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

+ + + + +

DEPARTMENT OF ENERGY

+ + + + +

PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS FOR GENERAL SERVICE FLUORESCENT LAMPS AND INCANDESCENT REFLECTOR LAMPS

+ + + + + TUESDAY, FEBRUARY 3, 2009

+ + + + +The meeting was held in Room 1E245, 1000 Independence Avenue, S.W., Washington, D.C., at 9:00 a.m., Doug Brookman, Facilitator, presiding.

PRESENT: DOUGLAS BROOKMAN, PUBLIC SOLUTIONS, INC. RONALD LEWIS, DEPARTMENT OF ENERGY LINDA GRAVES, DEPARTMENT OF ENERGY FRANCINE PINTO, DEPARTMENT OF ENERGY ERIC STAS, DEPARTMENT OF ENERGY MICHAEL McCABE, DEPARTMENT OF ENERGY DIANA BURK, NAVIGANT CONSULTING DOUGLAS ROSSIN, NAVIGANT CONSULTING ROBERT CARMICHAEL, NAVIGANT CONSULTING JEFFREY KINGMAN, NAVIGANT CONSULTING

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 2 ALISON LEHR, NAVIGANT CONSULTING MIKE RIVEST, NAVIGANT CONSULTING DOUGLAS J. ROSSIN, NAVIGANT CONSULTING CHRISTOPHER SEQUEIRA, NAVIGANT CONSULTING LESSLY GOUDARZI, ONLOCATION, INC. MIMI GUPTA, NAVIGANT CONSULTING CONAN O'ROURKE, LIGHTING RESEARCH CENTER TEREN ABEAR, SOUTHERN CALIFORNIA EDISON TIMOTHY BALLO, ESQ., EARTHJUSTICE NORMAN L. BOLING, Ph.D., DSI, INC. LANE WESLEY BURT, NRDC ANDREW deLASKI, ASAP MARIANNE DiMASCIO, ASAP DAVID C. GHATAN, LC, CM KLING & ASSOCIATES S. PEKKA HAKKARAINEN, MA, Ph.D., LUTRON ELECTRONICS CO., INC. DAIN M. HANSEN, NEMA JEFFREY HARRIS, ALLIANCE TO SAVE ENERGY PAMELA K. HORNER, OSRAM SYLVANIA JOSEPH G. HOWLEY, GE CONSUMER & INDUSTRIAL ROBERT M. HUMPHREY, ESQ., COWDEN HUMPHREY AMANDA KORANE, ACEEE DAVID J. LIS, NORTHEAST ENERGY EFFICIENCY PARTNERSHIPS, INC.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 3 DOUG LOCKARD, UNDERWRITERS LABORATORIES JON McHUGH, PE, McHUGH ENERGY CONSULTANTS JACK M. MELNYK, SOUTHERN CALIFORNIA EDISON MICHAEL MYER, PACIFIC NORTHWEST NATIONAL LABORATORY STEVEN NADEL, ACEEE GREG NELSON, PHILIPS DAVID NESTING, Ph.D., PHILIPS EDWARD OSANN, POTOMAC RESOURCES GRAHAM B. PARKER, PACIFIC NORTHWEST NATIONAL LABORATORY PHILIPPE S. POIRIER, NATURAL RESOURCES CANADA KRISTEN RAYMOND, U.S. Department of Justice MARK S. REA, Ph.D., LIGHTING RESEARCH CENTER STEVEN J. ROSENSTOCK, PE, EDISON ELECTRONIC INSTITUTE LEW SPIEWAK, WESTINGHOUSE LIGHTING CORPORATION AMANDA SLOCUM STEVENS, ENERGY SOLUTIONS LAUREN STARCK, UNDERWRITERS LABORATORIES STEVE STOCKDALE, ADVANCED LIGHTING TECHNOLOGIES JOHN O'NEILL STOREY, ESQ., COWDEN HUMPHREY JENNIFER THORNE AMANN, ACEEE EDWARD M. YANDEK, GE CONSUMER & INDUSTRIAL

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 4 TABLE OF CONTENTS PAGE Introductions..............................5 Opening Remarks: Ronald Lewis .......................10 Linda Graves .......................11 Agenda Review, Douglas Brookman ..........15 Rulemaking Overview Linda Graves .......................17 Mimi Gupta .........................20 Comments from Participants ...............23 Scope of Coverage, Product Classes and Engineering Analysis: Mimi Gupta .........................40 Conan O'Rourke .....................70 Life Cycle Cost Analysis, Diana Burk ....143 National Impact Analysis, Mimi Gupta ....191 Trial Standard Levels, Consumer Subgroup Analysis and Manufacturer Impact Analysis: Mimi Gupta ........................243 Doug Rossin .......................270 Utility Impact Analysis, Employment Impact Analysis, Environmental Assessment, Regulatory Impact Analysis: Lessly Goudarzi ...................298 Mimi Gupta ........................313 Discussion of Other Issues ..............322 Next Steps and Closing Remarks, Linda Graves ......................325 Adjourn

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 5 1 P R O C E E D I N G S 2 (9:02 a.m.) 3 MR. BROOKMAN: Good morning, 4 everybody. Welcome. I'm glad to see you 5 here. This is the U.S. Department of Energy's 6 public meeting on energy conservation 7 standards for general service fluorescent 8 lamps and incandescent reflector lamps. 9 Today is Tuesday, February 3rd. 10 Nice to see you all here. 11 Doug Brookman from Public 12 Solutions in Baltimore. We're going to start 13 off by going around and doing introductions, 14 and then we will have welcoming remarks. Name 15 and organizational affiliation, please. 16 MR. NESTING: My name is David 17 Nesting. I'm a researcher and chemist with 18 Philips Lighting. I'm also in my role as in 19 phosphors and coatings. I also sit on our 20 Global Commodity Team for Phosphors buying 21 globally for all of the factories worldwide. 22 I'm also a member of the NEMA Technical

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 6 1 Committee on Lamps. 2 MR. NELSON: Greg Nelson, Philips 3 Lighting. 4 MS. HORNER: Pam Horner, Osram 5 Sylvania, and also Chair of the NEMA Lamps 6 Section. 7 MR. HOWLEY: Joe Howley, GE 8 Lighting and also Chairman of the NEMA 9 Lighting Division. 10 MR. YANDEK: Ed Yandek, GE 11 Lighting. I chair the Lamp Section Technical 12 Committee of NEMA. 13 Thank you.

14 MR. HAKKARAINEN: Pekka 15 Hakkarainen, Lutron Electronics, and I'm Vice 16 Chair of the NEMA Lighting Division. 17 MR. HANSEN: Dain Hansen, NEMA, 18 National Electrical Manufacturers Association, 19 and I work in government relations. 20 MS. RAYMOND: Kristen Raymond, 21 Department of Justice. 22 MR. ROSENSTOCK: Steve Rosenstock,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 7 1 Edison Electric Institute. 2 MR. BURT: Lane Burt, Natural

3 Resources Defense Counsel. 4 MR. deLASKI: Andrew deLaski, 5 Appliance Standards Awareness Project. 6 MR. STOCKDALE: Steve Stockdale, 7 Advanced Lighting Technologies. 8 MR. HUMPHREY: Bob Humphrey, 9 Advanced Lighting Technologies. 10 MR. LEWIS: Ron Lewis, the 11 Department of Energy. 12 MS. GRAVES: Linda Graves, 13 Department of Energy. 14 MR. RIVEST: I'm Mike Rivest, 15 Navigant Consulting. 16 MS. GUPTA: Mimi Gupta, Navigant 17 Consulting. 18 MR. O'ROURKE: Conan O'Rourke, 19 Lighting Research Center. 20 MR. REA: Mark Rea, Lighting

21 Research Center. 22 MR. SEQUEIRA: Chris Sequeira,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 8 1 Navigant Consulting. 2 MR. KINGMAN: Jeff Kingman, 3 Navigant Consulting. 4 MR. ROSSIN: Doug Rossin, Navigant 5 Consulting. 6 MS. LEHR: Alison Lehr, Navigant 7 Consulting. 8 MS. BURK: Diana Burk, Navigant 9 Consulting. 10 MR. CARMICHAEL: Rob Carmichael, 11 Navigant Consulting. 12 MR. BROOKMAN: Why don't we go

13 back over here? Yes. 14 MR. PARKER: Graham Parker, 15 Pacific Northwest National Laboratory. 16 MR. STOREY: John Storey, Advanced 17 Lighting Technology. 18 MR. OSANN: Ed Osann, Potomac 19 Resources, consultant to ADLT. 20 MR. BOLING: Norm Boling with

21 ADLT. 22 MR. ABEAR: Teren Abear, Southern

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 9 1 California Edison. 2 MR. MELNYK: Jack Melnyk, Southern 3 California Edison. 4 MR. McHUGH: Jon McHugh, McHugh 5 Energy. I represent Southern California 6 Edison. 7 MS. STEVENS: Amanda Stevens, 8 Energy Solutions on behalf of PG&E. 9 MR. LIS: David Lis, Northeast 10 Energy Efficiency Partnerships. 11 MS. KORANE: Amanda Korane, 12 American Council for Energy Efficient Economy. 13 MR. GHATAN: David Ghatan, 14 International Association of Lighting 15 Designers. 16 MS. STARCK: Lauren Starck, 17 Underwriters Laboratories. 18 MR. SPIEWAK: Lew Spiewak, 19 Westinghouse Lighting Corporation. 20 MR. LOCKARD: Doug Lockard, 21 Underwriters Laboratories.

22 MR. BROOKMAN: Thanks to all of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 10 1 you. 2 We're going to have some opening

3 remarks. 4 MR. LEWIS: I made the mistake 5 once of welcoming people by saying I see a 6 bunch of old faces, and somebody said, "That's 7 not really appropriate." I see a lot of 8 familiar faces here and welcome you heartily. 9 Glad to have everybody here. 10 We are looking forward to a lively 11 discussion today. We've put some things 12 together that I'm sure are of great interest, 13 and we are looking forward to your honest and 14 robust input. Our desire is to get everything 15 on the table and handle everything that needs 16 to be handled and have a closing today where 17 everybody feels satisfied that they had an 18 opportunity to speak their peace and comment

19 on what we've done. 20 So don't be shy, for those faces 21 that I don't recognize that are new to these 22 meetings. We are presenting, but our basic

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 11 1 role today is a receipt mode, to present what 2 we've put together and looking for your input

3 on that. 4 This is of high interest to me 5 after working in the lighting field for many 6 years. I've got some other pressing matters I 7 have to handle right now, but I'm going to be 8 back just as soon as I can. So I just wanted 9 to make sure to be here to thank you all for 10 being here and make sure that you're 11 encouraged to speak up with anything that you 12 have concerns or issues with, and I'll be back 13 shortly to listen in and take part in the 14 discussions. 15 So thank you again for being here. 16 MR. BROOKMAN: I may have missed 17 it, but I don't think you introduced yourself. 18 This is Ron Lewis. He does have a lot of 19 familiar faces in the room. 20 Yes, thank you. 21 MS. GRAVES: Good morning and 22 thank you, Ron, for those welcoming remarks.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 12 1 Just to put it on the record, 2 welcome to the U.S. Department of Energy. 3 This is the public meeting on the Notice of 4 Proposed Rulemaking for standards on general 5 service fluorescent lamps and incandescent 6 reflector lamps. 7 I'm Linda Graves. I am the team 8 leader for lighting standards, and I am here 9 with my team that has made an extraordinary 10 effort to encompass the substance of this 11 massive rulemaking, as you all know. 12 The purpose of our meeting is to 13 invite your comments on the proposed energy 14 conservation standard levels. Those standard 15 levels that we have proposed are TSL3 for 16 general service fluorescent lamps and TSL4 for 17 incandescent reflector lamps, but we are also 18 here to receive your recommendations for 19 alternatives. 20 We will also present the 21 methodologies and characterize the results of 22 the analyses, which are summarized in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 13 1 Notice of Proposed Rulemaking and covered in 2 greater detail in the technical support

3 document. 4 We would like to discuss some 5 specific issues related to each analysis, and 6 we would like to seek input from interested 7 parties on our methodologies, assumptions, 8 data sources, and results from the analyses, 9 and we will also describe the next steps to 10 complete this rulemaking. 11 Participants are invited to 12 provide summary comments or statements, to 13 raise any additional issues of concern to you, 14 and I'd also let you know that the public 15 comment period will be 60 days long, and it 16 will begin when the Notice of Proposed 17 Rulemaking is published in the Federal 18 Register. 19 And with that I'm going to turn 20 the meeting back to our able facilitator, Doug

21 Brookman. 22 MR. BROOKMAN: Thank you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 14 1 I think all of you received a 2 packet when you registered, and we're going to 3 do a very brief agenda review, and then we'll 4 launch right square into a brief overview. 5 I think many of you are familiar 6 with the format that we typically use for 7 these appliance energy efficiency standards 8 meetings. There is in your packet all of the 9 slides that will be presented today, 10 frequently some backup slides as well with 11 additional data and information. 12 Following this agenda review we'll 13 go straight into the rulemaking overview and 14 following that there's an opportunity for any 15 of you that wish to do so to make brief 16 summary remarks about key issues and key 17 concerns you might have. 18 I'd ask you not to read six pages 19 into the record. Brief summary comments. I 20 know that will shock all of you. 21 Following those summary comments 22 we will go directly into scope of coverage,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 15 1 product classes, engineering analysis. We'll 2 take a break mid-morning around about 11

3 o'clock or so. 4 Following that, a detailed 5 description of life cycle cost analysis.

6 We'll break for lunch around about noon. 7 Following lunch, national impact 8 analysis; trial standard levels, consumer 9 subgroup analysis, and manufacturer impact 10 analysis; and then following that, utility 11 impact analysis, employment impact analysis, 12 environmental assessment, regulatory impact 13 analysis. 14 We'll take a break mid-afternoon.15 There's an opportunity following the mid16 afternoon break for when we get there for 17 other issues that you might wish to raise 18 before we adjourn today, and we'll do next 19 steps and closing remarks around about 4:30 or 20 so, or if we get there sooner, then we do. 21 We'll adjourn today at, you know, four, 4:30 22 or so. That's the plan.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 16 1 Questions and comments here at the 2 outset? Linda Graves. 3 MS. GRAVES: Yes, Doug. I'd just 4 like to add that if your remarks that you 5 brought are more extensive than the summary, 6 we can enter your entire set of prepared 7 remarks into the docket. We're just asking 8 that when you give your oral presentation that 9 you be brief. 10 MR. BROOKMAN: Okay. Thank you. 11 So then questions, comments here 12 at the outset before we get into an overview, 13 statutory authority or a few things like that? 14 I'd ask for your consideration. 15 As you can see, what we think is common 16 courtesy: for the purpose of this meeting, 17 please speak one at a time. Please say your 18 name for the record. I'm going to be trying 19 to acknowledge each of you by name as best I 20 can and queue you to speak. 21 Please keep the focus here. Turn 22 your cell phones on vibrate or silent mode,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 17 1 and if you need to have a sidebar conversation 2 with someone for more than about 20 seconds, 3 it's okay to take it out of the room. We

4 understand. 5 These new microphones that we've 6 got, they work really well. We can hear a lot 7 of the conversation that's going on. So 8 please be considerate. 9 And if you could be as concise as 10 possible and share the air time with your 11 colleagues, I know many of you have lots to 12 say. The purpose of this is to hear from all 13 of you today, and I'm going to be queuing 14 people as best I can, as I said. 15 I also wish to encourage dialogue, 16 back-and-forth, follow-on comments. I will

17 make sure the record reflects that somehow. 18 We'll figure that out. Okay? 19 So that's the plan. That's how we 20 intend to proceed. Are we ready? Okay. 21 Linda Graves. 22 MS. GRAVES: So the statutory

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 18 1 authority for this rulemaking is based on the 2 Energy Policy and Conservation Act, as amended 3 and as codified in 42 U.S. Code 6295(i)(3) and 4 (5). 5 So there are two main thrusts of 6 this rulemaking. One is to review and 7 possibly amend standards for general service 8 fluorescent lamps and incandescent reflector 9 lamps, and the other major thrust was to 10 determine whether standards should apply to 11 additional general service fluorescent lamps. 12 Now, this rule is also being done 13 in the context of having been impacted by EISA 14 2007, which addressed and amended standards 15 for general service incandescent lamps. So 16 this rule is no longer covering that subject

17 as well. 18 And I would also refer you to the 19 Notice of Proposed Rulemaking for more 20 information about the statutory and 21 legislative background on this under the 22 authority and background sections of the NOPR.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 19 1 Just a quick overview of where we 2 have been on this subject matter. Regarding 3 test procedures, which are obviously related 4 to the standard, we published a Notice of 5 Proposed Rulemaking proposing test methods for 6 general service fluorescent lamps and 7 incandescent reflector lamps on March 13th,

8 2008. 9 The final rule for test procedures 10 will be published by the end of June this 11 year. 12 Regarding the energy conservation 13 standards, we published the framework document 14 in May of 2006. We did an advanced Notice of 15 Proposed Rulemaking in March 2008, and we are 16 now at this stage of the rulemaking and the 17 Notice of Proposed Rulemaking on the technical 18 support documents that support this rule are 19 posted on our Web page. 20 And, by the way, the Web page is 21 on the front cover page of your handouts. 22 The publication of the Notice of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 20 1 Proposed Rulemaking has not yet been published 2 in the Federal Register. We are scheduled to 3 publish the final rule by the end of June this 4 year. 5 Okay. Now, this is something I'm 6 sure you're all familiar with because we've 7 dealt with it at every stage of this 8 rulemaking, but these are the seven factors 9 that the Energy Policy and Conservation Act 10 requires that we address in establishing 11 standards, and I don't need to read them. You 12 can see them right there, but there's the 13 factors on the left side, and then there's the 14 analyses that go with how we respond to each

15 of those factors. 16 And with that, I'm going to turn 17 it over to Mimi Gupta. 18 MS. GUPTA: Good morning. I'm 19 going to start off by giving you a brief 20 overview of the proposed standards. 21 So in proposing standards for 22 general service fluorescent lamps and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 21 1 incandescent reflector lamps, the Department 2 of Energy considered the impacts of standards 3 at each trial standard level beginning with 4 the most efficient level to determine whether 5 the given level was economically justified. 6 Then DOE considered less efficient 7 levels until it reached the highest level that 8 was technologically feasible, economically 9 justified, and resulted in significant energy 10 savings. 11 In the NOPR for GSFL, DOE analyzed 12 five trial standard levels and tentatively

13 concluded that TSL5 and TSL4 were not 14 economically justified. This was primarily 15 based on the economic burden on some consumers 16 who are forced to retrofit their existing T12 17 ballasts and the potentially large reduction 18 in industry INPV for manufacturers. 19 DOE believed that these burdens 20 outweighed the benefits of energy savings, 21 emissions reductions, and the positive net 22 economic savings to the nation. Therefore, in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 22 1 this NOPR DOE proposes to set standards for 2 TSL3 as presented in this slide. 3 Over the course of this meeting, 4 DOE will be seeking comment on the proposed 5 standard level for GSFL, as well as any other 6 potential approaches to maximize energy 7 savings while mitigating impacts to certain 8 GSFL consumer subgroups. 9 For IRL, or incandescent reflector 10 lamps, DOE analyzed five trial standard levels 11 and determined or tentatively found that trial 12 standard level five was not economically 13 justified and, therefore, proposed to set 14 standards at trail standard level four. This 15 proposal reflects DOE's tentative conclusion 16 that there's too much uncertainty regarding 17 the economic burdens to manufacturers or 18 consumers associated with meeting TSL5 using 19 non-proprietary technologies. 20 And, again, DOE will seek comment 21 throughout this meeting on the proposed 22 standard levels for incandescent reflector

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 23 1 lamps, as well as more information on other 2 technology pathways that can be taken to meet 3 trial standard level five and the associated 4 consumer manufacturer costs with that, those 5 pathways. 6 So now I think we're going to have 7 some opening remarks. 8 MR. BROOKMAN: As your packet 9 suggests, this is an opportunity for any of 10 you at which to make brief summary remarks, 11 issues that you want to raise to the fore, 12 knowing that as we go on today there's going 13 to be lots of opportunity for much more 14 detailed discussion. 15 Dain, I'll start with you. Please 16 say your name for the record. 17 MR. HANSEN: My name is Dain 18 Hansen with the National Electrical 19 Manufacturers Association.

20 And on behalf of NEMA and our 400- 21 plus electrical manufacturers, we look forward 22 to working with the Department of Energy and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 24 1 all stakeholders on this rulemaking. 2 As lamp manufacturers of the 3 products being regulated in this current 4 rulemaking, we publicly want to voice our 5 support for energy conservation standard. We 6 understand the need for America to conserve 7 energy. However, it is critical that no undue 8 burden is placed upon manufacturers, 9 especially during these economically tough 10 times. Placing unrealistic standards on 11 manufacturers or consumers may have 12 undesirable consequences. It is imperative 13 that the department recognizes the impacts on 14 both commercial and residential users in this 15 rulemaking process. 16 During the meeting today, we 17 implore you to listen to our comments 18 carefully and the concerns we raise, in 19 addition to our subsequent written comments. 20 MR. BROOKMAN: Thank you. Thanks 21 very much. 22 Other opening remarks? Andrew and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 25 1 then I'll go to this gentleman here. Please. 2 MR. deLASKI: Hi. Andrew deLaski, 3 Appliance Standards Awareness Project. 4 So is the mic on? 5 MR. BROOKMAN: I think it's on.

6 MR. deLASKI: You don't have to

7 turn these on? 8 MR. BROOKMAN: You'll see a little 9 green LED. 10 MR. deLASKI: Thanks for improving 11 the microphones. That's a nice improvement. 12 MR. BROOKMAN: Yes, that's a big 13 step forward.

14 MR. deLASKI: I want to make a 15 couple of remarks here at the outset, and 16 mostly I want to comment on, provide a little 17 bit of context from our perspective, a little 18 bit about what's at stake in this particular 19 rulemaking, and also talk about some of the 20 recommendations we have to improve upon the 21 proposal the department has put forward. 22 The context we have with the new

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 26 1 administration in office, having just taken 2 office a couple of weeks ago, I think, is one 3 where we see increased emphasis on energy 4 efficiency. President Obama ran on his 5 campaign. Clean energy was a huge part of his 6 campaign during the election season. It was 7 mentioned in his inaugural speech. He 8 committed during the election campaign to make 9 America the most energy efficiency country in 10 the world, a recognition that energy 11 efficiency is a critical aspect of how we 12 address climate change, how we diversify 13 America's energy resources, how we bolster the 14 economy, build new jobs for the next decade

15 and the next decades. 16 A very specific goal in the 17 campaign that was laid out is the goal to 18 reduce American electricity consumption by 15 19 percent by 2020 relative to projections. That 20 goal works out to a goal of reducing American 21 electricity consumption by 660 billion 22 kilowatt hours in 2020.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 27 1 The rulemaking that we're talking 2 about today offers an opportunity for an 3 excellent start toward meeting that goal. 4 Using DOE's numbers in the NOPR today, 5 supplemented by analysis by ACEEE to addressed 6 the exempted lamps, the potential savings from 7 these rulemakings have the potential to meet 8 ten percent of that goal, of that 2020 goal. 9 It's an enormous rulemaking from an energy 10 savings perspective. 11 Ten percent of President Obama's 12 2020 goal can be met by this rulemaking by

13 June 30th. It wouldn't be bad work for the 14 first six months for a goal that is meant to 15 be hit in 2020. 16 To get to the ten percent number, 17 there are several things that need to be 18 improved in the rule. DOE needs to strengthen 19 the GSFL proposal from TSL3 to one of the 20 higher levels. DOE needs to maintain or 21 improve the IRL proposal. DOE needs to close 22 the loopholes. About 40 percent of the IRL

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 28 1 lamps in the market are exempted from the 2 rule. DOE needs to close the loopholes for 3 the exempted lamps.

4 DOE needs to make sure the 5 treatment of modified spectrum lamps doesn't 6 result in a new loophole, doesn't result in 7 products migrating to parts of the market that 8 are less efficient. 9 A bit more context. The 30-year 10 savings from this rule afford the DOE workout 11 supplemented by ACEEE analysis of what you 12 would get by closing the loophole, works out 13 to potential savings of 7.1 to 17.1 quads over 14 the analysis period. 15 A little historical context by the 16 rulemakings. The essential air conditioner 17 rule issued in 2001 was 4.2 quads. The 18 clothes washer rule in 2001, 5.5 quads. The 19 water heater rule, 4.9 quads. The transformer 20 rule a couple of years ago, 2.7 quads. 21 This rulemaking dwarfs -- the 22 potential savings from this rulemaking dwarf

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 29 1 all the rulemaking DOE has completed in the 2 last decade. It is by far the largest 3 potential saver DOE has ever worked on. 4 Those savings work out to -- if 5 you translate those quads to households, the 6 30-year savings works out to enough 7 electricity to meet the need of between 59 and 8 142 million American households for a year. 9 So the savings are enough, the 30- 10 year savings are enough to power every single 11 American household for more than a year, 12 enormous potential savings. 13 Another impact that's often given 14 little attention by DOE, and in this case I 15 think I commented during the ANOPR phase that 16 DOE had given little attention to the job 17 impact of these rulemakings, and 18 unfortunately, I guess my advice wasn't taken 19 because in the NOPR it's ignored altogether. 20 You have to go to the TSD to find a job 21 impact. 22 So the job impact according to the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 30 1 TSD if DOE adopts the standards at the higher 2 levels considered, this rule would create 3 about 7,000 jobs by 2012, and by 2020 the job 4 impact according to DOE will be about 40,000 5 jobs created due to as we shift spending from 6 the energy sector to other sectors, the ImSET 7 shows 40,000 jobs created. 8 So at a time when we wake up every 9 morning and we see headlines about companies 10 shedding jobs, here's a policy that creates 11 40,000 jobs, yet it's ignored as part of the

12 DOE's and the actual NOPR document. 13 We have four areas of improvement 14 that we want to see, and we'll talk about 15 these. I hope I have a chance to discuss each 16 of these later today. 17 One, DOE needs to strengthen the 18 GSFL standard. At least got to TSL4 and 19 possibly TSL5. TSL4 and TSL5 both increase 20 savings significantly relative to TSL3. 21 They're cost effective for the vast majority 22 of purchasers.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 31 1 I hope we can learn some more 2 today about what hurdles, if any TSL5 presents 3 relative to TSL4. 4 Secondly, DOE needs to maintain or 5 possibly strengthen the IRL standard. We 6 applaud the department for what we think is a 7 very strong proposal for IRLs, based on HIR 8 technology and enhanced HIR technology, and we 9 also welcome the opportunity to examine with 10 other stakeholders the possibility of going to 11 the higher levels, TSL5, which we appreciate 12 the department opening the door to TSL5 in the

13 NOPR. 14 Thirdly, DOE needs to close the 15 IRL loopholes. About 40 percent of the market 16 for IRLs left outside the scope of the 17 rulemaking. That loophole needs to be closed. 18 And fourthly, DOE needs to make 19 sure that the modified spectrum does not 20 become a new loophole, as at the ANOPR stage 21 we support no break for modified spectrum 22 lamps, but if there's going to be a break, it

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 32 1 needs to be at an absolute minimum to prevent 2 these lamps from becoming the new loophole.

3 So what's at stake? To come back 4 to what's at stake, by our reckoning as much 5 as half of the potential energy savings I 6 outlined at the beginning is at stake, and 7 strengthening the rules in the four ways that 8 I just identified. So there's big payments at 9 stake, but getting the rule right gets us 10 about half of the savings. 11 MR. BROOKMAN: Thank you, Andrew.

12 MR. deLASKI: I have one comment 13 on process I want to get to, Doug, if you 14 don't mind.

15 Three out of the four 16 recommendations that we have we think can be 17 addressed within the context of the NOPR. 18 Therefore, we recommend that the department 19 move expeditiously to publish the NOPR in the 20 Federal Register. We can address and we think 21 the department can move to a final rule based 22 on this NOPR that can address most of our

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 33 1 recommendations. 2 However, we think the department 3 has unfortunately in this particular NOPR 4 created hurdles to addressing the loophole. 5 Therefore, we ask the department to 6 immediately draft and publish a supplementary 7 NOPR to reopen the question of addressing the 8 exempting lamps. 9 MR. BROOKMAN: Okay. 10 MR. deLASKI: In the change of 11 administrations we think DOE made an erroneous 12 legal determination, and that it's time in 13 order to address these exempted lamps. There 14 needs to be a supplementary NOPR or additional 15 NOPR to reopen the question of the BR65, 65 16 watt BR and other exempted lamps. 17 MR. BROOKMAN: Okay. Thank you. 18 MR. deLASKI: Thanks, Doug. 19 MR. BROOKMAN: So as all of you 20 know that are familiar with these proceedings, 21 your detailed written comments to support your 22 views are requested and welcomed by the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 34 1 department. So all of that would be helpful. 2 This gentleman here is next. Your 3 name for the record and to you. 4 MR. McHUGH: Thank you, Doug. 5 Jon McHugh on behalf of Southern 6 California Edison. Thank you for bringing us 7 all here together today. 8 I'm here with two utilities from 9 California. Both Pacific Gas and Electric and 10 Southern California Edison, and both of these 11 utilities are committed towards supporting the 12 governor's objectives of trying to reduce 13 greenhouse gas emissions by 2020 to the 1990

14 levels. 15 And California has a situation 16 where to get to those 1990 levels we're going 17 to have 40 percent more population in 2020 18 than we will in 1990, and this is about the 19 same growth in population as the world as a

20 whole. 21 These regulations, I know, to some 22 extent there's a feeling of conflict between

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 35 1 trying to maintain the status quo versus 2 requirements for new technology. However, 3 we've seen in the past that these regulations 4 have spurred innovation and industry, and I 5 liken it to pruning, that if you look at 6 pruning of trees, the old wood is actually 7 inhibiting the growth of the plant to produce 8 more fruit. 9 And similarly, if you look at some 10 of the historical regulations such as the 11 refrigerator regulation where we had a 12 situation where we had sort of a triple win 13 where due to the reduction of the older models 14 in the industry, there was innovation for more 15 efficient refrigerators. The capacity 16 increased for the consumer. The energy 17 consumption decreased, and the cost in real

18 dollars decreased. 19 I'm just trying to give a little 20 bit of background, but I look at 20 years ago 21 I was involved in the GM Sunrace, which was 22 the development of electric vehicles, and at

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 36 1 that time California had a regulation for zero 2 emission vehicles, and that regulation spurred 3 a substantial investment by General Motors in 4 electric vehicles, and if any of you have seen 5 "Who Killed the Electric Car," you perhaps 6 maybe have seen the EV1, which was a car that 7 was actually rather similar to the Tesla that 8 exists now, used advanced battery technology, 9 permanent magnet motors. 10 And the thing that's interesting 11 about that is they made this great progress, 12 and they got a little nervous. You know, they 13 already had this huge market share, the 14 largest company producing internal combustion 15 vehicles, and they waivered. They essentially 16 were able to get the state to basically renege 17 on the requirements for zero emission 18 vehicles. 19 So here we are in 2009. General 20 Motors is suffering from its lack of vision. 21 The Toyota went ahead with the hybrid vehicle. 22 It is now the world's largest manufacturer.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 37 1 So what I'm suggesting is that 2 embracing these new, efficient technologies 3 has the opportunity to spur innovation in the 4 industry, reduce energy consumption, create 5 jobs, create American products that will 6 expand our economy into this new era of 7 limited resources. 8 MR. BROOKMAN: Thank you. Thank 9 you very much.

10 Pam. 11 MR. deLASKI: And I just have one 12 more comment, which is one of the main 13 concerns I see about this proceedings is the 14 issue of the ER and BR lamps and that, you 15 know, we're looking at an increased energy or 16 we're leaving on the table over 200 terawatt 17 hours per year. 18 MR. BROOKMAN: There's going to be 19 a lot of opportunity to address that in 20 considerably more detail -- 21 MR. deLASKI: Okay, okay. 22 MR. BROOKMAN: -- as the day goes

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 38 1 on.

2 MR. deLASKI: And also the 3 discussion about that finding. 4 Thank you. 5 MR. BROOKMAN: Okay. Thank you.

6 Pam. 7 MS. HORNER: Thank you, Doug. 8 Pam Horner, Osram Sylvania. 9 Two quick points about lighting. 10 The lamp manufacturers would like to at this 11 point state our support for the DOE GSFL 12 standards. We believe that you have done a 13 very fair and well reasoned level. You've 14 considered many impacts and considered them 15 fairly, including the additional engineering 16 analysis that was requested for residential

17 use. 18 It looks as if by scanning through 19 the agenda and slides that there will be a lot 20 more opportunities to address the specifics of 21 that, but we wanted to go on record saying

22 that.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 39 1 We would also like to say that 2 simply stated, the IRL standards, in our view, 3 if the goal, indeed, was to go to an IR type 4 or infrared coating type world, that this 5 standard is set too high to accomplish that 6 goal. It would do it, but one does not need 7 to go to that level, and again, we will have

8 further comments. 9 I'd like to know where the 40,000 10 jobs are. 11 MR. BROOKMAN: We can get into 12 that later when we get to that segment in the 13 agenda. 14 Other brief summary remarks here 15 at the outset before we proceed? 16 And, Pam, in your last comment 17 were you speaking on behalf of NEMA? 18 (Laughter.)

19 MS. HORNER: Yes. 20 (Laughter.) 21 MS. HORNER: I'm nothing if not 22 funny.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 40 1 MS. GRAVES: Let the record 2 reflect that there was a visual affirmation 3 with her colleagues. 4 MR. BROOKMAN: Okay. Thank you 5 for that little bit of additional information. 6 So then I think that we're in a 7 position then to proceed, and, Mimi, back to 8 you.

9 MS. GUPTA: So as alluded to 10 before, in this NOPR DOE invites comments on 11 several issues enumerated on these two slides. 12 During this presentation we will be 13 addressing each of the 18 issues and opening 14 up the floor for discussion. 15 However, DOE also welcomes comment 16 on any issues not presented in the slides. 17 MR. BROOKMAN: Just to be clear, 18 this is a summary of the issues for which the 19 department would seek specific comment, not to 20 inhibit you from commenting on anything you 21 want to comment on, but it's a summary and 22 we'll be going step by step, slide by slide,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 41 1 chunk by chunk. So this is an opportunity for 2 you to respond as we're going along. 3 MS. GUPTA: So as Linda mentioned 4 earlier, this rulemaking addresses two 5 statutory criteria: one, to amend the 6 existing standard for general service 7 fluorescent lamps and incandescent reflector 8 lamps; and, two, to determine if standards 9 should be extended to additional general 10 service fluorescent lamps. 11 This slide lists lamps to which 12 DOE proposed to extend coverage to in the

13 NOPR. 14 So the current definition of 15 general service fluorescent lamp covers four 16 types of lamps: four foot medium bipin, two 17 foot U-shaped; eight foot single pin slimline; 18 and eight foot recessed double contact lamps. 19 With regard to two foot U-shaped 20 and four foot medium bipin lamps, DOE proposes 21 to lower the minimum wattage limit for 22 coverage from 28 watts to 25 watts. In the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 42 1 NOPR, DOE also proposes to add two new types 2 of lamps, T5 lamps, namely, two types: the 3 four foot miniature bipin standard output lamp 4 most oftenly sold as a 28 watt lamp, and the 5 four foot miniature high output lamp most 6 oftenly sold as the 54 watt lamp. 7 Based on a survey of commercially 8 available product, DOE found that reduced 9 wattage forms of this lamp exist. So, 10 therefore, DOE proposes to extend coverage to 11 four foot T5 standard output lamps with 12 wattages greater than or equal to 26 watts and 13 high output lamps with wattages greater than 14 or equal to 51 watts. 15 With regards to eight foot 16 recessed double contact high output lamps and 17 eight foot single pin slimline lamps, the 18 current coverage limits coverage to T12 lamps 19 through restrictions on defining fluorescent 20 lamp as only those listed in ANSI Standard 21 78.1 and 78.3, as well as the current 22 restriction for high output lamps.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 43 1 DOE proposes to extend coverage to 2 T8 lamps by eliminating these restrictions of 3 both current and the listing in the ANSI

4 standards. 5 DOE seeks comment on the scope of 6 covered products considered in this 7 rulemaking, specifically DOE's decision to 8 cover the four foot T5 miniature bipin 9 standard output and the high output lamps. 10 MR. BROOKMAN: Yes, Joe. 11 MR. HOWLEY: Yes. Industry -- 12 MR. BROOKMAN: Say your name, Joe. 13 MR. HOWLEY: Joe Howley, GE. 14 Industry agrees with these 15 proposed changes to the coverage of GSFL 16 products, and in addition, we agree to setting 17 T5 standards with the objective to prevent the 18 introduction of T5 halophosphate lamps. 19 We will make further comments on 20 this standard levels a little later on. 21 MR. BROOKMAN: Okay. Thank you. 22 There's the list and the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 44 1 additions. So specific comments on those. 2 Yes, Steve Rosenstock. 3 MR. ROSENSTOCK: Steve Rosenstock,

4 EEI. 5 In Item 2 on that Slide 14, should 6 that be less than or equal to 28 watts? 7 MS. GUPTA: Well, I think the 8 current coverage is for lamps greater than or 9 equal to 28 watts. 10 MR. ROSENSTOCK: Just making sure.

11 Thanks. 12 MR. BROOKMAN: Thank you. 13 Yes, Steve Nadel. 14 MR. NADEL: Yes. Steve Nadel,

15 ACEEE. 16 A couple of comments. First, we 17 do support the extension to the T5 lamps. 18 Thank you for including that. I know that was 19 a recommendation that we and industry have

20 both made. 21 Second, in terms of the wattage 22 range of the lamps, I haven't had a chance.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 45 1 The TSD just came out, but based on the NOPR, 2 it looks like for the wattage range you're 3 saying you looked at the rated wattage of 4 lamps currently, and that is your limit. 5 Rated wattages are subject to -- 6 there are some differences between rated 7 wattage and actual wattage. We'd recommend at 8 least coming down one more watt so that people 9 can't play games with the rating in order to 10 include those lamps. You know, all of a 11 sudden now as a 25 watt lamp gets rerated as a 12 24, or something like that. 13 There is imprecision in how 14 ratings are done, and we should allow for

15 that. 16 MR. BROOKMAN: Thank you. 17 MS. GUPTA: Okay. Thanks for your

18 comments. 19 MR. BROOKMAN: Any additional 20 comments on this slide? 21 (No response.) 22 MR. BROOKMAN: Okay.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 46 1 MS. GUPTA: In addition to 2 amending the definition for fluorescent lamp, 3 DOE proposes to alter its GSFL scope of 4 coverage by amending the definition of colored 5 fluorescent lamp. The definition of general 6 service fluorescent lamp excludes colored 7 fluorescent lamps from energy conservation

8 standards. 9 The existing definition of colored 10 fluorescent lamp defines the colored 11 fluorescent lamp as a lamp marketed as a 12 colored lamp and with a CCT either less than 13 2,500 K or greater than or equal to 6,600 K or 14 I think it's greater than 6,600 K. 15 DOE proposes to revise that 16 definition, namely, the upper CCT limit to 17 include all lamps with CCT greater than 7,000 18 K as covered lamps, and therefore, exclude 19 them from coverage, but this would also add in 20 lamps between 6,600 K and 7,000 K CCTs into 21 its scope of coverage. 22 DOE seeks comment on the decision

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 47 1 to amend the definition of colored fluorescent 2 lamp to include lamps with a CCT greater than 3 7,000 K.

4 MR. BROOKMAN: Ed. 5 MR. YANDEK: Ed Yandek, GE, and 6 also Chair of Lamp Section Technical 7 Committee. 8 And I guess I don't have to keep 9 repeating that, do I?

10 MR. BROOKMAN: No. 11 MR. YANDEK: Okay. NEMA strongly 12 supports this amended definition and 13 appreciates further DOE has correctly 14 understood the underlying technical and market 15 driven basis for this amendment, and we did 16 supply a large amount of comments on this, and 17 we'll of course amplify further on our written

18 comments. 19 MR. BROOKMAN: Thank you, and 20 that's a nice acknowledgement as well. Thank 21 you. 22 Other comments on this slide,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 48 1 definition of colored fluorescent lamps?

2 Steve Nadel. 3 MR. NADEL: Okay. A couple of 4 comments on this. One, the limit has been 5 placed at 7,000 K, but in the NOPR on page 74 6 it notes that there's an 8,000 K lamp that is 7 capturing an increasing market share of 8 general service applications. So either that 9 statement in the NOPR is incorrect, or if it 10 is correct, then DOE should probably extend it 11 to 8,000. 12 The idea is general application 13 lamps should be covered. Very specialty 14 colored lamps we're fine to exclude, but we 15 don't want to create a loophole where all of a 16 sudden these become general application lamps. 17 Therefore, the other thing that 18 was in the preliminary I guess it was the 19 ANOPR at the time that was dropped was a 20 statement in there that is not -- I think it 21 was intended for use in general service 22 applications. DOE has dropped that. We think

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 49 1 that should be added back in just to help 2 protect that. If someone starts marketing 3 these for general service applications, they 4 are not allowed. This is really a specialized 5 exemption. 6 As people who have been here 7 before know, we are very sensitive to 8 exemptions because the supposedly specialized 9 products sometimes become widespread, the 10 classic case being the BR lamp that we'll be 11 discussing later. It was originally a 12 specialized niche product, and it is now 40 13 percent of the market. 14 MR. BROOKMAN: Okay. Thank you.

15 Joe. 16 MR. HOWLEY: I would just like to

17 make a follow-on comment to Steve's comment. 18 Industry is not aware of any 8,000 degree 19 Kelvin lamp that is gaining any type of market 20 share in the general service lighting market. 21 Such a lamp would be extremely blue and not 22 appropriate for general service lighting

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 50 1 applications.

2 MR. BROOKMAN: thanks for the 3 clarification. Thank you. 4 Okay. Additional comments on this 5 slide before we move on? 6 (No response.) 7 MS. GUPTA: So this slide 8 concludes our discussion on scope of coverage. 9 So if there are any other comments regarding 10 scope of coverage, this is probably the time.

11 MR. BROOKMAN: Thanks for that

12 cue. 13 Any other scope of coverage 14 issues? 15 MR. deLASKI: Excuse me. This is 16 just for GSFL, right? 17 MS. GUPTA: No, this is scope of 18 coverage in general. These are the slides 19 that we have on scope of coverage. 20 MR. BROOKMAN: Do you want to 21 raise the other? 22 MS. GUPTA: But if you'd like to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 51 1 bring up other issues, you're welcome to. 2 MR. BROOKMAN: The incandescent 3 reflector lamps at this point? 4 MR. deLASKI: This is Andrew 5 deLaski. 6 I made my point in my opening 7 remarks. I won't repeat it here. DOE made a 8 serious error in leaving out the lamp that DOE 9 terms exempted in the IRL. DOE analysis 10 showed that 40 percent of the market 11 reflectors have an increasing share in the 12 residential sector. 13 Unfortunately the DOE analysis, in 14 your analysis by merging together the -- there 15 are two scenarios. One scenario you run is 16 the scenario in which you merge together, 17 shift to CFL products and shift to BR65, which 18 basically cancel each other out. So you 19 haven't modeled, you haven't shown us, the 20 public, what happens if consumers migrate to 21 the exempted lamps because you've also put it 22 together in a scenario where you show more

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 52 1 efficient lamps as well at the other end. 2 So we think that there will be 3 serious loss of energy efficiency savings as 4 consumers migrate to lamps that are left out 5 by the regulation. 6 We submitted with the ANOPR legal 7 memos outlining our perspective on DOE's legal 8 authority to cover these products and, indeed, 9 legal obligation to cover these products. DOE10 says they're covered. DOE put them in Never11 Never Land. they are covered, meaning that 12 their states are preempted from regulating 13 these products, but yet there is no -- but yet 14 DOE concludes in the NOPR that you lack 15 authority to actually set standards for the 16 products. 17 So they are -- one of these 18 products is in Never-Never Land. States can't 19 regulate them. The feds. can't regulate them. 20 I don't think that's what Congress meant, to 21 put products into this land where they can 22 never be touched by any sort of efficiency

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 53 1 regulation. 2 We have a change of 3 administrations. I think it's time for DOE to 4 take a fresh look at this issue, and to open 5 up a supplementary NOPR, again, to propose 6 standards for the exempted lamps that would be 7 at the same level as those lamps that aren't 8 exempted. 9 There is precedence for DOE to do 10 supplementary NOPRs on both the transformer 11 rule and the furnace rule in 2007. DOE issued 12 supplementary NOPRs to address the issues that 13 had not been raised or properly raised in the

14 NOPR document. 15 You need to move fast to get the 16 supplementary NOPR out because of the June 17 30th consent decree deadline, and I think it 18 should be the top priority for the department 19 right now to begin working on preparing that

20 document. 21 MR. BROOKMAN: Additional points 22 on scope of coverage?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 54 1 (No response.) 2 MR. BROOKMAN: Okay. 3 MS. GUPTA: All right. Now I'm 4 going to move on to the second part of this 5 rulemaking, which is addressing the statutory 6 criteria to amend the existing standards for 7 general service fluorescent lamps and 8 incandescent reflector lamps, and I'm going to 9 skip forward a bit to Slide 18 just to discuss 10 a little bit about the process that DOE takes 11 in conducting the NOPR. 12 As you can see in this slide, 13 we're in the NOPR stage. We've completed the 14 framework document and the ANOPR stage. The 15 first step in the NOPR stage of the rulemaking 16 is to revise the existing ANOPR analyses, of 17 which the three main ones are the engineering 18 analysis, the life cycle cost and payback 19 period analysis, and the national impacts 20 analysis. 21 DOE then establishes and selects 22 trial standard levels and conducts several new

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 55 1 NOPR analyses, such as the consumer subgroup, 2 manufacturer impact, utility impact, 3 employment impact, environmental assessment 4 and the regulatory impact analysis. 5 All right. I'm going to go back 6 to Slide 16. 7 So the first thing I'm going to 8 talk about is DOE's revisions to the product 9 classes in the NOPR. DOE generally 10 establishes product classes by the type of 11 energy used, the capacity or other performance 12 related features that affect efficiency and 13 factors such as the utility of the product to

14 users. 15 For GSFL using these criteria, DOE 16 established product classes based on lamp type 17 and correlated color temperature, or CCT, as 18 seen in this table. 19 DOE separates its coverage into 20 six lamp types, four foot medium bipin, tow 21 foot U-shaped, eight foot single pin slimline, 22 eight foot recessed double contacts high

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 56 1 output, four foot miniature bipin standard 2 output, T5 standard output lamp, and four foot 3 miniature bipin high output lamps. 4 As soon in this table, in DOE's 5 proposed product class structure DOE grouped 6 T12 and T8 lamps into one product class, which 7 would result in one minimum efficacy standard 8 for both types of lamps. 9 In addition, DOE established 10 separate product classes for T5 lamps. This 11 was based on DOE's belief that the physical 12 constraints and lumen package of T5 lamps 13 prevent them from being direct replacements 14 for T8 and T12 lamps in some applications. 15 In addition, DOE established 16 separate product classes for lamps with CCT 17 greater than 4,500 K and less than or equal to 18 4,500 K. This results in a total of 12 19 separate product classes of which DOE only 20 analyzes five, shown in yellow. DOE did not 21 directly analyze the two foot U-shaped product 22 classes nor the high CCT product classes.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 57 1 My colleague, Conan O'Rourke will 2 discuss further how DOE treated these 3 unanalyzed product classes in the engineering 4 analysis, but I'd like to pause here to invite 5 comments on the proposed product class 6 structure for general service fluorescent 7 lamps, in particular, the assigning of 8 separate product classes for four foot T5 9 lamps. 10 MR. BROOKMAN: Joe Howley. 11 MR. HOWLEY: Yes, Joe Howley. 12 Industry agrees with the proposed 13 product classes and also agrees that separate 14 product classes must be established for T5 15 standard output lamps versus T5 high output 16 lamps.

17 MR. BROOKMAN: So that tracks what 18 the department has done.

19 MR. HOWLEY: Yes. 20 MR. BROOKMAN: Thank you. 21 MR. HOWLEY: Through their 22 proposal.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 58 1 MR. BROOKMAN: Yes. Okay. 2 Additional comments on the product classes? 3 (No response.) 4 MR. BROOKMAN: No additional 5 comments. Okay. 6 MS. GUPTA: For incandescent 7 reflector lamps, DOE based its product class 8 structure on lamp diameter, voltage, and 9 spectrum. Firstly, regarding spectrum, DOE 10 established two sets of product classes based 11 on the standard spectrum and modified spectrum 12 lamps. 13 To define modified spectrum, DOE 14 proposed to adopt the definition of modified 15 spectrum in the Energy Independence and 16 Security Act and apply it to incandescent 17 reflector lamps. 18 DOE also proposes to set separate 19 product classes for smaller diameter lamps. 20 These lamps provide a distinct utility which 21 generally results in lower efficacy. DOE sets 22 a separate product class for lamps with less

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 59 1 than or equal to 2.5 inches, which correlates 2 to the 20 incandescent reflector lamp 3 diameters, such as Part 20s and R20s. 4 Finally, DOE established IRL 5 product classes based on rated voltage. 6 Current test procedures allow for lamps rated

7 at 130 volts to be tested at 130 volts and 8 lamps rated at 120 volts to be tested at 120

9 volts. 10 However, DOE is aware that a large 11 number of 130 volt lamps are actually operated 12 at 120 volts, resulting in longer life, but 13 also reduced efficacy. 14 Due to the resulting lower 15 efficacy requirements of these 130 volt lamps, 16 setting higher standards for incandescent 17 reflector lamps could result in increased 18 migration to the 130 volt lamps and possible 19 lost energy savings. 20 Therefore, in this NOPR DOE 21 proposes to set separate standards for 130 22 volt lamps.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 60 1 MR. BROOKMAN: Pam Horner. 2 MS. HORNER: Pam Horner speaking

3 for NEMA. 4 We have two technical points that 5 we would like to make, one on the modified 6 spectrum and one on 130 volt, and I am flanked 7 by the experts who can address each one.

8 If I could refer to Joe for a 9 brief comment on modified and to Greg for a 10 brief comment on 130 volt, please. 11 MR. HOWLEY: Joe Howley. 12 Separate product classes must be 13 established for PAR 20 and enhanced spectrum 14 lamps, as you have suggested here. However, 15 we do not agree especially with the PAR 20 16 that it was set appropriately. We could talk 17 about that further on in the discussion, and 18 also there are issues with the 130 volt class. 19 MR. BROOKMAN: Do you want to just 20 set appropriately? How would they be set 21 appropriately? 22 MR. HOWLEY: It has to do with how

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 61 1 they were scaled down from the proposed level. 2 We suggested a scaling in our NOPR comments, 3 but this scaling was inappropriately applied 4 to the technologies now being proposed. We 5 could talk further about how this level was 6 incorrectly arrived at in PAR 20. 7 MR. BROOKMAN: Okay. Yes. 8 MR. NELSON: Greg Nelson from 9 Philips. 10 Yes, we had some additional 11 comments on the 120 or the separate 12 classification for 130 volt. I think the DOE 13 correctly recognized the additional special 14 utility for the modified spectrum and for the 15 PAR 20, but we recognize a distinct class of 16 users who do have high line voltages in their 17 real applications. One, thirty volt is not 18 uncommon in some areas of the country. 19 The rulemaking as it stands today 20 would result in no usable offer for these 21 people because if they're forced to buy 120 22 volt lamps, they will be faced with continuous

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 62 1 short life situations and looking at where the 2 130 volt standards have been set, we don't 3 believe that it is technically possible to 4 achieve. They have been really set one bar 5 higher than even the 120 volt. 6 So we would support an area of 7 regulation where actually we don't have 8 separate classes, but we rate the lamps and 9 measure them at their rated voltages. 10 MR. BROOKMAN: Of course, the 11 department is very interested in having the 12 details on impacts like this. So in your 13 written comments if you can be very specific. 14 MR. NELSON: We will come back to 15 that in the writing, and if I can add, I think 16 there is a legitimate concern that was 17 addressed by the DOE in terms of, let's say, a 18 misuse of 130 volt in 120 volt areas. We 19 believe there may be other ways to address 20 that so that it does not become a loophole. 21 MR. BROOKMAN: Okay, okay. Yes,

22 Steve Rosenstock.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 63 1 MR. ROSENSTOCK: Steve Rosenstock,

2 EEI. 3 Just a quick question again. I 4 probably should have reviewed the NOPR a 5 little bit more closely, but I'm kind of 6 curious about for those lamps under 40 watts 7 why they were excluded. That was EPCA or EISA 8 or just, you know, because there are a lot of 9 under 40 watt IR lamps out there? 10 The second issue I want to 11 discuss, I'm sure, in the context of 130 volt 12 lamps is that basically for utilities they are 13 sending out, especially for the residential 14 sector, the transformers that transform the 15 voltage down to nominal 120 volts, and if you 16 look in utility rates terms and conditions, 17 for primarily most -- and there are some 18 utilities here -- in the rates and conditions 19 it's plus or minus five percent. Therefore, 20 the rate of voltage is 120 volts. That 21 utility voltage for almost all utilities will 22 be in the range between 114 and 126 volts

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 64 1 delivered to the end use customer. 2 So just as an FYI, but I have 3 heard of cases where typically the voltages 4 are higher for some, whether operational 5 reasons or distribution issues, but that's the 6 typical range for those utilities or entities, 7 you know, where the voltage is set at 120

8 volts. 9 Thank you. 10 MR. BROOKMAN: Thank you.

11 Under 40 watts? 12 MS. GUPTA: So I can say about the 13 under 40 watts is that our approach was to 14 take the existing scope of coverage for 15 incandescent reflector lamps. However, if you 16 feel that there are more lamps under 40 watts 17 that DOE should extend coverage to, we'd 18 appreciate those comments. 19 MR. BROOKMAN: Joe Howley.

20 MR. HOWLEY: Just a comment. On 21 IR products specifically, the industry does 22 not generally offer products that are under 40

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 65 1 watts in this area for technical reasons. I'm 2 not sure where that comment came from, but I 3 don't think it's accurate, the previous

4 comment.

5 MR. BROOKMAN: There are not under 6 40 watt products in general manufacture or 7 distribution?

8 MR. HOWLEY: That are IR 9 technology, I don't believe there are. I'm 10 not aware of any. Let's put it that way. 11 MR. BROOKMAN: I'm scanning down 12 the panel of manufacturer industry folks here. 13 You're shaking your heads no. Okay.

14 Steve Nadel. 15 MR. NADEL: A couple of things. 16 One, and I don't have my catalogue with me. I 17 do recall there were some 35 watt or higher 18 products. I'd have to look at my catalogue 19 for exactly who had them. 20 My vague recollection, it might 21 have been in GE, but the comment I wanted to 22 make was on the 130 volt class, we're looking

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 66 1 for more data to help determine what we feel. 2 Our understanding is that the vast majority 3 of 130 volt lamps are used on 120, 115 volt 4 areas as effectively a longer life lamp, and 5 we wanted to be sure that if there's a special 6 class for this, it doesn't become a loophole 7 for people regarding sales.

8 I don't know. Does the TSD 9 specifically address this issue and explain 10 the rationale in more detail? 11 MS. GUPTA: Yes, it does. It 12 explains the rationale behind the scaling 13 factor and why we sought separate product

14 class. 15 I can tell you that when Conan 16 speaks about the scaling, we set a higher -- 17 we proposed to set a higher standard for 130 18 volt lamps to mitigate lost energy savings due 19 to the fact that they're often used on 120 20 volt lamps.

21 MR. BROOKMAN: Ed. 22 MR. YANDEK: Yes, just one quick

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 67 1 comment, and we'll provide more in our written 2 comments obviously, but, yes, we do understand 3 ANSI C-84.1 is applied by utilities for line 4 voltage regulation. 5 On the other hand, we do know of 6 cases and we do know of regions of the country 7 where the line voltage is typically higher 8 than provided in ANSI C-84.1. So these are 9 products with real utility for those regions 10 of the country. 11 Secondly, even if one does operate 12 a 130 volt product at 120 volt, the power is 13 reduced proportionately. So you're not 14 increasing power. You're actually decreasing 15 power, just as you do every time you take an 16 incandescent phase controlled dimmer and you 17 dim an incandescent lamp. 18 But we will provide more 19 substantive comments in our written response. 20 MR. BROOKMAN: Thank you. 21 Greg, did you want to? 22 MR. NELSON: No, I think that has

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 68 1 got it. 2 MR. BROOKMAN: Okay. Additional 3 comments on these product classes, IRL product 4 classes on Slide 17? Andrew. 5 MR. deLASKI: At the ANOPR phase 6 we commented, I think, that this should not be 7 a separate part of a modified spectrum, and we 8 still feel that way. It should not be a 9 separate part class for -- 10 MR. BROOKMAN: Ed, I don't think 11 you're on. Why don't you just leave it on? 12 MR. deLASKI: Okay. At the ANOPR 13 phase we commented that there should not be a 14 separate product class for modified spectrum 15 products. We argued then that there are 16 options for consumers, technical options to 17 achieve modified spectrum utility using both 18 LED technology and phosphor based technologies 19 that would achieve the same utility for

20 consumers. 21 Reading the NOPR, I was struck 22 that the department concluded that, well,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 69 1 you've got to have that utility through an 2 incandescent technology. 3 So it strikes me that this is an 4 argument that by boxing it in with the 5 incandescent technology as opposed to what the 6 consumer observes and what the consumer gets 7 that we are creating a situation in which 8 we're not focused on the question of does it 9 provide unique customer utility, but rather, 10 does it use a specific technology, and I think 11 that's a mistake and one that risks 12 undermining energy savings in this rulemaking 13 and creates risk for other rulemaking as well. 14 So we continue think that there 15 should not be a break for modified spectrum, 16 but you talk about the specific levels later 17 on, right? 18 MS. GUPTA: Yes. The scaling will 19 be spoken about later on. 20 MR. deLASKI: Okay. Thanks. 21 MR. BROOKMAN: Okay. Additional

22 comments?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 70 1 (No response.) 2 MR. BROOKMAN: Okay. 3 MS. GUPTA: Okay. That concludes 4 the discussion on product classes, and my 5 colleague Conan O'Rourke will continue 6 discussing the changes and revisions to the 7 engineering analysis. 8 MR. O'ROURKE: Good morning. 9 Thank you, Mimi. 10 So briefly I'm going to go over 11 the engineering analysis and also describe 12 some of the new products that were addressed 13 since the ANOPR and also talk about scaling 14 throughout this as well. 15 So in general, the engineering 16 analysis is set to identify baseline lamps 17 within existing product classes and look at 18 higher efficiency or efficacious alternatives. 19 In general the process goes through choosing 20 representative product classes of the product 21 classes that have been identified; selecting 22 baseline lamps within those product classes;

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 71 1 and then developing higher efficacy levels 2 within that product class; and then scaling to 3 product classes that were not analyzed 4 directly.

5 So one of the comments that were 6 received during the ANOPR and was also 7 mentioned as a comment period here at this 8 meeting is there may be an opportunity where 9 halophsophor T5 lamps may be able to be 10 introduced to the market and gain market 11 share. So as part of this rulemaking we 12 looked at this T5 lamp and since there was no 13 commercially available halophosphors on the 14 market, we had to develop a model, and this 15 model was based on using shorter halophosphor 16 T5 lamps that were commercially available and 17 understanding the relationship to lamp length 18 and efficacy established in the product 19 industry journals and product literature and 20 extend it up to a four foot length lamp. 21 In here we're also showing you the 22 tables for what that baseline values would be

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 72 1 for the T5 standard output and the T5 high 2 output lamps, as well as efficacy levels 3 established for them. 4 So the department invites comment 5 on the properties of the T5 halophosphor GSFL 6 baseline lamps. 7 MR. BROOKMAN: Joe Howley. 8 MR. HOWLEY: The industry 9 generally agrees that the lumen per watt 10 standards for such a T5 lamp made with 11 halophosphor would be relatively low as 12 suggested here. We haven't done a thorough 13 analysis, but it would certainly be down in 14 the ranges proposed. 15 However, we feel just in general 16 that the LPWs for T5 lamps have been set 17 incorrectly in this manner. Like T12 and T8 18 lamps, T5 LPW standards should be set when 19 tested at 25 degrees C., which is standard 20 test lab temperature, not 35 degrees C. We 21 note that some manufacturers rate at 35, some 22 at 25, some at both, but in terms of a testing

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 73 1 number for DOE purposes, this should be tested 2 at 25 like the other lamps are tested. 3 Therefore, the numbers are set 4 significantly too high for testing at 25 5 degrees C. NEMA will provide appropriate LPW 6 numbers for T5 lamps in our written comments 7 that are above the performance of the T5 halo 8 lamps, but appropriate for existing T5 lamps. 9 We note in some of the cases even 10 the 35 degrees C. numbers were set right at 11 averages and were set also, we believe, too 12 high and unnecessarily too high because 13 they're way above where any halo lamp would 14 be, and it's not necessary to go that high 15 with these levels. 16 Also, maybe I'll take this 17 opportunity to talk in general about the LPW 18 numbers. We mentioned earlier that the level 19 set at TSL3, we're generally in agreement, but 20 NEMA in the NOPR comments, we did mention what 21 we thought appropriate TSL3 numbers should be. 22 Specifically, we note that for the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 74 1 four foot fluorescent lamp numbers, our 2 proposal was 83 lumens per watt and DOE is 3 proposing 84. So we still recommend going 4 down by one lumen per watt. 5 Also the two foot U-shaped lamp 6 number we believe should be lowered by two 7 lumens per watt from 78 to 76. We note that 8 you scaled the U lamps. You didn't do a 9 direct analysis, but we think the scaling 10 should be a little lower also by two lumens 11 per watt than proposed. 12 We think part of this reason is 13 that proposed numbers are high because in 14 reading the NOPR it appears to us that DOE did

15 not understand NEMA's comments NIST and NVLAP 16 testing and did not appropriately incorporate 17 these into the analysis. The comments we made 18 seemed to be dismissed after talking to NIST, 19 but we don't believe this was fairly 20 understood, nor NIST really understood what we 21 were commenting on. 22 Ed is going to comment further on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 75 1 this particular issue. 2 MR. BROOKMAN: Thank you.

3 Ed. 4 MR. YANDEK: Okay, and we'll 5 elaborate more in our written comments. 6 But our statement in our original 7 comments was not to imply that NIST had 8 reestablished the baseline post 1997. Of 9 course, they have not done that. But our 10 comments are really to indicate that ongoing 11 NVLAP assessments and adjustments to company 12 photometry facilities which do happen all the 13 time since 1997 have resulted in a reduction 14 of lumens for some products, particularly 15 those that have had tighter limits on them or, 16 let's say, less margin compared to catalogue 17 ratings. And this has occurred. We have made

18 these assessments ourselves. 19 While not significant in terms of 20 a nominal catalogue value, such changes must 21 be accounted for when sending mandatory 22 federal minimum standards based on small

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 76 1 sample lot testing because these are right 2 line standards in production. We must make 3 every lamp to conform to its requirements, not 4 averages. 5 So NEMA has accounted for this in 6 the data that we have, which is based on high 7 volume production data. You do not have 8 access to that and admittedly so. 9 So these slight changes are not 10 designed to create loopholes, but are created 11 to just allow for statistical normal variation 12 in production so if anybody were to sample our 13 products, our compliance would be assured in 14 the field. 15 We'll talk more about that in our 16 written comments. 17 MR. BROOKMAN: Thank you. 18 And, Joe, did you say why you were 19 asking for 25 degrees C.? Because I didn't

20 hear that.

21 MR. YANDEK: I'll comment on that. 22 It's just, you know, a well known industry

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 77 1 practice according to all industry standards 2 as well that even though the lamps are used at 3 a variety of temperatures, so for example in 4 the ceiling the temperature here is now 25 C. 5 typically, but the reference standard 6 temperature is always set at 25 C. so that we 7 have consistency and we have the best possible 8 accuracy and reproducibility. 9 In terms of marketing the T5 10 products, we know that a lot of them are used 11 at higher temperatures. So there is a rating 12 that occurs or a relative rating that occurs 13 at 35 C., but that is a secondary adjustment 14 by the manufacturer. 15 So the primary data is always 16 taken at 25 C. Then there's a relative 17 measurement that's made for 35 C., but we do 18 not place that equipment in 35 degrees C. 19 spheres. It would be too expensive, too 20 unproductive, and so the conmpliance testing 21 needs to be at 25 degrees C.

22 MR. BROOKMAN: Is that what's

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 78 1 specified by ANSI or whomever?

2 MR. YANDEK: That's what we had 3 specified in our industry standards. 4 MR. BROOKMAN: Industry standards. 5 MR. YANDEK: Now, this brings up 6 an interesting point because there already is 7 in parallel a test procedures rulemaking, and 8 obviously we want to make sure that when that 9 rulemaking gets issued there are no errors in 10 that that would impact the minimum efficiency 11 standards rulemaking. 12 So we are alerting you that we do 13 need to see -- we're not disagreeing in 14 general with the need to set these numbers for 15 T5s, but we need to make sure the numbers are 16 adjusted for 25 degrees Centigrade testing, 17 and Conan knows exactly what I'm talking

18 about. 19 (Laughter.) 20 MR. BROOKMAN: Okay. So then if 21 you know it, you don't need to comment, right?

22 MR. O'ROURKE: That's correct.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 79 1 MR. BROOKMAN: Steve Nadel. 2 MR. NADEL: A couple of comments 3 on these issues. First, we do support testing 4 of T5s at 25 C. That, as we understand it, is 5 the more typical condition, and we generally 6 believe the product should be tested at 7 typical conditions. 8 In terms of the question about 9 where to draw the line, we believe the line 10 should be drawn on typical performance for the 11 different classes, not try to set it so low 12 that it will just rule out halophosphor but 13 maybe would encourage some less efficient 14 halophosphor product. You should look at the 15 products on the market and not deliberately, 16 you know, lower it to allow some less 17 efficacious products that might be developed 18 in the future. 19 Likewise, in terms of the T8 20 category or T12 category, we support DOE 21 issues of looking at the compliance data and 22 basing the standards on those. We were very

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 80 1 concerned about NEMA's earlier proposal, which 2 we thought was too slack and allowed too many 3 products. 4 There are a lot of products. You 5 know, we're dealing with these 800 series 6 lamps, different performances being reported 7 and change of one lumen per watt would allow 8 quite a few products, I believe, from the last 9 time I looked at that. 10 So we support what DOE has done 11 and what NEMA proposed last time. 12 MR. BROOKMAN: Thank you. 13 Okay. Before you move on, 14 additional comments? 15 (No response.) 16 MR. BROOKMAN: Okay. 17 MR. O'ROURKE: All right. Going 18 on to the next slide, as addressed also at the 19 ANOPR and in the comments today, looking at 20 coverage for the residential sector for the 21 four foot medium bipin lamps, the department 22 has analyzed the medium bipin for this

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 81 1 residential sector as part of this NOPR 2 analysis and chose to use the 40 watt T12 lamp 3 as the baseline lamp for the residential

4 sector. 5 And looking for a lamp ballast 6 system, the lamp efficacy was about 76.8 7 lumens per watt and had a shorter lifetime, 8 about 15,000 hours, compared to its commercial 9 counterpart. 10 The department compared this with 11 a low ballast factor, a ballast of .68 ballast 12 factor for an input power of 70 watts. 13 The higher efficacy lamps that are 14 sold, that are available both in the 15 commercial and residential sectors will be 16 shown in the following slide, looking at the 17 different efficacy levels, and residential 18 lamps are subject to the same efficacy levels 19 as the commercial lamps are. 20 So the department invites comments 21 of the added four foot medium bipin 22 residential sector, particularly the choice of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 82 1 the baseline system lamp and ballast for this 2 residential sector. 3 MR. BROOKMAN: Joe Howley. 4 MR. HOWLEY: Industry has not had 5 time to review the technical analysis for 6 residential, and we do plan to do that and 7 provide comments in our written comments once 8 the review is completed. 9 Just in general, looking at this, 10 it appears that baseline for T12 lamps, 40 11 watt T12 lamps and the ballast used are fairly 12 typical of residential applications. We have 13 in general just general concern about the 14 economics of eliminating the four foot T12 15 lamps in the residential market, but further 16 analysis is needed. So we will provide 17 further comments in our written statement.

18 MR. BROOKMAN: Steve Rosenstock.

19 MR. ROSENSTOCK: Steve Rosenstock 20 at Edison Electric Institute. 21 For this analysis I was just 22 curious and again I should have reread the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 83 1 fluorescent lamp ballast rule that was passed 2 in 2000 where, you know, fixtures starting in 3 2005 they had to be higher efficiency 4 ballasts, and then any replacement ballast for 5 sale after April 2010. 6 So I couldn't remember if the 7 residential ballasts were exempt from that 8 rulemaking or not, but just something to 9 consider. 10 Thank you.

11 MR. BROOKMAN: I could see some. 12 Yes, Joe. 13 MR. HOWLEY: Yes, just to comment 14 on that, the residential shop light ballast, 15 as it's known, is exempted from that 16 regulation. 17 MR. BROOKMAN: Yes, Steve, go

18 ahead. 19 MR. ROSENSTOCK: Thank you.

20 Steve Rosenstock. 21 Okay. About the shop light, I'm 22 just wondering about I'll say a general

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 84 1 service fixture like in the kitchen or other 2 areas of the house, not -- 3 MR. HOWLEY: It's called a shop 4 light ballast, but it is used in all those 5 types of fixtures. It's a low end residential 6 fixture ballast, very typical.

7 MR. BROOKMAN: Steve Nadel. 8 MR. NADEL: Yes. I mean, products 9 below a certain power factor are not included 10 in the current federal standard. As I recall, 11 and there's a separate rulemaking on this, one 12 of the issues that has been raised for 13 comments is whether coverage in the next 14 ballast standard should be changed. 15 MR. BROOKMAN: Okay. So 16 additional comments? Four foot medium bipin 17 residential? 18 (No response.) 19 MR. BROOKMAN: Okay. 20 MR. O'ROURKE: Okay So I've gone 21 over some of the new analyses that have been 22 included since the ANOPR and talking about

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 85 1 selecting baseline product, and the next step 2 would be looking at higher efficacy levels 3 within product classes. 4 So this next slide I'm showing 5 kind of how we set that up for the four foot 6 medium bipin lamps, and establishing the 7 higher efficacy levels is using technology 8 options that have been identified and in this 9 case we're talking about different phosphorus 10 that could be used within the lamps, say, 11 going from halophosphor to triphosphor or 12 shifting from T12 to smaller diameter lamps as

13 well. 14 So what I'm showing here in this 15 table is, as Mimi mentioned in her 16 presentation, the T12 and T8 are included 17 together in one product class. There are four 18 separate baselines within this analysis. 19 There is a 40 watt T12 residential and a 40 20 watt T12 commercial industrial. There's also 21 a 34 watt T12 and a higher level baseline for

22 the 32 watt T8.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 86 1 And as we go up to higher and 2 higher efficacy levels, you'll see that at 3 about efficacy level three, the 40 watt T12 4 will not be able to meet that requirement at 5 efficacy level four. Not T12 34 or 40 watt 6 would be able to meet their requirement, 7 leaving the 32 watt T8s with higher design 8 options.

9 So to -- 10 MR. BROOKMAN: Wait just one

11 second.

12 Ed. 13 MR. YANDEK: A question. Where 14 does DOE want to discuss phosphor issues? We 15 talked earlier about -- 16 MR. O'ROURKE: There will be, you 17 know, on my scaling part I had a little bit of 18 a discussion about going to the 4,500. 19 MR. YANDEK: The scaling, okay. 20 MR. BROOKMAN: Thank you. 21 Okay. Mimi?

22 MS. GUPTA: No.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 87 1 MR. BROOKMAN: No? Okay. Good. 2 Thanks for raising it. 3 Steve, yes, a follow-on. 4 MR. NADEL: I was going to ask 5 another question. 6 MR. BROOKMAN: Please do, yes. 7 MR. NADEL: Could either you or 8 maybe industry could comment. I don't 9 remember what the 25 watt products are, the T8 10 products that are allowed by standard level 11 four but not five. What products are those? 12 MR. O'ROURKE: They're within this 13 class for the 32 watt T8, with the T8 class. 14 MR. NADEL: So they are a special 15 energy saving lamp?

16 MR. O'ROURKE: Correct. 17 MR. NADEL: Okay, fine. 18 MR. O'ROURKE: They're used 19 together with a lamp-ballast combination to 20 try to maintain light level and get the 21 benefit. 22 MR. NADEL: Right. Okay.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 88 1 MR. BROOKMAN: Okay? 2 MR. O'ROURKE: Okay. Going on to 3 a point that Steve Nadel had brought up just a 4 little while ago looking at the efficacy 5 levels, when we presented in the ANOPR, we 6 based our efficacy levels on the rated data, 7 and looking at the compliance data that we 8 have for products that are currently covered, 9 we noticed that the rated data does not always 10 match -- the measured data does not always 11 match exactly to the rated data, and the ANSI 12 standards actually take this into account. 13 So we show here an example of one 14 of the tables for one of the product classes 15 showing how the efficacy levels were. In some

16 cases some of the new NOPR values have been 17 raised or lowered, depending on the efficacy

18 level. 19 Also, since the compliance reports 20 round to the nearest lumen per watt, that also 21 played a role in what the new levels are as 22 well. So the department invites comment on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 89 1 the efficacy levels for each general service 2 fluorescent lamp product class, particularly 3 the department's decision to use compliance 4 report data to establish general service 5 fluorescent lamp efficacy levels.

6 MR. BROOKMAN: Ed. 7 MR. YANDEK: In general NEMA does 8 agree with the efficacy values. However, 9 there are certain slight changes we would like 10 to see made. We'll go into that more 11 explicitly in our written comments. 12 But again, we appreciate that DOE 13 went to the EPAC reports. That's a much more 14 reasonable way to go about doing it than to 15 just take nominal values out of catalogues. 16 However, your data is much less

17 than our data. We have a lot more data and we 18 have more recent test data, test data that 19 also involves the actual variability that 20 occurs in high production manufacturing which 21 we have to take into account, again, when we 22 have to meet the minimum efficacy.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 90 1 So we, in general, agree with what 2 was done. We will provide some slight 3 corrections that we feel are justified and 4 will provide that in our written comments. 5 MR. BROOKMAN: thank you. 6 Yes, please. Your name.

7 MR. REA: Mark Rea. 8 Implied in your statement, I 9 think, Ed, is that you have the data to decide 10 what quartile would now be included in a lower 11 number. So is this intended to get all of the 12 data; that someone is to test this lamp and 13 that, therefore, anyone would sample, say, 14 three standard deviations or what? 15 Because there's no uncertainty I'm 16 aware of on how you would set that number, one 17 lumen per watt or three or whatever it is. So 18 do you provide that information about the 19 distribution? 20 MR. YANDEK: We will in our 21 written comments talk about the confidence 22 level and how we look at that, which you know,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 91 1 on any given day you can always find one or 2 two lamps that wouldn't meet a conformance

3 level. 4 But in general, we would like to 5 be a in a situation where if somebody were to 6 buy a significant number of lamps from 7 multiple outlets, they will find that when 8 they do the math according to the DOE test 9 formula that the results will be in 10 conformance. So that is the basis on which we 11 are setting our numbers. 12 MR. BROOKMAN: Okay. Additional 13 comments on these efficacy levels? 14 (No response.) 15 MR. BROOKMAN: Okay. 16 MR. O'ROURKE: All right. 17 Continuing on for incandescent reflector lamp 18 efficacy levels, like general service 19 fluorescent lamps, when you establish the 20 baseline and you look at higher efficacy 21 levels, you're looking at different technology 22 options that may allow you to get there.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 92 1 These could include more efficient gas fills, 2 higher pressure housing capsules, more 3 efficient reflectors, as well as higher 4 temperature operation and different types of 5 coatings like infrared coatings. 6 The graph that we're showing here 7 is similar to the one we showed into the 8 ANOPR. There have been some slight 9 adjustments to the efficacy levels, and I will 10 talk about some of them in the following 11 slide, but just to review, the baseline is a 12 step function for the current EPCA standard, 13 and we have efficacy level one which is 14 looking at improved halogens, maybe using 15 xenon gas fill. 16 Efficacy level two is looking at 17 the longer life HIR technology with maybe an 18 improved halogen with reflector coating. 19 Efficacy level three would be 20 halogen infrared as well as EL4. It would be 21 an improvement on that halogen infrared. 22 And efficacy level five, the new

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 93 1 level, is an even more improved level. 2 MR. BROOKMAN: Quick question? 3 I'm sorry.

4 MR. ROSENSTOCK: Steve Rosenstock. 5 Again, back on that slide, just as 6 a quick reference, does the current proposed 7 NOPR, is that TSL4 aligned with EL4 in this

8 chart?

9 MR. O'ROURKE: Yes. 10 MR. ROSENSTOCK: Thank you. 11 MR. BROOKMAN: Andrew deLaski. 12 MR. deLASKI: Maybe you're going 13 to get to this, but if you could, if you are 14 just go ahead and tell me that, but are you 15 going to describe what you mean by improved

16 HIR at EL4 and EL5? 17 So what are the technological 18 improvements that you're --

19 MR. O'ROURKE: You can have 20 improvements in the infrared coating itself. 21 You can have also coatings within the 22 reflector that helps reflect a light out. It

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 94 1 could be a silver coating or some other type 2 of coating to help improve that.

3 MR. deLASKI: And what are some of 4 the other types besides the silver? 5 MR. O'ROURKE: Although the 6 aluminum is the typical one, but right now -- 7 well, I will talk about that briefly in the 8 next slide a little bit. 9 MR. deLASKI: Okay. Thanks. 10 MR. BROOKMAN: Yes, please. Say 11 your name.

12 MS. STEVENS: Amanda Stevens on

13 behalf of PG&E. 14 I had a quick question on the 15 framing of -- 16 MR. BROOKMAN: Amanda, get close. 17 MS. STEVENS: Sorry. 18 MR. BROOKMAN: Thank you.

19 MS. STEVENS: Just a comment on 20 the way that these standards are framed. So 21 in the graph shown, they're framed in terms of 22 efficacy in terms of watts, not lumens. If we

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 95 1 want consumers and manufacturers to focus on 2 lumens, which are a more appropriate measure 3 of the functional performance of a lamp, why 4 not consider framing the efficacy levels in 5 terms of lumens using a mathematically 6 equivalent approach, but based on lumens 7 instead of watts? 8 MR. O'ROURKE: In some degree the 9 lumens were taken into account. These colored 10 lines of the green, the red and the blue are 11 showing as you go to lower technologies trying 12 to maintain to some degree an equal light 13 output in the analysis. In some cases it 14 wasn't matched exactly, but it was the intent 15 to try and maintain light level. 16 MR. BROOKMAN: Okay. 17 MR. deLASKI: I have one follow-up 18 question. This is Andrew Delaski again. 19 So you mentioned a number of 20 technologies that could be applied to get you 21 to EL4 or EL5. Did you look at the -- in 22 terms of looking at MaxTech and getting to the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 96 1 level that is the maximum technically 2 feasible, matching these technologies -- I 3 guess the root of my question is is there an 4 EL6 that should have been analyzed or could 5 have been analyzed in this rulemaking?

6 MR. O'ROURKE: I'm not aware of 7 any, but I'll let Mimi comment on that. 8 MS. GUPTA: Yes, I think if -- 9 Mimi Gupta -- I think if you look at the NOPR 10 we discussed the potential max type level for 11 incandescent reflector lamps as an 12 incandescent reflector lamp that uses the best 13 reflector, namely what DOE knows right now as 14 the silver reflector coupled with halogen 15 infrared capsule using the best technology. 16 However, because that level would 17 only have one pathway to reach it and that 18 would be using a proprietary technology, DOE 19 did not analyze that level and sets the 20 highest level that it analyzes as EL5, which 21 may use that proprietary silver technology, 22 but can also be achieved by using other

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 97 1 technologies.

2 Is that clear? 3 MR. deLASKI: Yes, and I think 4 this came up during the ANOPR phase so that to 5 get to an EL6, you ruled it out because there 6 was the assumption that you have to use a 7 proprietary technology. 8 MS. GUPTA: Exactly. So that --

9 MR. deLASKI: And I recall that a 10 question that was raised at that phase of the 11 rulemaking was, well -- I can't recall whether 12 this was in our written comments or not, but 13 that there very well could be the opportunity 14 for cross-licensing. Just because something 15 is proprietary doesn't mean that the other 16 manufacturers don't have access to it. 17 And I wanted to see if you've 18 probably been able to investigate, you know, 19 is there cross-licensing of this technology

20 that would enable other manufacturers -- 21 they're here today -- do other manufacturers 22 have access to this proprietary technology?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 98 1 MS. GUPTA: We did look into 2 cross-licensing, and as of now for the NOPR, 3 DOE's position was to eliminate any level that 4 was solely based on proprietary technology, 5 but if you have further comments on our 6 consideration of cross-licensing and how we 7 should take that into account, then we'd 8 appreciate them. 9 MR. deLASKI: Did you find out? I 10 mean, are there cross-licenses? Do other 11 manufacturers have access to the technology? 12 MS. GUPTA: I don't think that's 13 something we can say. I'm sorry. It's under 14 confidentiality. 15 MR. BROOKMAN: Amanda, please. 16 Use the microphone. 17 MS. STEVENS: Yes. So I just had 18 a quick question, clarification. I just 19 wanted to see what the higher than TSL5 -- is 20 that based on an advanced IR coating or was 21 that based on a proprietary reflector?

22 MS. GUPTA: It would be based on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 99 1 both. It would be based on the proprietary 2 reflector plus the advanced IR coating. 3 The current EL5 that we're looking 4 at here is the level that we believe we could 5 achieve without the proprietary reflector, but 6 with the advanced IR coating. 7 MS. STEVENS: Because I thought -- 8 so in the TSD, one of the TSD documents, I 9 think you guys looked specifically at the 10 efficacy levels available with the advanced IR 11 coating, and I thought it was higher than the 12 level of TSL5 that's been proposed. 13 Is that -- but I don't think that 14 was based on a proprietary reflector. 15 MS. GUPTA: This is Mimi Gupta. 16 Are you talking about like an 17 appendix of the TSD? 18 MS. STEVENS: Yes, one of the 19 appendices, yes. 20 MS. GUPTA: Okay. Yes, we did 21 conduct some testing of advanced IR coatings, 22 and that was mostly done just to validate the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 100 1 fact that EL5 could be achieved without the 2 proprietary technology. However, there isn't 3 an incandescent reflector lamp out there that 4 uses that advanced IR coating. So we use that 5 more as a validation than a way to actually 6 set an efficacy level. 7 MR. BROOKMAN: Okay. Steve

8 Rosenstock. 9 MR. ROSENSTOCK: Steve Rosenstock,

10 EEI. 11 Again, I don't want to dig too 12 closely or get into any trouble with any sort 13 of trade issues, but when you mean 14 proprietary, do you mean there's a patent. 15 Unless they pay for a license, they would not 16 have access to technology for all, say, next 17 15 years? Is that --

18 MS. GUPTA: Yes. 19 MR. BROOKMAN: Thank you, Mimi. 20 Okay. Let's proceed then. 21 MR. O'ROURKE: All right. Thank 22 you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 101 1 So talking specifically about the 2 efficacy levels, the efficacy level one was 3 newly introduced to look at improving on the 4 halogen using a more efficient fill gas, 5 namely xenon. This was also not a 6 commercially lamp. So this is based on a 7 model, and it is estimated to be about a four 8 percent improvement on the efficacy. 9 Efficacy level two was slightly 10 lowered. Where it was originally established, 11 it was only that a proprietary so far as 12 reflector technology in this lamp could be 13 used. So it was lowered slightly so that it 14 could also include a long life HIR lamp as

15 well. 16 And EL5 was a newly introduced 17 level which we've been talking about we'll be 18 using. The only commercially available part 19 that we haven't been able to identify is using 20 the silverized reflector. That is 21 proprietary, but based on the testing that 22 Mimi is mentioning, looking at some of the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 102 1 high efficiency IR coatings looks like it's 2 possible to get there with that method as

3 well. 4 So the department invites comment 5 on the efficacy levels considered for the IRL, 6 in particular EL1 and EL5, and the department 7 also invites comments on the performance of 8 the characteristics of light up lifetime and 9 wattage established for these IR model lamps 10 used in the engineering analysis specifically 11 the properties of the improved halogen IRL and 12 the use of xenon as a fill gas established for 13 efficacy level one. 14 MR. BROOKMAN: Yes, Greg. 15 MR. NELSON: Greg Nelson, Philips 16 Lighting. 17 We'll summarize it in more detail 18 in our written statements, but I want to 19 outline a few points and then I think Joe will 20 also address specifically some issues around 21 the EL5 level was analyzed. 22 The first general comment going

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 103 1 toward Slide 24 where you show all of the 2 energy levels is that we did not see 3 recognized in these the necessary 4 manufacturing tolerances. So very often we're 5 looking and recognizing catalogue values in 6 these, but as we're setting a minimum efficacy 7 standard, it's important also to include the 8 manufacturing tolerances, especially as we get 9 to the higher and higher levels where there is 10 a much more complicated process with more 11 variables in. So that's an important point to 12 consider, and we'll come back to that in 13 writing. 14 Also in the analysis of the levels 15 and even in the breakout box to the left 16 there's quite a variation in the lifetimes, 17 and it raises a real issue with halogen 18 product. The lifetime and energy efficiency 19 is highly correlated in a negative way. 20 Typically you see about a 15 percent, let's 21 say, increase in efficacy might bring you 22 down to a half lifetime situation. So it's

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 104 1 extremely important within that to set a fair 2 basis and not be playing games back and forth. 3 We're also seeing long life as a 4 key factor to achieving an economically viable 5 product for the end user. So if we load all 6 of these advanced technologies in and we can 7 only meet that with a shortened lifetime, this 8 will not be an economically viable situation.

9 We do also have some concerns on 10 the cost build-up of these extra technologies. 11 You mentioned xenon in particular. I think 12 the four percent gain is a bit generous 13 compared to what we actually see, but the cost 14 of adding that improvement has become 15 increasingly significant over the last year to 16 two years, in particular. We've seen a 17 tenfold increase in the cost of xenon based on 18 a global scarcity, not a scarcity of the 19 material itself in the air, but a scarcity of 20 the liquefaction facilities to produce that as 21 a byproduct of other products. 22 And finally, you recognize it in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 105 1 EL2 that there's an option for a 6,000 hour 2 HIR lamp. However, by going and eliminating 3 all levels below EL4, basically the 4 opportunity to have a longer life halogen lamp 5 of 6,000 hour either by the 130 volt, as it 6 exists today, or even with an IR technology is 7 specifically eliminated. We don't see options 8 to achieve a 6,000 hour rating where the

9 levels are set. 10 And we think that that eliminates 11 specific utility in many retail settings, for12 instance. This is based on maintenance at re13 lamp cycles where that has an important role 14 to play and forcing them to a shorter lifetime 15 effectively would ban the technology for them. 16 So I'll turn it over to Joe on

17 EL5.

18 MR. HOWLEY: Just I know the 19 department is not proposing EL5, but in just 20 considering a world where EL5 was chosen, it 21 appears to be based on one very expensive and 22 unique product. The lamp is only available as

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 106 1 a PAR38 lamp. Therefore, use of EL5 would 2 essentially eliminate a lot of competition as 3 well as eliminate your basic PAR30 families, 4 PAR20 families, 130 volt designs and all other 5 PAR38 lamp designs. 6 This would essentially nearly 7 destroy this entire category of lamps if such 8 a level were chosen, and it is very 9 questionable whether it would be economically 10 viable because it would be potentially 11 expensive; it would be economically viable 12 probably for some customers, but for the vast 13 range of customers, I think the economics may 14 not work in all cases, especially residential 15 cases that tend to have much higher price 16 markups. 17 MR. BROOKMAN: Thank you. 18 Additional comments on IRL 19 efficacy levels? Conan described the two 20 issues for which the department seeks comment. 21 Yes, please, and your name. 22 MR. BOLING: Yes, I'd like to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 107 1 address these TSL levels, the max possible. 2 MR. BROOKMAN: Please say your

3 name.

4 MR. BOLING: Pardon me? 5 MR. BROOKMAN: Please say your

6 name. 7 MR. BOLING: Oh, Boling, Norman 8 Boling, ADLT.

9 It's true that there are none of 10 these products with reflectors with these 11 levels above TSL5 that you can buy in the 12 marketplace, but if you go out into the 13 marketplace and you buy a particular IRL lamp 14 and you take the burner out of that lamp and 15 replace it with a double-ended burner and if 16 you replace it with the best coatings that 17 could be made, which are already being made in 18 manufacture on single-ended lamps, you can not 19 only get well above that TSL5, which if I take 20 a 60 watt lamp, the coefficient is about 6.2 21 in front of that; you could take that so that 22 coefficient is a nine. I mean you are so far

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 108 1 above it simply by taking the reflectors that 2 are in the marketplace today, pulling the 3 burner out of them, putting another burner in, 4 the double-ended burner with the most advanced 5 coatings. You can far surpass your point and 6 what was in the analysis, the TSL5 level. 7 The TSL5 level is almost down in 8 the dirt for this, and it involves nothing 9 more than using reflectors you have and taking 10 one burner out and putting another one in.

11 MR. BROOKMAN: Pam Horner.

12 MS. HORNER: Pam Horner. 13 I have a question. What is the 14 lamp life? 15 MR. BOLING: Well, we could go 16 through in detail with that. That's obviously 17 you can get 50 LPW if you have a sort enough 18 life. Let me take a moment to do that, if I 19 might. 20 MS. HORNER: And how have you 21 tested it? 22 MR. BOLING: I'm sorry?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 109 1 MS. HORNER: What is the lamp life 2 and how have you tested it? 3 MR. BOLING: We tested it by 4 actual life. We tested the handbooks. If you 5 take a double-ended burner, you can go find 6 them in products in the United States now, and 7 you take a two material coating out of that, 8 and you put it in your photometer. You'll get 9 about 24, 25 LPW. Okay? 10 If you take -- 11 MS. HORNER: And the life is? 12 MR. BOLING: About 3,000 hours. 13 Good point, and a certain resistance. The 14 life is on the box, and you can measure the 15 resistance to find out what the temperature of 16 the filament is. So you can stick with that 17 in doing the analysis when you put the 18 advanced coating on. 19 If you put one of the more 20 advanced coatings on and run it at 120 volts, 21 that will drive the temperature up above the 22 design temperature, and it will drive the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 110 1 efficacy up. But what you'll measure of that 2 is about 37 or 38 LPW versus the 24 or 25 that 3 you get in the product that you buy out of the

4 store. 5 Now, that's 120 volts. The 6 lifetime of that is going to be down to 1,000 7 hours, whereas you started with a lifetime of 8 about 3,000 hours, which is what you want. So 9 you have to bring the temperature of the 10 filament down to the same resistance you 11 started with by measurement in the product 12 that you got off the shelf, same resistance, 13 same temperature, same lifetime. That brings 14 your LPW to about 32, ballparking. 15 Now, you could put that 32 LPW in 16 a silver reflector. You could put it in an 17 aluminum reflector with different coefficients 18 of reflection out of the thing, but you end up 19 with coefficients much higher than the 6.2. 20 So the lifetime is very important. 21 None of these things you can't get off the 22 shelf where the coating isn't being

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 111 1 manufactured today. 2 MR. BROOKMAN: Thank you. 3 Pam Horner or Greg. Greg. 4 MR. NELSON: Well, I think we're 5 aware of, let's say, the experimental lamps 6 that you're speaking of. Indeed, there's a 7 big difference between what can be done in the 8 laboratory, and we also have seen, let's say, 9 possibilities and are aware of the 3M coating 10 technologies. 11 However, applying that in an 12 industrial, robust way, in a way that will be 13 integrated into a PAR lamp environment. We 14 see also in order to achieve, let's say, an 15 economically viable lifetime to pay for those 16 advance coatings for the end user that you 17 really need to maintain lifetimes, let's say, 18 in excess of 4,000 hours. 19 So there are possibly some 20 interesting opportunities, but it's far from 21 let's say a given that there's a product 22 existing on which we can base a standard level

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

2 There's also concerns about that. 3 Indeed, most of these coating technologies are 4 tied to a single proprietary company, and 5 there's issues then for the industry partners. 6 MR. BROOKMAN: Your name again. 7 Go ahead. Yes, you, please. 8 MR. BOLING: Yes, I don't think it 9 is proprietary. 10 MR. BROOKMAN: Please say your 11 name again. 12 MR. BOLING: Norm Boling. 13 MR. BROOKMAN: Thank you. 14 MR. BOLING: I don't think it's 15 proprietary. You can analyze one of these 16 things, find the materials, find the designs.

17 Those are not. 18 And I agree with you completely, 19 have dealt long enough with the lighting 20 companies, know how difficult it is to take 21 these things from the laboratory and put them 22 in production. And the higher you get on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 113 1 these IR coatings, the more difficult that 2 becomes. It becomes a nonlinear affair where 3 you have to watch it much more carefully. 4 But to go back to the DOE analysis 5 and looking at the higher levels that one can 6 achieve today in the laboratory, and it's not 7 so far out of the laboratory, like I say, you 8 take something and it's on the shelf today. 9 Simply replace it with a lamp that's being 10 built today with coatings that are being built 11 today and you'll get the kind of efficiencies 12 I'm talking about. 13 But certainly the max technical 14 efficiency, it's much higher than that 6.2 15 level, for example, for the 60 watt lamp. 16 MR. BROOKMAN: Okay. Thank you. 17 So additional comments on these 18 efficacy levels before we move on? Steve

19 Nadel. 20 MR. NADEL: A question, I think, 21 for Greg, just trying to understand. The 22 baseline has a 3,000 hour life. The proposal

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 114 1 here, they analyze the 4,000 HIR for trial 2 standard four. Are your comments as well, 3 depending what you do, you may sacrifice 4 lifetime? Are you saying in any case that it 5 would go below 3,000 hours, or are you saying, 6 gee, it potentially restricts our ability to 7 go higher? that's one question. 8 The second question, you mentioned 9 specifically 6,000 hours. Are there any 10 existing 6,000 hour lamps? Are you proposing 11 a separate category for those or are you 12 proposing to weaken the standard for 13 everything just to allow a success in our lab? 14 MR. NELSON: I'll deal with the 15 second question first. The 6,000 hour lamp 16 does, indeed, exist either as a standard lamp 17 which is the 130 volt operated at 120. I 18 think you'll recognize that, and we discussed 19 that previously. 20 It also exists based on IR 21 technology. With a 6,000 with still a 22 relatively high efficiency, I think existing

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 115 1 lamps in the market would meet, if I'm not 2 mistaken, an EL3. 3 In going to an EL4 and not 4 creating any area for a 6,000 hour to operate, 5 that would eliminate the utility from the

6 market. 7 To your first point which just 8 remind me again so that I get the right point. 9 MR. NADEL: Any of these options, 10 would that drive like below 3,000 hours or are 11 you more concerned about this ability to -- 12 MR. NELSON: Well, okay. Thank 13 you. 14 The DOE, it's interesting, did not 15 specifically address the lamp life in setting 16 the lumen standards or the lumen per watt 17 efficacy standards, which does open the 18 possibility to go with, let's say, a lower 19 cost, lower performing lamp at a very short 20 lifetime and still meet the technical standard 21 definitions. 22 We don't support that approach,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 116 1 but we could not rule out that imported lamps 2 would go in that direction and still maintain 3 normal halogen technology. 4 What we see driving the higher 5 technology lamps is that if we are going to 6 manufacture an infrared coated lamp with, 7 let's say, specialized reflectors or super 8 coatings as was discussed a minute ago; if 9 we're going to do that and sell it to an end 10 user and expect that end users to have an 11 economically viable situation to purchase that 12 very expensive lamp, that lamp has to have a 13 long lifetime. 14 And today you'll see that in the 15 IR products that are currently sold, which are 16 typically in excess of 4,000 hours, and it's 17 simply to achieve a reasonable cost of 18 ownership for the end user. 19 Now, we could bring the lifetime 20 back down and get even higher efficacy. So, 21 yes, we could take our 4,200 hour products 22 that we have today and make them 3,000 or

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 117 1 2,000 hours. That's very simple technically, 2 and we can get the lumen per watt up. 3 But economically to the end user, 4 that is not a good model because it will 5 result in significantly higher operating 6 expenses. 7 MR. BROOKMAN: Thank you.

8 Steve Rosenstock.

9 MR. ROSENSTOCK: Steve Rosenstock. 10 This conversation just reminded me 11 of the provision in EPACT 2005 for compact 12 fluorescent lamps under that law that all 13 CFLs, whether manufactured or imported, have 14 to have a minimum life of 6,000 hours, I 15 believe. I would say it's a performance 16 standard that was done for compact fluorescent 17 lamps, and I believe it -- I don't know 18 whether it's 5,000 or 6,000, but it's in the 19 EPACT legislation, and that was because of the 20 import -- worries about imports and the like. 21 MR. BROOKMAN: So any additional 22 comments on these efficacy levels before

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 118 1 moving on? We need to keep moving here or we 2 won't get through this. 3 Okay. 4 MR. O'ROURKE: Okay. And after 5 discussing efficacy levels, I'm now going to 6 talk about scaling to product classes that 7 weren't analyzed directly. So we have a few 8 for general service fluorescent lamps and also 9 for incandescent reflector lamps. 10 So looking at general service 11 fluorescent lamps with correlated color 12 temperatures greater than 4,500, this is part 13 of the discussion at the last ANOPR meeting, 14 and the department looked at scaling to the 15 represented product class that we did not 16 analysis, in particular the greater than 17 4,500, and established a separate scaling 18 factor for each efficacy level within each 19 product class. It was not just one broad 20 brush scaling factor for the whole group. It 21 was done efficacy level by efficacy level 22 within the product class.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 119 1 So after looking at the catalogue 2 data from the lamp manufacturers and looking 3 at CCTs and comparing them to the ones less 4 than 4,500 that were analyzed in this 5 analysis, the department found that the NEMA's 6 recommendations were consistent with what we 7 found through the evaluation of the product 8 literature and adopted these efficacy 9 recommendations. They range from 2.6 percent 10 to 7.2 percent. 11 So the department invites comments 12 on the methodology using the scaling efficacy 13 levels from the represented product classes to 14 higher correlated color temperature lamps for 15 general service fluorescent.

16 MR. BROOKMAN: Ed. 17 MR. YANDEK: Yes, we generally 18 think this was done properly. We realize you 19 do not have access to actual, you know, two 20 foot U-shaped data, but we are fine with the 21 approach, and we'll just make some small, 22 minor suggestions in our written comments, as

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 120 1 we always do. 2 MR. BROOKMAN: Have they tapped 3 all of the data they are likely to get at this 4 point?

5 MR. YANDEK: Yes. 6 MR. BROOKMAN: Okay. Steve Nadel. 7 MR. NADEL: Yes, I want to push 8 back on that a little. As has been discussed 9 a lot in this rule making the rated data, the 10 nominal data sometimes has a lot of 11 squishiness to it, and does DOE have access or 12 can DOE get access to the actual data to come 13 up with actual scaling factors?

14 MR. O'ROURKE: We have some access 15 to some limited sets of data. So that was 16 taken into account for some of this, but most 17 of it was off of what was reported for 18 manufacturer's catalogue. 19 MR. NADEL: Okay. Is it possible 20 to get additional data and so we have to rely 21 less on this manufacturer data? That's what 22 you did for establishing the TSL levels, and I

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 121 1 think looking at actual data would be much

2 better. 3 MR. BROOKMAN: It seems as though 4 NEMA is suggesting that maybe you could at 5 least provide some validation, assurance, some 6 sort of -- go ahead. 7 MR. YANDEK: Let me be clear in 8 what we're suggesting. First of all, when 9 Navigant made their manufacturer visits, we 10 shared a great deal, and we showed the basis 11 for our numbers. So that data in a sense has 12 been already taken into account, although we 13 realize it's an awful lot to absorb and

14 understand. 15 Our data is based on day-to-day 16 manufacturing, high volume products. It is 17 not based on just picking a few lamps and go 18 throwing them into some test laboratory. 19 So, Steve, I mean, I understand 20 your concern. It comes up repeatedly, but in 21 this case, I really think what we're going to 22 propose is going to achieve the objectives

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 122 1 that we're all seeking, and I think we ought 2 to just move forward with it. 3 MR. BROOKMAN: Okay. Additional

4 comments? 5 MR. O'ROURKE: I would like to 6 make an additional comment, I guess, Steve. 7 These are taken from less than 4,500, which in 8 an analysis we are using compliance report 9 data. So since that's based on compliance 10 report data, this is going to be scaled from 11 that. So in some sense it is based on 12 compliance report data and not just the rated

13 value. 14 MR. BROOKMAN: Okay. Thank you, 15 Conan. Okay? 16 MR. O'ROURKE: Okay. Looking for 17 U-shaped lamps, in particular going for this 18 category is less than 4,500. The department 19 used the manufacturer's catalogue to develop 20 the efficacy levels for the U-shaped with the 21 similar technologies as the four foot medium 22 bipin.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 123 1 We then used also compliance 2 report data to establish what the efficacy 3 difference would be, but in many cases there 4 weren't compliance report data at every 5 efficacy level. So we had to try and fill in 6 the gaps and try to use the same scaling from 7 the four foot medium bipin lamps to fill in 8 the gap. So that was how we established the 9 existing efficacy levels for U-shaped. 10 The range ranged from 5.6 percent 11 to 7.7 percent. So the department invites 12 comments on the methodology used for scaling 13 efficacy levels to the represented product 14 classes for two foot U-shaped lamps.

15 MR. BROOKMAN: Joe. 16 MR. HOWLEY: As stated before, we 17 believe that the four foot lamp level should 18 be 83 lumens per watt and the U-shaped should 19 be 76. I note this is about an eight percent 20 efficiency reduction. In the catalogues 21 apparently when you did this analysis it was 22 5.6 to 7.7. So it's close to that same range.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 124 1 I think when you're looking at actual data 2 there is a little more complexity in building 3 a U-shaped lamp as you bend it, and there's 4 foster issues in the bend and different 5 things. You may get a little more variability 6 and need a little more tolerance variation in 7 the U-shaped lamps versus the four foot 8 straight lamps, which might account for a 9 proposal of about eight percent versus the 7.7 10 percent. It's very close though. 11 MR. BROOKMAN: Okay. Thank you. 12 Additional comments? Andrew. 13 MR. deLASKI: More of a general 14 comment about scaling. How did you choose -- 15 if you could remind me, how did you choose to 16 scale for these particular product classes 17 other than to analyze them directly? Why are 18 we scaling for these particular product

19 classes? 20 MR. O'ROURKE: Because they were 21 not analyzed directly within the analysis. So 22 the attempt was made by using data that you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 125 1 had for the covered products and the knowledge 2 that you have for these other products that 3 were not covered in trying to bridge that gap 4 through scaling of what the performance should 5 be for that other product class. 6 MR. deLASKI: Right, but take me 7 back a couple of steps because at some point 8 there was a decision by the department to not 9 analyze these particular products directly, 10 but to do scaling, and if you could remind me, 11 you know, how was that decision made that 12 certain products would be -- you know, rather 13 than analyzing them directly that there was a 14 need to do them indirectly in this method? 15 MS. GUPTA: Mimi Gupta. 16 The product classes that we chose 17 to analyze directly were based on high market 18 shares, and the ones that have generally low 19 market shares we chose to scale to. As it 20 states in the NOPR, we made this decision 21 primarily due to time and resource 22 constraints.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 126 1 MR. deLASKI: Okay. Thanks. 2 Just one follow-up question if you 3 don't mind, Doug. 4 Do you remember, Mimi, what the 5 market shares were for these products roughly 6 compared to the overall GSFL market? Or maybe

7 the manufacturers could answer. 8 MS. GUPTA: Yes, they probably -- 9 MR. deLASKI: Was it one percent, 10 two percent, five percent? 11 MS. GUPTA: I think for U-shaped 12 I'll have to check on this, but it's in the 13 single percentages. 14 MR. BROOKMAN: Maybe you could 15 take a peek at the break and see if you could 16 find it. 17 MS. GUPTA: Yes, I'll take a peek

18 at the break. 19 For CCT, DOE doesn't have set 20 numbers in terms of what percentage of lamps 21 have high CCT lamps or have high CCT, but if 22 manufacturers have those percentages, that

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 127 1 would be extremely helpful. 2 MR. BROOKMAN: Okay. So let's 3 keep pressing on here. 4 MR. O'ROURKE: Okay. Those are 5 the two discussions for general service 6 fluorescent lamps; three for incandescent 7 reflector lamps are covering the modified 8 spectrum. We'll start off with looking -- the 9 department has identified several incandescent 10 reflector lamps with modified spectrums and 11 compared their performance to standard 12 spectrum lamps. The department assessed the 13 efficacy differences between the standard and 14 modified levels by measuring their efficacies 15 of commercially available lamps. 16 By analyzing this data, the 17 department established that a reduction of 18 about 19 percent from the standard spectrum 19 would be appropriate for modified spectrum 20 incandescent reflector lamps. 21 The department invites comments on 22 the methodology used to scale the efficacy

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 128 1 levels from the represented product classes to 2 modified spectrum lamps. 3 MR. BROOKMAN: Yes, Joe. 4 MR. HOWLEY: In general, the 5 industry uses a 20 to 25 percent reduction in 6 lumens for these types of lamps. There is a 7 lot of variability depending on the 8 technology. We note that the department is 9 proposing 19 percent, which is close to these 10 typical levels. Obviously, the 19 percent 11 coupled with the TSL4 proposal is a little bit 12 concerning because the proposal is for such a 13 high level, and then this is proposing sort of 14 the minimum, kind of a minimum allowance. 15 So taken together, it represents 16 an extremely tough standard, but the approach 17 that you use to generate the 19 percent 18 standard we think does get you close to what 19 is necessary. 20 MR. O'ROURKE: I'd just like to 21 follow up on Joe's comment. We did notice 22 that for general service incandescent lamps

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 129 1 that 25 percent was more typical, but once you 2 went to halogen and HIR, those numbers are not 3 as high, as much of a reduction for those lamp 4 types. 5 MR. HOWLEY: Yes, I would 6 typically agree they tend to be more at the 7 lower end of that range. 8 MR. BROOKMAN: Okay. Thanks, Joe. 9 Okay. Additional? Steve Nadel. 10 MR. NADEL: A question. Was there 11 any difference in the data for normal halogen 12 and HIR? If you were to just look at HIR 13 would the scaling factor change? 14 MR. O'ROURKE: Yes, this range was 15 used between HIR and the halogens that we 16 looked at that did meet the definition. So, 17 yes, there was some slight differences between 18 what you got with the HIR. There was limited 19 product that we could actually obtain on the 20 market to do a large number of them. The 21 majority of the testing was with the HIR 22 technology.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 130 1 MR. BROOKMAN: Andrew. 2 MR. deLASKI: You say in your 3 third bullet that DOE establish a reduction of 4 19 percent. We determined that that would be 5 appropriate by analyzing the test data, but 6 what I don't see here is, you know, what you 7 did to analyze your test data. How did you 8 determine that 19 percent is the right number? 9 MR. O'ROURKE: We actually tested 10 the two lamps. We have a side-by-side lamp. 11 You have a standard spectrum and you have a 12 modified spectrum, and you look at the 13 efficacy difference coming out of the lamp 14 from the standard to the modified, and on 15 average it was about 19 percent reduction. 16 MR. deLASKI: So it's an average.

17 MR. O'ROURKE: Yes. 18 MR. deLASKI: It's an average of a 19 different modified -- 20 MR. O'ROURKE: What we tested, 21 yes. 22 MR. deLASKI: Average of what you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 131 1 tested.

2 MR. O'ROURKE: Yes. 3 MR. deLASKI: And how many 4 different approaches for achieving the 5 modified spectrum results did you test? 6 MR. O'ROURKE: We tested eight for 7 the HIR, for the halogen and one for the HIR 8 that we could get. I will comment that many 9 of the ones that were marketed also did not 10 meet the definition of modified spectrum. 11 Some of them were not below the black body 12 locus, as specified, and some of them were not 13 more than four step -- we count them -- steps 14 away from the clear lamp. Therefore, even 15 though they may be marketed as some type of 16 modified spectrum, they didn't actually meet 17 the definition. 18 MR. deLASKI: But the eight that 19 you took an average of --

20 MR. O'ROURKE: Were ones that met 21 the definition, correct.

22 MR. BROOKMAN: Amanda.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 132 1 MS. STEVENS: Amanda. 2 Just a follow-up question to that 3 because I noticed in the appendix chapter that 4 actually only two lamps met the definition;

5 was that correct?

6 MR. O'ROURKE: That's correct. 7 MS. STEVENS: Okay. So then in 8 the 19 percent it was for both lamps.

9 MR. O'ROURKE: That's correct. 10 MS. STEVENS: Are you guys 11 confident that those two are representative of 12 all the lamps? I mean, I'm just trying to get

13 a sense based on -- 14 MR. O'ROURKE: I mean, we could 15 look at our test data and see that many of the 16 ones that did not meet it, I mean, there was a 17 small margin that they potentially could be 18 close to the limit, but the data that we had 19 did not meet the definition. 20 MS. STEVENS: Okay, and just one 21 follow-up question to that. I guess kind of 22 following up on this issue that a lot of lamps

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 133 1 are labeled as modified spectrum but don't 2 actually meet the criteria, I'm just wondering 3 whether, you know, implications for the 4 standard and whether that would be a loophole 5 if there's ones out there that are --

6 MR. O'ROURKE: I'm not sure what 7 the compliance data will be required for this 8 to show whether they do meet or not meet the 9 modified spectrum definition. 10 MR. BROOKMAN: Greg. 11 MR. NELSON: I can maybe give a 12 view on that as I understand it. From the 13 EISA, which is the definition of modified 14 spectrum, that comes in 2012, and at that time 15 if you're selling a lamp that is defined under 16 the energy standards through a modified 17 spectrum, I would expect that there has to be 18 certain labeling.

19 At the moment these are marketed 20 under various trade names, Natural Light for 21 Philips, I think Reveal for GE, and they are 22 not claimed as modified spectrum lamps

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 134 1 according to that definition. 2 MR. BROOKMAN: Okay. Thank you. 3 MR. O'ROURKE: The next scaling is 4 looking at lamps with smaller diameters. 5 Smaller diameters incandescent reflector lamps 6 have inherently lower optical efficiencies 7 than the larger diameters. So to determine 8 the appropriate scaling for less than or equal 9 to 2.5 inches, the department examined 10 inherent efficacy differences between the 11 PAR20, PAR30 and PAR38 in looking at the 12 catalogue data for each of those lamp types 13 for several lamp manufacturers. 14 In the analysis, the department 15 found that the reduction of efficacy caused by 16 the reduction of the lamp diameter was 17 approximately 12 percent for incandescent 18 reflector lamps. 19 The department invites comments on 20 the methodologies used to scale these efficacy 21 levels from the represented product class to 22 the smaller diameter lamps.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 135 1 MR. BROOKMAN: Greg. 2 MR. NELSON: Greg Nelson. 3 First of all, we want to thank 4 Navigant and the DOE for recognizing this 5 issue, which was brought up in the ANOPR 6 stage, and we believe that they did apply the 7 correct optical discount to the PAR 20 versus 8 the PAR 30 and 38 because the PAR 20 is 9 inherently a less efficient optical system due 10 to its size. 11 However, at the time that those 12 comments were made to the ANOPR, we did not 13 envision that such a high baseline level as 14 TSL4, which is the equivalent of the CSL3, 15 would be chosen. In fact, the choice of TSL4 16 inherently the only way to reach that will be 17 through a double-ended IR coated halogen 18 product. 19 Currently today there is no 20 infrared coated version of a PAR 20 lamp, and 21 there's a good reason for that, because the 22 double-ended IR geometry that's needed for the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 136 1 efficiency levels that have been targeted does 2 not fit into a PAR 20. It's significantly 3 longer than the burners, the capsules that are 4 used in the less efficient products. 5 So by choosing a baseline TSL4 and 6 then only creating a 12 percent optical 7 discount, the rulemaking will effectively 8 eliminate PAR 20 from the market. We're 9 really wondering how we could manufacture a 10 PAR 20 lamp under the conditions that are set

11 forth. 12 We are still investigating that. 13 We were surprised by the NOPR, how it came 14 out, and we will evaluate other technical 15 options, but at the moment we don't have a 16 solution. We'll come back more in our written 17 comments surrounding options for the Part 20. 18 MR. BROOKMAN: Okay. Thank you. 19 Additional comments? Yes, Pam.

20 MS. HORNER: Pam Horner. 21 I'd just like to add one factoid 22 to this, and that is that in the PAR 20

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 137 1 category roughly 50 percent of the market is 2 with consumers, not commercial. 3 MR. BROOKMAN: Okay. Thank you.

4 Steve Nadel. 5 MR. NADEL: A question for Greg. 6 You mentioned that the double-ended won't fit 7 into PAR20. As I recall there's several 8 different lengths of PAR20s depending on 9 wattage. Does that apply to all of them or 10 just to the lower wattage PAR20s? 11 MR. NELSON: Sorry. There's only 12 one standard for PAR20 which is regulated by 13 ANSI and which we currently stay within the 14 outline. I think you might be referring to 15 PAR30 where there are two different versions. 16 There's a PAR30 version, which is 17 predominantly used in the professional market, 18 and there's a PAR30 version which also in 19 professional is more typically used in 20 consumer, but for PAR20 there's only one. 21 MR. deLASKI: So even like the 75s 22 and the 50 watt PAR20s are the same length?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 138 1 MR. NELSON: Yes, and those are 2 based all on a single ended, traditional 3 halogen burner technology. So to put the high 4 performing double-ended in creates some 5 issues. 6 MR. O'ROURKE: Okay. The last 7 scaling I have to discuss for incandescent 8 reflector lamps is the higher voltage. As 9 discussed, lamps rated at the 130 volts follow 10 different test procedures because there's 11 different input voltages than the 120. The 12 department has derived the efficacy scaling 13 factor which will result in the equivalent 14 performance of both classes of incandescent 15 reflector lamps when operated under the same 16 voltage condition. 17 The department determined that the 18 lamp operating at 130 volts would be 15 19 percent more efficacious than the lamp 20 operating the similar wattage at 120 volts. 21 So the department invites comments on the 22 methodology used to scale the efficacy levels

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 139 1 from the represented product classes to the 2 higher voltage lamps. 3 MR. BROOKMAN: Comments? Greg. 4 MR. NELSON: Following up on my 5 earlier comments, I think this comes to the 6 heart of the issue, and while the third bullet 7 point that you put up there is true, it is 8 also necessarily incomplete in that I would 9 additionally add that the resulting lamp will 10 have half of the lifetime by operating under 11 those conditions, and that is not an 12 economically viable situation that would 13 satisfy users who legitimately need 130 volt 14 lamps. 15 If I compare a lamp that's 16 designed for same lifetime at 120 and 130 volt 17 and same wattage, a 130 volt lamp is 18 necessarily less efficient by virtue of the 19 coil design. So we all know that low voltage 20 halogen has an inherent efficiency advantage, 21 so 12 volts, but that scaling continues. It's 22 not a big difference between 120 and 130, but

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 140 1 actually to achieve the same efficacy target 2 and same lifetime for a 120 and a 130 volt 3 version, 130 would be at a disadvantage. 4 So by setting the 130 volt 5 requirement even 15 percent higher than the 6 already difficult 120 volt standard TSL4, this 7 will completely eliminate 130 volt lamps from 8 the market. We don't see an opportunity to 9 meet that standard at a reasonable lifetime. 10 MR. BROOKMAN: Okay. Thank you.

11 Steve Rosenstock. 12 MR. ROSENSTOCK: Again, Steve

13 Rosenstock at EEI. 14 Again, just to reiterate, I know 15 you might be testing at 130 volts, but 16 typically throughout especially commercial 17 applications their typical operating voltage 18 will be nowhere near 130. It will be 120 plus 19 or minus five percent. 20 MR. BROOKMAN: Okay. Thanks,

21 Steve. 22 Additional comments on this side?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 141 1 I suggest we're due for a break. 2 MR. O'ROURKE: The last one is 3 just are there any general comments in 4 engineering analysis section. 5 MR. BROOKMAN: We covered this 6 pretty completely as we've been going along. 7 It's now by the clock up there on 8 the wall and by my watch 11:15. I'm going to 9 suggest we take a break now for 15 minutes. 10 It's very likely we're not going 11 to stop for lunch right at noon. We will 12 probably work until, say, 12:30 or so, in that 13 general range. If you need to get a piece of 14 fruit or something to tide you over, please do

15 so. 16 You need to have your badge on if 17 you're walking around inside the Forrestal 18 building, and there's a coffee shop for those 19 of you who don't know one floor below us.

20 There are restrooms on both ends. 21 We're not breaking for lunch yet. 22 We're just taking a coffee break.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 142 1 Restrooms at both ends of the 2 hall. The elevator bank which you already 3 found, you can go down one floor and there's a 4 coffee shop just beneath us on the other side

5 of the hall. 6 We've made really good progress. 7 The quality of the comments have been really 8 good, and we're getting a lot done here. So 9 we're going to press on with that, but we'll

10 resume at 11:30. 11 Thank you. 12 (Whereupon, the foregoing matter went off the

13 record at 11:14 a.m. and resumed 14 at 11:31 a.m.) 15 MR. BROOKMAN: Okay. One 16 housekeeping announcement. If you have not 17 given Brenda a business card, please do so. 18 She wants to have a complete listing of all 19 who have attended here, and they make a Xerox 20 copy that they can hand out at the end of the 21 day. So if you haven't handed in a business 22 card, she's missing a few of them for some

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 143 1 reason. Please give the registration desk or 2 Brenda your business card. 3 Okay. Now, so let's proceed. 4 We're moving on, and Diana Burk. 5 MS. BURK: Hello. My name is 6 Diana Burk, and I'm going to be talking about 7 the life cycle cost and payback period 8 analyses. 9 The purpose of the life cycle cost 10 and payback period analysis is to analyze the 11 economic impacts of an energy conservation 12 standard from the perspective of a consumer. 13 The life cycle cost, or LCC, is 14 basically the cost of owning and operating a 15 piece of equipment over its lifetime. It 16 includes both the installed first cost and the 17 operating expenses. 18 For the lamps analysis, DOE 19 calculated the life cycle cost for all 20 baseline lamps and their higher efficiency 21 alternatives in order to analyze the impacts 22 of the energy conservation standards of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 144 1 consumers using those baseline lamps. 2 DOE also analyzed the life cycle 3 costs for various events that could trigger 4 the purchase of the lamp. For example, if the 5 lamp fails. Somebody would have to purchase a 6 lamp or if a ballast fails. Somebody might 7 purchase a lamp. 8 DOE analyzed each product class in 9 its relevant sector. For example, in the four 10 foot medium bipin product class, DOE analyzed 11 it in both the commercial and residential 12 sectors. In the NOPR you might see a range of 13 life cycle cost results at any given 14 efficiency level. This is primarily because 15 there could be multiple pathways to save 16 energy at any given efficiency level. 17 For example, a consumer with a 32 18 watt T8 lamp in the baseline at efficiency 19 level five could either purchase a reduced 20 wattage, 28 watt lamp, or they could purchase 21 a higher efficiency 32 watt lamp and use it on 22 a lower ballast factor ballast and save energy

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 145 1 while maintaining light output. 2 So there are various reasons that 3 a consumer could purchase a lamp, and these 4 are analyzed in the life cycle cost analysis. 5 For incandescent reflector lamps, the reasons 6 are quite simple. A lamp could fail and it is 7 replaced or there could be new construction or 8 renovation. The lamp has to be purchased for 9 a new building. 10 For fluorescent lamps, there are 11 additional events that could cause the 12 purchase of a fluorescent lamp. The lamp 13 failure event is, of course, one. 14 Standards induced retrofit event 15 is an important event. Basically in this 16 event an increase in the efficiency standard 17 to, for example, efficiency level four or 18 five, could prompt an end user to retrofit 19 their lamp and ballast system where in the 20 base case they would only purchase a lamp. 21 This event is particularly salient 22 for T12 baseline lamps and for efficiency

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 146 1 levels four and five when those lamps are no 2 longer available. 3 Ballast failure event is another 4 important event. This event occurs when an 5 existing ballast fails. In the standards 6 case, they purchase a new ballast and a higher 7 efficiency lamp. Ballast retrofit is another 8 important event. In this case consumers who 9 are going to voluntarily retrofit their 10 existing lamp and ballast do so, and in the 11 standards case they do so with a higher 12 efficiency lamp and may purchase a lower

13 ballast factor ballast. 14 New construction and renovation 15 event is also an important event. In this 16 case DOE assumes that all new fixture 17 installations -- that the fixtures spacing 18 within the building can be changed. So if a 19 higher efficiency system has ten percent less 20 light output, the consumer would merely 21 install slightly more systems in their 22 building to maintain light output from the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 147 1 baseline system. 2 This slide discusses some of the 3 key inputs to the life cycle cost analysis. 4 Consumer product price is a key input. It's 5 achieved DOE applies the consumer product 6 price by applying a discount to manufacturer 7 catalogue pricing. 8 Sales tax is another important 9 input. It's derived from the Sales Tax 10 Clearinghouse, and it varies by region of the 11 country. 12 Installation costs are derived

13 from two factors: labor rates and labor 14 times. Labor rates are derived from RS Means 15 and the U.S. Bureau of Labor Statistics. 16 Labor times are from the 2000 Ballast Rule and

17 the RS Means. 18 We should note that certain 19 ballast installation times, in particular for 20 the new construction and retrofit event, are 21 adjusted upward to account for the 22 installation of a luminaire disconnect as

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 148 1 required by the 2005 national electric code. 2 Disposal costs are also included, 3 but only for fluorescent lamps in the 4 commercial and industrial sector. This is 5 basically the cost of recycling a fluorescent 6 lamp. 7 Annual operating hours is another 8 important input. These are determined by 9 associating building specific operating hours 10 data, for example, a retail mall or something 11 like that, and that's derived from the U.S. 12 lighting market characterization with regional 13 distributions of those building types, which 14 is gotten from the Energy Information 15 Administration. 16 Product energy consumption rate is 17 another important input to the life cycle cost 18 analysis. The energy consumption rate is 19 derived from manufacturer literature. It 20 should be important to note that for the 21 fluorescent lamp analysis, DOE uses system 22 powers, and these system powers can change

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 149 1 depending on the lamp wattage and the ballast 2 factor of the system. 3 Discount rates are another 4 important input. These are based on the 5 finance costs of raising funds to purchase 6 products and discount rates used are shown

7 below. 8 Electricity prices are based on 9 the 2006 EIA Form 861 data, and electricity 10 price trends are based on EIA's annual energy

11 outlook. 12 One of the issues that DOE 13 encountered in the life cycle cost analysis is 14 the fluorescent ballast lifetime. To 15 determine this lifetime, DOE evaluated several 16 different data sources. These include 17 manufacturer literature on ballast lifetime, 18 historical sales data on ballasts and measure 19 life reports. 20 DOE chose to use measure life 21 reports because DOE felt that these reports 22 represented the true service life of a ballast

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 150 1 in the field. 2 Manufacturer literature on ballast 3 lifetime could give the number of hours a 4 ballast can operate before it fails. However, 5 many ballasts could be replaced in the field 6 before it fails. Deriving ballast lifetime 7 from historical sales data basically required 8 too many complicated assumptions. So DOE 9 chose to use measure life reports. 10 In the commercial sector, DOE 11 found several measure life reports. One 12 stated that the ballast life was 13 years. 13 Another stated it was 15 years. Therefore, 14 DOE used the ballast lifetime of 14.2 years, 15 or 49,054 hours, which was the average used in

16 the 2000 ballast rule. 17 In the residential sector 18 analysis, DOE chose to use a ballast lifetime 19 of 15 years, and this was also based on 20 measure life reports. 21 MR. ROSENSTOCK: Question. 22 MR. BROOKMAN: Yes, please, Steve.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 151 1 MR. ROSENSTOCK: Steve Rosenstock,

2 EEI.

3 As I recall for the 2000 rule the 4 ballast lifetime was based on I'll say 5 standard magnetic ballasts, and now with the 6 current technology being primarily electronic 7 in the commercial sector, wouldn't those 8 lifetimes be longer?

9 MS. BURK: The ballast rule 10 analyzed both magnetic and electronic 11 ballasts, and did use that lifetime for both. 12 As for whether the ballast lifetime would be 13 longer, manufacturer literature states that 14 ballasts can live 50,000 or 60,000 hours. 15 However, DOE chose to use measure 16 life reports because it felt like to use 17 50,000 or 60,000 hours it would not represent 18 the true ballast life, the true life of a 19 ballast in the field. For example, in the 20 residential sector, 50,000 hour ballast with 21 the average operating hours of 789 hours per 22 year would live for 63 years, and we did not

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 152 1 feel that was appropriate.

2 MR. BROOKMAN: Pekka.

3 MR. HAKKARAINEN: Yes. The NEMA 4 ballast -- Pekka Hakkarainen with Lutron 5 Electronics.

6 NEMA ballast manufacturers have 7 not had a chance to analyze these data at this 8 point. We will provide more information in 9 written comments, but just a couple of quick 10 comments here is ballast manufacturers don't 11 typically rate ballasts in number of years. 12 So looking at how the 14.2 years was arrived 13 at, for instance, commercial sector gives 14 approximately a little less than 3,500 hours 15 per year operating time. That may be 16 appropriate for some applications, commercial 17 applications, but we have some concern that it 18 may not be the right value for some other 19 commercial applications. 20 So we'll try to provide some 21 detail on that.

22 MR. BROOKMAN: Do the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 153 1 manufacturers rate the ballast by hours? 2 MR. HAKKARAINEN: Typically. 3 MR. BROOKMAN: And can you say 4 generally what that range is now? 5 MR. HAKKARAINEN: Well, the 50,000 6 hours that's quoted here is probably common. 7 MR. BROOKMAN: Okay.

8 MR. HAKKARAINEN: But I cannot 9 speak for all of the manufacturers at this 10 time. 11 MR. BROOKMAN: Okay. Then I know 12 the department will appreciate your detailed 13 comments in writing.

14 MR. HAKKARAINEN: Yes. We'll 15 provide that later.

16 MR. BROOKMAN: Steve Nadel. 17 MR. NADEL: Two things. One, you 18 mentioned that you used two specific measure 19 life reports. Do you have citations for

20 those? 21 MS. BURK: Yes, they're in the 22 NOPR and in the TSD. I can't remember off the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 154 1 top of my head. 2 MR. NADEL: I don't recall seeing 3 them in the NOPR. Maybe they are in the TSD. 4 That just came out. 5 MR. BROOKMAN: Maybe we can dig 6 for those and we'll get you that citation.

7 Can someone over there look for

8 that? 9 MR. NADEL: And what year were 10 they from? Did they capture electronic 11 ballast or were they basically a magnetic

12 ballast? 13 MS. BURK: From what I recall, I 14 think one of them was from 2005. So I believe 15 it does capture electronic ballast, but again, 16 I'll have to look at that citation.

17 MR. NADEL: Yes. I would comment 18 for the record even in 2005 the vast majority 19 of ballasts out there are still going to be 20 magnetic. 21 Another thing going back to your 22 earlier slide where you talked about

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 155 1 electricity prices being for 2006 and 2 electricity price trends being from AEO 2008. 3 I'm assuming both of these will be updated 4 for the final rule like I know DOE just 5 released the 2007 electricity price data, DOE 6 meaning EIA has. 7 MS. BURK: Yes. We will update 8 with any current sources for that final rule. 9 MR. BROOKMAN: Okay. We're going 10 to keep moving ahead here. 11 MS. BURK: Another issue DOE 12 encountered was the residential fluorescent 13 lamp lifetime. In the residential sector 14 fluorescent lamp analysis DOE analyzed the 15 life cycle cost analysis with both average and 16 high operating hours. 17 Under average operating hours, 18 there are 789 hours per year. DOE found that 19 the lamp lifetime would be limited to 15 years 20 due to a ballast or fixture replacement. You 21 take a lamp lifetime. The baseline lamp life 22 is 15,000 hours. Fifteen thousand hours

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 156 1 divided by the average operating hours is 2 around 19 years, and so for this event DOE 3 assumed that there would be no lamp failure in 4 the residential sector. 5 In order to model a lamp failure 6 in the residential sector, DOE used high 7 operating hours, 1,210 hours per year, and 8 this would result in a lamp lifetime of 12.5 9 years for that 15,000 hour lamp. 10 In this case, the replacement lamp 11 would have on average 2.5 years of life left 12 before the ballast or fixture would be 13 replaced, and we invite comments on both 14 ballast lifetimes and lamp lifetimes used. 15 MR. BROOKMAN: Additional comments

16 on those? Steve Rosenstock. 17 MR. ROSENSTOCK: Steve Rosenstock,

18 EEI. 19 I'm just kind of curious how you 20 accounted for lighting diversity in the 21 residential sector when looking at these

22 numbers.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 157 1 MS. BURK: What do you mean by 2 "lighting diversity"? 3 MR. ROSENSTOCK: Well, there might 4 be like 20 lighting fixtures in a home, but 5 only a few of them are going to be operating 6 at the same time. So the diversity of usage, 7 and two or three hours per day, even the 8 residential sector, both are -- well, two 9 hours might be not as bad, but you know, three 10 hours is definitely kind of a higher usage 11 pattern in the residential sector. 12 MS. BURK: Right. In the life 13 cycle cost analysis, DOE used information from 14 the lighting market characterization, which 15 gave information on the average number of 16 operating hours by room type and by building 17 type, and in its life cycle cost analysis, DOE 18 performed a Monte Carlo simulation, which uses 19 those operating hours. 20 MR. ROSENSTOCK: Thank you. 21 MR. BROOKMAN: Additional? Yes,

22 Steve Nadel.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 158 1 MR. NADEL: Yes. A couple of 2 questions. What proportions do you assume of 3 customers where the high operating hour life 4 versus the standard operating life?

5 MS. BURK: We assume that of four 6 foot medium bipin lamp shipments, 7 approximately two percent would undergo a lamp 8 failure, would be in the high operating hours. 9 MR. NADEL: So two percent of 10 residential or two percent of total? 11 MS. BURK: Two percent of four 12 foot medium bipin shipments total. 13 MR. NADEL: Okay, and of those, 14 what percentage are residential? 15 I'm just trying to get the 16 relative proportion of residential 17 assumptions. 18 MS. BURK: Right. Off the top of 19 my head I'm guessing around 12 percent of 20 residential are high operating hours, but I'd

21 have to check that. 22 MR. NADEL: Okay. If you could

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 159 1 and get back to us. It wasn't obvious as we 2 were looking through the data. 3 MS. BURK: Right. We will do

4 that. 5 MR. NADEL: The other thing, just 6 trying to understand, so for the high 7 operating errors, you assume that after 12 and 8 a half years they'll have to replace their 9 lamps, and that that lamp only has a two and a 10 half -- they have to pay the full cost of 11 that, and it only has -- you're only using it 12 for two and a half years. The other ten years 13 is a throw-away.

14 MS. BURK: Yes. 15 MR. NADEL: Okay. That seems 16 fairly extreme. 17 MS. BURK: DOE uses a residual 18 value in its analysis. So even though the 19 consumer is throwing away that lamp, DOE 20 accounts for any residual value that that lamp 21 might have. 22 MR. NADEL: Oh, so DOE -- so I'm

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 160 1 making up a number. If the lamp cost $10 and 2 you only used it for 20 percent of its life 3 roughly speaking, the other 80 percent of the 4 cost of the lamp is credited? 5 MR. BROOKMAN: Mimi, do you want

6 to follow on here? 7 MS. GUPTA: I missed half of the 8 question. So no. We're talking about the 9 residual value in the residential sector? 10 We don't attribute a residual 11 value to the -- when looking at the lamp 12 replacement. We don't attribute a residual 13 value to that replacement lamp. So that 14 replacement lamp has a value of two and a half 15 years. 16 MR. BROOKMAN: The other thing 17 Steve was asking for is the percentage 18 attributable to residential generally, if you

19 knew that. 20 MS. GUPTA: Yes, I think Diana's 21 estimate is correct. I will check. 22 MR. BROOKMAN: She says 12.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 161 1 MS. GUPTA: Twelve percent. I 2 think it's approximately correct. I can't 3 tell you the exact number. It's two percent 4 of all four foot medium bipin shipments and 25 5 percent of four foot medium bipin shipments 6 are residential. So using those calculations, 7 you -- 8 MR. BROOKMAN: And since you've 9 got the microphone there, you are digging for

10 some other --

11 MS. GUPTA: Yes. So --

12 MR. BROOKMAN: -- than the TSD. 13 MS. GUPTA: Sorry. Yes, I was 14 looking through the TSD, but it's so big that 15 I couldn't find it. 16 MR. BROOKMAN: Oh, you haven't 17 found it yet. 18 MS. GUPTA: No, no, no. We found 19 it. We found it in the notice. So regarding 20 the measure life report citations on page 146 21 of the NOPR, Footnote 64 and 65 have measure 22 life report citations.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 162 1 MR. NADEL: Okay. Thank you. 2 But getting back to the question I 3 was asking -- thank you -- getting back to the 4 most recent question, you're basically saying 5 that you pay for the lamp after 12 and a half 6 years, and even though you only get 20 percent 7 of its life, you're paying for the full cost. 8 That assumption seems to drive that result 9 basically. 10 MS. GUPTA: We'd appreciate your 11 comments on that assumption. In general, we 12 make the assumption in the analysis that when 13 a ballast or a fixture is replaced, the lamp 14 is disposed with that ballast or fixture. 15 MR. NADEL: In this case you're 16 saying the fixture gets replaced two and a 17 half years later.

18 MS. GUPTA: That's correct. 19 MR. BROOKMAN: Yes, please. 20 MR. McHUGH: This is similar, but 21 on the other side -- 22 MR. BROOKMAN: Just say your name

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 163 1 again. 2 MR. McHUGH: Yes, Jon McHugh. 3 MR. BROOKMAN: Thank you. 4 MR. McHUGH: Mimi, so when you're 5 looking at the cost effectiveness of standards 6 that basically would eliminate the T12 lamp, 7 in your estimate of the cost, is what you're 8 estimating that if the standards required a 9 lamp change that the ballast would be replaced 10 potentially two and a half years early as 11 compared to the situation of where there was 12 no standard requirement prohibiting T12 lamps, 13 or are you looking at the total cost of that 14 ballast replacement to satisfy the lamp? 15 The question I'm asking is how are 16 you dealing with the residual value of that 17 T12 magnetic ballast. 18 MS. GUPTA: So in the residential, 19 high operating hour analysis, when looking at 20 the lamp replacement event, we assume that the 21 ballast has two and a half years of life left 22 from the beginning of the analysis period, and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 164 1 our analysis period last for two and a half 2 years. 3 So there is no residual value 4 given to that ballast, the baseline ballast. 5 Diana, you can correct if I'm incorrect here. 6 When looking at the options that

7 consumers would have under standards where 8 they have to replace their lamp but there 9 isn't a T12 lamp available, they have to 10 purchase a whole new ballast. That T8 11 ballast, since our analysis -- it would be a 12 T8 ballast -- and since our analysis period is 13 two and a half years, at the end of the 14 analysis period that T8 ballast would have 12 15 and a half years of life left, and we account 16 for that residual value for the T8 ballast.

17 Does that make sense? 18 MR. McHUGH: Okay. So when you 19 look at the average usage case where the 20 expectation is that the ballast is what forces 21 the replacement of the lamp, for the vast 22 majority of the residential -- because we're

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 165 1 saying most homes, the ballast is going to 2 fail first. 3 In that situation there is no 4 incremental ballast cost because you're going 5 -- well, there might be the incremental 6 ballast cost between a magnetic ballast and an 7 electronic ballast, but it's not this 8 additional cost associated with the measure, 9 that you're placing it anyway, and so now 10 you're only looking at incremental cost; is 11 that right?

12 MS. GUPTA: That's correct. 13 MR. McHUGH: Okay. Thank you. 14 MR. BROOKMAN: Thanks, Jon. 15 Final comments on this one? Yes, 16 Steve, it's the gentleman behind you. Please 17 use the microphone and say your name. 18 MR. MELNYK: Is this microphone 19 on? Okay. 20 Jack Melnyk. I'm with Southern 21 California Edison. 22 It's kind of an anecdotal comment.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 166 1 I've got six four foot T8 lamps in my 2 kitchen. You know, they're high efficiency 3 lamps, high efficiency programmed start 4 ballast. They've been in for ten or 12 years, 5 but I don't think I got 4,000 hours out of any 6 of those lamps because of the energy 7 conservation in my mind, and so you go in the 8 kitchen for 15 minutes or ten minutes and the 9 switch goes on and off. 10 So the 20,000 hour lamps last 11 three or 4,000 hours, and I guess when I see 12 this I don't know everything that's in the 13 massive report, but I wonder what are the 14 tiers or what's the percentage of shop lights 15 versus, you know, these kitchen boxes of often 16 many linear fluorescents, and I think what I 17 encountered may be more typical, and in fact, 18 it surprised me because I put them in 19 deliberately for long life with that type of 20 system, and the only way I could have gotten 21 the long life as far as I can tell is maybe a 22 couple of occupancy sensors and make sure

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 167 1 they're on 15 minutes or 20 minutes every time 2 the lamps were cycled on. 3 MS. BURK: Sorry. Can you repeat 4 your question? 5 MR. BROOKMAN: I think he wants to 6 know what your primary assumptions are 7 surrounding how you segmented or parsed the 8 lifetimes. 9 MR. MELNYK: Right. I think 10 there's two major tiers. One is the shop 11 lights that sit there forever and maybe 12 typically T12s, but there's a whole lot of 13 kitchens that are T8s with not even programmed 14 start ballasts like I had so that the lamp 15 replacement is much more frequent than may

16 have been modeled. 17 And maybe there's some data from 18 some of the manufacturers that can parse out 19 those tiers and show you what the frequency of 20 lamp replacement -- it might be different than

21 what I see assumed here. 22 MS. BURK: So basically DOE

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 168 1 assumes a baseline system is that shop light 2 ballast with a 40 watt T12 lamp in the life 3 cycle cost analysis. However, in the national 4 impact analysis, DOE also recognizes that not 5 all consumers have that 40 watt T12 shop light 6 ballast. In terms of where the shop lights 7 are in the home and what their operating hours 8 are, DOE uses in the life cycle cost analysis 9 a variety of operating hours, uses operating 10 hours of a system in the basement versus a 11 system in the kitchen where the operating 12 hours would be quite different and the lamp 13 lifetimes would thus vary in those two 14 situations. 15 MR. MELNYK: I guess my question 16 really distills down to is the four foot T12, 17 you know, linear fluorescent shop light the 18 dominant tier of four foot linear fluorescents 19 in residences? Is that the way you modeled 20 your systems? 21 MS. BURK: We don't assign market 22 share percentages in the life cycle cost

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 169 1 analysis, how many are the 40 watt T12. 2 However, we do assign them in the national 3 impact analysis. 4 MR. BROOKMAN: Mimi, please. 5 MS. GUPTA: This is Mimi Gupta. 6 I can refer you to the TSD Chapter 7 8, page 15 has further assumptions regarding 8 lamp lifetime, including what hours start 9 cycle we use, if that might help clear up. 10 MR. BROOKMAN: Okay. Steve Nadel. 11 MR. NADEL: A question probably 12 for the ballast section here. I don't know if 13 you have the answer. What is the typical 14 residential ballast life in hours? Because 15 they give it in years.

16 MR. HAKKARAINEN: I can't answer 17 that question. Pekka Hakkarainen, Lutron 18 Electronics. Not able to answer that 19 question. I just don't have the data right 20 now. We'll get back to you. 21 MR. NADEL: Okay. It would be 22 interesting because effectively what DOE is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 170 1 assuming in this is under normal operating 2 conditions a ballast last just under 12,000 3 hours, and under the high use case the ballast 4 last about 18,000 hours, which strikes me as

5 rather low. 6 MR. BROOKMAN: Mike Rivest. 7 MR. RIVEST: Just to clarify, 8 these measures life studies are talking about 9 the number of years a ballast is in place. It 10 doesn't say that it failed. It may have been 11 replaced for remodeling reasons, a variety of

12 reasons. 13 And those I've seen don't report 14 what the cause of the ballast being replaced 15 was. But just to make, you know, your 16 calculation assumes or you said that it will 17 fail. We're not making that assumption. 18 We're just talking about years in place.

19 MR. BROOKMAN: Jon.20 MR. McHUGH: So this is a follow21 up question. This is Jon McHugh. 22 This is a follow-up question

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 171 1 again. So when there's two and a half years 2 of useful life before the fixture is replaced, 3 the residual value of the ballast is credited. 4 Are the residual value of the lamp also 5 credited? 6 So essentially what we're looking 7 at is just the incremental cost of the lamp 8 and ballast over two and a half years versus 9 the incremental savings over two and a half 10 years? 11 MS. BURK: Yes, the residual value 12 of the lamp is also credited. 13 MR. RIVEST: This is a little 14 complicated because we're mixing two concepts. 15 MS. BURK: Okay. 16 MR. RIVEST: Mike Rivest, Navigant 17 Consulting. 18 There is the base case and then

19 there's the standards case. So we have a 20 situation. This is the paradox. We have a 21 lamp that if you base it on operating hours of 22 a ballast it would last 50, 60 years, and we

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 172 1 have measure life studies that say that 2 luminaires or fixtures are in place for 15. 3 So what we try to do is create a 4 segmentation of the lamps in terms of 5 operating hours to try and determine what 6 portion of those lamps will actually be 7 replaced, you know, because if you went on its 8 face, not a single replacement lamp would be 9 sold in the residential market on its face 10 using averages. 11 So we try to segment that into 12 bins of operating hours, and then we could do 13 that over ten bins. You know, we chose to do 14 average and high operating hours, and we came 15 up with for that scenario two and a half years 16 of remaining life, actually only two and a 17 half years of average useful life from that 18 replacement lamp. 19 That lamp, the assumption is that 20 the next lamp that's purchased is a T8 with 21 the new T8 system. So that lamp has no value. 22 So there is no residual.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 173 1 What Diana is referring to in 2 several circumstances is the analysis period, 3 and what we assume about, to bring everything 4 back to the same common number of years in our 5 analysis periods between the base case and the 6 standards case. Then we take into account the 7 residual values. 8 MR. McHUGH: So the assumption is 9 under the current base case is that --

10 MR. RIVEST: The current base case 11 for the high operating hour lamps. Remember 12 that the dominant assumption here is that 13 there are very few systems in the residential 14 sector actually have a replacement T12 lamp. 15 But for those that have high 16 operating hours, the assumption is that there 17 will be a replacement lamp. That replacement 18 lamp will still have a useful life when the 19 ballast is replaced or the system is replaced, 20 and that residual value is zero because it has 21 no value. From an economic perspective a used 22 T12 lamp has no value.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 174 1 MR. McHUGH: Right, but then you 2 look at the requirement for a T8 lamp and you 3 compare that to what would have occurred, 4 which potentially is that you had another shop 5 ballast and a shop lamp. Then are you 6 calculating that difference? 7 MR. RIVEST: So in the standards 8 case there would be, both the base case and 9 the standards case, the purchase of a ballast 10 and the purchase of a lamp. So that nets out. 11 MR. McHUGH: So you are capturing 12 that incremental cost over that next life span 13 of the next fixture.

14 MR. RIVEST: Yes. 15 MR. McHUGH: Okay. Thank you.

16 MR. RIVEST: To the extent I 17 understand exactly what we're saying. 18 MR. McHUGH: Yes. Thank you. 19 MR. BROOKMAN: So let's keep going

20 here. 21 MS. BURK: All right. Here are 22 the life cycle costs and installed cost

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 175 1 results for the four foot medium bipin system 2 operating in the commercial sector. As you 3 can see, we analyze life cycle cost results 4 for all of the baseline lamps, the 40 watt 5 T12, the 34 watt T12, and the 32 watt T8. 6 We also analyze life cycle cost

7 results for several events. Presented here 8 are three events, the lamp failure, lamp 9 replacement event, the standards induced 10 retrofit event and the ballast failure event. 11 As you can see, consumers can achieve 12 positive life cycle cost savings by purchasing 13 lamps at higher efficiency levels. 14 However, for the standards induced 15 retrofit events, requiring the retrofit of a 16 ballast at efficiency level four and five 17 results in large increased installed costs. 18 In the baseline a consumer with a T12 system 19 would only have to purchase several lamps for 20 $14 where efficiency levels four and five, 21 they would have to purchase a new lamp and 22 ballast system, a T8 system, and install that

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 176 1 system for approximately $64 to $76. 2 These are the life cycle cost 3 results for the residential sector. The top 4 table is the life cycle cost results under 5 average operating hours. We discussed earlier 6 DOE assumes there's no lamp failure event 7 under average operating hours. There's merely 8 a ballast failure event. 9 As you can see, life cycle cost 10 savings are generally positive and at all 11 efficiency levels and are more positive at the 12 higher efficiency levels, and the installed 13 prices are similar at these efficiency levels. 14 However, for those consumers that 15 do experience a lamp failure, those consumers 16 that have high operating hours, we analyze 17 those in the bottom table. You can see here 18 two events, the event 1(a), the lamp failure, 19 lamp replacement event, and event 1(b), lamp 20 failure, lamp and ballast replacement event. 21 As you can see, when the lamp 22 fails and the consumer has to purchase a new

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 177 1 lamp and ballast because an energy 2 conservation standard no longer allows T12 3 lamps to exist at efficiency levels four and 4 five, the installed costs are quite large; the 5 installed cost differences are quite large, 6 going from $4 to 50 to $54. 7 These are the incandescent 8 reflector lamps, life of cost results. As you 9 can see there are three baseline lamps, and 10 DOE analyzed them in both sectors, the 11 commercial and residential sector. 12 In general life cycle cost savings 13 increase with increasing efficiency levels for 14 all of the baseline lamps. There are a couple 15 of instances where life cycle cost savings are 16 negative. However, those occur at efficiency

17 level one. 18 So we invite comment on any other 19 aspects of the life cycle cost analysis.

20 MR. BROOKMAN: Steve Rosenstock. 21 MR. ROSENSTOCK: A quick question. 22 Steve Rosenstock, Edison Electric Institute.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 178 1 For the IRL analysis for 2 residential, what was the lifetime assumed for 3 the IRLs in residential settings? 4 MS. BURK: The lamp lifetime 5 varied by efficiency level, and the baseline 6 lamp was either 2,500 or 3,000 hours, and the 7 lamp lifetime at, for example, efficiency 8 level five was 4,200 hours. 9 Does that answer your question? 10 MR. ROSENSTOCK: Yes, and in this 11 case I'm just again looking at the footnote 12 table. The analysis period is .9 years. So 13 you're assuming -- oh, I'm sorry -- 3.4 years. 14 So you're -- 15 MS. BURK: It varies by sector. 16 The analysis period is based on the baseline 17 lamp life, so the longest lived baseline lamp. 18 So in the commercial sector, operating hours 19 are quite large. I think they're in the range 20 of 3,450 hours or something like that. In the 21 residential sector they're more like 880

22 hours.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 179 1 MR. ROSENSTOCK: So just one lamp 2 lifetime. 3 MS. BURK: Right, right. 4 MR. ROSENSTOCK: Thank you. 5 MR. BROOKMAN: Greg. 6 MR. NELSON: Yes, I'd like to make 7 some comments on the LCC and installed cost

8 results.

9 MR. BROOKMAN: For IRL?

10 MR. NELSON: For IRL.

11 MR. BROOKMAN: Yes. 12 MR. NELSON: We've only looked at 13 this briefly. This is fairly new information, 14 but a few quick reactions we will follow up in 15 written comments, first of all, understanding 16 why the residential cost is significantly 17 lower than the commercial cost. Perhaps 18 installation costs were included in one but 19 not accounted for the homeowner, but we don't 20 see that as representative of what's in the

21 market. 22 MS. BURK: DOE assumed that in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 180 1 residential sector, that there are no 2 installation costs, that the consumer 3 installed the lamp. 4 MR. NELSON: Okay. So perhaps 5 that skews it. 6 MS. BURK: Yes. I think the main 7 reason is because the operating hours are 8 longer in the residential sector and so you 9 have discounting that discounts operating cost 10 savings at the longer -- 11 MR. NELSON: I would expect the 12 operating hours longer in the commercial. 13 MS. BURK: Sorry. The lifetime is 14 longer in the residential. I misspoke. 15 MR. NELSON: Okay. Then so we 16 have to go back and analyze that, and we will 17 comment in writing. There's concern also in 18 terms of, let's say, the multipliers applied 19 going from the base situation to the various 20 energy levels, and if we look at that, the 21 multipliers seem at the very low end of what 22 was maybe considered as input by the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 181 1 manufacturers, and in particular, if I look at 2 EL2 to EL3, which represents the jump from, 3 let's say, an uncoated halogen situation to an 4 IR coated situation, which is probably the 5 most significant cost jump, that does not 6 appear from this to be properly modeled. 7 I won't go back and comment then 8 on the LCC because if the starting point on 9 the installed price is flawed, then we have an 10 issue on the LCC, but I think we'd better 11 address that in the written comments. 12 MR. BROOKMAN: So the department 13 would like for you to redo this table with 14 your numbers. 15 MR. NELSON: I think as an 16 industry we can comment on that.

17 MR. BROOKMAN: That's what's on 18 your "to do" list, right? Okay. 19 Ron Lewis. 20 MR. LEWIS: That is sort of a 21 standing kind of invitation. It's very 22 helpful to know if you have a different

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 182 1 opinion. It's much more helpful to know, you 2 know, the specifics and the supporting 3 evidence to help us to be better informed if 4 we didn't understand something. 5 So we're critiquing something. 6 Whether it hits the mark or not is good. 7 Giving us what does hit the mark is even

8 better. 9 MR. BROOKMAN: Point of 10 information. 11 MR. LEWIS: Right. 12 MR. BROOKMAN: Yes, Jon. 13 MR. McHUGH: Would you go back to 14 Slide 39 for a second? I'm just trying to 15 understand this analysis. I hope I'm not too 16 slow, but what I think you're saying here is 17 on Slide 39 you're showing a situation where 18 if you look at the top graph or the top table, 19 you're looking at the situation where the 20 ballast fails and you replace the lamp and 21 ballast at the same time, and your installed 22 cost is around $50. Your life cycle savings

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 183 1 is around 16. So your energy savings is 2 somewhere around $66. Am I understanding this 3 correctly? Energy cost savings is about $66? 4 Yes? Am I missing anything here? 5 Okay. Not obviously. Okay. 6 Now, you then look at that same 7 sort of situation for the lamp and ballast 8 replacement. You're looking at this over a 9 time period that is essentially one-fifth or 10 one-sixth of the amount of time. 11 So I would expect that the energy 12 savings are around $10, right? It was $60 the 13 first time, over 15 years. I'm looking at two 14 and a half years. Now I'm looking at 15 approximately one-sixth of the energy cost 16 savings, right? 17 MR. LEWIS: Is everything 18 normalized? 19 MR. McHUGH: Okay. That's still 20 life cycle cost. There's an intermediate 21 step. Okay? 22 Then you look at your costs, and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 184 1 you're saying, well, I'm going to also count 2 the residual value, and so my residual value, 3 if I include my residual value, I should 4 expect that my overall costs are essentially 5 one-sixth; that I've got five-sixth of the 6 life of both the lamps and the ballasts still

7 left. 8 If I look at it that way and I 9 look at that my installed cost is around $10 10 and my energy cost savings is somewhere 11 around, you know, ten to $14 for the savings, 12 and so I'm confused a little bit about why you 13 have a negative life cycle cost, especially if 14 you have a discount rate included as you'd 15 think those first two and a half years are 16 discounted less than the remaining --

17 MR. RIVEST: It's hard to follow. 18 MR. BROOKMAN: Mike Rivest. 19 MR. RIVEST: Mike Rivest. 20 The spreadsheets, the methodology 21 are clearly described in the documentation, 22 you k now. It's hard to follow everything you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 185 1 said, but are you perhaps, you know, talking 2 about capital costs as opposed to first costs 3 because this is first cost, and the fact that 4 a residual is credited back in the LCC, you 5 know, is built in, but the first cost is what 6 the consumer sees on the day of the 7 replacement. 8 So maybe that explains -- 9 MR. McHUGH: Right. So where are 10 you crediting the residual cost? 11 MR. RIVEST: In the life cycle 12 cost as an of year. 13 MR. McHUGH: On the savings side?

14 MR. RIVEST: Yes.

15 MS. BURK: It's at the end of the 16 analysis period. 17 MR. McHUGH: Okay. Oh, and so 18 you're discounting it at the end of the two 19 and a half years, but there's still something 20 like five-sixth of the value. 21 MR. RIVEST: That's absolutely 22 right, and that's credited back.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 186 1 MR. McHUGH: Thank you. 2 MR. BROOKMAN: Thank you. Okay. 3 So a lot of data in these last few 4 slides. Additional comments? Yes, Tim. 5 MR. BALLO: Tim Ballo, 6 Earthjustice.

7 I haven't had a chance to look at 8 the TSD yet. So I don't know what the payback 9 period results look like in there. However, 10 DOE has said it has chosen not to report them 11 in the Federal Register notice because it 12 believes life cycle cost savings are a better 13 measure of cost effectiveness. 14 This seems to be a conversation 15 we're having with DOE across several 16 rulemakings, but what we're trying to get at 17 here is the economic justification for the 18 standard. Life cycle costs are one means of 19 DOE gauging the economic justification for a 20 standard, but the statute requires DOE to also 21 consider payback periods specifically if the 22 payback period is three years. There is a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 187 1 presumption the standard is economically 2 justified. There needs to be some analysis of 3 that. I hope it's in the TSD, but it needs to 4 be in the rule as well. 5 MR. BROOKMAN: Mike Rivest. 6 MR. RIVEST: Mike Rivest. 7 I acknowledge your general 8 statement about all rulemakings, but I do want 9 to highlight in this particular rulemaking 10 payback is very problematic because of the 11 short life of some of these products being 12 like .9 years. So a three-year presumption 13 here, it's a hard abstraction to grasp. 14 MR. BALLO: Tim Ballo. 15 I recognize that this is a unique 16 product, that the statute is meant to apply 17 uniformly, and if there is a three-year 18 payback period, my position would be that the 19 standard is economically justified. 20 MR. BROOKMAN: Eric Stas. 21 MR. STAS: Eric Stas, DOE. 22 I just note that it's a rebuttable

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 188 1 presumption. In the full analysis we do take 2 in all the factors. 3 MR. BROOKMAN: Thank you. 4 Okay. We have gotten to the end 5 of the life cycle cost analysis segment. So 6 we should take any additional and final 7 comments on life cycle costs and then I think

8 we'll break for lunch. 9 MR. MELNYK: I have a quick 10 question. 11 MR. BROOKMAN: Please say your 12 name again. 13 MR. MELNYK: Jack Melnyk, Southern 14 California Edison.

15 You show 40 watt T12 as a 16 baseline. In California at least for the last 17 eight year, it has been very hard to find 40 18 watt lamps. You know, there are 34 watters in 19 the sockets. Maybe a quarter of them are 40 20 watters, but that's diminishing very fast, and 21 I wonder if these analyses have taken into 22 account some ratio of the 34 watters versus

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 189 1 the 40 watters in situ in the United States. 2 I understand we have a much higher percentage 3 in California and some other states do, too, 4 versus the rest of the United States, but has 5 that been taken into account for this process? 6 MS. BURK: In the commercial 7 sector we do take into account 40 watt and 34 8 watt lamps in the baseline. In the 9 residential sector we assume the primary -- 10 that primarily T12 lamps are 40 watt lamps, 11 and these assumptions of market shares are 12 more relevant in the national impact analysis, 13 which Mimi will discuss later. 14 MR. BROOKMAN: Joe Howley. 15 MR. HOWLEY: Just commenting on 16 what Diana said, the overwhelming majority 17 of our products for fluorescent lamps in the 18 residential market are 40 watt lamps 19 nationally. So that is the correct lamp to 20 use for the residential market. 21 MR. BROOKMAN: Okay. Thank you. 22 Okay. So let's pause for lunch.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 190 1 It's 12:20. It takes just about an hour to 2 eat lunch around here. That's if you don't go 3 off campus. Please do not. There's a major, 4 full scale cafeteria. If you go down one 5 floor to ground level or one? Ground, down to 6 ground and then go across to the other side of 7 the building, a whole bunch of us will be 8 going en masse over to the cafeteria. Please 9 wear your badge. 10 We really covered a lot of ground 11 here. We've got more to cover yet by four 12 o'clock this afternoon. So thanks to all of 13 you for speaking up. 14 And before we go to lunch, yes, we 15 will. This room will be locked. You can 16 leave your stuff in here, and we will meet 17 back here and resume at 1:30. Anything else? 18 Okay. Thanks for a good morning. 19 We'll see you back here at an hour. 20 (Whereupon, at 12:19 p.m., the 21 meeting was recessed for lunch, to reconvene 22 at 1:19 p.m., the same day.)

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 191 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:20 p.m.) 3 MR. BROOKMAN: Okay, so let's 4 proceed. The next item on the agenda is 5 National Impact Analysis, Mimi Gupta. 6 MS. GUPTA: All right. I'll be 7 discussing the Shipments Analysis, and the 8 National Impacts Analysis, and our revisions 9 to the ANOPR versions of that. 10 The purpose of the Shipments 11 Analysis is to estimate lamp shipments and the 12 product mix of the stock over the analysis 13 period for this rulemaking 2012 to 2042, in 14 the Base case and in the Standards case. The 15 purpose of the National Impacts Analysis is to 16 estimate the national energy savings, or NES, 17 and the net present value, NPV, from GSFL and 18 IRL efficacy standards. 19 In order to complete the Shipments 20 and National Impacts Analysis, DOE first 21 estimated the Base case shipment forecast from 22 2012 to 2042. Specifically, that included

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 192 1 accounting for shipments due to lamp 2 replacements, ballast replacements, fixture 3 replacements, renovation, and new 4 construction. To do this, DOE started with 5 historical shipments from 2001 to 2005 6 submitted by NEMA, and used these shipments 7 along with average product lifetimes to 8 calculate the 2005 lamp stock. 9 DOE then forecasted shipments 10 accounting for the penetration of several 11 existing and emerging technologies, such as 12 light emitting diodes, reflector CFLs, and 13 ceramic metal halide lamps. 14 In addition, DOE established 15 market share matrices that characterized the 16 product distribution or shipment and stock 17 over time. DOE also received confidential 18 2006 and 2007 shipments that it used to 19 calibrate its Base case shipment forecasts. 20 After establishing the Base case 21 shipment forecast, the Department used several 22 Standards case scenarios to model possible

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 193 1 consumer responses to standards, and the 2 resulting Standards case shipment forecasts. 3 One major input into developing 4 the Base case shipment forecasts were DOE's 5 growth rate assumptions. To model new 6 construction, DOE used commercial floor space 7 and residential building growth projections 8 from the Annual Energy Outlook 2008. However, 9 because AEO does not separately forecast 10 industrial floor space, DOE used the 11 Manufacturer Energy Consumption Survey 12 historical growth to calculate the industrial 13 sector floor space growth. 14 In addition to using new building 15 constructions to calculate the growth in the 16 residential sector, DOE also accounted for 17 historical trends in the number of lamps per 18 household. Specifically, DOE used a 19 California study to estimate the average 20 number of GSFL fluorescent lamps, and recessed 21 cans in homes constructed from 2001 to 2005. 22 Based on distributions of home age

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 194 1 and building growth, DOE estimated the average 2 number of fluorescent lamps and IRL in homes 3 from 2005 to 2042. The resulting average 4 residential growth rates were for fluorescent 5 1 percent per year, and IRL 2.6 percent per 6 year. 7 As you can see here, the IRL 8 growth rates were significantly higher than 9 the general service fluorescent growth rates, 10 and that's primarily due to the increasing 11 number of recessed cans per household. And I 12 will invite comment on the growth rate 13 assumptions using the residential sector.

14 MR. BROOKMAN: Steve Rosenstock. 15 MR. ROSENSTOCK: Thank you. Steve 16 Rosenstock, Edison Electric Institute. A 17 quick question. In the California study, was 18 that just for the study within the State of 19 California for the homes, or was it 20 nationwide? 21 MS. GUPTA: It was within the 22 State of California.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 195 1 MR. ROSENSTOCK: Okay. A couple 2 of reasons I mention that, is typically, from 3 the data that I've seen from RECS, the 4 Residential Energy Consumption Survey, that 5 homes in California tend to be small, have 6 tended to be smaller than the national 7 average. I'm not sure about the new homes, 8 but historically, the average square footage 9 for a home in California was less than the 10 national average. So that, again, just in 11 terms of using that as a baseline, I don't 12 know if that's really representative of the 13 whole country. 14 And, also, I think with the growth 15 rates, also from what I've seen, especially 16 the last few years, is that the increase in 17 the square footage of the homes has stopped, 18 and if not, it's actually declining, so that 19 would tend to have a negative impact on the 20 growth rate in terms of number of lighting 21 fixtures within a home, since smaller homes 22 equals less lighting fixtures. Thank you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 196 1 MR. BROOKMAN: Thank you. Greg? 2 MR. NELSON: Yes, I think we would 3 echo some of the same comments, that certainly 4 the trend has changed a bit in very recent 5 years. And with especially the very recent 6 economic downturn, it calls into question 7 moving forward. But all of the manufacturers 8 see in their results, let's say contradictions 9 to this projected IRL growth rate, on top of 10 which we already see significant penetration 11 of other categories, not yet maybe SSL, but 12 certainly CFLI reflectors that are shrinking 13 the IRL market. So I think we would take a 14 much more pessimistic view of the growth than 15 is presented here, and we'll address that in 16 our written comments. 17 MR. BROOKMAN: Thank you. So 18 we're looking at and commenting on the 19 Department's approach, and the growth rates 20 that they forecast looking ahead a long way 21 out. So additional comments on the growth 22 rates? Thank you. Jeff Harris.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 197 1 MR. HARRIS: Jeff Harris, Alliance 2 To Save Energy. I may have missed this, but 3 was home remodeling considered, which in my 4 casual observation does involve a lot of 5 recessed cans these days. 6 MS. GUPTA: Yes. In calculating 7 the second bullet of the average number of 8 fluorescents and recessed cans in homes for 9 2005 to 2042, we did consider home remodeling, 10 and the full documentation of those 11 assumptions can be found in the TSD Chapter 12 10. And, actually, it's also in the NOPR 13 notice, those assumptions. 14 MR. BROOKMAN: Okay. 15 MS. GUPTA: All right. Speaking 16 of Greg's point on emerging technologies, 17 another major input into the Base case 18 shipment forecast were the projections of 19 penetration of other lighting technologies 20 into the fluorescent and incandescent 21 reflector markets. To do this, and in 22 consideration of the high degree of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 198 1 uncertainty, DOE modeled two Base case 2 shipment scenarios, the existing technology 3 scenario, and the emerging technology 4 scenario. 5 The existing technology scenario 6 forecasts the penetration of technologies that 7 are already currently available, and have 8 reached maturation in terms of price and 9 efficacy. The emerging technology scenario 10 forecasts the penetration of these mature 11 technologies, and also those that are still 12 undergoing significant changes in price and 13 efficacy. 14 Using these criteria for GSFL, DOE 15 determined that there are no other existing 16 mature technologies that would penetrate the 17 fluorescent market. Therefore, in the 18 existing technology scenario, DOE modeled only 19 general service fluorescent lamps. However, 20 this scenario does include the penetration of 21 high-efficiency T5 lamps into other

22 fluorescent markets.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 199 1 To establish the emerging 2 technology scenario, DOE analyzed the possible 3 penetration of light-emitting diodes and 4 ceramic metal halide lamps into the general 5 service fluorescent markets. 6 For IRL, DOE considers reflector 7 CFLs to be a mature technology with a 8 relatively stable price point and efficacy; 9 and, therefore, considers reflector CFLs in 10 this existing technology scenario. For the 11 emerging technology scenario, DOE calculated 12 and estimated the penetrations of LEDs and 13 ceramic metal halides. 14 To establish the market 15 penetration forecasts, DOE first estimated the16 price and performance forecast of light17 emitting diodes and ceramic metal halides, as 18 well as assessing the price and efficacy of

19 reflector CFLs. Then DOE calculated the 20 payback period of light-emitting diodes, 21 ceramic metal halide, and reflector CFLs, and 22 compared that to -- calculated the payback

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 200 1 period of these alternative technologies 2 compared to general service fluorescent lamps 3 and incandescent reflector lamps. DOE then 4 used the payback period and market penetration 5 relationships to develop forecasts. And the 6 resulting penetrations that were calculated 7 for the emerging technology scenario were by 8 2042 DOE expects a 41 percent market 9 penetration of light-emitting diodes into the 10 general service fluorescent market. And for 11 incandescent reflector lamps, DOE expects a 40 12 percent residential, or 40 percent penetration 13 of light-emitting diodes by 2042 in the 14 residential sector, and 82 percent in the 15 commercial sector. These are only the emerging 16 technology, the numbers that I'm giving you.

17 MR. BROOKMAN: Steve Rosenstock. 18 MR. ROSENSTOCK: All right. Steve 19 Rosenstock, Edison Electric Institute. For 20 the reflector CFLs, when you say they're21 existing, are you talking about the non22 dimmable, or the dimmable CFLs, or both?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 201 1 MS. GUPTA: Diana, you can correct2 me on this, but I think we based on the non3 dimmable prices and efficacies. 4 MR. ROSENSTOCK: Okay. Because 5 from what I've seen, there's dimmable CFL 6 reflectors out there, but I think they're 7 still kind of an emerging technology, and not 8 fully dimmable like the incandescents. 9 They're like -- they dim down to 50 percent, 10 then they have problems, it seems like, the 11 ones that I've seen. I mean, that could also 12 be another game changer, if they perfect that 13 technology, so I didn't know if that was part 14 of the analysis process. 15 MS. GUPTA: It's not currently 16 part of the analysis. Are there any other 17 comments on market penetration of emerging 18 technologies, and the GSFL and IRL shipments 19 analysis? Okay.

20 MR. BROOKMAN: Pam Horner. 21 MS. HORNER: You saw me waffling. 22 Pam Horner. Sorry to be so slow here. On

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 202 1 the IRL market penetration, particularly with 2 emerging technologies, while we haven't 3 examined -- you mentioned a couple of these 4 percentages here, 41 percent of LED, et 5 cetera. But on the face of it, and we'll have 6 to address this very specifically in our 7 comments, but it would appear that such 8 penetration would erode the growth of IRL to 9 Greg's previous point, rather than to see it 10 continue to grow, as you show in a later 11 slide. So I'm starting to wonder how that

12 could be?

13 MS. GUPTA: Sure. 14 MS. HORNER: It says because of 15 new homes, but -16 MS. GUPTA: I can just fast17 forward to that slide. 18 MS. HORNER: Honestly, it looks 19 like this, not this. 20 MS. GUPTA: So we're on Slide 51 21 here. Is that what you're referring to?

22 MR. BROOKMAN: Yes.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 203 1 MS. GUPTA: And, Pam, were you 2 referring to the fact that the bottom 3 forecast, which is the emerging technologies 4 forecast of incandescent reflector lamps seems 5 to grow after 2020? Okay. The way the 6 penetration was implemented and calculated in 7 the IRL shipments forecast was that the 8 penetration of LEDs will -- or LEDs will 9 penetrate the existing stock of incandescent 10 reflector lamps to the percentages that I 11 mentioned earlier. But then at some point, 12 that penetration will become saturated until 13 the -- I guess before I said it's 40 percent 14 LED penetration in the residential sector. So 15 at some point you're going to have 60 percent 16 IRL, and 40 percent LEDs in the stock. And 17 then after that point, new -- the way we 18 implemented it was that new construction will

19 be -

20 MR. RIVEST: Number of sockets.

21 MS. GUPTA: Yes. The number of 22 sockets continues to go up, so you will have

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 204 1 some increase in IRL. 2 MR. BROOKMAN: Joe Howley.

3 MR. HOWLEY: Make a comment on 4 that. It seems that by 2020, what we are 5 seeing is ever-increasing building energy 6 codes, perhaps led by California's Title 24,

7 but a lot of these new standards are not 8 allowing sort of the older technologies to go 9 into new construction. Certainly, 12 years 10 from now I would expect the Energy Standards 11 to be stronger than they are today. I have 12 yet to see them reverse, unless the advocates 13 all of a sudden start pushing reversals of 14 these standards. I don't think they're going 15 to do that any time soon. And it's probably 16 more likely that by 2020, most of the 17 standards require the use of one of these more 18 advanced technologies, maybe not even allowing 19 some of these older technologies to be used in 20 new construction. Regardless of the fact the 21 market may want to behave this way, I think in 22 reality it won't be allowed to behave this way

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 205 1 because of building energy codes, which appear 2 not to be factored into this. 3 MR. BROOKMAN: So do you wish to 4 go further and speculate what that means for 5 these growth curves? 6 MR. HOWLEY: Well, I think they'll 7 just continue to dwindle down flat to the 8 lower. We have to do our analysis, but I 9 highly suspect that there won't be growth in 10 this area. We haven't analyzed it.

11 MR. BROOKMAN: Steve Rosenstock. 12 MR. ROSENSTOCK: Steve Rosenstock, 13 Edison Electric Institute. The 2009 14 International Energy Conservation Code for 15 residential construction now calls for 5016 percent of the lighting has to be high17 efficiency, and high-efficiency is defined at 18 least starting at 40 lumens per watt, as I 19 recall. And so DOE has yet to certify it, but 20 once DOE certifies it, then states have I 21 believe one year to update their codes to meet 22 or exceed the ICC 2009. So that is kind of a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 206 1 game changer that obviously could not be put 2 in the analysis until basically now, because 3 it was just published. So as a FYI. 4 MR. BROOKMAN: Okay. Thank you. 5 MS. GUPTA: Thank you. 6 MR. BROOKMAN: Yes, please. 7 David? 8 MR. NESTING: Yes. David Nesting 9 with Philips. Just kind of a follow-on to it, 10 because maybe I'm reading this wrong, but when 11 I look at your curve on Slide 51 for the 12 emerging technologies, when I look at this, 13 this graph says that we sold the most emerging 14 technologies ever three years ago, and it's 15 going to drop for the next 20 years. Because 16 we're talking about shipments in billions, 17 that it's going to be going down every year.

18 MS. GUPTA: These are all 19 incandescent reflector shipments, not emerging 20 technologies shipments. It's the incandescent 21 reflector shipments for the emerging 22 technology Base case forecast that considers

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 207 1 the penetration of emerging technologies. 2 MR. RIVEST: The different in area 3 -- Mike Rivest. The difference in area 4 between the below the pink and the blue lines, 5 that's the market share that the LED is 6 capturing. 7 MS. GUPTA: This is LEDs right

8 here. 9 MR. BROOKMAN: Ed, go ahead. 10 MR. YANDEK: We will have more to 11 say in our written comments, but clearly, and 12 I know this is a difficult area. Forecasting 13 is always difficult, but particularly when 14 you're doing new technology shifts; believe 15 me, from experience, you're not going to get 16 it right. The only question is how wrong, and 17 which way. And I think you understand which 18 way we think this is going right now, but we 19 will share some more information with how we 20 would view this during our written comments. 21 MR. BROOKMAN: Thank you. Jeff 22 Harris.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 208 1 MR. HARRIS: Jeff Harris, Alliance 2 To Save Energy. It seems to me that the 3 difference in those lines is not emerging 4 technology shipments, unless the average 5 lifetime of the alternate technologies is the

6 same.

7 MS. GUPTA: That's correct. I'm 8 just trying to say that the difference in the 9 shipments is due to the emerging technologies. 10 You're totally correct. We did not try to 11 project emerging technology shipments in

12 total. 13 MR. BROOKMAN: We jumped ahead 14 several slides. Let's go back to the earlier 15 shipments slides, and also provide an 16 opportunity, now that we've had this overview, 17 anybody else that wants to comment on emerging 18 technologies. And then, Mimi, why don't you 19 take us through the shipments graphs. 20 MS. GUPTA: All right. So after 21 considering growth rates, emerging 22 technologies, and several other assumptions,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 209 1 DOE resulted, or was able to calculate some 2 shipment forecasts for general service 3 fluorescent lamps, and this slides shows the 4 4 foot medium bipin shipment forecasts. And, as 5 you can see from the upper two curves, 4 foot 6 -- DOE expects 4 foot T8 medium bipin 7 shipments to continue to grow due to new 8 construction and retrofitting of 4 foot T12 9 and 8 foot T12 single pin Slimline systems. 10 You can also see here the top two 11 forecasts show the first -- the top forecast 12 is the 4 foot T8 forecast only considering 13 existing technologies; namely, just other 14 fluorescent technologies. The second forecast 15 in the light blue is the 4 foot T8 emerging 16 technologies forecast that considers the 17 penetration of LEDs. And as you can see, that 18 forecast has decreased comparatively. And the 19 very bottom forecast is the forecast of 4 foot 20 T12 medium bipin shipments. And as we 21 discussed earlier, the 2000 ballast rule 22 effectively eliminates the sale of 4 foot T12

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 210 1 medium bipin magnetic ballasts in the 2 commercial sector, causing T12 shipments to 3 decline. The remaining shipments you see here 4 are for lamps for installation on residential 5 and electronic ballasts.

6 MR. BROOKMAN: Let's do all of 7 them, and then we'll take comments 8 collectively. 9 MS. GUPTA: That sounds great. 10 For 8 foot single pin Slimline, 11 DOE calculated similar forecasts where you 12 have the 8 foot T8 single pin Slimline 13 shipments showing initially very slight growth 14 due to the retrofitting of some 8 foot T12 15 single pin Slimline systems, and 8 foot T12 16 single pin Slimline systems showing a sharp 17 decline due to the elimination of T12 magnetic 18 ballasts. Again, the remaining lamp shipments 19 in the later parts of the analysis period are 20 for installation on electronic ballasts.

21 For 8 foot recessed double contact 22 high output, historical shipments submitted by

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 211 1 NEMA show a sharp decline in 8 foot T12 2 recessed double contact high output shipments. 3 DOE projects that these shipments will 4 continue to decline due to the penetration of 5 other technologies, such as the 4 foot T5 6 miniature bipin high output, and high 7 intensity discharge lamps. 8 And, finally, for 4 foot T5 9 miniature bipin standard output and high 10 output lamps, DOE projects that these 11 shipments will grow due to new construction, 12 and penetration into the 4 foot medium bipin 13 and 8 foot single pin Slimline, 8 foot 14 recessed double contact high output, and high 15 intensity discharge markets. And DOE invites 16 comments all of its shipments forecasts, in 17 particular, the T5 forecasts. 18 MR. BROOKMAN: Five separate 19 shipment forecasts. Pam Horner. 20 MS. HORNER: Well, I've asked our 21 market share statistician early on to take a 22 look at this. I would say that in general,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 212 1 the industry believes that on T5, and that's 2 the one I'm looking at now, yes, it's in the 3 right direction. Yes, it will grow. I 4 piggyback on Ed's comment. You don't want to 5 hear his real answer, but what he said is out 6 to 2040? You've got to be kidding me followed 7 by comma, we only generally project out five 8 years. You could be off a tenth of a percent 9 in one confidence level, and the whole curve 10 goes -- and you know this. I mean, this is 11 what's so difficult for you. So general 12 direction, yes. Grow? Yes. We have no 13 confidence in projecting out to 2042, but I 14 would like to add one more point. 15 It's interesting, we've received 16 some data recently with the commercial markets 17 in the tank, the economics in the tank, 18 luminaire business is being severely affected 19 by this. Now, whether that will adjust in any 20 way the curve trajectory, but there certainly 21 will be blips along the way, because those are 22 new luminaires, new luminaires with these

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 213 1 lamps in them that people have to afford 2 during an economic crisis. So I know there's 3 no time to go back and reevaluate anything. 4 It's just a point I'd like to make, that 5 things happen over time, like economy. Thank 6 you. 7 MR. BROOKMAN: Thank you. So as I 8 said, five different shipment forecasts. I 9 don't want to slight any of them for those of 10 you that wish to comment. Yes, please. And 11 your name again? 12 MR. MELNYK: Jack Melnyk, Southern 13 Cal Edison. One thing that comes to mind 14 versus what Ms. Horner said is that there have 15 been economic dislocations, maybe not as 16 severe as we're in right now, but in the late 17 80's across the `90s, and if you had some 18 additional data, you might be able to shape 19 out to 2042 with a little more confidence, or 20 at least base it on more history than what's

21 there. 22 MR. BROOKMAN: Okay. Thank you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 214 1 So with no additional comments, we're just 2 going to keep moving on. 3 MS. GUPTA: All right. We've 4 already seen Slide 51, but historical 5 shipments submitted by NEMA in 2006 and 2007 6 indicate a decline in IRL shipments. DOE 7 models these decreased IRL shipments due to 8 the penetration of our reflector CFL and 9 emerging technologies. 10 Now, as we discussed earlier, you 11 see an increase in IRL shipments later in the 12 analysis period due to the emerging 13 technologies reaching a saturation in the 14 reflector lamp stock, and the total number of 15 sockets increasing due to new construction.

16 MR. BROOKMAN: Steve Rosenstock. 17 MR. ROSENSTOCK: Steve Rosenstock, 18 EEI. And just, again, to refresh my memory 19 for the shipments, at some point it's 60 20 percent IRL, and 40 percent LED, at some point 21 in the forecast? The reason I ask, I remember 22 you threw out that number, and I was like

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 215 1 well, where were the CFLs in that forecast? 2 MS. GUPTA: So what basically 3 happens is that in the beginning of the 4 analysis period, the way DOE approaches its 5 emerging technologies is that it calculates 6 the penetration due to emerging technologies 7 for all the separate technologies using the 8 payback period. And, basically, DOE takes the 9 maximum penetration of any given technology as 10 the total penetration of emerging 11 technologies. And so, in the beginning of the 12 analysis period reflector CFLs are much more 13 cost-effective than LEDs. So the penetration 14 of other technologies into the IRL stock is 15 mainly by CFL. By the end of the analysis 16 period, based on the LED price projections, 17 and efficacy projections, LEDs become much 18 more cost-effective than CFLs, and so the 19 penetration of emerging technologies is 20 primarily due to LEDs.

21 MR. BROOKMAN: Andrew? 22 MR. DELASKI: Andrew Delaski. I

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 216 1 have two questions. One is, why -- what's 2 happening, why are sales going down, 3 initially? 4 MS. GUPTA: Sales are initially 5 going down due to the penetration of reflector 6 CFLs. And that's consistent with the 2006-2007 7 historical shipments that we received from

8 NEMA. 9 MR. DELASKI: Okay. And then 10 these shipments are inclusive only of the 11 lamps that DOE has determined are not 12 exempted.

13 MS. GUPTA: That's correct. 14 MR. DELASKI: All the 65 watt BR, 15 for example, are not in these shipments.

16 MS. GUPTA: That's correct.

17 MR. DELASKI: Thanks.

18 MR. BROOKMAN: Yes. Pekka.

19 MR. HAKKARAINEN: Pekka 20 Hakkarainen. I'm now a little confused. On 21 Slide 46, the existing technologies scenario 22 for IRLs includes reflector CFLs.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 217 1 MS. GUPTA: That's correct.

2 MR. HAKKARAINEN: Are the 3 reflector CFLs now not included in this graph? 4 MS. GUPTA: No, they are not. 5 MR. HAKKARAINEN: They are. 6 MS. GUPTA: So if you look at the 7 pink forecast, that is the existing 8 technologies forecast. So that forecast is 9 the IRL shipments - 10 MR. HAKKARAINEN: Including the

11 reflector CFLs. 12 MS. GUPTA: Considering the fact 13 that only reflector CFLs are penetrating that

14 market.

15 MR. HAKKARAINEN: That's what I 16 thought.

17 MS. GUPTA: Yes. And the bottom 18 forecast is considering that okay, reflector 19 CFLs are penetrating the IRL market in the 20 beginning, but later in the analysis period, 21 LEDs start to dominate that penetration.

22 MR. HAKKARAINEN: So what we are

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 218 1 seeing is that because of the reflector CFL 2 introduction, we expect the shipments in this 3 market to decrease for still some years to

4 come.

5 MS. GUPTA: That's correct.

6 MR. BROOKMAN: Go ahead. Andrew. 7 MR. DELASKI: Andrew Delaski. I 8 don't see -- an example here, I don't see 9 numbers for -- did you model scenarios in 10 which consumers shift to exempted lamps? 11 MS. GUPTA: Yes, we did. And I'll 12 discuss that in a couple of slides. 13 MR. DELASKI: Okay. 14 MR. BROOKMAN: Okay. 15 MS. GUPTA: All right. So, as 16 discussed earlier, as part of the shipments 17 analysis, DOE develops market share matrices 18 to characterize the distribution of product 19 shipped, and in the stock. This slide shows 20 an example summary of the 4 foot medium bipin 21 Base case market share matrices. 22 As you can see here on the left,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 219 1 with regard to T8 systems in the commercial 2 sector, in 2012, DOE assumes that 90 percent 3 of these lamps are at 32 watts, or more than 4 90 percent of these lamps are at 32 watts and 5 10 percent are at reduced wattages. By 2042, 6 DOE expects that reduced wattage lamps gain 7 more of a market share. In terms of efficacy 8 distribution, we see that with time a shift 9 toward higher efficacy lamps occurs. And in 10 terms of ballast factor, DOE assumes that in 11 2012, 90 percent of consumers use a .88 12 ballast factor ballast. By 2042, DOE expects 13 a shift towards lower ballast factor ballasts. 14 For T12 magnetic systems shown on 15 the table on the right, we describe the 16 shipments in both the commercial and the 17 residential sector. So as you can see here, 18 in the residential sector, DOE assumes that 19 100 percent of T12 lamps shipped are 40 watt, 20 while in the commercial sector, one-third of 21 lamps shipped in the commercial sector are 40 22 watt, and the remaining are 34 watt.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 220 1 Another important thing to note in 2 the residential sector is the distribution of 3 ballast shipments for T12s. As stated 4 earlier, the 2000 ballast rule effectively 5 eliminates the sale of magnetic ballasts in 6 the commercial sector. Therefore, in the 7 commercial sector, DOE assumes that all T12 8 ballast shipments are of the electronic type. 9 However, as residential ballasts are exempt 10 from this rule, DOE assumes that 50 percent 11 are magnetic, 50 percent are electronic for

12 T12 ballasts.

13 MR. BROOKMAN: Steve Rosenstock.

14 MR. ROSENSTOCK: Steven 15 Rosenstock, EEI. On the commercial side, I'm 16 just kind of curious why DOE would project 17 lower ballast factors since ballast factors 18 directly kind of associated with light output 19 out of fixtures. That just surprised me. I 20 know the lamps are going to be more efficient, 21 but just kind of surprises me about the 22 ballast factors going down over time. I'm

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 221 1 just -- that shift kind of surprised me.

2 MS. GUPTA: That was based on the 3 fact that in the market we see more and more 4 lower ballast factor ballasts being 5 introduced. But we'd appreciate any comments 6 that you have on that, and whether that's 7 appropriate or not. 8 MR. ROSENSTOCK: Okay. Just, the 9 better the ballast factor, the more light 10 you're getting out of the lamps. And the 11 residential, there's no 34 watt lamps being 12 sold in the residential market that are T12? 13 MS. GUPTA: That is the assumption 14 that we made based on manufacturer interviews. 15 MR. ROSENSTOCK: Okay. The reason 16 I say that, I see 34 watt lamps are hardware 17 stores for the residential market, so it just 18 kind of surprised me. So, thank you.

19 MR. BROOKMAN: Pekka.

20 MR. HAKKARAINEN: Pekka 21 Hakkarainen. Particularly in the commercial 22 side, the building energy codes are starting

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 222 1 to address control issues, such as daylight 2 dimming and so on. When you look at the 2042 3 numbers that you have there, it seems to me 4 that there may be some disconnect there, 5 because currently only really the 32 watt lamp 6 is considered dimmable, so we would be 7 limiting the application of that type of 8 energy-saving technology to 25 percent of the 9 applications. I have a concern that that may

10 not be accurate. 11 MR. BROOKMAN: Thank you. John. 12 MR. McHUGH: John McHugh. Could 13 you describe the relative fraction of sales of 14 commercial versus residential lamps?

15 MS. GUPTA: Sure. Based on the 16 comment submitted by NEMA during the ANOPR 17 phase, NEMA estimates that approximately 25 18 percent of general service fluorescent lamps 19 go to the residential sector.

20 MR. BROOKMAN: Other comments on 21 these matrices? Andrew. 22 (Off the record comment.)

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 223 1 COURT REPORTER: Is his microphone

2 on? 3 MR. BROOKMAN: Andrew, we can't 4 hear you.

5 MR. DELASKI: Go on to the 6 resident sector versus being sold through 7 outlets like Home Depot, where we don't know 8 where they're going to end up. I remember Pam 9 saying we don't know where they're going.

10 MS. GUPTA: That's correct. 11 MR. DELASKI: There might be a 12 small commercial -- so 25 percent sounds high

13 to me. 14 MS. GUPTA: Yes, that's correct. 15 I just thought of that when I said that. We 16 did account for do-it-yourself stores not 17 always servicing only residential consumers. 18 I will have to get back to you on the exact 19 percentage. I'm having a little confusion in 20 my head right now on that, but I'll get back 21 to you later today on the exact percentage. I 22 thought the 25 percent included -- I'll get

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 224 1 back to you on that. Sorry. 2 MR. BROOKMAN: Okay. 3 MS. GUPTA: Speaking of getting 4 back to people on things, you had asked for

5 the market share of some of the excluded or 6 unanalyzed product classes, and it seems like 7 an appropriate time to bring it up. I checked 8 back in the TSD, and U-shaped lamps are -- DOE 9 approximates that they're approximately 4 10 percent of the total general service 11 fluorescent market. And in terms of the 12 question asked earlier about what percentage 13 of residential shipments are lamp replacement 14 shipments, that number -- I think we talked 15 about 12 percent earlier, and it's actually 16 around 9 percent according to DOE's analyses.

17 MR. BROOKMAN: Restate what that 18 is. 19 MR. NESTING: Say that again. 20 MS. GUPTA: The percentage of 21 residential shipments that are lamp 22 replacement shipments for 4 foot medium bipin

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 225 1 lamps. That number of shipments to the 2 residential sector - 3 (Off the record comment.) 4 MR. BROOKMAN: Okay. So then 5 let's proceed to 53. 6 MS. GUPTA: So similar to GSFL, 7 DOE developed market share matrices to 8 characterize a product mix for the IRL stock 9 in 2011 and 2012. And DOE assumes a lineal 10 progression from the 2011 stock mixes to 2042 11 stock mixes. 12 To model IRL, DOE analyzed three 13 different lumen packages corresponding to the 14 three baseline lamps analyzing the engineering 15 and LCC analysis. The lumen package 16 associated with a 50 watt halogen baseline 17 lamp is given 27 percent of the market share, 18 for the 75 watt halogen baseline lamps lumen 19 package, DOE allots 32 percent of the market 20 share. And for the 90 watt halogen baseline 21 lamps lumen package, DOE allots 41 percent of

22 the market share.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 226 1 MR. BROOKMAN: Steve Rosenstock. 2 MR. ROSENSTOCK: Quick question. 3 Steven Rosenstock, EEI. In the residential 4 sector, and please, I know you're showing a 5 halogen baseline, but aren't there non-halogen 6 old-style incandescent IRLs out there that are 7 being sold on the market that aren't halogen? 8 MS. GUPTA: That's correct, but as 9 we saw earlier, DOE's shipments analysis and 10 national impacts analysis only considers the 11 current stock of products that are being 12 regulated under this rule making, so that 13 would only be the halogen, and halogen 14 infrared lamps. The incandescent-type lamps 15 which are exempted from standards are not 16 considered in this rule making, except when 17 considering how people might migrate to them 18 due to standards. So they're subtracted from 19 the total incandescent reflector stock. 20 So what I'm trying to say is that 21 we're trying to assess the impact of standards 22 on the products that we're regulating under

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 227 1 this rule making, and we're only regulating 2 those non-exempt products. Therefore, our 3 analysis only addresses the non-exempt 4 products. 5 MR. ROSENSTOCK: Thank you. 6 MR. BROOKMAN: So you didn't fully 7 explain this matrix yet. 8 MS. GUPTA: Yes. So in addition 9 to getting a lumen package breakdown of the 10 stock, DOE developed an efficacy distribution 11 of the stock. And as seen on the right in the 12 residential sector, based on current 13 purchasing trends, DOE assumed that all lamps 14 are of the halogen technology throughout the 15 analysis period. 16 In the commercial sector, DOE 17 established an efficacy distribution that 18 assumes a market share in 2011 primarily at 19 halogen technology, but then shows a 20 significant migration by 2042 to halogen 21 infrared technology. Any further comments on 22 this slide?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 228 1 MR. BROOKMAN: I think that all 2 the manufacturers would love to have this 3 certainty. 4 MS. GUPTA: Okay. So using these 5 Base case market share matrices in combination 6 with the shipments projections, DOE calculated 7 total energy consumption for the Base case for 8 GSFL and IRL. To calculate shipments and 9 energy consumption in the Standards case, DOE 10 used several Standards case scenarios. The 11 Standards case scenarios help characterize the 12 product distribution in the Standards case, 13 and how consumers may respond to standards. 14 The first set of Standards case 15 scenarios applicable to both fluorescent lamps16 and incandescent reflector lamps are the roll17 up and shift scenarios. The roll-up and shift 18 scenarios characterize how the product 19 efficacy distribution will be affected by 20 Standards. In the roll-up scenario, only 21 consumers purchasing below the trial standard 22 level changed their purchase decisions in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 229 1 Standards case. These consumers will purchase 2 the lowest first cost lamp option available, 3 generally rolling up to the next highest 4 efficacy level. All other consumers 5 purchasing above the baseline are unaffected 6 by Standards. 7 The shift scenario models a 8 situation in which all consumers re-evaluate 9 their purchase decisions. Similar to the 10 roll-up scenario, consumers currently 11 purchasing at the baseline will purchase the 12 lowest first cost standards compliant lamp. 13 However, consumers purchasing above the 14 baseline level under Standards shift to even 15 higher efficacy product. In general, the 16 shift scenario aims to maintain the same 17 percentage of consumers purchasing at higher 18 efficacy levels in the Base case as it does in

19 the Standards case. 20 For GSFL, both scenarios, roll-up 21 and shift, are modeled in all sectors. 22 However, for IRL, because the residential

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 230 1 sector is considered to be entirely purchasing 2 at the baseline level, the shift scenario is 3 only applicable to the commercial sector. 4 For GSFL, a second set of 5 Standards case scenarios includes the lighting 6 expertise scenarios. DOE established the 7 lighting expertise scenarios to model varying 8 degrees of consumer education regarding 9 lighting options. As discussed earlier, for 10 GSFL, there are several ways that a consumer 11 can save energy when purchasing a higher 12 efficacy lamp. 13 The consumer could purchase a 14 higher efficacy lower wattage lamp, or 15 instead, he could purchase the same wattage 16 lamp, and install it on a lower ballast factor 17 ballast. Both of these options would allow 18 the consumer to save energy, while maintaining 19 lumen output. 20 In the high lighting expertise 21 scenario, DOE assumes that all consumers have 22 enough lighting expertise so as to make this

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 231 1 energy-saving isolumen decision in response to 2 Standards. However, DOE also recognizes that 3 some consumers without sufficient lighting 4 expertise might respond to Standards by simply 5 purchasing a higher efficacy same wattage lamp 6 and installing it on ballast with the same 7 ballast factor. This would result in the 8 consumer purchasing a higher efficacy more 9 expensive lamp without gaining the benefits of 10 energy savings. 11 In the market segment-based 12 lighting expertise scenario, DOE assumes that 13 the market contains a mixture of consumers 14 with high lighting expertise and low lighting 15 expertise. Thus, some consumers are making 16 energy saving decisions, and others are not. 17 To determine the percentage of lamps purchased 18 by consumers with high lighting expertise, DOE 19 broke an analysis out into several market 20 segments. For each market segment, DOE 21 determined the probability of certain types of 22 consumers to have high lighting expertise.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 232 1 And as you can see in this table, 2 in the renovation and new construction 3 segments, DOE assumes that a relatively high 4 portion of purchases will be made by consumers 5 with high lighting expertise. However, as you 6 can see in the residential sector, when 7 considering fixture or ballast replacement, 8 DOE considers these consumers to have 9 relatively low lighting expertise. In 10 addition, the amount of information available 11 on packaging in the residential sector is 12 generally less; and, therefore, assumes that 13 zero percent of these purchases are made with 14 high expertise.

15 MR. BROOKMAN: Pam Horner. 16 MS. HORNER: Pam Horner. Mimi, 17 thank you. I know you asked for the question 18 later, but rather than asking you to go back 19 to this slide, if I could just make a comment 20 on it right now.

21 MS. GUPTA: Yes. 22 MS. HORNER: Generally, this is a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 233 1 good approach, and you're right that there's a 2 mix. One thing that would probably affect the 3 first two numbers, we believe, and, therefore, 4 several of us went back to our OEM sales data, 5 and perhaps it's how we define renovation and 6 new construction versus how you do. That 7 could be it, but if you consider that in 8 renovation and new construction, new 9 luminaires are being used. That's how we 10 would define it. 11 Then the reason I said we went 12 back to our OEM manufacturers is decisions are 13 being made, and ballasts are being purchased 14 as part of new luminaires at some rate. I 15 know it isn't directly the probability of 16 commercial expertise in this area, but it 17 relates. And so, we can tell you that 18 somewhere in the vicinity of 90 percent of OEM 19 luminaires, especially in the T8, are with 20 normal power factor, so we think -- we 21 believe, and we can look into this further, 22 but those first two numbers, renovation and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 234 1 new construction, probably -- expertise or 2 not, should probably be closer to what you 3 call fixture replacement. 4 MS. GUPTA: So would fixture 5 replacement not be something that those OEM

6 manufacturers would - 7 MS. HORNER: In other words, if 8 you -- I hope I'm being clear. If you look 9 back at OEM sales, you can get a clue as to 10 the decisions that are being made, whether 11 they have the expertise about whether they 12 should go to lower ballast factors or not. Is

13 that clear?

14 MS. GUPTA: Yes. 15 MS. HORNER: Okay. 16 MR. BROOKMAN: So you say that the 17 number is more similar to fixture replacement. 18 Do you want to go further than that at this 19 point?

20 MS. HORNER: No. 21 MR. BROOKMAN: No. I thought I'd 22 give you an opportunity.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 235 1 MR. DELASKI: Mimi, this is Andrew 2 Delaski, again. So is this -- these are 3 numbers that are part of the entire analysis 4 period, or is this for 2012? 5 MS. GUPTA: Applied throughout the 6 analysis period. 7 MR. DELASKI: So it's consistent 8 figure over the analysis period up to 2042.

9 MS. GUPTA: That's correct. 10 MR. BROOKMAN: Over the entire 11 analysis period. 12 MS. GUPTA: Right.

13 MR. BROOKMAN: There's no 14 progression. 15 MR. DELASKI: I understand. Okay. 16 MS. GUPTA: We don't assume people 17 got smarter. 18 MR. DELASKI: Yes, I understand. 19 This is, again, one of the difficult estimates 20 that Ed characterized earlier. One that 21 strikes me as, perhaps, for the residential 22 sector in the fixture replacement, it strikes

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 236 1 me that the market will -- what's on sale at 2 the store determines what the consumer buys. 3 So the consumer has no expertise, but the 4 market provides an appropriate level of 5 lighting for what people are looking for when 6 they walk in the store, so that zero percent 7 may not be an accurate characterization of 8 what's happening in the market under 9 residential fixture replacement. 10 MS. GUPTA: Okay. Thank you for 11 your comments.

12 MR. BROOKMAN: IRL Standards case 13 scenarios. 14 MS. GUPTA: And finally, for the 15 last Standards case scenario that we'll be 16 discussing today, for IRL, in addition to 17 roll-up and shift, DOE models product 18 substitution Standards case scenarios. These 19 scenarios model the effect of consumers 20 migrating to exempted BR lamps and reflector 21 CFLs in response to Standards. 22 The no product substitution

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 237 1 scenario assumes all consumers who currently 2 purchase regulated IRL in the Base case 3 continue to do so in -- all consumers who 4 purchased regulated IRL in the Base case 5 continue to do so in the Standards case. 6 In the product substitution 7 scenario, DOE assumes that some consumers will 8 migrate to the exempted 65 watt BR lamp, and 9 reflector CFL replacements in response to 10 Standards. To calculate these increased 11 market penetrations, DOE used the payback 12 penetration relationships discussed earlier 13 for emerging technologies to calculate the 14 penetrations of RCFL and 65 watt BR lamps in 15 the commercial sector. However, in the 16 residential sector, when analyzing the current 17 purchase ratios of incandescent versus 18 halogen, DOE found that consumers in the 19 residential sector were not using the payback 20 penetration relationships. Therefore, DOE 21 established the increased movement to the 65 22 watt BR lamp in the residential sector based

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 238 1 on increased first cost of Standards compliant 2 lamps. And I'll pause here to open up the

3 floor for comments on the Standards case 4 scenarios discussed and the market share 5 matrices. 6 MR. NELSON: Greg Nelson. Going 7 back to Slide 56, specifically the second 8 bullet point where you assume that all 9 consumers who purchased regulated IRL in the 10 Base case continued to do so in the Standards 11 case. We believe that that fundamentally 12 misses a point that raising the efficacy 13 requirements for IRL also necessarily raises 14 significantly the market cost of those 15 products, which will tend to accelerate the 16 penetration speed of competing technologies. 17 So we see as, for example, the SSL at the 18 moment primary hurdle will be economic point 19 of penetration, so we would see that higher 20 levels as necessarily, let's say, more rapidly 21 eroding the market share of halogen. 22 Regarding the 65 BR, which I know

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 239 1 is not the topic, but we have to assess how it 2 will -- let's say any switching over will 3 impact the model, we don't see a likely impact 4 on the commercial segment that is so driven by 5 cost of ownership. And most, as we said, have 6 a very high level of lighting knowledge. We 7 think it's unlikely they're going to switch 8 back to a BR lamp. 9 As far as residential, 65 watt BR 10 switching, I think we have to model that 11 separately. There is a segment of that which 12 is outdoor, which is very unlikely to switch 13 because the BR lamps are unsuitable for 14 outdoor applications, so then we have to look 15 at that really only until -- for the indoor 16 residential down lighting market. 17 MS. GUPTA: We would appreciate 18 any comments that you have in terms of the 19 percentage of cover, or regulated products 20 that are outdoor versus indoor. 21 MR. NELSON: Okay. We will put 22 that in our written comments.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 240 1 MR. BROOKMAN: Okay. Other 2 comments on these scenarios, Base case and 3 Standards case market share matrices and 4 scenarios? 5 MR. DELASKI: This is Andrew 6 Delaski. Why did the Department choose to do 7 -- to analyze the product substitution 8 scenario with these two offsetting effects? 9 Looking at both the more efficient and the 10 less efficient as a package, than looking at 11 the two separately? 12 MS. GUPTA: It was just -- go 13 ahead, Mike. 14 MR. RIVEST: Mike Rivest. It's 15 not that -- if you look at the two scenarios, 16 so I understand that it may not be realistic 17 to model a situation where there's no 18 substitution at all, but what it does is it 19 gives us a number from which we can then 20 estimate to what extent substitutions might be 21 impacting our energy savings. So to look at - 22 - so the world is they don't substitute, or

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 241 1 they substitute. And then to try and parse 2 out, we'll do an analysis if they only 3 substitute to CFL, and then an analysis well, 4 if they only substitute to BR, I think would 5 sort of miss the point that we're trying to 6 capture consumer behavior of reactions to 7 differences in first cost, for example, or 8 differences in relative economics. So that's 9 why they're lumped together, if you will. It 10 wasn't to obscure anything. 11 MS. GUPTA: All right. Any 12 additional comments on the national impacts 13 analysis? Otherwise, that's the conclusion of 14 that analysis. Yes, Mike. 15 MR. RIVEST: Since I have the 16 microphone, I can ask questions. Mike Rivest. 17 What would be very helpful for us is to get a 18 better understanding, if we could segment the 19 market a little more, the IRL. We talked 20 earlier about indoor and outdoor, and how that 21 might have different substitution effects 22 there based on the utility of the product.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 242 1 Might there be other utility-type issues we 2 could consider in the commercial sector, and 3 the residential sector, some applications that 4 are just not appropriate, so that these 5 substitutions wouldn't happen. People 6 wouldn't go to CFLs in these cases, for 7 example, or wouldn't go to BR in these 8 situations. Anything that allows us to slice 9 the problem. 10 MR. NELSON: I think we can 11 comment more on that in writing, but it's a 12 valid point, and we can give examples of 13 retail where you would certainly never see a 14 substitution of a BR for FR. And also, CFL is 15 unlikely; whereas, in a home down light 16 setting, perhaps a CFL is an equally likely 17 substitution for energy-saving to going back 18 to a BR, so there's a real mix. 19 MR. BROOKMAN: Thank you, Greg. 20 Jeff Harris. 21 MR. HARRIS: Yes. Let me respond, 22 Michael, to your question, and also the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 243 1 previous point in response to Andrew's 2 question. It seems to me that there is a 3 pretty important difference between switching 4 the shape of an incandescent lamp and 5 switching to a CFL. Dimming is one question, 6 lifetime is another. So I think an important 7 way to parse out those differences might, in 8 fact, be to divide those two kinds and analyze 9 separately the two kinds of substitution, 10 especially in the residential sector. 11 MR. RIVEST: I'll think about

12 that. 13 MR. BROOKMAN: Okay. So then 14 we're moving on. 15 MS. GUPTA: Okay. We will now 16 move on to the selection of trial Standard 17 levels. The purpose of selecting trial 18 Standard levels is to create a list of 19 standard levels from which DOE can assess the 20 national impacts, manufacturer impacts, 21 employment impacts, utility and the 22 environmental impacts.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 244 1 DOE established a separate set of 2 TSLs or trial standard levels for fluorescent 3 lamps and incandescent reflector lamps. And 4 from those lists of trial standard levels, DOE 5 selected a proposed standard level. 6 As we've discussed earlier, DOE 7 established efficacy levels for each product 8 class, and these efficacy levels cover a range 9 of efficacies, and can include the max tech 10 level, the level with the lowest life cycle 11 cost, or efficacy levels with noteworthy 12 technologies. For example, an efficacy level 13 that would mandate a T8 lamp, or one that 14 would mandate a halogen infrared capsule. Each 15 trial standard level developed consists of an 16 efficacy level selected for each product

17 class. 18 This slide presents the trial 19 standard levels considered for general service 20 fluorescent lamps. As seen in this table, DOE 21 establishes five trial standard levels with 22 TSL5 representing the highest efficacy levels.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 245 1 For 4 foot medium bipin, 8 foot single pin 2 Slimline, 8 foot recessed double contact high 3 output product classes, DOE assigned efficacy 4 levels 1-5 to TSLs 1-5 respectively. For 5 these product classes, it is important to note 6 that TSL4 and TSL5 effectively eliminate T12 7 lamps from the market. For 4 foot mini bipin 8 standard output lamps, DOE analyzed two 9 efficacy levels, the first preventing an 10 introduction of T5 halophosphor lamps is 11 assigned to TSL 1-4, while TSL 5 consisted of 12 efficacy level 2 for standard output T5 13 product class. For high output T5 lamps, DOE 14 analyzes only one efficacy level, and assigns 15 that efficacy level to all TSLs. 16 The lower table presents the 17 minimum efficacy requirements associated with 18 each trial standard level. It's important to 19 note here that the slide only shows the 20 representative product classes that DOE 21 analyzed. As discussed earlier, DOE intends 22 to scale efficacy requirements from the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 246 1 representative product classes to the 2 unanalyzed product classes. And DOE invites 3 comments on the appropriateness of trial 4 standard levels considered for GSFL; in 5 particular, the combinations of efficacy 6 levels of each GSFL product class. 7 MR. BROOKMAN: David. 8 MR. NESTING: Yes. I think this 9 looks like kind of the best time to really get 10 into the phosphor discussion, and why some 11 levels seem more feasible or more possible 12 than others. And certainly, out of the site 13 visits, and I know Navigant came and visited 14 our site, as well, and we had some discussions 15 on this, and we really appreciate the effort 16 that the DOE put into tracking down all these 17 things from the USGS, and from Roadil, and 18 from Rhodia, and all the squires that we and 19 others use to maintain the pipeline. 20 That being said, there's a real 21 deficiency in the report that came out. And 22 the biggest thing that happens here is that

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 247 1 the current fluorescent market is two-thirds 2 halo, one-third triband. Now, the statement 3 made, and it's on like page 216 of the NOPR, 4 says that Actia cell 5, but only at the 5 highest level, one element will go up by 30 6 percent, or 31 percent. You're missing a 7 decimal place, because really, at the CSL 1 or 8 2, as soon as we eliminate all of the halo, 9 the number of lamps we have to produce has not 10 changed. We now need to make all of those 11 halo lamps using triband, and so at CSL 1, we 12 are talking about a 100 percent increase. The 13 triband is much more efficient than halo, 14 that's why it's not a 200 percent increase, 15 but the one-third that we buy in triband now, 16 we need to double that to take the place of 17 all the halo that we're replacing. And then 18 we go up from there when we start saying well, 19 let's move to 4, or let's move to 5. 20 So really, there's two challenges 21 out there. I mean, one, of course, is that 90 22 percent of the supply comes from China, and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 248 1 their export quotas are decreasing, and that 2 was captured in the NOPR where they are on 3 order of 3 percent a year cutting back their 4 production at the same time that we are going 5 to be asking for more. And don't need an 6 economics degree to say what that will do with 7 price, if they are cutting production and 8 you're asking for more. 9 As far as other sources, we 10 identified a lot of the places that we've 11 looked at. The key thing out there is when 12 the NOPR came out, it really talked about 13 total rare earth supply, and that well, if we 14 reopened Mountain Pass, that they would bring 15 20,000 tons of rare earth. The fact is that 16 it would only be less than 1 percent of that 17 would be useful to lighting, that if you go to 18 Mountain Pass and those ores that are there, 19 there is a bunch of rare earths in there, but 20 there are only -- out of the 15 rare earths 21 that are made, lighting uses five of them, and 22 two are in short supply. And so, when you go

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 249 1 in and you find the analysis that USGS and 2 Rhodia and such did when they looked at 3 Mountain Pass, they would have 20,000 tons per 4 year, and five tons would be for the green 5 phosphor. So you're talking fractions of a 6 percent that are actually helpful to the 7 industry in terms of making these lamps that 8 we want. So in terms of the important rare 9 earth elements, those ones that we use really

10 are rare. 11 The other side is volume. And we 12 mentioned this 31 percent, and that's well 13 off-base. We know that adopting this CSL 3, 14 so we've taken out the halo. We will more 15 than double our usage, and so in 2012, GE, and 16 Philips, and OSI, all the way down the line 17 will all line up in China and say please 18 double our order. And that's going to be a 19 problem. And we don't quite know what we're 20 going to do about that. 21 The other part of it is that when 22 we then look at well, what would happen if

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 250 1 went to higher levels, TSL 4 or 5, once we get 2 into T8s. And if you look at the base model 3 T8 going to the high level, or high 4 performance T8, there is an additional factor 5 of three in phosphor. Those 700 series T8s6 use only one-third the phosphor that the so7 called super T8s do. And so, that is on top 8 of the 100 percent that we're talking about up 9 front. And so, to get to CSL 5, we're really 10 talking 400 percent, not 30 percent for one

11 element. I'm not sure how the one element 12 came out of there, because if we're going to 13 increase our usage, it will be the same for 14 all of those elements, that the split between 15 terbium and europium is just physically not 16 possible. 17 The real point that I see in there 18 is because we all pride ourselves on having a 19 sustainability position, and that there are 20 issues around environment, there are issues

21 around renewable resources. And when we look 22 at those Base case T8s, the situation that you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 251 1 have is that if you move from 700 series to 2 the super T8s, the 3100 lumens, you move from 3 2800 lumens up to 3100 lumens, but you use 300 4 percent of the phosphor, and you're 10 percent 5 brighter, and the lamps are the exact same 6 wattage. So when I take that current lamp out, 7 and I put that new lamp in, my energy savings 8 is zero unless I make a ballast change. 9 So, unfortunately, we're locked 10 into really talking about lamps in the NOPR 11 rather than systems, and so we're out making 12 kind of assumptions of what would people do, 13 but I don't -- I would be really uncomfortable 14 to go out and say I think the real goal to the 15 energy savings in the United States is that we 16 really need to quadruple the strip mining of 17 all the rare earths worldwide so that we can 18 make our lamps 10 percent brighter with no 19 energy savings per lamp. I think that is way 20 off of what is any kind of a prudent way of 21 approaching this. 22 MR. BROOKMAN: Thank you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 252 1 MR. MELNYK: Jack Melnyk. Just a 2 quick question related to that. Then how do 3 you get the energy savings in the T5 HO going

4 from 54 watts down to 51 or 49? Is that a 5 phosphor change? 6 MR. NESTING: Some of it's 7 phosphor change, some of it's phosphor weight, 8 that if you would look at the 80 series, and 9 the Advantage series, you're really using the 10 same phosphors, you're just using a lot more. 11 And so what happens is the 70s and the 80s 12 are all about balancing the economy of how 13 much light are you going to deliver, because 14 as we said, the majority of lighting is 15 replacement market. And so, in a lot of these 16 things, performance levels were set on say 17 replacing 4 foot T12, and so when people then 18 came out with T8, they said well, we've set 19 the spacing of all of our fixtures and such so 20 that we want 2600 or 2700 lumen lamps. And so 21 then people came out and said well, let's make 22 it 2600 lumen T8. We can do that very

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 253 1 economically. That doesn't represent the most 2 light that you could generate from that. 3 However, the wattage stays the same, and so 4 when you're just changing out lamps, you'll 5 get more light. And, ultimately, you can say 6 well, we take out half the fixtures, or we 7 would change ballasts, but that's the normal 8 behavior for a very small percentage of the

9 consumers. 10 MR. BROOKMAN: Okay. So that was

11 a lot. 12 MS. GUPTA: Any further comments

13 on - 14 MR. YANDEK: If I could just make 15 one more comment. This is Ed YANDEK. To put 16 it in perspective. When we independently did 17 our own analysis, and we did have a team of 18 phosphor experts from our Technical Committee.

19 Dave was one of them. We had concluded 20 independently before we even saw the NOPR, 21 that to even go to CSL2 was going to put our 22 industry into unchartered waters in terms of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 254 1 triphosphor. 2 Now, you heard us say today that 3 we think we can make CSL work, three work with 4 some minor changes. To talk about CSL 4, I 5 think is outrageous based on what you just 6 heard. So that's, I think, putting it all in 7 perspective. 8 MR. BROOKMAN: Additional comments 9 or questions? Yes, John.

10 MR. McHUGH: We heard about the 11 constraints of worldwide rare earth supply. 12 What is NEMA's position on the real cost of 13 going to this next level, up to this level 4? 14 MR. BROOKMAN: The real cost being

15 the -

16 MR. McHUGH: Cost to the consumer.

17 MR. BROOKMAN: Cost to the 18 consumer, in the aggregate? 19 MR. McHUGH: Yes, for a 4 foot 20 bipin lamp. 21 MR. BROOKMAN: It looks like they 22 are not able to respond.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 255 1 MR. McHUGH: Okay. I would just 2 like to point out that we're looking at for 3 each of these lamps over the course of their 4 life, they're using about 600 kilowatt hours a 5 lamp, somewhere around $60 a lamp. So if 6 we're saying that we're going to be able to 7 increase the efficiency by 10 percent, we're 8 looking at essentially a $6 per lamp savings. 9 Something to consider. 10 MR. BROOKMAN: Okay. Thank you. 11 Yes, Ed. 12 MR. YANDEK: We can probably put 13 some estimates together for our written 14 comment, but I'll tell you that the cost 15 increase is going to be very significant. 16 Secondly, if you're particularly talking about 17 a consumer, you're not going to see the energy 18 savings reduction, so they're basically going 19 to be buying a very expensive lamp, a much 20 more expensive lamp for just a tiny more light 21 output, and they're going to consume the same 22 amount of energy. So that is the fallacy of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 256 1 these assumptions. 2 MR. BROOKMAN: Moving into TSL or 3 CSL 4. Okay. Additional questions or 4 comments before we move on? Mike Rivest. 5 MR. RIVEST: Getting back to the 6 quantity of phosphor required at each TSL. 7 One of the trends we're seeing is the 8 elimination of T12 through market forces, so I 9 would assume that one would have to consider - 10 - we would have to read the reports, but it 11 may be a Base case difference here. I mean, 12 if we're looking out 10 years, potentially 13 your total purchases of phosphors will have 14 gone up regardless of standards. 15 MS. GUPTA: Yes, we did consider 16 that in the report.

17 MR. RIVEST: And we would have 18 considered it, I'm not sure if you're 19 considering it. So it's a shock to the system 20 because you're being asked to do this 21 overnight, and that would show a spike in 22 purchases, I agree. But when compared 10

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 257 1 years down the road, or in aggregate over a 2 long period of time -- do you understand what 3 I'm saying?

4 MR. NESTING: Yes. 5 MR. RIVEST: So going to TSL2, 6 you're going to TSL2 on your own in 10 years. 7 MR. NESTING: Right. 8 MR. RIVEST: Right. So really, 9 the phosphor increments is the difference 10 between say two and three. 11 MR. NESTING: Right. But, I mean, 12 the first comment I made about the 31 percent 13 was Base case, which doesn't -- which assumes 14 where we're at today, or current product mix, 15 then going to CSL5 was a 30 percent jump. 16 MR. RIVEST: I was just being a 17 little defensive. That's okay. 18 MR. NESTING: That's okay. And, 19 obviously, there is that shift, but the real 20 drive is availability. It's not really a 21 machine capacity, it's not an ability to do - 22 it's is it physically possible to do it? Can

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 258 1 you actually get that much material out of the 2 ground? 3 I mean, three years ago when we 4 were working with Rhodia, they said there was 5 14 years of terbium for the green phosphor in 6 the ground, no reserves. And now we will 7 double our use of it, and so we say well, what 8 are we going to do in the next six to seven 9 years when it's physically gone? The other 10 side is, in the NOPR there was really -- it's 11 saying well, all of these other sources, Mount 12 Weld in Australia will come on, or Mountain 13 Pass will reopen. I would be very surprised 14 if many of the environmental organizations and 15 such would allow strip mining operation to 16 reopen in the State of California. I mean, 17 that is just not really a likely scenario. 18 Love to see it, it would also create jobs here19 in the United States, love to be self20 sufficient on a lot of these things, but when 21 we look at it and say what could really 22 happen, and where do we think we can get this

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 259 1 stuff from, because in a way it's a lot like 2 the oil crisis discussion. They say well, do 3 we start drilling in Anwar, and do we drill 4 offshore. And it's like those are all things 5 that could happen, but even if you started 6 now, they're not really going to be online in 7 time to do all of this. So, as Ed mentioned, 8 we're still really looking at even at the CSLs 9 that are proposed right now, we're still 10 scratching our heads on how we're going to 11 physically do it, not even whether we think 12 it's a good idea, and what happens in the 13 residential market. Those are completely 14 separate issues. We're sitting here saying 15 how do we physically deliver the number of 16 lamps that we've had before? 17 MR. BROOKMAN: For the record, 18 that last comment was from Dave. Dave, your 19 last name again? 20 MR. NESTING: Dave Nesting. 21 MR. BROOKMAN: Thank you. Okay. 22 Yes, please.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 260 1 DR. REA: Mark Rea, Lighting 2 Research Center. I guess I personally had not 3 realized how acute the issue was for 4 phosphors. Has the industry considered 5 reclamation from existing fluorescent?

6 MR. NESTING: Yes. And that's one 7 of the things, we've always been a partner 8 with Rhodia in terms of phosphor manufacturer, 9 and they are working on -- they are saying 10 right now that without a reclamation, it 11 physically won't work beyond like 2015. And 12 that's predominantly with the lap phosphor. 13 So the CFL phosphors are still not going to be 14 recyclable, so what they call cap phosphors, 15 you can't recycle them yet. So reclamation 16 does begin to factor in there, but then it 17 becomes a case of well, then we need to have 18 the infrastructure and get beyond a 20 percent 19 recycling level, and what year does that hit? 20 And then it's mercury contaminated, and then, 21 and then -- so, certainly, it's in the 22 equation, but we don't really know -- so we're

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 261 1 really starting to look at how do we bring 2 that on and mix it in. 3 MR. NELSON: If I could just add

4 to that. 5 MR. BROOKMAN: Yes, Greg. 6 MR. NELSON: One of the issues, 7 also, is that the reclaimed phosphor is never 8 performing at quite the same level as the new 9 phosphor. And at TSL3, as proposed, maybe 10 there's still some room to make products with 11 reclaimed phosphor, but if you push it to TSL4 12 or TSL 5 and you need the ultimate, ultimate 13 with a heavy layer of the best phosphor, you 14 also close the door for reclaiming phosphors.

15 MR. BROOKMAN: Yes. So that was 16 an interesting discussion. The final -- yes, 17 go ahead. 18 DR. REA: So given -- Mark Rea, 19 Lighting Research Center. It sounds to me 20 that the push to solid state is even stronger 21 given what you just told us.

22 MR. YANDEK: True.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 262 1 MR. BROOKMAN: Lane. 2 MR. BURT: Lane Burt with NRDC. I 3 just wanted to ask if the manufacturers could 4 talk a bit about the kind of reductions in 5 phosphor use they can see moving from T12 to 6 say T5, and whether that factors into their 7 motivation for their product lines? 8 MR. BROOKMAN: David. 9 MR. NESTING: Yes. David Nesting 10 with Philips. I mean, most of the T12s are 11 all halo lamps, and so in terms of the savings 12 in the rare earths, it becomes more difficult 13 to say well, how do we split those up? 14 Certainly, we know what the weights are, and 15 say okay, well, if all 600 million lamps were 16 T5, what would be the usage? But that doesn't 17 really fit back to what are people going to be 18 buying, and sourcing from elsewhere if the 19 local manufacturers would make that decision. 20 Then you know what, still comes in from China 21 because even now we see T8s coming from the 22 Asia-Pacific region into the U.S., so someone

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 263 1 is going to supply those. 2 MR. BROOKMAN: Okay. That was a 3 very interesting discussion, and I want to 4 make sure we keep moving so we get through the 5 rest of this material.

6 MS. GUPTA: Sure. So once we've 7 established trial standard levels for 8 fluorescent lamps, we can calculate the 9 national energy savings and net present value 10 results. And as you can see here in this 11 slide, we show the full range across the 12 several scenarios that we've discussed of 13 energy savings and NPV. The bars represent 14 energy savings, and those energy savings 15 generally increases with increasing TSLs. 16 Similarly, the lines represent NPV at the 3 17 and 7 percent discount rates. And, generally, 18 as you move to higher trial standard levels, 19 the NPV also increases. 20 For IRL, the TSL structure is 21 quite a bit simpler. As DOE analyzed only one 22 representative product class, DOE established

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 264 1 a TSL for each efficacy level analyzed 2 resulting in five TSLs. As discussed earlier, 3 these TSLs are based on design options, such 4 as the incorporation of xenon as a gas fill, 5 or the use of halogen infrared capsules. Each 6 TSL uses an equation dependent on the rated 7 wattage to establish minimum efficacy 8 requirement for incandescent reflector lamps. 9 And I'd like to pause here to 10 invite any comments on the appropriateness of 11 trial standard levels for incandescent 12 reflector lamps.

13 MR. BROOKMAN: Yes. Joe. 14 MR. HOWLEY: Just we've mentioned 15 this before, but in looking at these levels it 16 appears to us that TSL5 is not appropriate to 17 consider as a level. And we don't even 18 believe it's feasible for par 30s, par 20s, 19 130 volts as proposed. And really, it 20 eliminates the majority of par 38 lamps. So, 21 again, just another issue with going to TSL5. 22 TSL4, itself, is a very high proposal.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 265 1 MR. BROOKMAN: Yes, sir. Do you 2 wish to comment? No, I guess not. Okay. So 3 additional comments on these trial standard 4 levels considered for IRL? 5 MS. GUPTA: Similar to GSFL, after 6 selecting trial standard levels, we can 7 calculate energy savings and NPV due to the 8 IRL Standards. And as you can see here, with 9 increasing trial standard levels, we generally 10 have increasing energy savings and net present

11 value. 12 The next analysis I'm going to 13 briefly going over is the consumer subgroup 14 analysis. 15 MR. BROOKMAN: I think maybe we 16 should consider taking a short break. Should

17 we do that? 18 MS. GUPTA: This is like one 19 slide. Okay. We can take a break. This is my 20 last slide. 21 MR. BROOKMAN: One slide, and then

22 we'll take a break.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 266 1 MS. HORNER: There's no 2 difference.

3 MR. BROOKMAN: Between the two. 4 Hang on. Go ahead then. You're going to do 5 one slide? 6 MS. GUPTA: Is there a question on 7 the previous slide?

8 MR. BROOKMAN: Between 64 and 62. 9 Is that what you're looking at? 10 MS. HORNER: Pam Horner. Slide 11 64. Perhaps my eyes deceive me, but there is 12 a huge -- please clarify the light purple is 13 the savings?

14 MS. GUPTA: That's correct. The 15 light purple and the dark purple are the 16 savings. They represent the range of savings

17 that result from the several Standards case 18 and Base case scenarios we discussed earlier. 19 MS. HORNER: Okay. And the light 20 purple is? 21 MS. GUPTA: The light purple would 22 be the existing technologies, no product

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 267 1 substitution scenario savings, shift. 2 MS. HORNER: Okay. So there's 3 virtually no difference between 3 and 4.

4 MS. GUPTA: It's a stacked bar. 5 MS. HORNER: I understand, but in 6 the light purple scenario, there's no 7 difference really. 8 MS. GUPTA: In the light purple 9 scenario -

10 MS. HORNER: Between 3 and 4. 11 MS. GUPTA: There is a significant 12 difference. 13 MR. BROOKMAN: They're very 14 similar, you're saying.

15 MS. HORNER: No. 16 (Off the record comment.) 17 MS. GUPTA: So the high range of 18 savings predicted - 19 MS. HORNER: No, light purple. 20 MR. BROOKMAN: Okay.

21 MS. GUPTA: You have to look at 22 the full height, so the high -- okay.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 268 1 MR. BROOKMAN: Okay? So do you 2 want to do one more slide? 3 MS. GUPTA: Yes, let's just do one

4 more. 5 MR. BROOKMAN: One more slide,

6 then we'll take a short break. 7 MS. GUPTA: Okay. The purpose of 8 the consumer subgroup analysis is to evaluate 9 whether there are any consumer subgroups out 10 there that would be disproportionately 11 impacted by a standard more so than the 12 general population. To conduct this analysis, 13 DOE identified low-income consumers, houses of 14 worship, historical facilities, institutions 15 that serve low-income populations, and 16 consumers of T electronic systems as consumer 17 subgroups. 18 In order to model these subgroups, 19 DOE adjusted the electricity prices, operating 20 hours, and discount rates in the LCC model to 21 calculate LCC savings and simple payback 22 period for each of the subgroups.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 269 1 In general, the LCC results for 2 the subgroups were similar to that of the 3 general population, with a few exceptions. 4 One such exception was related to the 5 consumers who currently own T12 electronic 6 ballasts. At EL 4 and EL 5, when these 7 consumers are required to retrofit their 8 ballast upon lamp failure, they experience 9 negative LCC savings. This is in contrast to 10 their magnetic ballast counterpart owners, 11 who, as seen earlier, when they retrofit their 12 ballast in the commercial sector, experience 13 net positive LCC savings. And that concludes 14 the discussion of the LCC subgroup analysis. 15 MR. BROOKMAN: Okay. So we still 16 have quite a bit of material to cover; 17 although, my experience is that some of this 18 as we get towards the end goes rather faster.

19 So let's take a short break now. Can we do 20 this in 10 minutes? We're only going to run 21 to the restrooms. Right? Or sprint to the 22 Coke machine downstairs. So it's now 2:45.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 270 1 We'll start up at five minutes to three. And 2 it looks right now as though we could easily 3 be going until 4:30. So get a breath of fresh 4 air, no, no stay in the building, but move 5 around a little bit, freshen up, and then 6 we'll start up in 10 minutes. 7 (Whereupon, the proceedings went 8 off the record at 2:45:58 p.m., and went back 9 on the record at 2:53:34 p.m.)

10 MR. BROOKMAN: So then let's 11 proceed. I'll let you introduce yourself. 12 MR. ROSSIN: Okay. All right. 13 Good afternoon, everybody. My name is Doug 14 Rossin. I'll be presenting the manufacturer 15 impact analysis. 16 MR. BROOKMAN: Hey, folks, let's 17 bring it back together here, please. Thank 18 you. Okay, Doug. 19 MR. ROSSIN: Okay. So the main 20 purpose of the manufacturer impact analysis is 21 to assess the impacts of energy conservation

22 standards on manufacturers of GSFL and IRL.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 271 1 For this, DOE looks at publicly available 2 information, information provided by 3 manufacturers and other stakeholders, and 4 information from other analysis done for this 5 rulemaking. 6 The other main purpose of the MIA 7 is to identify and estimate impacts on 8 manufacturing subgroups. Now, this is 9 different from the subgroups done for the LCC, 10 where DOE looks at the consumer side. For the 11 MIA, DOE identified small business 12 manufacturers which are defined by the Small 13 Business Administration, to include 14 manufacturing companies that have 1,000 15 employees or less. 16 During the MIA process, DOE 17 identified these small business manufacturers 18 and conducts interviews, when possible, to 19 determine if they'll more impacted than their 20 large competitors. 21 And, finally, the other main point 22 of the MIA is to examine the impacts of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 272 1 cumulative regulatory burden on the industry. 2 For this, DOE looks at other DOE regulation 3 and federal regulation that can potentially 4 impact manufacturers financially. 5 As for the methodology, DOE uses 6 the gathered information to develop 7 manufacturer’s financial parameters and the 8 cost of complying with standards. These costs 9 are then implemented in the government 10 regulatory impact model, or the GRIM. For 11 this analysis, DOE developed two GRIMs, one

12 for the GSFL and one of the IRL market. 13 The GRIM then outputs cash flows 14 for the analysis period, and also calculates 15 the industry net present value or the INPV by 16 summing the discounted cash flows over the 17 analysis period. 18 Now, this is done for both the

19 Base case and a Standards case. And the 20 difference between the two cases is a 21 quantitative representation of the impacts on 22 manufacturers due to Standards. Additionally,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 273 1 DOE uses the interviewing process to further 2 refine the GRIM inputs, and to develop other 3 sub-analysis for this section. 4 I'd also like to point out that 5 interviews are conducted in confidentiality, 6 so manufacturers' information is not made 7 public individually. 8 So this slide shows the basic 9 process of the MIA. In Phase I, which happens 10 during the ANOPR, DOE looks at publicly 11 available information, such as 10Ks, and 12 annual reports, and develops an industry 13 profile. In Phase II, which happens during 14 the NOPR, DOE develops a strawman GRIM, 15 develops the interview guides, which are used 16 during interviews. And in Phase III, DOE 17 conducts the interviews, and uses the 18 information to assess other impacts, such as 19 employment, cumulative regulatory burden, and 20 also uses the information to finalize the

21 results. 22 So during manufacturer interviews,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 274 1 GSFL manufacturers brought up some key 2 issues. The main take of these interviews was 3 that higher efficacy lamps earn a higher 4 margin than lower efficacy lamps, in general. 5 Manufacturers are concerned that by 6 eliminating the lower efficacy lamps from the 7 market via higher standards, manufacturers 8 would have difficulty differentiating lamps 9 using the efficacy. So manufacturers are 10 concerned that by reducing the differentiation 11 in the market, the market thus becomes 12 commoditized. This then reduces the 13 manufacturer's product portfolio, which then 14 would ultimately impact their revenues, or 15 their margin. 16 To address this concern, DOE 17 developed a four-tier markup scenario where 18 each phosphor series is given a separate 19 markup. In the analysis, the manufacturing 20 markups for higher efficacy lamps are lowered 21 as lower efficacy lamps are removed from the 22 market, thus capturing this commoditization

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 275 1 effect. 2 The second main issues that 3 manufacturers had is of the high conversion 4 cost of converting T12 production lines into 5 T8 production lines. Now, for this DOE 6 gathered information from manufacturers, and 7 derived an industry average cost, and then 8 implemented these costs in the GRIM. 9 And, finally, the other issues 10 that manufacturers brought up was of the rare 11 earth phosphors, which we have heard already 12 today. For this, DOE developed a study on 13 global demand and prices, which can be found 14 in Appendix 3C of the TSD. 15 Okay. To bound the potential 16 impacts of INPV, DOE developed the two 17 markups, as I previously mentioned, and used 18 the various shipments from the NIA. The lower 19 bound of impacts is observed with the flat 20 markup. This is where manufacturers are able 21 to maintain gross margin as a percentage of 22 revenues as production cost increases with

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 276 1 higher efficacy. The higher bound of impacts 2 is observed with the four-tier markup. 3 Now, this is a case where 4 standards reduce manufacturers' product 5 portfolio, thus, squeezing their margins on 6 higher efficacy lamps as they are 7 commoditized. As for shipments, DOE uses the 8 same bounds used in the NIA to report the

9 results. 10 Here, the results shows that if 11 manufacturers are not able to differentiate 12 products by efficacy, the impacts are 13 significantly greater, as higher standards are 14 required. For example, if you look at TSL3, 15 if manufacturers have a constant markup, 16 there's actual positive impact on INPV. But 17 in the case of the four-tier markup, you have 18 a negative impact on INPV of about 24 percent. 19 One thing I would like to point 20 out is also that at TSL3, in general, 21 manufacturers are still able to manufacture 22 both T12s and T8s, and, therefore, still are

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 277 1 able to have that differentiation that I spoke 2 before. And I guess this is a good place to 3 ask questions. 4 MR. BROOKMAN: Let's pause here. 5 There's a lot of data on this chart, should 6 anybody wish to address these. Yes, Steve

7 Rosenstock.

8 MR. ROSENSTOCK: Steve Rosenstock. 9 Yes, just a quick question for both the 10 fluorescent and the IRL. What percentage of 11 the products are produced domestically, and 12 what percentage is imported, just out of 13 curiosity. 14 MR. RIVEST: Doug, I think I can 15 take that. I think I visited maybe not all 16 the facilities, but the vast majority. This 17 is a product that's different from most of the 18 other products. I have been going on 19 interviews recently, and the vast majority of 20 the product seems to be still domestically 21 produced. Probably due to the linear 22 fluorescents, I would assume. They're fairly

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 278 1 brittle, they're fairly large, and fairly 2 cheap, so that would explain. But for more 3 precise numbers, I look across the table.

4 MR. ROSENSTOCK: And the reason I 5 mention that is with some of the numbers, 6 would this tend to shift overseas? 7 MR. RIVEST: Well, if guys want to 8 interrupt me there. 9 MR. BROOKMAN: I see Ed is ready. 10 Ed, go ahead. 11 MR. YANDEK: Absolutely. 12 MR. BROOKMAN: They would shift 13 overseas under those conditions. 14 MR. YANDEK: Well, all you have to 15 do is look at what happened to compact 16 fluorescent. Okay. So we will comment more 17 in detail on this for our written comments. 18 We're not prepared to give numbers here today, 19 but the bottom line is yes, this is a concern

20 of ours. 21 MR. BROOKMAN: Okay. Thank you. 22 Mike Rivest.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 279 1 MR. RIVEST: Right. Just 2 commenting a little bit on the setup of the 3 scenarios here, and we'll be able to contrast 4 later with the IRL market.5 This product is very capital6 intensive, but the capital-intensity -- you 7 should see these facilities. They're just 8 amazing. You guys should bring a video of the 9 person drawing the line. That's something 10 quite amazing. But the capital-intensity 11 really is related to the diameter of the 12 tubes, and not so much on the variable costs 13 of producing a more efficient phosphor series, 14 for example. 15 Now, so the major impact here 16 we're talking about would be the shock to 17 converting those last T12 lines to T8 lines, 18 something that's happening through the market, 19 but at a gradual pace. Here, you would have 20 that shock. Those remaining T12 lines would

21 have to be converted at costs of tens of 22 millions of dollars. And really, when we do

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 280 1 our GRIM analysis, we capture these capital 2 costs coming in gradually over time, so from a 3 total investment number perspective, it's not 4 really different in the Base case as it is in

5 the Standards case. It's more the cash-flow 6 impact of a spike. So what may not be seen 7 here because these are discounted cash flows, 8 is that cash flow spike. 9 The uncertainty for future profits 10 is what's really driving this GSFL analysis, 11 because the markup scheme today correlates 12 with efficiency. And as we start squeezing 13 that product line, they have to find ways of 14 differentiating other than efficiency, so life 15 time for the bulbs, low mercury content, just 16 different things. But one of the major 17 differentiators is gone, so what happens in 18 the long run really depends on how much, and 19 how quickly they can re-establish a full 20 product line. 21 MR. BROOKMAN: Additional comments 22 on this slide? Okay.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 281 1 MR. ROSSIN: Okay. During 2 interviews, manufacturers of IRL brought up 3 some key issues which are listed in this 4 slide. The first one I'd like to point out is 5 that first, manufacturers are concerned that 6 emerging technology is already penetrating the 7 IRL market. With emerging technology already 8 taking a portion of the IRL industry, future 9 shipments are uncertain.

10 Manufacturers are also concerned 11 that IRL Standards could also make it likely 12 that the IRL market would shrink faster. 13 Additionally, higher price IRLs could make 14 substitutes more attractive by lowering the 15 difference in cost between IRL and RCFLs and 16 making the exempt BR lamps relatively cheaper. 17 Another major issue that 18 manufacturers brought up during interviews is 19 of the high capital conversion cost to comply 20 with Standards. The overall majority of 21 covered IRL is estimated to be in standard 22 halogen lamps. Manufacturers are concerned

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 282 1 that if they have to switch this majority of 2 the market to all HIR technology, they would 3 have to incur significant capital conversion

4 costs. 5 In the analysis, DOE preliminarily 6 finds that these high capital conversion costs 7 is a significant driver of the INPV. Now, 8 large capital conversion costs, combined with 9 emerging technology creates a situation where 10 investments are made in a market that would 11 shrink over the entire lifetime of the 12 investments. Depending on the market 13 penetration of the emerging technologies, 14 manufacturers are concerned that these high 15 costs may never be recouped. 16 Another issue brought up was the 17 competitive concerns, specifically the 18 patented technology, which we have already 19 discussed. And also, manufacturers brought up 20 the issue of xenon, which DOE developed a 21 specific study, which can be found in Appendix

22 3B of the TSD.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 283 1 For the IRL GRIM, DOE uses all of 2 the NIA shipment scenarios and reports the two 3 that bound the potential impacts on INPV. The 4 lower bound of impacts is observed when IRL 5 shipments are maintained after Standards. 6 This occurs on the existing technology Base 7 case, with no product substitution, and where 8 Standards do not cause additional shifts to 9 the exempt lamps or RCFLs. 10 The upper bound of the impacts on 11 RL industry occurs during the emerging 12 technology Base case with product 13 substitution. This is where Standards do 14 cause additional shifts to non-covered lamps. 15 Additionally, this is the scenario 16 where DOE incorporates manufacturers' concerns 17 about emerging technology and product 18 switching that are currently eroding the IRL

19 market. 20 Okay. So this slide shows the

21 results for the IRL INPV from the GRIM. One 22 thing I'd like to point is that regardless of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 284 1 the scenario that we look at, the negative 2 INPV at Standard Level 4 is due to these high 3 capital conversion costs that manufacturers4 have to incur during the conversion to an all5 improved HIR lamp. I guess, for example, we 6 can say that at TSL4, manufacturers have to 7 incur around $166 million in conversion costs, 8 and this is for industry that's currently 9 valued between somewhere of $207 and $267 10 million, so you can see that's a significant 11 portion. And I guess I can invite comments. 12 MR. BROOKMAN: Let's pause here. 13 Comments? Yes, Pam Horner. 14 MS. HORNER: While you have that 15 slide up, Pam Horner. I think Greg will 16 conclude after I have my say, but I'd like to 17 say that the INPV results that you showed for 18 general service fluorescent, it appears that 19 the manufacturer impact was taken into 20 consideration in selecting the EL, whatever 21 you're calling that final thing, EL; and 22 thereby creating a sort of balanced look at

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 285 1 all of the economic justifications that we

2 talked about. 3 It appears to us that the slide 4 that you show up here, when it's plastered 5 with negative numbers, looks like nothing but 6 bad news for manufacturers. And that it would 7 appear that one might have said gee, they're 8 all negative. Who cares? I hope that wasn't 9 the case. But it appears that the 10 manufacturer impact has not been considered in 11 setting the standard. 12 We have four points, or I have 13 four points to make, and then I'll pass it to 14 my colleague here. I'd like to point out that 15 these products are the ones you see up here, 16 to a great extent domestically made. The 17 alternatives are not. Second, if this is the 18 picture for the manufacturers of lamps, IRL 19 lamps in the future, only the products made 20 today and at current capacity will be made in 21 the future. All of these INPVs are negative 22 for the manufacturer, and the higher the TSL,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 286 1 the greater the negative value. Third, any 2 lack of investments on our part provides 3 scarcity of product, further increasing price. 4 And, fourth, we believe that all of that 5 taken into consideration, meaning the true 6 impact on our manufacturing, invalidates the 7 entire economic analysis for IRL. So, 8 obviously, we'll be providing a lot of 9 comments in this particular area, but it does 10 appear that this selection of the particular 11 trial standard level has done a very good job 12 of hastening the demise of IRL lamp 13 manufacturing in the United States. Greg. 14 MR. NELSON: Pam, I'm not sure 15 there's much left to say. I think that 16 captured it extremely well. We don't see as 17 an industry an opportunity to invest, to 18 expand capacity given the recognized negative 19 NPVs, as well as the limited time horizon 20 against emerging technologies. So, in fact, 21 we would find ourselves after 2012 in a highly 22 capacity constrained situation. And that

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 287 1 calls into question all of the pricing 2 analysis of the higher energy tiers that was 3 used earlier in the analysis. Therefore, the 4 economic benefit to the end-user is really 5 questionable in the overall. 6 What more can I say? I think I'll 7 end it there, Pam. I didn't really have 8 anything else. I think it was a valid point, 9 as well, about the emerging technologies are 10 primarily being manufactured overseas versus 11 this halogen business, which is a domestically 12 manufactured business, for the most part. 13 MR. BROOKMAN: Thank you, Greg. 14 Okay. Additional comments on slide 75 and the 15 implications? Yes, please, Amanda. 16 MS. STEVENS: Thank you. Amanda 17 Stevens on behalf PG&E. I just had a question 18 about DOE's calculation, just a clarification 19 question, I think, for me. So as I understand 20 it, the emerging technologies forecast will 21 shrink the traditional IRL market and the 22 shipments, which then has a negative impact on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 288 1 the industry net present value. Is that

2 correct? 3 MR. RIVEST: Yes, that's correct. 4 MS. STEVENS: So I just wondered 5 how, or if, the analysis considered if some 6 say manufacturers are the ones selling the 7 emerging technologies, or the replacement 8 technologies, does that sort of benefit side 9 of the equation also get accounted for in this 10 calculation?

11 MR. RIVEST: I'll take that one. 12 MR. BROOKMAN: Mike Rivest. 13 MR. RIVEST: I remember seeing 14 that issue somewhere. No, it does not. So 15 the -- if you will, in setting the definition 16 of what the impacted industry is, it's the - 17 in one situation, it's the general service 18 fluorescent lamp industry, and the other one, 19 it's the incandescent reflector lamp industry. 20 So in and out flows, if you will, and the 21 corresponding investments that a manufacturer 22 would have to make to serve those new markets,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 289 1 or the incremental revenues from those markets 2 is not considered within this cash flow.

3 MR. BROOKMAN: Andrew. 4 MR. DELASKI: So, Mike, who does 5 that cash flow affect, then? 6 MR. RIVEST: Who does this cash

7 flow affect?

8 MR. DELASKI: Yes. 9 MR. RIVEST: Profit centers within

10 manufact -

11 MR. DELASKI: And who owns that 12 profit center? 13 MR. RIVEST: Would you like to 14 answer the structure of the industry here? 15 MR. DELASKI: I'll stop the 16 question. I mean, the point I want to say is

17 that there are shareholders for these 18 companies. Ultimately, the companies are 19 owned by the shareholders. And those 20 shareholders get the benefit, they get the 21 costs, ultimately, it's the shareholders of 22 the companies, so to draw a box around a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 290 1 business center of the company strikes me as 2 completely artificial, because there's no 3 person that gets or loses that benefit.

4 MR. RIVEST: If I take that 5 analogy say to the extreme, one would draw the 6 box so large that there would be no analysis, 7 because there would be a pure in and out. 8 Right? So, eventually, you have to draw a 9 box. One could draw a box around GE, for 10 example, because it's such a large 11 multinational industry, so that would probably 12 be too big, as well. So you're drawing that 13 box to something meaningful, and what's been 14 the record of the program has been to draw it 15 around the regulated products of concern.

16 MR. BROOKMAN: Joe. Yes. 17 MR. HOWLEY: Yes, I just wanted to 18 add. I mean, a lot of this is theoretical in 19 terms of how big you draw this supposed box or 20 not, but if I could just bring us back to 21 reality. The reality is, we're all companies 22 with limited investment dollars, and so we're

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 291 1 all placing bets on what in technologies we 2 want to invest in, because we don't have 3 unlimited resources, despite how big you think 4 we are. We have limited resources to put 5 money in different investments, so in this 6 particular area, you're choosing between 7 investing in a technology which we believe is 8 slowly going to decline versus investing in 9 the newer emerging technologies, if you will. 10 And although I'm not the business manager 11 that makes that decision, I could speculate 12 what technologies are going to get the 13 investment money. 14 For this particular rulemaking, 15 what we're suggesting, if it goes too far, too 16 fast, too high, it's going to produce a 17 situation that is going to produce a 18 significant lack of availability of this 19 particular product type. Even though 20 customers may want it, companies will most 21 likely be unwilling to take their limited 22 investment dollars and place it here. So you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 292 1 are limited to the capacity already available. 2 And if you go too high, and too high for us 3 is 4 or 5 certainly, you're going to produce a 4 constrained market situation, and availability 5 situation based on existing manufacturing 6 capacity. We know that's one of the items 7 that DOE has to factor in, is what is it going 8 to do to the availability of this product? 9 And we're suggesting these high levels are 10 going to produce a serious negative, maybe 11 even crippling effect on availability, because 12 of those internal realities we have to deal 13 with of limited investment dollars. 14 MR. BROOKMAN: Yes, please, Greg. 15 MR. NELSON: Just to follow-up, 16 because it may be interpreted that hey, after 17 Level 3 you need IR anyway, so what's the 18 difference, 3 or 4? But there's a very real 19 impact to the industry in terms of the loading 20 that we can put through existing equipment. 21 Because to go to the higher levels requires 22 increasing cycle times, requires increasing

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 293 1 use for a fewer number of products of the 2 existing infrastructure. So it does 3 continuously further constrain capacity. 4 In addition, you've got -- let's 5 say in terms of the energy-saving graph you 6 showed, the biggest step was between TSL2 and 7 TSL3, as soon as you made the IR conversion. 8 TSL4 and TSL 5 were, let's say, incrementally 9 positive. I think that was Pam's point. If 10 you look at the manufacturer graph, or the 11 manufacturer impact INPV, there is still a 12 very dramatic shift to the negative of the 13 INPV in going from Level 3 to Level 4. 14 MR. BROOKMAN: Okay. So go to the 15 next slide, would you? I just want to 16 summarize here. I think we've been covering 17 the following questions or opportunities for 18 comment listed here as Issue 13, as we have 19 been going along. DOE invites additional 20 comment and methodology and inputs used for 21 manufacturer impact analysis, invites comment 22 on the ability of GSFL manufacturers to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 294 1 maintain current margins. And Mike Rivest 2 described some of the ways that might do that. 3 And further comment on how small businesses 4 could be impacted by standards on GSFL and 5 IRL. So additional, perhaps final comments on 6 those? Yes, Tim. 7 MR. BALLO: Tim Ballo. One final 8 comment on drawing the box, and where you do 9 that. I think in the challenge to the 10 furnaces standard, I believe the State of New 11 York has raised the issue of -- FCA defines a 12 manufacturer as any person who manufactures a 13 product, and any person is traditionally, I 14 think in some other statutes defined as the 15 corporation, and not the division of the 16 corporation that happens to manufacture the 17 GSFL or IRL. So I would argue that you draw 18 the box at the corporation. 19 MR. BROOKMAN: A bigger box. 20 Okay. 21 MR. DELASKI: It's not just a 22 bigger box, Doug. It's a corporation, it's a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 295 1 person, it is a legal entity that is treated 2 as a tax entity, it's treated as -- there is a 3 beneficiary. It is the shareholders. I don't 4 think it's arbitrary, Mike. We can go round 5 and round on this, but - 6 MR. RIVEST: I'm not trying to. 7 MR. DELASKI: -- a corporation is 8 not an arbitrary entity. It is how - 9 MR. RIVEST: I would just want to 10 -- this is not belittling the issue. I would 11 just pose to you some of the challenges in 12 doing what you're wanting to do. So we have 13 to forecast out the sales of Solid State 14 Lighting, for example, to be able to bring 15 them in our model. We would need to know the 16 price. We would need to know the investment 17 size of that equipment going to 2042. So that 18 is a challenge that goes way beyond just 19 looking at the IRL market. 20 MR. DELASKI: And I think as you - 21 that something being challenging does not 22 limit the Department's responsibility to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 296 1 tackle it. 2 MR. BROOKMAN: Let me ask if 3 anybody on this side of the table, do you have 4 any follow-on comments based on what's been

5 stated. 6 MR. NELSON: Sorry, I didn't catch 7 the question. 8 MR. BROOKMAN: Okay. Steve

9 Rosenstock. 10 MR. ROSENSTOCK: Steve Rosenstock, 11 EEI. I understand both sides of the argument, 12 but especially in this case with large 13 companies that make more of the lighting 14 products, it gets even more complex, because 15 you have to look at the whole corporation. I 16 know General Electric makes power equipment, 17 and consumer appliances, so trying to do it 18 with that whole analysis for just one product, 19 it could delay the rule makings, 20 unfortunately. That could be the unintended 21 consequence.

22 MR. BROOKMAN: Yes. Pam.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 297 1 MS. HORNER: Pam Horner. In our 2 case, we're a wholly owned subsidiary and a 3 standalone corporation. We make only 4 lighting. 5 MR. BROOKMAN: Okay. So then I 6 just read the three items listed as Issue 13 7 on page 76 of the presentation materials. Any 8 additional comments before we move on? Okay. 9 MR. GOUDARZI: My name is Lessly 10 Goudarzi. I represent OnLocation and the 11 Department. I'm going to talk about three 12 issues, one of which, the first one here is 13 the utility impact analysis that was done. 14 Can you hear me okay?

15 MR. BROOKMAN: Yes. 16 MR. GOUDARZI: Our goal here is to 17 try to investigate the impact on utilities of 18 the energy-savings associated with these 19 Standards. In doing that, we rely on the 20 energy-savings estimates that came from the 21 other parts of the analysis that have been 22 previously described.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 298 1 The tool that we used for this 2 particular analysis is the National Energy 3 Modeling System, a special version of that, 4 which we call NEMS-BT. And the variation 5 there is primarily to open up the model to be 6 able to have it accept these energy-savings 7 exogenously into the model. So that's the 8 primary difference, and that's what NEMS-BT 9 stands for, as opposed to Standard NEMS. In 10 this particular case, we're using AEO 2008's 11 version of NEMS, which is the one that was 12 available at the time the analysis was 13 performed. 14 Our primary interest is looking at 15 the changes in electricity sales and prices as 16 they affect the marketplace in utilities, the 17 mixed generation that would be affected, and 18 the amount of capacity that would be 19 installed, and the amount of generation that 20 would flow from that capacity. That's 21 basically the technique we're using, and NEMS 22 model, itself, if you want to know more about

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 299 1 it, it basically is a integrated model that 2 describes all sectors of the energy system, 3 and takes the electricity piece in some great 4 detail, and models both capacity expansion 5 generation, electricity prices.

6 MR. BROOKMAN: So do we have 7 questions or concerns about the utility impact 8 analysis? Okay. 9 MR. GOUDARZI: I'm next going to 10 talk about the employment impact analysis, and 11 recognize in this particular case we're 12 talking about the indirect employment impacts, 13 not the direct ones. The direct ones are

14 addressed elsewhere. 15 Here we're trying to look at the 16 flow of dollars that would go through the 17 consumer back into the economy, and what kinds 18 of jobs that would represent. We used the 19 ImSET model that's been used in a number of 20 the other standard setting processes. It's 21 intended to estimate the employment impact 22 over the entire United States economy. It

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 300 1 basically has an IO matrix that represents the 2 flows in and out of the different components 3 of GDP, and therefore, the jobs that flow from

4 that. 5 It takes estimates into it, the 6 cost and benefits as estimated by the other 7 parts of the analysis, specifically, the NAI 8 analysis. And as mentioned in the last bullet 9 here, the direct impacts were measured 10 elsewhere. This is just the indirect impacts. 11 And what we look as is a change in employment 12 that would be forecast by the ImSET model 13 given those assumptions. Any questions? 14 MR. MELNYK: I have a question. 15 MR. BROOKMAN: Yes, please. 16 MR. MELNYK: Jack Melynk Southern 17 Cal Edison. I see this general outline here, 18 but I wonder what the impact is on the, 19 essentially, disappearing labor, especially 20 related to SSL lamps. You'll have a major 21 reduction in need to repair this stuff over 22 any amount of time, and it's probably in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 301 1 neighborhood of half the labor, or maybe even

2 much more than that. I wonder how that's 3 factored into any of your studies? 4 MR. GOUDARZI: I'm not sure it is 5 directly factored in there. Making sure I 6 understand your question, first. Are you 7 asking about the impacts that would be 8 associated with the shifts going on through 9 the consumers investment in these 10 technologies? 11 MR. MELNYK: Maybe to give an 12 example, if you go out and repair a 13 streetlight now, you might encounter a lamp 14 change at $50 or $60, and you have to replace 15 or do more difficult stuff, you might spend 16 $100 per fixture. If you put a source in that 17 lasts two, or three, or four times as long, 18 the labor to do that disappears, and that 19 translates to lost jobs. And I wondered how 20 that might be factored into your assessments. 21 MR. GOUDARZI: It is factored into 22 it, because our given estimates about the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 302 1 amount of installation cost, and how much they 2 change between the two scenarios, if you will. 3 And so that change of those costs is, in 4 fact, passed through the model, and 5 represented in these impact analysis. So it 6 is there directly. I mean, there is an 7 installed cost associated with each scenario, 8 if you will. The difference between those is 9 what's passed into the model, so we're 10 measuring all the variants between the two 11 cases, if you will, reference case, and the 12 alternative standard cases. I hopefully 13 answered your question. 14 MR. BROOKMAN: Were you finished 15 describing this slide?

16 MR. GOUDARZI: I was. 17 MR. BROOKMAN: Yes, Greg. 18 MR. NELSON: Maybe I missed 19 something, but I don't see any follow-up to 20 this in the presentation. What exactly is the 21 outcome of the employment impact assessment? 22 MR. GOUDARZI: It's actually in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 303 1 the TSD and in the NOPR. 2 MR. NELSON: Can you give us -

3 MR. GOUDARZI: I don't actual 4 numbers right here, but I can tell you roughly 5 there is a slight positive impact in 6 employment associated with these flows, and 7 that impact is basically netted against what 8 he described a minute ago, the savings and the 9 flow of those dollars back into the economy 10 when the consumer actually benefits from the 11 savings, and so there's a net effect. It's a 12 very small impact, like point tenths of a 13 percent of employment. 14 MR. NELSON: Greg Nelson, again, 15 He identified a negative, and I think we, as 16 manufacturers, have identified some negatives. 17 Can you identify where the positives are 18 coming in that are overriding this? 19 MR. GOUDARZI: Sure. And, again, 20 I want to re-emphasize the fact that the 21 impacts we're talking about here are very, 22 very small on a national scale. We're talking

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 304 1 a tenth of a percent of employment change. 2 And so given the uncertainties of lots of 3 things, I'm not sure I'd dwell on that a whole

4 lot. 5 Now, having said that, the savings 6 parts comes from the fact that the consumer 7 has more dollars in his pockets, having 8 experienced the energy savings. He's not 9 spending on his consumption for electricity, 10 and the replacement cycle may be extended so 11 he doesn't have to replace it quite so often. 12 The combination of those savings is what's 13 being spent to offset. Now, granted this is 14 the indirect impacts alone. It does not try 15 to net it against the direct impacts, so I 16 don't mean to imply that it does. 17 MR. NELSON: I think diluting it 18 by putting it as a total employment rate for 19 the country as opposed to a net shift on this 20 obscures a bit - you say a tenth of a percent, 21 but also to take into account what people 22 might be spending their money on, that they

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 305 1 have saved from doing this. They may be 2 spending their money on consumer goods from 3 China, so it's very questionable when you get 4 into those kind of discussions. 5 MR. GOUDARZI: I would agree. 6 You're talking about a complex thing to try to 7 figure out how these dollars will flow back 8 into the system. The model has been vetted 9 and you guys have seen it. So it basically 10 is, in fact, the framework from which this 11 calculation is being done.

12 MR. NELSON: I hate to obscure a 13 net loss of domestic jobs, and also 14 installation by an overall model which hides 15 that in smoke. 16 MR. GOUDARZI: Okay. Again, this 17 part of the analysis was only focusing on the 18 indirect, the direct impact is not addressed 19 here, and so the offset there is not trying to 20 be netted out. We're just talking about the 21 positive piece. And, again, it's a small net 22 positive in this context.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 306 1 MR. BALLO: Tim Ballo. Just to 2 clarify, though, the indirect model does model 3 change in domestic and national employment, 4 not -- it doesn't -

5 MR. GOUDARZI: Correct. 6 MR. BALLO: So we are talking 7 about a difference then of something like 20- 8 22,000 jobs increase. 9 MR. GOUDARZI: That's the right 10 magnitude on some of the higher level - 11 MR. BALLO: And those are domestic 12 jobs. 13 MR. GOUDARZI: Those are domestic 14 jobs. 15 MR. BALLO: Thank you. 16 MR. BROOKMAN: And additional 17 money being freed up. John. 18 MR. McHUGH: John McHugh. On the 19 fluorescent level 4 analysis, does this 20 calculate all the replacement fixtures and 21 ballasts that you're hiring local electricians 22 to replace, or is this only -- you're only

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 307 1 looking at the selected standards that you've 2 selected. So, for instance, in the case of 3 fluorescent, only looking at Standard 3, or 4 have you done this analysis all the way 5 through for each of the cases? 6 MR. RIVEST: The analysis that's 7 being talked about here is a macro 8 input/output model that doesn't get to the 9 specifics of who's installing what types of 10 lamps, where, or anything like that. So it's 11 purely conversion of purchases from utility 12 bills to other uses, which may be more capital 13 -- more labor-intensive, and domestic with all 14 the complexities that that is. As far as I -- 15 and I think I know, there are no -- we assess 16 the manufacturer direct impacts that are 17 reported to us. We did not, and have never 18 looked at changes in employment due to 19 installation costs, for example. 20 MR. BROOKMAN: Additional? 21 MR. RIVEST: It's an input into 22 his model, but it's not -- I could not say the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 308 1 man-hours used to install fixtures had gone 2 down this many thousand. I don't - 3 MR. BROOKMAN: Okay. Thanks, Mike 4 Rivest. So then let's move on to 5 Environmental Assessment. 6 MR. GOUDARZI: Again, the goal 7 here is to take the energy savings that flow 8 through it, and try to convert it to -- from 9 power plants, in particular, the amount of 10 emissions that would be changed as a result of 11 these standards. Again, the principal tool to

12 measure that was the NEMS-BT model. That 13 model has an electricity generating segment 14 that is in great detail. 15 In order to do this, because of 16 the state of the affairs of the court 17 decisions on these things, what was used 18 instead of the direct output for Nox and for 19 mercury, we used ranges of estimates of - 20 based on displaced generation, if you will, 21 and took the generation amount, and used some 22 standard numbers which are described in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 309 1 NOPR itself, as well as the TSDs, as to where 2 those numbers came from. Basically use for - 3 Nox, we used average NOX emissions per 4 kilowatt hour output, for the high end, and 5 the low end we used the combined cycle plant, 6 which is assumed to be the type of plant that 7 would displaced in this context. Okay. On 8 the margin. 9 For mercury, we used the coal 10 generation change, and the number -- and the 11 average coal mercury emitted by coal plants as 12 the high end. On the low end, with the 13 combined cycle as the alternative, it doesn't 14 emit mercury, so it's zero. 15 SO2 was done slightly different. 16 It's assumed it's still being operated under 17 cap, and so the assumption is that the amount 18 of SO2 emitted would not really change, but 19 we'd have to the lesser degree banking and 20 other inter-temporal transfers, is basically 21 what you have is the same level of SO2 because 22 it's working under a cap.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 310 1 We then took these values and 2 monetized them, if you will, based on the 3 various studies that are mentioned in the NOPR 4 itself, and the TSD, which put a dollar value 5 per ton, or per pound of emitting emissions 6 reduced. And that's all I was intending to 7 say at this point, without answering 8 questions. 9 MR. BROOKMAN: Monetized the CO2, 10 NOx, and mercury.

11 MR. GOUDARZI: Correct. 12 MR. BROOKMAN: Okay. Yes, Steve

13 Rosenstock. 14 MR. ROSENSTOCK: Steve Rosenstock, 15 Edison Electric Institute. Just out of 16 curiosity, how did you monetize a value for 17 mercury since -- because of the quota that - 18 there was a cap, now there's not a cap, but I 19 haven't seen any, I'll say organized mercury 20 trading markets out there, so I'm just kind of 21 curious where you got the information to 22 monetize, or are you just using it as a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 311 1 commodity price of mercury? 2 MR. GOUDARZI: This is the impact 3 -- excuse me. This is the impact of that 4 mercury. It's not the actual value of the 5 mercury that would be traded in the 6 marketplace, if you will. And so the studies 7 that are referenced in there give you 8 estimates of what the impact of reducing a ton 9 of mercury in the environment would result in. 10 And so it's not the same as measuring, if 11 you will, an allowance price associated with 12 mercury, or an allowance price associated with 13 NOx, or CO2. 14 MR. ROSENSTOCK: Okay. Thank you.

15 MR. BROOKMAN: Yes. Lane. 16 MR. BURT: Lane Burt, NRDC. We 17 commented several times in various rule 18 makings that the value of carbon emission 19 should be part of the economic analysis, as 20 well as the environmental assessment. And to 21 this point, the Department's response has been 22 that they do take into account in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 312 1 environmental assessment, and that a value of 2 zero is a reasonable estimate for the domestic 3 price for reduction of carbon dioxide 4 emissions. 5 I would just like to point out 6 that carbon dioxide is determined in the 7 market currently for the northeast. What I'd 8 like to ask, is that going to be included 9 moving forward, since the previous reasons for 10 keeping it out had been the lack of market 11 price.

12 MR. GOUDARZI: I'm sure the 13 Department will consider it. I don't have an

14 answer for that. 15 MR. BROOKMAN: Eric Stas. 16 MR. STAS: Please give us your 17 comments on that point. I don't think we have 18 anything to add right now. 19 MR. BROOKMAN: Thank you. 20 MR. GOUDARZI: I would point out 21 in the study itself, there is a range for 22 carbon dioxide, there's zero and $20, so it's

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 313 1 not just zero. 2 MR. BROOKMAN: Additional comments 3 on environmental assessment? 4 MS. GUPTA: So I will be 5 discussing the last analysis, the last NOPR 6 analysis, the regulatory impact analysis. The 7 purpose of the regulatory impact analysis is 8 to analyze non-regulatory alternatives to 9 mandatory efficiency standards, and determine 10 what the national impacts would be from these 11 non-regulatory alternatives.12 DOE considered several non13 regulatory alternatives, such as no new 14 regulatory action, consumer rebates, consumer 15 tax credits, manufacturer tax credits, 16 voluntary energy efficiency targets, such as 17 Energy Star, and bulk government purchases. 18 The way that DOE analyzed these programs was 19 to take the NIA's spreadsheet model for each 20 of the products, and to modify specific 21 assumptions, namely, the market share matrices 22 to determine what the impacts would be from

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 314 1 these alternatives. 2 In general, DOE accounted for 3 these alternatives by increasing the market 4 share of higher efficacy products based on the 5 penetration predicted by these alternatives. 6 The results of the analysis ultimately showed 7 that none of the alternatives achieved the 8 same level of national energy savings, nor 9 national economic benefits at the proposed 10 standards for any of the products.

11 MR. BROOKMAN: Steve Rosenstock. 12 MR. ROSENSTOCK: Steve Rosenstock, 13 EEI. I guess under this area, especially 14 recently with commercial building codes, ASRAY 15 2004, and now IACC 2009, which both increased 16 stringency on the lighting areas, is DOE going 17 to try to account for those in any sort of 18 final analysis, because there were significant 19 changes in both of those codes in terms of 20 lighting technology, lighting efficiency 21 designations. 22 MS. GUPTA: Well, our national

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 315 1 impacts analysis efficacy projections and 2 distributions of efficacy projections are 3 meant to account for all of those types of 4 things. So if you could comment on those, and 5 whether you feel those are adequate, given 6 those new developments, that would be very 7 helpful. 8 MR. ROSENSTOCK: Thank you. 9 MR. BROOKMAN: Thank you. 10 Additional comments on regulatory impact 11 analysis? So that is the last of the analyses 12 to be described. I would just call your 13 attention to the fact that in the next three 14 pages, the Department has provided a summary 15 of key issues for which it has explicitly 16 sought comment. And maybe this would be an 17 outline for your written comments, looking 18 ahead. So now is an opportunity for anybody 19 that wishes to do so, to make summary remarks, 20 raise any additional issues that you wish to 21 raise at this point. Yes, Pekka.

22 MR. HAKKARAINEN: Pekka

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 316 1 Hakkarainen from Lutron. Just would like to 2 raise another issue on behalf of my company 3 perhaps more than NEMA. In the incandescent 4 reflector lamp standards analysis, an issue 5 that wasn't taken into account was the loss of 6 function for the consumers that comes about 7 from the loss of dimming capability with the 8 likely replacement sources. So I would just 9 like to -- we'll provide some more substance 10 to that in the written comments, but I'd just 11 like to urge that to be taken into account. 12 MR. BROOKMAN: Okay. And I'm sure 13 the Department would appreciate you being able 14 to describe the penetration there; that is, 15 the breadth of that application. 16 Okay. Additional closing remarks, 17 summary remarks? Amanda.

18 MS. STEVENS: Not so much a 19 closing remark, actually, a remark that I 20 didn't make this morning, that I overlooked. 21 So this goes back to the reflector lamps and 22 the design options, the technology options

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 317 1 considered. And I noted that one of the 2 options that wasn't considered in the analysis 3 was using integrated ballast to convert the 4 line voltage to a low voltage, which would 5 increase the efficiency. I see it was 6 screened out from -- at an earlier stage, 7 because there were no products available in 8 the U.S., although, this is obviously a 9 technology that's used in Europe and around 10 the world. And I was just wondering if this 11 was an additional design option, maybe a 12 question too for the manufacturers, whether 13 this was an additional design option that 14 could be considered in looking at these higher 15 standard levels for reflector lamps. 16 MR. BROOKMAN: Greg. 17 MR. NELSON: Greg Nelson. I can 18 speak a little bit to that. We also have a 19 similar product here in a professional range, 20 in a part 20. But primarily, you see those 21 products in Europe, and it fundamentally has 22 to do with the issue that the line voltage in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 318 1 Europe is 220, 230 volt. And that is 2 inherently much less efficient than a 120 volt 3 system. So the improvement to go from 220 4 volt to 12 volt is significant; whereas, going 5 from 120 volt to 12 volt is much less. But 6 you still have to pay the same expensive cost 7 of the integrated electronics. And when we've 8 looked at applying similar products to a North 9 American situation starting at 120 volt, there 10 was not a positive case for the end-user. So 11 that was a difficult -- and it's fundamentally 12 rooted in the difference in supply voltages. 13 MR. BROOKMAN: Yes, John. 14 MR. McHUGH: I was wondering if 15 one of the authors of the NOPR could describe 16 in some detail the rationale behind the 17 exemption for the ER lamps. My reading of the 18 comment seems somewhat confusing in that it's 19 clear that these lamps are covered, and then 20 that the example was given comparing the 21 coverage of these lamps relative to new 22 standards for, I believe it was televisions.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 319 1 And the discussion was well, the covered 2 equipment wasn't described. And what I think 3 I'm reading between the lines here is that if 4 that table had said these are the luminous 5 efficacy requirements for lamps greater than 6 50 watts to 65 watts, but not including 65 7 watts, and then greater than 65 watts, then 8 these other lamps could be covered. But 9 because for the simplicity of the language in 10 the standard, they said well, these are the 11 requirements for all lamps, the 65 watt lamps 12 are excluded, and these less than 50 watt 13 lamps are excluded. That language to simplify 14 the tables is now seen as an exclusion for 15 those lamps until Congress basically revisits 16 this question. So I was wondering if someone 17 could kind of explain to me this rationale, 18 because to me, it wasn't clear from reading 19 the response. 20 MR. BROOKMAN: Eric Stas. 21 MR. STAS: Eric Stas, DOE. As 22 explained in the NOPR, and I think it is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 320 1 pretty clearly explained in the NOPR, it comes 2 down to the statutory construction. 3 Obviously, we're having differing viewpoints 4 on that. Congress -- we have to live with 5 what Congress put in the law, and they set 6 standard levels for these lamps, so the 7 question is, when we have authority to amend 8 our standards, can we amend the exclusion? 9 Our interpretation, as explained in the NOPR, 10 is that the standard levels are the table of 11 levels set by Congress, and we were given 12 authority to amend the levels, and I guess 13 Subsection B, that's the table, not C, which 14 is the exclusion. So I think that just 15 clarifies what's in the NOPR.

16 MR. BROOKMAN: John.

17 MR. McHUGH: Just a short one. 18 John McHugh, again. So is there an 19 opportunity for DOE to get some clarification 20 from Congress about their intent, or is -- it 21 sounds like this was a legal interpretation, 22 but is there that process available to DOE to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 321 1 actually get the clarification from Congress? 2 MR. STAS: Eric Stas, again. 3 That's a hard question to answer, too. I 4 mean, whose intent do you get? If you have 5 one member say this was my view, and I voted 6 for this, that could be one out of 435 or 535. 7 Where do you get that clarification from 8 exactly? I mean, what's most important is 9 what passed, and that's the language we have, 10 so we have to try to - 11 MR. DELASKI: Doug, if I could 12 just come back to this point. You don't need 13 clarification from Congress. You have the 14 authority today to cover the lamps. And, 15 indeed, as we argued in our ANOPR comments, 16 you have the requirement to. And this is 17 something that you don't need new 18 Congressional authority. It's with your 19 authority today. It's within your requirement 20 today, and we strongly urge the Department to 21 revisit -- do a supplementary NOPR as soon as 22 practical, and to reopen this question for

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 322 1 public input and propose a standard. 2 MR. BROOKMAN: Thank you. Pam

3 Horner. 4 MS. HORNER: It's industry's view 5 that DOE's interpretation is correct. 6 MR. BROOKMAN: Thank you. So, as I 7 said earlier, this is an opportunity, a final 8 opportunity for anybody to raise any other 9 issues they wish to raise at this point. 10 We're drawing to a close now. Yes, Ed. 11 MR. OSANN: Ed Osann. This is a 12 question, I think, for Linda. Here we are at 13 the conclusion of NOPR public meeting, and the 14 NOPR has not been published in the Federal 15 Register. It's well known that the 16 administration has put out a directive 17 relating to the status of ongoing rule 18 makings, and I wonder if you could shed some 19 light on the Department's current thinking or 20 plans as to how this rule making fits into the 21 general directive from the administration to 22 slow down or forebear ongoing rule makings

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 323 1 until they had a chance to look at them. 2 Where does this fit in that general policy? 3 MS. GRAVES: Linda Graves. I'm 4 basically going to defer to General Counsel 5 that has been working directly with the 6 appropriate memos responding to this, and to 7 our Policy Office. What I can tell you is 8 that we're still interacting with the Federal 9 Register, and my concern is that I can't start 10 the clock on this public comment period, even 11 though it's been officially issued by the 12 Department, until the Federal Register 13 publishes it. So I will tell you, too, that I 14 will be sending out an email to all 15 stakeholders who are on my lighting 16 stakeholder email list informing you when it 17 is published in the Federal Register, which 18 will insert the date, the comment period ends. 19 Obviously, this makes it much more difficult 20 for my team to achieve the consent decree 21 deadline. 22 Now, I assume that the parties

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 324 1 involved in the timing of publication, my 2 understanding is that they are aware there is 3 a consent decree, and that this is a rule 4 making that falls under that schedule. 5 Someone will have to be accountable on the

6 consent decree. 7 MR. BROOKMAN: Eric Stas. 8 MR. STAS: Eric Stas, DOE. I 9 think you're all familiar with the memo that 10 Linda is talking about, it's the transition to 11 a new administration. There is an exception 12 in that memo for rule makings tied to judicial 13 deadlines and things like that. We consider 14 this to be clearly that case, but until the 15 powers that be say the appropriate blessings, 16 it's being slowed down somewhat, so we're 17 hoping it publishes as soon as possible, and I 18 think the fact that we're having this meeting 19 today and has gone forward, suggests that's 20 how it's going to go, and keep checking the 21 Federal Register. And please don't wait until 22 the last second to get your comments in. The

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 325 1 sooner you get them in, the better that it is 2 for us, as always. 3 MR. BROOKMAN: But, Linda, you'll 4 be sending out an email to everybody once 5 there is something to say about this. 6 MS. GRAVES: Correct. Yes, I will 7 give you whatever -- I'll pass that on. You 8 should be watching for the Federal Register 9 and share it with other interested parties. 10 Please make sure that I have you on my 11 stakeholder email list, and you can do that 12 just by sending me an email requesting to be 13 on the list. 14 MR. BROOKMAN: So then from my 15 perspective, I thank all of you for a very, 16 very productive day. I'll turn it back to 17 Linda Graves for closing remarks, and how to 18 submit your comments. And please feel out the 19 evaluation form that's being circulated. The 20 Department reads them carefully. 21 MS. GRAVES: I really would like 22 to give you my sincerest thanks for all of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 326 1 your active participation. The Department 2 finds the give and take among all stakeholders 3 of all viewpoints very useful. Sometimes it's 4 that give and take that really elucidates some 5 points for us, so I think this has been an 6 extremely useful meeting from the point of 7 view of the Department. And I hope it's been 8 useful to you. I appreciate your efforts to 9 travel to get here. 10 All oral comments made at this 11 meeting are a part of the official record. 12 They're transcribed into the official 13 transcript. The transcript becomes part of 14 the docket, and we will post the transcript on 15 our website after it's finalized. And in 16 terms of submitting written comments, this is 17 described in detail in the Notice of Proposed 18 Rule Making, in Section VII-D, but I would 19 just point out that you all know you can 20 submit comments by email, or snail mail, or by 21 courier. We ask that you always provide an 22 identification of the docket number, or the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 327 1 regulatory identification number, and that you 2 follow-up with an original signed copy. 3 Again, thank you very much for 4 your participation and attendance in this 5 meeting. 6 (Whereupon, the proceedings went 7 off the record at 3:55:12 p.m.)

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269:22 macro 307:7 magnet 36:9 magnetic 151:5,10 154:11,20 163:17 165:6 210:1,17 219:14 220:5,11 269:10 magnitude 306:10 mail 326:20 main 18:5 37:12

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272:7 manufactures

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