okay. And the next 22 slide, so here is the approach we developed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 102 1 together with DOE in order to use the NEMS 2 simulated result that expands to FFC. So, 3 basically, we developed ratios of FFC results 4 to combustion result. Both were from GREET in 5 order to maintain consistent. There we 6 applied ratios to -- we developed ratios for 7 both for energy use and emissions. And the 8 ratio was applied to the NEMS result, so it's 9 this process, and I think we all understand 10 from the proposed rule document, this whole 11 approach. 12 This table is in the proposed rule 13 in Federal Register. And, basically, it give 14 you the quantitative samples, that if we take 15 that approach, what are the ratios we generate 16 from GREET, which we could apply to the NEMS 17 result in order to move from primary energy 18 use to Full-Fuel-Cycle energy use. And if you 19 have specific questions, we can address, but 20 I'm not going to walk you through the table.

21 MR. BROOKMAN: Yes. Let's 22 Reference Table Two, as well.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 103 1 MR. WANG: Yes.

2 MR. BROOKMAN: And then we'll take 3 a couple of questions. 4 MR. WANG: Let me quickly present 5 this slide. This was for energy, so from 6 primary energy use to FFC energy use, for 7 greenhouse gas emissions from CO2 to the three 8 greenhouse gases, we use similar approach. 9 NEMS generates CO2 only emissions, so in order 10 to extend from CO2 to CO2, CH4, and others 11 combine together, we generate the ratios of 12 CH4 and N2O to CO2. And then we applied those 13 ratios to NEMS estimated CO2 emissions in 14 order to generated GHG emissions. So, pretty 15 much, similar approach as we did for energy

16 use. 17 MR. BROOKMAN: I'm a little 18 confused. You skipped forward a few slides. 19 Take it back to Table One and Two. And let's 20 take comments. I saw individuals had comments 21 on this. Steve Rosenstock. 22 MR. ROSENSTOCK: Steven Rosenstock,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 104 1 EEI. And, again, I would probably also refer 2 to the slide before where you showed the 3 different supply chains. It was above the 4 generation mix. So, this kind of really refers 5 to, if you go back one more slide, okay, the 6 supply chains, and then you have the tables. 7 My question is, for these tables, and, again, 8 you have these preliminary estimates, but all 9 the variations in the supply chains, and the 10 range of uncertainty, when you go back to 11 Table One and Table Two, number one, what is 12 the estimated range of uncertainty, and what 13 is the range of values based on all the 14 inputs? For example, let's say for fuel oil 15 1.13, was that plus or minus .13 or, again, 16 .5, depending on the supply chain model? And 17 are these average or median values? I'm 18 trying -- because with all different supply 19 chains, that could make a very big statistical 20 difference. 21 MR. WANG: Yes, a good point. 22 These are average or mean. Most cases,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 105 1 average and mean are very close in our 2 forecasting simulations. As you may be aware, 3 GREET was designed with stochastic 4 simulations, and we have major distribution 5 functions built in for key input assumptions. 6 And if that's what DOE are going to do, say 7 to generate some uncertainty range, we can do 8 so. We can generate statistic variations, the 9 standard deviation, the P value, which we have 10 the ability to do so for each of the supply 11 chains. But for this exercise, we did not do 12 the stochastic simulations with GREET. 13 MR. ROSENSTOCK: This is Steve 14 Rosenstock, EEI. You have some of those 15 results, so for fuel oil, let's say, I guess 16 the average value is 1.13, but the range could 17 be, let's say, 1.02, up to 1.3. Again, I'll 18 just throw some numbers out there, based on 19 different supply chains, based on the 20 information you have. 21 MR. WANG: Yes. There will be a 22 range, but it's not going to be 1.02 to 1.3.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 106 1 The range is narrow than what you -- 2 MR. ROSENSTOCK: Again, I'm just 3 throwing out that this is an average value.

4 MR. WANG: Yes. 5 MR. ROSENSTOCK: And there is a 6 range for all of these variables. 7 MR. WANG: There is. 8 MR. ROSENSTOCK: Thank you. 9 MR. BROOKMAN: Okay. Other 10 comments? Yes, please. 11 MR. HOFMANN: Alex Hoffmann, APPA. 12 I have a follow-up. I've sort of developed 13 what might be, as I was listening to this 14 presentation, I've developed what might be a 15 concern on the supply chain slide, but I just 16 sort of observed, it seems like right some 17 resources for production are allocated in 18 different points of production. Right? But 19 what I thought I heard you say earlier was 20 that if there is not enough information on 21 various parts of the infrastructure, various 22 sections, it's not included in the comparison.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 107 1 Is that -- 2 MR. WANG: Right. 3 MR. HOFMANN: Okay. So, my 4 question is, does that, by default of limited 5 scope and information provide some advantage 6 to one fuel type or another? That would be my 7 concern. It seems like -- 8 MR. WANG: Yes, it could. And 9 alerted us to do. Let's say if we're going to 10 have some region which will have solar or 11 photovoltaic provide power, versus the other 12 regions to have coal-fired power electricity, 13 but not including infrastructure-related 14 emissions, we overestimate the benefit for 15 solar or photovoltaics, because solar or16 photovoltaic has a larger infrastructure17 related emissions than coal-fired power plant. 18 But within the sector, that's going to be the 19 situation. Cross-sector has become much less 20 a problem. If we compare natural gas sector 21 versus electric sector, versus the petroleum 22 sector, that's become less issue. But within

### 202-234-4433 Neal R. Gross & Co., Inc. Page 108 1 the sector, especially for the electric 2 sector, by excluding that you could favor 3 certain technologies for the electric sector 4 more so towards that way. It does not change 5 the overall picture, but it pulls you more 6 towards to a given technology. 7 MR. BROOKMAN: Mark Friedrichs. 8 MR. FRIEDRICHS: Thanks. Yes, this 9 is actually a point of some interest, and that 10 is, where we should draw the line in terms of 11 the Full-Fuel-Cycle analyses, and is there 12 some point in the assessment of energy and 13 emissions associated with infrastructure that 14 we should not go beyond. At the risk of 15 opening a whole new set of issues, we, 16 obviously, have infrastructure energy and 17 emission impacts on the efficiency side of the 18 equation, which we haven't proposed to begin 19 to consider. And, at some point, this kind of 20 analysis becomes extremely complex, and of 21 less and less usefulness. So, anyway, I 22 wanted to raise that broader question. And if

### 202-234-4433 Neal R. Gross & Co., Inc. Page 109 1 anyone does have specific comments on how we 2 should draw those lines, it would be helpful. 3 MR. BROOKMAN: As was illustrated 4 earlier, oil exploration, for example, Don 5 Brundage. 6 MR. BRUNDAGE: I'm going to make a 7 quick comment on that, and then back to my 8 original comment. I agree with you, and the 9 further you go back and do an infrastructure 10 and feedback, the closer you come back to a 11 proxy of price, and end up back where you 12 start. I think where you're drawing the box 13 right now is reasonable. 14 I've got a question on Table Two, 15 not so much for what's in it, but for what's 16 not in it. Because I'm not seeing any place 17 in your presentation what your Full-Fuel-Cycle 18 efficiency assumption is for non-combustion 19 electricity sources, such as hydro, or wind, 20 or photovoltaic. What sort of Full-Fuel-Cycle 21 factors are assumed for those? And, 22 particularly, wind, that's an increasingly

### 202-234-4433 Neal R. Gross & Co., Inc. Page 110 1 important resource. 2 MR. WANG: Yes, that's a good 3 question. That come into our technical 4 discussion, life cycle analysis. What's your 5 starting point when you count energy, when I 6 say energy in kilowatt-hour, for coal-fired 7 power plant, I use roughly for U.S. 32, 35 8 percent conversion efficiency, so I know 9 what's embedded in that one kilowatt hour if 10 you produce from coal. When you produce from 11 wind, your turbine conversion efficiency is, I 12 think it's 10 to 20 percent. Of course, the 13 wind variability, whether you use all the 14 wind, so what's your starting points to count 15 energy. Do you count the energy of wind 16 available before it reach the top blade, or do 17 you count the energy reached one blade, or you 18 count the energy add up your electricity. 19 MR. BRUNDAGE: Now, I think what 20 you really need to consider there is if it's 21 not a depletable resource, then the efficiency 22 going across it is irrelevant. Wasted wind

### 202-234-4433 Neal R. Gross & Co., Inc. Page 111 1 does not have the same -- you don't deplete 2 wind the way you do oil in the ground. If you 3 look at the way building codes and things like 4 the Net Zero Energy program treat renewables 5 at the site of use, it's considered free 6 energy, which would be infinite efficiency. A 7 reasonable compromise for this approach would 8 be consider renewables in hydro 100 percent 9 efficient. And, actually, if you look at 10 GTRI's study, they generally assume renewables 11 at 100 percent efficiency. Thank you. 12 MR. BROOKMAN: Thank you. Frank 13 Stanonik. 14 MR. WANG: Let me quickly to 15 respond. That's exact our approach. 16 MR. BRUNDAGE: Thank you. 17 MR. BROOKMAN: Frank Stanonik. 18 MR. STANONIK: Frank Stanonik, 19 AHRI. Can you go back to Table One? I'm 20 feeling more empathy with our visitors from 21 outside the beltway right now than someone 22 who's lived here.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 112 1 (Laughter.)

2 MR. STANONIK: I don't understand 3 that table at all, and so the title is 4 "Preliminary Energy Conversion Factors for 5 Fuels Used in Home Appliances." So, you've 6 got a column that says, "Natural Gas." Okay? 7 So, as I'm understanding this, and if DOE 8 adopted this policy when they got to looking 9 at national benefits, they'd say okay, for all 10 my natural gas savings, I'm going to multiply 11 it by some number. Okay? So, I go down the 12 column, and I have entries for total energy, 13 petroleum, natural gas, coal, all under 14 natural gas. Isn't there only one factor for 15 natural gas? What am I missing here? 16 MR. WANG: I'm glad you asked that 17 question. Let me spend a little bit time to 18 walk you through that. And let's assume you 19 consume a one milli-BTU of natural gas for 20 your gas dryer. And EIA would say okay, so 21 you consumed one milli-BTU of natural gas for 22 your dryer. Now, what we do is from the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 1131 primary energy use pushed to the Full-Fuel2 Cycle energy use, by including all these boxes 3 of left side of the natural gas pathway, by 4 including these three additional boxes on this 5 chart, by do so, so now your total energy use 6 which including natural gas would be increased 7 about 7.3 percent from primary energy use to 8 the Full-Fuel-Cycle energy use, total energy. 9 Your fossil energy, which is a subset of your 10 total energy, because total energy include 11 fossil and renewable energy, increased about 12 7.2 percent, less than 7.3 percent because you 13 do have some renewable energy from electricity 14 generation. 15 If you look at petroleum, which is 16 a subset of fossil energy use, it's minimum, 17 because your natural gas pathway use very 18 small amount of petroleum use. Your natural 19 gas, basically, your 7.3 percent increase 20 primarily coming from your natural gas 21 increase, that's 6.5 percent. So, that's how 22 you interpret or read the table. Each is a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 114 1 subset of the above. 2 MR. STANONIK: So, the three 3 different fuels there are just an indication 4 of what, let's say what part they contribute 5 to the total number, and the total number -- 6 the number that matters, if DOE were to do 7 this, is the total energy number. Is that 8 right? 9 MR. WANG: Well, yes. Those three 10 fuels were used in the three boxes left side 11 of the yellow box of this flowchart, because 12 the yellow box, you have natural gas 13 combustion, one milli-BTU is purely natural 14 gas. But when you make that one milli-BTU all 15 the way from underground gas well to the point 16 available you use electricity, which could 17 come from nuclear, could come from hydro, 18 could come from natural gas, or coal. 19 MR. STANONIK: So, you're just 20 showing us the contribution of those to the

21 total number. 22 MR. WANG: Exactly. Right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 115 1 MR. STANONIK: All right. Can we go

2 to Table Two? 3 MR. BROOKMAN: Let me just make a 4 process note. Shortly we're going to pause 5 for a break, for those of you that are getting 6 antsy for whatever reasons. Mark Friedrichs 7 is going to comment before we go to Table Two.

8 MR. FRIEDRICHS: Just a further 9 explanation of the reason why we need those 10 fuel-specific values, and that is to get the 11 emissions side. Because, obviously, the 12 combustion of coal, combustion of petroleum, 13 or natural gas will each be associated with 14 different CO2 emission values, so that's why 15 we need that detail. 16 MR. BROOKMAN: Going to Table Two,

17 Frank. 18 MR. STANONIK: And I'm not -- well, 19 I'm not really sure it's specific to Table 20 Two, but I've got to ask the question. So, 21 based on some of these preliminary estimates 22 in these examples, what is the factor for the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 116 1 electricity that gets delivered to my house? 2 MR. WANG: Okay. Let me give you 3 example how to use Table Two for your 4 question. Let's say I use electricity 5 generated from natural gas combustion life 6 cycle plant, so you know the efficiency is 7 close to 50 percent, or even in some cases 8 above 50 percent. So, from that, you know how 9 much natural gas used for one kilowatt hour of 10 electricity you use for your electric dryer, 11 for example. 12 Now, that's still at the point of 13 the consumption, meaning at your natural gas 14 combustion cycle power plant, how much natural15 gas you use. Now, push that to all the Full16 Fuel-Cycle stages, you're going to include the 17 natural gas recovery, natural gas processing, 18 natural gas transportation, and the 19 distribution to power plant. That add 7.1 20 percent additional total energy use, and of 21 the 7.1 percent additional, 6.3 percent from 22 natural gas use. So, now instead of let's say

### 202-234-4433 Neal R. Gross & Co., Inc. Page 117 1 for one kilowatt hour you use, let's half 2 that, going to say 3 million, it's not 3 3 million. It's three units of natural gas, 4 you're going to multiply the three unit by5 1.063 get to the natural gas use of the Full6 Fuel-Cycle basis.

7 MR. STANONIK: Just one last 8 question with this additional explanation, 9 which I appreciate very much. I would ask the 10 Department of Energy to, at some point, at 11 least give us some initial indication of what 12 single number they would use in their analysis 13 for electric fuel factor, for the electricity 14 factor, because, otherwise, it's already 15 difficult for us to comment on this not being 16 GREET-knowledgeable, but, in fact, in the 17 Notice of Proposed Policy, I understand how 18 this all gets factored in. In your 19 explanations, it's based on where's my 20 electricity coming from, but in terms of 21 appliance rulemakings, again, my experience is 22 at some point they have to come up, if you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 118 1 will, with a national average factor for 2 electricity. And it would be useful to know 3 what DOE thinks that number is. 4 MR. BROOKMAN: Mark Friedrichs, and 5 then I'm coming to you next. 6 MR. FRIEDRICHS: Frank, the way in 7 which this will show up in rulemaking 8 documents is in the technical support 9 document. And we will be more clearly10 generating, using NEMS, actually, fuel11 specific energy savings values for future 12 years. And then we will be specifying the 13 Full-Fuel-Cycle conversion factor applied to14 each specific fuel type to get the Full-Fuel15 Cycle energy value. And then they'll be 16 totaled. So, there won't be an average value, 17 although, you'll be able to see the change 18 that the use of the fuel-specific values end 19 up having on the final value. And I did 20 provide that kind of very rough estimate of 21 what that range is likely to be, 7 to 15 22 percent, or something like that. We're not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 119 1 quite sure exactly where -- and, of course, it 2 will differ depending on product category, and 3 so forth. But the detailed numbers will show 4 up in the technical support documents. 5 MR. BROOKMAN: Greg Staple.

6 MR. STAPLE: Yes. I want to second 7 comments that have been made by several people8 here this morning. This is a potentially far9 reaching and important change in the way we 10 may set standards for appliances. We're 11 trying to give consumers more information. In 12 order for folks inside the beltway, let alone 13 farmers in Michigan, or in Iowa, or in 14 California to have any faith that the 15 government has got this right, and that the 16 standards we're setting are an improvement, 17 and will provide more accurate information, it 18 is essential that federal rulemaking notices 19 be transparent, and fully spell out the 20 implications. 21 I can tell you, I've been a lawyer 22 in Washington going on 25 plus years, and this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 120 1 was a Federal Register Notice that was not 2 easy to parse. I much appreciate the 3 explanation from Michael Wang for Tables One 4 and Two. There is no reason that the 5 Department of Energy going forward cannot take 6 the approach that the Internal Revenue 7 Services takes in proposing, for example, new 8 tax regulations, where you have very detailed 9 work examples of what's going on here. 10 This is crucial. If you want 11 consumers to feel that you're on their side, 12 and that we're going to clean up the air, and 13 produce savings, you've got to spell out why 14 this particular set of numbers translates into 15 those perceived benefits. I don't think that 16 was done here. It's unfortunate, because it 17 can be done with very little additional work. 18 And I'm also very sympathetic to 19 the comments made by the representative from 20 one of the appliance manufacturers. Tell us, 21 also, going into this how new Full-Fuel-Cycle 22 standards or policies would be worked into

### 202-234-4433 Neal R. Gross & Co., Inc. Page 121 1 proposed rulemaking for standards set for 2 particular appliances. Give us some 3 hypotheticals, so we know what the shooting is 4 all about. Then a large number of other 5 people can participate, and say yes, this is 6 the type of information I want, this is not. 7 And we will, also, damp down a number of other 8 concerns here; that is, this is arbitrary and 9 capricious. There are 50 different paths to 10 getting to a number. The range of numbers that 11 you may get out could vary by a factor of two 12 or three, perhaps it isn't that way. But 13 unless we know how these numbers were derived, 14 and can work them through for explicit 15 examples of how they will be applied, it's 16 very difficult to know whether these 17 criticisms are valid, or not. So, let me stop 18 there. You know where I'm going. 19 The whole point of our 20 intervention, largely, and our written 21 submission is look, we're trying to build 22 consumer trust, and we're trying to,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 122 1 potentially, offer people meaningful options 2 to change their behavior. They're not going 3 to have that trust, and they can't rely upon 4 these numbers to change their behavior if they 5 think it's all gobbledygook, and the people 6 who know how biomass is produced, and how 7 different farming techniques are used for 8 corn, or for sugarcane, don't buy into that. 9 That doesn't help any of us, so let me stop 10 there. I appreciate it. 11 MR. BROOKMAN: Okay. I'm going to 12 suggest we take a break here. We're ahead of 13 schedule. We have not so awfully many slides 14 left, but we've been going at this for about 15 two hours and 15 minutes now. So, when we 16 return, there will be the opportunity to 17 comment yet again on the next slide, which is 18 the Department's specific comment here slide. 19 Let's pause right now, it's 11:15. 20 And how many of you are not 21 familiar with the way it works in the 22 Forrestal Building? You need to wear the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 123 1 badge that you were given when you registered 2 this morning. There are restrooms on both 3 ends of the hall, both men's and women's. 4 There's a coffee shop one floor below us on 5 that side of the hall. If you're going to get 6 coffee, please go quickly. 7 Let's pause for 15 minutes. We'll 8 resume at 11:30. And being as how we only 9 have, I don't know, three, four, five or so 10 slides left, something like that, it's quite 11 possible we'll just go straight through say to 12 12:30 or so to conclude this, so that we're 13 not hanging people up here any longer than 14 they need to be here. However, we don't wish 15 to diminish your comments. 16 So, we'll pause now. We'll resume 17 at 11:15, see you back -- 11:30 is when we'll 18 resume. We'll see you back here then. 19 (Whereupon, the proceedings went 20 off the record at 11:13 a.m., and resumed at 21 11:32 a.m.) 22 MR. BROOKMAN: Okay. Let's start

### 202-234-4433 Neal R. Gross & Co., Inc. Page 124 1 back up here. I think that the slide that you 2 see up on the screen is the same slide we had 3 earlier. Mark? 4 MR. FRIEDRICHS: Right. 5 MR. BROOKMAN: Right. And so 6 these issues remain open for your additional 7 comment. And we'll just pause here and take 8 additional comments and then we'll be moving 9 on for the rest of the content in the packet. 10 MR. BEAUREGARD: Doug, this is Bob 11 Beauregard with APG. I just want to -- 12 MR. BROOKMAN: Is that turned on,

13 Bob? 14 MR. BEAUREGARD: Yes, it is. 15 MR. BROOKMAN: Okay. Thank you. 16 MR. BEAUREGARD: I'll get a little 17 closer. Greg Staple has left but I just 18 wanted to take this opportunity to echo and 19 support the comments he made at the close just

20 before the break. 21 I represent an organization that 22 is made up of over 700 public gas systems.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 125 1 And they are the closest to customers as you 2 can get. And straightforward, understandable, 3 transparent, easy-to-understand standards 4 coming out of DOE is paramount to them 5 accepting and feeling that they are serving 6 themselves plus their consumers. 7 And those kinds of examples that 8 Greg called for I would simply say that they 9 would serve everybody's purpose. And 10 encourage DOE. And we will, as an 11 organization, assist in any way we can to make 12 that happen. 13 MR. BROOKMAN: Thank you. That's 14 helpful. Thanks, Bob. 15 Yes, please? 16 MR. CALDARERA: Mike Caldarera,

17 NPGA. 18 Just echoing what Bob said, I 19 would encourage DOE, when they publish the 20 final policy statement, if you will, to maybe 21 develop a mock rulemaking, just an abbreviated 22 one. It doesn't have to be, you know, three-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 126 1 inches thick. But do something that would --

2 to demonstrate so that all the readers can 3 understand how this is going to impact a 4 rulemaking proceeding. 5 So all the information would be 6 there. And, you know, a picture is worth a 7 thousand words. So if you can see how it is 8 laid out and what the impact is going to be, I 9 think it would be very beneficial.

10 MR. BROOKMAN: Andrew? 11 MR. SOTO: Andrew Soto, AGA. If 12 you do a mockup like that, it would be helpful 13 to have a comparison of comparable appliances. 14 Get a gas appliance, a propane appliance, an 15 electric appliance. Run the numbers. Show 16 the comparison. And how the full fuel cycle 17 analysis would impact the standards develop. 18 To implement the third 19 recommendation or to come closer to 20 implementing the third recommendation from the 21 National Academies is to move immediately to a 22 source-based -- or you could use full fuel

### 202-234-4433 Neal R. Gross & Co., Inc. Page 127 1 cycle there for appliances for which there is 2 a choice of fuels. 3 So the comparison should be -- in 4 this mockup should be among the appliances for 5 which there is a choice of fuels so you can 6 actually see the impact across different 7 appliance types. 8 MR. BROOKMAN: Okay. Thank you. 9 Still looking for -- yes? Dave? 10 MR. MOHRE: During the discussion 11 -- prior discussion, Dr. -- how do you 12 pronounce your name -- 13 DR. WOYCHIK: Woychik. 14 MR. MOHRE: -- Woychik -- 15 DR. WOYCHIK: Thank you. 16 MR. MOHRE: -- raised the issue of 17 making sure you know all your benefits. And I 18 thought about that because we're heavily 19 involved -- the cooperatives are heavily 20 involved. As a matter of fact, leaders in 21 Smart Grid and the Mann response for the last 22 quite a few years, for a number of reasons we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 128 1 don't need to discuss, but public policy, it 2 is public policy in this country that we 3 encourage renewable energy, okay? 4 We have production tax credits. 5 We don't have a standard yet but we have 6 things that suggest that renewable energy and, 7 particularly in most cases, wind right now is 8 growing rather rapidly as everybody knows. 9 And we are committed to wind 10 development. A lot of money is going into 11 wind as far as co-op generation resources as 12 other utilities. 13 When you do your benefits, I think 14 it would be unfair to do a hypothetical 15 benefit based on even a large range of, quote, 16 CO2 costs and not give benefits for the very 17 real enabling of renewable energy resources 18 that electric appliances do. Particularly 19 electric appliances are controllable, whether 20 with chips or whether with load control. 21 So what I'm saying is if you are 22 going to do this hypothetical where you say

### 202-234-4433 Neal R. Gross & Co., Inc. Page 129 1 oh, we're going to give them credit for 2 present value for 290 years or whatever it is, 3 you know, that you equally ought to give 4 benefit for the enabling of renewable energy 5 that is made possible by having things like 6 simple electric water heaters. 7 And I would ask that, Mike, that, 8 you know, because you were into that, the 9 benefits, that you consider that. The fact of 10 the matter is we couldn't reach levels of 11 penetration of wind that we're talking about 12 without having a number of electric 13 appliances, particularly those with inherent 14 storage capability. 15 So if you can do some of these 16 hypothetical as a global CO2, I'm asking you 17 to do a hypothetical on this, too. Okay? 18 MR. BROOKMAN: Okay. Thank you. 19 Charlie is next, Charlie Stephens. 20 MR. STEPHENS: Charlie Stephens, 21 Northwest Energy Efficiency Alliance. 22 I have two concerns. One is that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 130 1 I don't think it is appropriate to exclude the 2 exploration and development drilling energy 3 use, quite frankly, from the oil and natural 4 gas equations. There should be another box

5 there. 6 It's not insignificant for some 7 fuels as it is for others. But the fact is I 8 have got the data. The amount of drilling per 9 unit of energy produced is going up and up and 10 up. The drilling is going up. The energy 11 produced is going down. And that should be 12 somewhere reflected in these numbers. 13 Which leads me to my second

14 concern. As I look at the numbers that are 15 projected from 2010 to 2030, there is an 16 implicit assumption in the fact that they 17 don't change for most of these fuels. And 18 that is that there is enough of that fuel, 19 whatever it is, available that can be produced 20 with that ratio of full fuel cycle energy. 21 And I don't believe that's true 22 based on all the data I've seen, especially in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 131 1 the last five years. I don't think there is 2 going to be enough of some of these fossil 3 fuels available on a BTU basis to produce at 4 the ratios that are fixed at the same numbers 5 they are today. 6 And so I don't know how you can 7 fix that but I've seen an awful lot of 8 analysis that just kind of presumes implicitly 9 that things will be there when, in fact, we're 10 dealing with finite fuel supplies here. And 11 they're changing. And we drilled and produced 12 all the best stuff first. And best, not just 13 in terms of energy and cost in dollars but 14 energy and physics, BTUs. 15 And so it is inevitable that the 16 BTU content of what we're producing is going 17 down, the supplies remaining are going down, 18 the amount of energy that it takes to get it 19 is going up for each unit produced. And I 20 don't see these things reflected in these 20- 21 year numbers.

22 But that's what all the data I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 132 1 have shows. So I'm having trouble 2 understanding how that can possibly work. 3 MR. BROOKMAN: Thank you.

4 Steve Rosenstock? 5 MR. ROSENSTOCK: Steve Rosenstock, 6 Edison Electric Institute. 7 In terms of some of this, I think 8 there is also a couple of things that need to 9 be talked about. And there was a mention of 10 policy. Well, on January 2nd of 2011, based 11 on EPA's regulatory policy, nearly all U.S. 12 power plants are going to be regulated under 13 the Clean Air Act. 14 Any power plant or large 15 facilities that emits over 100,000 tons of 16 CO2, which is almost all power plants except 17 for some peaker power plants that operate 18 intermittently, but basically they are under - 19 - they have to get a permit every year, a 20 Title 5 permit, to operate. 21 And they are required under the

22 statute to use what's called the best

### 202-234-4433 Neal R. Gross & Co., Inc. Page 133 1 available control technology as determined by 2 EPA. That is a game-changer. That is a 3 policy that is going into effect as of next 4 January 2nd. That is huge. 5 Another thing I would like to say 6 is -- and all power plant owners and operators 7 are going to have to respond to that. They're 8 starting to respond now actually because it's

9 out there. 10 Another possible game-changer is 11 if carbon capture and storage becomes 12 economical, that could change what happens 13 with the emissions of that CO2. That could be 14 -- have a significant impact on some of these 15 estimates, these upstream estimates. 16 So as DOE considers the input, I 17 think that those actual -- well, one is the 18 possibility of carbon capture and storage in 19 the 2020 time frame. But the actual real 20 reality is that as of right now, as of, you 21 know, today's date, EPA will regulate power 22 plants starting January 2nd.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 134 1 And also third, in New England, 2 the power plants have had caps on CO2 3 emissions since 2007 under the RGGI program. 4 Thank you. 5 MR. BROOKMAN: Thank you. 6 Yes, Rick? 7 MR. TEMPCHIN: Rick Tempchin, 8 Edison Electric Institute. 9 I just wanted to clarify something 10 that I mentioned earlier because I found the

11 reference. 12 In terms of the inter-agency 13 report that determines the social cost of 14 carbon, we were talking about five dollars to 15 65 dollars per metric ton. And I'm going to 16 read from the water-heater report April 16th. 17 It says the value of CO2 reflects18 the present value of all future climate19 related impacts out 230 years due to emitting 20 a ton of carbon dioxide in each year of the 21 forecast period. So we're putting a present 22 value of greenhouse gas emissions benefits

### 202-234-4433 Neal R. Gross & Co., Inc. Page 135 1 into the appliance efficiency standard 2 process. 3 And, you know, related to that 4 coming from this report also is social costs 5 of carbon, includes but not limited to net 6 agricultural productivity, human health, 7 property damages from increased flood risk, 8 value of ecosystem services, and other costs. 9 So that -- I just wanted to 10 clarify. Unless I'm reading this wrong, 11 that's what we're doing. We're taking those 12 costs and benefits and putting that into the 13 analysis and that is a big change from what 14 has happened before. 15 MR. BROOKMAN: Mark Friedrichs? 16 MR. FRIEDRICHS: Yes, just to 17 reiterate what I had said before. We began 18 using those estimated monetary values back in 19 February of this year. And we had begun using 20 earlier monetary values for CO2 approximately 21 three years ago. 22 So this particular proposed policy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 136 1 would affect our estimate of greenhouse gas 2 emissions. But it wouldn't affect our 3 methodology for estimating the monetary value. 4 MR. BROOKMAN: Okay. Thank you.

5 Steve Rosenstock? 6 MR. ROSENSTOCK: And, again, as 7 following on for that, under the RGGI program, 8 the range of actual market cost for the CO2 9 emissions from the power plants in New England 10 has actually gone down over the last few 11 years. It started about three dollars and 12 fifty cents a ton. At the last auction, it 13 was a dollar eighty-six per ton. 14 And those costs of carbon, and 15 they show on the RGGI website how much they've 16 collected from consumer rates, you know, it 17 might be let's say .2 or .3 cents per 18 kilowatt-hour. The cost of carbon in New 19 England is already built into their rates. So 20 any savings from the appliance efficiency has 21 already taken that into effect. 22 By adding the social costs, not

### 202-234-4433 Neal R. Gross & Co., Inc. Page 137 1 only are double counting but by using a value 2 that is above the market value that consumers 3 pay, if you go to five dollars a ton, you're 4 multiplying that market value by two and a 5 half times, 250 percent. 6 You get up to 65 dollars ton when 7 they're actually paying two dollars a ton, 8 you're multiplying it by a factor of 3,300 9 percent -- you know, by a factor of 33. So we 10 think that's very significant. 11 MR. BROOKMAN: Okay. 12 MR. ROSENSTOCK: Thank you. 13 MR. BROOKMAN: Mark Friedrichs? 14 MR. FRIEDRICHS: Yes. Just keep 15 in mind that those are really two very 16 different values. One is a market value based 17 on the RGGI program and the cost of complying 18 with the limitations that are embedded in that 19 program and the monetary value that we use is 20 based on estimates of the long-run societal 21 costs associated with greenhouse gas 22 emissions. And those two values are really

### 202-234-4433 Neal R. Gross & Co., Inc. Page 138 1 not directly comparable.

2 MR. ROSENSTOCK: Steven 3 Rosenstock, EEI. Doug, may I follow up?

4 MR. BROOKMAN: Steve? 5 MR. ROSENSTOCK: I appreciate 6 that, Mr. Friedrichs, and I understand that. 7 But the way it is presented in the 8 refrigerator rule table, .2, they are shown as 9 -- basically they are added up together to 10 show the overall societal benefits and costs 11 as they're justifying the appliance. 12 So I understand how they're used 13 and what they're saying but when you look at 14 the refrigerator rule, they are -- basically 15 in the table they are shown as basically 16 equivalent values. 17 Thank you. 18 MR. BROOKMAN: This gentleman is

19 next. Yes? 20 MR. HINKLE: Yes, Jerry Hinkle

21 from -- 22 PARTICIPANT: Turn the mic on.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 139 1 PARTICIPANT: It's got a green 2 light on it. Oh, sorry. Yes, Jerry Hinkle 3 from American Clean Skies. Just certainly to 4 support the comments that Greg Staple has

5 made. 6 But let me make a little different 7 kind of a comment here, something that is 8 perhaps more encouraging to DOE. When I 9 worked here numerous years ago, way before the 10 GREET model was invented, we did a lot of work 11 on looking at energy and economic flows and 12 emissions through different fuel cycles, 13 especially associated with making synthetic 14 crudes from coal and oil shale. 15 There is a lot of information that 16 comes out of that thinking about these things 17 that way than looking at it the way that these 18 appliance standards traditionally have been. 19 And the GREET model itself has got the 20 potential, if the homework problems are worked 21 very carefully, to really inform decisions on 22 -- I think on other kinds of things.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 140 1 For instance, when we were writing 2 large pieces of the 2005 Energy Act in the 3 Senate, I spent a lot of time looking at GREET 4 results, especially with regard to several 5 advanced technologies that we were thinking 6 about incenting in the act. And the GREET 7 work was very, very useful in helping to think

8 about that. 9 I would encourage you -- in fact, 10 if you could develop a useful -- there is a 11 decisional framework that comes out -- that 12 can come out of this that could be used -- and 13 to some extent, EERE uses some of these 14 considerations in their budgeting, but to use 15 it more so. 16 And also with respect to 17 evaluating FOAs, thinking about evaluating the 18 -- the evaluation criteria that are included 19 in loan guarantees, tax incentives, there's -- 20 and there's a certain expressed not only in 21 the 2005 act but in subsequent pieces of 22 legislation, there's certainly a Congressional

### 202-234-4433 Neal R. Gross & Co., Inc. Page 141 1 intent to have improved understanding of the 2 dimensions of not just the embodied energy but 3 all these system factors. 4 So I would encourage you to plunge 5 ahead. And learn more and do your homework 6 problems here. It's a transportation model. 7 I think you've got to do some more work in 8 converting it -- being able to convert it to 9 an appliance application. So anyway -- 10 MR. BROOKMAN: Thank you. 11 Don Brundage? 12 MR. BRUNDAGE: Looking at your 13 slide up there, you've got determining full 14 fuel cycle, greenhouse gases, and other 15 emissions. I looked forward at the few 16 remaining slides and you don't do anything 17 with any specific number on NOx and SOx. 18 Looking back at the NOPR, Table 6 19 shows the difference in coal NOx between 2010 20 and 2030. It goes from 1.14 to 1.12. And SOx 21 stays the same. Those, to me, are -- I'm 22 going to be kind -- they're not comprehensible

### 202-234-4433 Neal R. Gross & Co., Inc. Page 142 1 values to me because my own company is putting 2 scrubbers, NOx controls on every major unit -- 3 coal unit we have. And probably most of the 4 non-scrubbed ones are going to end up getting 5 retired or have controls added to them. 6 And this is a trivial change. And 7 even on CO2, Table 4 shows CO2 fuel combustion 8 from coal 102.905 and it drops to 102.904 in 9 2030, which is a one part per million change. 10 We have construction on a 600 11 mega-watt coal plant in Mississippi that will 12 scrub two-thirds of the CO2. That unit alone 13 would be enough to change these numbers more

14 than that. 15 You really need to do some work on 16 improving the estimates of the numbers that go 17 in here because this just seems to be a 18 straight line. And assuming there is no 19 emission improvement changes between 2010 and 20 2030, and just for construction that's 21 currently underway, without figuring any 22 policy changes, that's simply not true.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 143 1 MR. BROOKMAN: Okay. Don, so in 2 your written remarks, the Department would 3 love to see that kind of data. 4 MR. BRUNDAGE: We'll include that. 5 MR. BROOKMAN: Thank you. 6 Michael? Get to a microphone. 7 Michael Wang. 8 MR. WANG: Michael Wang from 9 Argonne. 10 Maybe comment on the question, 11 Table 4 specially, if you look at the Table 4, 12 the unit is emissions per unit BTU burned. So 13 it does not affect efficiency. 14 You know when you build a plant, 15 if you increase your efficiency, the emissions 16 per kilo-watt hours reduced. But for each 17 unit of fuel burned, it's still the same 18 amount of emission. So that's what -- 19 MR. BRUNDAGE: Okay. So you're 20 assuming on like NOx and SOx that there's no 21 emission controls? It's just what comes out 22 of the coal and doesn't include emission

### 202-234-4433 Neal R. Gross & Co., Inc. Page 144 1 controls? 2 MR. WANG: No. For your -- I 3 think your Table 6, right? 4 MR. BRUNDAGE: Okay. Well, what I 5 was saying was --

6 MR. WANG: Yes? 7 MR. BRUNDAGE: -- on Table 4, 8 that's implicitly assuming there's going to be 9 no CO2 removal from coal combustion between

10 now and 2030. 11 MR. WANG: That's right. There is 12 no assuming -- if you assume CO2 for each unit 13 of coal burned, you would reduce your14 emissions. Efficiency would add per kilowatt15 hour about 90 in per count of coal burned. 16 MR. BRUNDAGE: Well, Southern and 17 AEP both have utility scale carbon 18 sequestration units under construction. So 19 even if you just assumed those two were 20 completed, it would change these numbers more

21 than that. 22 And I think it is a reasonable

### 202-234-4433 Neal R. Gross & Co., Inc. Page 145 1 assumption that at least a little bit of 2 scrubbing of CO2 and sequestration is going to 3 occur by 2030. 4 And the NOx and SOx are just 5 totally off, even if you looked at what's 6 currently had construction contracts awarded 7 in 2010, and hasn't been commercialized yet, 8 I'm not saying the GREET model in itself is 9 wrong but it needs to get some updates for 10 regulatory compliance for the regulations that 11 have already been issued. 12 MR. WANG: Yes, for the NOx and 13 the SOx, I agree. We've seen the down-trend 14 of NOx and SOx emissions in power plants and 15 we continue to see that. And what you see 16 from 2010 to 2030, there is a down-trend but 17 not as much as you said. 18 So this is somewhere where we're 19 not -- how fast SOx emission control 20 technologies is installed in power plants. 21 But, again, I think what they assumed, maybe 22 it's business as usual. But, of course, we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 146 1 all know it is going to be dynamic in the next 2 20 years. So that's something that to work

3 on. 4 MR. BRUNDAGE: And it may be fixed 5 by the time you incorporate NEMS because the 6 NEMS made reasonable assumptions on these 7 things. So it may be solved in the more 8 complete process.

9 MR. BROOKMAN: Bob? 10 MR. BEAUREGARD: I just wanted to 11 thank Michael and DOE for the presentation on 12 GREET. But I wanted to reiterate APGA's goal 13 to continually look at input that could 14 improve the numbers, the emission calculations

15 under those models. 16 And would encourage both the 17 Argonne Labs and DOE and everybody around this 18 table to look at the SEEAT tool that the gas 19 technology group has developed and has offered 20 to DOE to further validate the numbers under

21 GREET. 22 In my statement, I give you the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 147 1 website for that tool. It's cmictools.com and 2 would encourage DOE and Argonne Lab to take a 3 look at that and see how it could help you in 4 your calculations. 5 MR. BROOKMAN: Thank you, Bob. 6 Thank you. 7 Okay. So I think we've answered 8 questions fairly completely. So I'm going to 9 ask that we move on to the final slides for 10 presentation. Is that -- Mark? Mark 11 Friedrichs? 12 MR. FRIEDRICHS: Actually, they 13 are not quite the final slides but they are 14 kind of the second part of our meeting today.

15 MR. BROOKMAN: Yes. 16 MR. FRIEDRICHS: And this is going 17 to be a shorter discussion I suspect. But I 18 did want to call out specifically the proposal 19 to add two greenhouse gases to our estimates 20 of the total greenhouse gas emissions effected 21 by efficiency standards. 22 We have traditionally, based on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 148 1 NEMS output, focused only on CO2. But this 2 proposal would add both methane and nitrous 3 oxide. Both of these gases are associated 4 with energy production and transportation, as

5 well as use to some extent. 6 It makes some sense in the shift 7 to full fuel cycle analysis to add these gases 8 to our estimates. They would have a modest, 9 we believe, effect on the total estimated 10 impacts of efficiency standards on greenhouse 11 gas emissions. We think roughly in the range 12 of four to eight percent. That would be in 13 terms of CO2 equivalent. 14 The GREET model is capable of 15 giving us estimates of these emissions derived 16 from the primary energy or CO2 emission 17 estimates that are generated by NEMS. So we 18 have the capability within GREET to give us

19 the numbers that we would use. 20 I should note one aspect, however, 21 of our consideration of these gases and that 22 is at this time, our consideration would be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 149 1 only of the physical values associated with 2 the emissions of these two greenhouse gases. 3 The interagency analysis focused 4 on the social cost of carbon emissions was 5 restricted to the societal costs, 6 uninternalized societal costs associated with 7 CO2 emissions. It explicitly excluded other 8 greenhouse gas emissions, although it noted 9 that future work may actually extend its 10 analysis to other greenhouse gas emissions. 11 And such work is anticipated but as far as I 12 know has not yet begun. 13 So sometime in the future, we 14 might place a monetary value on these non-CO2 15 greenhouse gas emissions but at this time, if 16 we added them to our analysis, as we propose, 17 it would only modify the physical values of 18 the greenhouse gas emissions affected by

19 standards. 20 I hope that's clear. There is a 21 slide which Michael already referenced 22 briefly, which kind of summarizes how GREET

### 202-234-4433 Neal R. Gross & Co., Inc. Page 150 1 would be used to generate these values for 2 methane and nitrous oxide. 3 And that's all I have to say about 4 that. And we're certainly seeking comment or 5 questions about this proposal -- this aspect 6 of the proposal and that's where we are now.

7 Thanks.

8 MR. BROOKMAN: Steve Rosenstock? 9 MR. ROSENSTOCK: Steve Rosenstock, 10 Gas and Electric Institute. 11 Similar concerns like what we have 12 addressed before in terms of the range of 13 values, especially as you are going 14 international with some of these issues in the 15 production process. I'll just mention one 16 thing, flaring of natural gas at oil wells 17 across the world in many areas. Huge range of 18 values right there right to start. 19 And, again, this is just showing, 20 again, one input, one -- I'll say it's one 21 average value and I guess the implication 22 being okay, so for whatever fossil fuel

### 202-234-4433 Neal R. Gross & Co., Inc. Page 151 1 equipment is, okay, and you say it's leaning

2 one ton at the current -- under the current 3 scenario modeling -- I'll just go under the 4 fuel oil one -- okay, primary energy CO2, it 5 says 1.12 in 2010. Then you add in the CH4 6 and N2O, it goes up to 1.16 multiplier. 7 When you're doing your social cost 8 of carbon, again, let's just say it's at 21 9 dollars per ton, are you going to multiply it 10 in future rulemakings by 1.12 or 1.16, for 11 example, because that can have an impact. 12 Especially with the range of social costs, 13 that can have an impact on the ultimate 14 efficiency standard. 15 MR. BROOKMAN: Okay. Thank you.

16 MR. FRIEDRICHS: Yes. Just to 17 clarify once again, at least for the time 18 being, the methane and nitrous oxide emissions 19 would be excluded from any calculation of the 20 monetary value. The monetary value would be 21 restricted to the CO2 emissions.

22 MR. BROOKMAN: Please.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 152 1 DR. WOYCHIK: Thank you. Eric 2 Woychik, Black & Veatch. 3 Mr. Friedrichs, I was a little 4 unclear in your qualification of the 5 additional two gases and how that's looked at. 6 In essence, are you saying that there is no 7 full fuel cycle analysis of those gases? 8 MR. FRIEDRICHS: No, there is. 9 DR. WOYCHIK: Okay.

10 MR. FRIEDRICHS: And GREET can 11 provide that analysis. And, in fact, it is 12 often in that part of the cycle that is not 13 associated with end use consumption or use in 14 power plants where much of that emission

15 occurs. 16 DR. WOYCHIK: Okay. Thank you.

17 MR. BROOKMAN: Other comments on 18 the proposed additions of two new gases, 19 methane and nitrous oxide? 20 (No response.) 21 MR. BROOKMAN: Nothing additional 22 on those? Okay.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 153 1 MR. FRIEDRICHS: Okay. Then I 2 think we're moving on to our last part of the 3 agenda which is consumer information. And 4 Anthoney will introduce. 5 MR. PERKINS: Thank you, Mark. 6 Again, Anthoney Perkins. Now 7 we're just going to talk about some of the 8 work with improving our information to the 9 consumers. We're going to use the FFC factors 10 to provide product-specific data on energy use 11 and GHG emissions associated with appliance 12 operations, possible support of consumer 13 research on options for encouraging consumer 14 understanding, and use of such information, 15 and working with the FTC will improve upon the 16 existing online database by enabling the 17 public to make cross-class comparisons of 18 product-specific data, which is kind of -- 19 we've already discussed some of those issues, 20 and possible addition of the EnergyGuide label 21 of an indicator of the appliance greenhouse 22 gas emissions.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 154 1 So we're seeking some comments on 2 whether the suggested online service would 3 benefit the consumers. And, if so, the most 4 effective way to present the information to 5 the consumer, information on the full fuel 6 cycle energy use and greenhouse gas emissions 7 would be provided on EnergyGuide labels. I 8 know we've already had some discussion about 9 this today.

10 And DOE also seeks comments on 11 issues associated with disseminating this type 12 of information to our consumers via other 13 types of labels. 14 MR. BROOKMAN: Yes, please. 15 MS. WEISS: I'm Joanmarie Weiss, 16 your consumer. 17 (Laughter.) 18 MS. WEISS: When I go out and buy 19 an appliance, the first thing -- and I usually 20 go to a big-box store. I'm sorry for the, you 21 know, manufacturers here who have their own 22 businesses but the first thing I look at is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 155 1 the price. And I compare prices. 2 The second thing I look at is that 3 energy sticker that's there right now. And 4 what is it going to cost me to operate it. 5 The third thing I look, if my 6 husband can't install it, is what is it going 7 to cost to install it. 8 So I think that the greenhouse 9 gases that you're talking about and the carbon 10 footprint that we're talking about here is11 going to be a distant fourth in my decision12 making and probably in most consumer's -- we 13 all want the world to be a better place. But 14 we're also very concerned with cost. 15 And what I'm hearing is, and what 16 I read was something about the cost is going 17 to be saved over eight years and the warranty 18 is six years, and that kind of alarms me.

19 There was some -- from DOE there was some 20 Energy Star stuff where we're going with an 21 eight-year payback with a six-year warranty,

22 that concerns me as a consumer. That's for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 156 1 you manufacturers to work out. 2 I don't know. I do not believe 3 that a full fuel cycle is going to be that4 important to most of us as we make that point5 of-purchase decision. It's just not. 6 Thank you. 7 MR. BROOKMAN: Thank you. 8 Charlie Stephens? 9 MR. STEPHENS: Charlie Stephens, 10 Northwest Energy Efficiency Alliance. 11 Just in case, for those people who 12 don't know, my organization represents the 13 large-scale energy efficiency interest of 137 14 electric utilities in the Pacific Northwest, 15 four states, all of them. A handful of them 16 are dual-fuel utilities. 17 Our utilities range 100 percent 18 renewable, mostly hydro in those cases, to one 19 that's about 50 percent or a little more than 20 50 percent coal-fired. The problem for us is 21 that those consumers are frequently right next 22 door to each other. And, in fact, they're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 157 1 going to be shopping at the same store for the 2 same appliances. 3 So you've got two different 4 consumers from two different utility service 5 areas shopping in the same store for the same 6 appliance. And one of them is all renewable 7 and the other one is 50 percent coal which -- 8 how are we going to get numbers on there that 9 isn't going to confuse those people. 10 Sometimes they're the same family. 11 (Laughter.) 12 MR. BROOKMAN: Mark Friedrichs? 13 MR. FRIEDRICHS: Yes, this is a 14 big problem. I would love to hear some 15 comment on the way in which we should think 16 about this issue. And there is a lot of 17 emphasis on the very big differences in the 18 generation mix from utility to utility and 19 certainly from region to region in the United

20 States. 21 But there are people who would 22 argue that we should not emphasize just the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 158 1 differences in those generation mixes but 2 instead we should look at the marginal source 3 of energy in different utility systems because 4 if more efficient appliances are going to slow 5 the rate of demand growth or even reduce 6 demand, it is going to help any particular 7 utility or region to reduce the consumption of 8 fuel in the generation of electricity on the 9 margin. 10 And that's not likely to be hydro 11 and it's not likely to be nuclear or even 12 renewable. It's more likely to be fossil fuel 13 in every region of the country. 14 So comment on that question would 15 be very helpful. 16 MR. BROOKMAN: Let's let Charlie 17 follow on, then I'm moving over here. 18 MR. STEPHENS: Okay, Mark, I will. 19 Charlie Stephens, again. 20 I don't know that there is going 21 to be a marginal situation when you go out 22 there and look at an individual rulemaking for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 159 1 an individual appliance. We are -- in a 2 utility that's 100 percent hydro, the marginal 3 resource is hydro. It's less hydro or more 4 hydro but it's hydro. 5 Collectively for a long time, in 6 some cases, we -- our projections in the 7 Northwest are, depending on the economic 8 circumstances and how they may change over the 9 next few years, suggest that we can meet all 10 of our new demand for electricity with 11 conservation -- with efficiency. 12 And so, you know, the marginal 13 resource for water-heating efficiency is 14 another more efficient water heater. So I 15 don't think -- you're going to have -- you're 16 just going to complicate the issue 17 dramatically more if you start getting into 18 marginal resources because that's just as 19 variable across regions and even across 20 utility boundaries as the generation mix is 21 itself.

22 MR. BROOKMAN: Let's let Mark

### 202-234-4433 Neal R. Gross & Co., Inc. Page 160 1 Friedrichs follow on. 2 MR. FRIEDRICHS: Yes, just one 3 observation. I guess the way some people 4 would look at that situation is that for a 5 utility system that is all hydro, what a 6 reduction in demand or a slowing of demand 7 does is it essentially enables that system to 8 export more power to other utility systems and 9 it ends up displacing fossil fuels someplace

10 else. 11 So it may not happen within that 12 utility system but it happens some place else. 13 It may happen in California. It may happen 14 in Idaho or Montana.

15 MR. BROOKMAN: Steve Rosenstock? 16 MR. ROSENSTOCK: Steve Rosenstock,

17 EEI. 18 Just following on this particular 19 point, we have people at EEI who track 20 capacity, you know new capacity being 21 installed or announced in the United States. 22 Here's some numbers for you.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 161 1 In 2009, natural gas represented 2 respectively 43 percent and 38 percent of new 3 additions, okay, unless those natural gas were 4 combined cycle -- 5 MR. BROOKMAN: New additions 6 within what? 7 MR. ROSENSTOCK: Within the United 8 States, that's a national -- 9 MR. BROOKMAN: Okay.

10 MR. ROSENSTOCK: -- across the 11 country. In 2010, what's happening? Of all 12 announcements in the United States during the 13 first seven months of the year, 82 percent 14 were renewable. Wind was 48 percent, solar 15 intake and solar thermal was 36 percent in 16 terms of marginal resources. 17 Now things change year by year. 18 We know that several years ago everything that 19 was put in was natural gas. Ten years, 15 20 years before that, a lot of it was coal. 21 But in terms of marginal 22 generation, especially in terms of new

### 202-234-4433 Neal R. Gross & Co., Inc. Page 162 1 policies, it is much, much more likely to be a 2 renewable or very, very high efficient natural 3 gas based on recent history. 4 Thank you. 5 MR. BROOKMAN: Eric? 6 DR. WOYCHIK: Thank you. Eric 7 Woychik, Black & Veatch. 8 As a strong expert in electric 9 markets, I agree with the marginal analysis 10 idea. I also agree though it is very complex 11 and very difficult to do that. And you now 12 have very different -- great differences 13 region upon region. In fact, LMPs, location 14 marginal costs, just -- so it's very difficult

15 to do. 16 The other thing to think about is 17 that ideally what you have on the margin and 18 what Jon Wellinghoff's vision is, the FERC 19 Chairman, a whole set of people that are 20 really trying to think about using the smart 21 grid, is that it is the dispatchable ramping 22 capacity on the margin based on the load side.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 163 1 So it's not even in power plant. 2 It's cycling water heaters, cycling other 3 appliances, using what's called Zigbee HAN, 4 home-area network. So it could be 5 dishwashers, a set of dishwashers. It's going 6 to be an aggregate of things as well as 7 ramping combustion turbines. 8 So it's a messy analysis. But 9 don't forget that the load side could be the 10 marginal resource.

11 MR. BROOKMAN: Dave? 12 MR. MOHRE: I was going to 13 reemphasize that. Thank you, Eric. 14 The fact of the matter is the 15 marginal resource is becoming more and more 16 wind. Why? What's the energy cost of wind? 17 Guess what gets dispatched, okay? 18 The bottom line on this thing is 19 we seem to have a right-hand, left-hand 20 problem. One the one hand, we're saying what 21 we need to do is go to renewables, which the 22 industry is doing like crazy, all right?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 164 1 And yet the very appliances that 2 will enable that to happen, along with the 3 smart grid, are going to be penalized by this 4 specific approach. And the reason it is going 5 to be penalized is it is not looking at the

6 future so much. 7 Now I understand it looked at 8 2030. But -- and I won't call it business as 9 usual, I'll call it -- what do we call it?

10 PARTICIPANT: Reference case.

11 MR. MOHRE: Reference case. Thank 12 you. It means the same thing to me but that's 13 all right. 14 At 2030, there's hardly any 15 change. I could see why you would reach the 16 conclusion you do. But the fact of the matter 17 is the industry is changing like crazy, very 18 rapidly, and going to renewables. 19 Let me ask you a question. Two 20 years ago, what was the price of natural gas 21 at the Henry hub? 22 PARTICIPANT: Fifteen dollars?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 165 1 MR. MOHRE: Yes, right, August, 2 13.50 about. What is it today? Okay, who 3 predicted that? And you're going to tell me 4 we're going to monetize 290 years worth of 5 financial impacts of CO2? And we couldn't 6 estimate this in the matter of two years. And 7 bless you for getting it down that way. 8 (Laughter.) 9 MR. MOHRE: You know I just think 10 we've got some confusion.

11 MR. BROOKMAN: Just -- I'm not 12 sure we caught it on the record. What was the 13 spread in price? 14 MR. MOHRE: The spread in price 15 was 13 dollars and 50 at Henry hub in April 16 `07. Or `08, I'm sorry, July of `08. Thank 17 you for clarification. And now it's four 18 dollars, 4.50.

19 MR. BROOKMAN: Yes. 20 MR. MOHRE: Okay? So what I'm 21 saying is our ability to forecast these things 22 is very limited. And yet here we're going to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 166 1 tell consumers we know precisely the financial 2 present value of CO2 over the next 290 years. 3 And we're going to include that.

4 MR. BROOKMAN: Yes.

5 MR. MOHRE: God bless. 6 MR. BROOKMAN: Michael Wang? 7 MR. WANG: Yes, let me comment on 8 the 200- or 100-year societal values. 9 Societal value, if you emit one pound of CO2, 10 we know CO2 lasts for 100 years. That is well 11 understood. So over the next 100 years, what 12 damages is that one ton of CO2 will cost and 13 what is the monetary values of that damage? 14 So there is a whole community to 15 evaluate this one ton of CO2 over the period 16 of 200 years. That's different from what 17 we're talking about which is whether we know 18 the price two years ago, the price this year. 19 Or we know the general recommendations, the 20 new addition in `09, the new addition in 2010, 21 and the new addition in 2040. I just want to 22 add this comment. Those are very very

### 202-234-4433 Neal R. Gross & Co., Inc. Page 167 1 different concepts.

2 MR. BROOKMAN: Steve Rosenstock? 3 MR. ROSENSTOCK: Just a quick 4 question. Does anyone know the social cost of 5 the carbon that was emitted in the year 1700 6 during the start of the Industrial Revolution 7 in Europe? I'm just kind of curious. That 8 was 300 years ago. What's the current price - 9 - cost of that? I'm just kind of curious. 10 Thank you. 11 MR. WANG: Well, yes. My part is, 12 you know, I'm not an expert in the climate 13 change area. I'm not saying that value isn't 14 very important. I'm saying it's two different 15 concepts. Let's not mix the two different 16 concepts together. 17 MR. ROSENSTOCK: Mr. Wang, they're 18 being mixed in the rules. They are mixed in 19 the refrigerator rule Table I.2. 20 Thank you.

21 MR. BROOKMAN: You are next. Go

22 ahead.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 168 1 MR. COMSTOCK: Owen Comstock from 2 the Energy Information Administration. 3 As far as the social cost of 4 carbon in 1790, I don't think we go back that 5 far but the price definitely wasn't zero. And 6 just because we have assigned that value of 7 zero doesn't make it so. And I think that's 8 the difference. 9 And so go ahead. 10 MR. ROSENSTOCK: Well, but that 11 was emitted that long ago, what's the cost 12 today of that carbon? 13 MR. COMSTOCK: Right. But that's 14 -- I think that's the difference is just 15 because we said it was zero doesn't mean that 16 those -- the emissions that happened then 17 didn't have implications that we're still 18 paying for in some way or the other. 19 MR. ROSENSTOCK: And I'm asking 20 for what are they costing us now. 21 MR. COMSTOCK: Yes, they're 22 difficult to quantify. That's the whole

### 202-234-4433 Neal R. Gross & Co., Inc. Page 169 1 point. But anyway -- 2 MR. ROSENSTOCK: Yes, thank you. 3 MR. BROOKMAN: I think we're 4 getting into some esoterica here. And I'd 5 like to move us back to the questions that are 6 on the screen and see if we can be responsive

7 to these.

8 MR. COMSTOCK: Yes. I'll address 9 that. Thank you.

10 MR. BROOKMAN: Yes. 11 MR. COMSTOCK: So the EnergyGuide, 12 that's the stickers that come with most 13 appliances, have -- it tells you how many -- 14 for instance, a refrigerator, it tells you how 15 many kilo-watt hours typical -- that that 16 model is going to use that year. And what the 17 cost of that energy is going to be. 18 But it is not exactly the cost 19 that I pay. And it's not necessarily how I 20 use that appliance. They are national 21 averages that are based on manufacturer data. 22 They are based on electricity prices that EIA

### 202-234-4433 Neal R. Gross & Co., Inc. Page 170 1 collects. So we're already using national 2 averages for that point in time to inform 3 customer decisions about the energy costs of 4 that specific appliance. 5 And I think using that same kind 6 of model, we don't necessarily have to use 7 exactly what those emissions are going to be 8 associated based on the electron path that the 9 different generation mix -- took to get to 10 that appliance. 11 But if you have, you know, the 12 national average in the previous year, which 13 is fairly well known based on the data we 14 collect, the emissions associated with that 15 generation mix at a nationwide average may be 16 while not the best data point, may be 17 something a consumer can use. 18 MR. BROOKMAN: Mark Friedrichs. 19 MR. FRIEDRICHS: Yes, that brings 20 us back to kind of the question of this part 21 of the meeting. And that is what can we do to 22 make it easier for consumers, who are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 171 1 interested in getting some of this 2 information, to get information that is really 3 valuable to them and is relevant to them in a 4 way that is as simple as possible? 5 And so we're struggling with that. 6 We're not sure that modifying the label is 7 the best way to go. It's certainly one way to 8 go. There are certainly other ways in which 9 we can make available this data. So that's 10 what we're looking to do, with help from you: 11 defining what kinds of mechanisms we should 12 consider. 13 MR. BROOKMAN: And, of course, the 14 slide references an online service. So maybe 15 you could address that as well. 16 Karim first. 17 MR. AMRANE: Karim Amrane, AHRI. 18 I guess to respond to Mark, have 19 we asked consumers if they really are looking 20 for that information? Our experience is that 21 they don't even look at the CLO EnergyGuide 22 label. It has been useless at least for air

### 202-234-4433 Neal R. Gross & Co., Inc. Page 172 1 conditioners and furnaces. 2 MR. BROOKMAN: Thanks, Karim. 3 Dave, do you have a comment? 4 MR. MOHRE: Yes. First, I think 5 the idea, if you do anything, do it on line. 6 Because if you do it online, you can address 7 the regionality problem that is so important. 8 MR. BROOKMAN: Can you address the 9 problem that Charlie raised? Maybe? 10 MR. MOHRE: Well, yes. Well, if 11 you are 100 percent hydro, I mean that's what 12 I'm calling a regional problem. 13 MR. BROOKMAN: Yes, okay. 14 MR. MOHRE: Okay? And that way 15 consumers that are interested, and I would 16 agree with what has been stated here, 17 including by the consumer, okay, that people 18 are mostly interested in what is it going to 19 cost me, okay?

20 But those who want to be more 21 informed -- but do it on a regional basis. 22 You know 22 regions, that sounds good.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 173 1 MR. BROOKMAN: Steve Rosenstock? 2 MR. ROSENSTOCK: Steve Rosenstock,

3 EEI. 4 And as Mr. Barker said, you know, 5 we support consumers having information. And 6 many utilities actually put information about 7 last year's emissions. Sometimes they put it 8 in envelope stuffers. At Dominion Virginia 9 Power, their bill stuffer, here was our 10 emissions profile and here was our generation 11 profile for 2009. 12 If people wanted to do the 13 calculations, they can go to the energy 14 company website. And it's not just for 15 electric utilities. Gas companies might do 16 it, too, oil companies, propane companies, 17 they might put some of that stuff. 18 And we would encourage all 19 companies, if they want to do that, to put it 20 on there because each appliance in each home 21 is going to have possibly different types of 22 scenarios in terms of looking upstream.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 174 1 Also the other issue is in many 2 areas with customer choice, in many areas 3 there's still gas choice and choice of 4 electric suppliers, it might depend on their 5 supplier as well. Some of the suppliers might 6 put out information. 7 But to put that type of 8 information, with all of the variabilities, on 9 an EnergyGuide label, to us does not make 10 sense. That's our first point. 11 The second point is as part of the 12 Energy Policy Act of 2005, the FTC was 13 directed to update their label to make it 14 better. So me being the geek that I am, I 15 have an old refrigerator label, okay, Energy 16 Star refrigerator label pre the current 17 rulemaking and the new one based on consumer 18 focus groups, based on information that they 19 gathered from their rulemaking. 20 Notice the difference? There's 21 actually bigger font and information is easier 22 to see for the consumer of the top items that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 175 1 they wanted to see. 2 MR. BROOKMAN: Hold them both up 3 together. 4 MR. ROSENSTOCK: Okay. Sure. 5 Okay, sorry. Old and new based on the FTC 6 rulemaking that was called for under the 7 Energy Policy Act of 2005. 8 MR. BROOKMAN: So are you making a 9 larger comment about the effectiveness of the 10 improved model? 11 MR. ROSENSTOCK: Yes. Well, I'm 12 saying this is a better label, much better. 13 MR. BROOKMAN: Okay.

14 MR. ROSENSTOCK: And now we're 15 saying let's add all this other information on 16 here, whether it is emissions or full fuel 17 cycle. Well, the FTC rejected it in their 18 rulemaking of August 29th, 2007. 19 And here is a key sentence. It is 20 likely that such a significant change to the 21 FTC's labeling requirements would require 22 substantial changes to the DOE test procedures

### 202-234-4433 Neal R. Gross & Co., Inc. Page 176 1 to allow for offsite energy use calculations 2 as well as additional research and discussion 3 regarding whether such information would be a 4 useful measure of energy consumption for

5 consumers. 6 So I would suggest that the DOE 7 review the FTC rulemaking on the labels to see 8 all their consumer research, to see all of the 9 open meetings that they had, and to see how 10 they determined that this would be a better 11 EnergyGuide label. 12 Another thing is that EPA is doing 13 a similar rulemaking. They put out an RFI 14 about doing eco-labels. So if people want to 15 do an environmental label, do it separate from 16 this. Don't mess up the EnergyGuide label 17 with some of this information, some of these 18 estimates, excuse me. 19 Thank you. 20 MR. BROOKMAN: Don Brundage? 21 MR. BRUNDAGE: I would agree that 22 you don't need to have it on the yellow label.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 177 1 The majority of consumers, it's just going to 2 confuse. They're interested in how much it is 3 going to cost to operate. 4 And some of the regional values, I 5 think that could be solved with a good online 6 database. I mean you can enter your zip code 7 and it could be like the -- and if you have 8 multiple utilities in that zip code, they 9 would come up with a list of three utilities 10 in your zip code. Which one is yours? And 11 then you really get accurate answers. 12 You are really not going to be 13 able to get meaningful information to 14 consumers for the national or even a regional 15 label. You need to have some sort of online 16 process. 17 MR. BROOKMAN: Thank you.

18 Bob? 19 MR. BEAUREGARD: Yes, you know, 20 comments that a majority of consumers don't 21 want this, I don't know where that information 22 comes from. EEI talks about putting all this

### 202-234-4433 Neal R. Gross & Co., Inc. Page 178 1 information on a label. We don't know what 2 the information would be. 3 You can hold up that new label and 4 put another little high -- big font 5 information on there without messing up the 6 label. Yes, the FTC looked at some things and 7 said not yet or no, not yet. But I don't 8 think that should be mandating how DOE 9 proceeds on this issue. 10 If there are some consumers, and I 11 evidence that, that there are some consumers 12 that won't look at this information, cost will 13 be their only consideration, but there are a 14 host of consumers out there that are demanding 15 this kind of information because they want to 16 be green. 17 They want to be knowledgeable 18 about the kind of appliances they're buying. 19 And I think the federal government is right to 20 provide them that kind of information. 21 MR. BROOKMAN: Okay. Thank you. 22 We'll take additional comments.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 179 1 I'm going to hand these out now. Would you 2 pass these down? These are the photocopies of 3 the business cards that were provided. And I 4 guess -- do we have a question or two from 5 online? 6 (No response.) 7 MR. BROOKMAN: And this is the 8 second batch of handouts. Please take, before 9 you leave, a moment to fill these out. 10 Although we're not finished yet, we're getting 11 down toward it. 12 So as we promised you at the 13 outset -- there's no question? Nothing? 14 (No response.) 15 MR. BROOKMAN: So as we promised 16 at the outset, there is yet another 17 opportunity, for anybody that wishes to do so, 18 to make additional comments to supplement what 19 was said earlier, to raise additional issues 20 that have not been raised adequately. And so 21 now is your opportunity to do that.

22 Steve Rosenstock?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 180 1 MR. ROSENSTOCK: Just one quick 2 one. It said in the slides that you are 3 thinking about doing -- making it be a policy 4 by December of 2010. And I'm just kind of 5 curious if -- what -- is there going to be 6 another -- is there going to be an 7 announcement in the Federal Register around 8 that time? 9 And then in terms of -- and, 10 again, this is a proposed policy. Is there 11 going to be an announcement of final policy? 12 And that's it?

13 MR. FRIEDRICHS: Thanks. Yes. 14 That is basically our intent to consider the 15 comments that we've received today and that we 16 are likely to receive in writing before 17 October 19th and to develop a final statement 18 of policy on these issues that we would hope 19 to issue by the end of the year. It might be 20 early next year. 21 But as I indicated before, these 22 policies will then be reflected in future

### 202-234-4433 Neal R. Gross & Co., Inc. Page 181 1 rulemakings and/or other activities of the 2 Department. And to the extent that they are 3 reflected in future rulemakings, they will be 4 the subject of further public comment. 5 So we would, in a new efficiency 6 standard, for example, propose a specific 7 methodology for moving to full fuel cycle 8 analysis in some future rulemaking. And as 9 part of that rulemaking process, that proposal 10 would be subject to comment, just like any 11 other aspect of that rulemaking. I hope

12 that's clear.

13 Some of these consumer 14 information-related activities might result in 15 work by the Department to make available an 16 online database. That wouldn't necessarily be 17 the subject of a rulemaking. But it would be 18 subject of activity. 19 And of course if there's any 20 action by the Federal Trade Commission to 21 change the EnergyGuide label, that would be 22 the subject of some future rulemaking. So you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 182 1 would see the result of this policy statement 2 in many different forms going out into the

3 future.

4 MR. BROOKMAN: We have some 5 additional comments.

6 Please. 7 MS. WEISS: Joanmarie Weiss from 8 Weiss Farm. 9 It's been an interesting morning 10 for me. I've really learned a lot here today 11 about this policy that I didn't understand, 12 including just now that this is may be rules 13 not even policy we're discussing. So maybe I 14 count a little bit. 15 I want to thank you all for coming 16 here and doing this for us as Americans, doing 17 this kind of stuff. There is a business card 18 sheet. So if you get to Michigan and you get 19 to Frankenmuth, which is our number one 20 tourist destination, stop in at our farm. See 21 what we're doing out there at the farm, how 22 we're using energy.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 183 1 We're trying to save it every way 2 we can. And if my husband is taking the 3 picture, you're going to be on a blog that I 4 do, too. 5 (Laughter.)

6 MS. WEISS: I do a 7 weisscentennialfarm.com blog. And that's just 8 something that I do to keep readers in 9 Michigan aware of what I do as a farmer. 10 So today I was in Washington. And 11 participated in policymaking. 12 Thank you. 13 MR. BROOKMAN: And, Jim, I think 14 you had a comment? Jim Woodward? 15 MR. WOODWARD: Yes, hi. Oh, there 16 we go. Hi, Jim Woodward from Deloitte 17 Consulting. 18 Given the last segment of 19 discussion regarding the consumer awareness 20 and the fact that we've mentioned the FTC 21 several times, and to my knowledge I'm not 22 seeing a representative from the Agency here,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 184 1 I was just wondering how closely -- how 2 closely today you've been working with FTC in 3 terms of this process. 4 MR. BROOKMAN: Mark Friedrichs? 5 MR. FRIEDRICHS: We've met with 6 the FTC staff. We're certainly aware of the 7 history of the development of the EnergyGuide

8 label. 9 I believe FTC staff are online 10 listening to today's public meeting. They 11 certainly will see the output of this. And we 12 will be meeting with them in the future to 13 discuss a way forward that seems to make

14 sense. 15 MR. PERKINS: Yes, Anthoney 16 Perkins. I specifically gave them the webinar 17 information because they did want to listen in 18 to this portion. 19 MR. BEAUREGARD: Mark or Anthoney, 20 do I understand that it is the FTC that has to 21 make the initiative on amending the 22 EnergyGuide label? That's yes?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 185 1 MR. PERKINS: Yes. It is. It's 2 their label.

3 MR. BEAUREGARD: So we all have an 4 opportunity to work directly with the FTC on 5 this matter say in conjunction with this 6 proceeding?

7 MR. PERKINS: Correct. You do.

8 MR. BROOKMAN: That was Bob. 9 Thank you, Bob. 10 Karim, you're next. 11 MR. AMRANE: Karim Amrane, AHRI. 12 A question for DOE. Has the 13 decision to switch to full fuel cycle been 14 made already by DOE? Or is it still being 15 considered by DOE? 16 MR. PERKINS: It is still being 17 considered. That's what this meeting is for 18 so we can take your comments and your concerns 19 into consideration. 20 MR. STANONIK: Frank Stanonik,

21 AHRI. 22 I just -- something just clicked

### 202-234-4433 Neal R. Gross & Co., Inc. Page 186 1 in my head about this whole issue of consumer 2 information or whatever. The EnergyGuide 3 label is about the efficiency of the 4 appliance. It is about an estimate of what it 5 is going to cost the consumer to operate that 6 appliance, okay? 7 This discussion we've had this 8 morning as to the -- I'll it the upstream 9 effects of that BTU that they used in their 10 home -- is independent of the appliance 11 efficiency. Certainly appliance efficiency 12 matters how many BTUs they use, okay? But the 13 amount of energy or the emissions that 14 occurred to deliver that kilowatt or that BTU 15 to their house doesn't care how efficient that 16 appliance was. 17 And to me, that's a fundamental 18 reason why if you're going to do any kind of 19 information related to -- again, what I'll 20 choose to call the upstream effects of energy 21 use -- it has to be disassociated. It should 22 not be on the EnergyGuide label.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 187 1 They are two very different 2 things. And it would be very much a mixed 3 message.

4 MR. BROOKMAN: Andrew? 5 MR. SOTO: Andrew Soto, AGA. 6 When it comes to labeling, this 7 proceeding should really be about giving 8 customers information so that they can make 9 smart appliance choices. 10 When I go to a big-box store and I 11 look at an appliance, I don't have an 12 expectation that that appliance, when 13 installed in my house, is going to exactly 14 equal the energy consumption that the label 15 says or that my operating costs are going to 16 exactly equal what the label says. These are 17 bases for people to make comparisons within 18 the same class of appliances and across 19 appliance fuel sources. 20 And in order to do that, all the 21 appliances need to be on a level playing 22 field. And the full fuel cycle provides an

### 202-234-4433 Neal R. Gross & Co., Inc. Page 188 1 opportunity to do that. 2 I would encourage the DOE to 3 continue their efforts to work with the FTC to 4 provide customers with information that they 5 can make a valid comparisons so that they can 6 make smart appliance choices. 7 MR. BROOKMAN: Okay. Thank you. 8 Final comments? Yes, Eric? 9 DR. WOYCHIK: Eric Woychik, Black

10 & Veatch. 11 Just a perspective. I live in 12 California. I started working with the 13 California Energy Commission in 1979. I also 14 worked on the building appliance standards.

15 That effort has created the 16 largest single increment of energy efficiency 17 that has occurred on the planet, without a

18 doubt. 19 MR. BROOKMAN: Improvement? 20 DR. WOYCHIK: Improvement and 21 everybody knows that.

22 MR. BROOKMAN: Yes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 189 1 DR. WOYCHIK: If you just go to 2 get the site standards right nationally, it is 3 going to be a huge, huge change. So in this 4 case, it seems to me that a conservative 5 approach of getting the first step right 6 following that example is very important.

7 Thanks. 8 MR. BROOKMAN: Okay. Thank you. 9 Yes, Dave? 10 MR. MOHRE: I'm thinking of an old 11 friend of mine, Alfred Kahn, the economist 12 from Cornell, who often said to every complex 13 problem there is a simple solution that is 14 generally wrong. And I think we need to think 15 about those words right now because telling 16 somebody who lives in the Pacific Northwest 17 that they are going to contribute to the 18 global warming of the planet when the 19 electricity is from hydro, that's simply 20 wrong. 21 We've got to be smarter than that. 22 If we're going to do anything, let's make

### 202-234-4433 Neal R. Gross & Co., Inc. Page 190 1 sure we give them good information. And that 2 is maybe an online service with regionality. 3 You've got the data. You've got 4 20, 22 regions. That's a start. 5 MR. BROOKMAN: Yes, please? 6 MR. HINKLE: Well, another thing 7 that I was cautioned about years ago is that 8 simulations are best at formalizing our 9 ignorance about a system. 10 (Laughter.) 11 MR. BROOKMAN: Say your name again

12 for the record. 13 (Laughter.) 14 MR. HINKLE: Albert Einstein. 15 (Laughter.) 16 MR. BROOKMAN: Okay. So this is 17 yet another opportunity for final comments 18 because I think we're nearing that point. 19 Yes, Dave, do you want to take it 20 to the last slide? 21 MR. PERKINS: So, I want to thank 22 you for being here. We've got some

### 202-234-4433 Neal R. Gross & Co., Inc. Page 191 1 information up here, which is in the 2 presentation and it is also information that 3 you can find in the Federal Register

4 announcement. And we'll have the 5 transcription of the public meeting and all 6 written comments will be available on 7 regulations.gov. 8 All written electronic comments 9 are due, again, by October 19th, as is stated 10 in the Register. Just remember if you're 11 submitting them, we've got the document up 12 here, the RIN number. We've got the email 13 address as well as regulations.gov website, 14 Ms. Brenda Edwards mail address or courier 15 address if you want to have them or couriered 16 over to her. And this is available. 17 Thank you on behalf of DOE. 18 Thanks, Doug Brookman, and all of our speakers 19 today. And we appreciate everybody here. 20 PARTICIPANT: (Speaking from an 21 unmiked location.)

22 MR. BROOKMAN: Please use the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 192 1 microphone. 2 MR. TEMPCHIN: Rick Tempchin, any 3 idea when the transcript will be available of 4 today? 5 MR. PERKINS: I can't give you an 6 exact date. It should be hopefully soon. As 7 soon as they can get them transcribed and to

8 us. 9 MR. BROOKMAN: It's typically a 10 week or so, yes. 11 MR. BEAUREGARD: Thank you, DOE, 12 for having this meeting. 13 MR. PERKINS: Thank you. 14 MR. BROOKMAN: Thank you. Safe 15 travels to everyone. 16 (Whereupon, the above-entitled 17 meeting was concluded at 12:40 p.m.)

18

19

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This is to certify that the foregoing transcript

in the matter of: Public Meetinq

Before: Doug Brookman, Facilitator

Date: Or.|-ol-rer '7. 2010 t t

Pl-ace: Washingt.on, D.C.

ranr^aaanf c i- lra aforementioned

f-rznor.rri t- i n a rvtrlY. full and compl-ete proceedings of the

mal-l-er :s ranorferi and reduCed tO tse



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