### 202-234-4433 Neal R. Gross & Co., Inc. Page 1 U.S. DEPARTMENT OF ENERGY + + + + + PRELIMINARY ANALYSIS PUBLIC MEETING ABOUT ENERGY CONSERVATION STANDARDS FOR ELECTRIC MOTORS

+ + + + TUESDAY, AUGUST 21, 2012

+ + + + + The Preliminary Analysis Meeting convened in Room 8E-089, U.S. Department of Energy, 1000 Independence Avenue, SW, Washington, D.C., at 9:00 a.m., Doug Brookman, moderator, presiding.

PRESENT DOUG BROOKMAN, Public Solutions, Inc., Moderator LUCAS ADIN, U.S. Department of Energy EMMANUEL AGAMLOH, Advanced Energy KIRK ANDERSON, Underwriters Laboratories HISHAM ARAJI, Navigant Consulting, Inc. TIMOTHY BALLO, Earthjustice DALE BASSO, WEG Electric Corporation THOMAS BISHOP, Electrical Apparatus Service Association, Inc. ALEX BOESENBERG, National Electrical Manufacturers Association ROB BOTELER, Nidec Motor Corporation EDWIN BRUSH, Consultant to Copper Development Association, Inc. KITT BUTLER, Advanced Energy HAYDEN COOK, Navigant Consulting, Inc. ROGER DAUGHERTY, National Electrical Manufacturers Association DANIEL DELANEY, Regal-Beloit ANDREW deLASKI, Appliance Standards Awareness Project

### 202-234-4433 Neal R. Gross & Co., Inc. Page 2 TOM ECKMAN, Northwest Power and Conservation Council R. NEAL ELLIOTT, American Council for an Energy Efficient Economy GEORGE FLOLO, The Flolo Corporation KEN GETTMAN, National Electrical Manufacturers Association WILLIAM HOYT, National Electrical Manufacturers Association SANAEE IYAMA, Lawrence Berkeley Laboratory MICHAEL KIDO, U.S. Department of Energy WILLIAM KOHSE, Navigant Consulting, Inc. FRANK LADONNE, Underwriters Laboratory PAUL LIN, Regal-Beloit ROBERT BRUCE LUNG, Alliance to Save Energy JOHN MALINOWSKI, Baldor Electric Company MATT NARDOTTI, Navigant Consulting, Inc. AL PADILLA, Underwriters Laboratories JAMES RABA, U.S. Department of Energy LINDA RAYNES, Electrical Apparatus Service Association, Inc. STEVE RUFFING, Nidec Motor Corporation TIM SCHUMANN, SEW-EURODRIVE CLARK SILCOX, National Electrical Manufacturers Association CHARLIE STEPHENS, Northwest Energy Efficiency Alliance MEG WALTNER, Natural Resources Defense Council ROBERT WILKINS, Danfoss DOUG RAWALD, U.S. epartment of Energy General Counsel ATTENDING VIA WEBINAR ERIC ANDERSEN, Pacific Northwest National Laboratory AUSTIN BONNETT, Navigant Consulting, Inc. BRIAN BOYD, Pacific Northwest National Laboratory JOHN COCKBURN, Natural Resources Canada HELCLO BLUM, Lawrence Berkeley National Laboratory RICK BUDZYNSKI, Motors BIJIT KUNDU, Energy Solutions

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

HOWARD JORDAN, Consultant

ROBBIE McELVEEN, Baldor Electric Company

DOUG MOORE, Kentucky Service

CHUN CHUN NI, Berkeley National Laboratory

DEREK SANDS, Platts

ZOLAIKHA STRONG, Copper Development

Association

GREG TOWSLEY, Grundfos

### 202-234-4433 Neal R. Gross & Co., Inc. Page 4 C-O-N-T-E-N-T-S Welcome, Introductions, and Agenda Review Doug Brookman................... 5 Purpose of the Public Meeting, Rulemaking Overview, and Opening Statements from Participants Jim Raba......................... 14 Test Procedure: Market and Technology Assessment Hisham Araji and William Kohse... 24

Screening Analysis and Engineering Analysis Hisham Araji and William Kohse... 104

Markups, Energy-Use Characterization, and Life-cycle Cost and Payback Period Analysis Sanaee Iyama..................... 187 National Impact Analysis Sanaee Iyama..................... 203 Preliminary Manufacturer Impact Analysis Hisham Araji.................... 293

Closing Remarks Jim Raba......................... 319

Adjourn............................... 320

### 202-234-4433 Neal R. Gross & Co., Inc. Page 5 1 P-R-O-C-E-E-D-I-N-G-S 2 (9:04 a.m.) 3 MR. RABA: Good morning, everyone, 4 and welcome, whether you are attending today's 5 public meeting in person or via the webinar. 6 This is the U.S. Department of 7 Energy's public meeting about a preliminary 8 analysis of energy conservation standards for 9 electric motors. 10 My name is Jim Raba. I am the 11 project manager for motors. I will be the 12 presiding officer. 13 Today's public meeting will 14 address the analytical framework and 15 procedural framework, models, and other tools 16 the Department of Energy will use to evaluate 17 efficiency standards for this equipment. In 18 all, the Department encourages you and other 19 interested parties to discuss the analysis and 20 submit information, data, and written 21 comments. We want to hear from you. 22 Good morning and welcome.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 6 1 MR. BROOKMAN: It is our tradition 2 to start with introductions. I will start 3 here to my immediate left. Please say your 4 name and organizational affiliation. You can 5 also get used to turning these microphones on 6 and off. And since we are doing a webinar, 7 you need to get the microphone fairly close to 8 your face. So please, name and organizational 9 affiliation. 10 MR. BISHOP: My name is Tom 11 Bishop, Thomas Bishop with the Electrical 12 Apparatus Service Association. 13 MR. BROOKMAN: Thank you. 14 MR. BOESENBERG: Charlie Stephens, 15 Northwest Energy Efficiency Alliance. 16 MR. WILKINS: Robert Wilkins with

17 Danfoss. 18 MR. BROOKMAN: Hang on, Robert. 19 Please, just in time. 20 MS. WALTNER: Meg Waltner with the 21 Natural Resources Defense Council. 22 MR. BROOKMAN: Thank you. Robert,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 7 1 thank you. 2 MR. BOESENBERG: Alex Boesenberg, 3 National Electrical Manufacturers Association. 4 MR. DAUGHERTY: Roger Daugherty, 5 Baldor Electric, Member of the ABB Group. I 6 am also here as the Chairman of the Technical 7 Committee of NEMA's Motor Generator Section. 8 MR. BROOKMAN: Thank you. 9 MR. DELANEY: Dan Delaney with 10 Regal-Beloit. I am also a member of the NEMA 11 Motor and Generator Section. 12 MR. MALINOWSKI: John Malinowski, 13 Baldor Electric, also representing ABB, 14 Incorporated. I am the Chairman of the NEMA 15 Motor and Generator Section. 16 MR. BOTELER: Rob Boteler, Nidec 17 Motor Corporation, Chairman of the NEMA Energy 18 Committee. 19 MR. BASSO: Dale Basso, Weg 20 Electric Corp. I am also the Vice Chairman of 21 the Motor Generator Section of NEMA. 22 MR. LADONNE: Frank Ladonne,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 8 1 Underwriters Laboratories. 2 MR. AGAMLOH: Emmanuel Agamloh, 3 Advanced Energy. 4 MR. DE LASKI: Andrew deLaski, 5 Appliance Standards Awareness Project. 6 MR. ELLIOTT: Neal Elliott, ACEEE. 7 MR. LUNG: Bruce Lung, Alliance to 8 Save Energy. 9 MR. KIDO: Michael Kido, DOE, 10 Office of the General Counsel. 11 MR. RABA: Jim Raba, DOE. 12 MR. BROOKMAN: Why don't you just 13 stand and say your name? 14 MR. ARAJI: Sure. Hisham Araji, 15 Navigant Consulting. 16 MS. IYAMA: Sanaee Iyama, with the 17 Lawrence Berkeley Laboratory. 18 MR. BROOKMAN: Louder, please. 19 MR. KOHSE: William Kohse, with 20 Navigant Consulting. 21 MR. NARDOTTI: Matt Nardotti, 22 Navigant Consulting.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 9 1 MR. ADIN: Lucas Adin, DOE. 2 MR. RAWALD: Doug Rawald, 3 Department of Energy General Counsel. 4 MR. SILCOX: Clark Silcox, NEMA. 5 MR. RUFFING: Steve Ruffing, Nidec 6 Motor Corporation and also representing NEMA. 7 MR. BUTLER: Kitt Butler with 8 Advanced Energy. 9 MR. BRUSH: Ned Brush, consultant 10 to the Copper Development Association. 11 MS. RAYNES: Linda Raynes with 12 electrical Apparatus Service Association. 13 MR. FLOLO: George Flolo with the 14 Flolo Corporation representing EASA. 15 MR. ANDERSON: Kirk Anderson, 16 Underwriters Laboratories. 17 MR. PADILLA: Al Padilla, 18 Underwriters Laboratories.19 MR. SCHUMANN: Tim Schumann, SEW20 EURODRIVE also here with NEMA. 21 MR. GETTMAN: Ken Gettman with

22 NEMA.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 10 1 MR. ECKMAN: Tom Eckman, Northwest 2 Power and Conservation Council. 3 MR. HOYT: Bill Hoyt with NEMA. 4 MR. LIN: Paul Lin, Regal-Beloit,

5 also a member of NEMA. 6 MR. BALLO: Tim Ballo, 7 Earthjustice. 8 MR. BROOKMAN: Okay did everyone 9 get a chance to introduce him or herself? I 10 think so. 11 Well once again, welcome and glad 12 you are here. And welcome also to those that 13 are joining us via the web. Can you tell us 14 the names of those that are joining us via the 15 web and read them into the record? 16 MR. GRAUL: We have got Austin 17 Bonnett, Bijit Kundu, Greg Towsley, and Howard

18 Jordan.

19 MR. BROOKMAN: So far.

20 MR. GRAUL: Yes. 21 MR. BROOKMAN: Okay. Thanks for 22 joining us.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 11 1 All of you received a packet of 2 information as you came in to the room today. 3 I am going to refer to the agenda first. 4 Immediately following this agenda 5 review there is an opportunity -- well we are 6 going to have brief opening remarks about the 7 purpose of the public meeting and we will make 8 an overview and opening statements from Jim 9 Raba. Following that brief overview, there is 10 an opportunity for opening statements. 11 Anybody that wishes to do so can make an 12 opening statement surrounding this rulemaking. 13 Immediately following that, comments on the 14 test procedure: market and technology 15 assessment. We will take a break mid-morning

16 around about 10:45 or so. 17 When we return from the break, 18 screening analysis and engineering analysis, 19 and then markups, energy-use characterization, 20 and life-cycle cost and payback period 21 analysis. 22 We will take lunch around about

### 202-234-4433 Neal R. Gross & Co., Inc. Page 12 1 12:30 or so. Returning from lunch, life-cycle 2 cost and payback period analysis and national3 impact analysis. We will take a break mid4 afternoon as we need to and where it fits 5 appropriately. 6 Following the break or whenever we 7 get there, preliminary manufacturer impact 8 analysis. We will close out the day today 9 with next steps and another opportunity for 10 public comment. Any other issues that haven't 11 been adequately covered, that would be another 12 occasion when you can raise them at the end of 13 the day. 14 We will have closing remarks from 15 Jim Raba. We plan to adjourn today around 16 about four o'clock, however we will go as 17 quickly and efficiently as we can as the day 18 proceeds. 19 Questions here at the outset on 20 the agenda? I see none. 21 I would ask for your 22 consideration, please. If you would, speak

### 202-234-4433 Neal R. Gross & Co., Inc. Page 13 1 one at a time. Please say your name for the 2 record each time you speak. You don't need to 3 say your organizational affiliation. All of 4 you registered as you entered today. 5 Typically, the Department will provide a 6 photocopy of the business cards of those 7 present, so we will have a record for you to 8 take home with you. 9 I am going to be queuing 10 individuals by name, as best I can. I would 11 like to encourage follow-on comment among 12 commenters. Please again say your name. 13 Sometimes the back and forth is very useful 14 for the Department as they review this record. 15 There will be a complete transcript of this 16 meeting available on the DOE website. 17 If you can please be concise, 18 share the airtime. There is a lot to be said 19 and I know that there is the potential for 20 some extended commentary this morning, based 21 on the petition and other events. So if you 22 can be as concise as possible, that would be

### 202-234-4433 Neal R. Gross & Co., Inc. Page 14 1 helpful. 2 Please keep the focus here. Turn 3 your cell phones on silent mode, if you would. 4 Those of you who are on the webinar, if you 5 keep your phones on mute, then we will have 6 less feedback here in the room. And if you 7 wish to speak, then you can raise your hand 8 and our webmaster moderator will pass a note 9 to me and we will get you in the queue for a 10 comment. Please be patient and we will -- 11 then when you un-mute your phone we can hear 12 you in the room. At least that is the way it 13 has worked for the last couple of meetings we 14 have done this. 15 So additional questions before we 16 proceed? Then I am going to turn it back to 17 Jim Raba for an overview. 18 MR. RABA: Well thank you, Doug. 19 And again, welcome to our public meeting about 20 energy conservation standards for electric

21 motors. 22 With the Energy Policy and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 15 1 Conservation Act, as amended, prescribes 2 energy conservation standards for certain 3 commercial and industrial electric motors, the 4 Department of Energy is considering further

5 amendments to those standards. 6 At today's public meeting, again, 7 we will address the procedural and analytical 8 framework, models and other tools the 9 department would use to evaluate efficiency 10 standards for this equipment, present the 11 results of information gathered thus far about 12 motors, the results of the preliminary 13 analyses. The potential energy conservation 14 standards will be derived from these analyses. 15 In all, we encourage you and other 16 interested parties to discuss these analyses 17 and presentations and further submit 18 information, data and written comments. We 19 want to hear from you. 20 Throughout today's presentations, 21 our experts from Navigant Consulting and 22 Lawrence Berkeley National Laboratory, you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 16 1 will see slides like this. And they will 2 prompt certain issues. I mean discussion 3 slides like this. Otherwise, comments about 4 any part of the presentation are welcome 5 throughout. 6 Before we address the regulatory 7 history, steps in the standards rulemaking 8 process, all the analyses, does anybody wish 9 to make an opening statement or brief comments 10 about the preliminary analysis and the 11 potential energy conservation standards for 12 electric motors? 13 Doug?

14 MR. BROOKMAN: So now as we had 15 promised, an opportunity for opening 16 statements. Neal, first. Please say your 17 name, Neal. 18 MR. ELLIOTT: Neal Elliott and I 19 am speaking on behalf of NEMA, motor 20 manufacturers, and the energy efficiency

21 advocates.

22 The advocates and manufacturers

### 202-234-4433 Neal R. Gross & Co., Inc. Page 17 1 have now had a 14-year partnership working on 2 motor standards. And this has led to many of 3 the steps that we are discussing today. In 4 particular, the Energy Independence and 5 Security Act of 2007 motor standards that went 6 into place. 7 Two years ago in this room I had 8 the opportunity again to speak on behalf of 9 the coalition and present a concept for the

10 next round of standards. Last week we 11 formally submitted and is in the packet of 12 materials that was circulated today a petition 13 seeking consensus with respect to the 14 standards. And I wanted to speak briefly in 15 terms of what the coverage of that petition is 16 and why I think this is important. 17 We have taken the approach in the 18 petition of expanding coverage to cover almost 19 all of the three phase induction motors one to 20 500 horsepower. The concept is in the 21 original Energy Policy Act was to specify 22 certain covered product. We think that it is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 18 1 much more administrable rather to approach 2 this by specifying that all motors, one to 500 3 horsepower polyphase induction should be 4 covered products and then explicitly exclude 5 those motors which we feel are inappropriate 6 for the application of the standard.

7 We recommend that the vast 8 majority of those motors be implemented at the 9 NEMA premium, which is the NEMA MG1 12-12, 10 efficiency level. We think that level is 11 achievable by manufacturers without undue 12 burden. The expansion of coverage and the 13 raising of motors to the NEMA 12-12 level will 14 result in significant savings of energy and 15 also result in substantial cost savings to 16 motor consumers in the marketplace. 17 We are pleased to see that the 18 PTSD confirmed that indicating that almost 19 five quads of energy would be saved during the 20 study period from that proposal. 21 We also would note that by 22 changing the approach and focusing on the fact

### 202-234-4433 Neal R. Gross & Co., Inc. Page 19 1 that all motors are covered except those that 2 are explicitly excluded enhances enforcement. 3 The coalition has been very concerned about 4 enforcement issues. For many years we had 5 extensive discussion two years ago when we met 6 to initiate these proceedings with respect to

7 enforcement. 8 We think by explicitly excluding a 9 small group of motors and including coverage 10 to all other motors, that this will enhance 11 enforcement by the Department and by the folks 12 at the Homeland Security. 13 We also think that this path 14 forward will be beneficial on the long-term 15 because this has the opportunity for motor

16 manufacturers to take resources that would be 17 allocated to meeting a higher efficiency 18 target and deploy those toward building the 19 next generation of electric motor. It is the 20 feeling of the coalition that advance motor 21 designs represent the future for efficiency 22 within the motor marketplace and that it is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 20 1 appropriate for the motor community to move 2 forward with that. 3 I would note that NEMA has begun 4 to explore the standards-setting process, 5 including advance motor designs in the MG1

6 standards. 7 Finally, I did want to note that 8 while we were very pleased to see the 9 standard, our proposal ranked well and 10 similarly to what we had analyzed within the 11 PTSD. We, as the coalition, do have some 12 concerns about the CSL Level 3 analysis and 13 are concerned that we may not have captured 14 the full cost in that analysis to the industry 15 of the transition. And those members from the 16 NEMA section will be discussing that in 17 greater detail, as appropriate through the 18 proceedings today. 19 I appreciate the opportunity to 20 speak. Thank you. 21 MR. BROOKMAN: Thank you, Neal. 22 And as you reference, I think all of you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 21 1 received a copy of the joint petition. That 2 was a part of the packet for today. 3 Who would like to speak next? 4 Yes, Robert. 5 MR. WILKINS: Thank you. I'm 6 Robert Wilkins with Danfoss. 7 I would like to start by 8 commending the work that has been done in this 9 PTSD and noted that for several types of 10 motors, there are several CSLs provided. Most 11 of the CSLs are around, near, or exceed 90 12 percent energy efficiency. And typically the 13 cost for CSL 4 and 5 rise very sharply, 14 yielding a lengthy payback period for perhaps 15 one or maybe two percent improvements in 16 energy efficiency. This reflects that for 17 these covered motors we are reaching the point 18 of diminishing returns in motor efficiency. 19 I would like to step back and call 20 attention to the EERE study entitled United 21 States Industrial Motor System Market 22 Opportunity Assessment which was revised in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 22 1 December of 2002, ten years ago. This study 2 states that on average, manufacturing sector 3 could reduce industrial motor energy use by 11 4 to 18 percent, using mature proven efficiency 5 technologies. But it went on to say system 6 efficiency can be improved by improving the 7 match between the component size and load 8 requirements and the use of speed control, 9 instead of throttling in bypass mechanisms. 10 The report stated that while motor 11 efficiency upgrades can achieve potential 12 savings of 19.8 kilowatt hours -- billion 13 kilowatt hours per year, system efficiency 14 improvements are potentially much larger, 37 15 to 79 billion kilowatt hours per year. It 16 goes on to cite the contribution of adjustable 17 speed drives, also known as variable frequency 18 drives or VFDs. 19 Motor efficiencies have indeed 20 improved since 2002 but the points regarding 21 the system efficiency opportunities remain 22 largely valid to date. And VFDs have improved

### 202-234-4433 Neal R. Gross & Co., Inc. Page 23 1 dramatically in the ten years since this 2 report, just as our cell phones, PCs, and 3 other electronic technologies have 4 dramatically improved. Yet, the technology 5 remains largely underutilized in the U.S. 6 compared to other countries. 7 I have had in written comments 8 some explanation about how these devices save 9 energy and I will pass that, in the spirit of 10 brevity. But applying VFD to many motor 11 systems can realistically save 20 percent, 30 12 percent, or more of the energy and the case 13 studies abound. 14 Furthermore, applying VFDs on 15 motor systems enhances the demand response 16 capabilities for both peak load reduction and 17 momentary or transient situations on the 18 electric grid. 19 So comparing this to a possible 20 one percent or maybe two percent efficiency 21 savings by improving the covered motor 22 efficiency, there is a dramatic difference. So

### 202-234-4433 Neal R. Gross & Co., Inc. Page 24 1 Danfoss urges DOE to consider the motor 2 system, not just the motor. We should pursue 3 the much greater energy savings potential that 4 can be afforded by variable frequency drives 5 that continuously match motor output to the 6 actual load of the system, while enhancing 7 demand response capabilities. 8 I appreciate the opportunity to 9 speak today. Thank you. 10 MR. BROOKMAN: Thank you, Robert. 11 Other opening statements here at 12 the outset? No additional comments at this 13 time? Okay. Then let's proceed. 14 All of you received a packet of 15 PowerPoint slides. As Jim referenced, this 16 material will reflect the flow of presentation 17 followed by discussion. 18 First we are going to hear from 19 Hisham. 20 MR. ARAJI: Good morning everyone. 21 My name is Hisham Araji with Navigant 22 Consulting.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 25 1 So as Jim previously mentioned 2 earlier on, DOE will be presenting today some 3 of the preliminary results of the Electric 4 Motor Standards rulemaking. But before we 5 dive into that, I would like first to give 6 some statutory background on where this 7 rulemaking comes from. 8 Going all the way back to the 9 1970s and the era of the energy crises, an Act 10 of Congress called the Energy Policy and 11 Conservation Act or EPCA signed into law in 12 1975 establishing energy conservation

13 standards. 14 EPACT in 1992 directed DOE to 15 establish efficiency standards for certain 16 industrial and commercial motors. More 17 recently in 2007, another Act of Congress 18 called EISA updated those efficiency standards 19 and also established new efficiency standards 20 for motor types not previously covered, which 21 brings us to today's rulemaking. 22 DOE is required by statute to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 26 1 revisit the most recent standards for electric 2 motors, which would be those standards set by 3 EISA, and to publish a final rule determining 4 whether to amend those standards. Any amended 5 standards that DOE does establish would have 6 a compliance date no sooner than December 19,

7 2015. 8 As directed by statute, DOE will 9 determine whether to amend standards for 10 electric motors and if so, what level those 11 new standards should be set at, based on an 12 in-depth consideration of three factors: 13 technological feasibility, economic 14 justification, and energy savings potential. 15 When determining whether a 16 standard is economically justified, DOE 17 considered seven different factors and it does 18 so in eight specific analyses. Here you can 19 see those factors and their corresponding 20 analyses. So for example, the total projected 21 energy savings is considered in the National 22 Impacts Analysis. We will be discussing each

### 202-234-4433 Neal R. Gross & Co., Inc. Page 27 1 of these in greater detail today. 2 So there are four main phases of a 3 standards rulemaking: framework, preliminary 4 analysis, notice of proposed rulemaking, and 5 final rule. Each stage includes a Federal 6 Register notice to place information in public 7 view. At multiple points in the process, DOE 8 invites both oral and written comments on it 9 analysis. Those comments can be in response 10 to not only the Federal Register notice but 11 also technical support documents and 12 analytical spreadsheets posted on DOE's 13 website. 14 The first phase for this 15 rulemaking, the framework document was 16 published on September 28th of 2010 and a 17 public meeting was held a few weeks later here 18 in Washington, D.C. The framework document 19 provides an overview of the rulemaking process 20 and encourages early participation by 21 interested parties. 22 Yes, do we have a comment?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 28 1 MR. BROOKMAN: Yes, Roger 2 Daugherty. 3 MR. DAUGHERTY: Roger Daugherty, 4 speaking on behalf of NEMA. Back at your 5 slide where you indicated current rulemaking 6 process, you do note that EPCA requires the 7 DOE to determine the rule whether to amend the 8 Energy Conservation Standard. However, you 9 don't mention there that you are given 24 10 months to do that. Is there a reason you 11 skipped mentioning that it is within 24

12 months? 13 MR. ARAJI: I think I will let GC 14 comment on this. 15 MR. BROOKMAN: Michael Kido. 16 MR. KIDO: I don't think there is 17 any reason why we just didn't indicate that in 18 there. There is nothing insidious about it. 19 MR. ARAJI: I will state 24

20 months. You are correct. 21 So after the framework document, 22 you go into the preliminary analysis stage,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 29 1 which is the phase we are in right now. 2 This is where DOE presents its 3 initial analytical results. Here you see the 4 different analyses that form the preliminary 5 analysis and we will go -- it's all done in 6 greater detail today. 7 Eventually DOE may publish a 8 Federal Register notice proposing a standard, 9 called a Notice of Proposed Rulemaking or NOPR 10 and hold a public meeting similar to this one 11 to receive feedback on that proposal. I say 12 "may" because DOE also has the option of 13 publishing a determination asserting that

14 these standards are not warranted. Here are 15 the NOPR analyses, which also include a round 16 of revisions to the preliminary analysis. 17 So if DOE does publish a NOPR 18 proposing amended standards, then it will move 19 on to the last phase of the rulemaking 20 process, which is the final rule. In that 21 phase, DOE once again revises its analysis and 22 incorporates feedback received during the NOPR

### 202-234-4433 Neal R. Gross & Co., Inc. Page 30 1 phase.

2 So let's take a look at the 3 timeline for all these steps. So here you can 4 see all the milestones that we just talked 5 about. So the notice announcing today's 6 meeting was published almost one month ago on 7 July 23rd of 2012. The next milestone DOE 8 will publish either a notice proposing new 9 standards or a determination asserting that

10 none are wanted. 11 A final rule, if needed, will be 12 published in October of 2013 and a compliance

13 date of not sooner than December of 2015.

14 That's another comment. 15 MR. BROOKMAN: Roger Daugherty. 16 MR. DAUGHERTY: Roger Daugherty. 17 But that gets back to my previous question. 18 2013 is beyond 24 months and it is as much as 19 the time that you are proposing there is 12 20 months' past. And that only leaves two years 21 between the possible time of the determination 22 and having to come into compliance.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 31 1 MR. BROOKMAN: Michael Kido. 2 MR. KIDO: I think the Agency will 3 take that into account when it sets whatever 4 compliance date. And clearly with respect to 5 the timelines, we have to make adjustments, 6 given the current situation. 7 So to the extent that the Agency 8 can stay within the timetables that have been 9 set out in the statute, it will try to do so. 10 MR. BROOKMAN: Thank you.

11 MR. ARAJI: So -- 12 MR. BROOKMAN: Andrew deLaski. 13 MR. DE LASKI: Just a brief 14 comment on process because I think the 15 petition, of course that we submitted to you, 16 was just received last Wednesday. We 17 understand that that is newly received, even 18 though we have been making recommendation 19 along these lines for, you know, at both the 20 framework stage and at the RFI stage for the 21 coverage. 22 But I just wanted to comment that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 32 1 in the event the Department decides to treat 2 this petition as a petition for a direct final 3 rule, that would then change this process 4 somewhat. And Michael maybe you want to 5 comment on that just so on the record that 6 process -- if the DFR process goes forward, it 7 would look a little bit different than what 8 you have just described. I just want to

9 address that. 10 MR. KIDO: That is correct. That 11 is a possibility, depending on what the 12 Department decides to. If it treats the 13 petition as a petition for direct final rule, 14 those particular timelines could change. 15 These timelines are based on the assumption 16 that a more, for lack of a better word, a 17 traditional notice of proposed rulemaking 18 process is filed so there is a proposal, a 19 comment period, and then a final rule is 20 issued. 21 If a direct final rule process is 22 filed, if that is followed, then those

### 202-234-4433 Neal R. Gross & Co., Inc. Page 33 1 timelines could alter somewhat. It could make 2 for a more truncated timeline. It sort of 3 depends on how the agency decides to treat the 4 petition and I would imagine it would also 5 depend on the timing of certain decisions as

6 well. 7 MR. BROOKMAN: Okay, thank you, 8 Michael. Thank you, Andrew. 9 MR. ARAJI: All right. Now that 10 we have some background on the standards 11 rulemaking, I would like to talk a little bit 12 about the test procedure final rule for 13 electric motors and some of the changes 14 recently made. 15 So in December of 2008, DOE 16 published a NOPR that proposed establishing 17 test procedures for small electric motors and 18 amending the test procedures for medium 19 electric motors. However, DOE deferred 20 amending the test procedure for medium 21 electric motors to a later date and that later 22 date was in January of 2011. That is when DOE

### 202-234-4433 Neal R. Gross & Co., Inc. Page 34 1 published a Supplemental Notice of Proposed 2 Rulemaking or SNOPR to address the issues that 3 were deferred by the previous NOPR. 4 For medium electric motors, that 5 SNOPR proposed four things: (1) updating the 6 referenced industry standards to more recent 7 versions; (2) clarifying the scope of coverage 8 for existing efficiency standards; (3) 9 revising or adding definitions for certain 10 terms; and (4) revising the guidance in 11 Appendix A to Subpart B of 10 CFR 431. 12 So DOE received lots of feedback 13 from interested parties and on May 4th of this 14 year, published the final rule, which 15 finalized many of the issues proposed in the 16 2011 SNOPR. However, rather than revise 17 Appendix A as initially proposed, DOE elected 18 to remove it from the CFR and will instead 19 post updated guidance on DOE's website. 20 Now this slide just gives a broad 21 overview of some of the clarifications made in 22 the most recent test procedure final rule. So

### 202-234-4433 Neal R. Gross & Co., Inc. Page 35 1 EISA 2007 had previously struck the definition 2 for the term electric motor. The May 2012 3 final rule went ahead and incorporated into 4 the CFR a broad definition of that term, 5 defining electric motor as a machine that 6 converts electrical power into rotational 7 mechanical power. 8 EISA 2007 also established 9 efficiency standards for these four types of 10 motors. Now, EISA did not provide definitions 11 for two of them, NEMA Design B motors and fire 12 pump motors. So the May 2012 final rule added 13 definitions for these previously undefined 14 terms and then clarified coverage for all four 15 of these categories. 16 MR. BROOKMAN: Roger Daugherty. 17 MR. DAUGHERTY: Roger Daugherty. 18 Again on behalf of NEMA we certainly welcome 19 the clarification of the coverage and the 20 definitions of subtype I and subtype II that 21 were included. We would like to take this 22 opportunity to publicly thank DOE to listening

### 202-234-4433 Neal R. Gross & Co., Inc. Page 36 1 to NEMA's proposal for that structure back at 2 the framework document and NEMA written 3 comments. However, seeing as how DOE 4 sometimes technical term "tinker" with things, 5 I will note that under the definition of 6 subtype I in trying to cover IEC motors that 7 you expanded on the definition of equivalent 8 frame size to NEMA T frame with equivalent IEC 9 and also trying to interpret those frame sizes 10 that are between standard frame sizes. 11 In the definition of subtype II 12 you duplicated the same definition. So in the 13 interest of those who are manufacturing IEC 14 motors to IEC standards, there is some 15 confusion here as to whether or not an IEC say 16 180 metric frame motor is now a subtype I or 17 a subtype II because you have defined it to be 18 related through both definitions. 19 So efficiency standards are 20 certainly different and this is a present day 21 issue. This doesn't have to do with your 22 proposal in the future. So it is a present

### 202-234-4433 Neal R. Gross & Co., Inc. Page 37 1 day issue as to whether or not IEC motors are 2 being covered and included as subtype II's at 3 lower efficiency levels than NEMA motors are 4 required to meet that are equivalent as 5 subtype I's. 6 So, if you could offer some 7 clarification on why you structured the 8 definition of subtype I and subtype II with 9 respect to frames identical, we would 10 certainly appreciate it. 11 MR. BROOKMAN: Okay. Well of 12 course these comments, you will put them in 13 writing and send them in. Correct? 14 MR. DAUGHERTY: Roger Daugherty, 15 yes. They will be in writing.

16 MR. BROOKMAN: Yes and I am 17 certain the Department will address them at 18 that point. 19 MR. DAUGHERTY: Roger Daugherty 20 again. But as I said, this is a present 21 issue, which goes toward clarifying some of 22 the additional scope of covered products. But

### 202-234-4433 Neal R. Gross & Co., Inc. Page 38 1 it would certainly help that we get this 2 cleared up. 3 MR. BROOKMAN: Michael Kido. 4 MR. KIDO: Okay, to the extent 5 that there is an issue regarding some 6 confusion as to that particular aspect, maybe 7 the best solution for that would be to 8 articulate that in writing for the agency to 9 consider as part of a guidance document or we 10 have a process by which manufacturers and 11 associations can submit questions regarding 12 the application of our various regulations. 13 So maybe that would be the best vehicle to 14 ensure that there is some consistent and 15 clarifying guidance provided to manufacturers 16 as well as to the rest of the public. 17 MR. BROOKMAN: And Michael, what 18 would you anticipate to be the timing for that 19 question and response sort of thing? 20 MR. KIDO: I couldn't say exactly 21 but typically in the past what the agency has 22 done is when it has come up with draft

### 202-234-4433 Neal R. Gross & Co., Inc. Page 39 1 guidance there is a comment period for 2 interested parties to provide some input on 3 that draft guidance but we would first have to 4 get some sort of initial question first. And 5 I can't give you a specific timeline on when 6 a response would be forthcoming. I would not 7 anticipate it taking years or anything like

8 that. 9 MR. BROOKMAN: Just to be clear, 10 what I heard you do there was invite NEMA to 11 submit their questions and comments to you 12 with the hope that they would get a response 13 in a relatively short time frame. 14 MR. KIDO: That's correct and it 15 is through the -- there is a frequently asked 16 questions section of our webpage that I 17 believe that will enable you to do that. 18 MR. BROOKMAN: Okay, that's 19 helpful. Thank you. 20 MR. ARAJI: So yes, thank you for 21 bringing that issue up. So if it is an issue 22 that currently affects the manufacturers, we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 40 1 can try to address it in guidance. 2 Also as mentioned earlier in the 3 meeting, DOE is considering expanding scope of 4 coverage and if that happens, another test 5 procedure will also have to be published to 6 accommodate those new motors brought into 7 coverage and at that point also changes to the 8 test procedure could be made, based on 9 comments or issues that manufacturers raise 10 today. 11 All right, so also as I previously 12 mentioned, the final rule also updated 13 references to industry standards to more 14 recent versions. And these referenced 15 industry standards also include NEMA MG1-2009. 16 Now DOE is aware that NEMA updated MG1 shortly 17 before the publication of the test procedure 18 final rule. 19 Now the preliminary analysis 20 results presented today cite NEMA MG1-2011, 21 which is the more recent version. And as I 22 just mentioned, we are considering expanding

### 202-234-4433 Neal R. Gross & Co., Inc. Page 41 1 scope of coverage to other motor types. And 2 if we do a test procedure to include those new 3 motor types, we could also update references 4 to MG1 to the more recent version as well. 5 And we will elaborate a little bit 6 more on that when we get into that discussion 7 in the next section, the market technology

8 assessment. 9 So at this point, I would like to 10 invite my colleague William Kohse up to 11 discuss the market and tech assessment. 12 MR. KOHSE: Good morning, William 13 Kohse, Navigant Consulting. 14 Okay, so again we see an overview 15 of the preliminary analysis stage and we see 16 that the market and technology assessment as 17 well as the screening analysis are the two 18 most upstream components of the preliminary 19 analysis. We will start with the discussion 20 of those. Also in this section, we will be 21 talking about the issue of scope expansion. 22 So the market and technology

### 202-234-4433 Neal R. Gross & Co., Inc. Page 42 1 assessment or the MTA characterizes the 2 electric motor market and industry, which 3 includes defining the scope of electric motor 4 types that are subject to energy conservation 5 standards for this rulemaking. It also 6 identifies technology options which are used 7 to improve efficiency and it also establishes 8 the equipment classes which are used 9 downstream in the analysis. 10 Screening analysis filters out 11 technology options for improving efficiency 12 that DOE will not consider in the engineering 13 analysis. 14 So here we see a diagram of the 15 relationship between the MTA screening and 16 engineering analyses. The MTA yields 17 technology options that are considered in the 18 screening analysis. The technology options 19 that aren't screened out are renamed a design 20 option and are considered in engineering 21 analysis. The MTA also yields equipment 22 classes, which feed directly into the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 43 1 engineering analysis. 2 So before we continue with that 3 discussion of technology options and equipment 4 classes, let's talk about the expansion of 5 scope of coverage. And a quick note here for 6 the sake of brevity, I am going to use the 7 phrase "scope of coverage" to mean scope of 8 motor types subject to energy conservation 9 standards for this rulemaking. And I may also 10 use the term "standards" to refer to energy 11 conservation standards. 12 So having said that, let me go 13 over a bit of background on the topic of scope 14 expansion. The first part of this slide lists 15 the three categories of general purpose and 16 fire pump motor types that are currently 17 subject to standards as established by EISA in 18 2007. EPACT 1992's definition of electric 19 motor only included general purpose motors 20 with special and definite purpose motors 21 separately defined. EISA 2007 struck EPCA's 22 definition of electric motor and then, through

### 202-234-4433 Neal R. Gross & Co., Inc. Page 44 1 the May 4, 2012 test procedure final rule, DOE 2 adopted a broad definition of the term 3 electric motor which encompasses both special 4 and definite purpose motors. 5 Consistent with the amended 6 statute and DOE's recently promulgated 7 definition of the term electric motor, DOE is 8 considering requiring other motor types that 9 do not fit into one of these three categories 10 noted above to meet minimum energy 11 conservation standards. This approach could 12 include setting standards for motor types that 13 DOE has not regulated in the past, including 14 definite and special purpose electric motors. 15 In response to the September 2010 16 Framework Document, as well as the March 2011 17 RFI document, DOE received numerous comments 18 that advocated the expansion of scope of 19 coverage to include many of these special and 20 definite purpose motors. 21 Commenters also stress this 22 approach would save considerably more energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 45 1 than increasing the current standard 2 efficiency levels for the categories of motors 3 currently subject to standards. 4 So as a result of that, DOE looked 5 into the issue after the framework and the RFI 6 meeting and further discussed expanding the 7 scope of coverage with NEMA, industry experts, 8 energy advocacy groups, as well as motor 9 testing labs. These technical discussions 10 involved whether those motor types that are 11 not currently addressed by standards are 12 capable of being tested under the current test 13 procedures as well as any characteristics a 14 particular motor may exhibit that could impact 15 its tested efficiency. 16 DOE came up with a list of motor 17 characteristics shown on the bottom portion of 18 this slide, which it believes describe the 19 basic characteristics of a motor that should 20 be able to meet minimum efficiency standards. 21 DOE feels that this list will help 22 simplify guidelines for motor types that it

### 202-234-4433 Neal R. Gross & Co., Inc. Page 46 1 plans to include in the expanded scope of 2 coverage and, as previously mentioned, it 3 would also help enforcement efforts by the

4 DOE. 5 Essentially, DOE plans to expand 6 the scope of coverage to include motor types, 7 exhibiting each of the characteristics in this 8 list. Motor types that fail to exhibit each 9 of these characteristics or motor types DOE 10 believes should not be subject to conservation 11 standards or whatever justified reasons will 12 be specifically called out in any DOE-provided 13 guidance as not subject to standards. 14 MR. BROOKMAN: Roger Daugherty. 15 MR. DAUGHERTY: Roger Daugherty. 16 In your list on the previous slide of the 17 common characteristics that are going to apply 18 to the expanded scope of coverage, down toward 19 the bottom you do indicate the correlation 20 between continuous duty of MG1, its definition 21 and duty type S1 of IEC. In the next line, 22 again we come to this type of frame size issue

### 202-234-4433 Neal R. Gross & Co., Inc. Page 47 1 -- the next line not the next slide. 2 MR. KOHSE: Oh, sorry about that. 3 MR. DAUGHERTY: -- and you don't 4 mention IEC. Just to note that that should be 5 included there. 6 MR. KOHSE: Okay, we will take 7 note of that. Okay, thank you. 8 So now that we have gone over a 9 bit of background on the issue, let's look at 10 the currently unregulated motor types that may 11 be subject to efficiency standards, should DOE 12 decide to move forward with scope expansion. 13 The table in this slide lists 14 motor types that are currently not subject to 15 minimum standards, but which DOE is 16 considering to include in the expanded scope 17 of coverage. Should DOE decide to include 18 these motor types in the expanded scope, they 19 will be subject to standards based on their 20 NEMA design type. 21 For example, a NEMA design B 22 integral break motor will be subject to the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 48 1 same standards as a general purpose NEMA 2 design B motor that has both the same 3 horsepower rating, pole, configuration and

4 frame enclosure. 5 So let's pause here for a minute 6 and open the floor to any comment regarding 7 the list of motor types that DOE is 8 considering to include in the expanded scope, 9 as well as any additional motor types that DOE 10 should consider including in this list. 11 MR. BROOKMAN: Let's go back to 12 the previous slide that shows them all, the 13 list. Comments here? Roger Daugherty. 14 MR. DAUGHERTY: Roger Daugherty. 15 But from your list of things that you are 16 wanting to bring up, are you wanting to go 17 through those definitions at this time? 18 MR. KOHSE: Yes, for these motor 19 types. The definitions in the supplementary

20 handout --

21 MR. BROOKMAN: Do we have the 22 supplementary handout?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 49 1 MR. KOHSE: I believe everybody 2 should have a copy of that. It has got a -- 3 I will have it up on the computer but it has 4 got a table that looks like this. 5 MR. BROOKMAN: Thank you. 6 Apparently Neal is holding up this copy. 7 That's the way it looks apparently. 8 MR. KOHSE: Yes, it wasn't 9 included in the original package. 10 MR. BROOKMAN: So maybe you can 11 look on with your neighbor if you don't have 12 one. Because at least half of you I believe 13 have the supplementary document. Okay. 14 So Roger, definitions? 15 MR. DAUGHERTY: Roger Daugherty. 16 Are you going to display the list and we will 17 go through them or we will just go through

18 them? 19 MR. BROOKMAN: Give us a sense, 20 Roger. Do you have a lot of comments on these 21 definitions or -- 22 (Laughter.)

### 202-234-4433 Neal R. Gross & Co., Inc. Page 50 1 MR. BROOKMAN: No. It strikes me 2 that you are doing diligence here quite a bit 3 of detail and specificity. That's good and we 4 want that either on the record now or in 5 written comments in the same level of detail. 6 And I am just, in my mind, I am asking what is 7 the best way for us to do this. 8 MR. DAUGHERTY: Maybe it is just 9 to give a few examples -- 10 MR. BROOKMAN: Okay, that would be 11 great. 12 MR. DAUGHERTY: -- and not try to 13 cover every one of them. Roger Daugherty 14 again. 15 But and I know my first comment 16 also deals with a later slide where you talk 17 about those which are to be excluded. And 18 this is a general comment on definitions as to 19 how the titles of items are labeled. And for 20 example, you and I said this is later but it 21 is a good example, you offer a definition of 22 submersible electric motor for the purpose of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 51 1 excluding that type of motor. 2 What appears to be in conflict is 3 that there is a requirement in 431.2 that if 4 those definitions are included in 431.12 of 5 covered equipment and electric motors being 6 covered equipment, then 431.2 requires any 7 electric motor that is defined in the 431.12 8 is covered equipment, it would therefore imply 9 its standards apply. 10 There is some precedence in the 11 present definitions where DOE did not define 12 NEMA Design B electric motors but instead 13 defined a NEMA Design B motor. So that 14 possibly the condition of 431.2 then did not 15 apply because there was not a definition of an 16 electric motor as a type. 17 Then there was the association 18 between the NEMA Design B motor as being 19 following those which fell into the subclass 20 subtypes I and II as then being covered by

21 standards. 22 So it is just a caution of when

### 202-234-4433 Neal R. Gross & Co., Inc. Page 52 1 you use the term "electric motor" as part of 2 the definition.

3 Most of the other comments deal 4 more with DOE's interpretation of maybe what 5 the common meaning of things are and 6 especially if I refer to the NEMA MG1

7 standard. 8 For example, if we go to 9 encapsulated electric motors, then NEMA would 10 like to point out that that definition which 11 DOE proposes for encapsulated electric motors 12 and attributes to MG1 1.27.2 is actually a 13 based on the NEMA definition of a machine with 14 sealed windings. 15 A definition of a machine with 16 encapsulated windings was in MG1 back at 1967 17 but that definition was replaced in later 18 years with a definition of a machine with 19 moisture-resistant windings so that today 20 there is no definition in MG1 of a machine 21 with encapsulated windings. 22 The other issue here is that in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 53 1 using the title encapsulated electric motor, 2 it tends to imply that the motor is 3 encapsulated, not that the item that we are 4 talking about is that the windings are 5 encapsulated. 6 So it is trying to clarify those 7 kind of things and they will certainly be in 8 the written comments of those particular type 9 of things. 10 Another one that I think becomes 11 very important in many of the new scope of 12 covered products deals with a discussion in 13 PTSD and I think it is in two different 14 chapters and that has to do with component 15 sets and partial motors and that the 16 definition that DOE has proposed for component 17 set states that these parts may consist of any 18 combination of stator frame, wound stator, 19 rotator, shaft, or endshields. 20 If you take that list as a whole, 21 that list describes a complete electric motor 22 but lacking just bearings. So I don't think

### 202-234-4433 Neal R. Gross & Co., Inc. Page 54 1 it is the intent of DOE to classify a complete 2 motor as a component set. And so again, we 3 are looking to try to help DOE clarify exactly 4 what a component set is. 5 We suggest that if it is defined 6 as a combination of motor parts that require 7 more than the addition of two endshields to 8 create an operable motor, then that will be a 9 workable definition. And the reason we 10 propose that definition has to do with our 11 discussion of the partial motor, which is 12 defined as one that requires the addition of 13 two endshields. 14 So a component set would require 15 more than the addition of the parts that are 16 added to a partial motor to make it a complete

17 motor. 18 So those are just a couple of 19 examples but I don't think we need to go into 20 a lot of detail on some of the other 21 definitions. 22 You will find a couple

### 202-234-4433 Neal R. Gross & Co., Inc. Page 55 1 clarifications in the petition that we propose 2 a modification of the DOE proposed definition 3 to be more in harmony. So you will also find 4 it in the petition. 5 MR. BROOKMAN: Thank you, Roger. 6 Those clarifications are helpful. 7 Yes, John. 8 MR. MALINOWSKI: John Malinowski, 9 Baldor Electric. I think I am speaking on 10 behalf of NEMA in this. 11 William you do a good job of 12 listing a lot of things here, as far as motor 13 types. You mention IEC Design N but you have 14 eliminated IEC Design H, which is the 15 equivalent to a NEMA Design C. You might 16 consider adding that to your list. 17 MR. KOHSE: Okay. 18 MR. MALINOWSKI: You refer to it 19 in the report in Chapter 2. 20 MR. KOHSE: Okay. 21 MR. MALINOWSKI: The other part 22 here that on the partial electric motor, one

### 202-234-4433 Neal R. Gross & Co., Inc. Page 56 1 of the things we have tried doing is adding 2 all of these motors into covered product 3 because there are companies that are trying to 4 get around energy standards by modifying their

5 motors. 6 Partial electric motor is a case

7 where we as motor manufacturers would sell 8 incomplete motors, typically a stator and a 9 rotor set to another company. And in some 10 cases, that other company would complete that 11 into a product that should be a covered motor. 12 And we would urge the DOE to add some notes 13 where that company that is doing the 14 conversion must register the motor with DOE 15 and get their compliance certificates and such 16 in line. We think that may be a 17 misunderstanding in the marketplace. 18 And then again we liked the 19 statement that was in Appendix A regarding 20 inverter-capable motors. The DOE had a 21 statement that said a Design A or B motor is 22 not an inverter duty motor just because it is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 57 1 run on an inverter. It is still a covered 2 product under the rules. 3 So adding something back into the 4 regulation, you know, just emphasizing that. 5 In the marketplace, people would like to see 6 inverter duty put on -- or inverter capable 7 put on there. But to have that excluded would 8 be a bad thing, using that as a loophole, if 9 you will. 10 MR. KOHSE: Okay.

11 MR. MALINOWSKI: We want to 12 eliminate loopholes in the new regulations. 13 MR. KOHSE: All right. 14 MR. MALINOWSKI: Thank you. 15 MR. BROOKMAN: Thanks, John. 16 MR. BOTELER: Rob Boteler with 17 Nidec Motor Corporation. A couple of 18 comments. On the chart with the air-over 19 motor we note the test procedure revision is 20 not necessary. And I think the answer would 21 be that is necessary. There is no test 22 procedure for an air-over because we don't

### 202-234-4433 Neal R. Gross & Co., Inc. Page 58 1 know that the air supply would be. 2 The other one would be that you 3 have included in this the integral brake motor 4 and I think you will note in our petition that 5 while we considered the integral brake motor 6 for quite a while, we have had a lot of 7 discussion amongst the members of the 8 coalition. We have concluded that it is a 9 very, very small number of units and the units 10 that are sold are all predominantly very low 11 horse power. So the connected horse power is 12 a very small number. And our conclusion was 13 that it was, I guess, more trouble than it was 14 worth to go through and try and sort through 15 what the losses would be with an integral 16 brake motor with the brake attached. And it 17 would slow down the process of implementing. 18 So we will recommend it in the petition to

19 remove that. 20 MR. BROOKMAN: Okay, thank you. 21 MR. KOHSE: Roger, I will just 22 clarify right quick -- I'm sorry -- Rob.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 59 1 So air-over electric motors we 2 don't have a test procedure revision for that 3 because we don't plan to include it in the 4 expanded scope of coverage.

5 MR. BROOKMAN: I saw both Frank 6 and Neal at the same time. I'm sorry. Is it 7 Dale? I apologize, Dale. Dale, why don't you 8 start, since I misnamed you? 9 MR. BASSO: All right, thank you. 10 Dale Basso. The concern was maybe that test 11 procedure heading. Does it mean -- is it one 12 sentence or is it two sentences? Test 13 procedure meaning one exists and revision 14 necessary is a second question or is it -- 15 MR. KOHSE: It is one sentence. 16 So does DOE feel that a test procedure 17 revision would be necessary for this motor 18 were it to be subject to standards? 19 MR. BASSO: So I think in that 20 case probably several would be wrong because 21 it is assuming there is a test procedure in 22 place. And in the case of, as Rob said, air-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 60 1 over, there is no definition for the amount of 2 air on the test procedure. 3 MR. KOHSE: Right. 4 MR. BASSO: And immersible motors 5 are really nothing more than a fan-cooled 6 motor. So again, the definition of saying -- 7 that one says yes, it is necessary and I'm not 8 sure why. So we probably would have more

9 comments about that. 10 MR. BROOKMAN: Okay, thank you.

11 Frank? 12 MR. LADONNE: Frank Ladonne, 13 Underwriters Laboratories. 14 While UL supports the incremental 15 scope expansion, UL agrees and supports the 16 statement of our colleague from the American 17 Council for an Energy Efficient Economy in 18 that far better clarity of intent and less 19 ambiguity should be realized through making 20 the statement that all motors except those 21 specifically excluded are intended to be

22 covered.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 61 1 As the scope and definitions 2 continue to expand, it would seem that 3 navigation and interpretation of intent 4 becomes increasingly complex. 5 MR. BROOKMAN: Got you. Okay, 6 thank you. Rob and then back to Roger. 7 MR. BOTELER: I just had one 8 comment that I noticed on the document. We 9 have got to be careful with our terms because 10 we have "test procedure" as the term. And 11 several of us have had conversations amongst 12 the coalition and with DOE that we are really 13 not talking about changes to test procedures 14 as much as just to the test configuration. 15 When we look at some of the incremental 16 product, the expanded scope of product, we are 17 never changing going away from the IEEE or the 18 CSA test procedures or test methods. All we 19 are really looking at is some minor mechanical 20 changes to the configuration, so that the 21 product can be mounted to a dynamometer and 22 tested using the existing test procedures

### 202-234-4433 Neal R. Gross & Co., Inc. Page 62 1 within the regulation. 2 MR. BROOKMAN: Got you. So those 3 specifics would be very helpful to the 4 Department. Thank you. 5 Roger. 6 MR. DAUGHERTY: Roger Daugherty. 7 I was just going to follow up on 8 the statements with regards to the totally 9 enclosed air or the air-over machines. While 10 it is true that you have to be able to specify 11 what the air flow air, the other significant 12 problem in doing the test is many times that 13 motor is connected with a fan and that is 14 enclosed in a particular enclosure which helps 15 to control that air flow that goes over the 16 motor, according to the arrangement in the 17 application. 18 So bringing that motor in and 19 trying to put it on a dynamometer and simulate 20 all its real operating conditions is the big 21 problem, not just having air flow but it is 22 getting everything correctly.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 63 1 MR. BROOKMAN: Okay, thank you. 2 Michael Kido. 3 MR. KIDO: I just have a couple of 4 quick follow-up questions. With respect to 5 that type of air-over condition for that type 6 of motor, are there any assumptions that could 7 be applied in applying, for example, those 8 types of conditions and then factoring that in 9 to calculate what the overall efficiency of

10 the motor would be? 11 MR. DAUGHERTY: Roger Daugherty. 12 Well, certainly from the 13 standpoint of the manufacturer with his design 14 analysis programs, then he works with the 15 customer who has his particular application 16 and can calculate what the fan performance is, 17 what the load is going to be on the motor, 18 assumes that the temperature of the motor is 19 going to be controlled. And within that 20 temperature range that the [manufacturer] 21 expects, he could calculate an efficiency 22 using his AEDM.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 64 1 The real aspect is whether then 2 when the customer gets that in a prototype 3 testing situation that he verifies that he has 4 the right amount of flow, that the 5 temperatures are staying where he expected 6 them to be and everything is operating7 correctly. So there is a good deal of follow8 up that would go. But back at the design 9 stage, yes, we calculate and try to determine 10 what the efficiency is going to be in the 11 actual application. However, there may be 12 instances where this motor that we are talking13 about, because it may have a very high air14 flow stream over it, the power density in the 15 motor may be significantly different than it 16 would be in a NEMA Design B. 17 It may also not have to meet the 18 performance requirements of a NEMA Design B, 19 knowing it goes on a fan, in a particular fan, 20 and what energy it takes to start the fan up. 21 So it could dip under locked rotor torque 22 required for Design B, so it can't be a Design

### 202-234-4433 Neal R. Gross & Co., Inc. Page 65 1 B. It is not a Design A and it is certainly 2 not a Design C. So then it falls out of the 3 range of these are the common characteristics 4 and, therefore, it wouldn't apply in the first 5 place. 6 MR. BROOKMAN: Neal, I think John 7 has a follow-on comment and then I am going to

8 Neal. 9 MR. MALINOWSKI: Yes, this is John 10 Malinowski at Baldor. What I was going to 11 say, Michael, is when we supply an air-over 12 motor and it might be totally enclosed or an 13 open motor, that motor goes in the application 14 at the customer's location, let's say as a

15 tunnel fan motor. It has the fan mounted to 16 it and we supply the motor in most cases with 17 temperature-monitoring thermocouples where the 18 customer can run it in application and measure 19 the temperature rise to make sure that we are 20 in compliance there and certainly monitoring 21 power input and such, he can determine 22 efficiency in the application.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 66 1 MR. BROOKMAN: Neal, please. 2 MR. ELLIOTT: Neal Elliott. I 3 guess, Michael, what I would say is as we 4 discussed this within our coalition, these are 5 specialty products and they are really sort of 6 one-offs in a lot of cases. They are designed 7 for a particular client for a particular 8 application. They represent a minute number 9 of the motors sold out there. I think this is 10 one of those that we thought fairly clearly 11 was suitable for exclusion, simply because it 12 is not a lot of savings. Their trying to do 13 testing, trying to do certification for a 14 product that is not an off-the-shelf type 15 product just didn't make sense from a resource 16 perspective. So we had recommended in our 17 petition that we exclude this motor. 18 MR. KIDO: And just a quick follow 19 up to that, would the same rationale apply to 20 the exclusion of any of the brake motor 21 variants, integral brake motor, external brake

22 motors?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 67 1 MR. BROOKMAN: I see, Dale.

2 Please. 3 MR. BASSO: I think brake motors 4 and air-over motors both apply in a way in a 5 way that as manufacturers we feel we can come 6 up with a number that is close to what we are 7 looking for. Our biggest concern really comes 8 down to the verification testing. If 9 something is covered, you have to be able to 10 verify it in a third-party lab situation. And 11 brake motors, we have really struggled with it 12 because even though we think we can build a 13 premium efficient type brake motor, it comes 14 down to being able to test down to the 15 tolerances allowed, the actual efficiency of 16 that motor in a laboratory condition without 17 the brake losses being considered. 18 So it is really, it is something 19 we have tried to figure out how to address but 20 it really falls into the exclusion and becomes 21 not quite worth the effort to gain the 22 efficiency.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 68 1 MR. BROOKMAN: Neal Elliott. 2 MR. ELLIOTT: Neal Elliott again, 3 following up on Dale Basso's comment. 4 One of the things I think that is 5 worth sort of keeping in mind here is this 6 issue of enforcement and testing. You know, 7 this again doesn't really -- it is not a big 8 number from an energy savings standpoint. 9 This adds to the complexity and diminishes 10 administrability of the law. And so that is 11 why we can get just the exclusion of these 12 products has been the best interest. 13 MR. BROOKMAN: Did you say your 14 name is Mano? 15 MR. AGAMLOH: Emmanuel Agamloh. 16 MR. BROOKMAN: Emmanuel, okay. 17 MR. AGAMLOH: Yes, I wanted to 18 come back to the air-over motors and also the 19 brake motors. I think that there are 20 assumptions that can be made and there have 21 been attempts in the past, especially for 22 small motors, single phase motors to make

### 202-234-4433 Neal R. Gross & Co., Inc. Page 69 1 assumptions as far as air-over motors are

2 concerned to test them based on the 3 temperature rise. It is more complicated, I 4 think, for integral motors primarily because 5 of the testing that has been used, which is 6 based on loss segregation. 7 So for regulatory purposes, it 8 would not be a repeatable process if you make 9 such assumptions. So I think it would be very 10 complicated to make assumptions for that case.

11 MR. BROOKMAN: Frank? 12 MR. LADONNE: Frank Ladonne, 13 Underwriters Laboratories. 14 I think when we start talking 15 about air-over motors we are now going into 16 the realm that one of my colleagues made in 17 the opening statements that we need to start 18 thinking more in terms of system efficiencies 19 because it is really very similar to the 20 situation you encounter when you take a half 21 horsepower motor, you can test it and certify 22 that the motor is going to produce

### 202-234-4433 Neal R. Gross & Co., Inc. Page 70 1 efficiencies in the mid- to high 90 percent. 2 But if it is not properly matched in size and 3 coupled with a load, you know, you could be 20 4 or 30 percent off. You know, I don't think 5 that you are going to see those kinds of6 differences with making assumptions with air7 over motors but I think it is more of a system 8 issue than it is anything else. 9 MR. BROOKMAN: Okay, thank you. 10 Final comments on these issues 11 listed in the scope of coverage because we are 12 about to move on. Okay, we are moving on. 13 MR. KOHSE: Okay, great. So that 14 takes us to the next table and this table 15 lists motor types which DOE considered 16 including in the expanded scope of coverage 17 but is no longer planning to cover them 18 because many of them present what DOE would 19 consider insurmountable testing difficulties 20 when testing with either IEEE Standard 112B or 21 CSA C390. And here we see air-over motors in 22 this list, component sets and submersible

### 202-234-4433 Neal R. Gross & Co., Inc. Page 71 1 motors from the motors previously mentioned. 2 Another example is liquid-cooled 3 electric motors. It requires a separate and4 external cooling means, very similar to air5 over electric motors. And DOE feels like that 6 would present insurmountable testing 7 difficulties or testing configurations, as we 8 said earlier. 9 Other motor types in this list may 10 remain not subject to standards because they 11 don't meet all the criteria listed. Back in 12 slide 25, for example, intermittent duty 13 motors, they are not continuous duty rated. 14 Single phase motors don't operate on polyphase 15 power.

16 MR. BROOKMAN: We have comments 17 from both Dan and Roger and also Robert. So 18 you all can choose. I haven't heard from you 19 yet, Dan. Go ahead. 20 MR. DELANEY: I'll go. Dan 21 Delaney, Regal-Beloit. I just wanted to ask 22 a question and ask for clarification on your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 721 number one there on the totally enclosed air2 over. You have that obviously identified as 3 totally enclosed and the prior document we 4 just reviewed being the air-over designation 5 there. I wanted to understand from your 6 perspective if there was a difference there.7 It is not defined as totally enclosed air8 over. 9 MR. KOHSE: Right. So and I guess10 that is my fault. This table is not up-to11 date with regards to that heading. It should 12 just be air-over motors. Part of this stems 13 from the decision to look at air-over motors 14 with both open frames and totally enclosed 15 frames. So by saying just air-over electric 16 motor, DOE is trying to be a little bit more 17 comprehensive in the motor types that it 18 captures that heading. 19 So this totally enclosed, those 20 words would probably drop off of this list.

21 MR. BROOKMAN: Robert. 22 MR. WILKINS: Thank you. Robert

### 202-234-4433 Neal R. Gross & Co., Inc. Page 73 1 Wilkins. 2 I would urge the DOE to consider 3 adding for the sake of reducing or avoiding 4 ambiguity or misunderstanding, add hermetic 5 motors or motors for hermetic compressors to 6 this list. And the reason is that these 7 motors are integral parts of compressors. 8 There is a rotor and a stator that is 9 inherently designed into the compressor and 10 optimized together with the compressor 11 performance. So just simply measuring the 12 motor performance is almost meaningless. 13 And furthermore, these devices are 14 ultimately applied in products that are 15 covered by the DOE, unitary air conditioning, 16 for example, chillers. So the end product is 17 covered, which obviates the need to have the 18 subsidiary components covered and it would 19 just add unnecessary work with little or no 20 benefit. 21 But I do think it would be useful 22 just to eliminate the ambiguity by making that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 74 1 explicit on this list. 2 MR. BROOKMAN: Roger, John has a

3 follow-on. John. 4 MR. MALINOWSKI: John Malinowski, 5 Baldor. That is a good point. However, is 6 that covered under component sets? 7 MR. KOHSE: Yes, it sounds a lot 8 like a component set of a motor. 9 MR. BROOKMAN: Thanks. Robert, go

10 ahead. 11 MR. WILKINS: It's Robert again. 12 Yes, I saw that and I put a tick by it because 13 in a sense it is component sets but it is such 14 a big sector that it could be -- 15 MR. BROOKMAN: Roger? 16 MR. WILKINS: Or you might say, 17 Robert, again, component sets including 18 hermetic motors is another way of doing it. 19 MR. BROOKMAN: Clarifications are 20 helpful. Roger, go ahead. 21 MR. DAUGHERTY: Roger Daugherty. 22 We certainly agree with your comment about the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 75 1 difficulty of testing liquid-cooled but that 2 is similar to the air-over situation that the 3 reason that motor is liquid-cooled is 4 generally that it is into a requirement that 5 requires a very high-power density. So you 6 are very restricted on size. And as we have 7 heard and read a lot in previous rulemakings 8 and through this PTSD, size carries a lot of 9 weight in trying to determine what efficiency 10 you can reach. 11 But it is just a point of 12 clarification. It is not only a testing 13 problem. It is again an application-related 14 power density relation problem and trying to 15 get to the same level of efficiencies that you 16 are wanting for a normal general purpose 17 design A and B motors is just not a practical 18 thing to accomplish. 19 MR. BROOKMAN: Okay, thank you. 20 MR. KOHSE: Okay, great.

21 MR. BROOKMAN: We do have one more 22 additional comment. Please use the microphone

### 202-234-4433 Neal R. Gross & Co., Inc. Page 76 1 and make sure it is -- stand up. Use the 2 microphone and make sure it is turned on. Use 3 the microphone right there. Yes, thank you. 4 Is it turned on? Tap it. 5 MR. RUFFING: Steve Ruffing 6 speaking on behalf of NEMA. 7 In the joint petition that Neal 8 alluded to in his opening statement, there is 9 an additional recommendation that integral 10 brake motors be included on this list of

11 excluded motors. 12 MR. BROOKMAN: Okay, thank you. 13 MR. KOHSE: Okay, so well here is 14 a comment slide. We have already taken 15 comment on a lot of the exempted motor types 16 that are not included motor types. Is there 17 any additional comment, especially with 18 regards to I know you said integral brake 19 motors but any other motor types that should 20 be included in that list? Okay. 21 MR. BROOKMAN: John, please. 22 MR. MALINOWSKI: John Malinowski,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 77 1 Baldor talking on behalf of NEMA. 2 NEMA Design D motors seem to be 3 omitted from this. 4 MR. KOHSE: Okay. 5 MR. BROOKMAN: And Jim Raba just 6 clarified over here that the list is for not

7 covered. Correct?

8 MR. KOHSE: Correct.

9 MR. BROOKMAN: Just to make sure 10 that is clear. 11 Okay, final comments on this and 12 then we are going to move on. 13 MR. KOHSE: John, you are 14 suggesting that NEMA Design D motors be put on 15 this list? 16 MR. MALINOWSKI: Yes, they are not 17 covered now. They shouldn't be. 18 MR. KOHSE: Okay. 19 MR. BROOKMAN: Roger. 20 MR. DAUGHERTY: Roger Daugherty. 21 Not to counteract my colleague but if you put 22 it on an exclusion list, then you have to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 78 1 define it. And you have been pretty clear of 2 this listed characteristics that are common to 3 all this additional scope of product being 4 Design A, B, or C to which you are defining A,

5 B and C. 6 So isn't it rather obvious that 7 Design D is not covered? 8 MR. BROOKMAN: Andrew deLaski. 9 MR. DE LASKI: Just to follow on, 10 I think I agree with Roger on this. I think 11 what needs to be excluded are things that fall 12 within the scope of your definition on back to 13 slide whatever it is, slide 25. 14 MR. KOHSE: Okay. 15 MR. DE LASKI: So if you are not 16 within those bullet points, and D clearly is 17 not, then you don't need to define it to 18 exclude it.

19 MR. BROOKMAN: So John -- 20 MR. DE LASKI: It just has to do 21 with structure. It is the same point. It 22 just has to do with how you structure what has

### 202-234-4433 Neal R. Gross & Co., Inc. Page 79 1 to be defined. 2 MR. KOHSE: Okay. 3 MR. MALINOWSKI: I understand it 4 from that aspect but --

5 MR. BROOKMAN: John. 6 MR. MALINOWSKI: John Malinowski. 7 I understand it from that aspect but we all 8 know that somebody perhaps from Europe or 9 wherever is going to be looking at this 10 legislation and looking for whether Design D 11 is covered or not. And if we can make it 12 obvious that it is not covered, it would be

13 better for enforcement. 14 MR. DE LASKI: And just to follow 15 on to that, this is Andrew again, that just 16 strikes me as belonging in the guidance

17 somewhere.

18 MR. MALINOWSKI: Somewhere. 19 MR. DE LASKI: It is a guidance 20 thing. It is not a regulation. It is 21 guidance. 22 MR. MALINOWSKI: Right.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 80 1 MR. BROOKMAN: Okay. 2 MR. KOHSE: Right and DOE is 3 planning to provide guidance which lists all 4 these motor types that would not be covered 5 and which ones would be covered. 6 MR. DE LASKI: And I think to the 7 extent that you can do it, you know, if it is 8 outside the scope of that, you don't have to 9 go to the trouble of negotiating over the 10 definition so it will expedite the process. 11 MR. BROOKMAN: Provided there is 12 guidance. 13 MR. DE LASKI: Provided there is 14 guidance, yes. 15 MR. BROOKMAN: Okay. Good, that 16 was useful discussion there. Meg. 17 MS. WALTNER: And just to follow 18 on that point, there is a bit of inconsistency 19 between the list on slide 25 or I guess 20 redundancy we should say -- 21 MR. KOHSE: Okay. 22 MS. WALTNER: -- between the list

### 202-234-4433 Neal R. Gross & Co., Inc. Page 81 1 on slide 25 and slide 28 now. So just 2 clarifying for example, slide 25 already 3 clarifies that it is a single speed motor and 4 then you list multi-speed on slide 28. 5 MR. KOHSE: Okay. 6 MS. WALTNER: So just 7 crystallizing that. 8 MR. KOHSE: Okay. 9 MR. BROOKMAN: Okay, good. So 10 let's go. 11 MR. KOHSE: Great. Okay, so 12 moving on. Now to discuss the new test 13 procedure rulemaking, test procedure NOPR that 14 DOE is developing in parallel with this 15 standards rulemaking. 16 The new test procedure rulemaking 17 will address new definitions and any 18 additional test procedure guidance language or 19 test procedure configuration language, which 20 it believes will be necessary to test these 21 motor types. 22 Now I should mention that DOE is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 82 1 not planning to modify either the IEEE or CSA 2 C390 test methodologies themselves but is only 3 planning to issue additional guidance 4 language, configuration language, or 5 preparatory setup steps that would allow the 6 motor to either be attached to a test bench or 7 a dynamometer or to allow the motor to operate 8 as a general purpose motor so that it may be

9 tested. 10 DOE has initiated discussions with 11 various motor testing labs and industry 12 experts concerning the difficulties of testing 13 some of these motor types, as well as how to 14 get around those difficulties. 15 Discussions with these interested 16 parties indicated that many of these motor 17 types could be tested using current DOE 18 accepted test methods with minor testing 19 configuration steps. 20 For example, DOE may issue 21 guidance that would allow a testing lab to 22 machine a custom endplate and provide a deep-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 83 1 groove radial ball bearing that would allow a 2 partial motor to operate as a general purpose 3 motor so that it may be tested. 4 Alternatively, DOE is also 5 considering the possibility of allowing the 6 original motor manufacturer to supply the 7 endplate and necessary bearing component. So 8 again, that the partial motor could be tested 9 as though it were a general purpose motor. 10 The supplementary handout 11 discusses more of these additional test 12 configuration steps that DOE is considering so 13 that all of these motor types may be tested in 14 repeatable, manageable, and consistent 15 manners, using currently accepted DOE test 16 procedures. 17 So I know we have kind of looked 18 at some of the test configuration steps but if 19 there is any additional comments on these 20 steps, specifically the test procedure 21 configuration steps. 22 MR. BROOKMAN: We have begun to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 84 1 cover that. Roger, please. 2 MR. DAUGHERTY: Roger Daugherty. 3 Rather than go into detail here, I just note 4 that that was considered in the submittal of 5 the petition and that you will find in 6 Appendix B of that petition some recommended 7 arrangements to be able to test various types 8 of these additional scope products. 9 MR. BROOKMAN: Okay, thank you. 10 Additional comments related to 11 test procedure modifications that perhaps may 12 not be in that appendix that was referenced. 13 Any additions? No? Nothing additional? 14 Okay. 15 MR. KOHSE: Great. Okay, so let's 16 move on from the discussion of scope expansion 17 and continue with the market and technology 18 assessment discussion picking it back up with 19 the discussion of how DOE divided covered 20 motor types into its equipment classes. 21 When DOE amends energy 22 conservation standards, it often divides

### 202-234-4433 Neal R. Gross & Co., Inc. Page 85 1 covered equipment into classes by statute. 2 These classes are based on the type of energy 3 used, the capacity of the equipment, or any 4 other performance-related feature that 5 justifies different standard levels such as 6 features affecting consumer utility. 7 So DOE breaks down its scope of 8 coverage into three equipment classes by the 9 utility of the motor design. Equipment 10 classes are important because each equipment 11 class ultimately gets its own standard. DOE 12 placed electric motors into three equipment 13 class groupings or ECGs based on three NEMA 14 design types. The equipment class groupings 15 include a group that contains both NEMA Design 16 A and B motors, a second separate group for 17 NEMA Design C motors, as well as a third and 18 final group for fire pump electric motors. 19 Within each of these groups, there are 20 equipment classes, which are based on all 21 combinations of horsepower rating, pole 22 configurations, and enclosure type.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 86 1 MR. BROOKMAN: Just pause there. 2 Roger, go ahead. 3 MR. DAUGHERTY: Roger Daugherty. 4 The industry has quite a bit of concern about 5 this equipment class and the way it is being 6 defined. The reason is the DOE is also under 7 another rulemaking in which an NOPR was issued 8 this year concerning AEDMs. 9 And in that NOPR, it was DOE's 10 proposal, and realize this NOPR covered more 11 than electric motors. It covered all kinds of 12 other products in the application of AEDM. 13 MR. BROOKMAN: Would you spell 14 that out for us, AEDM? 15 MR. DAUGHERTY: AEDM is the 16 alternative efficiency determination method. 17 As it applies to electric motors, it is 18 generally a design program that the engineer 19 uses to design the motor, calculates the 20 efficiency so that he knows that when it goes 21 into production that he gets the efficiency 22 that he expects to get and that it will be in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 87 1 compliance. 2 That AEDM is substantiated in 3 those requirements in 431.17 in 10 CFR, once 4 he has substantiated that he can use it for 5 the purpose of certification of product. 6 So the issue is that over in the 7 other rulemaking process, the DOE has proposed 8 that that AEDM must be substantiated for each 9 and every equipment class to which it is 10 applied. Now, the way DOE is proposing and 11 using the definition of equipment class in 12 this rulemaking is equivalent to what in 13 431.12 is the definition of rating, under 14 which present certification compliance 15 certificates are submitted to the Department 16 of Energy. 17 So you are introducing a new 18 identifier to an existing term that has been 19 in place since 1999 and is covered by the 20 labeling and certification requirements that 21 are spelled out in 431 and now we have this 22 significant concern of saying that an AEDM

### 202-234-4433 Neal R. Gross & Co., Inc. Page 88 1 that presently we can substantiate that that 2 AEDM is applicable to the complete line of 3 products from one to 500 horsepower, two, 4 four, and six-pole open and enclosed under all 5 of the subtype I types and subtype II types. 6 The other rulemaking is proposing, I would 7 have to substantiate the AEDM down to the 8 point that I am talking about a 200 horsepower 9 two-pole open motor. It totally defeats the 10 whole purpose of the AEDM. And it is a 11 significant benefit if you were not using 12 equipment class over in this rulemaking in 13 creating a problem with the other rulemaking. 14 And we have submitted a great deal 15 of comments to the other rulemaking and our 16 concerns about this but we recommend and have 17 suggested in those comments that induction 18 motors are recognized as, [for lack of] a 19 better word, "class." And so the AEDM can be 20 substantiated against this total class of 21 induction motors, whether it is a one 22 horsepower polyphase induction motor two-pole

### 202-234-4433 Neal R. Gross & Co., Inc. Page 89 1 or it is a 500 horsepower. Basically, it is 2 the same technology is used in the components. 3 They only differ in size and arrangement. So 4 the calculation of efficiency and losses is 5 not that different between the sizes. 6 So it is of our interest to try to 7 be certain that we don't create a problem in 8 this rulemaking that introduces a lot of 9 difficulty with the AEDM rulemaking going by 10 a different group within DOE, as I understand 11 it. 12 In the small electric motor 13 rulemaking, you just used the term called 14 efficiency level. You didn't use the term 15 equipment class. So I have noticed that there 16 is a lot of dissimilarities between this 17 rulemaking on what seems to be very similar to 18 what went on in the small electric motor 19 rulemaking. 20 So we want to encourage that 21 rating is presently well understood and that 22 you would not now go using that rating as the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 90 1 definition and confusing it with equipment 2 class, that you consider whatever nomenclature 3 that you wish to use, that through this 4 rulemaking it is identified that induction 5 motors are one, large, single class and that 6 somehow we can get that point over into the 7 AEDM rulemaking process. 8 So we need to request that you are 9 aware of what is going on in multiple 10 rulemakings that are going on simultaneously 11 at the present time. Thank you. 12 MR. BROOKMAN: Thank you. Thanks

13 a lot. 14 So I want you to finish with the 15 presentation and then we will take additional 16 comments because you didn't take up on 34 yet, 17 I do not believe. 18 MR. KOHSE: Okay, so here we see 19 the details of the three ECGs, as well as the 20 number of unique equipment classes in each 21 ECG. There are 514 discrete equipment 22 classes, which account for every permutation

### 202-234-4433 Neal R. Gross & Co., Inc. Page 91 1 of horsepower rating, pole configuration, 2 frame enclosure, and NEMA design type. Note 3 that Design C motors are only covered up to 4 200 horsepower and also lack the two-pole 5 configuration coverage. This is because NEMA 6 MG1-2011 does not define Design C motors above 7 200 horsepower or at the two-pole 8 configuration.

9 So here we see the 2011 market 10 details of the equipment class groupings by 11 units shipped per NEMA design type. DOE used 12 its own research paired with NEMA-supplied 13 data to generate these numbers. 14 The shipment numbers include motor 15 types that DOE is planning to include in the 16 expanded scope of standards. DOE uses this 17 information to focus its attention on the 18 market segments with the highest quantity. 19 The numbers show that NEMA Design 20 B motors have, by far, the highest shipment 21 volumes with the proceeding highest numbers 22 being NEMA Design A followed by NEMA Design C

### 202-234-4433 Neal R. Gross & Co., Inc. Page 92 1 and finally fire pump electric motors, which 2 have the lowest shipment volume. 3 This data is also important in the 4 national impact shipments as well as the 5 manufacturer impact analyses which are all 6 discussed later in this presentation.

7 MR. BROOKMAN: Pause there. 8 Roger, you want to -- okay. Keep going.

9 MR. KOHSE: So after the market 10 assessment, DOE conducts a technology 11 assessment which recognizes potential 12 technology options which may improve 13 efficiency for the electric motor types 14 covered in this rulemaking. Energy efficiency 15 losses are grouped into five main categories 16 which are stator I2R losses, rotor I2R losses, 17 core losses, friction and windage losses, as 18 well as stray load losses. 19 Designers have to balance the five 20 basic losses in order to optimize the various 21 motor performance criteria. There are 22 numerous tradeoffs that have to be considered.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 93 1 Efficiency is only one parameter that has to 2 be met and reducing one loss may increase 3 another, as well as what may be desirable on 4 a four-pole motor may not be desirable on a 5 two-pole motor.

6 MR. BROOKMAN: Yes? 7 MR. BISHOP: Tom Bishop, a minor

8 comment. 9 MR. BROOKMAN: Microphone. 10 MR. BISHOP: I'm sorry. Tom 11 Bishop. One minor comment but increased 12 copper wire diameter should be increased 13 copper wire area. 14 MR. KOHSE: Okay. 15 MR. BROOKMAN: Thank you. Yes,

16 Andrew? 17 MR. DE LASKI: Andrew deLaski. We 18 seem to be shifting to a technology 19 engineering so I want to come back to the 20 shipments because it seemed like a different 21 topic. 22 So in the shipments, could you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 94 1 describe a bit more, Will, sort of how you 2 developed these estimates? You said you used 3 the Department's own methodology. So I am 4 curious what was entailed with your sources. 5 MR. KOHSE: Right. So actually 6 Lawrence Berkeley National Lab developed a lot 7 of the shipment data. So I may well have to 8 have Sanaee chime-in on this.

9 MR. BROOKMAN: Get to a 10 microphone, please. 11 MS. IYAMA: Sanaee Iyama with the 12 Lawrence Berkeley National Lab. 13 So actually we worked with the 14 data that we received from the motor coalition 15 and we reviewed this data against data we 16 collected through a market research report 17 from IMS research and we combined -- so this 18 report provided shipments data across 19 different categories of AC induction motors 20 but didn't necessarily fit the scope, the 21 expanded scope that DOE considered in the 22 analysis. So we combined that IMS research

### 202-234-4433 Neal R. Gross & Co., Inc. Page 95 1 data with breakdowns between the different 2 categories of shipments that are considered in 3 the scope. And our estimated shipments data 4 was very close and agreed with what the 5 stakeholders had submitted. So we ended up 6 using the data provided by the motor 7 coalition. 8 MR. BROOKMAN: Okay. Yes, 9 sufficient? Yes. Rob, please. Thank you. 10 MR. BOTELER: Yes, your numbers 11 are pretty close to what we submitted and I 12 would just ask are all of the expanded scope 13 covered in your numbers? So you are including14 partial motors? You are including three15 quarter motors, gear motors, all of the 16 various categories? 17 MS. IYAMA: Sanaee Iyama. Yes.

18 MR. BOTELER: You are. You are 19 including them all. Because I think the IMS 20 numbers, the numbers that I saw were actually 21 a little more than ours. I think we came up 22 with 5.2 million. Their estimate was over

### 202-234-4433 Neal R. Gross & Co., Inc. Page 96 1 six. 2 MS. IYAMA: So again, we adjusted 3 those numbers because in the IMS research, 4 they include all the AC induction motors, no 5 matter the frame size, no matter the NEMA 6 design. So we readjusted those numbers with 7 estimates of how many AC induction motors are 8 NEMA Design B. Like how much of the total AC 9 induction motors are NEMA Design B motors, how 10 much of these are continuous duty. So we 11 disaggregated the IMS research data into 12 different categories and then we only 13 considered the ones that DOE wanted to add in 14 the expanded scope. 15 MR. BROOKMAN: And so to just to 16 confirm, what the Department is describing as 17 potentially being covered, that is what you 18 analyzed. 19 MS. IYAMA: Right. So the 20 shipment numbers that we see on this slide 21 represent the motor shipped that correspond to 22 the expanded scope that Will just described.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 97 1 MR. BROOKMAN: Great, Rob. 2 MR. BOTELER: Rob Boteler again. 3 And you did include then imbedded motors that 4 are imported into the country, imbedded in 5 other pieces of equipment.

6 MS. IYAMA: Correct. 7 MR. BOTELER: Okay. 8 MR. BROOKMAN: Thank you. Rob, 9 keep going, yes.

10 MR. BOTELER: One more. In the 11 final expanded scope that we submitted, which 12 is 5.2 million, we did add 56-frame polyphase 13 enclosed motors with similar operating 14 characteristics to the 140-frame. So that 15 would maybe explain why our numbers are 16 higher. 17 MS. IYAMA: Correct. And I think 18 those were estimated to about a million.

19 MR. BOTELER: Correct. Correct. 20 MR. BROOKMAN: Great, thank you. 21 Okay, that was good zeroing in there. 22 MR. KOHSE: Okay, so I just wanted

### 202-234-4433 Neal R. Gross & Co., Inc. Page 98 1 to add that different companies utilize 2 different approaches for minimizing motor 3 losses and DOE analyzed motor tear-downs to 4 determine which combination of the displayed 5 methods manufacturers may have used to 6 increase the efficiency of their motors and 7 took this into account in the next step, which 8 is the screening analysis. 9 MR. BROOKMAN: So let's pause 10 there. I see both Roger and Robert. Go 11 ahead, Robert. 12 MR. WILKINS: Thank you. I would 13 like -- Robert Wilkins -- just to comment on 14 this chart. 15 I don't know exactly what it leads 16 to but technology options is a little bit 17 misleading to me because it is more about 18 technology or design tradeoffs. And a couple 19 of items for example, rotor I2R losses. Yes, 20 you can increase the conductivity of the rotor 21 bar. You can switch materials. You can 22 change the air gap and enlarge or make a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 99 1 smaller air gap but these all have tradeoffs 2 to other design considerations, like the 3 speed-torque relationship and you might have 4 the most efficient motor in the world but it 5 won't start. And so I don't know exactly 6 where this goes but if we are going to discuss 7 it in this context, maybe we ought to have a 8 third column that illustrates the tradeoff or 9 the design compromises the design engineers 10 estimate. 11 MR. BROOKMAN: Okay. 12 MR. WILKINS: Thank you. 13 MR. BROOKMAN: Roger. 14 MR. KOHSE: So -- sorry, go ahead. 15 I was just going to say DOE took that into 16 account and the modeling that we did we 17 verified that modeling data with, I guess, 18 like to pull-up torque, break-down torque,

19 locked rotor current on the software-modeled

20 motors. 21 So we tried to take into account 22 the balance that all these technology options

### 202-234-4433 Neal R. Gross & Co., Inc. Page 100 1 have to have in order to make an operable

2 motor. 3 MR. BROOKMAN: Thank you. Roger. 4 MR. DAUGHERTY: Roger Daugherty. 5 On that list under core losses, 6 you state "select lamination with less watts 7 per pound." I know that you are aware of 8 submittals during the small electric motor 9 rulemaking and you refer to that in this PTSD 10 of that type of an assumption, and that DOE 11 went forward with that same assumption and 12 continued it in this PTSD. Just by choosing 13 some electrical steel that happens to have an 14 Epstein characteristic of having less watts 15 per pound at a particular flux density level 16 means that you can then successfully use that 17 in an electric motor to reduce core losses and 18 that those core losses will change by that 19 relationship given to the Epstein loss. 20 Now the data that you submitted 21 during the small electric motor rulemaking 22 that you refer to did not support that. And

### 202-234-4433 Neal R. Gross & Co., Inc. Page 101 1 that was test data of prototypes built using 2 different types of electrical steel that 3 reported to have very low loss per pound. It 4 didn't work out when it was put into an 5 electric motor. You didn't get what was 6 expected and it actually ended up with more 7 core loss than this electrical steel that was 8 normally used. 9 Now in this PTSD, we will be 10 submitting comments and I won't go into all 11 the detail here, but is a different kind of 12 example of a manufacturer specifying to 13 various steel lamination for material 14 manufacturers to purchase electrical steel 15 according to the same specification and then 16 built prototypes from receiving electrical 17 steel from two different manufacturers, 18 manufacturing prototypes of two different 19 ratings, multiple prototypes, not single 20 prototypes, conducted the testing based on 21 Epstein test. 22 The Epstein test would have told

### 202-234-4433 Neal R. Gross & Co., Inc. Page 102 1 you let's say if we identify them that steel 2 type B was better than steel type A. But when 3 it was put into an electric motor, steel type 4 A turned out to be better than steel type B. 5 The point is that the simplified 6 analysis the DOE describes in the PTSD only 7 discusses any current loss in hysteresis loss, 8 which are those characteristics that are 9 measured in the Epstein testing. And again, 10 not to get too deep into this, but there are 11 other losses in a machine that appear in the 12 air gap and the flux level that is imposed on 13 that electrical steel, which is not accounted 14 for in Epstein testing. 15 There are also characteristics of 16 stray load loss when the machine is loaded 17 down that has an effect and is affected by the 18 type of electrical steel. So while this 19 manufacturer went out whole-heartedly, was 20 getting the same electrical steel from two 21 different suppliers, say for building up 22 inventory whatever in research, it was found

### 202-234-4433 Neal R. Gross & Co., Inc. Page 103 1 that even that, depending on how that steel 2 manufacturer manufactured his steel, then he 3 got different levels of losses. 4 And what was said to be good by 5 Epstein test was not the preferred electrical 6 steel when it was put in an electric motor. 7 And that was the same information 8 that was supplied in the small electric motor 9 rulemaking where it actually compared 10 different types of electrical steel and showed 11 the same thing. You can't depend on Epstein 12 test data to make a determination as to how 13 that electrical steel is going to perform in

14 a motor. 15 So the motor industry was very 16 encouraged by reading a comment in a PTSD that 17 DOE fully intended to look into building 18 prototypes by which it could make a 19 determination that by adapting some of these 20 technology options, that it could be proven 21 out. And we certainly encourage that DOE go 22 ahead with those prototypes.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 104 1 MR. KOH SE: Thank you. I will 2 just add that we considered Epstein testing 3 but what we actually used for our software 4 model motors was a grade of electrical steel 5 that was not above the highest grade6 electrical steel that we saw from motor tear7 down, which I believe was M36. So we didn't 8 actually end up using Epstein testing to 9 develop our software model numbers. 10 MR. BROOKMAN: In this slide 36, 11 you see the type of motor losses identified in 12 the technology options, also identified 13 additional comments on what you see in this

14 table. Because we are due for a break. 15 And we should take a break. It is 16 now almost ten minutes to eleven. We will 17 take a 15-minute break, which means we will 18 resume at five after eleven. Don't anybody go 19 anywhere yet. 20 We got a really good start on the 21 day. You must wear this badge visible inside 22 the Department of Energy. There are restrooms

### 202-234-4433 Neal R. Gross & Co., Inc. Page 105 1 on both ends of the hall. There is a coffee 2 shop on the ground floor. Go quickly -- 3 sometimes they are stacked up down there -- 4 because we will resume at 11:05 sharp. We'll 5 see you back here then. 6 (Whereupon, the above-entitled

7 matter went off the record at 10:48 a.m. and 8 resumed at 11:09 a.m.) 9 MR. BROOKMAN: So starting back 10 up, I thought the morning conversation was 11 very, very helpful and I appreciate everybody, 12 the breadth and depth of the comments and now 13 we are going to proceed with screening 14 analysis. 15 At the same time, the Department 16 has prepared, as I mentioned earlier, a 17 photocopy of business cards of the individuals 18 that are here in the room. We are going to 19 pass those around and we are going to hear 20 back from William on screening analysis. 21 MR. KOHSE: All right. Okay, so 22 in the screening analysis DOE removed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 106 1 technology options that it will not consider 2 in the engineering analysis. DOE evaluates 3 technology options on four criteria. These 4 criteria are technological feasibility, 5 practicability to manufacture, install and 6 service, adverse impacts on equipment utility 7 or availability to consumers, whether or not 8 there are any impacts on health or safety. 9 Technology options which fail any of these 10 criteria are screened out of the analysis. 11 So this slide discusses some of 12 the technology options that were screened out 13 for the analysis. Amorphous magnetic steels 14 are non-crystal alloys characterized by high 15 magnetic permeability and high electrical 16 resistance. Amorphous steels could 17 potentially be used to replace the standard 18 electrical steels currently used in motors so 19 that they may help reduce core losses and 20 minimize eddy current losses. However, they 21 are also thin and brittle, making it difficult 22 to cut and machine the material into shapes

### 202-234-4433 Neal R. Gross & Co., Inc. Page 107 1 suitable for electric motor cores. 2 While some prototypes have been 3 developed using amorphous core material, DOE 4 is unaware of any polyphase induction motors 5 that use amorphous core technology. 6 Therefore, DOE does not believe this option is 7 likely to be technologically feasible at this 8 time. 9 The next technology is called 10 plastic bonded iron power, or PBIP, which is 11 based on an iron powder alloy that is 12 suspended in plastic and then shaped into 13 electric motor components using a centrifugal 14 mold. Potential advantages of this technique 15 include lower core loss, a reduced number of 16 production steps, and increased efficiency. 17 However, DOE is not aware of any polyphase 18 induction electric motors that have been 19 prototyped using this technology. Therefore, 20 it does not consider this option to be 21 technologically feasible and has also screened 22 it out of the analysis at this time.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 108 1 So we will pause here for a second 2 and open the floor to any comments on PBIB or 3 amorphous steel technology in electric motors, 4 including any such efforts that are underway 5 or prototypes that may be under development. 6 MR. BROOKMAN: Roger Daugherty. 7 MR. DAUGHERTY: Roger Daugherty. 8 We certainly agree with the exclusion of those 9 two particular types of technology as not 10 passing the screening criteria. However, at 11 this time, it is noticeable that you omitted 12 from your presentation the inclusion of cast 13 copper rotors as meeting all four screening 14 criteria. 15 And I will try to keep this brief 16 and there will be a lot of detail in the NEMA 17 comments that will be submitted. In trying to 18 examine this issue of cast copper as 19 applicable to motors with one to 500 20 horsepower, two-, four-, and six-poles in open

21 and enclosed enclosures of what DOE has 22 estimated would need to be available for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 109 1 approximately five million cast copper rotors 2 available for production beginning in 2016 to 3 be in compliance if efficiency standards were 4 established on that basis. So we went back 5 and tried to find how DOE could have 6 successfully screened cast copper rotors as 7 being a viable technology to meet that need. 8 First we looked at production in 9 the United States for NEMA Design B electric 10 motors manufactured with cast copper rotors, 11 manufactured in the United States. We 12 couldn't find any. We looked and noted that 13 DOE had said that cast copper rotors were 14 being used in present products. The only 15 products that we could find were manufactured 16 outside the United States.

17 We located two manufacturers 18 making such products. Manufacturer A, in19 looking over those products, only made four20 pole motors, only made ratings for one to 30 21 horsepower. None were Design B, they were all 22 Design A. None of those of course were being

### 202-234-4433 Neal R. Gross & Co., Inc. Page 110 1 made in the United States.

2 We looked at the second 3 manufacturer who has a product line 4 manufactured outside the United States and 5 while theirs covered from one to 20 6 horsepower, there were some gaps. There were 7 some missing frame sizes within those ratings 8 where there were no cast copper rotors. But 9 again, it was limited to 20 horsepower. There 10 were no eight-poles included in those 11 availability products. 12 And if you look, and this will get 13 more toward their scaling issue, but I will 14 mention it now, if you look at the change in 15 efficiency level that was obtained, if you 16 look at two-poles, it was not consistent. 17 Half of them attained two NEMA bands, higher 18 efficiency. Half of them attained three. If 19 you looked at the four-poles, they only 20 attained one. If you looked at the six-poles, 21 again there was a dispersion of what level 22 efficiency is attained. Okay and that, as I

### 202-234-4433 Neal R. Gross & Co., Inc. Page 111 1 said, we will get to the scale in issue of how 2 DOE scales things by assuming it is common 3 across all pole numbers. 4 So that is the only scope of 5 products that we could find and couldn't see 6 how someone took that very limited scope and 7 made an assumption that at the end of 2015, 8 that technology was going to be applicable to 9 the full range of product we are talking

10 about. 11 Carrying feasibility a little bit 12 further than the simplified statement that DOE 13 says that they follow, we examined two recent 14 technological feasibility studies that were 15 conducted by the U.S. Army. The U.S. Army16 began a study in 2004 on ten horsepower four17 pole motors to make an examination as to 18 whether or not it was technically feasible 19 using manufacturing processes in the United

20 States. 21 As a result of that study, their 22 first attempt in the first ones they designed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 112 1 had very poor results. So they worked on 2 refining the process to try to get better 3 results. At the conclusion, they did have a 4 ten horsepower four-pole motor that had a 5 slightly higher level of efficiency, the NEMA 6 premium. That study concluded basically with 7 that result. There was no sort of any 8 industry support. It was all that study. 9 But that study did recommend that 10 they needed to investigate higher horsepower. 11 So in 2007, they began another study looking 12 into a 75 horsepower two-pole motor. And the 13 purpose of that motor was a replacement for an 14 existing motor at Fort Bragg. So it had both 15 an application assigned to it where they could 16 test it out in real operation, as well as 17 seeing if they could get higher efficiency. 18 At the same time, they had an available 19 replacement motor from the market cast 20 aluminum rotor that had an efficiency level of 21 95.0, I believe it was. 22 So their design goal was they had

### 202-234-4433 Neal R. Gross & Co., Inc. Page 113 1 to beat that. So this group of electric motor 2 designers, the only industry in the U.S. that 3 was really familiar with trying to cast copper 4 rotors and various other support groups tried 5 to design a 75 horsepower two-pole motor that 6 had higher efficiency than available in the 7 marketplace. 8 To say the results were 9 disappointing is putting it very mildly. The 10 efficiency that they obtained was 11 substantially lower than the cast aluminum 12 motor that they could purchase as a 13 replacement but they did go ahead and they put 14 that motor in place. 15 So the only study that I know of 16 that has looked into higher horsepower motors 17 is that study funded by the U.S. Department of 18 the Army and it was not successful in making 19 a determination that this process is 20 technologically feasible for motors up into 21 that horsepower, let alone larger horsepower 22 ratings.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 114 1 Then you also have your second 2 requirement is the practicality to 3 manufacture, install and service. And that 4 requirement states if mass production of a 5 technology and commercial products and 6 reliable installation and servicing of the 7 technology could be achieved on a scale 8 necessary to serve the relevant market at the 9 time of the effective date of the standard, 10 then DOE will consider that technology. 11 I put it to the DOE to be able to 12 demonstrate that that technology will be 13 available for mass production on such a scale 14 in the United States to support the range of 15 products that would be impacted by that 16 technology. 17 The third is adverse impacts on 18 product utility or product availability. In 19 this case, we have heard and you can read in 20 the PTSD problems, and you heard them earlier 21 this morning, of it is not so easy to make 22 changes in motor design to achieve efficiency

### 202-234-4433 Neal R. Gross & Co., Inc. Page 115 1 without the impact it has on a lot of the 2 other performance requirements. 3 So when you look at a lot of this, 4 and especially into the increased scope 5 products, going to cast copper rotors could 6 make those products unavailable to the market. 7 You have not satisfied condition three in 8 terms of utility and availability. 9 The fourth item is adverse impacts 10 on health and safety. I'm sure DOE, since 11 they referred to it and have been made aware 12 of it, that one reason cast copper rotor 13 technology is not in use by manufacture in the 14 United States is you cannot purchase the cast 15 copper casting machinery. And if you do a 16 little research, you will find why that 17 manufacture withdrew that equipment from the

18 market. 19 So you have successfully screened 20 and passed cast copper rotor technology as 21 completely technologically feasible over all 22 this product range, practical to manufacture

### 202-234-4433 Neal R. Gross & Co., Inc. Page 116 1 as mass manufacturing effective January first 2 -- actually December 20, 2015, should 3 standards be based on that, that it would have 4 no adverse effect on product utility or 5 product availability and it would have no 6 adverse impact on health and safety trying to 7 work with this very high molten metal 8 temperatures. 9 It is NEMA's contention and the 10 industry's contention that DOE was improper in 11 successfully screening this technology for 12 application in electric motors and that this 13 technology should be used over to the list of 14 technologies that were screened out and that 15 the PTSD should remove any engineering 16 analysis that is based upon the use of cast 17 copper technology. It cannot have 18 successfully passed screening. 19 MR. BROOKMAN: Okay, thank you. 20 MR. KOHSE: We will take those 21 comments into consideration.

22 MR. BROOKMAN: Are there other --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 117 1 yes, Michael Kido. 2 MR. KIDO: Just a real quick 3 clarifying question. Those two reports that 4 you cited, are those reports that NEMA can at 5 least provide the citations to so we can track 6 those down a little more easily or are those 7 things that you have in hand that can be 8 submitted for the record? 9 MR. DAUGHERTY: Roger Daugherty. 10 I would expect the Department of Energy -- or 11 the Department of the Army had some identifier 12 assigned to them, so we can try to find what 13 that identifier was to provide you a

14 reference. 15 MR. BROOKMAN: Thank you. It is

16 Ed?

17 MR. BRUSH: Ned. 18 MR. BROOKMAN: Ned, please say 19 your name. 20 MR. BRUSH: Ned Brush, 21 representing the Copper Development 22 Association, consultant to them.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 118 1 I am a metaler, just by 2 background, who was part of the team that 3 developed the die casting of copper. I worked 4 with Siemens, for instance, which was one of 5 the companies that Roger has just mentioned. 6 They completely did a redesign optimized for 7 copper because as Roger indicated, there are 8 many factors there and when you change the 9 conductivity of the conductor and the 10 induction rotor, you are on a different place 11 in the torque curve, for instance. So you 12 have got to do a lot of things that are 13 different from the traditional die cast 14 aluminum rotors. 15 Siemens quite successfully has 16 entered that business and commercialized it in 17 February of 2006, I believe. So they have one 18 through 20 horsepower available, two-, four-, 19 six- and some eight-pole. They manufacture in 20 Mexico with a manufacturing cell, as well as 21 in Germany for IEC frame sizes and the frame

22 market.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 119 1 So I think it is feasible. We 2 worked with them. They have resolved a whole 3 range of the issues that we dealt with in the 4 development process. SEW-EURODRIVE has been 5 using it. There are some manufacturers of 6 die-cast rotors supplying other people, 7 including I think Danfoss as well as Grundfos 8 and so on, FAVI in France, Breuckman in 9 Germany. We have a number here in the United 10 States that have also supplied at least 11 moderate quantities but Siemens produces for 12 itself in Mexico. 13 So there is some feasibility 14 there. It is not of a scale that we are 15 talking about the five million units available 16 yearly sold and so on, at this time. But I 17 think it is technologically feasible. It has 18 been demonstrated and now it is production by 19 people like Siemens and SEW-EURODRIVE. 20 MR. BROOKMAN: So you will submit 21 those as written comments? 22 MR. BRUSH: Yes, we will.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 120 1 MR. BROOKMAN: Thank you, Ned. 2 Okay, Roger. 3 MR. DAUGHERTY: Roger Daugherty. 4 Yes, as I stated in my comments, 5 we recognize that the technology was being 6 used in a very limited scope of product. But 7 the screening criteria should be based up on 8 all the electric motors that you are talking 9 about. It does not serve the industry for DOE 10 to base efficiency standards of certain 11 particular ratings in this whole grouping on 12 one type of technology, other ratings on 13 another technology, and other ratings on 14 another group of technology. Industry doesn't 15 work like that. 16 And so my comments were when you 17 look at the full scale requirement as defined 18 in the screening criteria in reference to the 19 total scope or product we are talking about, 20 then it is difficult to understand how you 21 successfully pass the screening process. 22 MR. BROOKMAN: Okay. So can you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 121 1 go to slide 38? The next slide. 2 Yes. So I just want to get 3 additional and perhaps final comment on 4 technology options that were screened out. 5 Any additional comments here before we move

6 on? 7 Let's hear from this gentleman and 8 then back to Roger. Please say your name. 9 MR. SCHUMANN: Tim Schumann with

10 SEW-EURODRIVE. 11 With reference to the copper 12 rotors, yes we do market those globally, even 13 here in the United States. It is not on a 14 full-scale basis. Our premium efficient line 15 only offers three models. It is very limited 16 due to the cost, the expense incurred. The 17 trouble we go through to cast those copper 18 rotors is very difficult and it is not 19 something we market on a full-scale basis. 20 MR. BROOKMAN: Okay, thank you. 21 Roger. 22 MR. DAUGHERTY: Roger Daugherty.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 122 1 I would like to direct your 2 attention now away from cast copper rotors and 3 give you an example of a technology that I 4 know we sit here and we talk about and you 5 used in your analysis. It sounds like it has 6 been in use for a long time but maybe it needs 7 a re-screening because of the scope to which 8 you are talking about applying it. And that 9 is hand winding. Over the past 30 to 40 10 years, the emphasis on winding stators has 11 been to move to as much automated winding as 12 possible. So while certainly hand winding 13 existed before automated winding and hand 14 winding exists today in those which may not be 15 in technically mass production, whatever mass 16 production is. 17 My point is, that when you really 18 consider hand winding and you are looking at 19 slot fills in making your engineering analysis 20 that would force potentially, if the standards 21 were based upon slot fills based upon hand 22 winding and moving to hand winding, a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 123 1 reversing a 30-year trend to the industry 2 toward automation and putting it back into 3 hand winding. 4 The infrastructure that would have 5 to be created and put in place to have all 6 those hand winders available on December 20, 7 2015 and if you consider the well-known 8 adverse impacts on health and safety that are 9 related to repetitive operations because now 10 you are talking about a very significant 11 increase in manpower or womanpower, whichever 12 you wish, who are working with their hands and 13 installing these windings, so if you look at 14 it does have an adverse impact on health and 15 safety. 16 So I toss it out to DOE to really 17 consider maybe you should have examined hand 18 winding when you are talking about applying it 19 on such a scale as you are talking about in 20 looking at higher efficiency standards. Thank 21 you.

22 MR. BROOKMAN: Other comments

### 202-234-4433 Neal R. Gross & Co., Inc. Page 124 1 before we move on? Yes, Rob. 2 MR. BOTELER: Yes, Rob Boteler, 3 just to pick up on the hand winding. The 4 other thing that we all know will happen if 5 that technology was necessary is we as global 6 manufacturers would be forced into low-cost 7 countries in other to meet the requirements. 8 And pretty much all of us sitting at the table 9 are now globally positioned to do that without 10 a whole lot of difficulty. 11 MR. BROOKMAN: Okay, thank you. 12 Okay, we are going to move on. 13 MR. KOHSE: Okay, so that brings 14 us to the end of the screening analysis and we 15 will move on to the engineering analysis. 16 The purpose of the engineering 17 analysis is to develop a relationship between 18 the efficiency of an electric motor and the 19 manufacturer's selling price or MSP for that 20 particular unit. Also, the engineering 21 analysis evaluates the design options that 22 improve efficiency and uses these options when

### 202-234-4433 Neal R. Gross & Co., Inc. Page 125 1 modeling higher efficiency motors. 2 The cost efficiency outputs of the 3 engineering analysis are then used downstream 4 for the lifecycle of costs and payback period 5 analyses, as well as the national impact and 6 manufacturer impact analyses. 7 So this slide shows some of the 8 key steps that DOE followed in the engineering 9 analysis. First, DOE identified 10 representative units for analysis within each 11 equipment class grouping which were developed 12 in the MTA. Then DOE purchased, tested, and 13 tore down models representing increased 14 efficiency levels for each representative 15 unit. 16 DOE verified nameplate and NEMA 17 design performance criteria by testing models 18 using IEEE 112-B, as well as lock rotor 19 current testing. 20 Next, DOE used a motor modeling 21 expert to create higher efficiency motor 22 designs. DOE then developed candidate

### 202-234-4433 Neal R. Gross & Co., Inc. Page 126 1 standard levels or CSLs, based on torn down 2 motor efficiency as well as software modeled 3 motor efficiency. The CSLs are used to 4 identify specific levels of efficiency which 5 are used in the analysis. 6 Next, DOE developed cost inputs 7 such as material prices, markups and labor 8 hours. Finally, DOE scaled the results from 9 the representative units to the unanalyzed 10 equipment classes. DOE uses scaling because 11 there are 514 permutations of horsepower 12 ratings, pole configurations, and frame types, 13 and individually assessing each combination 14 would not have been feasible. 15 So this slide shows some of the 16 NEMA design type horsepower ratings, pole 17 configurations, and frame enclosure types for 18 the representative units of each equipment 19 class group. DOE used a five, 30, and 75 20 horsepower representative unit to represent 21 all motors in equipment class group one. For 22 equipment class group two, DOE used a five and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 127 1 a 50 horsepower representative unit to 2 represent all motors. Finally, DOE based the 3 analysis of equipment class group three on the 4 analysis of equipment class group one. And 5 therefore, the analysis of fire pump motors is 6 based on the same representative units that 7 were used in equipment class group one. 8 DOE chose these representative 9 units by analyzing catalogue efficiency data 10 to find horsepower ratings that were 11 sufficiently spread out among all 12 representative unit efficiencies. For 13 equipment class group one, which are NEMA 14 Design A and B motors, DOE chose a five 15 horsepower motor to represent all motor 16 permutations from one to ten horsepower. DOE 17 chose a 30 horsepower motor to represent all 18 motor permutations from 15 to 50 horsepower. 19 And lastly, DOE chose a 75 horsepower motor to 20 represent all permutations above 60 21 horsepower.

22 Note that all of the selected

### 202-234-4433 Neal R. Gross & Co., Inc. Page 128 1 representative units have a TEFC enclosure as 2 well as a four-pole configuration. DOE chose 3 motors with these characteristics because they 4 are the most popular design options for the 5 motors addressed in this rulemaking. 6 So this colorful graph is a visual 7 representation of the motor horsepower ranges 8 and their representative equipment classes. 9 Now, in addition to looking at efficiencies, 10 DOE also looked at the "D" dimensions of frame 11 designations in an effort to pick motor types 12 that were evenly dispersed throughout the 13 range of "D" dimensions. 14 The "D" dimension is the length 15 from the center of the shaft to the mounting 16 feet of the motor and determines the NEMA 17 motor frame designation. 18 The bold colors indicate the 19 actual motor horsepower rating analyzed by DOE 20 and the lighter shade regions of the same 21 color are the equipment classes that were 22 indirectly analyzed through these

### 202-234-4433 Neal R. Gross & Co., Inc. Page 129 1 representative units. Note that for NEMA 2 Design C motors, DOE chose a five horsepower 3 motor to represent motors from one to 20 4 horsepower and a 50 horsepower motor to 5 represent motors above 25 horsepower -- sorry 6 -- 25 horsepower and above. 7 So I will stop here for a second 8 and open the floor to any comments regarding 9 the selected representative units. 10 MR. BROOKMAN: Roger. 11 MR. DAUGHERTY: Roger Daugherty. 12 As you are fully aware in the 13 comments on the framework document, NEMA 14 submitted a recommended group of motors as at 15 least a minimum list to look at for both 16 engineering analysis and the test analysis. 17 Very few of those motors made it into your 18 criteria. You based everything on four-pole

19 motors. 20 In the PTSD, you discount the 21 importance of pole configuration by failing to 22 understand that based upon that pole

### 202-234-4433 Neal R. Gross & Co., Inc. Page 130 1 configuration there is a different 2 relationship between the amount of material 3 and the size of the rotor relative to the 4 stator, that the rotor diameter grows as the 5 pole number increases. That has a significant 6 impact on the distribution of losses between 7 the stator windings and rotor cage and the 8 stray load loss and the core losses. 9 You failed to seem to understand 10 the difference between in two-pole motors 11 there may be a greater proportion of friction 12 and windage loss related to those than there 13 are in four-pole and in six-pole, and eight. 14 So while the proportion of losses 15 that you seem to concentrate on trying to 16 minimize in the stator winding, in the core, 17 in the rotor cage, you don't really address 18 what happens when you go to the two-pole motor 19 and now the friction and windage becomes a 20 higher proportion of your total. And so all 21 your minimization on the ones you have 22 concentrated on may not give you the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 1311 efficiency increase that you saw in the four2 pole. Similarly for the six- and eight-pole. 3 You failed to differentiate the 4 difference between open motors and totally 5 enclosed fan-cooled. NEMA MG1 in Part 13 6 establishes a table of the standard horsepower 7 assignments given to particular frame size in 8 open motors. There is also a corresponding 9 table for totally enclosed fan-cooled. If you 10 compare those two tables, for the same rating 11 and pole number, you will generally find that 12 there is a difference in frame size between 13 the motor of that rating in open compared to 14 enclosed. And in many cases, you will find 15 that there is a difference in frame series; 16 that what may be in a 180 frame series in one 17 for that rating is in a 210 frame series for 18 the other rating in the other configuration. 19 So the purpose of why NEMA 20 supplied the list that it supplied was to try 21 to encourage that you did examine those 22 characteristics and how things change between

### 202-234-4433 Neal R. Gross & Co., Inc. Page 132 1 as a pole configuration and how they change as 2 an enclosure configuration. But you failed to 3 do that in making your choice that you were 4 only going to concentrate on four-pole types 5 of machines. 6 The other is that other sides in 7 your PTSD where you talk about selecting the 8 ratings, you have a chart based upon total 9 shipments of motors in which your chart shows 10 that the five horsepower motor had the highest 11 level of shipments. You based your selection 12 of the five horsepower, according to the PTSD, 13 on that five horsepower which had the highest 14 shipment, that shipment of units. If you had 15 changed your chart so it recognized that 16 different units had different horsepower 17 levels and different energy use, then in your 18 chart the ten-horsepower motors have 19 approximately an eight percent shipment. 20 In your paragraph where you talk 21 about choosing the five horsepower, you say it 22 has a 15 percent. Well eight percent shipment

### 202-234-4433 Neal R. Gross & Co., Inc. Page 133 1 at ten horsepower is more energy use than 15 2 percent at five horsepower. So had you 3 examined in terms of energy use, and the whole 4 goal here is energy savings, then it questions 5 whether or not you made an appropriate choice, 6 based on only looking at shipments. 7 You contain a statement that in 8 selecting the 75 horsepower motor that you 9 looked at the largest frame size. But in your 10 chart where you identify the frame size, that 11 frame size is two frame sizes lower than the 12 largest frame series. Again, that is why NEMA 13 encouraged that one of the motors that NEMA 14 suggested was higher than 75 horsepower. 15 You also make the observation and 16 in your chart that you presented here, the 17 efficiency tended to flatten out as you got 18 into higher levels of horsepower. If you were 19 to recognize that flattening, you may have 20 recognized the difficulty of getting those 21 higher horsepower ratings up to higher 22 efficiencies. But if you base your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 134 1 conclusions on those motors where it may be 2 easier in your analysis to arrive at the 3 higher horsepower levels and then you use that 4 as your scaling factor and say it applies all 5 the way to 500, in reality you may have 6 created a situation that is not achievable 7 with the technology under which you analyze 8 and said it was achievable. 9 So again, NEMA had a very good 10 reason and tried to explain those reasons when 11 it submitted those ratings, enclosures, and 12 pole numbers that it recommended that you 13 include. It doesn't mean you had to only 14 include those. Those were just a recommended 15 starting point. And we certainly encourage 16 that you go back and that you look at if you

17 had looked at those ones that NEMA had 18 recommended, would you have achieved the 19 efficiency gains that you observed here on the 20 five, 30 and 75 horsepower. So do those three 21 really represent for proper application of 22 your scaling criteria, do those three really

### 202-234-4433 Neal R. Gross & Co., Inc. Page 135 1 properly represent the total scope of product 2 that we are talking about?

3 MR. BROOKMAN: Do we have 4 additional comments on choosing representative 5 units? Anything additional? Yes, please. 6 Microphone and your name again. 7 MR. RUFFING: Steve Ruffing 8 speaking on behalf of NEMA. Is the microphone 9 working properly? 10 MR. BROOKMAN: Yes, that's good.

11 MR. RUFFING: NEMA also has a 12 concern with the plan to base the possible 13 amended energy conservation standards for fire 14 pump motors off of the analysis of the Design 15 B equipment class. The reason being that 16 there are additional requirements for fire 17 pump motors that don't apply to standard 18 Design B motors. 19 In the National Electrical Code, 20 it specifies that fire pump motors, the 21 circuit protection for fire pump motors shall 22 be able to withstand locked rotor or overload

### 202-234-4433 Neal R. Gross & Co., Inc. Page 136 1 currents indefinitely and only short-circuit 2 currents should trip it and a similar 3 statement appears in the National -- NFPA 20, 4 National Fire Protection Association 20. 5 So the fallout of that is that a 6 fire pump motor is required to withstand the 7 currents, the locked rotor currents under 8 stall conditions for a significantly long 9 period of time, potentially. 10 Motor designs that are suitable

11 for that need to have lower levels of locked 12 rotor amps and those lower levels of locked 13 rotor amps then tend to be conducive to lower 14 efficient motor designs. 15 MR. BROOKMAN: Okay, thank you. 16 Final comments on representative units? Okay. 17 MR. KOHSE: Great. Okay, so the 18 table we see here illustrates the four 19 efficiencies represented by the four motors 20 that DOE purchased, tested, and tore down for 21 the representative units of equipment class 22 group one. Note that DOE included in its

### 202-234-4433 Neal R. Gross & Co., Inc. Page 137 1 analysis unregulated motor types that it is 2 considering for inclusion in the expanded 3 scope of coverage. Therefore, some of the 4 purchased motors have efficiencies below the 5 currently allowable federal standards, which

6 are EPACT 1992 levels or also NEMA Table 12-11

7 levels. 8 For equipment class group two, 9 DOE, which is not shown on this slide, DOE was 10 only able to purchase representative units at 11 the EPACT 1992 efficiency levels and this was 12 due to the low available product selection for 13 NEMA Design C motors, namely, Design C motors

14 that were below EPACT 1992 levels. 15 So here we see a sample bill of 16 materials for a NEMA Design B five horsepower

17 motor tear-down. DOE conducted tear-downs on 18 the purchased motors to determine design and 19 material changes that the motors exhibited as 20 they increased in efficiency. DOE measured 21 and recorded material weights and conducted 22 metallurgical analysis on the electrical steel

### 202-234-4433 Neal R. Gross & Co., Inc. Page 138 1 in order to determine the grade of steel used. 2 DOE uses the bill of materials to 3 develop a materials cost, an important input 4 when calculating the MSP discussed later in 5 the analysis. 6 Hardware, insulation material, and 7 bearing component costs were kept constant 8 across incrementing CSLs and the frame 9 material costs were scaled based on the stack 10 length of the motor. 11 So I will hold here and open the 12 floor to any comments regarding the approach 13 DOE used to develop the materials costs input, 14 namely, whether or not hardware, material, 15 frame material, or insulation have a heavy 16 impact on the efficiency of a motor.

17 DOE then conducted software 18 modeling to represent -- 19 MR. BROOKMAN: Hang on second. 20 Dale, go ahead. 21 MR. BASSO: This is Dale Basso. 22 A question. As you are doing the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 139 1 material analysis, I see it talks about the 2 tear-down but did you do electrical tests on 3 all of these motors to verify the 4 characteristics before evaluating the 5 materials? 6 MR. KOHSE: Could you -- you mean 7 like locked rotor current? 8 MR. BASSO: Like making sure that 9 they actually met the locked rotor, what their 10 actual efficiency was because there is a

11 tolerance allowed. 12 MR. KOHSE: We did. We performed 13 NEMA -- sorry -- IEEE 112-B tests on them and 14 then we also did locked rotor current testing 15 on them to make sure that they met all of the 16 nameplate details that the motors had. So we 17 verified that they were in fact NEMA Design B 18 motors or NEMA Design C motors. 19 MR. BROOKMAN: Thank you. Roger 20 Daugherty. 21 MR. DAUGHERTY: Roger Daugherty. 22 I guess I was interested in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 140 1 whether or not -- I know here you only talk 2 about materials cost. But in trying to go 3 from one CSL level to another, how did you 4 account for whether or not a change in 5 material had other costs associated with it? 6 Because I noticed that in Figure 7 5.6 and the other figures that refer to 8 manufacturer's selling price which DOE 9 calculated, it is not necessarily the real 10 selling price, that when you went from level 11 CSL 3 to 4, which was a change in basically 12 electrical steel type and core length, and 13 corresponding stator winding and rotor cage, 14 there was a very significant increase in cost 15 from around $375 to $525. But when you 16 replace the aluminum with copper, the increase 17 in changing to that new technology, everything 18 that is encompassed in trying to cast that 19 cast copper rotor motor, you only went up $50.

20 So how -- do these numbers that 21 you came up with, are they just purely based 22 upon the fact that in one of the motors your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 141 1 aluminum went from two pounds and you ended up 2 using nine pounds of copper. And you said 3 that copper was 2.7 times the cost of aluminum 4 at the time you did the study. Was that the 5 total basis of the increase in selling price 6 related to changing from aluminum cast rotor 7 to a copper cast rotor? 8 MR. KOHSE: So we did use a 9 different overhead markup when we switched 10 from aluminum rotors to copper rotors and that 11 accounts for most of that price difference. 12 We found out from a strictly 13 materials standpoint, although copper costs 14 more, you don't use as much of it as you would 15 aluminum. So there is a little bit of the 16 price differential is balanced out by that.

17 MR. BROOKMAN: I see John has a 18 comment. Oh, let's have a follow-on from 19 Navigant. 20 MR. NARDOTTI: This is Matt 21 Nardotti. Yes, the answer is yes. We simply 22 -- it is based -- the MSP that we calculated

### 202-234-4433 Neal R. Gross & Co., Inc. Page 142 1 in the engineering analysis is just based on 2 the costs of the materials.

3 You know the costs that 4 manufacturers would incur to change their 5 production lines, those costs for capital 6 conversion would be accounted for in the 7 manufacturer impact analysis, which we will 8 get into a bit later. But yes, the MSP is 9 that we calculate in this analysis is strictly 10 based on the material costs. 11 MR. BROOKMAN: John, follow-on. 12 MR. MALINOWSKI: I'll wait until 13 we get into it later. 14 MR. BROOKMAN: Great okay, back to 15 Roger, then. 16 MR. DAUGHERTY: Roger Daugherty. 17 But as a follow-up, though, 18 somewhere you came up with the motor costs and 19 the incremental costs to do the LCC analysis. 20 Are you telling me that that doesn't include 21 any additional costs that would be the real 22 cost to the user of trying to get a motor that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 143 1 is of the change in technology? 2 MR. BROOKMAN: This is Matt. Go

3 ahead. 4 MR. NARDOTTI: So the LCC analysis 5 takes as inputs the outputs of the 6 engineering. So yes, just the MSPs that we 7 calculate in the engineering based on just the 8 materials cost. 9 Again, this additional cost would 10 have to be considered in the MIA.

11 MR. BROOKMAN: John. 12 MR. MALINOWSKI: John Malinowski, 13 Baldor. I expect we will cover this in more 14 detail later but even CDA will admit that to 15 use a copper rotor machine correctly, the 16 whole lamination set has to be retooled to 17 optimize the use of the efficiency of the 18 copper rotor. So we are going to have 19 complete costs of new lamination dies, 20 progressive stamping dies, retooling of our 21 winding equipment, as well as however we are 22 going to cast these rotors and those are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 144 1 significant costs.

2 We stated before and we looked at 3 it again that to retool the line between 140 4 and 440 frame is somewhere in the 80 million5 dollar range for two-pole, six-pole, eight6 pole. And we have gone back and looked at 7 those numbers again and those are real 8 numbers. We can break those down. We will 9 break that down in our written comments. And 10 that doesn't include the incremental 11 engineering cost to change 100,000 plus specs. 12 We will get into that more when we get into 13 section seven. But you know, your cost 14 assumptions are grossly incorrect. When we 15 were doing interviews we said these things are 16 not scalable and you used scale and made some 17 assumptions that are grossly wrong. 18 MR. BROOKMAN: Okay, thank you. 19 Have we covered this now? We have covered it, 20 yes? Okay, we are moving on. 21 MR. KOHSE: Okay. DOE then 22 conducted software modeling to represent motor

### 202-234-4433 Neal R. Gross & Co., Inc. Page 145 1 efficiencies that were not commercially 2 available for purchase. DOE utilized 3 different design options to increase motor 4 efficiency within higher CSLs. DOE also used 5 tear-down and motor testing data in order to 6 correlate its software to ensure an accurate 7 modeling platform. 8 This slide shows some of the 9 design options that DOE utilized in order to 10 create higher efficiency designs. 11 So I will stop here again and take 12 comment on this slide concern the design 13 options or modeling used to improve the 14 efficiency of software model motors. 15 MR. BROOKMAN: Dale first, then 16 Roger. 17 MR. BASSO: This is Dale Basso. I 18 just had a question on when you talked about 19 burying the stack length. Did you have limits 20 based on motors that you had torn down of what 21 you limited, the maximum overall length of the 22 stack and the coil heads to be or did you

### 202-234-4433 Neal R. Gross & Co., Inc. Page 146 1 allow them to expand beyond current envelopes? 2 MR. KOHSE: So we did base it on 3 some catalogue data. We looked at tear-down 4 data, you know, measured the stack length. 5 And then we looked at the overall length of 6 the motor and came up with a ratio of stack 7 length to length of the motor. And then we 8 looked at catalogue data of I believe it was 9 the "C" dimension of motors, the overall 10 length of a motor and applied that ratio from 11 the tear-downs through that catalogue "C" 12 dimension and kind of came up with a 13 theoretical maximum stack length that we used 14 for software modeling. 15 MR. BROOKMAN: Okay? John 16 Malinowski. 17 MR. MALINOWSKI: Yes, John 18 Malinowski, again. 19 Again, we get back into slot fill 20 issues, slot fill of 82 percent is about the 21 technological maximum for machine winding. 22 You had some slot fills that are above 85

### 202-234-4433 Neal R. Gross & Co., Inc. Page 147 1 percent, which our manufacturing people, 2 showing them that, they are skeptical that you 3 could actually do that in hand winding. 4 Certainly, it would be very difficult to do 5 that in volume production of five million

6 motors. 7 And again to Dale's point, 8 everything you did was modeling. You have not 9 tried any of it to know that it works. So it 10 is hypothetical.

11 MR. BROOKMAN: Bob. 12 MR. BOTELER: Yes, just picking up 13 on that, we had this discussion during the 14 small motor rulemaking is the AEDM used by the 15 Department, was it one that had gone through 16 the same scrutiny as the manufacturer's go 17 through where we have submitted our 25 samples 18 to correlate our estimated computed data with

19 actual test data. 20 MR. BROOKMAN: Okay. Roger? 21 MR. DAUGHERTY: Roger Daugherty. 22 I also have a question on the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 148 1 software, but that is in relationship at the 2 present time to the test data. So you have 3 purchased a variety of motors. You tested a 4 variety of motors. I am assuming that you 5 have modeled that variety in the software. In 6 making the comparison between software and 7 test, did you compare the calculated 8 efficiency to the test efficiency or the 9 calculated efficiency to the nominal 10 efficiency? 11 MR. KOHSE: So Howard Jordan did a 12 lot of our software modeling and that may be 13 a question I will have to ask him but we did 14 correlate -- you know, we did remodel the torn 15 down motors in his software. And I believe he 16 looked at tested motor efficiency when 17 comparing the two. But that is something I 18 will have to follow up with you about. 19 MR. BROOKMAN: Follow-on, Roger. 20 MR. DAUGHERTY: Roger Daugherty. 21 I guess I will ask what probably 22 should have led up to that. So just bear with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 149 1 me and I will try to keep this short. 2 But you make a comment that DOE 3 selected that they only had to purchase one 4 motor of each to test, to use that test 5 results to assist them in their analysis, 6 confirmation of the design and their software. 7 DOE cites that the reason for that is because 8 they tested in accordance with 431.16 and that 9 they did not have to test in accordance with

10 431.17. 11 The only thing that is in 431.16 12 is testing shall be done in accordance with 13 Appendix B to Subpart B. And Appendix B to 14 Subpart B says first that efficiencies shall 15 be determined in accordance with NEMA MG1 and 16 then in accordance with IEEE 112 or CSA 17 standards. Okay, that is all that is there; 18 how to do the test and get an efficiency

19 value. 20 DOE then, through -- and this is 21 in Chapter 5 -- so I tried to come up with an 22 example as to the impact of only testing one.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 150 1 And I know that Rob has already alluded to the 2 small electric motor rulemaking and every time 3 I bring that one up, I get a rolling of the 4 eyes, so I won't bring that one up. 5 I tried to think of a good example 6 that I could bring when I realized the most 7 perfect example I could think of is in Chapter 8 5. And in Chapter 5 for that 30 horsepower 9 four-pole motor, DOE went out and based upon 10 I assume catalogue data at the time, they were 11 looking for a motor that had a 93.6 percent 12 efficiency. They purchased that motor, it was 13 marked on the nameplate at 93.6. They did the 14 test. The test came in at 94.2 in some odd 15 figure. 16 DOE made a conclusion that that 17 motor can't be 93.6, that it was improperly 18 marked and that it was really 94.1 and, 19 therefore, they threw out the test results and 20 substituted a software model for that motor. 21 It is interesting that the reason 22 given for throwing it out, the most supporting

### 202-234-4433 Neal R. Gross & Co., Inc. Page 151 1 reason given was because they went to a 2 website and they found 94.1 percent on the 3 website. So despite the catalogue, despite 4 the actual marking on the motor, the website 5 ruled and was the basis for throwing it out. 6 Now if we look at the way it 7 should have progressed, at least in the 8 industry's opinion, if you followed all the

9 rules and understood NEMA MG1 and the rules 10 that are in 431, you would have gotten that 11 motor. You tested the motor in accordance 12 with 431.16. You were now faced with this 13 problem 94.2 percent versus a nameplate of 14 93.6. You go back to NEMA MG1, definition of 15 NEMA nominal efficiency that is marked on the 16 nameplate or you go to 431.12's definition. 17 Those two differ in only one important word 18 and that is the word "large" before population 19 is missing in the DOE definition. However, 20 that definition merely says that the NEMA 21 nominal efficiency that is marked on the 22 nameplate shall not be greater than the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 152 1 average efficiency of the large population of

2 motors. 3 Okay, fine, 93.6. You tested 4 94.2. There is no indication that 93.6 is not 5 a proper marking. Your test data so far 6 supports that the average of the population 7 based upon one is above what is marked. It is 8 in conformance with the MG1 standard. It is 9 in conformance with 431.12. 10 If you go to 431.17 is the only 11 place that you have guidance to make a 12 determination as to whether or not the sample 13 passed screening criteria to make a 14 determination if it was representative of the 15 total population. 16 In 431.17, the guideline is 17 whether or not the average of the sample, in 18 this case we only have one, the average must 19 be it, that it has an efficiency value that is 20 not less than the marked efficiency, nameplate 21 efficiency, plus five percent additional 22 losses. So it is a slightly lower than

### 202-234-4433 Neal R. Gross & Co., Inc. Page 153 1 nameplate. Obviously, 94.2 passed that 2 criteria. 3 The other criteria is that no 4 motor out of the sample have an efficiency 5 that is lower than that based on 15 percent 6 additional losses. Obviously, we passed that 7 requirement. That is not a problem. 8 If we were really looking at this 9 from the enforcement viewpoint and this goes 10 back to around 1994, for those of you who were 11 around in 1994, Appendix A to Subpart U uses 12 a 20 percent criteria, instead of 15. The 13 reason it uses 20 is because of a NEMA round 14 robin that was done and agreement between 15 Department of Energy and NIST and NAVLAP and 16 manufacturers that part of the NEMA minimum 17 associated with a nominal value recognizes a 18 variation in test facilities that result in

19 test. 20 So DOE took away five percent in 21 certification, assuming the manufacturer did 22 all his testing in the same facility. Added

### 202-234-4433 Neal R. Gross & Co., Inc. Page 154 1 in the five percent when it comes to testing 2 in some facility that the manufacturer didn't 3 test in to allow for this variation. So we 4 passed that requirement. No problem. 5 If we look at the LCL requirement 6 that is Appendix A to Subpart U, we have to 7 have a determination of our sample as 8 appropriate size. Well, you can't do that 9 when you have got a sample of one. There is 10 no standard deviation and you can't apply the 11 rule. It won't apply. 12 If you go to NEMA MG1, Table 12-10 13 the DOE refers to in the PTSD, there is an 14 associated minimum with each nominal. 15 Associated with that value of 93.6 is a 16 minimum that is two NEMA bands below that. 17 Well, we are talking about a statistical 18 population where nominal represents the peak 19 of the distribution. Just as likely as you

20 could have a motor that was down two NEMA 21 bands below the nominal, you could have a 22 motor that is two NEMA bands above the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 155 1 nominal. Two NEMA bands above 93.6 is 94.5. 2 The motor as tested meets all guidance and all 3 rules the DOE has written and is in accordance 4 with the NEMA MG1 standard. 5 So now the problem is that DOE is 6 faced with a motor that they tested and 7 purchased as a NEMA Premium motor CSL 2 that 8 had an efficiency level above the one they 9 purchased for CSL 3. How can that be? Well 10 maybe the manufacturer had a good day. He had 11 all the best materials, the best processes and 12 everything and he ended up with a motor that 13 met the criteria. But the point is that 14 motor, as far as we know, on the sample one 15 was representative of that product. So DOE 16 threw that one away and substituted a software

17 model. 18 If we look at some of the others, 19 it even becomes more interesting because DOE 20 went out and purchased an 89.5 percent 21 efficient motor for one of their other designs 22 and it tested at 88.5. DOE had no concern

### 202-234-4433 Neal R. Gross & Co., Inc. Page 156 1 about that, that it was a whole NEMA band 2 below what the nameplate was. But they were 3 concerned when they were a NEMA band above. 4 So they didn't throw that one out and replace 5 it.

6 And the reason I asked about the 7 software program and what comparison was being 8 done was that in all of the charts of data 9 related to CSL levels, the efficiency that is 10 carried forward in those tables are the NEMA 11 nominal efficiency values. They are not test

12 data values. So for the motor that had the 13 tested efficiency of 88.5, DOE concluded no, 14 that is really 89.5. And this tear-down 15 analysis that they did supports 89.5, not 16 88.5. But in this other motor that tested 17 better than the nameplate data, that tear-down 18 analysis supported what that efficiency was 19 but DOE discounted it in that case. 20 There seemed to be a preference to 21 only accepting motors that had efficiency 22 lower than nominal, except for one case. And

### 202-234-4433 Neal R. Gross & Co., Inc. Page 157 1 there was one that was just slightly above 2 nominal and DOE accepted that one. 3 But my main concern is that I have 4 expected that the software analysis was 5 compared against the tested value for 6 confirmation of the software analysis. How 7 often that software analysis, if they were to 8 model the motor that tested 88.5 and confirmed 9 that their software calculates 88.5, how could 10 they confirm that the software then 11 corresponded to a nominal of 89.5? Why would 12 the software be known to be always calculating 13 on the low side? And if it is always 14 calculating on the low side, when you look at 15 those that tested higher than NEMA nominal, 16 why would then the software be calculating the 17 value that is on the high side? 18 So things don't jibe in the 19 tables, when you look at everything together 20 that DOE used. And the importance of course 21 is that it affects what you attribute to your 22 tear-down analysis, how you looked at

### 202-234-4433 Neal R. Gross & Co., Inc. Page 158 1 efficiency, how you calculated energy savings, 2 how you calculated the LCC. Everything is all 3 related and in a way, it all ties back to the 4 choice of testing one motor. It just leads to 5 a lot of mis-conclusions throughout the 6 analysis. 7 MR. BROOKMAN: Okay. We are on 8 slide 51. Additional comments on modeling 9 high efficiency designs? Yes, please. 10 MR. RUFFING: Steve Ruffing, NEMA. 11 I just would like some 12 clarification on one of the design options 13 listed in Chapter 4 that was listed as a 14 potential option for reducing stray-load loss 15 and that is improving of motor bar insulation. 16 And I would just like some explanation as to 17 what DOE meant regarding the nature of that. 18 Is that some sort of coating that is applied 19 to the punch surface of the rotor lamination 20 slots prior to die casting or is that some 21 sort of heat and quench process after the die 22 casting that separates the two or what is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 159 1 exactly the nature of that as it pertains to 2 die cast rotors? 3 MR. KOHSE: I'm going to have to 4 get back to you on that. I don't know off the 5 top of my head. 6 MR. BROOKMAN: Yes, Dan? 7 MR. DELANEY: One more comment, 8 just to Roger's point on this software 9 modeling that was conducted. 10 Roger already alluded to some of 11 the issues obviously of using a single model 12 or a single motor to go through that analysis. 13 One other point we wanted to make sure from 14 NEMA's perspective was that calibration of 15 these models are extremely important. And 16 using multiple models, again back to equipment 17 class groups across multiple, these models 18 don't come about in a matter of one year. 19 They come about as a generation of these 20 product lines and it is a very key point of 21 the calibration of those models. And the new 22 AEDM rule, which is a note at this point, is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 160 1 putting attrition to that fact of the minimum 2 number of samples that are needed to be tested 3 but the calibration of those models are very 4 important to the lack of interpolation of what 5 they are doing here. 6 MR. BROOKMAN: Okay. Roger? 7 MR. DAUGHERTY: Roger Daugherty. 8 I would just like to expand a little further 9 on what Dan was just referring to. It is one 10 thing to calibrate a software model against 11 motors that you can test. It is another thing 12 to have a calibration against motors you 13 didn't test and against technology that you 14 don't really have any information on. 15 And that is what happened in the 16 Department of Army's two studies. There were 17 expectations of performance in loss 18 characteristics that were not experienced when 19 the prototypes were built. And so while they 20 were using a program that was well calibrated 21 to cast aluminum with the expectation it was 22 going to perform similarly with cast copper,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 161 1 the end results were rather dismal because 2 there were characteristics that occurred from 3 the cast copper process that influenced losses 4 that were not expected. And those are all 5 detailed in the report but the point is that 6 until you built a prototype, you really have 7 not calibrated your program to know that what 8 you are calculating is going to be right and 9 it has not been shown so far in at least two 10 government sponsored feasibility studies. 11 MR. BROOKMAN: Okay, thank you. 12 Yes, John? 13 MR. MALINOWSKI: John Malinowski, 14 Baldor. I just wanted to emphasize the amount 15 of calibration that is done. We have got two 16 full-time engineers, Roger and another, that 17 constantly upgrade our AEDM programs, our 18 motor design programs here. And we have 19 people in Europe that model and input the ABB 20 design programs. It is something that is a 21 continuous, if you want to call it a 22 continuous improvement. We want it to be as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 162 1 accurate as possible when we design things. 2 And you just don't buy a program 3 off the shelf, design a motor and expect it to 4 be this performance because chances are, it is 5 not. I mean to certify a program the DOE 6 expects us to build five motors of multiple 7 different designs before you will certify our 8 AEDM program. And the number of motors that 9 were designed and built by the DOE's program 10 was zero. So you would not even certify your 11 own program. 12 MR. BROOKMAN: Okay, thank you. 13 We are going to try and keep 14 moving here. And shortly in ten or 15 15 minutes, we are going to pause for lunch. 16 Let's keep going, though. 17 MR. KOHSE: Okay, great. 18 So this chart shows some 19 performance and properties of the 75 20 horsepower representative unit that was 21 purchased and software modeled. The data for 22 purchased motors are in white and the data for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 163 1 the software modeled motor designs are in 2 yellow. Note that the software model motors 3 utilized copper rotor technology, which 4 accounts for their heavier than typical rotor 5 conductor weights. 6 Here we see the steel grades, slot 7 fills, stack lengths, and material weights 8 change as we increase inefficiencies. 9 So I am going to stop there and 10 see if there is any comment on this slide 11 before I have Hisham come back up and finish 12 the engineering section.

13 MR. BROOKMAN: Comments here? No? 14 We've covered it sufficiently? Okay, then to 15 Hisham. 16 Yes, John, one comment. 17 MR. MALINOWSKI: John Malinowski. 18 It kind of comes to the question Dale brought 19 up before on end turns and the winding length, 20 does it fit into the mechanical restrictions 21 we have in the frame? And when you go from a 22 ten and a half inch long stack to one that is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 164 1 13 inches long, and you go from a 70 percent 2 slot fill to an 85 or an 83 percent slot fill, 3 one would expect the end turns to be 4 substantially larger, as well as the stack 5 going to be two and a half inches longer. It 6 is probably not going to fit in the mechanical 7 frame endplates, which would mean that part of 8 the motor would have to be redesigned, which 9 would mean that it is probably not going to 10 fit into the space where the old motor fit and 11 the end user is going to have problems with 12 it. 13 I know we are going to cover that 14 later but this is a good slide right now to 15 illustrate that. 16 MR. BROOKMAN: Okay, thank you. 17 Yes, Steve? 18 MR. RUFFING: One additional 19 question, which you may not have the answer to 20 but I am just curious as to where the large 21 stator copper weight increased between the CSL 22 2 and CSL 3 levels came from considering that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 165 1 they have approximately the same stack lengths 2 and the slot fills is reported to be the same. 3 I am just wondering if there is an 4 error there somewhere or maybe the number of 5 stator slots increased significantly. 6 MR. KOHSE: Yes, so that was 7 software model. And it may be an increase in 8 stator slot size. I will talk to Howard 9 Jordan and follow up with that. 10 MR. BROOKMAN: Okay. Okay, 11 Hisham. 12 MR. ARAJI: So Hisham Araji, 13 Navigant Consulting. 14 So now I am just going to talk 15 about how we developed the CSLs for the 16 engineering analysis. 17 So once DOE had physical and 18 modeled motors for the engineering analysis, 19 it developed candidate standard levels to 20 identify specific levels of efficiency for the 21 analysis. These CSL spanned a range of 22 efficiency levels from the baseline to the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 166 1 maximum technologically feasible. 2 When selecting CSLs, DOE 3 considered several criteria. First, DOE 4 selected levels that were either commercially 5 available or achievable in software modeling. 6 Second, DOE considered the NEMA standard 7 nominal efficiency levels in MG1 Table 12-10 8 for the increments between the baseline 9 efficiency level and the max-tech efficiency. 10 Table 12-10 is essentially a list of 11 standardized efficiency levels that 12 manufacturers use when labeling their motors. 13 Throughout the presentation today, 14 I will refer to the increment between two 15 consecutive NEMA nominal efficiencies as a

16 "NEMA band." 17 And then lastly, DOE considered 18 several benchmark efficiency levels, such as 19 NEMA "Energy Efficient" or "NEMA Premium." 20 So this slide shows the 21 efficiencies of the CSLs for the equipment 22 class group one rep units. Baseline

### 202-234-4433 Neal R. Gross & Co., Inc. Page 167 1 efficiency for CSL zero is based on the lowest 2 observed efficiency levels in manufacturer 3 catalogues for the motor types that DOE is 4 considering extending coverage to. 5 CSL 1 is based on NEMA MG1, Table 6 12-11, which NEMA now calls "Energy 7 Efficient." And CSL 2 is based on NEMA MG1, 8 Table 12-12, which is called "NEMA Premium." 9 CSL 4 and 5 also represent software modeled 10 motors as we have discussed before. And the 11 reason DOE used software modeling for these 12 CSLs is because there were basically no 13 commercially available motors at these 14 efficiency levels.

15 Also note that CSL 4 and 5 for the 16 30 horsepower rep unit have the same 17 efficiency and this is because a three NEMA 18 band increase over "NEMA Premium" levels was 19 not achieved in the software model for that 20 rep unit like it was for the other rep units. 21 So at this point, we have an issue 22 box seeking comment on the tentative CSLs that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 168 1 NEMA selected for its rep units.

2 MR. BROOKMAN: Let's hear from 3 Neal first, then to Roger. 4 MR. ELLIOTT: Somewhat to Roger's 5 point earlier, the NEMA nominal efficiency 6 represents the midpoint on distribution and 7 the distribution is by definition two NEMA

8 bands. 9 So the CSL 3 being one NEMA band 10 above CSL 2 is not statistically different 11 from CSL 2. So therefore, a motor that would 12 be CSL 3 in likelihood would probably actually 13 be nominally a CSL 2 motor. So I just want to

14 make that note.

15 In all the work that we have done 16 over the last 20 years we always say if you 17 are going to raise the efficiency level, you 18 have to raise it two bands. Because if you 19 are not doing it two bands, it is not 20 statistically different than the band one band

21 down. 22 MR. BROOKMAN: Okay. Roger?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 169 1 MR. DAUGHERTY: Roger Daugherty. 2 As noted on your slide, you 3 present the CSL levels purely based upon 4 incremental increase in NEMA bands. The 5 problem that can lead you into and it actually 6 did lead you into is that when you look at the 7 three NEMA Design B motors that you examined

8 across the CSL levels or look at the NEMA 9 Design C, those two motors, under each CSL 10 level as you got higher, you mixed up 11 technologies. So that you may be making one 12 of those motors of the common class using a 13 different technology under that CSL level than 14 you were the other motors. 15 And as I mentioned earlier, 16 manufacturing, and I am aware that several of 17 you visited manufacturing facilities and I am 18 aware of what goes on in manufacturing, 19 manufacturing again does not randomly select 20 what materials to pull out of inventory, send 21 through lamination presses and build, whether 22 it be hand winding in this case or machine

### 202-234-4433 Neal R. Gross & Co., Inc. Page 170 1 winding in another case, but now we are just 2 trying to stick with technology. 3 So I encourage that DOE, in 4 defining the CSL levels, go beyond the 5 efficiency level but also associate with those 6 levels a technology. That is what was done in 7 the small electric motor rulemaking. So that 8 when everyone sits down and says CSL 3, they 9 know it was a common group of technologies

10 that was used across that class. The same for

11 CSL 4 and 5. 12 And it is easy to do that because 13 based upon your tables of 5.5, 5.9, 5.13, and 14 5.16, besides the definition you have given to 15 the CSL levels here, from those tables you can 16 also realize that CSL 2 uses M47 for 17 electrical steel and it's an aluminum cast 18 rotor. CSL 3, the commonality would be M47 19 again in aluminum rotor. Again because you 20 have said CSL 3 uses present technology in 21 construction.

22 CSL 4 would move to the M36

### 202-234-4433 Neal R. Gross & Co., Inc. Page 171 1 material and aluminum cage and CSL 5 would be 2 both M36 electrical steel and the cast copper 3 rotor technology. Again, it is NEMA's 4 position that CSL should not exist if it 5 depends on cast copper because that should 6 have been screened out of the process. But I 7 am just addressing the way you presently 8 present the tables. 9 Similarly in the tables for the 10 NEMA Design B, A and B, you were not hesitant 11 at putting empty entries into the table when 12 it was not achievable. So when you look at 13 what you did for NEMA Design Cs, you redefined

14 what CSL 0 was. You took the EPACT levels 15 that in Design Bs are CSL 1 you moved them 16 down to CSL 0. That is causing confusion as 17 people talk and sit, you know, sit and talk 18 and say okay I am talking CSL 3. Well are you 19 talking CSL 3 in Design Bs or are you talking 20 CSL 3 in Design Cs? Because they have 21 different meanings. 22 So again it is encouraged that the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 172 1 same as you can leave empty spaces, you can 2 leave any entries for CSL 0 out for Design C 3 and start at CSL 1 as being EPACT, so it is 4 common across both equipment groups, class 5 groups. 6 And then from there on for Design 7 C you can build up on what technology of 8 electrical steel and aluminum construction 9 would apply to the appropriate levels as you 10 go up from there. Again, that way you are 11 doing your analysis the way things really get 12 manufactured and the way materials get 13 utilized in the industry and not mixing things 14 up and causing a lot of confusion. 15 Well this one I designed, if you 16 happen in this particular group of motors, you 17 use M36 instead of M47 in order to achieve 18 this. And again, some emphasis has to be put 19 on real world manufacturing and what the 20 processes are. And it is not impossible to 21 structure these CSL levels with that in mind 22 to keep track of it.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 173 1 MR. BROOKMAN: Okay, Robert. 2 MR. WILKINS: Thank you, Doug. 3 I note on this chart that a move 4 from CSL 2 and I picked these moves 5 arbitrarily, but a move from CSL 2 to CSL 5 6 would result in a two percent efficiency 7 improvement in one case and a one percent 8 efficiency improvement in two other cases. 9 And I do realize that this docket 10 is about motor efficiency. I get the point. 11 But in a larger sense, it is about improving 12 the energy efficiency of American industry in 13 a cost-effective manner. We need to be sure 14 we are doing that in reaching the broader 15 goal, as well as the micro goal. 16 So far we have discussed a 17 microeconomic analysis in motor efficiency. 18 And that is very appropriate. We should do 19 that. But I would also urge DOE to take a 20 macro view of the analysis at the same -- in 21 parallel. 22 Now I will draw a little

### 202-234-4433 Neal R. Gross & Co., Inc. Page 174 1 comparison. It seems to me what we are 2 debating here is a little like trying to 3 improve the miles per gallon of an automobile. 4 And we are talking about spending multiple 5 millions of dollars to totally redo the engine 6 design to get another tenth of a mile per 7 gallon, when we could do it as an industry 8 much more cost effectively by changing the 9 tires. I think that is what a macro analysis 10 is all about. 11 Or said another way, how can 12 American industry users of motors save energy 13 in the most cost-effective way? We can spend 14 a hundred million dollars, a figure I have 15 heard to save one or two percent. But if we 16 look at it from a macro point of view, there 17 is a better way and more cost-effective. Off 18 the shelf, variable frequency drives can save 19 20 to 30 percent. 20 Now, I know this isn't a docket 21 for variable frequency drives but the question 22 is it really cost effective to try to eke out

### 202-234-4433 Neal R. Gross & Co., Inc. Page 175 1 one percent motor energy efficiency might bore 2 down into the motor when if you stand back and 3 look at the bigger picture, there are much 4 larger opportunities. 5 So I would argue that this is a 6 relevant consideration in deciding the future 7 motor efficiency and would urge the DOE to 8 stand back and take a macro view before 9 deciding that we want to bore down and try to 10 eke out a half or one or even two percent. 11 MR. BROOKMAN: Okay, thank you. 12 Additional comments on this series of slides, 13 developing candidate standard levels? 14 MR. ARAJI: I just had a quick 15 follow-up to Roger's suggested approach.

16 MR. BROOKMAN: Yes.

17 MR. ARAJI: If we understand that 18 manufacturers often use different technology 19 options to achieve the same efficiency levels, 20 so manufacturer A might use a different 21 combination than manufacturer B. So in your 22 suggested approach if you could maybe in your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 176 1 written comments, just recommend a set of 2 technology options for each CSL that you 3 suggest that DOE go with, we would appreciate

4 that. 5 MR. BROOKMAN: Roger? 6 MR. DAUGHERTY: Roger Daugherty. 7 Well, yes, it is certainly true 8 that different manufacturers take different 9 approaches, not only the choice of materials 10 which is the only thing I have limited this 11 to, material technology, but they also take 12 different approaches to how they design their 13 frames, what diameters they use for their 14 laminations within those frames, how long they 15 make the frames, trying to stay within the 16 NEMA mounting dimensions, et cetera, and not 17 have too much overhang on them. 18 So there is so much that goes into 19 play that yes, one manufacturer may have an 20 arrangement with an electrical steel supplier 21 that he uses one particular type of electrical

22 steel and another manufacturer uses another

### 202-234-4433 Neal R. Gross & Co., Inc. Page 177 1 that he has adapted to all of his processes. 2 But my point was that by you 3 mixing things together, you are actually 4 imposing that kind of mixture on everyone. 5 They are not really being free to try to 6 choose what is best for them. Anytime that 7 you have to take the viewpoint that in order 8 to get this level of efficiency, I have got to 9 deviate from all the rest of my product by 10 using this particular steel because it is the 11 only way I can get there, then you have got to 12 look at well that manufacturer may choose I am 13 not going to do it. So I can't achieve it. 14 It removes that product from the market. It 15 reduces availability and utility of that 16 product and then you don't meet your screening 17 criteria. 18 So it is very important with 19 respect to your screening criteria and 20 production that you use a common technology 21 for each of these groups and you have enough 22 groups and you have already demonstrated the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 178 1 importance of certain technologies at 2 particular CSL levels that you can do that. 3 MR. BROOKMAN: Final comments on 4 this series develop CSLs? Additional

5 comments? 6 Let's go to lunch. 7 (Whereupon, the above-entitled 8 matter went off the record at 12:34 p.m. and 9 resumed at 1:34 p.m.)

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### 202-234-4433 Neal R. Gross & Co., Inc. Page 179 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:34 p.m.) 3 MR. BROOKMAN: By my count, I think 4 we left off with Slide 56. We're going to 5 resume and hear from Hisham. 6 MR. ARAJI: All right. So, picking 7 up where we left off, we just discussed how 8 DOE developed CSLs. Now we're going to get 9 into the process of developing the 10 manufacturer selling prices for the rep units. 11 All right. So, after developing 12 CSLs, DOE had to develop manufacturer selling 13 prices for rep units that we analyzed. Now, 14 the manufacturer selling price is a key output 15 of the engineering analysis, and it's used 16 later on in the downstream analyses that we'll 17 talk about today. 18 So, as Will mentioned earlier, DOE 19 had already figured out what's inside of these 20 motors by doing tear downs. This gave us the 21 material cost inputs. From these tear downs, 22 DOE was not only able to quantify how much

### 202-234-4433 Neal R. Gross & Co., Inc. Page 180 1 steel, copper, aluminum, and other materials 2 were inside the motors, but also labor hour 3 estimates and whether the motor was hand- or 4 machine-wound. 5 DOE determined material prices and 6 labor requirements through conversations with 7 manufacturers and industry experts and markups 8 and labor rates were derived from Census data 9 and SEC filings. 10 This chart shows the manufacturing 11 markups that DOE applied to its labor costs 12 and raw tear down costs when developing the 13 manufacturer selling price. You'll notice that 14 DOE used higher non-production markups for 15 motors over 30-horsepower. This is to account 16 for the extra profit margin manufacturers may 17 receive on larger electric motors that are 18 sold in smaller volumes. 19 So, at this point we are seeking 20 comment on three issues here. First one, DOE's 21 5-year average for copper prices, pricing 22 copper. And then current year prices for all

### 202-234-4433 Neal R. Gross & Co., Inc. Page 181 1 other materials. And we're requesting comment 2 on that decision to use a 5-year average for 3 copper and the current pricing for all other 4 materials. 5 Second issue is, we're seeking 6 comment on the higher non-production markup 7 for the 30- and 75-horsepower rep units. 8 And the final issue on the slide, 9 we're welcoming comment on the decision to use 10 aggregate domestic and foreign fully burdened 11 labor rate. And then balancing each of these 12 rates based on an estimate of how much of the 13 work we believe is done overseas and how much 14 is done domestically. 15 MR. BROOKMAN: Maybe you could go 16 back to slide 57, so we have that slide on the 17 screen. Roger. 18 MR. DAUGHERTY: Roger Daugherty. My 19 question is actually on the one prior to that 20 slide. But since you went to the trouble of 21 doing the tear-down analysis and calculating 22 production cost and trying to get a

### 202-234-4433 Neal R. Gross & Co., Inc. Page 182 1 manufacturer selling price, did you compare 2 that to the actual manufacturer selling price 3 for each of the motors that you purchased? And 4 how well did that compare? 5 MR. ARAJI: I believe it varied 6 based on model. You know, sometimes we bought

7 the motors lower than the manufacturer's 8 suggested retail price because of volume 9 discounts for certain motors. Other models 10 ended up actually being a little bit higher, 11 so it varied. But I think the general trend 12 varied. 13 MR. BROOKMAN: So, then go back to 14 the next slide -- or go forward to the next 15 slide. Comments on -- the three issues are: 16 copper's large price fluctuations, how that 17 was handled; the higher non-production markup 18 for its 30 to 75-horsepower representative 19 units; and the balancing decision they made in 20 Issue 13. Comments, please. Yes, Rob? 21 MR. BOTELER: I have a question on 22 the labor, where you say you did aggregate

### 202-234-4433 Neal R. Gross & Co., Inc. Page 183 1 cost of domestic and offshore. Did you look at 2 the two labor rates and just average 50-50, or 3 how did you arrive at that? 4 MR. ARAJI: This is actually 5 weighted more towards the foreign 6 manufacturing, if I recall correctly, so it

7 wasn't a 50-50 balance. 8 MR. BOTELER: Okay, so that $33.46 9 an hour includes -- are you making assumptions 10 of hand winding, moving product offshore or 11 was that just looking at today's mix? 12 MR. ARAJI: It was just based more 13 on feedback from manufacturers and their 14 estimates of how much they do abroad and how 15 much they do here. We understand some 16 manufacturers do everything here, some do most 17 abroad, but it was just an estimate. So, I 18 would welcome comment on it. 19 We didn't factor in hand-winding 20 or machine-winding in this rate. That was more 21 accounted for in the labor hour estimates. 22 MR. BOTELER: Okay. I mean, my

### 202-234-4433 Neal R. Gross & Co., Inc. Page 184 1 personal comment, I think, is if it includes 2 a lot of offshore that it seems high to me, 3 but I'm not directly involved with that part 4 of our business, so it just seems high. 5 On Issue 12 on the markups, and 6 we're all competitors so we're not going to 7 talk a whole lot about that. But, again, 8 looking at the markups, you acknowledge that 9 there's a lesser markup on the lower 10 horsepower which I think is probably true. I 11 don't know if the break is really quite as low 12 as 30-horsepower, but looking at the markups 13 that you have, the percentage markups, again 14 in both cases I would tell you that they seem 15 a little bit high to us. 16 MR. BROOKMAN: Okay. Dale, do you

17 want to follow on? 18 MR. BASSO: A couple of comments. I 19 think you're doing the best you can with 20 trying to aggregate everything together. And, 21 unfortunately, it is a very complex analysis. 22 When you talk about fully burdened hourly

### 202-234-4433 Neal R. Gross & Co., Inc. Page 185 1 rates you're going the full range from small 2 to large on that, and in many manufacturers we 3 would break that up to different cells for 4 different rates depending on the 5 sophistication, the cost of the equipment that 6 goes with it and everything. And you sort of 7 made up for that, I think, by taking a 8 different approach with the SG&A markups. And 9 assuming markup where maybe our markups aren't 10 the same but hourly rates are higher. So, in 11 aggregate it's the best you can get for an 12 estimate. It probably couldn't be applied 13 accurately to any one rating. 14 One concern I have is that, when 15 you do this analysis and you based it on both 16 a domestic and offshore rates it may lead to 17 an accurate analysis of the present state, but 18 it would certainly encourage, the analysis 19 would favor more production going offshore in 20 the end when you make a decision based on 21 this. So, it probably goes against one of the 22 rules that DOE would like to follow of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 186 1 domestic employment. 2 MR. BROOKMAN: Thank you. Three 3 comment boxes, 11, 12, and 13, take a peek. 4 We'd like to receive your comments on those. 5 Yes, Charlie Stephens. 6 MR. STEPHENS: Charlie Stephens. 7 One question looking ahead. When you go to 8 actually do the life cycle cost analysis and 9 you have to pick a motor cost from that, will 10 these -- is the range of costs that you're 11 going to pick from in terms of a distribution 12 of costs going to allow for perhaps these 13 being the cost of the variation in that 14 distribution? Are you going to have a -- I 15 can't remember now how that ultimately gets 16 applied and how wide the distribution of, for 17 instance, a 30-horsepower motor cost is when 18 you go to select it in the 10,000 runs that 19 are typically done in a Monte Carlo run. 20 MR. ARAJI: So, basically, these go 21 into -- are then fed into the next analysis 22 which is the markups analysis. And Sanaee

### 202-234-4433 Neal R. Gross & Co., Inc. Page 187 1 Iyama from LBNL can speak more to that. 2 MS. IYAMA: Sanaee. So, what 3 happens after the engineering is that we take 4 the manufacturer's selling price which 5 incorporates the manufacturer markup, and then 6 we apply the rest of the markups that are 7 between the manufacturer and the end user. So, 8 that's going to be what I'll talk about in the 9 next section. But very briefly, to answer your 10 question, we applied log normal distributions 11 on the distributor markups, distribution 12 channel markups. 13 MR. STEPHENS: Okay. Charlie 14 Stephens. The reason I was asking this is I 15 was wondering if -- I mean, ultimately you 16 take a range of prices paid by end users when 17 you do the life cycle cost analysis. 18 MS. IYAMA: Right. And each 19 iteration is going to pick a markup that's 20 within that log normal. 21 MR. STEPHENS: Within the band, so 22 you're going to end up in that analysis with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 188 1 a range of prices that may -- you won't know 2 why the price is 10 percent higher or 10 3 percent lower as you select them, but many of 4 these effects -- this part here seems as 5 important or more important in the 6 manufacturer impact analysis, then ultimately 7 when you get to start picking motor prices for 8 the life cycle cost analysis, you'll end up 9 with a distribution without reference to cause 10 of the distribution of why it's 10 percent 11 lower or why it's 10 percent higher. It just 12 comes from a distribution of prices with all 13 effects included. Right? Because you could 14 arrive at the same price with a high 15 distributor markup and a low manufacturer 16 markup as you do with a high manufacturer 17 markup and a low distributor markup, and get 18 to the exact same price. 19 MS. IYAMA: Right. 20 MR. STEPHENS: But you don't 21 distinguish as to how you got to any 22 particular price.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 189 1 MS. IYAMA: Well, I mean, if you 2 look at the aggregated results you won't see 3 that. But if you look at the specific one 4 iteration in the life-cycle cost amongst the 5 10,000 iteration then you would see why. 6 MR. STEPHENS: Right. Well, you

7 would see the effect. 8 MS. IYAMA: You would see exactly 9 which markup assumption was made for each of 10 the market players in the distribution

11 channel. 12 MR. STEPHENS: Yes, I can see what 13 the assumptions, but what I'm saying is when 14 you can get to the same price in your analysis 15 with a low manufacturer markup and a high 16 distributor markup as you can with a high 17 manufacturer markup and a low distributor 18 markup, then you've kind of covered the bases. 19 You're not saying that -- 20 MS. IYAMA: I think I'm going to 21 check in with Hisham on this, but I don't 22 believe -- we only get a single MSP from the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 190 1 engineering, which includes the manufacturer 2 markup so there's no statistical distributions

3 over that value. 4 MR. STEPHENS: Right. Yes, I guess 5 what I'll look at later is the -- how wide the 6 band of pricing is. And as long as the 7 manufacturers are reasonably content with the 8 band of pricing that you come up with in the 9 marketplace, and they think that's 10 representative, then I don't think coming up 11 with a single MSP and then going from there 12 will be a bad thing necessarily. 13 MR. BROOKMAN: Okay. Yes, John 14 Malinowski. 15 MR. MALINOWSKI: John Malinowski, 16 Baldor. I guess I'm a little skeptical of the 17 numbers you have there for 37 and 45 percent. 18 As Rob said, you know, talking specifically 19 would violate some antitrust things, but those 20 seem high. 21 The last year that our company 22 reported in an annual report our earnings were

### 202-234-4433 Neal R. Gross & Co., Inc. Page 191 1 like 14 percent, and that was a record in 90- 2 some years of the company, so I wish they were 3 this high, it would have been higher than

4 that. 5 MR. BROOKMAN: Thank you. 6 Additional comments on these comment boxes 7 listed? 8 MR. ARAJI: Yes, just to be clear, 9 non-production isn't strictly profit. There's 10 other things, too. 11 MR. BROOKMAN: What are they? 12 MR. ARAJI: R&D, research and 13 development, insurance, warranty risk 14 premiums. 15 MR. BROOKMAN: Okay. Speak up. 16 MR. ARAJI: Sorry. I was just 17 mentioning that non-production isn't strictly 18 profit. There's other stuff in there,

19 research.

20 MR. MALINOWSKI: I understand. I'm 21 just -- again, I can't speak to this because 22 of antitrust.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 192 1 MR. BROOKMAN: Okay. 2 MR. MALINOWSKI: Just trying to 3 give you an idea. Motors are not extremely 4 profitable. 5 MR. ARAJI: Okay, any other 6 comments? All right, moving on. 7 So, the final step in engineering 8 analysis is to scale to efficiency levels, 9 scale the efficiency levels of the 10 representative units we selected to the 11 equipment classes that were not directly 12 analyzed. 13 Efficiency Levels for Equipment 14 Class Group 1 were derived from the Design B 15 rep. units. Efficiency levels for Equipment 16 Class Group 2 were derived from Design C 17 units. And as for Equipment Class Group 3, 18 which is fire pump motors, those efficiency 19 levels are derived from the rep units for 20 Equipment Class Group 1. And as we mentioned 21 earlier, DOE did this because the shipment 22 volumes were really low for fire pump motors

### 202-234-4433 Neal R. Gross & Co., Inc. Page 193 1 and so were the run times. 2 So, in both approaches that DOE 3 considered for scaling, the efficiency levels

4 for CSLs 1 and 2 were based on MG-1 Tables 12-

5 11 and 12-12. 6 Now, the main differences between 7 the two approaches were how the higher CSLs 8 were developed. The first approach was to look 9 at the efficiency levels in 12-11 and 12-12, 10 and try to develop power law equations to 11 characterize each table. Any perceived pattern 12 in these equations could then be used to model 13 similar tables for higher CSLs. 14 The second approach simply 15 incremented each subsequent CSL by one NEMA 16 band. Ultimately, DOE decided to use the 17 second scaling approach of one NEMA band 18 improvements because it was more simple and 19 more straightforward. 20 So, this slide summarizes the 21 second scaling approach I just discussed. I 22 just want to mention that because DOE is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 194 1 considering expanding coverage to motor types 2 not previously covered, the efficiency levels 3 for CSL-0 in Equipment Class Group 1 are based 4 on the lowest efficiency values that were 5 observed in motor manufacturer catalogs for 6 the scope of motors we're intending to expand 7 coverage to. 8 The next two CSLs, CSLs 1 and 2

9 are then based on 12-11 values and 12-12 10 values, and then each subsequent CSL above 11 that goes up by one NEMA band. 12 And as we've mentioned throughout 13 the presentation today, DOE divided up 14 equipment classes into smaller subsets. On 15 this slide they're highlighted in blue, red, 16 and green. Now, the analysis of the equipment 17 classes in each highlighted portion are based 18 on a representative unit within that 19 highlighted portion. So, for instance, in the 20 red section of this chart, if a 30-horsepower 21 rep unit in Equipment Class Group 1 was only 22 able to achieve a two NEMA band improvement in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 195 1 efficiency above "NEMA Premium," then all the 2 equipment classes based on that rep unit would 3 be assumed to have a max tech efficiency of 4 only two NEMA bands above "NEMA Premium," as

5 well. 6 So, now we reach another one of 7 DOE's issue boxes. We're basically seeking 8 comment on the scaling methodology that we've 9 elected to use to generate the efficiency 10 levels for the other equipment classes. 11 MR. BROOKMAN: Roger? 12 MR. DAUGHERTY: Roger Daugherty. 13 The initial scaling that you tried to examine 14 looked at CSL-1 and CSL-2, is a comparison 15 based upon, basically, the same technology, 16 across those two. And you say you observed 17 some change. But when you move into different 18 levels of technology as you go into CSL-3, 4, 19 and 5, and then you've mixed up technology in 20 different motors that you examine, and 21 different designs, what in your scaling method 22 in the way that you've applied it would have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 196 1 predicted that at least 30 percent of the 2 designs could not be achieved, the efficiency 3 level you were looking for couldn't be 4 achieved? So, how could you scale from those 5 that it could be achieved into those to which 6 it could not be achieved? Your scaling method 7 seems to fall down once you move into 8 additional technology, or consideration of 9 higher technology for higher efficiency. 10 Because you're going from one 11 common relationship between CSL-1 and 2, then 12 you're trying to introduce different 13 technologies, but your own report says that 14 you couldn't obtain certain efficiency levels 15 in certain CSL classes without considering a 16 different technology for that particular 17 rating. And to me that says, okay, at least 30 18 percent of the ratings in all the equipment 19 classes can't be met by using the technology 20 that you were examining for the rest. So, to 21 me it says the scaling method based upon any 22 particular set of technology is not scalable

### 202-234-4433 Neal R. Gross & Co., Inc. Page 197 1 across all the equipment classes, and that's 2 where you're applying it. 3 And, again, that comes back to the 4 point that you didn't examine any two-poles, 5 six-poles, or eight-poles and what effect 6 there would be there, and you didn't examine 7 open machines, which are in different frame 8 sizes than the totally enclosed fan-cooled 9 that you actually looked at. 10 MR. ARAJI: Yes, so with that in 11 mind, we do have limited resources on how many 12 rep units we can actually directly analyze. 13 But if you guys here today have any 14 recommendations on how we can scale given the 15 fact that we do have limited resources, we can 16 only purchase a certain number of motors, 17 please submit them in written comments. This 18 is the kind of stuff we're looking for. If you 19 don't feel like you could scale from four-pole 20 to two-pole, or we need to incorporate some 21 other factors when doing that, that's the kind 22 of stuff we'd like to know.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 198 1 MR. BROOKMAN: Either one of you. 2 Go ahead, Rob. 3 MR. BOTELER: I think we would say 4 that we really don't think scaling is the way 5 to do this sort of an exercise. It just has 6 too many issues with it, and there's too many 7 variables. 8 We have guys sitting at the table 9 that are Ph.D. electrical engineers that have 10 spent 35 years trying to do this, and they 11 don't scale like this. So, it's kind of 12 something that I don't think DOE is going to 13 figure out a way to accurately come up with 14 this sort of an exercise. 15 MR. BROOKMAN: Okay, Neal, and then 16 back to you, John. Neal. 17 MR. ELLIOTT: Neal Elliott. I just 18 wanted to comment. I mean, there's this idea 19 that there's some underlying fundamental 20 physical theory associated with Table 12-11 21 and 12-12. And having actually dealt with this 22 now for a quarter of a century, not as long as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 199 1 certainly some of the other gentlemen like Mr. 2 Daugherty over there, but it's fairly a 3 heuristic exercise where those things came, 4 and there's a lot of judgment and a lot of 5 market legacy that went into those tables. So, 6 the instant I saw the word "regression" on 12- 7 11 and 12-12 I immediately sort of went, mmm, 8 there's not an underlying theory here. So, 9 that's just a gut, for whatever it's worth. 10 MR. BROOKMAN: So, one thing in 11 your written comments or now to suggest how 12 the Department might actually do this if 13 they're not going to scale. That would be 14 helpful. Rob, keep going, then to John. 15 MR. BOTELER: I think we have 16 recommended that. We've submitted our direct 17 petition, and I think that's what we would

18 want to fall back to. That's our 19 recommendation. 20 MR. BROOKMAN: Thank you. John, you

21 have a follow on? 22 MR. MALINOWSKI: I think Rob has

### 202-234-4433 Neal R. Gross & Co., Inc. Page 200 1 answered what I was going to say. 2 MR. BROOKMAN: Okay. Roger. 3 MR. DAUGHERTY: Roger Daugherty. 4 Just to try to answer your question about use 5 of resources. One way is that it doesn't take 6 that much effort necessarily to do the 7 software analysis if you can get your hands on 8 the basic design that you start from to check 9 it out. That's part of the main concern. But 10 if you just look at some of these 11 technologies, as I said earlier that have been 12 tried to be advanced, they certainly don't fit 13 any of the scaling relationships that you're 14 trying to fit things into. It just doesn't

15 work out. 16 MR. BROOKMAN: Okay, thank you. 17 We're about to move on. Are we finished with 18 this one? Yes. 19 MR. ARAJI: All right. Thank you. 20 At this point I'd like to invite Sanaee Iyama 21 from Lawrence Berkeley National Labs to 22 discuss the markups and energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 201 1 characterization analysis. 2 MR. deLASKI: Doug, this is Andrew 3 deLaski, if I could just interject. 4 MR. BROOKMAN: Please, Andrew. I 5 was going to cue you, yes. I'm sorry. 6 MR. deLASKI: Okay. I wanted to 7 come back to a point that was raised earlier 8 when Rob and Sanaee were having the 9 interaction over the shipments, and it's just 10 a discrepancy between a point that I want to 11 highlight, that the discrepancy the Department 12 has outlined in its definition and the scope 13 of coverage that we recommend in the joint 14 petition. 15 On page 3 of the joint petition, 16 page 2-3 we outline the motors that would 17 highly recommend treatment of groupings of

18 motors. And one of the areas where we

19 recommended that DOE cover at Table 12-12 20 efficiency levels is to cover 56 frame motors 21 that are outside the scope of the Small Motors 22 Rule, integral horsepower.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 202 1 In the DOE definition back to 2 page, whatever it was of the slide, it 3 referenced three digit frame sizes being the 4 limit. 5 MR. ELLIOTT: Slide 25. 6 MR. deLASKI: So, I think Rob in 7 that discussion -- there's a lot of motor 8 shipments here. 9 MR. BOTELER: Yes, I think agreed 10 on that, that the 56 was missing in that. That 11 would really bring our -- the 56, if we added 12 those would bring our number up very close to 13 what IMS showed, kind of in the middle. 14 MR. deLASKI: So, I just wanted to 15 highlight that point, and I wanted to bring it 16 back to that page 25. So, I think someone else 17 earlier highlighted that IEC frame size on

18 that second to last bullet needed to be 19 performed in there, the point that Roger made. 20 And another point here would be 21 another -- that a three digit NEMA frame size 22 is something that needs to be either another

### 202-234-4433 Neal R. Gross & Co., Inc. Page 203 1 bullet to address 56 frame or to somehow 2 capture the 56 frame is outside the scope of

3 the Small Motors Rule -- 4 MR. BROOKMAN: Okay, thank you. 5 Thanks for bringing that back up. 6 MS. IYAMA: Hi, I'm Sanaee Iyama. 7 I'm with the Lawrence Berkeley Lab, and I'll 8 present the next sections of the preliminary 9 analysis. Is that better? 10 MR. BROOKMAN: I think you need to 11 maybe get it a little closer to your mouth, 12 like hang it on the edge of your blouse or 13 something. 14 MS. IYAMA: Try this. And I'll 15 start with the markups analysis.

16 MR. BROOKMAN: Is that better? 17 Speak up. 18 MS. IYAMA: So, the purpose of this 19 analysis is to determine consumer motor prices 20 for baseline efficiency motors and higher 21 efficiency motors. And this information is 22 used as an input to the life cycle cost

### 202-234-4433 Neal R. Gross & Co., Inc. Page 204 1 calculations. 2 So, first we characterize how 3 motors are distributed from the manufacturer 4 to the end user. Then, for each party involved 5 in the distribution channels we established 6 markups, and then we used these markups to 7 convert the manufacturer selling prices into 8 consumer price data. 9 DOE identified six main 10 distribution channels that are represented on 11 this diagram. And the different percentages 12 that you see represent the estimated shares of 13 units of motors sold through either of these

14 channels. 15 So, after doing this, we estimated 16 markups for each party involved in the 17 distribution channel so we had the original 18 equipment manufacturers, the distributors and 19 the contractors. And here we have listed the 20 different sources of data that we used. We 21 also applied a sales tax rate based on 2012 22 Sales Tax Clearinghouse data.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 205 1 So, for each of these parties 2 involved in the distribution channels we 3 established both a baseline and an incremental 4 markup. So, before I go into details of what 5 these two markups represent, I just want to 6 mention that DOE has been using this approach 7 for quite some time, so this is not something 8 new in this analysis. 9 The baseline markups relate the 10 consumer price to the cost of goods sold prior 11 to a change in efficiency. It covers all the 12 business' expenses and profit, as well as 13 direct labor costs. 14 The incremental markups relate the 15 change in consumer price to the incremental 16 increase in cost of goods sold due to 17 increased efficiency. The basis for using such 18 approach is that the purchase price of a piece 19 of equipment is not strictly proportional to 20 its -- I mean, the selling price of a piece of 21 equipment is not strictly proportional to its 22 purchase price, so when the cost of goods sold

### 202-234-4433 Neal R. Gross & Co., Inc. Page 206 1 increases due to efficiency, only a fraction 2 of the business expenses increases. And some 3 others like direct labor costs remain

4 constant. 5 So, the incremental markups only account for 6 those business expenses that will vary with 7 the cost of goods sold, and is only applied to 8 the incremental increase in the cost of goods

9 sold. 10 So, applying this approach and 11 using the data sources that I presented on the 12 previous slides, as well as the different 13 shares of motors sold by distribution 14 channels, we calculated an average overall 15 baseline markup of 1.63, and an overall 16 incremental markup of 1.50 for all equipment

17 classes.

18 And here we have a comment box 19 about any comments you might have on any 20 alternative approaches or sources of 21 information that DOE could use to develop 22 product prices.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 207 1 MR. BROOKMAN: Yes, Rob. 2 MR. BOTELER: Rob Boteler. If you 3 go back one slide, no, forward one, forward, 4 forward, right there. You made the comment 5 that on direct labor, you said that "the 6 direct labor costs remain constant." 7 MS. IYAMA: For example, so here 8 we're assuming that if you're a distributor 9 and you're selling a baseline motor you have 10 a certain markup, and then if you're selling 11 a higher efficiency motor, for example your 12 rental -- what you pay for your building cost, 13 this will remain constant. It's not going to 14 vary with the cost of -- with the manufacturer 15 selling price of the motor. 16 MR. BOTELER: Okay. 17 MS. IYAMA: So, basically, we 18 calculate an incremental markup to translate 19 that, the fact that some business expenses 20 don't scale with this cost of goods sold, but 21 then we only used this incremental markup on 22 the incremental increase of the cost of goods

### 202-234-4433 Neal R. Gross & Co., Inc. Page 208 1 sold. 2 MR. BOTELER: Okay, thank you.

3 MR. BROOKMAN: You can see the

4 comment box there. Do we have comments here? 5 No? Okay. 6 MS. IYAMA: So, next I will talk 7 about the energy use characterization. The 8 purpose of the energy use characterization is 9 to develop annual energy consumption data for 10 electric motors based on field operating 11 conditions. And we do this for each efficiency 12 level considered in the engineering analysis. 13 This annual energy consumption 14 data is then used in the life cycle cost 15 calculation in order to develop the 16 electricity costs. 17 The method used in this section 18 relied on using typical motor operating 19 profiles associated to different applications 20 in different sectors. And we considered 21 variability in the field through the use of 22 statistical distributions for inputs such as

### 202-234-4433 Neal R. Gross & Co., Inc. Page 209 1 operating hours and motor load. We also 2 accounted for reactive power demand as another 3 necessary input to the life cycle cost. 4 So, for electric motors the energy 5 used by the motor itself actually refers to 6 the energy losses in the motor, and the rest 7 is converted to useful mechanical shaft power. 8 The annual energy used which combines both the 9 motor losses and mechanical power is 10 calculated through this formula on the slide, 11 so it relates to the motor capacity, motor 12 load, annual operating hours, and efficiency 13 at the considered load. And at the bottom of 14 the slide we have the formula used to

15 calculate motor losses. 16 So, the next couple of slides I'll 17 go through each of the inputs used in the 18 annual energy use calculation. I'll start with 19 the annual operating hours, then motor load, 20 then efficiency at the considered load. 21 So, before I go into the details

22 of the use of --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 210 1 MR. BROOKMAN: Sanaee, hang on. 2 Roger wants to comment here. 3 MR. DAUGHERTY: Yes, before you 4 leave that slide, your last calculation -- 5 MR. BROOKMAN: Use the microphone. 6 MR. DAUGHERTY: Roger Daugherty. 7 The equation you have at the bottom for 8 calculating losses, I thought we cleared this 9 up quite a few years ago, that that's not the 10 equation for calculating the losses in a motor 11 on the basis of efficiency. It's one over the 12 efficiency minus one, multiplied by the motor 13 energy that gives you the losses. 14 MS. IYAMA: Okay. 15 MR. BROOKMAN: Thank you. Yes, 16 Frank, follow-on. Microphone, please. 17 MR. LADONNE: Frank Ladonne, 18 Underwriters Laboratories. And I think we've 19 said this before, but I think it bears 20 repeating and maybe a suggestion on how to 21 proceed. But I think the first equation 22 assumes that the motor is perfectly matched to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 211 1 the load. And as soon as you depart 2 significantly from that, the efficiency drops 3 way off. 4 I would like to see some work done 5 on -- in the field, how well motors are being 6 matched to load, and what is the actual 7 realized efficiency of the system? 8 MS. IYAMA: I might touch upon this 9 in the later slides. 10 MR. LADONNE: Okay. 11 MR. BROOKMAN: Okay. 12 MS. IYAMA: So, before I go through 13 the actual details of how we develop the usage 14 inputs, again the annual operating hours, the 15 motor load, and the efficiency at the 16 considered load, I want to add that motor 17 field operating conditions depend on the field 18 where the motor is -- on the sector where the 19 motor is used, and on the application where 20 the motor is used. So, in order to account for 21 those differences we developed a model of 22 motor population and established estimates of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 212 1 the share of motors used in the commercial 2 sector, industrial sector, and agricultural 3 sector by horsepower range. We also 4 established distributions of motors by 5 application for each horsepower range, and 6 equipment class. 7 So, here on the left -- on the 8 right we have -- I mean on the left we have an 9 example of the distribution by sectors for all 10 equipment class group, for motors within the 11 6- to 20-horsepower range, and then here we 12 have another example which is an example of 13 the distribution by application for Equipment 14 Class Group 1 motors between 6- and 20- 15 horsepower. 16 So, what DOE did is that we 17 established user inputs specific to 18 applications and sectors, and then we used 19 those types of distributions to aggregate into 20 an annual energy use -- average annual energy

21 use data. 22 So, again for each sector and

### 202-234-4433 Neal R. Gross & Co., Inc. Page 213 1 application, DOE derived usage inputs starting 2 with annual operating hours, so here we have 3 an example of the usage inputs in terms of 4 average operating hours in the industrial

5 sector. 6 MR. BOTELER: Hey, Doug, call on

7 me. 8 MR. BROOKMAN: Rob. Sorry, I was 9 immersed in the table. I'm sorry. Rob, go

10 ahead. 11 MR. BOTELER: Rob Boteler. I just 12 wanted just to comment on this table, that in 13 our analysis that we submitted in our petition 14 for direct final rule we didn't go into this 15 level of detail, and this is great. We just 16 simply selected 4,000 hours across the board, 17 and we did that for all of the horsepowers and 18 speeds that we -- we did it with connected 19 horsepower. We calculated the connected 20 horsepower that would be impacted and then 21 stuck with 4,000 hours at 100 percent load. 22 MS. IYAMA: Right. And these values

### 202-234-4433 Neal R. Gross & Co., Inc. Page 214 1 are higher than the 4,000 but these are for 2 the industrial sector only. And in other 3 sectors in the commercial sector and 4 agriculture we have much lower annual 5 operating hours assumptions for the different 6 applications. But here I was just showing this 7 as an example. 8 So, we developed average values. 9 We also used statistical distributions to 10 account for variability in the field. So, 11 again that's only an example for the 12 industrial sector in the different 13 applications considered. 14 So, we did this for the annual 15 average operating hours. We also did this for 16 load. So, we determined average motor load 17 values throughout the year by application. We 18 also established statistical distributions but 19 I'm not showing them here on the slide. I'm 20 just showing the average annual motor load 21 that was used as inputs to our energy use 22 calculation.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 215 1 MR. BROOKMAN: Rob.

2 MR. BOTELER: And I understand 3 where you have to get to an average load, but 4 if we look at the DOE study it tells us that 5 40 percent of motors, industrial motors are 6 operated below 40 percent load. I think kind 7 of Frank's comment a minute ago, if you do it 8 at an average load like this it tells you a 9 pretty kind of level story that the efficiency 10 hasn't degraded a whole lot when you're in the 11 65-70 percent load. 12 MS. IYAMA: Right. And this table 13 here again only shows the average value, but 14 in the actual LCC calculation we used 15 statistical distributions around those values 16 so we have different bins. 17 MR. BOTELER: Okay. So, you did use

18 some below -- 19 MS. IYAMA: And I believe half of 20 the motors are below 50 percent operating

21 load. 22 MR. BOTELER: Okay. Good, thank

### 202-234-4433 Neal R. Gross & Co., Inc. Page 216 1 you. 2 MS. IYAMA: So, in order to account 3 for the fact that motors don't operate at full 4 load we established part load efficiency based 5 on the engineering test data, and here they're 6 just translated into losses versus load values 7 at the different operating load. So, basically 8 we derived a polynomial equation between 9 losses and load based on the engineering test

10 data. 11 So, using all the inputs I just 12 presented we calculated average annual energy 13 consumption by efficiency levels. And these 14 results are for -- are an average across all 15 sectors and all applications. 16 So, here we have a slide 17 presenting DOE's request for comments. So, 18 we're interested in comments or any additional

19 sources of data that could be used to 20 establish the distribution of motors across 21 sectors by horsepower range, trying to improve 22 our estimates on this. Same for the sector-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 217 1 specific distribution of motors across 2 applications. And we also seek any additional 3 sources of information on field data for motor 4 operating hours and load, specifically in the 5 commercial sector and agricultural sector. In 6 the industrial sector we have a pretty good 7 data set of -- plant assessment data that we 8 used. We didn't have that many data that we 9 could use in the commercial and agricultural

10 sectors.

11 MR. BROOKMAN: Neal. 12 MR. ELLIOTT: Not so much -- this 13 is Neal Elliott. Not so much a point, but for

14 the record the DOE undertook a market -- or 15 undertook two market analyses to look at 16 commercial and industrial motor use in the 17 late 1990s. The intent was that those were to 18 be updated every three years. We have not seen 19 those updated in the last -- 20 (Off microphone comment.) 21 MR. ELLIOTT: Yes, but they never 22 updated. They just did the technical

### 202-234-4433 Neal R. Gross & Co., Inc. Page 218 1 corrections, so there is pending as part of 2 the INGAA legislation a direction to the 3 Department or to the Secretary to undertake 4 such a study. And we have approached the 5 Department, EERE about possibly undertaking 6 the study with existing authorization. 7 And I would just note that the 8 motor community would welcome the opportunity 9 to see the Department undertake such a study 10 without necessarily direct Congressional 11 direction. 12 MR. BROOKMAN: Thank you. Dan, did 13 you wish to comment? 14 MR. DELANEY: Yes, Dan Delaney, 15 Regal-Beloit. I guess my biggest question, 16 when we come back we look at the industrial, 17 as you mentioned, you don't -- you have a very 18 limited amount of commercial information 19 that's here. Some of the information going 20 back a couple to -- one more, right there. On 21 these operating hours -- 22 MS. IYAMA: So, again, these are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 219 1 for the industrial sector. 2 MR. DELANEY: Industrial, correct. 3 And, again, looking at the percentages that 4 seem very high to me looking at these, that 5 this is only 25 percent of the values as you 6 look back here. Noting that commercial is 7 being 75 percent, is as we roll these values 8 up -- 9 MS. IYAMA: Right. And, again, 10 these -- this split by sector is just for the 11 6- to 20-horsepower range. In the larger 12 capacities you would see much more industrial 13 motors, and much less commercial applications. 14 MR. DELANEY: So assuming -- 15 MS. IYAMA: So, this is just an 16 example for illustration, but it's kind of -- 17 it kind of reverses as you go further in 18 increased motor capacities.

19 MR. BROOKMAN: Rob. 20 MR. BOTELER: Yes, I think that's 21 part of our question. When we're only looking 22 at the 6- to 20-horsepower, the hours of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 220 1 operation that you have even in the industrial 2 arena seem very high to us. We sold high 3 horsepower motors, you know, we start talking 4 1,000-, 2,000-horsepower motors, we expect 5 them to run continuously. But in a lot of 6 cases when we sell smaller, the 1 to 5- 7 horsepower and the 6 to 20, they go into 8 applications in industry that are intermittent 9 operations that might run a couple of hours a 10 day throughout the day. So, having an average 11 of four or 5,000 hours seems high to us. 12 MR. BROOKMAN: Dan, follow on. Then 13 I'm coming back to Frank. 14 MR. DELANEY: Yes, Dan Delaney, 15 Regal-Beloit. Again, just to fall back to that 16 75 percent and to drive that home, the point 17 is that the percentage of those hours, the 75 18 percent is considerably less than the values 19 that are being presented in industrial, so I 20 just wanted to make that comment. And that 21 obviously drives a huge percentage when you 22 look at those CSL levels in extrapolation of

### 202-234-4433 Neal R. Gross & Co., Inc. Page 221 1 a determination and recommendation of those 2 CSL level 3. I just wanted to make that point. 3 It's a huge point, is the amount of hours and 4 as well as I would also argue that the load 5 goes the same percentage on that, the loads 6 would be even lower than those percentages on 7 the commercial end of the 75 percent. 8 MR. BROOKMAN: Thank you. Frank, 9 microphone. 10 MR. LADONNE: Frank Ladonne, 11 Underwriters Laboratories. I just want to 12 amplify Rob's comment. In particular, the 13 numbers look a little strange to me when I 14 look at fire pump motors. I mean, by 15 definition that's a lot of hours for a fire 16 pump motor to be running. You know, you would

17 assume from these numbers there's a lot of 18 buildings burning down. 19 MR. BROOKMAN: Okay, thank you. 20 MS. IYAMA: So, again, if you think 21 some of these numbers -- I mean, it's very 22 useful to know what your perception of these

### 202-234-4433 Neal R. Gross & Co., Inc. Page 222 1 values are, whether they're too high or too 2 low. But if you have any data that we could 3 actually use to backup your comments that 4 would be even more helpful to us. 5 Okay. So, next I will talk about 6 the actual life cycle cost calculation and 7 payback period analysis. The purpose of this 8 analysis is to determine the LCC impacts and 9 payback period for the consumers of electric 10 motors under the considered efficiency levels. 11 The results are expressed in terms of life 12 cycle cost difference between a particular

13 standards case and a base case. 14 The base case represents a 15 situation where we have no new or amended 16 standards. The life cycle cost includes two 17 components, the total installed cost and the 18 sum of annual operating costs discounted to a 19 particular base year. 20 The analysis models the 21 uncertainty and variability of the inputs 22 using a Monte Carlo approach which

### 202-234-4433 Neal R. Gross & Co., Inc. Page 223 1 characterizes inputs as probability 2 distributions. And we implement this analysis 3 under Excel, combined with Crystal Ball which 4 allows using inputs in the form of probability 5 distributions.

6 And here we have the overall flow 7 chart for the life-cycle cost and payback 8 period analysis calculations. So, the top part 9 of the chart represents the development of the 10 total installed cost, and the bottom part 11 represents the calculation for the operating 12 cost. Both the total installed cost and the 13 lifetime operating cost go into the life-cycle 14 cost. And we calculate the payback period as 15 the total installed cost divided by the first 16 year of operating expenses. 17 And the total installed cost 18 includes the motor price and the installation 19 cost, and it also includes the shipping cost, 20 which is derived from the weight of the motor. 21 The operating expenses include the 22 electricity costs that we derived from energy

### 202-234-4433 Neal R. Gross & Co., Inc. Page 224 1 consumption data, also includes repair costs 2 and maintenance costs. 3 So, in gray here we have 4 represented all the inputs to the calculation, 5 in green we have the intermediate results, and 6 in yellow the final results. And in the next 7 slides I'll go through the inputs that we 8 haven't yet covered in the engineering 9 analysis, the markups analysis, and the energy 10 use characterization. And I'll start with the 11 electricity price. 12 Electricity prices are used to 13 convert the energy use data into electricity 14 costs. We considered regional electricity 15 prices by sector, and we used current and 16 projected information on energy prices from 17 the Energy Information Administration, and 18 more specifically from the Annual Energy

19 Outlook. And we also collected data on 20 reactive power prices. And on the next slide 21 I have represented the average electricity 22 prices that were used in the analysis, by

### 202-234-4433 Neal R. Gross & Co., Inc. Page 225 1 region and sector. And also an example of the 2 electricity price trends that were used in the 3 LCC calculations. 4 Another important input to the 5 life cycle cost are the discount rates. DOE 6 uses the discount rates to determine the 7 present value of lifetime operating expenses. 8 It derives those discount rates from 9 information on the cost of capital for 10 companies in the commercial/industrial sector

11 that use motors. 12 Next I'll go over the 13 installation, maintenance, and repair costs 14 which are also inputs to the life cycle cost 15 calculation. 16 DOE evaluated how installation, 17 maintenance and repair costs change with 18 increased efficiency. We looked at data from 19 RS Means, Vaughens, other manufacturer 20 literature, also inputs from stakeholders and 21 experts. For installation costs, DOE assumed 22 no changes in installation costs with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 226 1 increased efficiency. And that was based on 2 the fact that we stay within the same motor 3 frame designations. 4 For repair costs we developed a 5 model of repair costs based on Vaughens data. 6 This model basically estimated repair costs 7 based on the motor horsepower, enclosure, pole 8 configuration and efficiency level. And for 9 maintenance costs so far we didn't find any 10 information supporting any changes in 11 maintenance costs with increased efficiencies, 12 so we assumed these also remain constant 13 across efficiency levels. 14 Another thing that's not mentioned 15 here are the shipping costs. Again, these were 16 calculated directly based on the weight data 17 from the engineering analysis. 18 MR. BROOKMAN: Yes, Tom. Turn on 19 your microphone, please. Tom. 20 MR. BISHOP: Tom Bishop. The 21 question I have is where it says develop a 22 repair cost model. Is that repair -- what's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 227 1 involved in that repair? Does that include a -2 - is it a rewind and an overhaul, or is it þ3 MS. IYAMA: It's a rewind. The 4 basic bearing replacements were considered as 5 part of the maintenance cost. 6 MR. BISHOP: Okay.

7 MS. IYAMA: Next -- 8 MR. BROOKMAN: Yes, Rob, please. 9 MR. BOTELER: I just have a small 10 point. On the installation cost, depending 11 upon the level of efficiency, if we were to go 12 to, say, level 3 and we looked at what we have 13 in our proposal of moving from a special 14 purpose or definite purpose which has no 15 regulation today, we may find that the end 16 user has motors that are running at 17 significantly higher speeds because we have 18 the premium efficient motor, the 12-12. In 19 that case, we don't really know, but the 20 installation may require changes, it may be 21 move from a Design B to a Design A. It may 22 require some electrical changes to the system.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 228 1 It more likely would require some changes to 2 throttling valves or veins to accommodate for 3 the higher speed in order to maintain the 4 performance of whatever operation that they're 5 doing. 6 And it's something that I think we

7 have to be aware of. I don't know how we 8 quantify it because it varies dramatically 9 based on what the system is set up for today. 10 But I think the reality is that it could occur

11 that the end user would have to make some 12 pretty significant changes to his system to 13 accommodate a higher speed motor. 14 MR. BROOKMAN: So, I want to be 15 specific. You referred to the proposal and 16 that is the petition from the Motor Coalition.

17 MR. BOTELER: Yes. 18 MR. BROOKMAN: Thank you. Okay. 19 MS. IYAMA: Next, another item that 20 we took into account in the life-cycle cost 21 analysis is that not all repairs are performed 22 following industry-recommended practice, so in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 229 1 some cases repair might affect the efficiency

2 of the motor. 3 So, DOE assumed that one-third of4 repairs were performed following industry5 recommended practice, and in that case we 6 didn't see any changes in the motor efficiency 7 before and after the repair. 8 We also assumed that two-thirds of 9 repairs do not follow industry-recommended 10 practices, and in that case we would see 11 efficiency drops between 0.5 and 1 percent 12 depending on the motor size. 13 In terms of average repair 14 frequency, we assumed motors would be repaired 15 on average after 32,000 hours of operation, 16 that roughly corresponds to 5, 16, and 15 17 years of operation depending on the sector. 18 And for fire pump electric motors we assumed 19 there is no repair due to the lower operating

20 hours. 21 And here we have a slide that 22 specifies the requests for comments. So, any

### 202-234-4433 Neal R. Gross & Co., Inc. Page 230 1 comments on how to determine the motor repair 2 cost. Also seeking comments on additional 3 sources to estimate the frequency of motor 4 repair. Also we seek comment on data on 5 maintenance costs and installation costs. 6 MR. BROOKMAN: Go ahead, Tom, 7 please. 8 MR. BISHOP: The question I have is 9 where you have that one-third/two-third, what

10 was the source for that breakdown? 11 MS. IYAMA: We used a study by the 12 Bonneville Power Administration, it's called 13 Industrial Motor Repair in the United States. 14 It's -- I think it was published in the '90s, 15 in the late '90s, but that's the most recent - 16 - it was basically a survey of 60 repair 17 shops, and that's the data we could find to 18 try to estimate that breakdown. 19 MR. BISHOP: Is that citation in

20 the TSD? 21 MS. IYAMA: Yes, it's part of the 22 TSD references in Chapter 8.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 231 1 MR. BROOKMAN: Please say your

2 name. 3 MR. FLOLO: George Flolo with Flolo 4 Corporation representing EASA. I have a couple 5 of questions that I'd like to go back to your 6 Vaughens's pricing. Can you give me some sort 7 of a period of time that you obtained that 8 pricing from Vaughens. You pronounce it 9 differently, but -- 10 MS. IYAMA: Oh, yes. We used the 11 publication from 2010, I think. 12 MR. FLOLO: Okay, because your 13 pricing that you've shown on that chart is 14 significantly lower than what the current 15 Vaughens pricing is. So, that's one. 16 MS. IYAMA: Okay. 17 MR. FLOLO: Number two, question on 18 the one-third and two-thirds, also. Is that 19 units of repair, or is that service centers or 20 what is that number? And then an additional 21 question is, because you're using the word 22 repair rather than rewind, okay, do you have

### 202-234-4433 Neal R. Gross & Co., Inc. Page 232 1 any kind of statistics that talk about how 2 many rewinds really occur versus how many what 3 we would call repairs or reconditions that 4 occur? And after you've answered that I'll 5 explain maybe why I asked that. 6 MR. BROOKMAN: Is a repair the same 7 as a recondition? 8 MR. FLOLO: A repair would -- we 9 would have used the term repair as the same as 10 recondition. If it's a rewind, we would always 11 use the word rewind. 12 MR. BROOKMAN: Okay. 13 MS. IYAMA: So, here by repair we 14 meant rewind. And then the 32,000 hours of 15 operation for the rewind frequency was an 16 estimate we established through mostly inputs 17 from Austin Bonnett. 18 MR. FLOLO: Well, I wasn't as much 19 referring to that as -- 20 MS. IYAMA: Okay.

21 MR. FLOLO: -- much as I was 22 referring to how many units actually get

### 202-234-4433 Neal R. Gross & Co., Inc. Page 233 1 rewound. And let me better explain why I'm 2 asking. It's because if you would take our 3 company along with many other EASAs especially 4 in the '90s we all employed two, three, four 5 winders. Right now I have a part-time winder. 6 I know of other firms that have gone from four 7 winders down to one winder. And, therefore, 8 the amount of windings that are taking place 9 or rewinds is such -- it's a much smaller 10 number, and that's attributable to the 11 electronics in across the line starters doing 12 a much better job of protecting the windings 13 as well as variable frequency drives. So, I 14 just want to point that out to the group that, 15 you know, the amount of motors that are 16 honestly getting rewound is getting to be a 17 much, much smaller number than what you would 18 have had in some of your databases, especially 19 since one of them takes you all the way back

20 to the 1990s. 21 MS. IYAMA: So, again for the 22 frequency of the rewind here in the LCC we're

### 202-234-4433 Neal R. Gross & Co., Inc. Page 234 1 looking at one motor, so that's the 2 perspective we're taking. So, I don't have 3 information on the number of motors that are 4 being rewound each year. 5 MR. FLOLO: Right, but that would 6 be a significant issue in your energy 7 consumption, especially since you're 8 considering degrading efficiency during a 9 rewind process. And if you don't know that 10 number how do you justify its damage to the 11 environment? 12 MR. BROOKMAN: Charlie Stephens. 13 MR. STEPHENS: Just to follow-up as 14 a question. Are you suggesting that the 15 32,000-hour number is no longer as valid as it 16 once was, perhaps? 17 MR. FLOLO: That's exactly right. I 18 think it's much higher than that between 19 repairs. And that's number one. Because, let 20 me give you an example. My business went from 21 20 percent rewinds out of 1,000 motors a year, 22 and it's less than 6 percent currently, so

### 202-234-4433 Neal R. Gross & Co., Inc. Page 235 1 that's a significant drop. And that's all due 2 to -- so, most of the problems that we get in 3 are bearing issues, it's environmental issues. 4 It is not winding issues. 5 MS. IYAMA: Right. So, again any 6 information or additional sources of 7 information that you could recommend to help 8 us assess or estimate the frequency of motor 9 repair would be really helpful to try to 10 readjust maybe that 32,000-hour number. 11 MR. FLOLO: Yes, I don't -- that's 12 hard for either EASA or anybody to exactly 13 come up with. However, the source, if you 14 start looking at -- if you guys went out to 15 some of the large users, whether it be the 16 Fortune 500 or Fortune 1,000 that do asset 17 management to a high degree you would be able 18 to obtain that kind of information. 19 MR. BROOKMAN: I was not certain we 20 got the lexicon squared up here. You said that 21 repair means rewind from the perspective of

22 DOE.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 236 1 MR. FLOLO: Right.

2 MR. BROOKMAN: You used some other 3 words in there. Differentiate this for us. 4 MR. FLOLO: Okay. First of all, 5 when a motor comes in for repair, there's two 6 things that can happen; it gets reconditioned 7 which is --

8 MR. BROOKMAN: Yes. 9 MR. FLOLO: -- new bearings, clean 10 it up, do any mechanical work. If the winding 11 has failed, then we call it a rewind. 12 MR. BROOKMAN: And that's A plus B. 13 MR. FLOLO: A plus B would be a -- 14 a rewind is also a recondition.

15 MR. BROOKMAN: Gotcha. 16 MR. FLOLO: Yes. I'm sorry, that's 17 a good point. 18 MR. BROOKMAN: Yes, okay. Thank 19 you. I'm not -- okay, thank you. Good. 20 MS. IYAMA: Thank you.

21 MR. BROOKMAN: Now we can move on. 22 MS. IYAMA: Okay, so we went

### 202-234-4433 Neal R. Gross & Co., Inc. Page 237 1 through the discount rates, the electricity 2 prices, the repair costs, maintenance costs, 3 installation costs, so next I'll go through 4 the lifetime. 5 DOE assumed -- DOE developed 6 mechanical lifetime in hours for each 7 horsepower range considered. And this was done 8 for all equipment classes grouped together. 9 And then in the life cycle cost calculation we 10 derived lifetimes in years using the annual 11 operating hour estimates. So, these are the 12 results for the estimated average lifetimes in 13 years for Equipment Class Group 1. So, again, 14 these are derived from the mechanical 15 lifetimes I just presented combined with the 16 different annual operating hour estimates in 17 the industrial sector here, and commercial 18 sector, and agricultural sector. 19 Another item that DOE included for 20 motor lifetime is that for motors below 75- 21 horsepower which are most often embedded in 22 larger pieces of equipment we assume that the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 238 1 motor is retired when it reached this lifetime 2 or when the equipment of which it's part of 3 reaches its lifetime, so whatever happens 4 first. So, if we have a motor embedded in a 5 pump and if the pump breaks down, then the 6 motor is assumed to also retire. 7 And on lifetime here again we have 8 a comment box, and DOE is interested in any 9 comments or additional sources of data on 10 motor lifetime that could be used to validate 11 our estimate of motor mechanical lifetime. Are 12 there any inputs on the method to estimate 13 motor lifetimes?

14 MR. BROOKMAN: Neal? 15 MR. ELLIOTT: Neal Elliott. Not so 16 much a comment but a question. Motors below 75 17 horse are assumed to retire. What happens to 18 motors above 75 horsepower? 19 MS. IYAMA: So, for the larger 20 horsepower motor, we assumed they were not 21 used as a component of a larger piece of 22 equipment, so they would not retire -- they

### 202-234-4433 Neal R. Gross & Co., Inc. Page 239 1 would follow these assumptions of mechanical 2 lifetime. It's just that for the smaller 3 motor, since there's a possibility that they 4 could be embedded in an equipment that could 5 fail before those mechanical lifetimes are 6 reached, then we account for those potential 7 shorter lifetimes. 8 MR. BROOKMAN: For the larger 9 motors it would be more direct replacement? 10 MS. IYAMA: They would just -- 11 MR. BROOKMAN: Along this -- 12 MS. IYAMA: -- be retired after 13 these amounts of mechanical lifetimes.

14 MR. BROOKMAN: Yes. Frank. 15 MR. LADONNE: Frank Ladonne, 16 Underwriters Labs. I really have nothing to 17 base this on, and I guess I would rely on our 18 colleagues from EASA but it seems to me that 19 75 is a pretty big number. It seems to me that 20 you're probably more talking about a 40 or 50- 21 horsepower motor because even with a 50 22 there's significant capital costs, and most

### 202-234-4433 Neal R. Gross & Co., Inc. Page 240 1 users would prefer to have the motor rebuilt

2 or rewound.

3 MR. BROOKMAN: Let me note for the 4 record that we have several heads in the room 5 nodding up and down in assent. I thought I saw 6 John, or was it Rob, or Dan? Norm, please go 7 ahead. George. 8 (Off the record comments.) 9 MR. FLOLO: I would like to point 10 out that, for example, BP has a standard that 11 at 60-horsepower, they don't even consider 12 having the motor repaired. It's a throw-away 13 item. I will say that, unless the motor is 14 pretty doggoned special, when you start 15 getting around 40-horsepower, it's pretty hard 16 for me with my labor costs to be competitive 17 against new. I would not -- that value of 75, 18 I'm sure there are various users and various 19 EASA repair service centers that certainly 20 still could be a replacement item and not a 21 considered repair. 22 MR. BROOKMAN: Okay. Dan.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 2411 MR. DELANEY: Dan Delaney, Regal2 Beloit. Can you go back to the prior issues? 3 I got confused because the numbering is 4 different than our side. If you go back to the 5 prior questions, the last one, Issue 20, on 6 our's it's Issue 22. I wanted to make a 7 comment here -- a question as well as maybe a

8 comment. 9 You talk about technology options 10 that could drive motor mechanical 11 configuration. I go back to the commercial 12 world and your OEM configuration where this 13 could drive maybe possible higher repair 14 rewind for very specific OEM applications 15 where length and some other things drive more 16 efficient motors to that additional cost, 17 especially at the lower end which would 18 probably end more in the commercial end. Was 19 that the point of this comment/question on 20 this, or was it in regards to another area? 21 MS. IYAMA: So, we're mostly 22 interested in knowing whether an increase in

### 202-234-4433 Neal R. Gross & Co., Inc. Page 242 1 efficiency of a motor may also result in 2 higher installation costs. So, in the 3 engineering right now, we try to keep the 4 dimensions of the motor and the frame 5 designation constant, but if there is any 6 information we should consider to help us 7 quantify -- if there is an increase in 8 installation costs, then we would welcome such 9 information. 10 MR. DELANEY: I'll make a point on 11 a definite and special purpose product that is 12 not regulated today, motor starters and you 13 had essentially most of the motor starters 14 and/or switchgear that may be available for 15 some of that product, really the breaker 16 systems for that could have an issue if it is 17 at the threshold at the definite -- at the 18 standard designs what they are today. I could 19 certainly see as having to -- I don't know if 20 I'd say mechanical configuration but certainly 21 electrical performance type of upgrades 22 necessary to accommodate higher efficiency on

### 202-234-4433 Neal R. Gross & Co., Inc. Page 243 1 a definite -- special purpose that came from 2 no regulation of efficiency all the way up to 3 let's say Table 12-12. So, that's a pretty 4 large jump in efficiency. 5 MR. BROOKMAN: I see George is 6 still standing back there, so go ahead, 7 George. 8 MR. FLOLO: All right. One last 9 point, and I just want to reemphasize the 10 mechanical considerations. Even when we are 11 replacing motors for our end users, it's 12 amazing to me even with the different 13 manufacturers that we represent the difference 14 in the C dimension on these motors, so that we 15 are cognizant even in today's standards of 16 that C dimension when we're replacing a motor. 17 I struggle with you being able to increase to 18 the next level and maintain that C dimension. 19 And what you're going to force the user to do 20 is exactly what you're talking about. He won't 21 be able to obtain a motor that fits in his 22 machine anymore, and now that motor will

### 202-234-4433 Neal R. Gross & Co., Inc. Page 244 1 become a special motor. 2 MR. BROOKMAN: John, and then to 3 Charlie. 4 MR. MALINOWSKI: Yes, John 5 Malinowski, Baldor. And I'm going to speak a 6 little bit on behalf of the ABB side of our 7 company in this answer.

8 MR. BROOKMAN: Excuse me. What's 9 the ABB side? 10 MR. MALINOWSKI: ABB is our parent 11 company. 12 MR. BROOKMAN: Thank you, that's 13 fine. 14 MR. MALINOWSKI: And they also make 15 electric motors of the IEC type that are sold 16 in North America worldwide. 17 When we look at -- to George's 18 point, when we've looked at some of these 19 motors at the higher efficiency levels, we've 20 added active material stack length and added 21 slot fill which adds end turns, so that would 22 mean that we're going to have to come up with

### 202-234-4433 Neal R. Gross & Co., Inc. Page 245 1 a longer frame. 2 That machine isn't going to fit 3 where the old machine perhaps was in some user 4 applications, but by your own numbers you said 5 50 percent of the business goes to OEMs, so 6 this could mean that the OEMs have to redesign 7 their machinery to fit these motors. Dan 8 talked about that a little bit on special 9 purpose and definite purpose motors, but 10 whether it's a small one-horse motor or a 11 large 500-horse motor, if it's bigger, it's 12 probably not going to fit. 13 MR. BROOKMAN: Okay. 14 MR. MALINOWSKI: And in the case of 15 IEC motors, they're more closely tied to size 16 and space than we are. They don't have the 17 service factor, and a little bit more design. 18 Roger will probably jump in here and get me 19 down the right path, but it's tougher for an 20 IEC motor to raise the efficiency without 21 jumping frame sizes. And what the IEC world 22 would do is go to a larger diameter rather

### 202-234-4433 Neal R. Gross & Co., Inc. Page 246 1 than go longer. So, now you're going to have 2 a machine, maybe a packing machine for the 3 food industry that came in with IEC motors on 4 it that we're going to replace with a new 5 motor, and it's bigger in diameter, and it's 6 not going to fit. 7 MR. BROOKMAN: Gotcha. Charlie. 8 MR. STEPHENS: Yes, I had a 9 question. Charlie Stephens. Is the data that 10 you're able to access for motor lifetime and 11 motor repair frequency, have you got enough 12 sources to see any trends in that that you 13 could actually pick out? 14 MS. IYAMA: I don't know, but what 15 kind of trends exactly? 16 MR. STEPHENS: Well, there's been 17 some comment here that suggests that, because 18 of the applications, repair cycles are getting 19 longer potentially. And I guess that would 20 cause me to reiterate Neal's point, that the 21 study that we really need to get some more 22 data is probably more important than ever.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 247 1 MR. BROOKMAN: Thank you. This has 2 been very productive. Rob, keep going. 3 MR. BOTELER: I'm on -- what page 4 am I on here? Page 92 with the chart on motor 5 life expectancy. Right there. You know, I 6 don't think I could cite any studies 7 necessarily that we've seen, but as 8 manufacturers, we sell polyphase motors into 9 the agricultural world, and agriculture 10 doesn't do a real good job of maintenance.

11 The motors that both John and I 12 sell, the vast majority of them operate 13 underwater in irrigation systems seasonally. 14 Yes, they sit in a field for seven months and 15 then they turn them on.

16 MR. ELLIOTT: And we should note 17 that he is not referring to submersible motors

18 here. 19 MR. BOTELER: No, they're not 20 submersibles; they're irrigation drives. And 21 I think we would also tell you that industrial 22 applications, industrial customers are more

### 202-234-4433 Neal R. Gross & Co., Inc. Page 248 1 inclined to take better care in service and 2 maintenance, and agriculture and commercial 3 are less likely. So, when I look at your -- 4 MS. IYAMA: So, do you think the 5 agricultural numbers are too high, or the 6 industrial numbers are -- 7 MR. BOTELER: Yes, I think the 8 agricultural are too high, and I think the 9 industrial are too low. And I'm probably okay 10 with the commercial. 11 MS. IYAMA: Okay.

12 MR. BROOKMAN: Yes. 13 MR. BOTELER: Okay, John says 29 14 years is too high, but 29 years in a 200 to 15 500 on industrial, I've been in industrial 16 plants where I found motors that are 40 and 50 17 years old. 18 MS. IYAMA: And, again, those are 19 average values, so you know, LCC -- 20 MR. BOTELER: Well, that's a good 21 question. Yes. 22 MS. IYAMA: -- calculation we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 249 1 actually account for a distribution around

2 these numbers.

3 MR. BOTELER: Yes. 4 MS. IYAMA: So, you'll see motors 5 that actually operate much longer lifetimes or 6 much lower lifetimes. 7 MR. BOTELER: Right, right. 8 MR. BROOKMAN: Neal, follow on. 9 MR. ELLIOTT: I mean, I -- and 10 Linda was up there nodding, so -- but my sense 11 is that a 200 to 500-horsepower motor, you 12 know, you're talking about hundreds of 13 thousands of dollars of capital cost. And

14 that's the bread and butter for a lot of the 15 repair shops because those things, you never 16 want to let them die because you've already 17 invested. The point is that a lot of this 18 stuff, at least the guys I've worked with in 19 the industrial sector, a lot of these are IEEE 20 841 motors so that they're not just a standard 21 motor, so they're a huge amount of capital

22 cost.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 250 1 And I guess the last time I looked 2 841s were running about twice what a standard 3 motor, but something on that order, so we're 4 talking about a lot of investing, a lot of 5 capital investment in these things, and so 6 there's a lot of motivation to keep them 7 running. 8 MR. BROOKMAN: Okay. So, any data, 9 any actual data that you have, noting that 10 this table reflects averages, that would be 11 especially helpful. Alex next, and then I'm 12 coming back to you, Dan. 13 MR. BOESENBERG: Alex Boesenberg, 14 NEMA. Speaking on behalf of myself and my own 15 personal experiences, I'll have to back up 16 what Rob said about the agricultural side of 17 things just from my personal growing up in the 18 country. And then I have a friend who is a 19 farmer right now about 30 miles from here. 20 I've never seen anybody in my 21 experience do any preventative maintenance on 22 a motor. They turn it on and expect it to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 251 1 work. When it doesn't, they beat it with a 2 crow bar until it does, and they use it, and 3 then they turn it off and they go, boy, I've 4 got to look into that. And they don't do it 5 again until the fall when they need it again. 6 And then they beat on it until it works, you 7 know. I've grabbed a motor because a starter 8 failed, and you grab the belt after pulling 9 the guard out of the way so you can start 10 spinning it and say okay, turn it on.

11 MR. BROOKMAN: Gotcha.

12 MR. BOESENBERG: Yes.

13 MR. BROOKMAN: Dan.

14 MR. BASSO: Dale Basso. 15 MR. BROOKMAN: Dale, thank you.

16 Dale. 17 MR. BASSO: Just a comment. I think 18 where everybody is going with this obviously 19 is the agricultural years are long, and I'm 20 sure the way you came up with it was the 21 mechanical lifetime times then the hours of 22 operation --

### 202-234-4433 Neal R. Gross & Co., Inc. Page 252 1 MS. IYAMA: Right, so it might not 2 necessarily account for the -- 3 MR. BASSO: And that math led you 4 down a path, and unfortunately we do build 5 different kinds of motors. We build industrial 6 motors, we build commercial motors, we build 7 farm-duty motors, so when it really comes down 8 to it, you're working with the big picture 9 numbers. And I think you just fell into a trap 10 that didn't account for a farm-duty motor that 11 nobody takes care of and last three years. And 12 yes, it still runs those hours that you 13 calculated but the mechanical lifetime is much 14 shorter for those products that don't get 15 maintenanced. So it tends to skew your whole 16 assumption here, and that's -- it's a hard 17 number to come up with I realize, but I think 18 what you'll find in talking to the farmers of 19 the world is that it's just -- you're talking 20 very few years with a motor in a farm before 21 they just throw it away and replace it. And 22 most of it is much smaller. You know, there's

### 202-234-4433 Neal R. Gross & Co., Inc. Page 253 1 not that many of the big motors out in the

2 farms.

3 MR. BROOKMAN: Rob. 4 MR. BOTELER: Yes, just picking up 5 on that, just kind of to Neal's comment. The 6 industrial motors, that market has moved 7 almost totally to cast iron, and a lot of that 8 to the cast iron 841 motor where the 9 agriculture is still a lighter duty steel 10 frame motor, so the mechanical construction is 11 not nearly as robust as the industrial. 12 MR. BROOKMAN: Interesting. Okay, 13 thank you. Andrew deLaski, please. 14 MR. deLASKI: So, you would expect 15 longer lifetimes out of these -- 16 (Off microphone comment.) 17 MR. deLASKI: Right. And do you 18 think these numbers are representative of 19 that, or you said they're a little low is -- 20 (Off microphone comment.) 21 MR. deLASKI: Okay. 22 MS. IYAMA: Thank you.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 254 1 MR. BROOKMAN: Okay.

2 MR. deLASKI: And I wanted to -- on 3 that, so now you -- on Slide 91 you say 4 various literature sources. So, are -- what 5 were the key sources for this, can you say? Do 6 you remember? 7 MS. IYAMA: So, we actually started 8 by lifetimes in years in the industrial 9 sector. And this was based on information we 10 got through our motor expert. And then we used 11 that combined with our annual operating hour 12 assumptions to get to estimates of mechanical 13 lifetimes. And this became sort of the 14 reference for the lifetime of the motors. And 15 then we derived the lifetimes in years in the 16 other sectors, in the commercial sector and 17 agricultural sector based on these mechanical 18 lifetimes. 19 So, again we chose that approach 20 because there is some data on lifetime in the 21 literature. We have some in -- I don't 22 remember all the references but the problem

### 202-234-4433 Neal R. Gross & Co., Inc. Page 255 1 with the data we found in the literature is 2 that it wasn't clear if it was considering the 3 repair cycles -- it wasn't clear on the 4 definition of the lifetime, so we sort of had

5 to start from scratch to be sure that we're 6 talking about what we want to talk about, 7 which is lifetime from when the motor is sold 8 to when it's completely retired from the

9 market.

10 MR. BROOKMAN: Neal. 11 MR. ELLIOTT: I mean, I think this 12 is part of the issue. And I'm sitting here 13 looking and it's not jiving with what I've 14 sort of looked at. The assumption -- and, 15 again, this goes back to what George and Linda16 understand. And there's repair and there is þ17 - there's repair which they -- which I mean 18 basically you go in, you clean the motor, you 19 redo the conductors, you replace the bearings, 20 seals, things like that. That's what I mean 21 when repair, and that's routine, and that 22 happens I would say every three to five years

### 202-234-4433 Neal R. Gross & Co., Inc. Page 256 1 in an industrial application, maybe five to 2 seven years. George? 3 Anyway, so you've got that. I 4 would assume that that motor is going to go 5 through quite a number of reconditioning 6 cycles before it ultimately gets retired. 7 MR. BROOKMAN: George, follow-on. 8 George. 9 MR. FLOLO: Yes, that is quite 10 true. Matter of fact, there's obviously -- and 11 some service centers do it, but also a lot of 12 users do their own, and that is predictive and 13 preventive maintenance. They have -- matter of 14 fact, in some of the steel mills they have 15 crews of guys they call oilers and greasers, 16 and that's all they do all day long. So, the 17 point behind it is, yes, if there's a proper 18 predictive, preventive maintenance program, we 19 won't even see that motor, to be honest. And 20 what you're really starting to deal with is 21 the mechanical bearing life aspect which is -- 22 can be calculated. And I think all bearing

### 202-234-4433 Neal R. Gross & Co., Inc. Page 257 1 manufacturers do have that kind of data that's 2 readily available. 3 MR. BROOKMAN: Okay. 4 MR. ELLIOTT: Just as a follow-up, 5 you may want to check with the ABMA, American 6 Bearing Manufacturers Association. I think 7 they do have some data, as George indicated, 8 available on bearing life. So, they may be 9 actually a very good source of information. 10 MS. IYAMA: Right. So, another --

11 MR. BROOKMAN: That last comment

12 was from Neal. 13 MS. IYAMA: I'm sorry. 14 MR. BROOKMAN: Keep going, Sanaee. 15 MS. IYAMA: I have a question then. 16 Do you think bearing replacement would change 17 across efficiency levels?

18 MR. BROOKMAN: Who can comment on 19 that? Now, I see a bunch of manufacturers 20 shaking their heads no.

21 MS. IYAMA: Because that's -- 22 MR. BROOKMAN: George, go ahead.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 258 1 MR. FLOLO: Unless when we buy 2 bearings we're told those are the same 3 specifications that the motor manufacturers 4 purchase also. So, I see no reason for that to 5 have any degradation on efficiency. And then 6 when you couple with that, when a motor comes 7 in for reconditioning we're using micrometers, 8 and we're measuring the bearing journals as 9 well as the bearing housing. And when that 10 motor leaves it's to the exact OEM 11 specifications of the motor manufacturer. So, 12 there should be absolutely zero degradation as 13 a function of efficiency. 14 MS. IYAMA: Right. And I guess the 15 question was also more in terms of, does the 16 cost of a bearing replacement for a baseline 17 efficiency motor, will that significantly 18 change now if we have a higher efficiency

19 motor? 20 MR. FLOLO: No, there is no 21 relationship there at all. Efficiency, the 22 fact that it's a high -- a premium efficient

### 202-234-4433 Neal R. Gross & Co., Inc. Page 259 1 motor versus an EPACT, a bearing, is a 2 bearing. 3 MS. IYAMA: Okay. 4 MR. FLOLO: Makes no difference. 5 MR. BROOKMAN: And the substitution 6 is exact.

7 MR. FLOLO: Exact. 8 MR. BROOKMAN: Okay, glad we 9 clarified that. Yes? John. 10 MR. MALINOWSKI: I just wanted to 11 get back to the comment about going to look at 12 L10 bearing life. You have to remember that 13 those bearing calculations are lab 14 calculations. Under an ideal loading in a 15 clean environment, that's what you're going to 16 get. You take the motor and you put it in an 17 industrial, commercial, or certainly 18 agricultural application and it's going to get 19 contamination in it. It's probably not going 20 to have the right lubrication cycle, could be 21 under-lubed, over-lubed, wrong grease, so L10 22 is like a wish list of life. It's not real

### 202-234-4433 Neal R. Gross & Co., Inc. Page 260 1 world. 2 MR. BROOKMAN: Okay. We are now -- 3 I think we've concluded 23. We need to keep 4 moving, but maybe we should take a short break

5 now. It's been about an hour and a half. Just 6 10 minutes, go quickly to the restrooms, and 7 make it back here, which means at 10 minutes 8 after 3:00 we'll resume. We're doing pretty 9 well, I think. Let's keep pressing on. See you 10 back here in 10 minutes. 11 (Whereupon, the above-entitled 12 matter went off the record at 3:01 p.m. and 13 resumed at 3:13 p.m.) 14 MR. BROOKMAN: We are going to 15 press on here, folks, and back to Sanaee. 16 MS. IYAMA: So, I'm going to 17 continue on the life cycle cost analysis. So 18 next inputs to the life cycle cost analysis 19 are the base case efficiency distributions. 20 So, as mentioned earlier, the results in the 21 LCC are expressed in terms of life cycle cost 22 difference between a standards case and a base

### 202-234-4433 Neal R. Gross & Co., Inc. Page 261 1 case. 2 And the base case efficiency 3 distribution basically accounts for the fact 4 that not all motors considered in the analysis 5 are covered by the current standards, so some 6 may have efficiency below the NEMA 12-11 7 tables. Not all consumers purchase motors 8 meeting the current minimum standards, meaning 9 some may purchase motors with higher 10 efficiencies above premium. So, the life cycle 11 cost analysis recognizes that consumers 12 already purchasing motors at efficiencies 13 greater than or equal to a perspective 14 standard level will not be impacted by the 15 standard. So, again the life cycle cost 16 results are expressed in terms of life cycle 17 cost difference between a standards case and 18 a base case. So, if in the base case you're 19 already purchasing a motor that has an 20 efficiency equal or greater than the projected 21 standard, then you will not be impacted by

22 that standard.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 262 1 In order to establish those base 2 case efficiency distributions we used data 3 from catalog manufacturers and we looked at 4 2011 catalogs. We used this data to establish 5 the distribution -- the efficiency 6 distribution by equipment class groups and 7 horsepower range. And here we have an example 8 of the efficiency distribution for Equipment 9 Class Group 1, and for motors between 1 and 5- 10 horsepower motors -- between 1 and 5- 11 horsepower.

12 And here DOE seeks comments on the 13 estimated base case efficiency distributions 14 for all equipment class groups. And any 15 additional sources of data that could be used 16 to derive those efficiency distributions.

17 MR. BROOKMAN: Dan. 18 MR. DELANEY: If you want to go 19 back. Yes, in this table on thing that's 20 somewhat misleading about the definite 21 purpose, special purpose is you're going to 22 find that not all that type of product is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 263 1 going to be a catalog type of product. A good 2 percentage of that, 5 to 5-1/2 percent is 3 going to say low, as well as you're not going 4 to see efficiency levels always provided for 5 definite and special purpose type product 6 because that is not the driving factor for 7 that type of product anyway. It is for torque 8 or for mechanical options, or other. So, 9 that's why I think that 5-1/2 percent is low 10 by a good percentage. 11 MR. BROOKMAN: Michael, do you want

12 to -- 13 MR. DELANEY: Yes, so what would be 14 an appropriate number? 15 MR. BROOKMAN: Dan, do you want to 16 take a stab, or you want to let Rob try? Rob. 17 MR. BOTELER: If you go back to our 18 petition, our estimate is again at about 49 19 million connected horsepower is sold every 20 year, and in today's world we cover about 18 21 million connected horsepower. And that would 22 be covered by either 12-12 or 12-11. So, that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 264 1 leaves 31 million connected horsepower that's 2 not covered, so that's going to be special 3 purpose, definite purpose, offshore, gear 4 motors, partial motors. And I think that 5 number which is about 60 percent of the total 6 number of connected horsepower would fall 7 either into Category Zero or Category 1. 8 There's certainly some of that that is EPACT, 9 but I think there's a very large percent of it 10 that is not -- it falls into a Category Zero. 11 MR. BROOKMAN: Okay, thank you. 12 Yes, John. 13 MR. MALINOWSKI: Maybe another way 14 of looking at this, what you're doing is 15 looking at what models are in a catalog. And 16 that really doesn't tell you how many of those 17 units are sold. And I think that's really what 18 you're trying to drive to, because we've got 19 a lot of things in the catalog you might sell 20 25 of, and we've got stuff in the catalog

21 that's tens of thousands. 22 So, if we can go back to some

### 202-234-4433 Neal R. Gross & Co., Inc. Page 265 1 numbers, and we could probably get accurate

2 numbers out of NEMA. If we look at where we 3 were prior to enactment of EISA, premium 4 motors at the 12-11 -- I'm sorry, 12-12 level 5 was probably in the low 20s, 20 percent of our 6 three-phase, 1 to 500-horse production was at 7 12-12. Since then it's probably pushing 70 8 percent.

9 MR. BROOKMAN: Wow. 10 MR. MALINOWSKI: Well, that's -- 11 MR. BOTELER: Because if you look 12 at our expanded scope of 5.2 million units,

13 that's not true. 14 MR. MALINOWSKI: That's true, but 15 we're also -- well, we're looking at things 16 that are mandated at 12-11 today, EPACT level 17 that customers are choosing to go above. So, 18 maybe the 70 percent is a little high, but 19 it's substantially larger than the 20s. 20 MR. BROOKMAN: These are very 21 helpful comments for the Department. 22 MR. MALINOWSKI: And we can get an

### 202-234-4433 Neal R. Gross & Co., Inc. Page 266 1 exact -- we'll put a more exact number in our 2 written comments.

3 MR. BROOKMAN: Yes. 4 MS. IYAMA: Thank you. 5 MR. MALINOWSKI: That's my 6 estimate, that's not agreed on by my 7 colleagues. 8 MR. BROOKMAN: Rob, do you want to 9 add on here, or did you say it? 10 MR. BOTELER: This is Rob. We'll 11 put it into our written comments. We'll 12 discuss this. 13 MR. BROOKMAN: Okay, thank you. 14 Thanks a lot. Alex, I'm looking at you. Yes. 15 Okay, okay. Keep going. 16 MS. IYAMA: Okay. So, using all the 17 inputs that I presented in the previous slide 18 in the base case efficiency distributions that 19 were derived from the catalog data, these are 20 the results of the life cycle cost 21 calculation. And here as an example, I'm 22 providing the results for Representative Unit

### 202-234-4433 Neal R. Gross & Co., Inc. Page 267 1 1, and then on the next slide for 2 Representative Unit 3. 3 So we have the average LCC, and 4 here we see that the average LCC savings is 5 positive up to C Cell 3. And then we get into 6 negative savings. And we have similar results 7 for the 75-horsepower motor. 8 So, next I will cover the National 9 Impact Analysis. 10 MR. BROOKMAN: Please, Rob. 11 (Off microphone comment.) 12 MR. BROOKMAN: Yes, there's no -- 13 that's okay. 14 MR. BOTELER: Can you go back to 15 that slide? Yes, right there. When you're 16 doing the life cycle analysis, back to Roger's 17 comment on the formula on page 73, if that 18 formula changes would that then change all of 19 your calculations on the life cycle? You used

20 the formula for the motor losses. 21 MS. IYAMA: We used the top

22 formula.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 268 1 MR. BOTELER: The top formula.

2 MS. IYAMA: Yes. 3 MR. BOTELER: Okay, you did not use

4 the lower formula.

5 MS. IYAMA: No. 6 MR. BOTELER: Okay. So, Roger -- 7 MR. DAUGHERTY: Roger Daugherty. 8 Yes, I'm assuming that when they were over 9 here with the LCC analysis that they 10 calculated the actual energy use of each CSL 11 level, and then you take the difference in 12 that energy use. 13 MS. IYAMA: Right. 14 MR. DAUGHERTY: So, it's not 15 dependent upon the other relationship. 16 MR. BOTELER: Okay, that's all I'm 17 -- that's my question, thank you. 18 MR. BROOKMAN: Thank you. Dale. 19 MR. BASSO: This is Dale Basso. 20 Just one last thought on this, as far as the - 21 - with these calculations it all starts with 22 the price assumption. Correct? So, in that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 269 1 price assumption I think you stated that these 2 don't include any manufacturer impact that 3 might change other factors that could increase 4 the price. So, as we get into the discussion 5 later on manufacturers that doesn't actually 6 happen until the NOPR. Right? Where you would 7 look at manufacturer impact, and you would 8 then go back and adjust these numbers based on 9 any impact finding? 10 MS. IYAMA: Not in the LCC or in 11 the engineering analysis. It's a separate 12 analysis, but it would be taken into account 13 in any decisions. 14 MR. DAUGHERTY: Okay, so you're 15 basing decisions on this number, but you're 16 not putting all of the cost into the number? 17 Is that what I'm understanding? 18 MS. IYAMA: So, the life cycle cost 19 is one of the many analyses that DOE performs, 20 so it's considered in the decision making 21 process, but the NIA is also another 22 component, and the manufacturer impact

### 202-234-4433 Neal R. Gross & Co., Inc. Page 270 1 analysis is also another component.

2 MR. BROOKMAN: John. 3 MR. MALINOWSKI: Yes, John 4 Malinowski, Baldor. We've already talked about 5 the cost assumptions you've made on these 6 motors that they're wrong. If we look at the 7 incremental cost differences between a level 8 zero motor and an EPACT without getting in 9 trouble with antitrust, in industry we've 10 talked about ranges of 15 to 20 percent. Then 11 we saw another 15 to 20 percent in ranges 12 between an EPACT and a premium. 13 One might expect some additional 14 material to get to the level 3, and then more 15 material, copper to get to level 4 and 5. 16 We've not taken into effect any hand winding 17 additional cost. You've only added for the 18 copper, you've not added for any of the 19 additional infrastructure, new laminations 20 needed for 3, 4, or 5, new manufacturing 21 equipment. 22 It's going to skew these things

### 202-234-4433 Neal R. Gross & Co., Inc. Page 271 1 and make the payback longer than you have, 2 particularly by the time you get to 4 and 5. 3 The hours that you had in that chart for 4 industry and particularly commercial and 5 agricultural maybe too many hours in some 6 cases, not enough hours on maybe some of the 7 small industrial. 8 The whole life cycle cost of the 9 study is -- needs a fair amount of review. I 10 mean, everything you've got here is probably 11 understated. It's probably a lot longer on 12 these higher, particularly 4 and 5, maybe even 13 a little bit to level 3.

14 MR. BROOKMAN: Rob. 15 MR. BOTELER: Yes, John mentioned a 16 lot of the things that happened in the factory 17 as far as material and equipment, but one of 18 the things that you need to realize and why 19 the manufacturers are -- the Coalition is 20 supporting expanded scope and staying at level 21 2 is because we have already developed the 22 electrical packages, the wound-stator

### 202-234-4433 Neal R. Gross & Co., Inc. Page 272 1 assemblies and we've proven those that meet 2 the level 2 efficiency. 3 When we expand the scope of 4 product what we can do is, we have the ability 5 in our engineering systems to do batch changes 6 where we change that particular component in 7 hundreds of builds and material relatively 8 easily. We don't have to go back and do a lot 9 of retesting and reconfiguring to make sure 10 that end turns, I was accused yesterday of 11 saying interns, end turns fit within the 12 frame. If we move even just one level, it then 13 requires us to go back and re-engineer the 14 complete electrical package, and then 15 determine will it fit in the mechanical 16 package so it adds a tremendous amount of 17 engineering for what we pointed out, what Neal 18 pointed out is pretty much a rounding error in 19 efficiency gain. And I think we need to 20 recognize that. 21 So, in your numbers here you show 22 a very significant increase when we go to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 273 1 level 4, and our concern is that there's a 2 similar increase when you go to level 3. And 3 that there's some significant engineering 4 costs that need to be considered. 5 MR. BROOKMAN: Okay, thank you. 6 Please say your name. Is that on? No, it's not

7 on.8 MR. LIN: Paul Lin with Regal9 Beloit. Just a process question. Are you going 10 to go back and adjust your LCC based on the 11 feedback that you received today?

12 MS. IYAMA: In the NOPR we have an 13 entire -- the first phase of the NOPR stage. 14 And in the next steps, I'll detail this, 15 consists of revising all the analysis we 16 presented here today with either the comments 17 we've received or newer data that we can come

18 across. 19 MR. LIN: Okay. I guess when you do 20 that why wouldn't you include some of the 21 capital costs that we've talked about, because 22 the concern I have, taking my Regal hat off,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 274 1 and taking the NEMA hat off is the DOE reports 2 are utilized by a lot of people as reference 3 material. And if they're not accurately 4 reflecting the costs, it could lead others 5 down the wrong road. And that's why I want to 6 make sure that in the report that all the cost 7 analysis is done with everything in mind 8 because the people who read the report may not 9 have the benefit of sitting in this room and 10 understanding what's in and what's out of that 11 particular life cycle cost analysis. 12 MR. BROOKMAN: Okay. 13 MR. LIN: That's only my comment. 14 MR. BROOKMAN: Thank you. 15 MS. IYAMA: Okay. So, I'll move on 16 to the National Impact Analysis. The National 17 Impact Analysis actually includes both the 18 shipments analysis and the National Impact 19 Analysis. And I'll start with the shipments 20 analysis. 21 The purpose of this section is to 22 estimate shipments projections both in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 275 1 base case and in the standards case. So, we 2 used the current information on shipments and 3 projected those values assuming that shipments 4 are driven by economic growth and fixed 5 investment in equipment including motors. 6 We based that assumption on a high 7 degree of correlation found between historical 8 shipments of motors and fixed investment in 9 selected equipment. So, here on this graph we 10 have the historical shipments represented by 11 an index in blue, and in red the product fixed 12 investment in selected equipment including

13 motors. 14 This correlation was derived from 15 a linear regression represented by this 16 equation here, and it allowed calculating 17 estimates of shipments, and the predicted 18 shipments based on private fixed investment 19 projections which were based on data found in 20 the Annual Energy Outlook. So, we projected 21 the fixed investment and then we used that 22 equation to project our shipments.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 276 1 Here I'm just repeating the data 2 we saw in the market assessment, the different 3 shipments for the year 2011, so we took this 4 data and applied the equation in order to 5 project those shipments over the analysis 6 period from 2015 to 2044. 7 The shipments analysis also 8 includes a breakdown of motor shipments across 9 equipment class groups and equipment classes. 10 So, in order to establish those breakdowns we 11 used data from different market research 12 reports, inputs from interested parties as 13 well as U.S. Census data. We also used plant 14 assessment data as proxy. And all of these 15 breakdowns are detailed in Chapter 9 of the

16 TSD. 17 And here DOE seeks any comments on 18 any additional sources of data on motor 19 shipments that could be used to validate our 20 shipments model and projections. 21 MR. BROOKMAN: Any additional that 22 haven't been mentioned already data sources?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 277 1 MS. IYAMA: Okay. So, as mentioned 2 earlier the purpose of the shipments analysis 3 is to establish both a base case shipment 4 projection and a standards case shipment 5 projection. The shipment projections are 6 expressed both in terms of quantities, but 7 also in terms of efficiencies. 8 For the base case efficiency 9 distributions, DOE assumed there would be no 10 changes in motor shipments efficiency during 11 the analysis period, so the base case 12 efficiency remains constant and equal to the 13 2011 one that I mentioned during the LCC 14 analysis. 15 So, here we request comments on 16 this decision to use constant efficiencies 17 throughout the analysis period in the base 18 case scenario. And any data that could help us 19 characterize trends in efficiency would be 20 helpful. And again, that would be in a base 21 case situation.

22 MR. BROOKMAN: Rob.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 278 1 MR. BOTELER: Yes. I don't know if 2 this one would fit here, but there certainly 3 is a trend as the fellow, Robert, from Danfoss 4 mentioned. There is a trend of more and more 5 product that's in the categories that we're 6 talking about moving to variable frequency 7 drives. So, I mean, the efficiency levels are 8 going to change as they become more integral 9 to the system and benefit from the variable 10 frequency drives. But what that would be -- 11 you know, we all talk about the percentage of 12 product we sell, and try and estimate the 13 number of units that are going to be used with 14 drives, but we don't have any real solid NEMA 15 data on that subject, but it could have an 16 effect over the period. 17 MR. BROOKMAN: Okay, thank you. 18 MS. IYAMA: So, we did this for the 19 base case situation. We do the same for the 20 standards case. For the standards case, the 21 standards case shipments projections,DOE is 22 aware that increased electric motor prices

### 202-234-4433 Neal R. Gross & Co., Inc. Page 279 1 could affect the repair versus replace 2 decisions and, therefore, impact shipments. 3 However, in the absence of data to 4 quantify and estimate the impact of increased 5 motor prices on shipments, we assumed that the 6 standards case shipment projection would be 7 equal to the base case shipments. 8 Now, in terms of efficiency we 9 derived standards case efficiency 10 distributions from the base case efficiency 11 distribution and applied a roll-up scenario.

12 And here's that a comment box. We 13 would be interested if you have any 14 information that could help us quantify the 15 impact of increased motor prices on motor 16 shipments in the different standards case. 17 MR. BROOKMAN: No additional

18 comments. 19 MS. IYAMA: So, next we have the 20 actual National Impact Analysis. The purpose 21 of this analysis is to estimate national 22 energy savings for motor ships -- for motors

### 202-234-4433 Neal R. Gross & Co., Inc. Page 280 1 shipped from 2015 to 2044, as well as to 2 estimate the national economic impact on 3 electric motor users. 4 So, DOE calculates national energy 5 savings by multiplying unit lifetime energy 6 savings by the projected shipments, and 7 accumulating this projected value over the 30 8 years. And I'll go in the details of that 9 calculation.

10 DOE also calculates the net 11 present value for the national economic impact 12 by accumulating the difference each year 13 between the energy bill savings and increased 14 equipment expenditures for all motors shipped 15 over that 30-year period. 16 So, here we have the overall flow 17 chart for the calculation of the national 18 energy savings. It starts off by the shipments 19 analysis and we use the base case projections, 20 and standards case shipments projections. So, 21 in the base case we calculate the base case 22 lifetime energy consumption for motors sold

### 202-234-4433 Neal R. Gross & Co., Inc. Page 281 1 each year over the 30-year period analysis, we 2 convert that base case lifetime energy 3 consumption by -- into primary energy. And we 4 accumulate those values over 30 years to get 5 to the base case cumulative energy use. So, we 6 do this in the base case situation, we do this 7 in the different standards case situations, 8 and the differences gives us the national 9 energy savings. 10 Next we have a similar diagram 11 describing the calculation for the net present 12 value. Again we start off with the shipments 13 projections. We use the shipment projection to 14 calculate the lifetime energy cost of motors 15 shipped each year over the analysis period, so 16 we do this in the base case and in the 17 standards case projections. 18 We also use the shipments to 19 calculate the lifetime repair, maintenance, 20 and installation costs, total installation 21 costs for motors shipped each year over that 22 30-year period.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 282 1 We calculate the cumulative energy 2 cost savings by taking the difference between 3 the standards case and base case energy cost, 4 and we calculate the cumulative non-energy 5 cost increase by taking the difference between 6 the standards case and the base case repair, 7 maintenance, and total install costs. 8 We use a discount rate to convert 9 those time series of monetary values into a 10 present value, and the difference between the 11 non-energy cost increase and the energy cost 12 savings gives us the net present value. 13 Now, this slide summarizes all of 14 the inputs that were used into the National 15 Impact Analysis, so we've gone through all of 16 them in the previous sections, except maybe 17 for the discount rate. In the NIA we use 7 18 percent and 3 percent discount rates. This is 19 OMB guidance. 20 Another thing I will go into 21 details in the next couple of slides are the 22 total installed cost. The total installed

### 202-234-4433 Neal R. Gross & Co., Inc. Page 283 1 costs are the sum of the motor price and 2 shipping cost. We didn't include the 3 installation costs because they're assumed to 4 stay constant across efficiency levels, and 5 here we're looking at results in terms of 6 difference between standards case and base

7 case. 8 So, the motor price is derived 9 from the manufacturer selling price by 10 applying markups, and the shipping cost is 11 derived from the motor weight by applying an 12 average shipping cost. 13 The engineering analysis provided 14 manufacturer selling price and weight data for 15 the represented -- for the representative 16 units only. So, in order to calculate total 17 installed costs for all equipment classes we 18 had to extrapolate on this information for the 19 representatives units, and develop estimates 20 of total installed costs for all equipment 21 classes. And that's what I'm going to detail 22 in the next slide.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 284 1 We used similar methodologies to 2 extrapolate --

3 MR. BROOKMAN: Sanaee?

4 MR. BOESENBERG: Yes. 5 MR. BROOKMAN: Meg? 6 MS. WALTNER: Meg Waltner from 7 NRDC. A quick question on this slide. Are you 8 not using learning rates in this analysis, or 9 is that not part of this? 10 MS. IYAMA: So, we looked at 11 learning rates and it turns out that for 12 motors, the biggest drivers are the material 13 costs. And it was -- we didn't find enough 14 data to be confident to project and use a 15 learning rate so we assumed a constant price 16 in the default scenario. But as a sensitivity 17 analysis we included different learning rates. 18 So, we used a similar methodology 19 to calculate and scale manufacturer selling 20 price and weight data from the representative 21 units to all equipment classes. So, here I'll 22 just talk about the manufacturer's selling

### 202-234-4433 Neal R. Gross & Co., Inc. Page 285 1 price but we did the same for the weight. 2 We developed scaling relationship 3 at each CSL. So, for example, the Equipment 4 Class 1 the engineering gave us manufacturer 5 selling prices for four-pole enclosed 5- 6 horsepower motor, 30-horsepower motor, and 75- 7 horsepower motor. 8 We used a power law regression to 9 estimate manufacturer's selling prices across 10 all horsepower ranges in that motor 11 configuration, four-pole enclosed. So, we did 12 that at CSL 1, 2 -- CSL 0, 1, 2, 3, 4, 5. 13 Then we used an index, we 14 established an index to describe how the 15 manufacturer selling price varied by pole and 16 enclosure, and we did that through a 17 statistical analysis of manufacturer catalog 18 data of over 10,000 motor configurations. 19 So, using that database and 20 statistical analysis we derived an index for 21 each horsepower rating that allowed to scale 22 the manufacturer selling price that we had for

### 202-234-4433 Neal R. Gross & Co., Inc. Page 286 1 the four-pole enclosed motor across all of the 2 other pole and enclosure configurations. So, 3 this allowed DOE to estimate total installed 4 cost for all of the equipment classes.

5 And here we have a comment box on 6 this approach for extrapolating the 7 manufacturer selling price and weight data 8 from the representative units to all of the 9 equipment classes that were considered in the 10 analysis. 11 MR. BROOKMAN: So, comments related 12 to these comment boxes, methodology for 13 scaling, manufacturer selling price data, and 14 comments on scaled values for motor weights. 15 MS. IYAMA: Okay, so next -- so, 16 we've been through the methodology, the inputs 17 used, and on the next slide I'll present the 18 results of the National Impact Analysis 19 starting with the national energy savings. 20 Here we have the summary of the national 21 energy savings in quads for the three 22 equipment class groups, and for each of those

### 202-234-4433 Neal R. Gross & Co., Inc. Page 287 1 CSL levels considered in the analysis.

2 We see that due to the lower 3 shipments the savings are lower for a NEMA 4 Design C motor in comparison to the NEMA 5 Design A and B motors. And another thing that 6 I want to add is that in 2011 DOE published a 7 policy -- a Notice of Policy stating its 8 intention to add full fuel cycle as a metric 9 in the NIA, so we actually included that in 10 the preliminary analysis, so you'll find in 11 the TSD chapters results that are very similar 12 to this, but expressed in terms of full fuel 13 cycles. It's basically a multiplier that's 14 applied to those primary energy savings in 15 order to convert those savings into a full 16 fuel cycle metric.

17 MR. BROOKMAN: Rob. 18 MR. BOTELER: Rob Boteler. I guess 19 the number that just jumps out at me on this 20 chart, I just really struggle with, and I know 21 we've talked about this all day. If we go back 22 to our original earlier charts, the 5-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 288 1 horsepower example, the level of efficiency at 2 level 3 versus level 2 is 7/10ths of a 3 percent. The 30-horsepower is 5/10ths of a 4 percent, and the 75 is 4/10ths of a percent. 5 When I get to this chart my savings with 6 small, really small increment between level 2 7 and level 3, I'm saving almost double the 8 savings in quads? I go from 4.4 to 7.5 on 9 savings on each unit of 7/10ths down to 10 4/10ths. That just amazes me. 11 MS. IYAMA: I think it might be due 12 to -- I mean, there is a lot of things that go 13 into these calculations, but one of the main 14 drivers I'd say is also the efficiency 15 distributions. That would explain the jump you

16 see. 17 MR. BROOKMAN: Matt, please, find a 18 microphone. 19 MR. NARDOTTI: Matt Nardotti from 20 Navigant. So, in other words you're saying 21 there's just a lot of motors that are already 22 at CSL 2. Right? There's a lot of motors being

### 202-234-4433 Neal R. Gross & Co., Inc. Page 289 1 shipped already at the NEMA premium level, so 2 going up to CSL 3 you're now pulling all of 3 those motors up, as well, so the shipment is 4 being affected as a driver in the energy 5 savings.

6 MR. BROOKMAN: Rob. 7 MR. BOTELER: Yes, and in our 8 proposal we're taking a huge number, we're 9 taking 31 million connected horsepower and 10 moving it to level 2. And what you're doing is 11 you're doing the same thing moving it to level 12 3. And then you're also moving the 18 million 13 connected horsepower that we already have and 14 moving that to level 3. 15 MS. IYAMA: Right. 16 MR. BOTELER: Right. So, it just 17 seems like a huge difference to me. 18 MR. BROOKMAN: Okay, thank you. 19 Yes, Charlie.

20 MR. STEPHENS: I'll add on to what 21 Rob was saying. I think there is a big 22 difference between the estimates that are

### 202-234-4433 Neal R. Gross & Co., Inc. Page 290 1 behind this proposal in terms of how much is 2 already at what level when it comes to the 3 categories that are not covered right now, 4 which I think are substantially 5 underestimated, potentially, in the current 6 analysis. So, I think some of these things may 7 get ironed out when some of the numbers get 8 reconciled a little better, I think. 9 MR. BROOKMAN: Okay, thank you.

10 Yes? 11 MS. IYAMA: Okay, so I'll continue 12 on the results of the National Impact 13 Analysis, and I'll go through the net present 14 value results. So, here I have a slide for 15 Equipment Class Group 1. So, we have the NPV 16 for the two discount rates considered, and 17 here we present the results for all horsepower 18 ranges, as well as for individual horsepower 19 ranges. And we see that past CSL 3 we get into 20 the negative net present value results. 21 For Equipment Class Group 2 22 similar results, and here we have the negative

### 202-234-4433 Neal R. Gross & Co., Inc. Page 291 1 values highlighted also in red starting at CSL 2 2. And then Equipment Class Group 3 all of the 3 net present value results were negative across 4 CSLs. That's for fire pump electric motors. 5 MR. BROOKMAN: So, there's no 6 comment box here, but should anybody wish to 7 comment on these results please do so. Alex 8 Boesenberg. 9 MR. BOESENBERG: Alex Boesenberg, 10 NEMA. Please refresh my memory on what the 11 difference between a positive and negative net 12 present value result is on these slides. 13 MS. IYAMA: Okay. So, the net 14 present value is the difference between your 15 cost savings and the incremental cost of 16 purchasing a new motor. It also includes the 17 incremental cost of repairing a higher 18 efficiency motor. So, the net present value 19 here is calculated as the difference between 20 the non-energy cost increase and the energy 21 cost savings. 22 So, for example, you buy a more

### 202-234-4433 Neal R. Gross & Co., Inc. Page 292 1 efficient motor, you're saving on your energy 2 bills but it's a higher investment to begin 3 with. So the NPV is sort of the tradeoff 4 between the two. And it's negative when your 5 initial investment and operating lifetime 6 costs are greater than the payback. 7 MR. BROOKMAN: Is it lifetime or at 8 the 30-year? 9 MS. IYAMA: Here it's -- so, it's 10 the lifetime of motors shipped over 30 years. 11 MR. BROOKMAN: Yes. Thank you. Yes. 12 Charlie. 13 MR. STEPHENS: Charlie Stephens. 14 I'll add that basically it's saying that your 15 costs don't outweigh your initial investment, 16 but when you use the 7-percent discount rate 17 you're discounting all of your future savings 18 substantially. The near-term dollars matter 19 much more than the year 15 to 30 dollars, so 20 the numbers look a lot worse when you use the 21 7-percent discount rate, than they do if you 22 use a 3-percent.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 293 1 MR. BROOKMAN: Okay. So, then 2 moving on. 3 MS. IYAMA: Right, so moving on 4 I'll let Hisham continue with the preliminary 5 manufacturer impact analysis. 6 MR. BROOKMAN: So, let me just take 7 a quick poll in the room. How many of you have 8 participated in the manufacturer impact 9 interviews in the past? Just a few of you, 10 okay. I think they're familiar with much of 11 this material. 12 MR. ARAJI: All right. So, I'm 13 going to talk a little bit about the 14 preliminary manufacturer impact analysis right 15 now, and where it comes into the preliminary 16 analysis stage. You could see here it's a 17 little bit separate during this part of the 18 rulemaking process. 19 So, the purpose of the preliminary 20 MIA is to qualitatively and quantitatively 21 assess the impacts of amended efficiency 22 standards on manufacturers of electric motors.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 294 1 A key output of this analysis is the change in 2 industry net present value resulting from

3 amended standards. 4 DOE normally performs the MIA in 5 three phases. In the first phase, DOE creates 6 an industry profile that builds on the market 7 and technology assessment. This market profile 8 is then updated through interviews with 9 manufacturers, and this typically takes place 10 during the preliminary analysis which is the 11 phase of the rulemaking that we're in right

12 now. 13 During this time, DOE identifies 14 the key issues concerning manufacturers. In 15 Phase 2, it spans the NOPR and final analysis, 16 I'm sorry, final rule stages. DOE builds a 17 strawman industry cash flow model called the 18 "Government Regulatory Impact Model," or GRIM, 19 to forecast free cash flows in the industry. 20 It does this for the base case and the 21 standards case scenario, and calculates an 22 industry net present value which is the main

### 202-234-4433 Neal R. Gross & Co., Inc. Page 295 1 output of the GRIM. 2 Also in Phase 2, DOE develops an 3 interview guide that it will use to guide its 4 subsequent discussions with manufacturers 5 during the MIA interviews, which will take 6 place in Phase 3. 7 Now, during these interviews DOE 8 speaks with a variety of different 9 manufacturers to receive feedback on the items 10 listed in the interview guide. We'll be 11 scheduling these interviews soon after this 12 meeting, and we'll start conducting the 13 interviews some time after the close of the 14 comment period. 15 I would also like to mention at 16 this point that these interviews are nearly 17 always conducted with a non-disclosure 18 agreement in place so that no proprietary 19 information could be shared publicly, but 20 rather aggregated across all the responses. 21 Following the interviews, DOE will 22 refine the GRIM and evaluate other qualitative

### 202-234-4433 Neal R. Gross & Co., Inc. Page 296 1 issues such as manufacturer capacity, direct 2 employment impacts, and impacts on 3 competition. 4 So, taking a step back to what was 5 done for the preliminary analysis stage, 6 during our preliminary MIA, DOE identified 7 three key issues affecting manufacturers. Now, 8 a lot of these issues were brought up 9 throughout the meeting today, but we'll repeat 10 them again here because they are important 11 when we are considering impacts to

12 manufacturers. 13 First, manufacturers indicated 14 that higher efficiency standards may drive 15 consumers to rewind older, less efficient 16 motors rather than buying new more efficient 17 motors that are more expensive. Now, as Sanaee 18 mentioned, DOE does acknowledge that this 19 increase in electric motor prices could affect 20 the "repair versus replace" decision for 21 consumers, so DOE is welcoming and seeking 22 comments on data sources that it could use to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 297 1 better estimate the impacts of this scenario 2 on shipments. 3 For the second key issue, DOE 4 identified several concerns related to 5 switching to more efficient copper rotor 6 motors. Manufacturers indicated that because 7 copper has a higher melting point than 8 aluminum it's more dangerous to fabricate. 9 Also, the higher molten temperature of copper 10 increases energy costs of manufacturers and 11 leads to quicker degradation of tooling that's 12 used in fabrication. 13 Now, manufacturers also indicated 14 that electric motors with copper rotors have 15 reduced starting performance compared to those 16 with aluminum rotors. This means higher inrush 17 current and lower locked rotor torque. So, to 18 compensate for these reduced performance 19 characteristics manufacturers often have to 20 adjust other design characteristics, such as 21 slot design to maintain NEMA performance 22 requirements just so basically they stay

### 202-234-4433 Neal R. Gross & Co., Inc. Page 298 1 within the bounds that NEMA prescribes for 2 Design A, Design B, and Design C. Now, these 3 adjustments to these other characteristics 4 could potentially negate the improvements in 5 efficiency gained from switching to copper

6 rotors. 7 Additionally, manufacturers 8 indicated that not only is copper a more 9 expensive raw material compared to aluminum, 10 but there are significant costs associated 11 with retooling their entire production lines 12 for this design option. And a lot of people 13 have brought that up today. 14 Third key issue, domestic 15 manufacturers have indicated that they may be 16 disproportionately affected by new efficiency 17 standards if DOE does not broadly enforce 18 efficiency requirements for all covered 19 motors, including those imported from foreign 20 countries. 21 MR. BROOKMAN: Roger. 22 MR. DAUGHERTY: Roger Daugherty.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 299 1 While under the copper rotor motors and 2 throughout most of today you've tended to 3 concentrate on only the parts of the MG1 4 standard that differentiate between design 5 types, Design A, B, and C. There are many 6 parts of the standard that apply commonly to 7 all the design types, and those performance 8 criteria must also be met in the design. 9 One of the things that's difficult 10 in the cast copper rotor is that in order to 11 achieve sufficient starting torque with a more 12 conductive material, and you allude to this in 13 various discussions, is having to shape the 14 rotor slot so that you minimize the amount of 15 material that's active at the time of 16 starting, so you get a very high power density 17 loss in that material. 18 The MG1 standard has requirements 19 for at least being able to start twice from a 20 cold start condition, or once from a hot start 21 condition with a certain amount of inertia and 22 a certain assumed load torque. But one of the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 300 1 more difficult criteria is, is there's also a 2 specified stall time, and that's related to 3 the fact that many of these motors are 4 protected by a standard class type of 5 protective device that will keep that motor on 6 line in a stalled condition if it's unable to 7 start for a significant period of time. The 8 MG1 standard is 20 seconds, so it's also 9 important, and I didn't see that discussed in

10 the PTSD. 11 So, it's really necessary that 12 when you're making a decision of any 13 technology, so I'm not just restricting this 14 to cast copper rotors, that the entire 15 standard be considered and not just the parts 16 that differentiate between design types. But, 17 again, I just reiterate you won't need to do 18 this evaluation if you screen out cast copper 19 rotors in the first place. Thank you. 20 MR. BROOKMAN: Thank you. John, and

21 then to Steve. 22 MR. MALINOWSKI: John Malinowski,

### 202-234-4433 Neal R. Gross & Co., Inc. Page 301 1 Baldor. On the last bullet point you have on 2 enforcement, I just wanted to clarify that one 3 of our concerns is when we talk about domestic 4 manufacturers being affected by energy 5 standards, that's beyond just motor 6 manufacturers, it's OEM manufacturers. And 7 they're affected by non-complaint motors 8 coming into the country embedded in machinery. 9 We're having that problem today. It would be 10 worse in the future if domestic manufacturers 11 try complying with whatever new laws. The 12 delta between compliant and non-compliant 13 motor would be even greater than today, and 14 that would be job losses for machinery 15 builders here that would be going overseas. 16 MR. BROOKMAN: Thank you. Steve, 17 yes. 18 MR. RUFFING: Steve Ruffing. We had 19 -- the conversation had again kind of gone 20 back to design changes that are necessary to 21 compensate for negative performance aspects 22 related to, let's say, copper rotors. And we

### 202-234-4433 Neal R. Gross & Co., Inc. Page 302 1 got -- Roger then mentioned there was emphasis 2 placed on complying with the NEMA 3 specifications related to the design letter 4 specifically B. And there's one thing I wanted 5 to point out when I saw in Chapter 5 where the 6 various CSL levels, the 4 and 5 were reported 7 to be in compliance with NEMA Design B. So, 8 one of the things I noticed was some of the 9 margins that the calculated values met them by 10 were -- I guess I'd characterize those as 11 razor thin. For example, the 30-horsepower 12 four-pole Design B CSL 4 level design is 13 required to meet a level of 200 percent 14 breakdown torque to comply with NEMA Design B. 15 And the level that was reported per the design 16 calculation program was 202 percent. Now, keep 17 in mind that 200 percent is a minimum value 18 that has to be met, not a nominal value. So, 19 what that's essentially saying is that -- is 20 this what I presume to be a nominal level of 21 202 percent for the program accounts for not 22 only inaccuracies that might exist in the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 303 1 program, but then also manufacturing variation 2 from one motor to the next. And all that is 3 taken up with a 2 percent margin. 4 Similarly, on one of the 75- 5 horsepower designs, I'll just look up the 6 numbers, the NEMA Design B limit for locked 7 rotor amps is 542.5, and the CSL 5 design has 8 locked rotor amps of 541.3. So, again, 9 inaccuracies in the program plus manufacturing 10 variations would only account for one amp of 11 tolerance there, which seems a little overly 12 optimistic in my opinion. 13 MR. BROOKMAN: Okay, thank you.

14 Ned.

15 MR. BRUSH: Ned Brush. I wanted to 16 comment on the copper rotor question. Roger 17 raises a number of very important points about 18 using copper rotor as opposed to the aluminum 19 die-cast rotor. I would point out that Siemens 20 did this, but it was a basic redesign for 21 North America for 60-hertz motors, and it was 22 a slot design that at approximately 3-

### 202-234-4433 Neal R. Gross & Co., Inc. Page 304 1 horsepower you change to the double bar 2 design, and so on to be able to control that 3 inrush, as well as achieve very respectable 4 torques, and so on. 5 It is possible, but it does 6 require redesign. You're just in a different 7 place in the torque curve because you've 8 changed the conductivity of the conductor in

9 the rotor. 10 I would also point out that, for11 instance, our friends in China on copper die12 casting last year did about 80,000 rotors, a 13 little more, up from 20,000 the year before. 14 And a number of their motor companies, for 15 example, are shipping around the world, many 16 of them to IEC standards, some to IEEE. We 17 also people working in South Korea, and in 18 Taiwan, as well as in Germany, and in France 19 and so on, so there are quite a number of 20 people that are producing motors, some to 60- 21 hertz for use in North America like Siemens,

22 and others for IEC.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 305 1 I might add that the Chinese, one 2 operation does only the die cast copper using 3 our manufacturing cell technology and so on, 4 and that 80,000 that they produced last year 5 for commercial is up from 20,000 the year 6 before. And they only started the year before 7 that, so there is growth. And many of their 8 customers are reported to be sort of looking 9 at this as a product line at a time in terms 10 of making the transition. And I believe some 11 of them, anyway, have said that it was at a 12 time when their stamping dies were wearing 13 out, so they had to buy new -- they had to 14 build new stamping dies, and make that 15 investment, anyway. So, they changed the 16 design, but they did make major design changes 17 to be able to stay within inrush, to be able 18 to achieve torques and so on, but it is 19 possible. 20 MR. BROOKMAN: Okay, thank you. 21 Yes, John. 22 MR. MALINOWSKI: Yes, I'd like to

### 202-234-4433 Neal R. Gross & Co., Inc. Page 306 1 just comment that the motors that I think Ned 2 is talking about are, as he said, IEC motors, 3 and the general purpose IEC motor would be a 4 Design N motor. And in a Design N, that 5 includes both what we would call NEMA Design 6 B, as well as NEMA Design A. So, we're talking 7 Design B motors, and the copper motors that 8 we've identified coming into the U.S. are 9 Design As. 10 MR. BROOKMAN: Thank you. Alex. 11 MR. BOESENBERG: Alex Boesenberg, 12 NEMA. I won't -- I'll try not to repeat 13 anything that's already been said, but I want 14 to build on the topic of the feasibility of 15 increasing hand winding, and also the comments 16 on jobs or cost of retooling, and then how 17 that factors into enforcement. 18 Using the Battery Charger and 19 External Power Supplies rulemaking as an 20 example of what can happen to a particular 21 sector, and what they do about it. As has 22 already been noted, cast copper rotors, hand

### 202-234-4433 Neal R. Gross & Co., Inc. Page 307 1 winding, and some of the other distinct have 2 to make a lot of changes solutions will force 3 businesses to make decisions about where to 4 add that capacity. And several manufacturers 5 have already commented they probably can't do 6 it in the U.S. because of the cost. 7 So, what happens then is it goes 8 overseas, and politicians get interested 9 because of the U.S. job loss. And I know the 10 GRIM model has some factors in for that, but 11 beyond the strict economic factor, the 12 feasibility of carrying out a rule starts to 13 come into question. And that's why I mentioned 14 the Battery Chargers rule. 15 I know of a bill in progress to 16 exempt an entire product class because it 17 happens to be a single U.S. manufacturer that

18 has to close down. And there was another 19 manufacturer, I was sitting right here, and he 20 was sitting over there during that rule and he 21 said, "We're the only U.S. manufacturer this 22 size, 12-volt charger. If you make me meet

### 202-234-4433 Neal R. Gross & Co., Inc. Page 308 1 your NOPR, I'm going to shut down my plant and 2 just contract it out to China, and all those 3 U.S. jobs gone." 4 And while that -- I know there's 5 tradeoffs on jobs, et cetera, in the GRIM, 6 it's inescapable of the political climate, as 7 well, and I hope the DOE will bear that in 8 mind. 9 MR. BROOKMAN: Thank you. Do we 10 have other final comments as suggested here, 11 key issues related to preliminary manufacturer 12 impact analysis, because we need to keep 13 going. We're going to keep going. 14 MR. ARAJI: Thank you. And now I'll 15 hand it over to Sanaee who will talk about the 16 NOPR analysis. 17 MS. IYAMA: All right. So, we 18 finished the preliminary analysis. So, in the 19 NOPR we'll start off by revising the 20 preliminary analysis, and then we'll cover 21 some new analyses that are not included in the 22 preliminary analysis. And these are the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 309 1 customer subgroup analysis, the employment 2 impact analysis, the utility impact analysis, 3 the emissions analysis, the monetization of 4 emission reduction benefits, and the 5 regulatory impact analysis. 6 So, first on the revision of the 7 preliminary analysis, what we'll do is that 8 we'll consider the comments and the inputs 9 from the stakeholders while making our 10 revisions. We'll also consider any new 11 information that we'll come across, and we'll 12 do this for the main analysis of the 13 preliminary stage. 14 Next, I'll go over the customer 15 subgroup analysis. The purpose of this 16 analysis is to analyze the economic impacts of 17 standards on specific groups of consumers that 18 may be significantly more impacted by a 19 standard compared to the general user 20 population. So, we'll use the same LCC 21 spreadsheet analysis, but we'll modify the 22 inputs to the specific subgroup of users that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 310 1 we want to look at. And here, DOE welcomes any 2 comment on any specific subgroup that would be 3 appropriate to look at in this rule. 4 Next, I'll go through the 5 employment impact analysis. The purpose of 6 this analysis is to assess the overall impact 7 of standards on national employment. And here 8 we'll be looking at indirect employment 9 impact. Hisham just covered the direct 10 employment impact. And the way to do this is 11 by using the impact of sector energy 12 technologies, the ImSET model that will help 13 us evaluate the indirect employment impacts. 14 And here, DOE welcomes feedback on its 15 proposed approach to analyze indirect 16 employment impact with ImSET. 17 Next, the utility impact analysis. 18 So, the purpose of this section is to estimate 19 the overall impacts of standards on domestic 20 electricity suppliers, and that would be done 21 through the use of a modified version of the 22 national energy modeling system model which is

### 202-234-4433 Neal R. Gross & Co., Inc. Page 311 1 called NEMS-BT. The NEMS model is the model 2 used by the EIA to produce the projections you 3 see in the Annual Energy Outlooks. And here 4 again we have a comment box on the proposed 5 approach to use NEMS-BT to conduct the utility 6 impact analysis. 7 Next, I'll go through the 8 emissions analysis. So, in that section DOE 9 will report emission impacts resulting from 10 amended or new energy conservation standards. 11 It will also include emissions on the based 12 full fuel cycle emissions. 13 We'll report carbon dioxide 14 emission reduction, mercury and nitrogen oxide 15 for the 22 states where these emissions are 16 not capped. For the states where these 17 emissions are capped, and for sulfur dioxide 18 where we have an existing legislation capping 19 sulfur dioxide, DOE assumes that the impacts 20 of standards are minimal. And here we also 21 seek inputs on the intent to use NEMS-BT to 22 conduct the emissions analysis.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 312 1 So, after quantifying the emission 2 reduction another step is to use monetary 3 measures or conversion factors to translate 4 those emission reductions into monetized 5 values. So, here DOE intends to use the most 6 current social cost of carbon values given by 7 OMB to convert the CO2 emission reduction into 8 dollar values. And on this slide we have the 9 rates that we will be using. And we also do 10 this for NOx emission reductions. And here 11 another comment box on this approach.

12 And then I'll move on to the last 13 section of the NOPR, which is the regulatory 14 impact analysis. So, in this section the 15 purpose is to investigate the national impacts 16 of non-regulatory alternatives compared to the 17 impacts of mandatory energy conservation

18 standards. 19 Some of the non-regulatory 20 alternatives that may be considered in this 21 section include consumer rebates, tax credits, 22 manufacturer tax credits, voluntary efficiency

### 202-234-4433 Neal R. Gross & Co., Inc. Page 313 1 levels, early replacement programs, and bulk 2 government procurement programs. So, the way3 we would evaluate the impact of those non4 regulatory options would be to use a similar 5 National Impact Analysis model, and estimate 6 the same outputs, the national energy saving,7 the net present value associated to those non8 regulatory alternatives. And here we have the9 last comment box inviting comments on any non10 regulatory alternatives that should be 11 analyzed in that section. 12 And with that, we're done. 13 MR. BROOKMAN: We've taken it to 14 the slide on how to submit comments, and I'm 15 going to -- and before I turn it over to Jim 16 Raba for closing remarks, another opportunity 17 for anybody that wishes to do so to comment, 18 issues that haven't been covered fully, other 19 things you wish to say here as we move towards 20 closure. Roger. 21 MR. DAUGHERTY: Roger Daugherty. 22 This has to deal with how to submit the

### 202-234-4433 Neal R. Gross & Co., Inc. Page 314 1 comments. I notice that in the presentation 2 today the issues were numbered differently 3 than they are in the handout. I also note that 4 in the Executive Summary, there was a list of 5 issues to which DOE wished comments. 6 In Chapter 2, we identified at 7 least 49 places where DOE requested comments 8 or information. Obviously, some of those were 9 not presented today. There are various places 10 throughout the PTSD that warrant comment, and 11 DOE's discussion in different chapters is 12 different on the same subject. So, it's a 13 matter of trying to organize comments in a 14 very short period of time, and exactly how to 15 organize those. If DOE has a recommendation 16 how to go about this, it would be very 17 appreciated. 18 MR. KOHSE: I think just following 19 the numbers in the presentation would probably 20 be the most simple approach.

21 MR. DAUGHERTY: The handout? 22 MR. KOHSE: Yes, the handout.

### 202-234-4433 Neal R. Gross & Co., Inc. Page 315 1 MR. BROOKMAN: So, that was not on 2 the record. The recommendation for the record 3 is to follow the -- to make your comments 4 based on the numbers that are in the handout, 5 today's handout. 6 MR. DAUGHERTY: Roger Daugherty. 7 But then to go beyond those, because like I 8 said, in Chapter 2 there's 49 different 9 places, and you only hit 34 or 35 here. And in 10 the Executive Summary, so we attach those as 11 another set of separate and isolated comments? 12 MR. BROOKMAN: Michael? 13 MR. KIDO: I was just going to 14 suggest maybe to the extent that you've got 15 specific comments related to those chapters 16 that are in the TSD, maybe you could have some 17 sort of appendix or something that says 18 comments related to Chapter 2, comments 19 related to Chapter 3, et cetera. That way it's 20 easy for you guys to organize and it's easy 21 for us to sort of figure out what the comments

22 relate to. Would that be workable?

### 202-234-4433 Neal R. Gross & Co., Inc. Page 316 1 MR. BROOKMAN: Alex. 2 MR. BOESENBERG: Alex Boesenberg, 3 NEMA. Right now my draft is keyed to page 4 number and clause, like page 14, 4.3.2. Will 5 that work for you guys? Good, because then I 6 don't have to renumber 53 pages. 7 MR. BROOKMAN: Yes, thank you for 8 that. Okay, Andrew. 9 MR. DELASKI: So just to kind of 10 close where we began, which is to reiterate 11 the support of the Motor Coalition for the 12 joint petition, which we think represents a 13 way to move forward expeditiously towards 14 issuing a final rule with really broad support 15 of the stakeholders, many of the stakeholders 16 represented here today. 17 And I think a lot of the concerns 18 that you've heard today, I would say virtually 19 all the concerns you've heard today have to do 20 with levels beyond the levels that are 21 recommended by the Motor Coalition. So, I 22 think a lot of the -- whether it be copper

### 202-234-4433 Neal R. Gross & Co., Inc. Page 317 1 rotors, or whatever the issue might be that's 2 raising the need for additional and deeper 3 analysis, that occurs by going beyond the 4 levels recommended by the Coalition. So, part 5 of the reason for the recommendation is it 6 gives us a path forward that can be 7 accomplished within a really -- within the 8 statutory limits, which is by December 17th. 9 Otherwise, we can't meet. And I know the 10 Department meets obligations otherwise to show 11 that the criteria under the statute have been 12 met, but I think what you're hearing from this 13 community today is that the Coalition's 14 recommendations meet those criteria, and we 15 spelled that out in the petition. 16 So, I would just close by urging 17 the Department to move forward to adopt the 18 recommendations in the joint petition filed 19 last Wednesday. They deliver enormous savings, 20 LCC benefits that are solidly within the life 21 cycle of the products, and address the 22 concerns that have been raised today about

### 202-234-4433 Neal R. Gross & Co., Inc. Page 318 1 some of the other aspects of the analysis. 2 MR. BROOKMAN: Thank you, Andrew. 3 Yes, Alex. 4 MR. BOESENBERG: Alex Boesenberg, 5 NEMA. I'll second Mr. deLaski's statement. 6 MR. BROOKMAN: Speaking on behalf

7 of NEMA? 8 MR. BOESENBERG: Speaking on behalf 9 of NEMA, yes, not my farmer friends or 10 anybody. 11 (Laughter.) 12 MR. BOESENBERG: To build on my 13 last statement about enforcement, and jobs, 14 and everything, perhaps it's obvious but I 15 want to restate that a rule that everyone can 16 agree on is one that logically most, if not 17 all, stakeholders will immediately then begin 18 to adhere to, versus in the case of the 19 example I mentioned, the product class that is 20 seeking total exemption from the rule that is 21 about to be published for battery chargers 22 means that all energy savings are lost in that

### 202-234-4433 Neal R. Gross & Co., Inc. Page 319 1 product class because the exemption they're 2 pursuing is to say that DOE may not dedicate 3 funds to enforce this product class, which 4 means the whole thing is gone. 5 They didn't like CSL 3, but if 6 they would have agreed to a painful CSL 2 then 7 you would have saved the jump from 1 to 2. And 8 that's certainly the sort of things we want to 9 avoid in this rule. 10 MR. BROOKMAN: Final comments? No 11 additional comments. So, for my part I thank 12 you. This was a very constructive day. We 13 covered a heck of a lot of ground very 14 efficiently. And, particularly, for all of you 15 that gave a lot of really good and very useful 16 information, very, very helpful to the 17 Department. Thank you. Congratulations on 18 that. And back to Jim Raba for closing

19 remarks. 20 MR. RABA: We conclude today's 21 public meeting with expressed appreciation 22 from the Department of Energy for your

### 202-234-4433 Neal R. Gross & Co., Inc. Page 320 1 participation. As Doug pointed out, it's been 2 a very informative meeting, very productive. 3 And thank you, thank you all. And, also, to 4 thank our presenters Will Kohse, Hisham Araji 5 from Navigant Consulting, Sanaee Iyama from 6 Lawrence Berkeley National Laboratory, our 7 technical crew back stage who made possible 8 the webinar portion, Jack Graul. And, of 9 course, our excellent facilitator, Doug 10 Brookman. Thank you, and safe travels. 11 We look forward to your written 12 comments. The written comments and safe

13 travels. 14 (Whereupon, the above-entitled 15 matter went off the record at 4:21 p.m.)

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2:7,10,21 8:15,20 8:22 15:21 24:21 41:13 141:19 165:13 288:20 320:5 navigation 61:3 NAVLAP 153:15 Neal 2:2 8:6 16:16 16:17,18 20:21 49:6 59:6 65:6,8 66:1,2 68:1,2 76:7 168:3 198:15,16 198:17 217:11,13 238:14,15 249:8 255:10 257:12 272:17 Neal's 246:20

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265:6 500-horsepower

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219:22 220:7 234:22 60 127:20 230:16

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240:11 65-70 215:11 7 7 282:17 7-percent292:16

292:21 7.5 288:8 7/10ths 288:2,9 70 164:1 265:7,18 73 267:17 75 112:12 113:5 126:19 127:19 133:8,14 134:20 162:19 219:7 220:16,17 221:7 237:20 238:16,18 239:19 240:17 285:6 288:4 303:4 75-horsepower 181:7 182:18 267:7 79 22:15 8 8 230:22 8E-089 1:9 80 144:4 80,000 304:12

305:4 82 146:20 83 164:2 841 249:20 253:8 841s 250:2 85 146:22 164:2 88.5 155:22 156:13

156:16 157:8,9 89.5 155:20 156:14

156:15 157:11 9 9 276:15 9:00 1:10 9:04 5:2 90 21:11 70:1 191:1 90s 230:14,15

233:4 91 254:3 92 247:4 93.6 150:11,13,17 151:14 152:3,4 154:15 155:1 94.1 150:18 151:2 94.2 150:14 151:13 152:4 153:1 94.5 155:1 95.0 112:21NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of:

Before:

Date:

Place:

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

----------------------- Court Reporter 365

Energy Conservation Standards for Electric Motors

US DOE

08-21-12

Washington, DC