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U.S. DEPARTMENT OF ENERGY 

 PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS 

 FOR COMMERCIAL REFRIGERATION EQUIPMENT 

Room 8E-089 

U.S. Department of Energy 

1000 Independence Avenue, S.W. 

Washington, D.C. 20585 

9:00 a.m. 

Tuesday, September 23, 2008 

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A G E N D A 

ITEM: PAGE: 

Welcome 6 

Opening Remarks, Introductions and 

Agenda Review 6 

 Doug Brookman 

Rulemaking Overview 11 

 Charles Llenza 

Comments from Participants 14 

 Doug Brookman 

Engineering Analysis 28 

 Aris Marantan and Matt Millard 

Energy Use Analysis and Life-Cycle Cost 

Analysis 74 

 Dave Winiarski 

National Impact Analysis 90 

 Dave Winiarski 

Afternoon Session

Trial Standard Levels and Manufacturer 

Impact Analysis 146 

 Dave Winiarski and Aris Marantan 

Utility Impact Analysis, Employment Impact 

Analysis, Environmental Assessment, 

Regulatory Impact Analysis 161 

 Dave Winiarski 

 

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ATTENDEES

DOUG BROOKMAN, Facilitator 

Public Solutions,Inc. 

KARIM AMRANE, 

Air-Conditioning, Heating & 

Refrigeration Institute 

TIMOTHY BALLO, 

Earthjustice 

JEFFREY BAUMAN, 

Continental Refrigerator 

R. J. (Dick) BIENVENA, JR., 

Ingersoll-Rand Company 

Hussmann Corporation 

LANE WESLEY BURT, 

Natural Resources Defense Council 

ROGER W. CARLONE, JR., 

Traulsen 

BELINDA CARR, 

Energetics, Inc. 

BEN DeJAGER, 

Structural Concepts Corporation 

ANDREW deLASKI, 

Appliance Standards Awareness Project 

MARIANNE DiMASCIO, 

Appliance Standards Awareness 

Projects 

BRENDA EDWARDS, 

Department of Energy 

GARY FERNSTROM, 

Pacific Gas & Electric Company 

BURT M. FINKELSTEIN, 

Kason Industries, Inc. 

MIKE GRASSMUCK, 

Hussmann Corporation 

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ATTENDEES

BRUCE R. HIERLMEIER, 

Zero Zone, Inc. 

CHARLES HON, 

True Manufacturing Company 

EDWIN A. HORNQUIST, 

Southern California Edison 

An EDISON INTERNATIONAL Company 

LARRY HOWINGTON, 

Hill PHOENIX Display Cases 

JILLIAN JAYNES, 

UCLA Anderson School of Management 

BIJIT KUNDU, 

ICF International/Energy Star 

REBECCA LEGETT, 

Navigant Consulting 

RONALD LEWIS, 

Department of Energy 

CHARLES LIENZA, 

Department of Energy 

NICOLE MANZANILLA, 

UCLA Anderson School of Management 

ARIS MARANTAN, 

Navigant Consulting, Inc. 

MATTHEW MILLARD, 

Navigant Consulting, Inc. 

MASSOUD NESHAN, 

Southern Store Fixtures, Inc. 

GRAHAM B. PARKER, 

Pacific Northwest National Laboratory 

FRANCINE PINTO, 

Department of Energy 

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ATTENDEES

DEVIN RAUSS, 

Southern California Edison 

An EDISON INTERNATIONAL Company 

MIKE RIVEST, 

Navigant Consulting, Inc. 

HARVEY SACHS, 

American Council for an Energy 

Efficient Economy 

JOHN R. SAWYER, 

United States Department of Justice Antitrust Division 

STEPHEN SCHAEFER, 

Hoshizaki America 

RACHEL S. SCHMELTZ, 

Environmental Protection Agency 

ERIC STAS, 

Department of Energy 

JANET R. URBAN, 

U.S. Department of Justice Antitrust Division 

ROBERT J. WEEKS, 

Kysor/Warren 

DAVID WINIARSKI, 

Pacific Northwest National Laboratory 

 

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1 P R O C E E D I N G S 

2 9:15 a.m. 

3 Welcome

4 Opening Remarks, Introductions and Agenda Review

5 MR. BROOKMAN: Good morning, everybody, and 

6 welcome. 

7 This is the U.S. Department of Energy’s 

8 Public Meeting on Energy Conservation Standards for 

9 Commercial Refrigeration Equipment, and thanks for 

10 being here on time. 

11 My name’s Doug Brookman and I’m with Public 

12 Solutions in Baltimore. 

13 Let me introduce Ron Lewis, Supervisor of 

14 Regulatory Activities. 

15 MR. LEWIS: Good morning, everyone. 

16 Appreciate your being here. We’ve had a real pick-up 

17 in the last couple of years with a number of these 

18 meetings and a lot of familiar faces here that have 

19 gathered a lot of frequent flier miles coming to 

20 Washington and we’re glad you’re here. 

21 Looking forward to a good day and looking 

22 forward to your candid input on what you think about 

23 what we posted and want to get everything on the table 

24 and have good discussions and so we don’t want anybody 

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1 holding back but giving us your thoughts. 

2 So thanks for being here and look forward to 

3 an engaging day. 

4 MR. BROOKMAN: Thank you. It’s our tradition 

5 to have each person introduce him or herself and so 

6 let’s do that. Would you say your name and 

7 organizational affiliation? 

8 Charlie? 

9 MR. HON: Charlie Hon, TRUE Manufacturing. 

10 MR. BROOKMAN: Thank you. 

11 MR. HOWINGTON: Larry Howington, Hill 

12 Phoenix. 

13 MR. AMRANE: Karim Amrane, Air-Conditioning, 

14 Heating and Refrigeration Institute. 

15 MR. BALLO: Tim Ballo, EarthJustice. 

16 MR. deLASKI: Andrew deLaski, Appliance 

17 Standards Awareness Project. 

18 MR. BURT: Lane Burt, Natural Resources 

19 Defense Council. 

20 MR. SACHS: Harvey Sachs, American Council 

21 for An Energy Efficient Economy. 

22 MR. FERNSTROM: Gary Fernstrom, Pacific Gas 

23 and Electric, one of the few, if perhaps not the only, 

24 utility pursuing codes and standards improvement in the 

25 country. 

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1 MR. HIERLMEIER: Bruce Hierlmeier, Zero Zone. 

2 MS. PINTO: Francine Pinto, General Counsel’s 

3 Office, DOE. 

4 MR. LLENZA: I’m Charles Llenza. I’m the 

5 Project Engineer for the Department of Energy. 

6 MR. RIVEST: Mike Rivest, Navigant 

7 Consulting. 

8 MR. LEWIS: Ron Lewis, DOE. 

9 MR. MILLARD: Matt Millard, Navigant 

10 Consulting. 

11 MR. MARANTAN: Aris Marantan, Navigant 

12 Consulting. 

13 MS. LEGGETT: Rebecca Leggett, Navigant 

14 Consulting. 

15 MR. PARKER: Graham Parker, Pacific Northwest 

16 National Laboratory. 

17 MR. BROOKMAN: Want to introduce yourself, 

18 please? 

19 MR. FINKELSTEIN: Roy Finkelstein, Kason 

20 Industries. Thank you. 

21 MS. DiMASCIO: Marianne DiMascio from 

22 Appliance Standards Awareness Project. 

23 (Introductions Off Microphone.) 

24 MR. BROOKMAN: Thank you. So I’m going to go 

25 real fast and give an overview and then we’re going to 

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1 go from there to providing a short Rulemaking Overview. 

2 Following the overview, there’s an opportunity for each 

3 of you, any of you that wish to do so, to make brief 

4 summary remarks about issues and concerns. 

5 Following Charles Llenza’s Rulemaking 

6 Overview, there’s an opportunity for each of you, 

7 anybody that wishes to do so, to make brief summary 

8 remark about the issues that are of particular 

9 importance to you in this rulemaking. 

10 From there, we’ll go directly into a 

11 presentation followed by discussion on Engineering 

12 Analysis. We’ll take a break midmorning, around about 

13 11 o’clock or so. From 11:15 till noonish, we’ll have 

14 Energy Use Analysis and Life-Cycle Cost Analysis. 

15 We’ll take a break for lunch around about 

16 noon. Following that, we’ll have the National Impact 

17 Analysis presentation and discussion. Following that, 

18 Trial Standard Levels and Manufacturer Impact Analysis. 

19 Then Utility Impact Analysis, Employment Impact 

20 Analysis, Environmental Assessment, and Regulatory 

21 Impact Analysis. 

22 We’ll take a break midafternoon, around about 

23 2:45, and then at the end of the day, this afternoon, 

24 there’s yet another opportunity for those of you that 

25 wish to do so to raise additional issues that you think 

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1 you’d like to try and cover and emphasize before we 

2 leave this meeting. We’ll close with Next Steps and 

3 Closing Remarks. 

4 We intend to adjourn today no later than 

5 4:30. That’s our plan. 

6 Questions and comments here at the outset? 

7 (No response.) 

8 MR. BROOKMAN: I’d ask your consideration. 

9 You can see I’ve listed on the board. Please speak one 

10 at a time. I think this is nothing more than basic 

11 courtesy. Please speak one at a time. Say your name 

12 for the record. You’ll see we have a court reporter 

13 here. There will be a full transcript of this meeting 

14 provided. 

15 I’m going to be trying to queue each of you 

16 by name. I also wish to try to encourage follow-on 

17 comments, so we have something more than a block by 

18 block rote by rote comment here. We do wish to 

19 encourage discussion and dialogue exchange. So say 

20 your name for the record. I’ll be trying to queue you. 

21 Please be concise, share the air time, and if you keep 

22 a focus here, turn your cell phones on silent, and if 

23 you need to have a sidebar conversation with anybody, 

24 we’ll understand if you simply -- if it’s going to go 

25 for more than about 10 or 15 or 30 seconds, please take 

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1 it out of the room. We’ll understand that. 

2 As I said, I’ll be queuing people as best I 

3 can to speak. Questions? Comments? 

4 (No response.) 

5 MR. BROOKMAN: I see none. Okay. Charles 

6 Llenza. 

7 Rulemaking Overview

8 MR. LLENZA: Welcome to the Department of 

9 Energy and we’re here today to receive your comments on 

10 the Proposed Notice of Rulemaking for Commercial 

11 Refrigeration Equipment. 

12 The website where you can obtain all the 

13 information on the material for the Notice is on the 

14 bottom of the first page. 

15 The purpose of today’s meeting is to invite 

16 you all to comment for the Proposed Energy Conservation 

17 Standards for Level TSL-4 and to request 

18 recommendations for alternatives, if you have any, to 

19 present the different methodologies and characterize 

20 the results that we utilize in this rulemaking, to 

21 discuss specific issues and reach analysis, to seek 

22 input for the ANOPR, and to describe the next steps 

23 that we are to follow in achieving the final rule, 

24 encourage the participants to provide your summary 

25 comments of statements and to raise additional issues 

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1 to discuss today as we go through the presentation. 

2 Please also note that the comment period ends 

October 24th 3 . 

4 The standard statutory authority of the 

5 Energy Policy and Conservation Act, as amended, is 

6 addressed in the requirements of 42 USC 6313(c)(4)(a), 

7 as you can see, and basically we are to issue a rule by 

January 1st 8 , 2009. The effective date becomes January 

1st 9 , 2012, and the rule is part of the report to 

10 Congress. 

11 Okay. The test procedure that we have used 

12 for establishing the standards was published in 

13 December 8, 2006, known as the rule and the Energy 

14 Conservation standards, where we’re at at this point is 

15 that we have -- we’ve gone through the same -- the 

16 Framework Document was published in April 2006. We had 

the Advanced Notice of Proposed Rulemaking July 26th 17 , 

18 2007, and we’ve issued the Technical Support Document, 

the TSD, and we have -- the NOPR was issued on the 12th 19 

of August and published on August 25th 20 . The final rule 

21 is scheduled again end of the year. 

22 The Energy Policy and Conservation Act, EPCA, 

23 has directed the department to consider seven factors 

24 when setting our Energy Conservation standards and 

25 these are the seven factors here. 

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1 We have selected the proposed standard. We 

2 considered five trial standard levels and we began with 

3 the most efficient level of TSL-5 which is also known 

4 as the max tack, and we worked on it to a level where 

5 the benefits and potential standards outweigh the 

6 burdens. 

7 We tentatively concluded that TSL-5 is not 

8 economically justified because of the energy savings 

9 commercial consumer average LCC savings and emission 

10 reductions would not outweigh the costs, the national 

11 MPV decreases and loss in the IMPV. 

12 So DOE’s proposing at this moment in time 

13 TSL-4, which represents the maximum improvement that -- 

14 in energy efficiency that is feasible and economical, 

15 economically justified. I’m sorry. 

16 We request comments also at this time whether 

17 it should -- if we should adopt TSL-5 or some other mix 

18 of efficiency levels of the equipment classes, and the 

19 following tables is the Proposed Amended Energy 

20 Conservation Standard TSL-4. I’ll go through them 

21 rather fast here, but they will be discussed further 

22 down in the presentation. 

23 Okay. I’m going to skip this slide. 

24 Basically, the Summary of Issues that we seek comment 

25 today are data or information on predicted LED costs 

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1 reductions based on such projections, base case 

2 efficiency trends, determining operating temperature 

3 ranges for equipment classes, use of offset factors and 

4 methodology used to calculate them, extending the 

5 results for the engineering analysis for the -- to the 

6 23 secondary equipment classes, determining appropriate 

7 standard levels for hybrid classes and wedges and 

8 consideration of TSL-5, whether its benefits would 

9 outweigh the burdens. 

10 At this point, I’m going to hand this back to 

11 Mr. Brookman. 

12 Comments from Participants

13 MR. BROOKMAN: Thank you. So this will be an 

14 opportunity for any of you to make comments, brief 

15 summary remarks about your key concerns. 

16 Did you hear from anybody in advance that 

17 they wanted to speak at this time? 

18 MR. LLENZA: No. 

19 MR. BROOKMAN: Okay. 

20 MR. LLENZA: We didn’t get any comments. 

21 MR. BROOKMAN: So this will be more free form 

22 than normal. 

23 MR. LLENZA: Yes. 

24 MR. BROOKMAN: Opening remarks from anybody 

25 that wishes to do so. Yes, please, Larry. 

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1 MR. HOWINGTON: I had -- Larry Howington with 

2 Hill Phoenix. I had three points that I wanted to 

3 cover. I’ll try to cover those as briefly as I can. 

4 One has to do with the operating ranges or 

5 thresholds for the rating temperatures, and in the 

6 proposed standard, the operating range for a low 

7 temperature goes to minus four degrees and the 

8 operating range for ice cream goes from minus five and 

9 below. The rating temperature for ice cream is minus 

10 15. 

11 We originally some time ago asked that the 

12 rating temperature for ice cream cases be changed from 

13 minus five to minus 15 because folks in our industry 

14 make cases that require a different construction that 

15 uses more energy and has to run at a colder temperature 

16 for a number of cases that are used for ice cream that 

17 are different than the typical cases that are used in a 

18 grocery store for display of ice cream, that reach into 

19 our cases is really what I’m talking about. 

20 The cases that we make for grocery stores in 

21 general and this is, I think, true for the industry, 

22 also, the same case, same construction operates at zero 

23 down to minus 10 or so with no change in construction, 

24 simply changing the set point on the product. 

25 Cases with different construction are 

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1 required, as you know, to go to the minus 15 

2 temperature and below; that is, additional anti3 condensate heat and other factors built in to prevent 

4 condensation and to hold the product at that 

5 temperature. 

6 What I believe needs to be done is the 

7 operating range simply needs to be changed from minus 

8 four up to 32 degrees for the low temp to minus 14 up 

9 to 32 degrees for the low temp freezer and then the ice 

10 cream freezer would be minus 15 and below for the 

11 operating range. No change in threshold, just the 

12 operating range. 

13 What it would -- if it didn’t, it would force 

14 us for ice cream application to rate a low temperature 

15 case at the minus 15 rating point when it’s really not 

16 capable of running at the minus 15, but it’s normally 

17 used in the minus five and minus 10 and that’s the 

18 point. 

19 MR. BROOKMAN: Okay. 

20 MR. HOWINGTON: And then equipment not 

21 capable of operating at rating temperatures, what we 

22 would call special application cases, and typically 

23 this is a case that is used for frozen meat 

24 applications most often, and they will run in the minus 

25 -- excuse me -- the plus 10 to plus 20 product 

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1 temperature range. 

2 Usually they are a merchandiser that’s used 

3 Thanksgiving, Christmas, that type of thing. They put 

4 turkeys and hams and those kinds of things. It’s not 

5 required to run at zero degrees for frozen. So it 

6 really can’t be rated at zero. 

7 We would like to propose that we use the zero 

8 degree rating energy limit and rate it at the lowest 

9 temperature at which it is capable of operating against 

10 that energy limit. As long as it uses less energy than 

11 that, it would be acceptable. 

12 The problem is if we actually adapt it to run 

13 at zero degrees, it will use more energy and the irony 

14 would be is we would have to change the product used 

15 for energy in order to meet the rating. So that’s kind 

16 of the conundrum we’re stuck in there. 

17 And then the third point has to do with the 

18 wedge-type cases. Most of the wedges that we make are 

19 used to fill in between line-ups of straight cases in a 

20 corner. As a product, they are not a stand-alone 

21 display merchandiser. They require straight cases on 

22 either side in order to operate. 

23 So -- and for that reason, they were excluded 

24 from HRI or ARI, ANSI Standard 1200, so they’re not 

25 included in that standard, because traditionally it’s 

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1 always been a problem to have a rating standard for 

2 them because they required the other cases in order to 

3 operate. 

4 So based on that, we would like those just 

5 excluded from the certification. They’re a fill-in 

6 merchandiser. A few are used in a typical store. Most 

7 -- a majority of the stores don’t use them because they 

8 are much more expensive per linear foot than a standard 

9 case and for that reason, most stores don’t use them. 

10 Some stores do, but when they do, they use very few 

11 within an entire store, and for per linear feet, they 

12 probably only represent a few linear feet out of the 

13 several hundred linear feet of merchandising in the 

14 store. 

15 Those are the three points that I have. 

16 MR. BROOKMAN: Okay. Thank you. Thank you. 

17 Other comments here at the outset? Issues and 

18 concerns? Yes, please, and if you’d say your name, 

19 please, for the record. 

20 MR. GRASSMUCK: Yeah. Mike Grassmuck with 

21 Hussman. I would just like to make a few more points 

22 like Larry brought up. 

23 First on the operating ranges, we used the 

24 term “ice cream,” and I’m a little concerned that we 

25 might get confusion actually using a product definition 

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1 in setting the temperature ranges. 

2 As Larry started to point out, in the remote 

3 case business, we build a single cabinet that can be 

4 operated, typically operated at two temperatures. One 

5 is published for frozen food and the other is published 

6 for ice cream, and the exact same case only operating 

7 at a different evaporator temperature. 

8 We came back and specifically requested a 

9 minus 15 ice cream temp application for the folks 

10 making self-contained equipment because in that 

11 particular market, they like to run it harder and they 

12 referred to it as having rock-hard ice cream, if you 

13 will. So just using the term “ice cream” might cause 

14 some confusion down the road. 

15 And the other point, I’d like to talk a 

16 little bit more about wedges as well. We have inside 

17 and outside wedges. The thing about an inside wedge is 

18 many of them have a TDA that approaches zero because 

19 they come to a point. So it makes it extremely 

20 difficult to try to set an energy standard for 

21 something that has zero in the denominator. 

22 Thank you. 

23 MR. BROOKMAN: Thank you. Thank you. Yes, 

24 please. Your name, please. Bruce? 

25 MR. HIERLMEIER: Bruce Hierlmeier, Zero Zone. 

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1 I have two areas and maybe we’ll get to it as we go 

2 through the analysis. 

3 First, in Standard 72 and 1200, those aren’t 

4 written to include all the types of equipment that are 

5 available in the marketplace. So how you’re going to 

6 address that or how you’d test to something like that 

7 when there’s actually not a standard available to test 

8 the equipment to. 

9 The other area of concern is that not all of 

10 our customers use air conditioned stores, so all the 

11 standards are applying for a well air conditioned store 

12 and the equipment will perform properly. When you move 

13 to a non-air conditioned environment, typically you 

14 only need more anti-condensate beat to prevent water 

15 from running on the floor and a lot of those customers 

16 in their facilities are unlikely to upgrade their air 

17 conditioning system so they can buy new pieces of 

18 equipment. So there probably will be a performance gap 

19 there with water on the floor and slip and falls. 

20 So if the DOE had any plans to work in that 

21 type of an environment to provide equipment that would 

22 operate in that type of environment. 

23 MR. BROOKMAN: Okay. Thank you. Yes, 

24 please, and your name for the record. 

25 MR. NESHAN: Yes, Massoud Neshan with 

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1 Southern Store Fixtures. A couple of comments. 

2 One is the ice cream versus frozen food. 

3 Their applications were actually frozen juice is 

4 displayed in ice cream-type cases. The temperature 

5 requirements are such, depending on the sugar content 

6 and all that, frozen juice is displayed in ice cream 

7 case. So one has to distinguish between those two. So 

8 it needs to be very careful about identifying case of 

9 frozen food versus an ice cream. So it really is a 

10 temperature application than the type of product is 

11 displayed in the case. 

12 Number 2. As Bruce indicated, we manufacture 

13 a lot of cases that do go into stores that are not 

14 fully air conditioned. Through the NSF standards, we 

15 have Type 1 and Type 2 display cases. All these 

16 standards -- all the members have been looking at 

17 referring to an energy efficiency requirement. 

18 However, there are two different ambient 

19 conditions, different drywall conditions or room 

20 temperature and relative humidity. So there needs to 

21 be a distinction. If you go to the store that is not 

22 air conditioned or go to convenience stores, the 

23 ambient conditions are not ASHRAE Standard 55 percent 

24 relative humidity. Therefore, they do require higher 

25 energy consumption, higher BTU requirement and higher 

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1 electrical requirement due to anti-condensate heaters 

2 and so on. 

3 There are stores in areas, such as, for 

4 example, Hawaii, it’s almost impossible to get a 55 

5 relative humidity and 75 degree room temperature, even 

6 though it is air conditioned in the stores, but we do 

7 have to supply additional electrical components to 

8 ensure the case performs properly. Therefore, the 

9 energy consumption is going to be higher. 

10 We want to make sure that we do not 

11 manufacture a case that is shipped to the store that 

12 meets the standards and then on the side ship 

13 components to be retrofit in the stores to make it 

14 comply with the requirement in the store and not comply 

15 to the standard requirements. 

16 MR. BROOKMAN: Additional comments here at 

17 the outset? Andrew. 

18 MR. deLASKI: There are a couple remarks that 

19 are general and may come up later in the day, but I 

20 wanted to address right at the beginning. 

21 First is to acknowledge that the department’s 

22 done a very nice job with the analysis in this 

23 rulemaking. I think you deserve credit for having (1) 

24 stuck with a schedule that was imposed on you by 

25 Congress in 2005. Typically, it takes three years to 

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1 do a rulemaking. 

2 Well, the law was passed three and a half 

3 years ago, so here we are close to having a final rule. 

4 So congratulations for sticking within a legal deadline 

5 that was not easy to meet. I think that your objective 

6 of getting a final rule out by December is doable and 

7 one that I expect that you’ll meet. 

8 I also want to congratulate the department on 

9 their proposal today, the proposal for TSL-4 standard 

10 which will deliver significant energy savings. It’s a 

11 solid proposal. 

12 DOE, in the proposal today, did a number of 

13 things which I want to highlight because they address 

14 concerns that we in the advocacy community, the energy 

15 advocacy community, have been raising in several 

16 rulemakings over the years and in a way that shows that 

17 you’re listening. We appreciate that. 

18 I want to highlight those issues right now at 

19 the outset and they make come up today, they may not. 

20 One is that in the level that you chose for the 

21 proposed standard, you proposed a standard where DOE 

22 found the maximum net present value using a seven 

23 percent discount rate. 

24 We will have some discussion. We may 

25 disagree with the criteria that you used. For 

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1 instance, we often have advocated using a three percent 

2 discount rate as being the right discount rate and the 

3 societal discount rate. We will have discussion later 

4 on today about LED lights and how that should fit into 

5 the analysis. We’ll have a discussion about how the 

6 value of carbon should be brought into the analysis. 

7 Each of these things, I think, will point us 

8 towards the TSL-5 as being the right standard level for 

9 the final outcome of this rulemaking, but what I want 

10 to emphasize in my opening remarks here is the 

11 department chose in the proposal a standard level which 

12 followed -- which attempts to follow the statutory 

13 notion of the maximum level that’s cost effective 

14 rather than, as we sometimes have seen in the past 

15 rulemakings, a gravitation to minimum LCC, okay, and we 

16 have emphasized over the years the law says DOE must 

17 set the standard at the lowest maximum level that meets 

18 the criteria of being economically justified and 

19 technically feasible, maximum energy savings, rather 

20 than maximum dollar savings. 

21 The department, thank you, seems you’ve heard 

22 that point by looking at the levels which are cost 

23 effective. This is important. My colleague, Harvey 

24 Sachs, has often raised the point that we need to be 

25 careful about using LCC as a straitjacket for analysis 

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1 and he may comment on that today, but I think it’s 

2 important that you’ve shown some flexibility here and 

3 looked at how do we maximize energy savings rather than 

4 maximize dollars savings. 

5 I also want to recognize two other things 

6 where we’ve seen some progress in the department. We’d 

7 like to see some more progress, but I want to recognize 

8 the progress that we’ve seen. 

9 In two final rules issued last year, we saw 

10 the department apply discount rates to pollution, 

11 discount rates to carbon dioxide emissions, to NOX, to 

12 mercury, to sulfur dioxide. The notion that you can 

13 somehow take a financial factor of a discount rate and 

14 discount pollution, that that was somehow a -- and the 

15 department has stopped that practice. Thank you. 

16 You’ve heard us, that applying discount rates to 

17 physical quantities is not appropriate. You’ve heard 

18 us. We appreciate that. 

19 You’re still applying discount rates to 

20 quads. That I don’t get. That’s a mistake. It’s 

21 wrong. You can’t apply a financial discount rate to a 

22 physical quantity. The department recognizes that a 

23 discount rate is a financial instrument and applying 

24 discount rates to quads isn’t appropriate. You stopped 

25 it on pollution. We urge you to stop applying those 

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1 discount rates to physical quantities of quads. 

2 The department also -- one other area I want 

3 to recognize that will also come up later today is 

4 applying -- is in the monetization of carbon emissions. 

5 In the last couple of proposed rules that 

6 have come up, DOE for the first time has begun to 

7 address this issue repeatedly in rulemakings over the 

8 years. We think more work needed to be done, but we 

9 want to acknowledge the progress that’s being made in 

10 coming up with some initial estimates of ranges of 

11 impacts. 

12 We want to dispute that the low range can 

13 possibly be zero. We think that’s incorrect, but 

14 having these estimates in the analysis, I think, is a 

15 positive step forward. 

16 Most importantly in the rule today, DOE has, 

17 in your opening remarks here from Charles and in the 

18 ANOPR, has opened the door to TSL-5. You proposed a 

19 level and you’ve acknowledged that you’ve made a 

20 mistake in the analysis. Essentially, you said, look, 

21 we just used today’s value. We used 2007 prices for 

22 LEDs. No one thinks that in 2012, the prices for LEDs 

23 are going to be the same as 2007. 

24 I think you’ve acknowledged, you’ve opened 

25 the door to a TSL-5, and I think that’s a very 

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1 important point, enabling the department to move 

2 forward with the final rule that considers strong 

3 standard levels. 

4 The difference between TSL-4 and TSL-5 is 

5 important. It’s big. Fifty percent more savings with 

6 TSL-5 than TSL-4. 7.4 quads, over 300 megawatts peak 

7 demand reduction for the 20 megatons of carbon dioxide 

8 global warming emission reductions. That’s a big 

9 difference on the savings side of the equation. So we 

10 appreciate the fact that you’ve opened the door to TSL11 5 and are entertaining comments that will help us get 

12 to a strong standard level. 

13 MR. BROOKMAN: Okay. Thank you. Additional 

14 comments here at the outset? 

15 (No response.) 

16 MR. BROOKMAN: Okay. So I see -- thank you 

17 for all those comments. 

18 Let’s then proceed with the first 

19 presentation and I think most of you are familiar with 

20 how we generally do this, which is that we have lead 

21 presenters and they present a lot of information. You 

22 in your packets have the complete slide package here 

23 and at certain break points in the presentation, 

24 there’s opportunity for question and comment and 

25 elaboration. 

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1 So Matt. 

2 Engineering Analysis

3 MR. MILLARD: Yes. Okay. Good morning. My 

4 name’s Matt Millard. 

5 So as we move on with the NOPR Analysis from 

6 the ANOPR, the first thing that we do is revise our 

7 ANOPR Analysis based on all the comments that we’ve 

8 received from stakeholders and as the first part of 

9 that, I will be talking about the Engineering Analysis. 

10 The purpose of the Engineering Analysis is to 

11 characterize the cost-efficiency relationships for 

12 equipment currently on the market for higher-efficiency 

13 equipment and we will determine a baseline unit and 

14 then look at various design options that will get us 

15 higher efficiencies. 

16 For the Engineering Analysis, DOE prioritized 

17 the equipment classes based on the highest shipment 

18 volumes. For the industry data that we received, that 

19 broke -- we looked at equipment with 100 shipments or 

20 more and that ended up being 14 equipment classes and 

21 after talking to the manufacturers, we found that 

22 there’s actually an additional equipment class that had 

23 high shipment volumes that we should analyze which was 

24 the vertical open remote-condensing low-temperature 

25 equipment class. 

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1 For the Engineering Analysis, we used the 

2 design option approach and, as I said, that involved 15 

3 shipment -- 15 equipment classes and we also received 

4 four cost-efficiency curves from the industry which we 

5 used to verify our curves. 

6 So the first issue is, as was brought up 

7 earlier, the operating temperature ranges. For medium 

8 temperature, it would be at or above 32 degrees 

9 Fahrenheit. For low temperature, between 32 degrees 

10 Fahrenheit and five degrees -- minus five degrees 

11 Fahrenheit, and for ice cream temperature, less than or 

12 equal to minus five degrees Fahrenheit. 

13 MR. BROOKMAN: So we’ve already heard some 

14 comment on this. Anybody that wishes to go further 

15 with their comments, we can do that now. 

16 Karim Amrane. 

17 MR. AMRANE: Karim Amrane, AHRI. I guess I 

18 want to understand from DOE what was the logic behind 

19 picking the minus five degrees for ice cream 

20 temperature and the rating temperature. 

21 MR. MILLARD: Well, I can respond to that. 

22 We felt that the temperature descriptions weren’t 

23 specific enough and there was some variability. There 

24 was some uncertainty as far as what would actually fall 

25 into the various temperature ranges -- the temperature 

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1 descriptions. 

2 So temperature ranges were developed and then 

3 those associate with the various rating temperatures in 

4 the test procedure. 

5 MR. BROOKMAN: Aris? 

6 MR. MARANTAN: Aris Marantan, Navigant 

7 Consulting. Specifically, the ice cream temperature 

8 operating range was selected based on the definition of 

9 an ice cream freezer that was included in the test 

procedure final rule, December 8th 10 , 2007, I believe. 

11 It’s on the test procedure final rule. 

12 In that final rule, DOE included a definition 

13 of ice cream freezer as operating at minus five or 

14 below and so that’s how the range for this rulemaking 

15 was chosen. 

16 MR. BROOKMAN: Karim, does that answer it for 

17 you? 

18 MR. AMRANE: I guess, yes. 

19 MR. BROOKMAN: Okay. Additional questions at 

20 this point or comments on the operating temperature 

21 ranges you see there in Slide 14? Yes, Harvey Sachs. 

22 MR. SACHS: Harvey Sachs, ACEEE. If I move 

23 back one slide to the Purpose and look at Bullet 1, 

24 Characterize Manufacturer Cost Efficiency 

25 Relationships, when is the appropriate time to ask 

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1 questions about that particular bullet? 

2 MR. MILLARD: You can ask questions now. 

3 That’d be fine. 

4 MR. SACHS: I hate the thought of playing bad 

5 cop and Andrew’s good cop, and I feel a little bit like 

6 a broken record because this has come up more than once 

7 or twice in this context, but I’m still very puzzled 

8 that each time the department begins with a snapshot 

9 analysis, the engineering options which are available 

10 on a given date, Mike and I’ve had discussions about 

11 the increasing sophistication of these analyses and 

12 they’re beautifully done, but somehow I keep going back 

13 to the historical record of prices and the response of 

14 prices to efficiency regulations and find no support. 

15 The historical record is that the redesigns 

16 to meet new efficiency standards, we’re in unchartered 

17 territory with this category, have almost unvariably 

18 led to substantial reductions in cost relative to the 

19 forecasts in the DOE analysis, that it should be clear 

20 by now that the use of a still camera instead of the 

21 large knowledge base manufacturing processes and 

22 declining costs may be a useful indicator but it’s 

23 hardly definitive and yet each time I ask DOE to review 

24 its own record, I’m met with yet another assumption 

25 that the snapshot of the incremental costs of adding 

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1 features, done without any concern of what happens when 

2 you re-engineer your manufacturing processes, leads to 

3 substantial increases in costs. 

4 It doesn’t look like that’s the case in the 

5 record. Again, this is a different class of product, 

6 many of which have very small shipment volumes. I 

7 don’t claim to understand the commonalities among sizes 

8 and among product classes and the piece parts that are 

9 put together for a given product, but I’m frankly just 

10 very depressed that the department sticks to a single 

11 narrow line of analysis and ignores the historical 

12 record. 

13 Thank you. 

14 MR. BROOKMAN: Karim? 

15 MR. AMRANE: Karim Amrane, AHRI. I guess I 

16 have to disagree with you on this point. I guess if 

17 you just look back at what happened the last rulemaking 

18 on central air conditioners, you find out that it was 

19 the opposite, that DOE and the industry underestimated 

20 the incremental costs, significantly underestimated the 

21 incremental costs. 

22 I mean, we’ve seen, and I think everybody has 

23 seen it as well, that the cost of air conditioners 

24 today are significantly more expensive than the $230 

25 that DOE estimated to be incremental costs compared to 

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1 a 10 CU unit. 

2 I mean, we are talking about a $700 to $800 

3 incremental cost today compared to the $230. So I 

4 guess it goes both ways. 

5 MR. SACHS: Excuse me. This is Harvey Sachs, 

6 and our comments on the CAC proceeding demonstrated, I 

7 thought fairly well, using data from RD that the 

8 observed price increase in baseline units was 46 

9 percent. The department had forecast 48 percent. 

10 During the interval between the NOPR and the 

11 emergence of the products, the adoption of the 

12 effective date of the standard, we had a doubling in 

13 the price of the steel and aluminum that comprised 75 

14 percent of the value of the product, according to DOE, 

15 quadrupling the copper, and once one makes the 

16 adjustments for that, the increase in price is washed 

17 out and, indeed, the table that I introduced at the 

18 hearing strongly suggested that with their redesign of 

19 the products, the manufacturers were able to achieve 

20 substantial economies relative to forecast. 

21 I can’t state that that would be the case for 

22 this product. I can -- this class of products. I can 

23 assert, based on the example brought forward by my 

24 colleague Karim, that the DOE’s analysis and ignoring 

25 history is effective. 

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1 MR. BROOKMAN: Andrew? 

2 MR. deLASKI: Let me make a suggestion. 

3 There’s a really nice notion of tunneling through the 

4 cost barrier and that’s partly what Harvey’s talking 

5 about. Sometimes when you add up all the different 

6 ways of making it more efficient without losing a lot 

7 of costs, but when you redesign the process, you often 

8 find that you tunnel through that cost barrier and that 

9 costs were lower than you would have expected. 

10 What we’ve suggested previously is that -- 

11 and this is a cross-proceeding and we need to get back 

12 on this proceeding, but a cross-proceeding, that some 

13 retrospective analysis by the department or by a third 

14 party of the department’s record on how it’s done 

15 estimating costs would be useful for helping the 

16 department to true up, to evaluate how good is this 

17 model working at predicting costs, addressing both 

18 Karim’s point and Harvey’s point, how do we disentangle 

19 things happening in the market anyway. 

20 If the department could do that type of 

21 analysis and find time within its busy schedule and its 

22 limited budget, I think it would be a valuable thing 

23 that would help inform a lot of rulemakings going 

24 forward. How close has this been? 

25 We’ve done a bunch of rules now that have 

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1 gone into effect over the last few years. We really 

2 should have an opportunity to go back and say, well, 

3 how good are these estimates? 

4 MR. BROOKMAN: As is always the case, I’m 

5 certain the department really welcomes your analyses, 

6 your retrospective analyses, your price points, your 

7 looking at what is that there that’s easily accessible 

8 so that they’ve got information that you wish to have 

9 them see. 

10 Gary. 

11 MR. SACHS: Harvey Sachs again. I’m aware of 

12 at least three peer-reviewed papers that will support 

13 my point. 

14 MR. BROOKMAN: Okay. Thank you. Other 

15 comments here on the purpose statement and in fact 

16 moving on as well from Slide 13 to Slide 14, Equipment 

17 Class Operating Temperature Ranges? 

18 (No response.) 

19 MR. BROOKMAN: Okay. Thank you. 

20 MR. MILLARD: Okay. Our next issue deals 

21 with offset factors, based on some comments that were 

22 brought up at the ANOPR meeting. 

23 We realize that the standards that we were 

24 setting intersecting the origin of the calculated daily 

25 energy consumption versus total display area were too 

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1 restrictive towards smaller units and so looking at our 

2 various design options and looking at the equipment, we 

3 developed offset factors to bring that intersect up 

4 higher, so that we could account for certain end 

5 effects dealing with conduction through the ends of the 

6 equipment and various lighting loads that are going to 

7 exist, even with very small equipment and so we’d like 

8 some input on whether anybody has comments on our 

9 offset factors or the methodology used to calculate 

10 them. 

11 MR. BROOKMAN: Harvey Sachs. 

12 MR. SACHS: Harvey Sachs. Please remind us 

13 if you showed any kind of calibration of these offset 

14 factors in the TSD against equipment available today. 

15 The concept certainly looks quite appropriate. 

16 MR. MILLARD: In Chapter 5 of the TSD, it 

17 discusses our methodology used for calculating the 

18 various offset factors for all equipment classes. 

19 MR. SACHS: Did you calculate -- did you 

20 demonstrate the validity against baseline equipment by 

21 size in the market today? 

22 MR. BROOKMAN: Aris Marantan. 

23 MR. MARANTAN: Yes, Aris Marantan, Navigant. 

24 To answer your question, no, we did not, but what we 

25 used to create the estimate was the Engineering 

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1 Analysis from the ANOPR portion of the rulemaking and 

2 the values that are in the Engineering Analysis were 

3 also updated for the NOPR. So we used the Engineering 

4 Analysis tool. 

5 MR. SACHS: Thank you. 

6 MR. BROOKMAN: Thank you. Other comments 

7 with respect to offset factors and the methodology? 

8 (No response.) 

9 MR. MILLARD: Okay. Our next issue, as I 

10 mentioned earlier, we analyzed 15 of the 38 equipment 

11 classes that we’re setting standards for and as a 

12 result, we had to develop a methodology to extend the 

13 standards for those 15 classes to the other 23 and so 

14 in looking -- using the Engineering Analysis, DOE 

15 developed various extension factors, based on 

16 similarities between equipment classes, and we’d like 

17 some feedback on our methodology used and the values 

18 that we’ve used for those extension factors. 

19 MR. BROOKMAN: So you can seethe detail there 

20 in Slide 16. Questions, comments? Yes, please. Your 

21 name again. 

22 MR. NESHAN: Massoud Neshan, Southern State 

23 Fixtures. The question here is, well, what type of 

24 environment these numbers are applicable to? These are 

25 Type 1 case or Type 2 display cases, as defined by the 

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1 industry? 

2 MR. BROOKMAN: Aris, please. 

3 MR. MARANTAN: Aris, Navigant. Could you 

4 explain the Type 1 and Type 2? I’m unfamiliar with 

5 that. 

6 MR. NESHAN: I believe it is in NSF and also 

7 ARI Standards that defines the Type 1 being in an 

8 environment that’s 75 degrees ambient, 55 percent 

9 relative humidity. 

10 MR. MARANTAN: Okay. Yes, I can tell you 

11 that the analysis is solely based on the 75/55 

12 condition that’s specified in ARI 1200 and ASHRAE 72. 

13 MR. NESHAN: So basically all the equipment 

14 that’s sold to convenience stores and semi-air 

15 conditioned stores, this would not be applicable then? 

16 MR. MARANTAN: Well, Aris again, I can tell 

17 you that for the Engineering Analysis where we’re 

18 evaluating the cost of design options, we’re solely 

19 looking at the conditions specified in the test 

20 procedure. However, there’s a separate analysis that 

21 we can get into that describes the performance of the 

22 equipment in real world conditions. It’s the Energy 

23 Use Characterization Analysis. 

24 I believe Dave Winiarski can describe that in 

25 more detail and answer your question. 

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1 MR. BROOKMAN: Do you want further 

2 elaboration on this? 

3 MR. NESHAN: If I may just say, it’s very 

4 important because the other factor of 2.51, for 

5 example, the very first one for self-contained, usually 

6 self-containeds are used in a more hostile environment. 

7 Consequently, those factors become extremely important. 

8 So I want to know how you derive that number 

9 because that would have a major impact on the overall 

10 efficiency and the standard of what this case has to 

11 comply with. 

12 MR. BROOKMAN: So will we cover this in 

13 detail later? 

14 MR. MARANTAN: We will, but I can answer the 

15 2.5 question. 

16 MR. BROOKMAN: Why don’t you answer that now? 

17 Then we’ll cover it later with Dave. Go ahead. 

18 MR. MARANTAN: Okay. 

19 MR. BROOKMAN: Aris. 

20 MR. MARANTAN: So just looking at the first 

21 bullet here on this slide, it’s a comparison between 

22 open remote-condensing equipment and open self23 contained equipment. The factor there, 2.51, is what 

24 we’re estimating as a multiplier on the remote25 condensing equipment to get the self-contained energy 

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1 use. 

2 The 2.51, you know, that is a large number. 

3 We realize that. That’s based on the fact that a lot 

4 of self-contained units have to have a condensate pan 

5 heater to address defrost melt water. So that is a 

6 large portion of a self-contained energy consumption. 

7 In addition, that number is even greater when 

8 you consider that these cases are open. You know, it’s 

9 not just remote-condensing versus self-contained. It’s 

10 open remote-condensing versus open self-contained. So 

11 you have a lot of, you know, infiltration into the case 

12 and energy use is just exacerbated. 

13 So 2.51 is a very large number. It has 

14 mostly to do with the condensate pan heater. 

15 MR. BROOKMAN: Follow-on, please. 

16 MR. NESHAN: I just want to add, I understand 

17 that, but I want to say that number is undersized, is 

18 not large enough -- 

19 MR. MARANTAN: No, not large enough. 

20 MR. NESHAN: -- because you’re working in 

21 more humid environment. 

22 MR. MARANTAN: Well, keep in mind this is for 

23 the steady state conditions specified in the test 

24 procedure, the ARI 1200 and ASHRAE 70. 

25 MR. NESHAN: But the ARI Standard also says 

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1 there’s Type 2 display cases which means higher 

2 ambient, higher humidity, which adds to more condensate 

3 water, which adds more to btu carbon, and compressor 

4 run times is longer, on and on and on. So that number 

5 might not be large enough. 

6 MR. BROOKMAN: And might you suggest how -- 

7 what it should be? 

8 MR. NESHAN: No, I do not know. I don’t know 

9 how this was calculated. We have actual numbers for 

10 self-contained case. 

11 MR. BROOKMAN: Mike Rivest. 

12 MR. RIVEST: I don’t know. Frankly, I don’t 

13 know the details of the analysis. So let me ask a 

14 question that might be helpful. 

15 When you perform the test on your Type 2 

16 equipment, do you perform the testing for the rating 

17 under the same conditions as you would the Type 1 

18 equipment? 

19 MR. NESHAN: Oh, no, no, no. 

20 MR. RIVEST: No? 

21 MR. NESHAN: That’s a whole -- the difference 

22 is how you test the case. 

23 MR. BROOKMAN: Please use the microphone 

24 again. I’m sorry. Please do. 

25 MR. NESHAN: The major difference is the 

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1 ambient conditions. 

2 MR. RIVEST: Right. But I’m trying -- 

3 MR. NESHAN: Which is how the case operates. 

4 MR. RIVEST: So I’m trying to separate out, 

5 Karim, the -- 

6 MR. BROOKMAN: Karim Amrane. 

7 MR. AMRANE: I guess to clarify the issue, 

8 the ARI 1200 Standard, there is only the Type 1 

9 condition, so it’s not part of the test procedure. I 

10 don’t know how DOE is going to address that, but I 

11 think that it went through the standard and this is 

12 what the standard says. 

13 MR. NESHAN: I know, but the standard, 

14 however, doesn’t apply to the Type 2 equipment that is 

15 being manufactured and being used today. 

16 MR. BROOKMAN: I see Dave Winiarski. Please. 

17 Find a microphone up here, Dave. 

18 MR. WINIARSKI: Hi. Dave Winiarski, Pacific 

19 Northwest Laboratory. I think I’m trying to follow up 

20 on this, if I’m understanding, maybe to clarify the 

21 issue because it’s been brought up early on. 

22 The analysis, as was mentioned, the analysis 

23 here all reflects energy use based on the ARI 1200 test 

24 which has ambient conditions that are fixed and they’re 

25 for a Type 1 case, but a Type 2 case could be, I think, 

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1 tested under those same conditions. 

2 Now whether it is or is not, that I don’t 

3 know, but I think it could be tested under those 

4 conditions and that’s what DOE has as its test 

5 procedure. That may not tell a manufacturer what the 

6 performance would be in a worse set of ambient 

7 conditions. 

8 So given that or given that assumption, 

9 that’s where the analysis went. I guess one of the 

10 things I would ask the manufacturers of Type 2 cases is 

11 whether or not the design of those cases is such that 

12 when tested under the ARI 1200, they would use more 

13 energy. 

14 I heard a little bit earlier, I think from 

15 Bruce, regarding the anti-condensate heaters and maybe 

16 if those heaters are not controlled or something, 

17 they’re on full time, they would result in a higher 

18 energy use and maybe there are other things, but I 

19 think some specifics as to why the Type 2 case might 

20 use more energy under -- when tested under the ARI 

21 rating condition is probably useful information to be 

22 submitted to the department. 

23 MR. BROOKMAN: Ron Lewis? 

24 MR. LEWIS: Yeah. I’d just like 

25 clarification. I think you would state that the Type 2 

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1 was in the ARI Standard and I thought I heard somebody 

2 else saying it’s not. So I want to clarify. I think 

3 we got two different answers. 

4 MR. BROOKMAN: Well, let’s go back to Neshan 

5 first. Is it Neshan? 

6 MR. NESHAN: Yes, it is. 

7 MR. BROOKMAN: Please. 

8 MR. NESHAN: I do not believe it’s in 

9 Standard 1200, but this was originally discussed and it 

10 is in the FD and the NSF requirement, that we design 

11 our equipment to that -- those two standards, Type 1 

12 and Type 2. 

13 MR. BROOKMAN: Okay. Larry. 

14 MR. HOWINGTON: This is Larry Howington, Hill 

15 Phoenix. To clarify, Type 1 and Type 2 equipment is 

16 defined in the NSF, National Standards Foundation, 

17 Standard 7, ANSI Standard 7, and it defines a different 

18 temperature and I believe humidity operating 

19 environment and the reason for that was, within the 

20 sanitation standard, because it gets it more into a 

21 food prep kind of area, but really any area that is not 

22 a standard grocery store-type environment which was 

23 what the standard environment is what ARI Standard 1200 

24 addresses and it does not address Type 2. 

25 So if you want to see the definition and you 

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1 can go to the NSF ANSI Standard 7. 

2 MR. BROOKMAN: Yes, please. 

3 MR. HON: Charlie Hon, TRUE Manufacturing. A 

4 quick one for you because basically we’re trying to 

5 compare two different pieces. Any unit that’s built to 

6 an NSF Class 2 is designed with much more capabilities 

7 and much more capacity, heat rejection capacity than a 

8 unit built for Class 1. 

9 That means it has an efficiency window. 

10 Unfortunately, the efficiency windows of Class 2 are 

11 much more severe condition. They’re designed to have 

12 higher heat rejection. They’re not designed for the 

13 lower temperatures. 

14 Also, the heater elements are much more, 

15 shall we say, beefed up, so they’re much stronger. 

16 They aren’t usually controlled by volume in the pan, 

17 but they have a heat-up and cool-down cycle which 

18 consumes more power as well. 

19 So we’re trying to compare apples and 

20 oranges. It’s like me driving a Viper down the street 

21 and claiming I’m going to get good mileage. It has far 

22 too much power for the standard street if it’s got a 70 

23 mile-an-hour speed limit on it. The same with Class 2 

24 equipment. It has far too much power potential because 

25 it’s planned for offroad conditions, outside kitchens 

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1 which are 80-90 degrees with high humidities because of 

2 all the steaming and all the frying going on in them, 

3 and it’s designed differently. It is a problematic 

4 issue on that level. 

5 MR. BROOKMAN: Yes, Dave Winiarski. 

6 MR. WINIARSKI: Two questions, I guess. So 

7 for clarity, in a certification program, could you test 

8 -- recognizing there may be some differences in energy 

9 use, could you/would you test the Type 2 equipment 

10 under the ARI 1200 rating conditions? 

11 MR. HON: It could be done. Charlie Hon, 

12 TRUE Manufacturing. It can be done, but it will give 

13 you a very distorted picture because it’s not truly 

14 picking up the conditions that they work under. 

15 MR. WINIARSKI: So it would give you a 

16 distorted picture in that the energy use that you would 

17 get when testing under ARI 1200 would be less than that 

18 in the actual operating conditions? 

19 MR. HON: That is a correct statement, also, 

20 but -- this is Charlie Hon again. But it would also be 

21 much worse than a piece designed for that test 

22 condition. 

23 MR. WINIARSKI: Okay. I guess the other 

24 question I would ask would be, you know, if you had to 

25 -- I understand that this is an issue and it’s 

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1 important to that particular market, but if you had to 

2 state sort of what fraction of the markets maybe 

3 separately for remote-condenser equipment and for self4 contained equipment would be Type 2 products, if there 

5 is a way you could estimate that? 

6 MR. BROOKMAN: Charlie? 

7 MR. HON: I’m trying to think of our 

8 applications for Type 2 equipment. Unfortunately, we 

9 have two different classifications. Number 1 is the 

10 market that it’s being sold into. Number 2 is the 

11 locations it’s being sold into. 

12 We sell a lot of equipment to coastal 

13 regions. It has to be Class 2 to meet the humidity 

14 requirements. A lot of equipment at that level is sold 

15 into the travel vacation-type markets where the 

16 conditions are very, very stringent. The products 

17 quite often are milk products. So we have to be very 

18 cognizant of safety and then’s when it gets very, very 

19 difficult because those pieces of equipment have more 

20 than double the btu capacity of a standard piece of 

21 equipment, plus they have a very large heater potential 

22 in them as well and that gets very questionable because 

23 I have yet to see a true definition of how we are to 

24 test this with all heaters on. 

25 Some people have all heaters -- you know, 

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1 they run all the time. Other people have controls on 

2 their heaters. That’s a point that I was going to 

3 bring up a little later because if we run all heaters 

4 on all the time, it becomes an energy hog at all times. 

5 MR. WINIARSKI: Sure. 

6 MR. BROOKMAN: So you have lots of 

7 variability here, depending on both the conditions and 

8 the operators practices? 

9 MR. HON: Yes, and there’s also the issue of 

10 is it allowable to turn certain units off. 

11 MR. BROOKMAN: Harvey Sachs. 

12 MR. SACHS: I guess -- Harvey Sachs, ACEEE. 

13 I would beg the luxury of being able to think aloud and 

14 I certainly am impressed with the potential of this 

15 question of Type 1 versus Type 2 and as I think out 

16 loud, one of the question is whether the shipments of 

17 Type 2 are virtually all self-contained units. 

18 MR. BROOKMAN: Charlie. 

19 MR. HON: I do not get into the others in the 

20 market nearly enough to make that statement. The self21 contained units are something I’m very familiar with. 

22 The remotes at this level, I have very, very limited 

23 knowledge. 

24 MR. BROOKMAN: Neshan. 

25 MR. NESHAN: No. The answer is no, no self-

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1 contained cases are Type 2. 

2 MR. SACHS: Is the preponderance of these 

3 self-contained -- is the preponderance of the Type 2 

4 markets self-contained? 

5 MR. NESHAN: No. 

6 MR. SACHS: There’s a lot of remote condenser 

7 Type 2 equipment? 

8 MR. NESHAN: Absolutely. 

9 MR. SACHS: Harvey Sachs again. My next 

10 question would be whether, given what I’m hearing, it 

11 is feasible to label equipment as certified Type 2 

12 versus certified Type 1, assuming that 1200 is 

13 extended, et. cetera, et. cetera. Is it possible to 

14 consider these as two different classes? 

15 MR. BROOKMAN: I’m looking over at this side 

16 of the room here. Karim. 

17 MR. AMRANE: Frankly, I don’t know what the 

18 plan is within the HRI, Commercial Refrigeration 

19 Section, as to whether they want to extend the standard 

20 to Type 2. I don’t know. Maybe, Larry, you can tackle 

21 that. I don’t know what the -- it has not been 

22 discussed. 

23 MR. SACHS: And again, I’m thinking out loud 

24 because of the time pressures that are on all of us and 

25 I’m not -- Harvey Sachs again. I’m explicitly not 

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1 making a proposal on behalf of the community. 

2 But were we able to separate certification by 

3 Class 1 versus Class 2, then what would happen is that 

4 the allowable applications of what is perhaps 

5 appropriate devolved to building code-type issues, that 

6 a state building code could state Type 1 equipment 

7 shall be required in all air conditioned applications, 

8 Type 2 equipment shall be permissible in convenience 

9 stores. 

10 This recognition of two separate categories 

11 would have that possible benefit and, as has been 

12 alluded to, would allow appropriate energy efficiency 

13 measures to be made for Class 2 equipment, Type 2 

14 equipment, excuse me, in the applications for which 

15 it’s intended. 

16 It seems to me that if the manufacturing 

17 volumes are adequate to support the design and testing 

18 requirements, that this might be an appropriate path. 

19 Again, I’m thinking out loud and looking for reactions. 

20 MR. BROOKMAN: Yeah. Larry, please. 

21 MR. HOWINGTON: Yeah. Larry Howington with 

22 Hill Phoenix. I believe that, in general, and, of 

23 course, anyone will correct me if I misspeak, for NSF 

24 purposes, you’re required to label your equipment as 

25 Type 1 or Type 2, based on how you test it, and also 

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1 the -- I chair the Commercial Refrigerator 

2 Manufacturers Division of HRI, and we would be more 

3 than willing to add Type 2 equipment to the standard. 

4 That would not be a problem and so I would believe then 

5 that if you wanted to have a distinction on Type 1 and 

6 Type 2 equipment, it would be very reasonable to do so 

7 since the equipment is mandated to be labeled as such. 

8 MR. BROOKMAN: Okay. Thank you. Ron Lewis. 

9 MR. LEWIS: Can I just ask for clarification 

10 from what I’ve heard thus far? It sounds like the ARI 

11 1200 and the testing and hence the certification that’s 

12 going on right now is only for the Type 1 or Class 1. 

13 So by default, that’s all that we’re looking 

14 at right now. So it’s a matter of extension. There 

15 should not be confusion. They’re all being tested to 

16 Type 1 testing at this point. So everything’s being 

17 certified as being certified right now to Type 1 only, 

18 is that correct? 

19 MR. HOWINGTON: That’s correct. 

20 MR. BROOKMAN: Larry, thank you. Neshan. 

21 MR. NESHAN: One comment or addition. As was 

22 stated, NSF does require manufacturers to label their 

23 cases as Type 1 or Type 2 and we have to test our 

24 equipment to make sure they comply with the requirement 

25 of Type 1 and Type 2 of NSF 7. 

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1 The test procedure that we use is the same as 

2 Type 1. I mean that is ASHRAE Standard that we use for 

3 testing. It’s just a matter of product temperature 

4 that we are making -- ensuring that the product 

5 temperature is appropriate and meets the NSF 

6 requirements. So that is being done. It’s not true 

7 for ARI because the certification has not started yet. 

8 Under the old ARI or CRMB part of ARI, we do test those 

9 cases to those conditions. 

10 MR. BROOKMAN: Do you want to follow on? 

11 MR. WINIARSKI: Well, yeah. Given that this 

12 is an issue that I don’t think came up in the ANOPR and 

13 so the department really hasn’t prepared its analysis 

14 for this type of issue, I guess I’m asking, you know, 

15 maybe what solutions or stakeholders might have for the 

16 issue. 

17 For instance, should we be looking at trying 

18 to provide offset factors for Type 2 for this 

19 rulemaking? Are we postponing the Type 2 equipment for 

20 now, you know, given some of the issues with the 

21 mandates by Congress? 

22 MR. BROOKMAN: Charlie. 

23 MR. HON: Charlie Hon, TRUE Manufacturing. 

24 We have no database because the equipment has never 

25 been tested under ASHRAE test standard to NSF 

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1 conditions. We have no test base whatsoever to give 

2 you data because that’s a much different condition than 

3 what we’ve provided and stabilization of an open air 

4 curtain unit is very difficult and very costly to test. 

5 Normally, we will stabilize for two to three 

6 days on a glass-doored unit or a solid door unit and 

7 get good stabilization. We quite often end up two 

8 weeks getting stabilized on an air curtain because to 

9 get the conditions where you’re going to get maximum 

10 energy efficiency, you’re not going to risk overflowing 

11 the drain pans. You’ve got to have your heaters 

12 correct. You’ve got to have everything correct. 

13 You’ve got to have your air flow correct. It’s a lot 

14 more complicated test. 

15 So for us to get data would be very time16 consuming and since we have no standard to test 

17 against, we’re sort of up in a quandary at that level. 

18 MR. BROOKMAN: I hear the department asking 

19 what could be done about this. 

20 MR. AMRANE: Karim Amrane, AHRI. I see two 

21 possible options here. I mean either exempt those 

22 products just temporarily until we build up the 

23 database and we know what we’re doing and maybe later 

24 on address those products separately or ask 

25 manufacturers to apply for waivers if they cannot meet 

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1 the requirements. 

2 MR. BROOKMAN: Andrew. 

3 MR. deLASKI: So I have a lot of concern 

4 about exemptions. Exemption, we have to be very 

5 careful about the scope of the standard because then we 

6 have to be concerned about suddenly the huge migration 

7 of the marketplace to the exempt product. Suddenly, we 

8 see equipment designed for that Type 2 showing up in 

9 air conditioned spaces. 

10 I don’t think we’re going to see building 

11 codes adjusted in time to adjust -- that we have a 

12 problem with the market -- a problem that has to be 

13 thought through very carefully, you know. Are we doing 

14 this right, not by any intention but by creating a 

15 market incentive to go around the standard? 

16 So we need to be very careful about that. So 

17 I think Karim’s first path that was suggested is not 

18 one that -- it needs to be approached with extreme 

19 caution. 

20 The waiver exemption is something in existing 

21 law and available to manufacturers at any time and then 

22 I think Dave’s asked the question and I think we’ve 

23 been dancing around this question, which is we just 

24 don’t know to what extent this is truly a problem in 

25 the sense that we don’t know -- in part, it depends on 

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1 what the final standard is. It depends in part on, you 

2 know, just what -- how does this equipment perform 

3 under whatever the final standard the department 

4 selects might be. 

5 MR. BROOKMAN: Ron Lewis. 

6 MR. LEWIS: There’s been a reference a couple 

7 times to the units are presently -- the Type 2 units 

8 are presently being tested to the NSF 7, was it, and 

9 labeled accordingly. 

10 Is that data the test data? ARI does not 

11 have a certification program yet, but is that data 

12 submitted anywhere to show that it qualifies, it’s been 

13 tested to that standard that’s in existence, that test 

14 procedure that’s in existence, and it shows compliance 

15 with the test procedure which you say is the same test 

16 procedure that’s being used in the ARI 1200? You say 

17 it’s the same test procedure, but there’s a different 

18 environmental factor, the temperature and humidity 

19 temperatures. 

20 What -- where is that data, and for you to 

21 put that label on it, is there a test somewhere where 

22 somebody says you need to show that you meet that 

23 criteria presently? 

24 MR. BROOKMAN: Neshan. 

25 MR. NESHAN: It is a requirement when our 

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1 cases are tested, the industry cases are tested. 

2 There’s a certification that’s required and those tests 

3 are witness-tested by those agencies and those are not 

4 submitted to any organization. Those are inhouse data. 

5 We need to comply with the requirement to make sure and 

6 to certify that it works and that’s the end of that. 

7 MR. LEWIS: So let me just follow on that. 

8 If it’s -- your statement that it’s presently being 

9 tested to the same test procedure but with the -- a 

10 specific environmental change in temperature and 

11 humidity? 

12 MR. NESHAN: That’s correct. 

13 MR. LEWIS: So it’s the procedure is 

14 established, the stringency is established, it’s just a 

15 change of the two parameters. So that data you’re 

16 saying in order to comply with the labeling that you 

17 have that data -- already exists because you’ve had to 

18 show that in order to label it as such, is that 

19 correct? 

20 MR. NESHAN: That is correct. 

21 MR. LEWIS: Okay. So the data -- 

22 MR. NESHAN: I cannot speak for the other 

23 manufacturers. 

24 MR. LEWIS: Okay. I’m looking for remedies. 

25 I’m looking for ways -- what is the knowledge base and 

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1 what are our options here? So in looking at how we 

2 could potentially look at these, if there was something 

3 that’s in existence, there’s something -- and you say 

4 it’s been done by third party testing organizations, 

5 but you mentioned it’s inhouse. 

6 MR. NESHAN: They certify. They come in and 

7 witness the test. They certify the procedure and the 

8 result. 

9 MR. LEWIS: Okay. 

10 MR. BROOKMAN: Well, that was unclear. Were 

11 you saying that every time they do these tests, they 

12 test them to the same conditions? 

13 MR. NESHAN: Well, we test it to the Type 2 

14 requirement conditions and we test -- again, the 

15 purpose of the test is to ensure product temperature, 

16 not whether it’s using two kilowatts per hour or five 

17 kilowatts per hour. The intent is to make sure the 

18 case performs at product temperature as well as the 

19 safety, health and safety concerns. 

20 MR. BROOKMAN: Right. Charlie, go ahead. 

21 MR. HON: It’s basically -- there’s two 

22 different things that are happening here, one of which 

23 is that the test conditions are very similar. 

24 Unfortunately, most of us who have been at this for 

25 awhile know how we can run a piece of equipment to get 

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1 the best possible numbers, so we run them on the warm 

2 side of the test standard, and when we run NSF tests, 

3 we run them on the cold end of the standard because you 

4 get better test results for NSF on the cold end because 

5 you have certain safety requirements. They’re more 

6 worried about the temperature of the containers inside 

7 the cooler than the ambient temperatures. So the 

8 numbers would be skewed slightly, probably five to 

9 seven percent. 

10 MR. LEWIS: But there’s a relationship or 

11 something that’s constant. 

12 MR. HON: It’s not constant but there’s a 

13 relationship. You can come up with probably less than 

14 a 10 percent error factor, I think. 

15 MR. BROOKMAN: Dave Winiarski. 

16 MR. WINIARSKI: And for clarity again, I may 

17 just be confused here, but when you run that test, 

18 that’s essentially the ASHRAE 72 test. So people are 

19 taking the same data in terms of refrigerant loads on 

20 the case and power consumption and everything else. 

21 MR. HON: Yes, that is true for remote case. 

22 That is not necessarily true for the commercial -- I 

23 mean, excuse me, it’s true for a self-contained case 

24 but a remote case, that’s not necessarily true because 

25 they don’t do -- do not do all the -- they don’t always 

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1 do all the refrigerant flow characteristics required. 

2 MR. BROOKMAN: Larry. 

3 MR. HOWINGTON: The NSF Standard is a 

4 different standard in sanitation and so it doesn’t 

5 require the energy consumption data to be recorded, 

6 only that you run it at these set points under these 

7 environmental conditions. 

8 MR. WINIARSKI: But it could be recorded. 

9 MR. HOWINGTON: It could be, yes. Some 

10 people may record it and others may not. That’s not 

11 really the purpose of the test. It’s more to show that 

12 you get the product temperature under those 

13 environmental conditions. 

14 MR. WINIARSKI: So I guess my thought here is 

15 whether or not -- Ron is speaking about what data is 

16 available out there and it sounds like there’s a good 

17 possibility that the energy data that would be needed 

18 to sort of run through the ARI 1200 process just simply 

19 may not be available from all manufacturers. 

20 MR. HON: Charlie Hon, TRUE Manufacturing. I 

21 know that -- you know, that’s dependent on who’s 

22 running the test. Some people record it all and some 

23 people don’t. You don’t have to have a log meter on 

24 there for an NSF test. We have standardized testing 

25 procedures so that we know where we’re coming from, but 

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1 I cannot speak for any other manufacturer. 

2 MR. BROOKMAN: Yes, Ron Lewis. 

3 MR. LEWIS: Just trying to explore one other 

4 possibility. If there is a universe of information 

5 that’s out there and there’s a relationship, it’s a 

6 band that you’re testing against. If we could have 

7 some kind of cloth, so that we don’t leave things in a 

8 total void of being accepted or everybody have to come 

9 in for waivers on a piece of equipment, if there was 

10 some kind of tolerance factor that was available for 

11 units that are in this more severe environment, if it 

12 was based on the unit that’s now being certified for 

13 Type 1/Class 1, and there was -- for the same 

14 dimensions, the same size but the more severe 

15 environment, if there was a factor that now could be 

16 used, possibly while we’re collecting data and have 

17 some kind of initiative and action underway to get more 

18 knowledgeable and more precise before the next update 

19 on this. 

20 Is there a possibility that we’ve got enough 

21 knowledge of the equipment right now that we could on 

22 that relational basis that you seem to indicate there’s 

23 enough there to force -- first order of approximation, 

24 so we’re not just saying everybody just -- you’re 

25 exempted but trying to do the best we can with what 

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1 we’ve got, with the fact we’ve got a rulemaking that’s 

2 due by the end of this year. 

3 We don’t have a lot of time to go out and 

4 test and gather information. 

5 MR. HON: I will go back and -- Charlie Hon. 

6 I will go back to our data and see if I can find any 

7 information for you, and who should I submit it to? 

8 MR. LEWIS: The e-mail address in the 

9 comment, if you’d send it there. It becomes part of 

10 the docket. Unless it’s confidential information, then 

11 it has to be marked clearly that way, and we talk to 

12 you about how to handle that. 

13 MR. HON: Okay. We may be able to come up 

14 with some numbers there, the 2.51 factor from our own 

15 data, but that does not include anyone else’s data. 

16 MR. BROOKMAN: What about the other 

17 manufacturers in the room? 

18 MR. HON: I do not see many self-contained 

19 equipment manufacturers in this room, other than 

20 myself. 

21 MR. LEWIS: Neshan brought -- 

22 MR. NESHAN: We have some information. 

23 MR. BROOKMAN: Thank you, Neshan. 

24 MR. NESHAN: We do have also some information 

25 that we can share. 

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1 MR. BROOKMAN: That would be helpful. Thank 

2 you. The submission procedure and for where you send 

3 it is all in this packet. Slide 49. Thank you. 

4 Harvey. 

5 MR. SACHS: Harvey Sachs, ACEEE. On a point 

6 that Andrew’s made to me from the public policy 

7 perspective, it would be of enormous value to have a 

8 sense by equipment category of the fraction of units 

9 that are being NSF-rated Type 2 versus Type 1. 

10 My guess is that the Type 2 units are 

11 concentrated in a relatively small fraction of the 

12 equipment categories, but I have no way of knowing 

13 that, and it may be that this is an issue that can be 

14 handled much more easily in terms of the energy savings 

15 at stake if the industry is able to work together to 

16 aggregate the data to the extent possible while 

17 protecting manufacturer confidentiality. 

18 This is something that AHRI’s predecessors 

19 have done for a number of classes of equipment in the 

20 past. It’s not new ground, but this would be by 

21 category of equipment, including the question of 

22 whether it’s remote condenser or self-contained. 

23 MR. LEWIS: To follow on, -- 

24 MR. BROOKMAN: Ron Lewis. 

25 MR. LEWIS: -- is there any recording that’s 

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1 going on now, like to the Bureau of Census, is there 

2 any reporting that shows what Class 2 or even to NSF, 

3 is there anything that would show any kind of 

4 quantities or shipments that would be a first look at 

5 that? 

6 MR. BROOKMAN: Andrew. 

7 MR. deLASKI: Does the industry today -- 

8 MR. BROOKMAN: So, Charlie, your response to 

9 Ron’s question is? 

10 MR. HON: My response to Ron’s question is 

11 no. 

12 MR. BROOKMAN: Thank you. I saw you shaking 

13 your head. 

14 Andrew deLaski. 

15 MR. deLASKI: Those of you in the industry, 

16 do you have a sense of what that ballpark might be or 

17 range of what portion of the equipment is Type 2 versus 

18 Type 1, either by unit sales or by linear feet? 

19 MR. BROOKMAN: Charlie again. 

20 MR. HON: I only know one of the Ns of that 

21 question as far as the self-contained. I do not wish 

22 to make any opinions on the linear feet of the remotes, 

23 but I would say probably 25 percent of the equipment in 

24 self-contained market is Type 2 equipment. 

25 MR. deLASKI: By unit sales? 

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1 MR. HON: By unit sales, yes. 

2 MR. deLASKI: By linear feet size, it’s 

3 smaller than that probably? 

4 MR. HON: It’s -- that’s -- I don’t want to 

5 -- linear feet is traditionally in the remote system. 

6 MR. BROOKMAN: So since we’re on this 

7 subject, let’s just open it up a little further, if we 

8 could. 

9 Does anybody else have any ideas about how 

10 this kind of data might be obtained, this kind of 

11 distinction separation in shipments, some sort of thing 

12 like that? 

13 Dave Winiarski. 

14 MR. WINIARSKI: I wanted to follow up on 

15 that, and if possible, if you could identify specific 

16 classes of equipment where this might be of concern, 

17 whether it’s a concern with open cases versus closed 

18 cases would be useful as well. 

19 MR. BROOKMAN: Okay. Thank you. Charlie. 

20 MR. HON: Charlie Hon. Unfortunately, they 

21 cross bounds quite often, but I know for a fact that 

22 the self-containeds are quite often thrown into these 

23 conditions because of the tourist industry. 

24 MR. BROOKMAN: Karim. 

25 MR. AMRANE: Karim Amrane, AHRI. We will go 

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1 back to our members and see whether we can you some 

2 sort of percentage. 

3 MR. BROOKMAN: Yeah. Okay. Thank you, 

4 Karim. Bruce, I haven’t heard from you in awhile. 

5 Please. 

6 MR. HIERLMEIER: Bruce Hierlmeier, Zero Zone. 

7 The one area earlier I talked about stores that are off 

8 conditions. We manufacture a lot of door cases and 

9 don’t list them as a Type 2 door or Type 2 case but 

10 they’ll operate in poor conditions. I think some of 

11 our competitors do a similar matter. 

12 So if all of a sudden, you started looking at 

13 we would have Type 2 that would allow for poor 

14 conditions, we might rate some of our cases, as you 

15 point out, we might rate some of them into that area 

16 that would use more energy because they would be 

17 designed in an application where they would need the 

18 energy to keep water off the floor. 

19 Again, we’re looking at that our cases 

20 perform under a variety of temperatures, perform under 

21 a variety of conditions. It’s the outside condensation 

22 where you start seeing some issues. So the products 

23 still have good integrity, but when you have water on 

24 the floor, that’s a bad situation and that would be a 

25 new area of changes we’d start seeing in the industry. 

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1 MR. BROOKMAN: Okay. Dave Winiarski. 

2 MR. WINIARSKI: I just wanted to add one more 

3 maybe clarification question. There’s some current 

4 legislation on the books for the self-contained 

5 equipment with doors and that doesn’t address this 

6 issue of Class 1/Class 2. I don’t know if it’s an 

7 issue with those products already or not. 

8 MR. HON: Charlie Hon, TRUE Manufacturing. 

9 It has always been an issue. We see some vast 

10 differences in the product. You will see that Class 1 

11 items will traditionally be the more efficient units 

12 and you will see those showing up as Energy Star, RCEEE 

13 Tier 2 units, compared to the harder condition-type 

14 equipment which meet that standard, and we can try to 

15 drive them that way, but traditionally we can’t make it 

16 happen. 

17 So it’s one of those energy efficiency 

18 balancing acts that we -- there’s no perfect answer for 

19 it because there are certain things that just go on in 

20 the industry and certain economic cut points on 

21 compressor sizes and different things. 

22 MR. WINIARSKI: So basically, the Class 2 

23 equipment in those doored self-contained products, it 

24 meets the current legislation but it just doesn’t get 

25 up to the Energy Star levels typically. 

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1 MR. HON: That’s correct, yes. 

2 MR. BROOKMAN: So I think we’ve covered that 

3 sufficiently at this time. Ron Lewis. 

4 MR. LEWIS: Just one more. Talking out loud, 

5 like the precedent has already been set, thinking out 

6 loud, I’m just a bit amazed that this is such a big 

7 issue and there’s such a difference in operating. 

8 Here we are proposing a level. We’ve had a 

9 Framework Document meeting. We’ve had an ANOPR 

10 published and a public meeting. Why this hasn’t come 

11 up before? Here we are with a severe time problem. 

12 We’re under order to have this out by a certain time 

13 and we’re just hearing this huge issue with no data and 

14 I’m just a little bit startled by that. 

15 Is there -- there’s no way I can ask the 

16 question that it’s going to entice an answer that’s 

17 going to be helpful, I don’t think. So I’ll just -- 

18 MR. BROOKMAN: Andrew. 

19 MR. deLASKI: I just want to ask a question 

20 about this 25 percent. Were you talking -- is that 

21 about -- I mean, again, you reminded me that, you know, 

22 this -- we already have a standard by Congress for 

23 closed cases and this was just in terms of the package 

24 equipment. It’s just the open cases. Is it the same 

25 for closed versus open? 

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1 MR. HON: This is Charlie Hon, TRUE 

2 Manufacturing. The conditions, the high humidity 

3 conditions do not nearly impact the test standards so 

4 much in a closed case as they do an open case. So the 

5 difference is far, far less between the energy 

6 efficiency levels there and we’ve always worked with 

7 that condition because we’ve been dealing with energy 

8 regulations from California since 2000 and that’s been 

9 part of the database. No one’s ever questioned it. We 

10 just went on and dealt with it because it wasn’t that 

11 big a difference. 

12 We are seeing open cases grow in popularity 

13 and there’s an ASHRAE test going on right now to verify 

14 market sales through that open case versus closed case. 

15 It’s a study being done right now by ASHRAE and that’s 

16 something that’s going to drive some of our customers 

17 because if they show us again previous data which was 

18 that sales increased from an open case versus a doored 

19 case, we will have continued marketing pressures from 

20 our customers to have open cases. 

21 MR. deLASKI: This is Andrew again. I 

22 understand that, you know, the market trend towards 

23 open cases is a trend that’s resulting in higher energy 

24 consumption for the nation. So there is -- how this 

25 rule interacts with the rule already on the books set 

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1 by Congress, I mean that’s something we have to pay 

2 attention to, is how are we shifting market share? How 

3 are we -- we don’t want to -- we want to be careful 

4 about encouraging the trend towards higher energy 

5 consumption. We don’t want to shift even more of the 

6 market to open cases by leaving a portion of it outside 

7 our regulation where the closed have to be more 

8 efficient. So let’s not penalize the equipment that is 

9 inherently more efficient. 

10 MR. BROOKMAN: Harvey Sachs. 

11 MR. SACHS: At the risk of -- Harvey Sachs, 

12 ACEEE. At the risk of pouring salt into a wound and 

13 then rubbing, I have found myself thinking back to the 

14 rejection by General Counsel of a boiler consensus 

15 reached by the boiler manufacturers and the 

16 environmental advocates a couple of years ago and that 

17 consensus proposed a performance level and a couple of 

18 prescriptive requirements. 

19 General Counsel proposed a novel reading that 

20 said they could not do both prescriptive requirements 

21 and performance levels. 

22 In the present instance, I’m learning about 

23 this Type 2 equipment for the first time and I’m 

24 hearing in part that we have an issue with much larger 

25 refrigeration engines and in part that we have electric 

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1 heaters to handle the condensate. 

2 Now, again I’m not a specialist in this 

3 equipment, but a prescriptive requirement is nothing 

4 more than a float valve in that condensate pan to turn 

5 off and on the electric heater would go a long way 

6 toward minimizing the use of electricity to evaporate 

7 that condensate. 

8 An IPOV on the refrigeration cycle would go a 

9 long way toward helping to balance the need for a large 

10 capacity with the need for efficient operation, and I 

11 must admit some concern that this Administration’s 

12 General Counsel has taken away what seems to be a 

13 potentially important regulatory tool that would be 

14 beneficial to manufacturers in some categories as was 

15 indicated by consent, that consensus agreement. 

16 At that point, I better stop before I get 

17 thrown out of the room. 

18 MR. BROOKMAN: Gary. 

19 MR. FERNSTROM: Gary Fernstrom, PG&E. I just 

20 would like to echo Ron Lewis’s comment. I’m astonished 

21 that we would be at this point in the rulemaking and 

22 find that there’s this class of equipment that hasn’t 

23 been considered yet, and I’d like to just suggest what 

24 might be the case if the tables were turned and the 

25 residential air conditioning were seriously wanting to 

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1 consider regionality and the Department of Energy and 

2 others involved in that process have said that’s going 

3 to be very, very difficult because new test standards 

4 will have to be considered and so on. 

5 Here we are in this case with this and I just 

6 find it equally hard to understand how we can 

7 accommodate a big issue like this at the last minute. 

8 MR. BROOKMAN: Yes, Neshan. 

9 I guess answering to what Harvey brought up, a float 

10 valve is extremely common in this application. 

11 MR. SACHS: But not required. 

12 MR. NESHAN: No, it is not required, but I 

13 have yet to see at least a couple manufacturers who 

14 manufacture this type of equipment, who would ship a 

15 case without the float valve in the pan. So it’s a 

16 very common thing to do. 

17 MR. BROOKMAN: Okay. Thank you. Yes, 

18 Harvey, go ahead. 

19 MR. SACHS: Follow-up? Thank you very much. 

20 That’s very helpful. My point is only that a 

21 manufacturer wishing to save a nickel could avoid that 

22 where a simple prescriptive requirement would set a 

23 floor and level the playing field. 

24 MR. BROOKMAN: Bruce. 

25 MR. HIERLMEIER: Bruce Hierlmeier, Arizona. 

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1 I just want to clarify when I discuss anti-condensate, 

2 I’m talking about the heat applied to the surface of 

3 the material which you’ll see in the store versus 

4 sometimes anti-condensate is also for the drain water, 

5 so there’s two different things. 

6 MR. BROOKMAN: Andrew, perhaps a final 

7 comment before moving on. Go ahead. Okay. So thank 

8 you for that discussion. 

9 Now we’re going to proceed. I guess not. 

10 MR. RIVEST: One consideration all the time 

11 about, you know, either waivers or exempting products 

12 is the possible migration towards the lower cost 

13 product, is a Type 2 piece of equipment, is 

14 significantly more expensive than a Type 1? 

15 MR. BROOKMAN: Neshan. 

16 MR. NESHAN: It’s very difficult to say. It 

17 is more expensive, but I can’t tell you is it five 

18 percent more or 20 percent more. It all depends on the 

19 type of the display case. 

20 MR. BROOKMAN: And within the distribution of 

21 different types, it’s consistently, you would say, a 

22 little more expensive? 

23 MR. NESHAN: Oh, yes. Oh, yes. You do need 

24 a larger condensing unit, compressor unit, because your 

25 environment is different than the Type 1. Higher 

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1 ambient temperature, hence higher btu requirement for 

2 the display case means larger condensing unit or 

3 compressor unit, as well as electrical requirements as 

4 well. 

5 MR. BROOKMAN: Thank you. Charlie. 

6 MR. HON: Charlie Hon, TRUE Manufacturing. 

7 There is an obvious difference because it does require 

8 a larger compressor, condenser, evaporator coils. It 

9 also requires electric heater elements, higher wattage, 

10 and different control circuits because of the increased 

11 load of electricity, but to say that it is a huge 

12 incremental cost is, I think, a misnomer because you’re 

13 going usually one step up in compressor, slightly 

14 larger coils. 

15 Are you going to add 10 percent of the cost 

16 of the equipment? Very easily. Are you going to add 

17 50 percent increase? No chance. 

18 MR. NESHAN: Thank you. 

19 MR. BROOKMAN: Thank you. So let’s move on 

20 now. 

21 MR. MILLARD: I’m done. I think we’re ready 

22 for a break. 

23 MR. BROOKMAN: I think we’re ready for a 

24 break. It’s now -- by my watch, it’s 10:45. Let’s see 

25 if we can do this in 15 minutes. We’ll resume at 11. 

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1 (Recess.) 

2 MR. BROOKMAN: Let’s start again here. Dave 

3 Winiarski. 

4 Energy Use Analysis and Life-Cycle Cost Analysis

5 MR. WINIARSKI: Okay. Can everyone hear me? 

6 Okay. Well, as we talked about, the start of the work 

7 here is to update the ANOPR Analysis. We spoke about 

8 the Engineering. The next part -- portions that we’ll 

9 talk about is the Life-Cycle Cost and Payback Period 

10 Analysis and the portions that go into that and then 

11 the National Impact Analysis. 

12 I’ll try to do the Life-Cycle Cost and 

13 Payback Period Analysis before lunch. That’s the 

14 agenda. 

15 The Life-Cycle Cost Analysis is really 

16 characterized by three different analyses. The first 

17 is the Energy Use Characterization of the equipment. 

18 As was mentioned earlier, typically DOE does an Energy 

19 Use Characterization to try to reflect the energy use 

20 in the field for the equipment as opposed to simply the 

21 energy use from the test procedure and also to 

22 determine the energy savings for going to higher TSLs 

23 from the baseline. 

24 In this work, for those who were here at the 

25 ANORP, we also tried to validate the energy use that 

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1 was coming out of the Engineering Analysis with some 

2 whole building modeling of the energy use for 

3 refrigeration equipment. 

4 I got a little nervous earlier because people 

5 were talking about whether this would address the Type 

6 2 equipment. We don’t really address that type of 

7 ambient conditions when we did this modeling, so just 

8 be aware of that. 

9 We also produce analysis. We develop mark10 ups, the distribution chain mark-ups that take us from 

11 the manufacturer selling price of the equipment to the 

12 customer purchase price of the equipment and to do 

13 that, we have to characterize how the equipment flows 

14 from the manufacturer through the different 

15 distribution channels to get to that end use customer, 

16 and we combine those two pieces together in the Life17 Cycle Cost and Payback Period Analysis portion which 

18 really deals with just the accounting for the energy 

19 use and energy costs and first costs of the equipment. 

20 Okay. So for the Energy Use 

21 Characterization, DOE resolved that due to the 

22 complexities of this product and all the different 

23 types of equipment that it initially planned to use the 

24 Engineering Estimates of Energy Consumption that were 

25 coming from the test procedure. 

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1 The test procedure, ARI 1200, accounts for 

2 two types of energy use equipment, what we call the 

3 direct energy consumption which is lights, fans, and in 

4 self-contained equipment the compressors, the anti5 condensate heaters that are on the equipment, 

6 everything that’s really tied to the specific piece of 

7 equipment being tested. 

8 ARI 1200 also tries to deal with the indirect 

9 energy consumption for remote cases and this is the 

10 energy coming out of the compressor rack, basically to 

11 cool down and to liquefy the refrigerant that’s 

12 traveling to the remote cases. 

13 While it accounts for that, DOE wanted to 

14 explore exactly how close the ARI 1200 test procedure 

15 results would be from the energy savings standpoint as 

16 compared to doing some measurements using -- not 

17 measurements but some simulations, whole building 

18 annual simulation programs that dealt with both the 

19 refrigeration system as well as the whole building 

20 interactions, the heating-cooling loads in the 

21 building, and so I’ll talk a little briefly. 

22 Again, this was presented for the ANORP. The 

23 results were then updated based on the NOPR Analysis. 

24 These are the distribution channels that DOE 

25 arrived at for the equipment. Basically, there’s a 

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1 channel, what we call a national account, which is 

2 where the products are sold directly from the 

3 manufacturer to the final customer. That’s the 

4 majority of shipments for the remote-condensing cases. 

5 There’s a channel where it goes from the 

6 manufacturer through some type of wholesaler who then 

7 resells the equipment to the end user and in some 

8 cases, there are some products that are sold from a 

9 wholesaler through a mechanical contractor or 

10 refrigeration contractor who then resells to the end 

11 user. 

12 The shipment fractions that are shown here 

13 are those used for the NOPR Analysis. They’re slightly 

14 different than what was proposed from the ANOPR, based 

15 on some comments that DOE received. 

16 In addition, for the ANOPR, I believe that 

17 the national account shipment fractions were something 

18 like 86 percent of all shipments were assumed to be 

19 national accounts. 

20 Comments received were that a much higher -- 

21 a much lower fraction went to national accounts for the 

22 self-contained product, but these tend to be resold in 

23 other markets and so we broke out the relative shipment 

24 fractions for each distribution channel by the self25 contained and the remote-condensing products. 

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1 We then go through the process to, once we 

2 got those distribution channels figured out, we go 

3 through the process to try and determine the equipment 

4 price mark-ups through those distribution channels. To 

5 do that, we look at firm balance sheets from the 

6 various participants in the distribution channel, those 

7 wholesalers, mechanical contractors, and to some extent 

8 general contractors. 

9 We also looked at a split between the new 

10 construction and replacement market. Originally, we 

11 calculated sort of a rough estimate of what that split 

12 was. It did not actually come into play in terms of 

13 developing the mark-ups. 

14 The end results of applying those changes to 

15 the distribution channels were changes in the baseline 

16 and the incremental mark-ups that were developed. The 

17 baseline mark-ups are essentially the calculated mark18 up factor for a baseline piece of equipment. That 

19 represents sort of what the industry average is today. 

20 The incremental mark-ups are the additional 

21 mark-ups that would be applied to the incremental costs 

22 a manufacturer faces to design higher-efficiency 

23 equipment. 

24 Let’s see here. The mark-ups here are a 

25 little bit higher, as I said, than what was presented 

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1 in the ANOPR in both cases. I think that the ANOPR 

2 mark-ups were more on the order of 1.4 roughly for 

3 remote-condensing products and for self-contained 

4 products. The self-contained mark-ups are really the 

5 ones that increased quite a bit in the ANORP Analysis. 

6 We used those mark-ups to come up with sort 

7 of customer prices for each type of equipment or class 

8 of equipment, and then we can use those customer prices 

9 and the energy use numbers to -- as portions of the 

10 Life-Cycle Cost Analysis. 

11 Life-Cycle Cost represents the customer 

12 price, plus the sum of all the annual operating costs 

13 associated with the given piece of equipment, 

14 discounted down to a base unit, in this case 2012, the 

15 effective date of the rule. 

16 The economic evaluation that’s done here is 

17 based on the customer’s perspective. Those are his 

18 prices that he’s paying for the product and the energy 

19 savings also accrue to him. The analysis is 

20 implemented in Excel spreadsheets that are available 

21 online at the CRE website that DOE has set up and they 

22 can be reviewed online. 

23 The results for the analysis are expressed in 

24 terms of life-cycle cost savings; that is, the life25 cycle cost of the baseline product minus the life-cycle 

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1 cost for the standard level, so that where you see 

2 positive life-cycle cost savings that’s beneficial to 

3 the customers. 

4 In addition, we calculate simple payback for 

5 each efficiency level that’s analyzed, again from the 

6 customer’s perspective. 

7 One of the key portions of the Life-Cycle 

8 Cost Analysis is in fact the energy costs that are 

9 paid, the electricity costs in this case that are paid 

10 by the customer. All the LCC Analysis was based on the 

11 use of state by state average electricity prices paid 

12 by four different business types. Those types were 

13 large grocery stores, convenience stores, convenience 

14 stores and small groceries with convenience. 

15 Convenience stores without gasoline pumps and 

16 with gasoline pumps were broke out separately because 

17 that changes sort of how much electricity is used by 

18 those and the total cost for electricity that’s used by 

19 those different building types. 

20 It also looked at what we call multiline 

21 stores, those would be the Walmarts, the Super Targets, 

22 that use refrigeration equipment but also have a lot of 

23 other base electrical uses in the building. 

24 The start of the process was to develop 

25 essentially ratios of the electricity price paid for 

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1 these specific building types compared to the average 

2 commercial sector electricity prices using the 2003 EIA 

3 Commercial Building Energy Consumption Survey, CBECS. 

4 Then we applied those ratios to the state by state 

5 average commercial sector electricity prices from EIA 

6 data for 2006, that’s updated from the ANOPR where we 

7 used earlier data, and that allowed us to get average 

8 state by state electricity prices for each of these 

9 four business types. 

10 We then used the ADA 2007 to project what 

11 those electricity prices would likely be in 2012, the 

12 start date of the rule, and for the future. The LCC 

13 Analysis basically starts in 2012 and extends out to 

14 sort of one full life cycle of the equipment. 

15 DOE plans to update the Life-Cycle Cost 

16 Analysis using ADA or 2008 forecast data for the final 

17 rule. 

18 Other inputs to the Life-Cycle Cost Analysis 

19 include installation costs. Those costs were actually 

20 updated from those presented in the ANOPR based on 

21 industry comments for typical installation costs for 

22 self-contained and for remote-condensing equipment. 

23 They are still held constant with higher-efficiency 

24 levels, also based on industry input. 

25 DOE has to discount the energy savings, 

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1 energy price savings back to the present value. It 

2 uses discount rates that it deems appropriate for each 

3 business type independently. Those come from an online 

4 website called Damodaran. It’s a business website 

5 where it has average costs of capital or you can 

6 calculate average costs of capital for each of the 

7 business types that DOE was looking at. Again that was 

8 updated data. 

9 DOE also made modification to its analysis 

10 with regards to equipment lifetime. The equipment 

11 lifetime that was used for the ANOPR was 10 years for 

12 all products. We got a number of comments that 

13 suggested that in particular smaller businesses might 

14 use -- might be more likely to keep the equipment 

15 longer, I think numbers on the order of 12 to 18 years 

16 that have been discussed or even longer than that. 

17 So one change to the analysis that DOE made 

18 was that for these convenience stores in this, which 

19 basically is convenience store and small grocery, they 

20 raised the lifetime from a 10-year to a 15-year. That 

21 represents about 20 percent of the markets. So you 

22 have work out that that results in, I think, an average 

23 of about 11-year life instead of the 10-year life for 

24 all products. 

25 DOE also modified how it was handling repair 

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1 costs. For the ANOPR, the repair costs were sort of 

2 broken out into -- well, I’ll have to be clear on this. 

3 The repair costs here talk about unanticipated repairs 

4 to the equipment, a fan goes out, the compressor 

5 breaks, something like that. For the ANOPR, DOE had 

6 assumed had a constant repair cost. 

7 We had some comments on that as a function of 

8 efficiency level. So we tried to gather some data with 

9 regard to the relative frequency and types of repairs 

10 that might occur in the different types of cases and 

11 updated using that frequency of repair information and 

12 the engineering costs for, say, higher-efficiency fans 

13 and other things, we tried to -- result in an 

14 increasing repair cost now as a function of the 

15 efficiency level. The details for that are presented 

16 in the Life-Cycle Cost Chapter. 

17 Maintenance costs. They came from RS Means 

18 Cost Works Data. Maintenance costs, preventive 

19 maintenance costs are held constant with the efficiency 

20 level. However, because of the change in lighting 

21 technology, we tried to calculate lighting replacement 

22 cost separately, depending on whether we were using 

23 fluorescent technologies or LED-type technologies. 

24 This is just an example of a typical life25 cycle cost curve. This is complete life-cycle cost for 

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1 vertical open medium temperature equipment. What you 

2 see in this example here is that the life-cycle cost 

3 decline through the different efficiency levels that 

4 were examined, in this case down to about Levels 5 and 

5 6 which were about the same, and then there was a 

6 sudden increase in life-cycle cost at Level 7 due, in 

7 this case, to the use of LED lighting. 

8 This particular example is for a multiline 

9 retailer and the energy costs and discount rates that 

10 are appropriate to that business type. 

11 This is an example of the different-looking 

12 life-cycle cost curve. This was for a vertical closed 

13 transparent product, a remote-condenser product. The 

14 design options here resulted in the last four levels 

15 having nearly identical life-cycle costs. Again, LED 

16 technologies were brought in at Level 7 but they did 

17 not result in the increased life-cycle costs that we 

18 saw for the medium temperature open product. 

19 Let me drop back here. I’d also like to 

20 mention that some other additions in the NOPR Analysis 

21 were that DOE tried to examine through a sensitivity 

22 analysis what might be the impact of changes in LED 

23 lighting costs in the future. That’s documented in the 

24 Chapter 8, end of Chapter 8, and you can examine that. 

25 In general, DOE found that it could -- let me 

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1 see -- that the projected LED lighting costs could 

2 significantly impact the life-cycle cost curves for 

3 those products at the tail end of these curves, 

4 particularly for the open medium temperature products 

5 that were examined, and we’ll talk a little more about 

6 that when we talk about the National Energy Savings 

7 Analysis as well. 

8 So any questions? 

9 MR. BROOKMAN: Or comments on this series of 

10 slides. Yes, Harvey. 

11 MR. SACHS: Harvey Sachs, ACEEE. With 

12 respect to Slide 24, a minor technical question. On 

13 the second bullet from the bottom, I don’t remember 

14 that the EIA Analysis takes into account the roll-in of 

15 lagged price increases due to changes in electricity 

16 regulation and that’s a very profound effect in a 

17 number of states, 60 to 70 percent, for example, in 

18 Maryland over a two-year period, and I would ask that 

19 we check that EIA forecasts are not just passing along 

20 fuel forecasts but that they’re also looking at the 

21 fairly well-documented regulatory changes in prices due 

22 to catch-up on regulatory freezes that have been 

23 imposed in the past. 

24 MR. BROOKMAN: Thank you. Other comments on 

25 these slides? 

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1 MR. SACHS: On Slides -- Harvey Sachs. On 

2 Slide 20, and this is a question, but as I went through 

3 the TSD and not in the detail that I expect others 

4 have, I found no analyses at all that looked at 

5 secondary refrigerant as one of the options for remote6 condensing units as is increasingly common in Europe 

7 and certainly have been installed on a number of 

8 supermarkets in this country, and I gather was judged 

9 to be experimental from DOE’s analysis? 

10 MR. WINIARSKI: I think secondary 

11 refrigeration equipment was not -- was basically not 

12 included in this particular rulemaking. 

13 Ron or Francine, I don’t know if you want to 

14 comment on that a little bit. 

15 MR. BROOKMAN: Yes, Aris. 

16 MR. MARANTAN: Aris Marantan, Navigant 

17 Consulting. Yes, Dave’s right. The secondary coolant 

18 applications were addressed in the Advanced Notice of 

19 Proposed Rulemaking, the ANOPR. In that Notice, DOE 

20 stated that, based on the definition of commercial 

21 refrigeration equipment that was contained in the 

22 Energy Policy Act of 2005, their interpretation of that 

23 definition does not include secondary coolant 

24 applications. 

25 Commercial refrigeration equipment has seven 

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1 items in the definition and one of the items is that it 

2 has to be connected to either a self-contained 

3 refrigeration system, the compressor and the condenser, 

4 or a remote system and so DOE interpreted that to mean 

5 that it has to be directly connected. 

6 Secondary coolant applications. DOE stated 

7 that it doesn’t meet the definitions. So it’s not 

8 included in this rulemaking. 

9 MR. BROOKMAN: Harvey. 

10 MR. SACHS: I find myself marveling at the 

11 ability to exclude technology options that may become 

12 extremely important in the time frame of interest, 

13 given changes in refrigerants, given the alternatives 

14 that will drive owners to try to control leakage rates 

15 by perhaps adopting this. It may be water under the 

16 dam now, but it’s just amazing how the department’s 

17 able to use narrow readings of the applications to 

18 exclude important technology classes. I find myself 

19 surprised. 

20 Thank you. 

21 MR. BROOKMAN: Comments about this series of 

22 slides before we move on? Yes, Tim. 

23 MR. BALLO: Tim Ballo with EarthJustice. It 

24 isn’t necessarily a comment on this series of slides, 

25 but I can’t think of a better time to raise it. 

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1 The statute requires DOE consider the 

2 rebuttal presumption payback period and it appears from 

3 the Federal Register Notice that several classes of 

4 these products satisfy the rebuttal presumption payback 

5 period at the highest TSL level the DOE studied. 

6 DOE, in the Federal Register Notice, does not 

7 provide any sort of rationale for why it did not 

8 specifically use or does not plan to use the rebuttal 

9 presumption payback period analysis to set the trial 

10 standard level for these products. 

11 It looks as though DOE just sort of prefers 

12 its own analysis and maybe there’s some reason for 

13 that, but Congress has specifically provided that once 

14 this rebuttal presumption payback period is satisfied, 

15 it takes the trial standard level out of the seven16 factor analysis that DOE normally uses and rebuttal 

17 presumption is a word or is a phrase that sort of has 

18 been determined to have a specific meaning. 

19 I’ll be submitting more detailed written 

20 comments on that, but I just wanted to flag this issue 

21 because DOE is sort of treating the rebuttal 

22 presumption payback period as if it really has no 

23 meaning in the statute and Congress has very clearly 

24 provided that it does have a very significant meaning 

25 for this analysis. 

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1 MR. BROOKMAN: Thank you. Those written 

2 comments will be helpful. Harvey Sachs. 

3 MR. SACHS: Harvey Sachs. With respect to 

4 Slide 25, question. Bullet 3 gives a 10-year average 

5 lifetime for large grocery and multiline retailers. 

6 Is it the assumption of the department that 

7 the equipment is scrapped at the end of 10 years or 

8 enters the secondary market? 

9 MR. WINIARSKI: The analysis assumption is 

10 that the equipment is effectively scrapped and has no 

11 salvage value at the end of that time. In fact, 

12 conversations with industry people involved in that 

13 secondary market have generally said that the salvage 

14 value is often very low for the cases that are removed, 

15 I think primarily because a lot of these cases are in 

16 line-ups of cases that are for -- you know, 

17 particularly when you’re talking about the large 

18 grocery sector of the market and it’s often difficult 

19 to find exactly how you would incorporate that 

20 particular style of line-up into a new store. 

21 MR. SACHS: The secondary market -- Harvey 

22 Sachs again -- could refer to a number of different 

23 things, such as export to other countries. 

24 Again, I ask this as a question whether the 

25 department did analysis to see if there was a robust 

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1 secondary market related to alternatives to scrappage. 

2 MR. BROOKMAN: Neshan, did you have a 

3 comment? You looked like you did. I don’t mean to 

4 provoke you. 

5 MR. NESHAN: Neshan. No, I’ve never heard of 

6 the equipment being removed and being exported to 

7 another country. I mean, this is the first time I’m 

8 hearing such a comment. I’m not aware of any. 

9 MR. BROOKMAN: Thank you. Thank you. 

10 MR. WINIARSKI: I believe this is when we 

11 stop for lunch but I’ll just keep going. 

12 MR. BROOKMAN: Keep going. 

13 National Impact Analysis

14 MR. WINIARSKI: Okay. The next part of the 

15 revision for the ANOPR Analysis is to revise DOE’s 

16 National Impact Analysis. 

17 The National Impact Analysis is actually 

18 composed of two parts. The first part is to estimate 

19 CRE or Commercial Refrigeration Equipment shipments out 

20 into the future. DOE uses the time frame of 30 years 

21 from the 2012 start date of the rule out to 2042 and so 

22 we project shipments out over that time period. 

23 The second part, once the shipments are out, 

24 it takes data that’s developed in the Life-Cycle Cost 

25 Analysis to try to estimate both the national energy 

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1 savings impact from all those shipments over time as 

2 well as the national economic impact. The economic 

3 impact is expressed in terms of a national net present 

4 value for different energy conservation standards. 

5 Briefly, the shipments forecasts are based on 

6 looking both at existing historical shipment data as 

7 well as the lifetimes of the products, so we know when 

8 those products need to be replaced over time, as well 

9 as looking at the projected growth and floor space for 

10 the different building types that might use commercial 

11 refrigeration equipment. 

12 In addition, although it’s not part of the 

13 actual shipments discussion in the TSD, DOE tries to 

14 make estimates of the mix of efficiency levels that are 

15 in the market. DOE recognizes that there will be some 

16 mix of efficiency levels and that not every equipment 

17 sold is going to be at the baseline efficiency level 

18 for this analysis. 

19 DOE then has to track the shipments and the 

20 stock that’s in the entire U.S. in terms of the vintage 

21 of the product, when it was first sold into the market, 

22 whether it’s a new piece of equipment that’s going into 

23 sort of a new building versus simply a replacement for 

24 an existing product, and it has to do that by the 

25 different equipment classes. 

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1 In general, the basic approach here was 

2 similar to that used in the ANOPR. One exception that 

3 was brought up earlier is that DOE tried to make an 

4 estimate of the shipments for the vertical open remote5 condensing low temperature cases. That was something 

6 that DOE did not have a number for in the ANOPR. 

7 Based on consultation with manufacturers, DOE 

8 made an estimate that the shipments for that product 

9 class were roughly five percent of what they were for 

10 the similar medium temperature-type product, again 

11 following those shipments but we did want to account 

12 for it. 

13 This slide shows the growth, the estimated 

14 growth, in shipments of products over time. You’ll see 

15 the graph itself has a little issue here in that at the 

16 first four years, it looks like there’s a jump there. 

17 Essentially, there’s no jump there. You should be 

18 really looking at the shipments from about 2005 or 2006 

19 onward. 

20 What we’re trying to trace through here is 

21 the two lower bars basically represent replacements for 

22 equipment that was in the total refrigeration equipment 

23 stock in the year 2000. We then track also sales into 

24 large buildings, what we consider to be the large 

25 grocery and the multiline retailers, separately from 

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1 the convenience stores and small grocery applications, 

2 primarily because those have a different life, so we 

3 have to track them separately. 

4 Also in here, we’ve broken out sort of the 

5 shipments that are replacing the existing stock that 

6 was in place in the year 2000 as opposed to that that’s 

7 going into the new construction. The new construction 

8 happens to be the -- let’s see here -- purple and 

9 yellow, the two intermediate colors, and the -- pardon 

10 me. Yeah. Purple and large yellow, and then the -- on 

11 top of that are replacements for shipments that go into 

12 new construction. 

13 So all together, that gives you a sense of 

14 how the department foresees total shipments of CRE 

15 increasing over time. This is in terms of thousands of 

16 linear feet of all product categories. 

17 Based on the shipments and the energy use of 

18 the equipment, DOE calculates the national energy 

19 savings for the period from 2012 to 2042. Because some 

20 of the equipment has been put into place in 2042 and 

21 will continue to receive economic benefits over time, 

22 DOE actually calculates the national net present value 

23 over a longer time period, going out to 2062, until 

24 virtually all of the equipment that was put in place in 

25 2042 has gone away from the market. 

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1 As I said, DOE develops a distribution of 

2 efficiencies. DOE requested data on what efficiencies 

3 might be sold into the market. DOE actually has very 

4 little data on that. So it developed an economic 

5 approach similar to what’s used in the EIA’s National 

6 Energy Modeling System to look at consumer choice, 

7 consumer preference, in terms of the individual 

8 customer’s risk for purchasing higher- and higher9 efficiency equipment and using the cost data for that 

10 equipment from the Engineering Analysis and developed 

11 typical distributions of shipped efficiency products at 

12 the different levels, efficiency levels that DOE was 

13 analyzing. 

14 This is an example. The first table is an 

15 example of that for the VOPRCM product. 

16 Then as standards, different standards were 

17 coming into place, DOE looked at a roll-up analysis 

18 where essentially it assumed that all shipments for all 

19 efficiency levels below the standard were rolled up to 

20 the standard level. It was then assumed that higher21 efficiency -- individuals who were purchasing equipment 

22 at higher efficiencies than the standard level would 

23 essentially be unaffected by the standard level. 

24 Over time, as old equipment goes out of the 

25 inventory, it’s then replaced with equipment at the 

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1 standard level and then using data on the customer 

2 purchase cost of the equipment, the annual energy use 

3 for that higher-efficiency equipment and the associated 

4 other expenditures, such as repair and maintenance 

5 costs, all coming out of the LCC, DOE develops total 

6 streams of energy savings and total streams of energy 

7 and other costs associated with all the equipment 

8 that’s going into the U.S. market over those periods 

9 outlined earlier. 

10 It then discounts all those costs back to 

11 present value to determine the national net present 

12 value for each efficiency level. 

13 This brings up one of the early issues that 

14 DOE has to deal with. Because DOE was developing these 

15 market distributions based on an economic analysis, DOE 

16 used current and that economic analysis was based on 

17 the costs that were in the Life-Cycle Cost Analysis. 

18 The efficiency trends over time are static. 

19 In other words, the distribution of 

20 efficiencies is assumed to be the same throughout the 

21 time. DOE does not have any information in order to 

22 project how those trends might change in the future. 

23 DOE does -- as we heard earlier, LED costs are dropping 

24 and there may be greater use of LEDs in the future 

25 because of the lower costs for them and that could in 

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1 fact affect shipments for products incorporating LEDs 

2 out in the future in a way that’s not captured in DOE’s 

3 model and so they welcome any kind of comments from the 

4 industry on how that might affect the shipments at each 

5 efficiency level in the baseline. 

6 MR. BROOKMAN: So comments, both specifically 

7 about the LED costs and other costs perhaps. Harvey 

8 Sachs. 

9 MR. SACHS: Harvey Sachs, ACEEE. Again, this 

10 is a question. As I read through, and perhaps not as 

11 carefully as I might have, the implied assumption was 

12 that we would have LEDs as an alternative installed 

13 much in the way that fluorescents are today; that is, 

14 with the diode and its heat sink within the 

15 refrigerated case. 

16 An alternative that takes advantage of the 

17 intrinsic near-point source characteristics is to use 

18 inexpensive plastic fiber to give a vastly better 

19 distribution of the light with less space required in 

20 the cabinet and the heat sink and almost all heat 

21 dissipation external to the cabinet, and it’s not clear 

22 to me, and I would just request clarification from the 

23 department, whether the assumption was that the LED 

24 light source would be within the refrigerated cabinet 

25 of the space. 

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1 MR. BROOKMAN: Who would like to respond? 

2 Aris. 

3 MR. MARANTAN: Aris Marantan, Navigant 

4 Consulting. Yes, to answer your question, the LED 

5 strip that makes up the lighting for, you know, LED 

6 systems is -- it includes the driver as well as the 

7 light source itself within the refrigerated space. So 

8 all of it is included in the space. 

9 MR. SACHS: So by driver, you mean the power 

10 supply? 

11 MR. MARANTAN: The circuitry and the power 

12 supply, yes. 

13 MR. SACHS: I can’t imagine any basis for 

14 that, but given that that leaves that entire heat 

15 dissipation of the LED within the refrigerated space, 

16 and again I’m not a refrigeration cabinet designer, but 

17 in terms of having a fairly steady environment, there’s 

18 an awful lot of that and for reasons of space and 

19 flexibility and a lot of other things, I can imagine a 

20 number of reasons that my product might be much more 

21 attractive to my customer. Much that happens to be 

22 heat load actually external to the cabinet. 

23 MR. BROOKMAN: Mike Rivest. 

24 MR. RIVEST: Mike Rivest, Navigant. We 

25 simply modeled products that are currently on the 

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1 market today and I understand that there could be new 

2 products that take advantage of that, of those features 

3 in the future, but that hasn’t been taken into account. 

4 MR. SACHS: Thank you, Mike. This is Harvey 

5 Sachs again. The net effect works for all standard for 

6 to be adopted would be to open up an entire category of 

7 innovation and we relax the necessity of improved 

8 efficiency identified by the department as cost 

9 effective through changes in other energy-dissipating 

10 components and allows significant part of the energy 

11 efficiency to be met by adoption of the LEDs, perhaps 

12 with the remoted heat-driving components which we 

13 really need and the reason to bring it up at this time 

14 is that between now and 2012, one would expect the 

15 creativity of manufacturers to be dedicated to product 

16 innovations that will have long life in the market, so 

17 they will not have to redesign yet again and some of 

18 these things look like, for whatever reasons, were 

19 taken out of the bounds of the system envelope to be 

20 analyzed by the department in this proceeding. 

21 MR. BROOKMAN: Mike Rivest. 

22 MR. RIVEST: Harvey, and I’m looking to Aris 

23 to correct me, but I believe that at TSL-4, there are 

24 LEDs being used in several of the display cases and 

25 from my recollection, TSL-4 represents a standard level 

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1 where display cases with doors have LEDs as the design 

2 option. 

3 So the difference between 4 and 5 is that 5 

4 makes use of LEDs in open cases. So I would think -- 

5 so 4 is not LED-less. 

6 MR. SACHS: Thank you, Mike. That’s helpful 

7 and it leads then to a process question. Harvey Sachs 

8 again. Is the department considering the option of 

9 Trial Standard 4 for some product categories and Trial 

10 Standard 5 or above for others? 

11 MR. RIVEST: I think the construction of 4 is 

12 that is a combination of 3 and 5. So 4 in fact was 

13 constructed to achieve -- you know, to bring in LEDs 

14 where it was cost effective based on today’s pricing. 

15 MR. SACHS: Mike, I’m sorry, I must be very 

16 dense, I’m recovering from an illness. Does that mean 

17 that the department would adopt what its analysis calls 

18 Trial Standard 4 for certain -- 5 for certain product 

19 classes, such as closed products? 

20 MR. RIVEST: The requirement on 5 is the same 

21 as 4 on several products. 

22 MR. BROOKMAN: Andrew. 

23 MR. deLASKI: I think the department actually 

24 specifically answered Harvey’s question in the Notice. 

25 MR. SACHS: Thank you. 

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1 MR. deLASKI: It says at the very end, on 

2 Page 50128, “DOE also requests comments on whether to 

3 adopt TSL-5 for all or some of the classes.” So it 

4 does strike me the department’s already opened the door 

5 to doing a final TSL which could be a combination of 4 

6 and 5. 

7 MR. BROOKMAN: But, Mike, restate again. 

8 MR. RIVEST: 4 is already a combination that 

9 includes some of the efficiency levels that are in 5. 

10 So a redefined 4 or a 4-A could include more of TSL-5 

11 levels within 4. So it’s not like 5 is one series of 

12 numbers and 4 is an entirely different series of 

13 numbers. Does that make any sense? 

14 MR. SACHS: I think we’ll have to -- I’m 

15 obviously very dense and will have to carry this 

16 offline. Thank you. 

17 MR. BROOKMAN: Okay. Thank you, Harvey. So 

18 the question still remains. Other comments with 

19 respect to cost projections for LED use, how they might 

20 drop, and other cost factors as featured in Slide 33. 

21 MR. SACHS: Mr. Brookman, Harvey Sachs again. 

22 The question was not only cost projections for LEDs but 

23 the engineering aspects of LED application in terms of 

24 the expected heat dissipation required within the 

25 refrigerated volume. 

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1 Thank you. 

2 MR. BROOKMAN: Neshan. 

3 MR. NESHAN: Yes, I’d like to make a comment 

4 regarding that last statement, in that do you want us 

5 to distinguish between an open case and a closed case, 

6 one with a transparent door on it? In the transparent 

7 glass door, it is very common to have the ballast or, 

8 in this case, the power module included in the 

9 refrigerated zone because they rely on the heat 

10 dissipated from that unit to help the anti-condensation 

11 requirement of the door that is the light being applied 

12 to. 

13 For the remote -- for an open display case, 

14 however, it’s quite different. Just about every 

15 manufacturer, I can’t say all, uses the fluorescent 

16 bulb currently with a remote ballast. The remote 

17 ballast is not in the refrigerator zone. So one has to 

18 distinguish between a reach-in door or a case with a 

19 door and an open case. 

20 It is recommended -- one would -- should 

21 recommend to use a remote power module for LED light in 

22 an open display case to be not part of the light 

23 fixture and be a remote application, whereas for a door 

24 case, it is recommended to use -- would be recommended 

25 to use the power module as part of the light fixture 

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1 within the refrigerated zone. 

2 MR. BROOKMAN: Okay. Thank you. Other 

3 comments? Andrew. 

4 MR. deLASKI: You’re looking for comments on 

5 LED price projections now in part? 

6 MR. BROOKMAN: Yes. 

7 MR. deLASKI: I have a couple other comments 

8 on some of the preceding slides, but I’ll take that one 

9 first. 

10 So I wonder if the department could just take 

11 a moment and just tell us what did you project for LED 

12 prices? 

13 MR. WINIARSKI: In terms of the sensitivity 

14 studies? The base analysis -- 

15 MR. deLASKI: In terms of what you proposed 

16 in the rule, yes. 

17 MR. WINIARSKI: The base analysis that was 

18 done by the department uses current prices for LED 

19 fixtures for its analysis and that leads to effectively 

20 the proposed level, the TSL-4 that’s being proposed. 

21 DOE did some sensitivity analysis, looking at 

22 projected reductions in LED lighting, fixture lighting, 

23 fixture cost, both in terms of what those costs may be 

24 reduced by 2012 as well as a separate analysis that 

25 looked at reducing those costs for the first 

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1 replacement of LEDs out in essentially 50,000 hours 

2 later or 2018, and those are in the -- they’re in the 

3 Chapter 8 or the TSD with regards to the discussion for 

4 Life-Cycle Cost Analysis and they are in Chapter 11, I 

5 think, with regards to the Net Present Value Analysis. 

6 I can go into a little detail on those, if 

7 you’d like, but the TSL-4 levels are based on current 

8 prices. 

9 MR. deLASKI: Current. If I remember, it was 

10 2007 prices, so not -- 

11 MR. WINIARSKI: It changes quickly. Yes, 

12 it’s 2007. 

13 MR. deLASKI: Okay. I think your point is 

14 well taken that LED prices are changing very quickly. 

15 They’re dropping. I think I’ve heard the notion that 

16 Morris Law may apply to the prices and you could say 

17 the prices are dropping precipitously. 

18 I don’t think the prices will not drop at all 

19 between now and 2012. That’s for sure. Certainly the 

20 analysis period you’re looking at here, the notion that 

21 prices will stay the same as 2007 is just wrong and I 

22 think that may be a sensitivity analysis, but that 

23 certainly shouldn’t be the main analysis. The main 

24 analysis strikes me as it needs to be based on the 

25 realistic projection of what LED prices are going to do 

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1 over this analysis period, which you pointed out, is 

2 2012 to 2060 something. 

3 So it is -- you know, LED prices are dropping 

4 through the floor. We’ve seen that happen on red LEDs 

5 and now it’s happening with white LEDs. We certainly 

6 will address this in our written comments in more 

7 detail, but I think the department also is investing, I 

8 think, tens of millions of dollars in developing solid 

9 state lighting. It’s an important initiative for the 

10 department and you have your own projections for what’s 

11 going to happen to the prices in the marketplace and 

12 you have very helpfully provided them here in the rule. 

13 I think it’s an 80 percent reduction within 

14 the time frame between now and when the rule will go 

15 into effect. It’s big reductions the department has 

16 already projected internally to this -- in this 

17 building here as to what’s happening in the 

18 marketplace. 

19 So I think that zero percent reduction, no, 

20 that’s got to go, that’s not right. Is it 80 percent? 

21 Is it a 160 percent? It’s a very large reduction and 

22 we’ll be addressing that in our written comments. I 

23 think you -- bounding it at zero, though, is not 

24 appropriate. 

25 MR. BROOKMAN: Thank you. Yes, Karim. 

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1 MR. AMRANE: Karim Amrane, AHRI. I guess if 

2 we try to project the price in the future, then are you 

3 doing the same thing for other components in this 

4 system? There are some indication that the refrigerant 

5 that’s being used today might quadruple two years or 

6 three years from now. Is it being taken into account 

7 in the analysis as well? 

8 MR. WINIARSKI: No. No, the only sensitivity 

9 was done on LED lighting because of -- I think the 

10 concern that those prices are known to be changing and 

11 DOE has its own program, but certainly there -- you 

12 know, other prices potentially could change in the 

13 future. DOE has just used its fixed costs for the -- 

14 MR. AMRANE: Then my follow-up question would 

15 be if indeed DOE is thinking of looking at projection 

16 of LEDs and how the costs may change in the future, 

17 then you should do it for everything else and do a real 

18 sensitivity analysis because the refrigerant, you know, 

19 might go out in the other direction and so I think that 

20 would be our recommendation. 

21 MR. BROOKMAN: Yes, Andrew. 

22 MR. deLASKI: Andrew deLaski. We’re 

23 certainly in favor of taking into account developments 

24 in the marketplace that are going to be important for 

25 influencing what will be the right answer in the 

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1 rulemaking and if refrigerant prices are going to be 

2 increasing, we would agree that that should be taken 

3 into account in the rulemaking. 

4 I think the department has to answer the 

5 threshold question, though, and you’ve done a nice job 

6 in the proposal of teasing that on the LED, which is 

7 does it matter? Okay. We can tease out what’s going 

8 to happen to all sorts of different prices in the 

9 Engineering Analysis, but, you know, are the impacts 

10 going to be on the scale that’s going to influence the 

11 decisionmaking the department has to make and if 

12 refrigerant prices are changing dramatically, I would 

13 certainly work at taking those into account in the 

14 analysis as well. 

15 The department, I must say, you know, 

16 routinely makes estimates of things that are uncertain 

17 in the future. That’s what this exercise is all about. 

18 Electricity prices. There’s electricity price 

19 forecasts in the analysis. The department relies on 

20 those developed by EIA and so it’s part of the 

21 analysis. I don’t think this is something that’s brand 

22 new to the analysis. 

23 MR. BROOKMAN: Charlie, and then over to 

24 Gary, and then to Lane. 

25 MR. HON: Charlie Hon, TRUE Manufacturing. 

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1 There’s several different areas that have to be 

2 considered here. Number 1 is that there’s a lot of 

3 research on LED lights, but, unfortunately, for some of 

4 our market, we don’t know where we’re going with it 

5 because the frequencies of light that we need in our 

6 cabinetry are not necessary the leading ones that some 

7 of them because we take -- the traditional in the 

8 market. We have different colored lights available to 

9 us, depending on the market. 

10 If you want a meat market, you want a 

11 slightly red tint light to make the meat look fresher. 

12 Those aren’t readily -- we do not know the timeline of 

13 development of those products. The white lights are 

14 looking very good. There’s no question there. 

15 We also have some very significant changes in 

16 the market on value, especially in such things as 

17 copper. There’s significant research right now to 

18 replace a lot of the high-efficiency heat transfer 

19 devices that have copper with aluminum which is not as 

20 efficient a heat transfer device because of cost, 

21 depending on the cost of aluminum and the cost of 

22 copper. 

23 Again, a variable cost which does make an 

24 impact on the consumption of equipment but it’s not 

25 been considered here. 

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1 MR. BROOKMAN: Larry. 

2 MR. HOWINGTON: Well, I think the prior 

3 speaker just answered my question. Thank you, Doug. 

4 MR. BROOKMAN: Thank you. Lane. 

5 MR. BURT: I just wanted to build on what 

6 Andrew said -- Lane Burt, NRDC -- and point out that 

7 the sensitivity analysis for the projections are very 

8 important because it’s the department’s job to look 

9 ahead and set a policy that drives us into the future 

10 and that can apply to LEDs which we have very strong 

11 indications are going to draw the prices somewhere 

12 between zero and 50 percent for the total system by the 

13 department’s own projections. 

14 We also have refrigerant sensitivity analysis 

15 which should be done and then we also have a coming -- 

16 another cost that’s coming online and that’s the cost 

17 of carbon that we see with greater and greater 

18 certainty that’s going to become an issue from 

19 California adopting a Climate Program and the Regional 

20 Greenhouse Gas Initiative in the Northeast. 

21 So all these issues the department needs to 

22 take into account when looking ahead to set a standard 

23 and just to get back to the question at hand with LEDs, 

24 there’s so many indicators that these costs are coming 

25 down and the department has done a very good job of 

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1 checking publicly-available data against their own 

2 projections and checking the red light projections and 

3 we would just like to fully support the department 

4 using its own projections in the analysis to set the 

5 appropriate standard level. 

6 MR. BROOKMAN: Any other comments -- yes, 

7 Andrew. 

8 MR. deLASKI: This is another aspect of the 

9 LED question but not a cost aspect. How is it 

10 incorporated into the energy use portion of the 

11 analysis? 

12 It’s my understanding, and I’ve heard that 

13 LEDs are more susceptible, they perform well, if you 

14 turn them off at night when the store’s closed and that 

15 some stores that have shipped LED lighting find that 

16 they can turn the lights off whereas the fluorescent 

17 they couldn’t, and I’m wondering whether DOE has tried 

18 to incorporate that element of the energy savings into 

19 the Energy Savings Analysis. 

20 MR. WINIARSKI: No, DOE has not. We did do a 

21 sensitivity analysis in the Life-Cycle Cost Section 

22 with regards to the equipment operating -- lighting 

23 operating hours and I believe that looked at the impact 

24 of lighting operating hours on the -- pardon me. I 

25 said that -- misspoke. That was in the Energy Use 

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1 Section. 

2 But certainly if you were in the case where 

3 the LEDs were turned off more frequently than the 

4 fluorescent lights they might be replacing, there would 

5 be some additional benefits that are not captured in 

6 the department’s analysis. 

7 MR. RIVEST: Mike Rivest. I believe I went 

8 into a store where there’s actually dimmers. You walk 

9 down the aisle and the LEDs light intensity goes up. 

10 Now, of course, we did not capture those 

11 benefits nor have we costed the cost of the control 

12 circuitry. 

13 MR. BROOKMAN: Tim. 

14 MR. BALLO: Tim Ballo, EarthJustice. Just 

15 following up on Andrew and Lane’s comments earlier, 

16 EPCA provides a standard for DOE’s determinations. 

17 They must be based on substantial evidence. 

18 I haven’t reviewed the record or the TSD 

19 carefully, but if the only evidence in the record on 

20 the future cost of LEDs is DOE’s own study that says 

21 it’s going to come down significantly, if that’s the 

22 only evidence in the record, I don’t think DOE has 

23 substantial evidence that supports the decision that 

24 LED costs are not going to be decrease. 

25 MR. BROOKMAN: Gary. 

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1 MR. FERNSTROM: Gary Fernstrom from PG&E. 

2 Well, if I could comment on how multiple market studies 

3 in the LED business that show market trends toward 

4 reduced costs, so I’m sure there are other references 

5 that could be cited here. 

6 MR. BROOKMAN: Lane. 

7 MR. BURT: I just want to bring up the point 

8 that it’s not just an energy issue with the LEDs. The 

9 department’s analysis of the value to the nation of 

10 this standard, Standard Level 5, with assuming the 

11 current prices which is wrong, is negative 200 million. 

12 The value at six percent is the breakeven point. 

13 Somewhere between six and 50 percent, we see a huge 

14 amount of value to the nation, all the way up to the 

15 department’s own projection of 50 percent for the 

16 system, decreasing by 2012 to 1.62 billion. 

17 So this is really an important decision for 

18 the general public and it shouldn’t be made lightly. 

19 MR. BROOKMAN: Thank you. Other -- yes, 

20 please, Neshan. 

21 MR. NESHAN: On the cost effective, I’d like 

22 to make the following comment in that, as stated 

23 earlier, there are certain display cases that do 

24 require different K value for the LED light. For the 

25 reach-in case or freezer case, a general lighting LED 

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1 is well accepted and is used. 

2 However, for applications, such as meat, 

3 dairy, deli, produce and so on, these LEDs have to have 

4 a special color and a special color index that makes 

5 these LEDs expensive. These have to be hand sorted in 

6 order to put them together. So the cost is not the 

7 manufacture of LED but it is in the labor used to sort 

8 them. They have to be tested and sorted to make sure 

9 they fall within certain temperature rating for this 

10 application. 

11 MR. BROOKMAN: Thank you. 

12 MR. NESHAN: So those prices are not coming 

13 down as rapidly as the others. 

14 MR. BROOKMAN: Do you wish to characterize 

15 how much of the market, how much of the penetration of 

16 LEDs depends on that color segmentation, Larry? 

17 MR. HOWINGTON: This is Larry Howington. 

18 Basically, I think you could divide it between the low 

19 temperature of the frozen cases and the medium 

20 temperature cases. Almost all of the medium 

21 temperature cases have product in it that is from fresh 

22 product to meats and dairy packages and so on that is 

23 going to require the higher-quality LEDs. 

24 On the low temperature side, which people 

25 refer to as the colder LED, on the low temperature 

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1 side, they’re cold cases, and it’s been some -- it’s 

2 starting to be accepted in the marketplace for low 

3 temperature, but for medium temperature, there’s a very 

4 exacting standard and what we have found so far, even 

5 when we find the color that meets the customer’s 

6 requirement, getting the repeatability on the color, 

7 even with the current binning standards, binning being 

8 the way they sort the LEDs, you have to go to sub9 binning to actually get the repeatability so that when 

10 you put two in a case, they don’t look different. 

11 MR. BROOKMAN: Right. 

12 MR. HOWINGTON: And there are four levels of 

13 each bin. 

14 MR. BROOKMAN: Gary, go ahead. 

15 MR. FERNSTROM: Gary Fernstrom, PG&E. Let’s 

16 not suggest for a moment that the price of premium 

17 sorted bin LEDs is not coming down commensurate with 

18 the cost of all LEDs. 

19 If the price of manufacturing LEDs comes down 

20 in general, there’s a premium, of course, associated 

21 with binning and sub-binning, but that premium is at a 

22 constant. So if the baseline at which the premium 

23 applies comes down, the opportunity for reduction in 

24 price accrues across the market. 

25 MR. BROOKMAN: Charlie. 

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1 MR. HON: There’s a couple of comments in 

2 there that I disagree with. Number 1 is that in the 

3 market in general, there’s two different, completely 

4 different sectors. The remote market tends to be 

5 grocery store and relies more on colored product than 

6 certain of the glass door merchandisers. Glass door 

7 merchandisers are fairly loose in their nature as far 

8 as the bottled products, your Cokes, your Pepsis, your 

9 different major consumer products which are sold 

10 refrigerated. The product itself is so recognized that 

11 slight differences would not make that big a 

12 difference, but in a grocery store business, the food 

13 products are truly from an endpoint. 

14 MR. BROOKMAN: Thank you. Harvey. 

15 MR. SACHS: Harvey Sachs, ACEEE. My comments 

16 are general and perhaps will not apply in detail. 

17 They’re meant to give some context. 

18 One of them is that just like price scale, 

19 the product attributes are scale dependent. As 

20 manufacturing comes up in scale, reproducibility also 

21 comes up. The initial LCD screens offered in the 

22 market at 90 percent scrappage rates, scaling-up 

23 manufacturers about reducing the variance of the 

24 product. 

25 We also see that the difficult challenge, the 

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1 Holy Grail, has been the white LED, not the colored, 

2 that the red ones are reasonably common in our consumer 

3 experience, what we stop in traffic, not that tint, but 

4 the beginning problems are the question, I believe, of 

5 manufacturing scale that has in its solution the demand 

6 for the product. 

7 I could be desperately wrong, but certainly 

8 the experience of so many other solid state products 

9 suggest that I’m probably sniffing up the right tree 

10 for that particular posture. 

11 MR. BROOKMAN: Okay. Charlie, do you have 

12 additional comments? No other comments. 

13 So this has been a useful discussion. 

14 Additional thoughts on LEDs and pricing and other 

15 issues that are related? Andrew. 

16 MR. SACHS: I am looking for a monochromatic 

17 white LED. 

18 MR. BROOKMAN: So is the Department of 

19 Energy. 

20 MR. SACHS: Thank you. 

21 MR. BROOKMAN: And for a much lower cost than 

22 -- how many lumens per watt? 

23 MR. deLASKI: My comments are on LED price, 

24 among other things. 

25 MR. FERNSTROM: 100. 

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1 MR. BROOKMAN: Thank you. 100 lumens per 

2 watt. Thank you. 

3 MR. deLASKI: I’m on LEDs. 

4 MR. BROOKMAN: Please do. Keep going. 

5 MR. deLASKI: If you’d go back a slide, 

6 please, I have a question about shipments, and is this 

7 an appropriate time to ask about shipments? 

8 MR. WINIARSKI: Sure. 

9 MR. deLASKI: In the second bullet here, base 

10 case for penetration of higher efficiency CREs, what 

11 you’ve shown here is, correct me if I’m wrong, but is a 

12 distribution of efficiency by efficiency level for that 

13 particular product. 

14 MR. WINIARSKI: Right. 

15 MR. deLASKI: Right? 

16 MR. WINIARSKI: And sort of DOE’s baseline 

17 analysis for the first table, yes. 

18 MR. deLASKI: Right. Help me reconcile 

19 something that I found in the record with this. What I 

20 found in the record is what the manufacturers have 

21 explained to DOE which is that they have a single 

22 product line and I think this probably applies -- I’m 

23 not sure if it applies to both remote-condensing and to 

24 the packaged equipment, but I assume it does. That’s 

25 my understanding from what I read. 

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1 If a single product line -- yet, I look at 

2 this and I see a distribution of efficiency. So is 

3 that telling me that, you know, okay, that’s one 

4 manufacturer at that Level 1 and it’s a different 

5 manufacturer at Level 2 and a different manufacturer at 

6 Level 3? What’s going on? 

7 MR. WINIARSKI: Let me -- 

8 MR. deLASKI: What’s the efficiency in the 

9 marketplace? 

10 MR. WINIARSKI: Right. Let me speak to that, 

11 both in terms of what was done to the analysis and my 

12 understanding of the market and the industry can come 

13 back if they have other statements to that. 

14 DOE used an economic model to sort of predict 

15 what it expects the distribution of efficiencies to 

16 look like in -- over the time period of the rule, based 

17 on the incremental costs to get to higher-efficiency 

18 levels and based on a perception of customer risk for 

19 purchasing higher-efficiency equipment. Okay? 

20 So this is essentially an econometric model 

21 and it really isn’t based in available data with regard 

22 to the market efficiencies. That’s because DOE simply 

23 doesn’t have that. Data certification programs have 

24 only recently been put in place and still aren’t -- 

25 there’s not a lot of data out there on what’s readily 

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1 available for the equipment. 

2 That said, my understanding of the products 

3 in the industry is that a large fraction of -- 

4 certainly for the remote products, is that the 

5 purchasers can ask for customized options which affect 

6 the efficiency level of the product that’s sold into 

7 the marketplace and so I suspect that if you could 

8 look, you would see a fairly wide distribution. 

9 We know that some people purchase products 

10 that have older fluorescent lights and some people are 

11 purchasing LEDs today and I don’t know, maybe the 

12 industry can comment a little more on that. 

13 MR. deLASKI: Correct me because I’m about to 

14 characterize it. Manufacturer X has a single product 

15 line but, you know, a customer comes and they say I 

16 want to have these efficiency enhancements. They’re 

17 going to give them those efficiency enhancements. 

18 MR. WINIARSKI: That is my understanding. 

19 MR. BROOKMAN: I see Bruce. 

20 MR. HIERLMEIER: Bruce Hierlmeier, Zero Zone. 

21 That’s correct. We have options and they can select 

22 them, depending on what their design preferences are, 

23 what they like. Some will pick some high-energy or 

24 high-energy saving options, yet leave others behind, 

25 based on their own individual experiences. We, as 

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1 manufacturers, can’t always understand why they make 

2 some of those decisions because they seem inconsistent 

3 but the customers pick what they want. 

4 MR. deLASKI: So that gives us a distribution 

5 efficiency in the marketplace today, even though we 

6 don’t have -- are now offering good, better, best, in 

7 the sort of traditional sense. 

8 MR. BROOKMAN: Andrew for follow-on, and now 

9 Charlie. 

10 MR. HON: This is Charlie Hon. That can also 

11 be driven on aesthetics and market product appearance 

12 because we have customers who want much more lighting 

13 on the product than other customers. We have customers 

14 who want a very aesthetically-pleasing unit which may 

15 not be quite as energy efficient. 

16 When you have a product line with 8 or 900 

17 products and you have deviations from those, you can 

18 get some pretty big variation patterns in energy 

19 levels. 

20 MR. BROOKMAN: Yes, Aris. 

21 MR. MARANTAN: Yes. In Chapter 3 of the TSD, 

22 we went through the exercise of characterizing the 

23 range of efficiencies by product classes that we’ve 

24 analyzed. So they’re shown there in Chapter 3. 

25 We also presented it at the Advanced Notice 

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1 of Proposed Rulemaking Public Meeting. So we have a 

2 couple of slides if you’re interested in seeing the 

3 actual ranges that we’ve estimated. 

4 MR. BROOKMAN: Larry. 

5 MR. HOWINGTON: Just to give an example, we 

6 have 13 assembly lines. We produce over 200 different 

7 product models. We took one of those assembly lines 

8 and we did a variability study and on the one line, we 

9 looked at the -- I think it was five different options, 

10 not all of the options and not all of those five 

11 represented different energy levels, although some of 

12 them did. We had others that went beyond that. 

13 We had two million combinations on five 

14 options that the customer could select to build an 

15 order. So there’s a wide variability and many of those 

16 things that are aesthetic, just as Charlie said, 

17 affects energy. The higher the front, the treatment on 

18 the front sill of the case, the shelves, the depth of 

19 the shelves, if they’re angled or not, all of those 

20 things affect energy. 

21 MR. deLASKI: So then a follow-up, which is 

22 that in your next bullet, in the analysis that you’re 

23 saying that as you have each efficiency level, I’m not 

24 sure I characterize this correctly, that all of the 

25 equipment is then, you know, just meeting that 

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1 efficiency level. It did meet it before and you were 

2 above it and were going to keep on being above it. 

3 MR. WINIARSKI: Right, right. The assumption 

4 is a purchaser who’s made an economic decision to 

5 purchase at a higher efficiency level is just basically 

6 unaffected by the standard. 

7 MR. deLASKI: And that if he went as far as 

8 TSL or in this case the highest level, Level 7, I 

9 guess, for example, at that point, nothing in the 

10 market would be more efficient than this product? 

11 MR. WINIARSKI: Right. The assumption here 

12 is, again going back to the Engineering Analysis, is 

13 that this was a max tech level. You know, there’s 

14 probably -- because there can -- somebody could 

15 actually purchase something, for instance, that didn’t 

16 have any lights for whatever reason. There may have 

17 been other, you know, more efficient products out 

18 there, but in this simplified analysis, that’s the 

19 approach. 

20 MR. deLASKI: It strikes me as being perhaps 

21 wrong for the following reason, that there’s a test 

22 method. The test method captures certain aspects of 

23 energy performance but not all aspects of energy 

24 performance. So that a customer, call them Walmart or 

25 call them, you know, any other big customer out there, 

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1 who wants other energy efficiency enhancements that are 

2 off-test method, so it strikes me that you still are 

3 going to see a distribution of efficiency above this 

4 max tech level of performance, we’ll call it. It may 

5 not show up on the test method, but it’s going to be a 

6 -- there are performance enhancements that are off-test 

7 method that could show up. 

8 MR. BROOKMAN: Charlie. 

9 MR. HON: Quick question for you. There’s -- 

10 we have certain legal requirements on our testing if 

11 we’re going to have a product and due to the 

12 regulations of the Federal Government, regulations of a 

13 possible product, we will traditionally test for the 

14 severe case where we put all the options on it and test 

15 to that level and in reality, quite often, the units 

16 are shipped out to less than that, but that actually 

17 increases the efficiency, but from a testing 

18 standpoint, we cannot afford to test every iteration. 

19 So we go to the most severe so that we can 

20 beat the standard. We don’t want to be adding the 

21 others on there after the fact. We want to be able to 

22 say, okay, worst case scenario, this piece of equipment 

23 with all the options on it will get you this 

24 efficiency. 

25 MR. BROOKMAN: Karim, did you want to add on 

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1 to that? 

2 MR. AMRANE: I guess -- Karim Amrane, AHRI. 

3 I want some clarification from Andrew. What do you 

4 mean, what is it that the test procedure doesn’t count? 

5 What are the energy efficiency improvements? 

6 MR. deLASKI: Steady state test, right? Dave 

7 can probably answer it better than I can. 

8 MR. AMRANE: Yes, but if the case has all 

9 those features, it could be tested that way. So I 

10 guess I’m confused. It should be counted as a test 

11 procedure. If we test equipment, if it has those 

12 features, it’s there. It should count. 

13 MR. deLASKI: We’ve found that test methods 

14 don’t always capture every element, every aspect that 

15 applies to energy consumption or there are some aspects 

16 of energy consumption that may be -- just aren’t 

17 captured by the test method. Test methods aren’t 

18 perfect. 

19 MR. AMRANE: You’re talking about lighting, 

20 talking about all those kinds of things are counted. 

21 MR. deLASKI: Okay. 

22 MR. BROOKMAN: Gary. No, okay. So I think 

23 we’re just about ready to go to lunch. That’s where I 

24 think we are. 

25 Final comments on 33. We’re not quite 

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1 through the National Impact Analysis slides. Do you 

2 want to go through a few more slides, then go to lunch, 

3 Dave? 

4 MR. WINIARSKI: The next portion -- I can 

5 probably do that. 

6 The next portion of the analysis, after DOE 

7 has completed its revisit of the ANOPR Analysis, DOE 

8 goes through the process of trying to select trial 

9 standard levels which is the second chevron up here. 

10 The trial standard levels are effectively the 

11 potential standards that DOE is really going to 

12 consider for the remainder of the rulemaking and in 

13 order to do that, DOE has some sort of a standard set 

14 of conditions that it wants to look at in terms of the 

15 Life-Cycle Cost Analysis and the NPV Analysis in order 

16 to select specific levels that it’s going to be 

17 interested in. Those are shown here on the slide. 

18 DOE looks at the most efficient energy level 

19 that’s going to carry that through the remainder of its 

20 analysis. It looks at the efficiency levels that have 

21 the lowest life-cycle cost. Traditionally, DOE has 

22 considered that. DOE looks at efficiency levels that 

23 have shown a payback of three years or less. I think 

24 that was brought up earlier as sort of similar to the 

25 rebuttable presumption, and DOE has sort of options to 

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1 look at, particular technologies, that might be 

2 noteworthy and that it wants to consider in the 

3 remainder of its NOPR Analysis stage. 

4 DOE also can select the efficiency levels 

5 that try to fill in gaps between these other levels or 

6 in these levels and the base case. DOE wants to be 

7 able to present a suite of possible levels that it’s 

8 going to analyze for its NOPR Analysis. 

9 Each trial standard level is examined with 

10 respect to these options in terms of its selection and 

11 then DOE has gone through and tried to assess which 

12 particular trial standard levels it wants to carry on. 

13 The trial standard levels are also generally picked 

14 along a consistent theme. For instance, all products 

15 -- one trial standard level may be all products at the 

16 max tech. Another one is all products at the minimum 

17 life-cycle cost level. 

18 In some cases, and it turned out the way DOE 

19 selected a trial standard level but mixed those results 

20 for the different classes of products, so there’s a 

21 trial standard level but the theme is not perfectly 

22 consistent. 

23 In particular, as the trial standard levels 

24 are shown here expressed in terms of the equations for 

25 the different products, these are in terms of kilowatt 

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1 hours per day of energy consumption, either calculated 

2 by daily energy consumption which is the term that ARI 

3 1200 uses for remote-condenser products where the 

4 actual energy consumption of the condensing unit is 

5 estimated, as well as the total daily energy 

6 consumption which is what it uses for self-contained 

7 equipment where the actual total energy consumption can 

8 be measured in the test. 

9 We had a detailed discussion earlier, thanks 

10 to Harvey, with regard to the trial standard levels, so 

11 I’m going to try to explain these real quickly. 

12 Trial Standard 5 represents the max tech 

13 level, the maximum energy efficiency level that was 

14 considered from the Engineering Analysis. Trial 

15 Standard Level 3 represents the maximum life-cycle cost 

16 level, again assuming the present day LED costs. Trial 

17 Standard Levels 1 and 2 were actually selected. They 

18 happen to be somewhat lower than the life-cycle cost 

19 level. There really wasn’t a lot of difference between 

20 TSL-3 and TSL-5 in terms of intermediate efficiency 

21 levels, but we did want to make sure that we had some 

22 other levels to look back in case we had to revise the 

23 analysis. So TSL-1 and 2 are in this mix as well. 

24 TSL-4 was basically produced by looking at 

25 some of the preliminary Life-Cycle Cost and NPV 

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1 Analyses which suggested, as was brought up earlier, 

2 that the low temperature products, the LEDs, generally 

3 were very, very cost effective, but they appeared to be 

4 less cost effective and in some cases not cost 

5 effective based on current LED costs for the medium 

6 temperature products, at least on a national level. 

7 So TSL-4 basically represents TSL-3 for those 

8 five medium temperature products that are discussed in 

9 the rule and TSL-5 for the remaining equipment classes 

10 that are discussed in the rule. 

11 The five equipment classes that TSL-3 was 

12 used in TSL-4 are the vertical open remote-condensing 

13 medium case, the vertical open self-contained medium 

14 case, the semi-vertical open remote-condensing medium 

15 case, and the semi-vertical open self-contained medium 

16 temperature case, as well as the service over-counter 

17 medium remote-condensing products. 

18 As I guess one quick note, just a minor 

19 correction that’s in the NOPR, again these are in terms 

20 of kilowatt hours per day. I think the first table in 

21 the NOPR that shows the selected standard levels 

22 doesn’t actually have the units on it but for clarity, 

23 they are in kilowatt hours per day based on the 

24 appropriate test procedure. 

25 MR. BROOKMAN: Okay. Yes, Karim. 

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1 MR. AMRANE: Karim Amrane, AHRI. I guess I 

2 have a question. You said the TSL-3 were the levels 

3 for which you had to match the savings, right? 

4 MR. WINIARSKI: Right. 

5 MR. AMRANE: So I guess, I mean, on the 

6 comment standpoint, those were the most cost-effective 

7 levels? 

8 MR. WINIARSKI: Right. In the analysis, yes. 

9 MR. AMRANE: So why did you then take -- for 

10 the ROTAM cases, what did you pick to max tech? 

11 MR. WINIARSKI: Well, -- 

12 MR. AMRANE: It did not show the maximum 

13 life-cycle cost. 

14 MR. WINIARSKI: For clarity, we analyzed TSL 

15 -- each product was analyzed separately across all the 

16 different TSL products. TSL-3 was the ones that showed 

17 that they were most cost effective -- pardon me. TSL-3 

18 was most cost effective from the Life-Cycle Cost 

19 Analysis standpoint. 

20 TSL-5, however, was not necessarily the most 

21 cost effective. I think it actually is in some of the 

22 categories. So it’s the same level from TSL-3, 4 and 5 

23 for certain categories. However, when looking at the 

24 National Net Present Value Analyses, for many of the 

25 categories, some of the assumptions in that analysis 

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1 are different than the LCC Analysis and the Net Present 

2 Values were still positive or nearly at the same level 

3 as they were in TSL-3 at -- for those particular 

4 product classes and so for that reason, TSL-4 looked at 

5 those max tech levels for those classes and looked at 

6 the TSL-3 levels, the life-cycle cost levels, for those 

7 five product classes that we talked about. 

8 Does that help explain? 

9 DOE typically aggregates the results by TSL. 

10 Again, most TSLs are sort of under a consistent theme. 

11 So this slide basically shows the aggregate net present 

12 value for the product classes analyzed at each TSL 

13 level. TSL-3 showed approximately $1.2 billion over 

14 the analysis time frame for selection of that TSL. 

15 TSL-5, when considering all the products, was 

16 minus $200 billion -- I’m sorry. That’s a mistake. 

17 Minus 200 million. That’s a correction in the slides. 

18 No, the slide is correct. I’m incorrect. Sorry. $.2 

19 billion. But it is negative and this slide shows 

20 negative because of those five medium temperature 

21 products all show negative NPVs. The other products, 

22 even at TSL-5, all showed positive NPVs. 

23 TSL-4, as you can see here, where we’ve 

24 allowed the efficiency levels for those five products 

25 to drop back to effectively what was in TSL-3, showed 

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1 aggregate NPV of 1.1 billion, again very, very slow to 

2 what the max tech level -- not max tech but the maximum 

3 LCC level projected. 

4 MR. AMRANE: Karim Amrane again. But again, 

5 we’ll be looking at this. The maximum NPV was at TSL3. 6 

7 MR. WINIARSKI: Yes. 

8 MR. AMRANE: This is important because of 

9 what, the energy savings? Does it show energy savings? 

10 MR. WINIARSKI: Yes. 

11 MR. RIVEST: Yes. 

12 MR. BROOKMAN: Thank you, Mike Rivest. 

13 MR. AMRANE: Purely economic basis, TSL-3 is 

14 really the one that’s most cost effective. 

15 MR. WINIARSKI: Based on the analysis, right. 

16 Based on the analysis that was done. 

17 MR. BROOKMAN: Mike Rivest, go ahead. 

18 MR. RIVEST: There are many components in the 

19 analysis. So, you know, cost effectiveness here in the 

20 more holistic view, you know, is not based strictly on 

21 the LCC. 

22 MR. BROOKMAN: Andrew deLaski. 

23 MR. deLASKI: A couple of comments. I think 

24 both the DOE does a nice job, I think, in the Notice 

25 citing back to the statute here and it’s very 

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1 subjective and it’s very clear to achieve the maximum 

2 improvement in energy efficiency, it has to be 

3 economically justified. That’s a very different thing 

4 than saying the maximum of the standards should be most 

5 cost effective. It’s just not in the law. So the law 

6 is about saving energy in -- 

7 MR. AMRANE: In a cost-effective way. 

8 MR. deLASKI: -- a cost-effective way. Yeah. 

9 I want to make a couple comments. One is that I think 

10 the department is leaning too heavily on the seven 

11 percent discount rate. OMB guidance has DOE looking at 

12 both the three percent and seven percent discount rate. 

13 We believe that DOE should be giving primacy 

14 to the lower discount rate which is the societal 

15 discount rate than to reflect the society -- the time 

16 value of the society as a whole. It’s a social 

17 decision. The appropriate discount rate should be 

18 given primacy in my opinion, in our view, should be the 

19 three percent discount rate. 

20 I’m struck by your slide. Why isn’t the 

21 three percent number up there? Why is there this 

22 decision to give primacy to seven percent? I think 

23 that’s an inappropriate focus on the seven percent. I 

24 think it would benefit this audience to see both the 

25 seven percent and three percent. 

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1 MR. WINIARSKI: Note to self, put three 

2 percent on slide. 

3 MR. deLASKI: Thanks. That’s it. Could you 

4 go back one slide? Oh, and on this, I think another 

5 concern here and this relates back to the same point, I 

6 think here, DOE has to construct a TSL around the seven 

7 percent discount rate, but there’s no TSL constructed 

8 around three percent discount rate. Again, showing the 

9 primacy the department’s given the seven percent which 

10 to me strikes me as just pulling a number out of the 

11 hat. 

12 When you’ve got two numbers, OMB gives you 

13 guidance to use. You’ve chosen seven percent with no 

14 explanation as to why you’re leaning on that particular 

15 rate. 

16 The other thing that strikes me is that it 

17 would have been, I think, very instructive for the 

18 department to consider a TSL which was constructed at 

19 the maximum level cost effective for the customer. 

20 Using the LCC Analysis, you chose to give the minimum 

21 LCC but you don’t have a TSL that’s constructed around 

22 the level that would maximize energy savings and be 

23 cost effective for the customer and that strikes me as 

24 being a very useful TSL to have analyzed on this and 

25 other rulemakings. 

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1 MR. BROOKMAN: Mike Rivest. 

2 MR. RIVEST: That’s essentially what TSL-4 

3 is. 

4 MR. deLASKI: How is that, Mike? 

5 MR. RIVEST: What I mean is the -- if you 

6 look at this as -- how many product lines are there? 

7 15? I think there were only five that had negative 

8 LCC at TSL-5 and those are the ones that were 

9 brought down. So in effect, TSL-3 is maximum LCC 

10 savings. TSL-4 is maximum energy savings with 

11 positive LCC and TSL-5 is max tech. So I think, you 

12 know, -- 

13 MR. deLASKI: Is that right or is it positive 

14 NPV? These are two different analyses. 

15 MR. RIVEST: Well, because there’s not -- 

16 there’s such a step function between the LED or no 

17 LED, there’s no distinction here. There’s a big 

18 jump between the 1.2 billion down to -- 

19 MR. deLASKI: You’re saying the same numbers. 

20 I’m saying it would be the same numbers. 

21 MR. RIVEST: Yes. 

22 MR. deLASKI: All right. I’ll take it 

23 offline with you as well. I understand that. 

24 MR. BROOKMAN: Gary. 

25 MR. FERNSTROM: I do this energy efficiency 

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1 advocacy for PG&E both here and in California and 

2 when I sit in the California Energy Commission 

3 workshops, it’s a three percent discount rate and so 

4 I’d just like to support Andrew’s perspective. 

5 MR. WINIARSKI: And, I believe, to add to 

6 that, I believe that the results at a three percent 

7 discount rate, although I don’t present them here, 

8 show that TSL-5 is a positive aggregate net present 

9 value. I think you still have this same issue, that 

10 when you look at individual products, I think those 

11 five products may not be cost effective. 

12 MR. BROOKMAN: Mike. 

13 MR. RIVEST: I think TSL-4 is not -- its 

14 construction is not affected with the three or the 

15 seven percent, but the absolute NPV does change. 

16 MR. WINIARSKI: Right. 

17 MR. BROOKMAN: Okay. Harvey. 

18 MR. SACHS: Again, the boundaries around this 

19 model as constructed from a zero decline from 2007 

20 posted prices for LEDs and a zero change in the 

21 relative prices for refrigerants. These are just 

22 boundaries of the model as posited. 

23 Thank you. Some of us would feel that these 

24 are rather critical deviations from the overwhelming 

25 likelihood in the marketplace. 

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1 MR. BROOKMAN: Charlie. 

2 MR. HON: I mean, over a 12-month period, 

3 July to July last year, we saw 78 percent increase 

4 in the copper values, things like that. So aluminum 

5 was up 34 percent. Those are critical components to 

6 us. 

7 MR. SACHS: We agree. 

8 MR. HON: Absolutely. 

9 MR. BROOKMAN: So additional comments on 

10 Slide 37 and 38? 

11 (No response.) 

12 MR. BROOKMAN: I think it’s time for lunch. 

13 It’s now 12:40. 

14 (Whereupon, at 12:40 p.m., the meeting was 

15 recessed for lunch, to reconvene this same day at 

16 1:50 p.m.) 

17 

18 

19 

20 

21 

22 

23 

24 

25 

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1 

2 A F T E R N O O N S E S S I O N 

3 1:50 p.m. 

4 MR. BROOKMAN: Dave’s up, and he’s already 

5 posted, you can see here on the screen, the issue. 

6 MR. WINIARSKI: Actually, this is essentially 

7 what we had for the Impacts Analysis. There was one 

8 more slide. I don’t think I’ll belabor it too much, 

9 but these were the results or some of the results of 

10 the National Impact Sensitivity Analysis. Andrew, I 

11 think, actually mentioned some of these before. 

12 We looked at both six and a 50 percent LED 

13 lighting cost assumptions, a six percent lighting 

14 cost assumption, resulted in TSL-5 showing a 

15 positive NPV in aggregate, but again for the five 

16 equipment classes we mentioned earlier, medium 

17 temperature classes. They individually showed 

18 negative NPVs under a seven percent discount rate. 

19 Again, under a three percent discount rate, that 

20 would still be positive NPV at that TSL-5. 

21 I take that back. It would be positive in 

22 aggregate. At a 50 percent LED lighting cost 

23 reduction, which was consistent with sort of DOE’s 

24 solid state lighting program estimates, TSL-5 would 

25 have resulted in a positive NPV for all the product 

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1 classes when taken individually and so DOE again 

2 requests more information or comments that can be 

3 provided with regard to the LED lighting cost 

4 reductions or projections as well as DOE is 

5 interested in not just the eventual reduction in LED 

6 prices that might occur but when those pricings 

7 might occur, if any information could be presented, 

8 and again they seek information on sort of what 

9 would be the impact of the baseline analysis as LED 

10 costs are reduced into the future. How would that 

11 affect the assumptions that are used in the baseline 

12 analysis and how it could incorporate that in the 

13 rule? 

14 MR. SACHS: Harvey Sachs, ACEEE. My sense, 

15 and again this may reflect careless reading, is the 

16 LED analysis was based on dollars per fixture, is 

17 that correct, for LED unit of lighting? 

18 MR. WINIARSKI: The sensitivity studies? 

19 MR. SACHS: Yes. 

20 MR. WINIARSKI: Yes, the sensitivity studies, 

21 the six and the 50 percent cost reductions here, 

22 really refer to the change in cost of the entire LED 

23 lighting system, including the drivers and 

24 associated wiring and such. 

25 MR. SACHS: The reason that I ask that -- 

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1 this is Harvey again -- is that during lunch, the 

2 gentleman from Southern California Edison pointed 

3 out that concurrent with the decline in cost, which 

4 the department has not chosen to incorporate, has 

5 been an increase in efficacy, which Mike crudely 

6 referred to as lumens per watt. That has 

7 implications both for the cost of getting a certain 

8 light level as well as for the heat redemption. 

9 MR. WINIARSKI: Let me address that. For 

10 clarity, the -- and one of the Navigant folks may be 

11 able to correct me or elaborate a little on this, 

12 but for clarity, the lighting costs reductions are, 

13 I think, in terms of dollars per lumen outputs. 

14 They incorporate both the effect of efficacy 

15 improvements as well as sort of the dollars per just 

16 the fixture, the driver and stuff. 

17 MR. SACHS: I appreciate that clarification. 

18 MR. BROOKMAN: Aris, yes. 

19 MR. MARANTAN: Aris Marantan, Navigant. The 

20 projections that were used in the sensitivity 

21 analysis only included the cost reduction projection 

22 and so I don’t believe that we included the efficacy 

23 aspect. It was just the cost for -- 

24 MR. WINIARSKI: I see what you’re saying. So 

25 the costs are, correct me if I’m wrong, the costs 

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1 that -- the reduction that’s incorporated is 

2 effectively the cost to provide the lumens necessary 

3 to illuminate the case, but the energy analysis 

4 portion does not incorporate a change in the effect 

5 -- reduced heat load from those products. I believe 

6 that’s the case. 

7 MR. BROOKMAN: Gary. 

8 MR. FERNSTROM: Gary Fernstrom, PG&E. Two 

9 things are going on here. The cost of LED products 

10 and lighting systems, including heat sinks and 

11 drivers, is going down, and the watts required to 

12 provide acceptable light in the cases is going down, 

13 too. 

14 So it’s not just the heat load but it’s the 

15 electrical power demand and the cost. 

16 MR. BROOKMAN: Okay. So several specific 

17 questions that are here on Slide 39, some of which 

18 we’ve covered already. The last thing that Dave 

19 asked about was kind of the when of this sequencing 

20 of this, I guess, if you had any thoughts on how it 

21 would turn out. 

22 Harvey. 

23 MR. SACHS: I guess -- Harvey Sachs. I’m 

24 going to put this one starkly. I guess, given that 

25 the department has been unable to accept the 

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1 forecasts of the department on projected LED costs, 

2 what would the department do in order to actually 

3 include this, not in the sensitivity analysis but in 

4 the LCCs and NPVs? 

5 MR. BROOKMAN: Mike Rivest. 

6 MR. RIVEST: Harvey, perhaps it’s necessary 

7 to differentiate the word “forecast” from “program 

8 goals.” You know, I don’t -- I believe that the 

9 better description of DOE’s solid state lighting 

10 program, the figures that they publish are program 

11 goals. 

12 So, you know, now these are meant to be 

13 realistic goals, based on, you know, the knowledge 

14 of industry experts and also consistent with the 

15 history and, you know, red LEDs, for example. So 

16 these are not pie in the sky goals, but I do want to 

17 highlight that these, you know, are the products of 

18 research. 

19 MR. SACHS: I very much appreciate that, 

20 Mike, and again this is Harvey. The question still 

21 is for those of us who would comment upon the DOE’s 

22 analyses at this stage and who wish to have the -- 

23 some consideration given to the overwhelming 

24 likelihood of declining costs for these products, 

25 what burden are we facing to have such accepted by 

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1 the department? 

2 We’ve had the unfortunate circumstance of 

3 some things that we thought, together with industry, 

4 were likely to be accepted and there are a number of 

5 things we could do, such as directly contacting 

6 manufacturers, seeing how rigorously they’re willing 

7 to commit. There are lots of things we could try to 

8 do, but if there ain’t nothing we can do that’s 

9 going to move the department, then I’d like to know 

10 that today. 

11 Now maybe I should be careful about what I’m 

12 asking for. 

13 MR. RIVEST: Very generally, Harvey, you 

14 know, there’s a lot of information that’s been 

15 presented that you could provide your own assessment 

16 of its relevance and if you can identify alternative 

17 sources of information that would either support or 

18 contradict those forecasts, that would also be 

19 helpful, and we do have obviously manufacturers 

20 stepping up and, you know, commenting to the docket. 

21 I think those are all, you know, things that 

22 typically are weighting the decision, but I don’t 

23 think there’s a threshold issue here that we can 

24 discuss. 

25 MR. SACHS: I couldn’t hear the last point. 

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1 MR. BROOKMAN: He didn’t think there was a 

2 threshold issue here. 

3 MR. RIVEST: Right. I mean, I don’t think, 

4 you know, there’s no definitive answer. You know, 

5 there’s no definitive piece of evidence that I could 

6 even speculate on right now that would be 

7 definitive. 

8 MR. BROOKMAN: Andrew, go ahead. 

9 MR. deLASKI: I’ll be good cop to Harvey’s 

10 bad cop. 

11 MR. BROOKMAN: I’ll need both your badges. 

12 MR. deLASKI: I don’t think the department 

13 can sit here today and say if you told me X, then I 

14 would do Y. We know you can’t say that. So, you 

15 know, I don’t expect you to answer that question in 

16 sort of definitive way. 

17 As the department, I again want to kind of 

18 get -- you laid out that this is the critical 

19 element of the analysis and I think we made points 

20 earlier today that this is going to be coming up 

21 with a credible estimate and it’s critical that we 

22 have the right answer of this rulemaking to meet the 

23 statutory criteria and that that answer can’t be 

24 zero but that it’s going to be some -- maybe it’s 

25 going to be some particular value or some estimate 

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1 of values. We’ll comment on that in more detail in 

2 our written comments. 

3 MR. BROOKMAN: Thank you. Charlie. 

4 MR. HON: I think we need to slow down a 

5 little bit because we’re focusing so much on one 

6 point. The project here is to get the total power 

7 requirements of the complete equipment, whether it 

8 be the compressor manufacturers giving us more 

9 efficient compressors, lighting more efficient. 

10 The objective here is the Department of 

11 Energy wants to get the most efficient theoretical 

12 unit out there, and I can argue just as vehemently 

13 on different types of compressor designs that are in 

14 the works right now being considered that don’t fit 

15 our market at this time. Variable speed scrolls and 

16 a lot of other things that should probably have more 

17 impact on energy consumption than LED lighting but 

18 they’re not on the table at this moment because we 

19 don’t have a good cost estimate as to where they’re 

20 going to land. They’re just a few -- couple years 

21 further down the line than what this is. 

22 Isn’t the objective to make this as viable as 

23 possible? I think that the Department of Energy’s 

24 done a reasonable estimate here. We know that it’s 

25 coming down. Do we know the timeline? No, we don’t 

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1 know that. Do we know the actual efficiencies of 

2 these bulbs? Not until they’re there. We know that 

3 there’s been a pattern so far that way, but it may 

4 be the law of diminishing returns. 

5 MR. BROOKMAN: Harvey. Harvey, let’s let 

6 this gentleman speak. 

7 MR. SACHS: Sure. 

8 MR. BROOKMAN: Please state your name for the 

9 record. 

10 MR. BOWMAN: Hi. I’m Jeff Bowman from 

11 Continental Refrigerators. I was going to hold my 

12 comments for the input later but just a couple of 

13 things. 

14 I think we’ve talked about the LEDs and we’ve 

15 talked about light quality and things. We’re all 

16 expecting the cost of LEDs to come down, but as we 

17 get into particularly low temperature applications 

18 for LCDs, there’s a lot of issues in light quality 

19 because the color of the LEDs will degrade because 

20 of the temperature applications, too. 

21 So this technology still has to be developed. 

22 So it may not just be a sorting issue, it can be 

23 other issues because of the application. So I 

24 think, you know, these are the type of issues -- 

25 these things may not be set in stone for 30 years. 

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1 It’s going to be reviewed in five years. So I think 

2 that’s part of the issue I wanted to raise, and the 

3 other thing, as Charlie said, you know, there’s 

4 copper and layered foam. There are issues of new 

5 foams that are being regulated and costs are going 

6 up on those and also we’ve got insulation is worse, 

7 not better. 

8 I mean, we’d all love to have four-inch 

9 insulation in cases and things, but the quality of 

10 the foams that we can get now with the price are 

11 going down and a lot of the foams aren’t even 

12 available. So I just wanted to add those, also. 

13 MR. BROOKMAN: Thank you. Harvey. 

14 MR. SACHS: I only wanted to comment on 

15 Charlie’s point about the compressors and similar 

16 technologies which were excluded from the analysis 

17 because the relevant ASHRAE and AHRI rating methods, 

18 test methods, are steady state and do not allow us 

19 to take credit for the benefits of arc load and we 

20 would welcome the opportunity to work with you on 

21 the next generation of rating methods that would 

22 allow us to incorporate these important energy 

23 saving technologies. 

24 MR. BROOKMAN: Thank you. So we’re about to 

25 move on to the next slide. So if you would, look at 

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1 these questions here and see if you have any 

2 additional thoughts and responses. 

3 Yes, Larry. 

4 MR. HOWINGTON: Well, at least for the last 

5 bullet relative to whether we would adopt LED 

6 technology for the design of our equipment, we most 

7 certainly would. I mean that’s what we do, is we 

8 try to find innovative solutions to bring energy 

9 efficient products to our customers and our 

10 customers are receptive to that and, of course, they 

11 look at and expect that over a reasonable amount of 

12 time, you know, they will see those benefits and 

13 just we would love to be able to say in three years, 

14 we can economically provide in these five classes of 

15 cases which happen to be open medium temp cases LED 

16 lighting, but there’s not a great amount of evidence 

17 right now that we can. 

18 As a matter of fact, as an example, we’re 

19 shipping LEDs in doored cases for low temp 

20 applications every day. We have yet to sell one 

21 open medium temp case with LEDs in it. We’ve given 

22 some away but no one’s bought one. 

23 MR. BROOKMAN: Okay. Thanks. Dave. 

24 Trial Standard Levels and Manufacturer Impact 

25 Analysis

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1 MR. WINIARSKI: All right. So let’s see. 

2 We’ve talked about -- forget where I am here. 

3 Basically, within the body of that, we’ve looked at 

4 Trial Standard Levels. We actually do an SEC 

5 subgroup analysis and in that analysis, DOE tries to 

6 identify subgroups that might be impacted in a 

7 manner that’s different than the general user 

8 population for the equipment. 

9 So we asked for -- during the ANOPR, we asked 

10 for input on what might be possible subgroups. The 

11 one thing that I think came back is that we should 

12 be looking at the impacts on small businesses. So 

13 what DOE did was to try to do a subgroup analysis or 

14 an LCC Analysis that really focuses on the impacts 

15 to small businesses. 

16 There are some limitations to that. We tried 

17 to use the base framework that was developed in the 

18 LCC Analysis. The DOE tried to identify who might 

19 be considered small businesses and in this case, we 

20 used the Small Business Association definitions, 

21 SBA-defined small businesses for supermarkets and 

22 grocery stores as largely businesses with less than 

23 $25 million in sales, business firms, not individual 

24 stores. For specialty stores and convenience 

25 stores, -- actually, for convenience stores and 

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1 specialty stores, like meat markets and bakeries, 

2 that number is -- I think the threshold is 6.5 

3 million. 

4 Okay. It’s still a fair amount of sales and 

5 what we did is there’s Census data out there looking 

6 at individual firms that fit within these 

7 definitions where they’ve done surveys and they’ve 

8 looked sort of at the total sales per the firm, the 

9 size of the firm in terms of number of employees, 

10 and you could go through and identify within these 

11 categories of businesses what really gets classified 

12 under small businesses. 

13 What you find out is that a lot of firms in 

14 all categories, a lot of individual firms in all 

15 categories fit the small business definition, but 

16 that when you look at the large grocery and the 

17 multiline retailers, as a whole, the shipments to 

18 those retailers are almost -- you know, by far and 

19 away the majority of the shipments to those 

20 retailers don’t fit into the classification of 

21 shipments to small businesses. 

22 When you start looking at convenience stores 

23 and small grocery stores, that’s not the case, and a 

24 large portion of the shipments, I think something 

25 like 80 percent of these shipments to convenience 

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1 stores, were classified as shipments to small 

2 businesses. 

3 So DOE decided to look at convenience stores 

4 as sort of a proxy subgroup for small businesses in 

5 general. Again two classes of convenience stores 

6 were looked at, those with and without gas stations, 

7 because of the different electricity prices that 

8 were developed for those different business types. 

9 The -- let’s see here. The assumptions that 

10 are -- were used in the general LCC Analysis to 

11 describe those subgroups were largely the same 

12 assumptions that were used for the subgroup 

13 analysis; i.e., they had the same discount rates 

14 that we associated with small business or with the 

15 convenience stores. They had the same equipment 

16 life that was associated with convenience stores. 

17 We did make one assumption which is that, in 

18 general, since we knew we were looking at small 

19 businesses, we modified the shipments through the 

20 difference distribution channels, such that we 

21 assumed that these very small businesses would not 

22 have access to national accounts and that their 

23 shipments would be equally split between sales from 

24 wholesalers and sales through mechanical 

25 contractors. Again that results in a higher overall 

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1 mark-up for those businesses. 

2 DOE processed that data through the LCC 

3 spreadsheet, looking only at those business types. 

4 In general, the results were that the life-cycle 

5 cost impacts on the fraction of the population of 

6 users who would benefit from those standards was at 

7 roughly the same level or maybe even slightly higher 

8 than those for the general population. I think 

9 that’s largely the result of some of the assumptions 

10 with regard to equipment life, but that was the 

11 general result of the subgroup analysis. 

12 So if there’s any questions. 

13 (No response.) 

14 MR. WINIARSKI: Aris. I’ll pass this on to 

15 Aris Marantan who will talk about the Manufacturer 

16 Impact portion of the analysis. 

17 MR. MARANTAN: Thank you, Dave. The 

18 Manufacturer Impact Analysis is another analysis we 

19 conduct for the NOPR phase. 

20 Basically, the purpose of this analysis is to 

21 assess the impact of standards on commercial 

22 refrigeration equipment manufacturers and to do 

23 this, we analyze certain key parameters in the 

24 analysis. 

25 We analyze the costs of complying with the 

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1 standard. So everything that the manufacturer has 

2 to do in order to comply with the standard and the 

3 associated costs are included. We analyze things, 

4 such as our capital conversion costs, product 

5 conversion costs, the costs needed for research and 

6 development to comply with standards, and the two 

7 things that we have as outputs to the analysis 

8 include the cash flow, the industry cash flow 

9 analysis and also the industry net present value. 

10 The second purpose for the Manufacturer 

11 Impact Analysis is to identify and estimate impacts 

12 on manufacturer subgroups. This is separate from 

13 the subgroup analysis for the LCC that Dave spoke 

14 about previously in that this is just manufacturer 

15 subgroups and so we’re not talking about the 

16 purchaser subgroups which were the convenience 

17 stores he mentioned. 

18 The subgroups that we analyzed in this 

19 analysis include small manufacturers and the Small 

20 Business Administration classifies small 

21 manufacturing in this case as a manufacturing 

22 company that has 750 employees or less. 

23 So we reached out to those subgroups -- small 

24 manufacturers, and we conducted interviews with them 

25 as well to find out if they’re more severely 

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1 impacted then, for example, larger manufacturing 

2 companies. 

3 Before one is to examine the impact of 

4 cumulative regulatory burdens on the industry, in 

5 this analysis we look at such things as 

6 manufacturers who produce equipment -- Gary. 

7 MR. FERNSTROM: Gary Fernstrom, PG&E. Could 

8 I go back and ask a question about the industry cost 

9 impact? 

10 We had some discussions in the meeting 

11 earlier about the impact of the increase in the 

12 price of components, such as copper and aluminum. 

13 So how do you differentiate between the effect of 

14 the standard and the effect of changes in costs that 

15 are going on in the industry otherwise, apart from 

16 the effect of the standard? 

17 MR. BROOKMAN: Mike Rivest. 

18 MR. RIVEST: Well, the cash flow analysis is 

19 performed for a base case, just as the energy 

20 modeling, and then for standards case. So in the 

21 base case, it incorporates the product costs, 

22 assuming certain levels of commodity prices, for 

23 example, and those are held constant, both in the 

24 base case and in the standards case. 

25 So the only thing that changes in the product 

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1 cost between the two scenarios is those standards2 induced costs which might result in larger heat 

3 exchangers, more cost to compressors, things like 

4 that. So if you will, those effects of changes in 

5 commodity prices are netted out. 

6 MR. FERNSTROM: Okay. Thank you. 

7 MR. MARANTAN: Okay. I think I was on the 

8 third bullet here. To examine the impact of 

9 cumulative regulatory burdens on the industry. 

10 We looked at several items that fall under 

11 this category of cumulative regulatory burden. We 

12 asked manufacturers during our interviews, you know, 

13 what types of cumulative burdens would they 

14 experience and one of them, for example, is if a 

15 manufacturer produces several types of equipment, 

16 one of them being commercial refrigeration, one of 

17 them might be HVAC equipment, well, HVAC equipment 

18 might also be subject to standards at the federal 

19 level and so we want to analyze any cumulative 

20 effects of having to comply with standards for 

21 several different products. 

22 Another one, for example, is the ROHS or the 

23 Restrictions on Hazardous Substances Directive. 

24 It’s another example and also for commercial 

25 refrigeration, we also analyzed the effect of 

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1 complying with refrigerant phase-outs in the 

2 industry. 

3 For method, we have two things that we 

4 present as an output to this analysis. One is the, 

5 as I mentioned, industry cash flow analysis and the 

6 other is the industry net present value and these 

7 are both analyzed with the Government Regulatory 

8 Impact Model. 

9 Next, we also have the interview process that 

10 we use to determine the items I mention here. 

11 The next slide shows an illustration of what 

12 we do for the Manufacturer Impact Analysis. Phase I 

13 is conducted prior to the ANOPR where we analyze the 

14 industry in terms of publicly-available data. This 

15 can include things such as SEC 10-K reports and 

16 annual reports from manufacturers, if they’re 

17 available, and a complete market and industry 

18 analysis. 

19 Phase II and Phase III happen right after the 

20 ANOPR where we actually develop a strawman 

21 government regulatory impact model, the interview 

22 guide which we use during the interview process, and 

23 Phase III, as a whole, is conducted right before the 

24 NOPR itself and so we’ve conducted this in the last 

25 year. I think we visited manufacturers in 2007 and 

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1 so all of this was considered in MIA. 

2 Are there any questions about the 

3 Manufacturer Impact Analysis? 

4 (No response.) 

5 MR. MARANTAN: Thank you. 

6 MR. BROOKMAN: All right. 

7 MR. MARANTAN: Yes, Andrew. 

8 MR. deLASKI: So are you going to describe 

9 the results from the analysis or are you just 

10 describing the process? 

11 MR. MARANTAN: Just describing the -- yes, 

12 this is it. We’re just describing the process. Our 

13 results are in the TSD. I can highlight some of the 

14 key issues. 

15 MR. deLASKI: One point I want to raise that 

16 caught my eye in reading it. This is a comment, not 

17 so much a question to the department or to you. A 

18 comment, which is that my understanding of the 

19 reading of -- I was going to characterize how I read 

20 the NOPR is that you have essentially looking at 

21 five TSLs. At the lower TSLs, you run two scenarios 

22 for MIA. 

23 One MIA scenario shows a pretty modest impact 

24 on manufacturers and the other shows pretty -- a 

25 much larger impact on manufacturers and at the lower 

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1 levels of the analysis, the lower TSLs, the 

2 department says that it tends to think that the 

3 lower impacts would occur, but at the higher TSL 

4 levels, the ANOPR says that the department tends to 

5 think that the higher impacts would occur, and I 

6 have looked through the ANOPR to look for why that 

7 is and all I can find is because the manufacturers 

8 told us so. 

9 Now I know that this is a difficult 

10 rulemaking to move through because you haven’t had a 

11 rulemaking before on this equipment. So you have to 

12 go to the manufacturers for information and you have 

13 a diversity of manufacturers who I suspect gave you 

14 a lot of different answers. I think that when you 

15 see a range of impacts like this, that it’s 

16 incumbent on the department to be able to assess, 

17 you know, what are, you know, the reasonable 

18 estimates, moving aside from the -- just the data 

19 provided to you by a highly-interested party; that 

20 is, the regulated industry. 

21 At this point, I think that one of the 

22 challenges will be to -- you put down two -- you 

23 characterize in this bounds and it strikes me as 

24 that those bounds have gone too high and I suspect 

25 they’ve gone high because you’re looking at the 

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1 worst case scenario laid out to you by the 

2 manufacturers of the worst case scenario. 

3 Again, I don’t have a lot to go because all 

4 it says in the rule is that you interviewed 

5 manufacturers and they said they think the impact’s 

6 going to be this big. So that’s just a comment more 

7 than it is a question. 

8 MR. BROOKMAN: Mike Rivest. 

9 MR. RIVEST: What would be helpful to receive 

10 comment on and that’s why we put it very clearly in 

11 the TSD and the Notice even is the magnitude of the 

12 capital investments that are required to change the 

13 production facilities, so the magnitude and the 

14 nature of those investments, because they’re a key 

15 driver as well as the product conversion costs. 

16 So because of the magnitude of the products 

17 that need certification, because these products have 

18 not been tested in the past, so there’s not a lot of 

19 knowledge base, you know, the magnitude of the R&D 

20 and the product testing costs are very high and 

21 they’re presented here. So if, you know, we could 

22 receive comment on those that would be very helpful. 

23 The other area of significant uncertainty is 

24 how consumers will respond to these increases in 

25 product costs and to what extent you’ll be able to 

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1 pass them along in price increases and I know that 

2 in the transformer industry, we had, similar to your 

3 industry, significant changes in the price of copper 

4 and steel and because of the nature of their 

5 contracts, which are -- have escalation clauses, you 

6 know, the industry was able to recuperate a lot of 

7 those increased product costs. 

8 So, you know, we’d be looking for anything on 

9 the record, you know, relative to those issues that 

10 would allow us to, you know, improve on our estimate 

11 or at least close the gap between the lower and 

12 higher bounds of expectations. 

13 MR. BROOKMAN: Okay. Thank you. Yes. 

14 MR. deLASKI: Mike, do you have any sources 

15 of data for this, other than what the manufacturers 

16 tell you? 

17 MR. RIVEST: For -- the capital costs are 

18 essentially our estimates. These are not, you know, 

19 strictly off of manufacturers -- 

20 MR. deLASKI: Am I confusing then capital and 

21 conversion costs as two different things? 

22 MR. RIVEST: Those are two different things. 

23 One, the product costs, the product conversion costs 

24 are the costs of product redesign and testing and 

25 certification, whereas the capital conversion costs 

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1 would be the costs of new tooling and equipment 

2 within the facilities. So, you know, those are not 

3 -- these are estimates that we prepare, that we vet, 

4 but because we did a design option and we did some 

5 reverse engineering on some of the products, we were 

6 able to develop some of our own estimates and these 

7 are key drivers in the results. 

8 MR. BROOKMAN: Other questions on Phase I, II 

9 and III for the Manufacturer Impact Analysis? 

10 MR. AMRANE: One question. I mean, since you 

11 are looking through the years down the road, have 

12 you looked at the Regulatory Impact Analysis from 

13 the manufacturers, have you looked at potential 

14 capital rate program on what this would do to the 

15 industry, things like that? 

16 MR. MARANTAN: Not as part of the MIA. 

17 MR. RIVEST: No. If you look at the 

18 definition of regulatory burden as part of the 

19 process, the process rule, it’s fairly explicit that 

20 the intent was primarily to look at the impact of 

21 other federal regulations on this product within the 

22 three-year window of the implementation date or the 

23 impact of other federal regulations of appliance 

24 efficiency standards on other products made by the 

25 same manufacturers. 

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1 So that type of impact, while it would -- you 

2 know, we would certainly gather information and 

3 qualitatively prescribe it, it’s not something that 

4 typically we’ve taken into account in our analysis. 

5 MR. AMRANE: I know, but we know it’s coming, 

6 we know it’s going to happen, you know, within the 

7 next, I don’t know, three-four years. 

8 MR. RIVEST: Perhaps to the extent that those 

9 would change the product costs, like I know that 

10 there was potential regulation on refrigerants, for 

11 example. So those would translate into increased 

12 prices of refrigerants. I think those would be 

13 analogous to the LED forecasts. Is that what you 

14 had in mind? 

15 MR. AMRANE: Oh, yes. 

16 MR. RIVEST: All right. I thought you were 

17 talking more about global climate change policy. 

18 MR. AMRANE: But that would be impact on a 

19 lot of things, not just the equipment. I mean, it 

20 would be on electricity, be on -- 

21 MR. BROOKMAN: Final comments on this. 

22 (No response.) 

23 MR. BROOKMAN: So then we’re moving on to 

24 Utility Impact Analysis. 

25 

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1 

2 Utility Impact Analysis, Employment Impact Analysis, 

3 Environmental Assessment, Regulatory Impact Analysis

4 MR. WINIARSKI: Okay. DOE, as part of its 

5 NOPR Analyses, performs an analysis of the impact of 

6 different trial standard levels on utilities, both 

7 in terms of energy production by fuel type and in 

8 terms of total installed capacity. 

9 It does this using EIA’s National Energy 

10 Modeling System or NEMS. For this rulemaking, DOE 

11 refers to it as NEMS-BT because they actually modify 

12 the NEMS model slightly to perform the work. 

13 The output of DOE’s analysis are the change 

14 in electricity sales and price. The data is 

15 actually available by EIA’s Census regions, although 

16 I think in the rule it’s actually shown in terms of 

17 national impacts, also in the mix of electrical 

18 generation from the different types of generation 

19 sources and the change in installs capacity for each 

20 of those generation sources. 

21 Basically, the results are shown both in the 

22 NOPR and in the TSD. In general, what we see is 

23 significant reductions in both coal and nuclear 

24 plant installations over time. That makes sense as 

25 this is largely a base load for most utilities and 

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1 therefore it can be served by these sort of base 

2 load plants. 

3 Example of the savings. By 2030, the total 

4 reduction in generation capacity is approximately .4 

5 gigawatts for TSL-4. I think, as Andrew, you 

6 commented earlier, it’s about 50 percent higher, 

7 .586 at TSL-5. 

8 DOE, because NEMS-BT model only runs to 2030, 

9 DOE extrapolates based on the last five years of the 

10 model. DOE extrapolates out what those impacts 

11 would be out to 2042 and those results are shown in 

12 the Utility Impact Analysis Section. 

13 In addition, DOE performs an analysis on 

14 National Employment Impact. Basically, they’re 

15 trying to report net jobs created or eliminated 

16 nationally as a consequence of new standard levels 

17 or, in this case, new standard levels at different 

18 TSLs. 

19 To be clear here, the employment impacts that 

20 are discussed in this section are what we call 

21 indirect employment impacts. These are not the 

22 employment impacts that are occur for the 

23 manufacturers of these products. Those impacts are 

24 dealt with in the MIA Section. These are -- in this 

25 section, we deal with the impacts on the remainder 

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1 of the economy. 

2 To do that, DOE uses a model called ImSET for 

3 Impact of Sector Energy Technologies that was 

4 developed for the Building Energy Program, I think, 

5 originally. It looks at -- I forget. There’s a 

6 number of sectors of the economy on the order of 

7 hundreds that it looks at and then looks at the 

8 change in flows, both the first cost and energy 

9 costs to each of those sectors and then tries to 

10 estimate the impact on the national economy. 

11 What generally happens here is that as you 

12 reduce energy expenditures, you free up resources 

13 that can be put to other use within the economy and 

14 one of those uses is employment. So in this case, 

15 what you see is that the analysis predicts that by 

16 2012, when the rule goes in place, there is an 

17 initial drop in national employment, that then by 

18 2020 has picked up significantly and then by 2042 

19 there’s a corresponding continual increase in the 

20 level of employment in the country as a result of 

21 those freed-up resources. 

22 Those results are all shown in Chapter 15. I 

23 think those, depending on the TSL looked at, I think 

24 at the higher end, as much as in 2020, I think 3,000 

25 jobs might be created as a result of the TSL-5, 

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1 again not in the manufacturing sector for these 

2 products but in the rest of the economy. 

3 MR. deLASKI: Doug, are you going to ask for 

4 comments on this? 

5 MR. BROOKMAN: Yes, go right ahead. 

6 MR. deLASKI: So I think I have just a 

7 correction, Dave. For TSL-5, it’s 5,187 jobs that 

8 we estimated. For TSL-4, it’s 4,434 jobs. 

9 MR. WINIARSKI: Yeah. I think it’s -- 

10 MR. deLASKI: You’re looking at different 

11 years. 

12 MR. WINIARSKI: I’m looking at the year 20 -- 

13 I think it’s 2020 or 2022. 

14 MR. deLASKI: You’re doing it over 10-year 

15 increments from 2012. 

16 MR. WINIARSKI: Right, right. Well, if you 

17 look at the sheet below that, how those numbers 

18 change, basically it’s a big jump by 2022 and then a 

19 slightly smaller jump as you get out to 2042. 

20 MR. deLASKI: Right. So my comment on this 

21 is again an observation more than it is a 

22 clarification, which is that, you know, 5,000 jobs 

23 is a significant number. 

24 The department -- right above the table in 

25 ANORP, it says the following, says, “The net 

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1 increase in jobs is so small that it would be 

2 imperceptible in the National Labor Statistics and 

3 might be offset by other unanticipated effects on 

4 employment.” This has sort of been a pattern in 

5 these rulemakings. 

6 The department does the analysis but then 

7 says we don’t believe it. So, you know, I don’t 

8 know quite what to make of this. It’s sort of how 

9 we’ve been dealing with jobs for a number of years. 

10 I think it’s important to keep doing the analysis. 

11 The ImSET Model is a recognized model. Input/output 

12 models are used to estimate job impacts on the 

13 economy and econometric modeling is a recognized 

14 field, though imprecise, but it is a valid field and 

15 it’s appropriate that we’re doing the modeling. 

16 You know, many folks up at the other end of 

17 Pennsylvania Avenue talk about 5,000 jobs, they’d be 

18 pretty happy about that, and if you were to look at 

19 all the rulemaking this department’s doing right 

20 now, the impact is perceptible. Okay. It is 

21 perceptible when you talk about the 25 or so 

22 standards to be set in the next four years. You’re 

23 talking probably, you know, numbers that are going 

24 to exceed a 100,000 jobs, if not 200,000 jobs, 

25 across this whole set of rulemakings that are being 

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1 undertaken. 

2 So for the department to do the analysis and 

3 just do on the back of your hand, I think this is 

4 something that should weigh into your decisionmaking 

5 and how you set standards. Jobs are important, you 

6 know. It’s important in terms of manufacturing 

7 sectors, in terms of the indirect impacts, and I 

8 just would encourage the department going forward to 

9 give this analysis greater weight in its factoring 

10 of its decisionmaking. 

11 MR. BROOKMAN: Thank you. Yes, Bruce. 

12 MR. HIERLMEIER: I just had a question. 

13 Those are U.S. jobs? Those aren’t jobs in China to 

14 make the LEDs and India when we move offshore for 

15 lower-cost components? I mean that’s a fact of 

16 life. We’ve been buying LEDs from other countries. 

17 So a lot of those things will be lost as American 

18 jobs, not necessarily I don’t see gains. 

19 MR. BROOKMAN: Dave, you want to comment on 

20 that? 

21 MR. WINIARSKI: I can comment, and I’m by no 

22 means an expert on this particular model, but it’s 

23 an input/output model of the United States economy. 

24 So in theory, those are jobs that would be created, 

25 I think, within the borders of the United States. 

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1 That said, you make some points about very 

2 specific industrial changes and the model is at a 

3 fairly gross level in terms of it sees flows in the 

4 economy of dollars from one sector of the economy to 

5 the other occurring but it does not get into the 

6 specifics of, you know, yes, those are LEDs and 

7 those LEDs are made somewhere else. So it just 

8 can’t address that. 

9 MR. BROOKMAN: Karim. 

10 MR. AMRANE: Karim Amrane, AHRI. So you said 

11 that the jobs creation is outside of the industry. 

12 What’s the impact on the industry? 

13 MR. WINIARSKI: Those are discussed in the 

14 Manufacturer Impact. I don’t have those numbers off 

15 my head. 

16 MR. BROOKMAN: Could you repeat the question, 

17 Karim? 

18 MR. AMRANE: The question is what Dave said 

19 about job creation outside of the industry, and I’m 

20 asking what’s the impact on the industry. 

21 MR. BROOKMAN: So Aris is searching here. 

22 MR. RIVEST: I believe it is in the ANOPR. 

23 Here’s my understanding of the ImSET Model and how 

24 it works. Essentially, we’re reducing the amount of 

25 expenditures to electricity and generation of 

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1 electricity has certain labor intensity associated 

2 with it and it’s probably a fairly low labor 

3 intensity. 

4 So that money, which is no longer spent on 

5 electricity, is freed up to be spent on other things 

6 and on average, those other things that will hire 

7 labor intensity than energy, so that’s why we’re 

8 saying plus jobs. So it recognizes that part of 

9 that freed-up investment, freed-up dollars is going 

10 to go to China, for example, to purchase LCD 

11 screens, but, you know, that’s the level of 

12 aggregation this model is operating on, whereas when 

13 we’re looking at the industry impacts, typically in 

14 more expensive product, it’s more -- it has more 

15 labor content than least costly product. 

16 So unless there are decisions about, you 

17 know, moving facilities outside of the country, more 

18 costly product results in positive industry impacts 

19 in terms of job growth. So the hard part in doing 

20 these analyses is trying to separate out, you know, 

21 job migration to other countries which, you know, 

22 very frequently is happening. It’s a true ongoing 

23 trend but separate out the effect of the standards 

24 from the natural or, you know, the market-driven 

25 trends and ultimately that’s probably what that TSD 

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1 says. 

2 MR. BROOKMAN: So in response to Karim’s 

3 question, Aris. 

4 MR. MARANTAN: Yes, the numbers we have for 

5 the employment impacts for the CRE industry 

6 themselves at TSL-5, we have 587 production 

7 employees in 2012, for TSL-4 it’s 231. So it’s 

8 about a tenth of what Dave stated for -- 

9 MR. deLASKI: You mean this is an increase, 

10 you’re saying? 

11 MR. MARANTAN: Yes. 

12 MR. deLASKI: So you’re showing an increase 

13 and it’s probably an increase that’s proportionate 

14 to, you know, the price of the product, for example. 

15 MR. BROOKMAN: Tim. 

16 MR. BALLO: Tim Ballo with EarthJustice. 

17 Seeing as we’ve recognized that the direct and 

18 indirect employment impacts are both positive, it 

19 calls into question something that DOE includes in 

20 the NOPR. On Page 5108, DOE concludes that “the 

21 proposed commercial refrigeration equipment 

22 standards are only likely to produce employment 

23 benefits that are sufficient to fully offset any 

24 adverse impacts on employment in the commercial 

25 refrigeration equipment industry.” 

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1 You have a benefit and a benefit and you’re 

2 saying they cancel each other out and that just 

3 doesn’t make any sense to me. That’s just a comment 

4 I’d make. 

5 MR. BROOKMAN: Okay. 

6 MR. deLASKI: I do want to comment on 

7 something Mike said. 

8 MR. BROOKMAN: Andrew, go ahead. 

9 MR. deLASKI: So my understanding of the 

10 ImSET Model at this point is it’s a model of the 

11 U.S. economy and what Dave said is it’s a model of 

12 the employment in the U.S. economy. 

13 MR. WINIARSKI: It’s an input/output model 

14 which includes employment as well as other -- as an 

15 output. 

16 MR. deLASKI: But it’s U.S. employment, just 

17 to clarify this point. 

18 MR. WINIARSKI: My understanding is that it 

19 is U.S. employment, yes. 

20 MR. deLASKI: Okay. 

21 MR. BROOKMAN: Thank you, Aris. 

22 MR. WINIARSKI: DOE also does an assessment 

23 of the environmental impacts of different TSLs. In 

24 this case, the environmental impact is primarily the 

25 result of changes in power plant emissions. 

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1 So DOE used the results from the Utility 

2 Analysis, the modeling of the utility sector with 

3 NEMs and those changes in generation by fuel type, 

4 to generate -- well, within NEMS, it actually 

5 generates the resulting emissions impacts in terms 

6 of carbon dioxide, nitrous oxides, and mercury. It 

7 also generates impacts on CO2 or SO2. Pardon me. 

8 DOE reports those impacts by TSL for the 

9 rule. The SO2 emission changes are actually 

10 assumed. Because SO2 has a firm cap nationwide on 

11 the allowances, DOE assumes that any reductions that 

12 occur due to the standards, effective of the 

13 standards on reduced energy consumption are made up. 

14 Somebody basically purchases that allowance and they 

15 use it to generate allowances that might have -- it 

16 continually -- the cap is continually being met 

17 within the analysis. 

18 Basically, throughout late 2007 and 2008, 

19 regulatory changes with regards to NOX and mercury, 

20 we had two rules that were in place or that were set 

21 to be in place for those particular emissions. NOX 

22 was regulated under the Clean Air Interstate Rule 

23 which would have set a cap on the emissions in 28 

24 Eastern states and the Clean Air Mercury Rule which 

25 was also in place at the time would have set a 

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1 national cap on mercury emissions. Those caps are 

2 built into the NEMS-BT Model, both for the AEO 2007 

3 version and for the AEO 2008 version, and so DOE 

4 generated emissions -- there were some emissions 

5 results that came out of the modeling for those 

6 particular pollutants. 

7 DOE reports the results of that modeling and 

8 also reports -- well, first, it reports the results 

9 of that modeling but it recognizes that there’s a 

10 large amount of uncertainty in those results due to, 

11 you know, these sort of regulatory changes that are 

12 happening. 

13 However, once it did report the results that 

14 are coming from the modeling, it also monetized the 

15 results of the emissions in CO2, nitrous oxides and 

16 mercury. For each of those pollutants DOE used a 

17 range of costs, based on available literature, and 

18 applied that to the changes in emissions to result 

19 in sort of a monetized value for the emissions and 

20 those were, I believe, discounted back to get sort 

21 of a discounted rate that would be consistent with 

22 how it looks at other impacts or the other net 

23 present value of the equipment. 

24 The ranges for economic values were developed 

25 for NOX and mercury based on damage estimates that 

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1 were in the literature and the range of costs for 

2 CO2 was based on worldwide impact studies that have 

3 been done for CO2 and obviously there are some 

4 issues with what should be the appropriate number. 

5 That is still something that the department is kind 

6 of wrestling with, but these are what was reported 

7 for the NOPR and so we invite any kind of comment on 

8 those. 

9 MR. BROOKMAN: Comments on the Environmental 

10 Assessment? Yes, Tim. 

11 MR. BALLO: Tim Ballo with EarthJustice. One 

12 question on the model. Does it have a module that 

13 would allow you to calculate particulate matter 

14 emissions reductions? 

15 MR. WINIARSKI: You know, I can’t recall. I 

16 don’t believe so, but I would have to actually look 

17 at some of the reported values for particulates. 

18 MR. BALLO: I know this issue has been raised 

19 in prior rulemakings and DOE has asserted that it 

20 would be too complex to calculate the impacts on it. 

21 I just would like to know if the model used actually 

22 would produce some sort of a number. 

23 MR. WINIARSKI: It may, but I would have to 

24 actually look at that. I know that there are some 

25 issues with particulates in terms of interaction 

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1 effects, once they’re released what happens, that 

2 complicate the analysis. 

3 MR. BALLO: And then a follow-up question. 

4 On the figures for NOX and mercury, those, in terms 

5 of pollutants, were derived as output from the model 

6 under the assumption that CARE would apply, for 

7 instance, so that the NOX emissions, those are only 

8 for the 22 states that were not part of CARE or 

9 that’s calculated for the whole country and the CARE 

10 emissions, the CARE states were deducted from that? 

11 MR. WINIARSKI: I believe that what we’ve got 

12 in here is essentially assuming that the emissions 

13 that were shown in the model did actually apply 

14 nationwide but in some cases, they correspond more 

15 to the generation of allowance credits that might 

16 occur, I think, in the Eastern states. 

17 Now, of course, with CARE being vacated, you 

18 know, it’s a little hard to say what they would 

19 apply to. So, you know, DOE is going to continually 

20 look at this issue as it moves into the final rule 

21 and see if there’s a better way to sort of describe 

22 what these emissions impacts might be. 

23 MR. BROOKMAN: Yes, Andrew. 

24 MR. deLASKI: A comment on the carbon 

25 evaluations. I made a comment on this in my opening 

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1 remarks this morning. 

2 It’s important that the department is 

3 beginning to put some numbers down and I think we’ll 

4 comment in our written remarks on what appropriate 

5 values should be for this analysis going forward. 

6 But even the analysis published today makes 

7 no good sense of why this is important. You look at 

8 the numbers and this is on Page 5125 of the NOPR 

9 where DOE assumed values of zero to $14, the value 

10 at a -- for TSL-4 for a seven percent discount rate 

11 is zero to $253 million and a three percent discount 

12 rate up to $551 million and at TSL-5, using the $14 

13 value, the high end evaluated for the rule, $368 

14 million, this is real money. 

15 The department -- you know, this is part of 

16 the reason why it’s been so important for the 

17 department to wrap its arms around this issue 

18 because this is a significant economic benefit that 

19 is deriving from this rule, that up until this NOPR 

20 and the NOPR on PTACS, we didn’t have this number, 

21 any sort of numbers, and as a result of not having 

22 numbers, my sense is that it wasn’t factored into 

23 the analysis in a way that the decisionmaking, in a 

24 way that our numbers can help this, can be factored 

25 into the decisionmaking. 

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1 So thank you for this progress and we’ll have 

2 other comments to the NOPR on this. 

3 MR. BROOKMAN: Other comments on the 

4 Environmental Assessment segment? Karim. 

5 MR. AMRANE: Karim Amrane, AHRI. I guess we 

6 believe that DOE has no statutory obligation to 

7 account, to monetize the CO2, but if DOE decides to 

8 go in that direction, then we need to account for 

9 CO2 emission that will result from producing more 

10 efficient products, for example, and that we have to 

11 account for the additional copper from the mining, 

12 from the time we mine the copper until the finished 

13 product, and so on. 

14 I think that’s -- if we want to go in that 

15 direction, we need to do a full analysis of CO2 

16 emissions. 

17 MR. BROOKMAN: Andrew. 

18 MR. deLASKI: I think part of what has come 

19 out of this result so far is, you know, the result 

20 that these numbers matter and I think we have to -- 

21 I think the government can appreciate that with a 

congressional deadline of December 31st 22 this year, 

23 that paralysis by analysis isn’t an option at this 

24 point in this rulemaking. So we need to move the 

25 department. It has an obligation to get the 

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1 standard done and, you know, we can -- we need to -- 

2 I think one of the things incumbent on us is to 

3 show, you know, if we start analyzing additional 

4 elements, does it matter, and I think to say we 

5 analyze everything all the time isn’t really going 

6 to get us very far, but it does show that there’s 

7 changes that need to be analyzed that actually would 

8 help us get to an answer that helps achieve the 

9 obligations and then we’ll support seeing what those 

10 pieces might be. 

11 MR. BROOKMAN: Harvey. 

12 MR. SACHS: Harvey Sachs, ACEEE. I guess, 

13 Karim, what you’re asking for is the impact of the 

14 incremental amount of metal and you would, of 

15 course, be wanting to consider that in the context 

16 of the large-scale recycling so that we’re not 

17 working from the opposite side of large fractions of 

18 these metals. We’re not working from the ore. 

19 MR. AMRANE: No. 

20 MR. SACHS: And we have as a rough guideline, 

21 not from this class of equipment or equipment in 

22 general, for buildings and the equipment in them and 

23 everything associated with them the energy use 

24 during the operating life of roughly 85 percent or 

25 so of the total energy involved over the total life 

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1 cycle, so that just with the points I think we’re 

2 creating upon the incremental energy of a largely3 recycled metals stock is likely to be very small 

4 swing at this analysis relative to some of this. 

5 MR. BROOKMAN: Charlie. 

6 MR. HON: When we started looking at total 

7 impact on the environment, the biggest impact on the 

8 environment was welding agents and refrigerants. 

9 You can discount everything else when you start 

10 running the numbers. 

11 When you have GWPs at 1,300, 1,500, 3,800, 

12 you’re talking impacts that are astronomically 

13 higher than other impacts that we face. That’s 

14 where our true focus is. 

15 MR. SACHS: Thank you. Thank you very much. 

16 MR. BROOKMAN: Okay. Dave. 

17 MR. WINIARSKI: DOE also performs what we 

18 call a Regulatory Impact Analysis. The term, I 

19 think, is a bit misleading but it’s what the 

20 department has used for years now and in effect what 

21 we’re looking at here are really regulatory 

22 alternatives to the rule and the impacts of -- as 

23 best we can guess of what those alternatives might 

24 be. 

25 For -- there’s a number of things DOE could 

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1 look at in the rule. DOE actually looked at 

2 effectively the first three. I see it’s shown up 

3 here as the first four, but primarily it looked at, 

4 you know, what’s the impact, you know, what’s the 

5 world going to look like with no new regulatory 

6 action, what might be the world look like if there 

7 were some sort of national rebate program for the 

8 high-efficiency equipment. 

9 It based its assessment there on looking at 

10 existing rebate programs for utilities. What --

11 essentially if you think about what a rebate program 

12 is, it’s a money transfer. You’re taking money from 

13 somebody that’s a utility program or a national 

14 program paying into a pot of money and transferring 

15 that to purchasers of the equipment. It’s the same 

16 total amount of money for the equipment that’s being 

17 purchased but it incentivizes the purchaser of the 

18 equipment maybe to look at buying more efficient 

19 products. 

20 Similarly, DOE looked at customer tax credits 

21 that might be available for the purchase of higher22 efficiency equipment in line with some of the tax 

23 credits that have been used for other products and 

24 that were in the Energy Policy Act of 2005. 

25 The process to look at those is to make some 

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1 assessment on what would be the values in terms of 

2 rebates or tax credits that might be applied to 

3 equipment at higher efficiency levels and then to 

4 use those to look at how it might influence customer 

5 purchase decisions. Again because we used an 

6 econometric model to developed assessments of 

7 customer purchase decisions, that was a fairly 

8 straightforward process. We reduce the cost of 

9 higher-efficiency equipment compared to lower10 efficiency equipment and you move some of the market 

11 to make that purchase for the higher-efficiency 

12 equipment. 

13 It looked at those impacts on shipments by 

14 efficiency level and then ran that through the 

15 National Energy Savings Model. 

16 DOE reports those results in Chapter 17 of 

17 the TSD in detail. What it came up with, it reports 

18 in a number of different ways, but typically our 

19 assessment of customer rates resulted in on the 

20 order of .1 quads of energy savings in general for 

21 all product categories. Tax credits provided 

22 similar levels of potential energy savings. 

23 There’s actually -- in the TSD -- in the 

24 NOPR, we talk about setting tax credits at five 

25 percent of the purchase cost for certain classes of 

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1 equipment at TSL-3. DOE also did an analysis at TSL2 5 and 10 percent of the purchase cost and there’s 

3 some discussion in the TSD as to why those five and 

4 10 percent levels were arrived at, 10 percent tax 

5 credits were arrived at, but in general, the savings 

6 was on the order of less than a tenth of a quad from 

7 those programs as opposed to nearly a factor of 

8 about a .8 quads for the proposed TSL-4 level. 

9 Okay. With that, that concludes essentially 

10 DOE’s discussion of the Impact Analyses. I’m going 

11 to come back to this slide here which talks about 

12 the issues, particular issues which DOE has 

13 identified and seeks comment. We’re looking at 

14 comments and stakeholder input on LED costs. 

15 Obviously we’ve talked about that and base case 

16 trends and efficiency that DOE could use to improve 

17 the analysis, the operating temperature ranges, the 

18 use of the offset factors that were new in the ANOPR 

19 rulemaking, the extension of the Engineering 

20 Analysis results to the secondary or 23 secondary 

21 equipment classes. 

22 We’ve already talked a little about inputs on 

23 hybrid cases and wedges, and also just general input 

24 on how DOE should consider TSL-5 based on the 

25 results of its analysis. 

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1 MR. BROOKMAN: Charles. 

2 MR. LLENZA: Charles Llenza, Department of 

3 Energy. Also to that list, we’ll add the 

4 consideration of NSF-7, Type 1 and Type 2 cases in 

5 the analysis. We want some comments on that 

6 specifically. 

7 MR. BROOKMAN: So as you look at this listing 

8 there on Slide 48 that Dave just went through, if 

9 there are any additional and final comments, my own 

10 sense of it is we’ve at least taken a first good 

11 shot at all of them, I think, already, but if there 

12 are additional comments now would be the time to 

13 have them. 

14 Yes, Andrew. 

15 MR. deLASKI: Charles, could you just repeat 

16 your last point, please? 

17 MR. LLENZA: Yes. Well, we wanted to add to 

18 that list a Number 8 item, which is what we found 

19 out today about the consideration of NSF’s 7, Type 1 

20 versus Type 2 cases in the analysis, and we’re going 

21 to -- we’d like to have more information on that and 

22 whatever is available. 

23 MR. BROOKMAN: So additional comments on 

24 that? 

25 (No response.) 

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1 MR. BROOKMAN: Okay. So I want to provide 

2 another opportunity for anybody that wishes to do so 

3 to make final comments, to emphasize a point or two, 

4 to summarize their thought processes after this day 

5 of discussion. 

6 (No response.) 

7 MR. BROOKMAN: No other issues to be raised 

8 at this time? 

9 (No response.) 

10 MR. BROOKMAN: I’ll turn it back to Charles. 

11 MR. LLENZA: Okay. Well, I appreciate you 

12 all coming to the meeting today. This concludes our 

13 session. This final slide here is again how to 

14 submit your comments back to the department. A 

reminder. It’s October 24th 15 is the deadline for the 

16 submittal of comments in either written form or via 

17 e-mail or electronic. 

18 So that concludes our session today. Thank 

19 you for coming in. 

20 (Whereupon, at 3 o’clock p.m., the meeting 

21 was concluded.) 

22 

23 

24 

25 

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1 REPORTER'S CERTIFICATE

2 

3 This is to certify that the attached proceedings 

4 before: 

5 UNITED STATES DEPARTMENT OF ENERGY 

6 In the Matter of: 

7 PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS 

8 FOR COMMERCIAL REFRIGERATION EQUIPMENT 

9 

10 Were held as herein appears and that this is the 

11 original transcript thereof for the file of the 

12 Department, Commission, Board, Administrative Law Judge 

13 or the Agency. 

14 Further, I am neither counsel for or related to any 

15 party to the above proceedings. 

16 

17 

18 Wendy Greene 19 Official Reporter 

20 Dated: September 29, 2008 

21 

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